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Mar 25, 2019

Education | DeVos launches investigation into college admissions scandal


Betsy DeVos
Education Secretary Betsy DeVos denounced the college admissions scandal as “disgraceful” and asked department officials to determine whether any of the agency’s own regulations had been violated. | Mark Wilson/Getty Images
The Education Department has opened investigations into eight universities tied to the sweeping college admissions and bribery scandal unveiled by federal prosecutors earlier this month, according to individuals familiar with the investigation.
Department investigators are examining whether any of the universities violated any laws or rules “governing the Federal student financial aid programs” or “any other applicable laws,” according to a document reviewed by POLITICO.
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If the department decides that any of the schools violated federal education regulations, it could assess penalties, which at the most extreme would include cutting off an institution’s access to Pell Grants and federal student loans.
Federal education officials on Monday notified eight universities that they each faced a “preliminary investigation” stemming from the criminal charges announced earlier this month.
“The allegations made and evidence cited by the Department of Justice raise questions about whether your institution is fully meeting its obligations” under federal education laws and regulations, an Education Department official wrote.
The letter was sent to the presidents of Yale University, Wake Forest University, the University of San Diego, Stanford University, Georgetown University, the University of Texas at Austin, the University of Southern California and the University of California, Los Angeles.
The Justice Department earlier this month accused dozens of wealthy parents, including celebrities Lori Loughlin and Felicity Huffman, in a major cheating and bribery scheme that has rocked higher education. A dozen of the individuals charged in the case made their first appearances in a federal courtroom in Boston on Monday. Another hearing with several more of the accused is scheduled for Friday.
Education Secretary Betsy DeVos denounced the college admissions scandal at the time as “disgraceful” and asked department officials to determine whether any of the agency’s own regulations had been violated.
The letters sent to university presidents on Monday cite a wide range of federal education regulations and laws that investigators are exploring. They note that universities receiving federal student aid must demonstrate “administrative capacity” and have proper procedures and policies to administer federal money.
Universities also have an obligation to alert the Education Department of “any credible information indicating that an employee” or other agent of the institution may have engaged in fraud, misrepresentation or other illegal conduct related to federal student aid programs. In addition, the letter warns that federal officials can impose sanctions on schools receiving federal funding that engage in “substantial misrepresentation about the nature of its educational programs.”
As part of the Education Department investigation, officials demanded that each of the universities turn over, within the next 30 days, documents including marketing and promotional materials, statements made to organizations that rank schools, such as U.S. News and World Report, and internal control policies and procedures related to admissions for recruited athletes.
Department investigators also asked the schools to identify “the names of all students whose admission” was “mentioned in the allegations raised in the Department of Justice’s investigation” as well as any disciplinary actions taken against employees charged by federal prosecutors in the case.
The investigations into each of the eight colleges is being led by the department’s Student Aid Enforcement Unit, which has the power to issue subpoenas. The unit, which is meant to police fraud in higher education, was created by the Obama administration in response to abuses at for-profit colleges.
Democrats have accused the Trump administration of gutting the enforcement unit and hamstringing its investigations into for-profit education companies.
The Trump administration earlier this year reassigned the enforcement chief leading the unit, Julian Schmoke, who had was selected for the job in August 2017. He had been a frequent target for congressional Democrats because of his previous work at a for-profit college, DeVry University.
Jeff Appel, who has been delegated the duties of chief enforcement officer until a permanent official is named for the position, is leading the investigations. Appel has served in other roles at the department, including as the deputy undersecretary of education during the Obama administration.
Appel signed the letters sent to the eight universities on Monday.

Source: Politico

Climate And Environment | In blow to climate, coal plants emitted more than ever in 2018

By Chris Mooney 

Scientist: ’We are headed for disaster, and nobody seems to be able to slow things down.'

FILE PHOTO: A worker walks past coal piles at a coal coking plant in Yuncheng, Shanxi province, China January 31, 2018. Picture taken January 31, 2018. REUTERS/William Hong/File Photo (William Hong/Reuters)

Chris Mooney
Reporter covering climate change, energy and the environment.

Brady Dennis
Reporter focusing on environmental policy and public health issues
Global energy experts released grim findings on Monday, saying that not only are planet-warming carbon dioxide emissions still increasing, but that the world’s growing thirst for energy has led to higher emissions from coal-fired power plants than ever before.
Energy demand across the globe grew by 2.3 percent over the past year, marking the most rapid increase seen in a decade, according to the report from the International Energy Agency. To meet that demand, largely fueled by a booming economy, countries turned to an array of sources, including renewables.
But nothing filled the void quite like fossil fuels, which satisfied nearly 70 percent of the skyrocketing electricity demand, according to the agency, which analyzes energy trends on behalf of 30 member countries, including the U.S.
In particular, a fleet of relatively young coal plants located in Asia, with decades to go on their lifetimes, led the way towards a new record for emissions from coal fired power plants -- exceeding 10 billion tons of carbon dioxide “for the first time," the agency said. In Asia, “average plants are only 12 years old, decades younger than their average economic lifetime of around 40 years,” the agency found.
As a result, greenhouse gas emissions from the use of energy — by far their largest source —surged in 2018, reaching an all-time record high of 33.1 billion tons. Emissions showed 1.7 percent growth, well above the average since 2010. The growth in global emissions in 2018 alone was “equivalent to the total emissions from international aviation," the body found.

The Washington Post
Monday’s report underscores an unnerving truth about the world’s collective efforts to combat climate change: Even as renewable energy rapidly expands, many countries — including the United States and China — are nevertheless still turning to fossil fuels to satisfy ever-growing energy demand.
“Very worrisome" is how Michael Mehling, deputy director of the Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology, described Monday’s findings.
“To me, all this reflects the fact that climate policies around the globe, despite some limited pockets of progress, remain woefully inadequate,” he said in an email. “They’re not even robust enough to offset the increased emissions from economic expansion, especially in the developing world, let alone to spur decarbonization at levels commensurate with the temperature stabilization goals we’ve committed to under the Paris Agreement.”
Mehling questioned whether the Paris Agreement – the 2015 global accord in which countries vowed to slash their carbon emissions – has the capacity to compel nations to live up to their promises and ramp up climate action over time.
“This will require overcoming the persistent barriers that have prevented greater progress in the past,” Mehling said.
Overcoming those barriers is complicated, as the agency report makes clear.
China, for instance, satisfied a demand for more energy last year with some new generation from renewables. But it relied far more on natural gas, coal, and oil. In India, around half of all new demand was similarly met by coal-fired power plants.
In the U.S., by contrast, coal is declining — but most of the increase in demand for energy in this country was nonetheless fueled by the burning of natural gas, rather than renewable energy. Natural gas emits less carbon dioxide than coal does when it is burned, but it’s still a fossil fuel and still causes significant emissions.
Granted, there’s some slight good news in the new report, in that as renewables and natural gas have grown, coal now has a smaller share of the energy pie overall.
Yet the fact that it’s still growing strongly contradicts what scientists have said about what’s needed to curb climate warming. In a major report last year the United Nations’ Intergovernmental Panel on Climate Change found that global emissions would have to be cut nearly in half, by 2030, in order to preserve a chance of holding the planet’s warming to 1.5 degrees Celsius (or 2.7 degrees Fahrenheit).
That would require extremely fast annual reductions in emissions — but instead, the world is still marking new record highs.
And when it comes to coal use, that same report found that to limit temperatures to 1.5 degrees C, it would have to decline by as much as 78 percent in just over 10 years. Again, coal emissions are still rising.
Rob Jackson, a professor of Earth system science at Stanford University, said the substantial growth of wind and solar energy detailed in Monday’s report was overshadowed by the world’s ongoing reliance on fossil fuels.
“The growth in fossils is still greater than all the increases in renewables,” Jackson said, adding that few countries are living up to the pledges they made as part of the Paris climate accord. “What’s discouraging is that emissions in the U.S. and Europe are going up, too. Someone has to decrease their emissions significantly for us to have any hope of meeting the Paris commitments.”
The new results dash prior hopes that global emissions might be flattening and starting to decline. From 2014 through 2016, they fell slightly, and coal emissions in particular dipped as well. But with a renewal of growth in 2017 and new record highs in 2018, turning the corner on emissions remains nowhere in sight.
As a result, optimism from earlier this decade has largely faded. International efforts to combat climate change have struggled to maintain momentum and the U.S. government has undergone a reversal of priorities.
“We are in deep trouble,” Jackson said of Monday’s findings. “The climate consequences are catastrophic. I don’t use any word like that very often. But we are headed for disaster, and nobody seems to be able to slow things down.”

Latest News | Opening Remarks by Christine Lagarde on Corporate Taxation in the Global Economy

Peterson Institute for International Economics Washington, D.C. March 25, 2019

March 25, 2019
Good afternoon everyone. Thank you for inviting me to join you today. It has been a little while since I have been to the Peterson Institute, and it is my pleasure to see both old friends and new faces.
I last had the honor of being here in September 2012, and not long after that, Adam Posen took hold of the baton as president of the Institute.
More than ever, we need an institution like Peterson. We need a lively intellectual debate and pragmatic solutions for the key issues facing the global economy.
Adam: you and your colleagues have led the way here, and we are all the richer for your work. Thank you.
Restoring Faith in the System
Our issue today is international corporate taxation. Albert Einstein once said that “the hardest thing in the world to understand is the income tax.”
It may be difficult, but it is possible to create a corporate tax system that better reflects the changes in the global economy.
I believe we need new rules in this area. Why?
The public perception that large multinational companies pay little tax has led to political demands for urgent action.
It is not difficult to see why.
A New Approach
Let me highlight three reasons why a new approach is urgent.
First, the ease with which multinationals seem able to avoid tax, and the three-decade long decline in corporate tax rates, undermines faith in the fairness of the overall tax system.
Second, the current situation is especially harmful to low-income countries, depriving them of much- needed revenue to help them achieve higher economic growth, reduce poverty, and meet the 2030 Sustainable Development Goals.
Advanced economies have long shaped international corporate tax rules, without considering how they would affect low-income countries.
IMF analysis shows, for example, that non-OECD countries lose about $200 billion in revenue per year, or about 1.3 percent of GDP, due to companies shifting profits to low-tax locations.
These countries need a seat at the table. The Platform for Collaboration on Tax, a joint effort by the IMF, World Bank, OECD and the UN is helping on this front.
Third, an impetus for rethinking international corporate taxation stems from the rise of highly profitable, technology-driven, digital-heavy business models.
These business models rely heavily on intangible assets, such as patents or software that are hard to value.
They also demonstrate that assuming a link between income and profits and physical presence has become outdated.
This in turn has sparked fairness concerns. Countries with many users or consumers of digital services find themselves with little or no tax revenue from these companies. Why? Because they have no physical presence there.
So, we clearly need a fundamental rethink of international taxation.
Yet this means countries must work together. Making progress requires coordination among all, and in the right direction.
This is difficult, but possible.
The primary vehicle for coordinating multilateral work on international tax is the OECD’s Inclusive Framework, which now includes over 125 country members. This is impressive progress on multinational participation, but vulnerabilities remain.
IMF Role
What about the IMF? I believe we have a role in helping countries craft a solution that offers stability and fully incorporates the interests of developing countries.
New IMF research published two weeks ago analyzes various options in the context of three key criteria: better addressing profit-shifting and tax competition; overcoming the legal and administrative obstacles to reform; and ensuring full recognition of the interests of emerging and developing countries.
The paper also gives a broad review of leading options, along with empirical analysis that can inform the critical discussions now underway.
How else are we helping?
We also give technical support on tax issues to more than 100 countries every year. We also have expertise to assess the economic impact of tax reforms.
Perhaps best of all, we have a near-universal membership, which gives us an understanding of the particular problems facing developing countries.
I would like to leave you with a single, clear clarion call for your discussions.
The current international corporate tax architecture is fundamentally out of date. By rethinking the existing system and addressing the root causes of its weakness, all countries can benefit, including low-income nations.
At the same time, we can restore faith in the fairness of the international tax system that has eroded over the years. We can restore much needed trust.
Thank you.
IMF Communications Department
Phone+1 202 623-7100Email:

Notice to Members | NFA Amends Rules and Adopts Interpretive Notice Implementing Swaps Proficiency Requirements

Notice to Members I-19-09
March 25, 2019
NFA Amends Rules and Adopts Interpretive Notice Implementing Swaps Proficiency Requirements
NFA recently amended NFA Bylaw 301 and NFA Compliance Rule 2-24 and adopted a new Interpretive Notice entitled NFA Bylaw 301 and Compliance Rule 2-24: Proficiency Requirements for Swap APs to implement NFA's Swaps Proficiency Requirements.
Applicability to Swap APs at FCMs, IBs, CPOs and CTAs
NFA Bylaw 301(l) currently requires futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO) and commodity trading advisor (CTA) Members engaged in CFTC regulated swaps activities, and registered associated persons (AP) of those Members whose activities involve CFTC regulated swaps, to be approved by NFA as a swap firm or swap AP, respectively. NFA amended NFA Bylaw 301(l) to specify that any individual seeking approval as an FCM, IB, CPO or CTA Member swap firm or as a swap AP of an FCM, IB, CPO or CTA Member must take and pass NFA's Swaps Proficiency Requirements.
NFA also amended NFA Compliance Rule 2-24 to prohibit an FCM, IB, CPO or CTA Member from having any person engaging in CFTC regulated swaps associated with it that has not satisfied NFA's Swaps Proficiency Requirements.
Applicability to SDs
Individuals acting as APs at NFA Member swap dealers (SD) are not NFA Associate Members subject to NFA's jurisdiction. Therefore, NFA is not imposing these requirements directly on individuals acting as APs at SDs. However, NFA amended NFA Compliance Rule 2-24 to prohibit an SD Member from having any person associated with it who is acting as an AP (as defined by CFTC Regulation 1.3) that has not satisfied NFA's Swaps Proficiency Requirements.
Applicability to Non-U.S. APs
The Interpretive Notice excludes certain individuals acting as APs at SDs located outside the U.S., including non-U.S. branch offices of U.S. SDs, from NFA's Swaps Proficiency Requirements. Specifically, those individuals who limit their swap related activities to counterparties that are non-U.S. persons and/or non-U.S. branch offices of a U.S. SD are not required to satisfy NFA's Swaps Proficiency Requirements.
Effective Date and Timing
These new requirements will become effective on January 31, 2020. The Interpretive Notice sets out the implementation schedule for NFA's Swaps Proficiency Requirements. In particular, individuals who are approved as swap APs at an FCM, IB, CPO or CTA Member firm or acting as an AP at an SD on January 31, 2021 (the Compliance date) must have satisfied NFA's Swaps Proficiency Requirements to remain approved as a swap AP or continue working as an AP at an SD after this date. Since NFA intends to allow individuals to begin satisfying the Swaps Proficiency Requirements in January 2020, this will provide current registered APs engaging in swaps activities and individuals acting as APs at SDs an entire year to complete the requirements. Subsequent to January 31, 2021, any individual who wants to engage in swaps activity will need to satisfy NFA's Swaps Proficiency Requirements prior to being approved as a swap AP at an FCM, IB, CPO or CTA Member or acting as an AP at an SD.
Two-Track Approach
The Interpretive Notice establishes two proficiency tracks—a Long Track, which is designed for APs at SDs, and a Short Track, which is primarily designed for APs at FCMs, IBs, CPOs and CTAs. The Interpretive Notice also acknowledges that some individuals acting as APs at SDs may perform more limited functions and provides guidance on when an AP at an SD would adequately satisfy NFA's Swaps Proficiency Requirements by completing the Short Track. NFA is not in any way expanding or altering the definition of AP under CFTC Regulation 1.3. SD Members should refer to that definition when identifying individuals that must satisfy NFA's Swaps Proficiency Requirements.
Frequently Asked Questions and Member Education
NFA developed Frequently Asked Questions (FAQ) regarding the implementation of the Swaps Proficiency Requirements. NFA will continue to update the FAQs as additional operational and technical information is finalized.
In addition, NFA discussed these amendments and the new Interpretive Notice during Member workshops held in February. Access the workshop materials. NFA will provide further Member education on these requirements to ensure that Members understand their obligations.

More information on the amended rules and the Interpretive Notice is available in NFA's March 5, 2019 submission letter to the CFTC. If you have any questions regarding these amendments please contact Lauren Brinati, Managing Director, Market Regulation ( or 312-781-1495), Sudhir Jain, Director, OTC Derivatives ( or 212-513-6080), or Julia Wood, Senior Attorney ( or 312-781-7459). 

FX | Currencies | Euro ticks up as German business survey pares recession fears

David Reid

RT: Dollars cash 180828
Marcos Brindicci | Reuters
The euro gained on Monday as a stronger-than-forecast German business confidence survey allayed some fears about a recession and pulled the safe-haven yen from a six-week high against the dollar.
Financial markets around the globe were roiled on Friday, stemming from anxiety about an economic downturn after the U.S. yield curve inverted, with the 10-year yield dropping below the three-month bill rate. Those fears stoked a dumping of stocks and other growth-oriented assets and a rush into the yen, gold, U.S. and German government debt and other perceived low-risk investments.
A yield curve inversion has preceded every U.S. recession in the past 50 years.
“On Friday we were looking into the abyss,” said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC in New York. “Today we are taking a step back.”
Trader sentiment stabilized after Germany’s IFO Institute said its business climate index rose to 99.6, beating a consensus forecast of 98.5 and ending six consecutive months of decline. The IFO data briefly lifted German 10-year yields into positive territory and helped European shares.
They also buoyed the euro, which rose 0.2 percent to a session-high of $1.13315. Against the yen, the single currency at one point surged 0.46 percent to a high of $124.81, having traded as low as 123.875 earlier.
It is unclear whether the mild bounce in the euro and emerging market currencies will be sustained as traders remain wary with the U.S. yield curve inversion persisting for a second trading session, analysts said. “I wouldn’t say the dash for safe assets is over. The tone of general risk-off sentiment will prevail for a while but not to the same extent (as Friday),” Commerzbank strategist Ulrich Leuchtmann said, noting a recession was unlikely in the near term in the euro zone or the United States.
As for the greenback, it was 0.15 percent lower against a basket of currencies. It did not react much to U.S. Attorney General William Barr’s announcement that U.S. Special Counsel Robert Mueller found no evidence of collusion between Russia and President Donald Trump’s 2016 election campaign team.
The dollar was little changed at 109.935 yen after the yen hit a six-week high of 109.7 per dollar earlier on Monday.
The British pound recovered somewhat from earlier losses against the dollar and euro as the UK parliament prepared to try and wrest control of the Brexit process in a series of votes planned for later in the day . Sterling was down 0.24 percent at $1.318 and the euro was 0.43 percent stronger at 85.9 pence in late U.S. trading.

Source: CNBC

Bond Yields Report on March 25, 2015 | 10-year Treasury yield falls to the lowest since Dec. 2017 on global growth concerns

Thomas Franck

The yield on the benchmark 10-year Treasury note fell on Monday to its lowest level since December 2017 as fixed-income investors continued to worry about global growth and a potential deceleration in the U.S. economy.
Those fears kept the Treasury yield curve inverted during the session, with the yield on the 3-month bill above that of the 10-year note.The short-term rate first exceed that of several longer-term securities last week in a phenomenon known as inversion and viewed by many as a recession predictor.
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at 2.388 percent, its lowest since December 2019. The yield on the 2-year Treasury note was also lower at 2.233 percent while the 3-month yield was at 2.454 percent.
International fixed-income markets have also been affected since the Fed’s commentary last week. Yields on both the German 10-year bund as well as the Japanese 10-year traded in negative territory Monday.
Inversion happens when investor expectations for growth recede. The yield curve normally slopes upward: Those that buy U.S. government debt in the form of bonds are compensated with better interest rates than those who loan money for a matter of months.
If traders believe Americans will produce fewer goods and services in two years than it will in two months, the curve can invert, or slope downward as more investors move into long-term debt and pivot elsewhere in the near-term.
That appears to be the case now, days after the Federal Reserve tempered U.S. growth forecast. The central bank added last Wednesday that it plans to cease its program of reducing the bonds and mortgage-backed securities on its balance sheet.
“The Fed has officially moved to the sidelines (so they’re not the catalyst for higher rates, and could even cut if needed),” wrote George Goncalves, head of fixed-income strategy at Nomura Securities International.
“The rally’s speed is suggestive that there was still a portion of market participants that were clinging to the hope of one more hike for the cycle. Some serious damage was done to technical charts too and rate levels,” he added.
— CNBC’s Sam Meredith contributed reporting.

Source: CNBC