Wall Street Wonders What’s Next After Trump Jolts Markets

• Dow average sinks 370 points in worst day since September
• Gold rallies, volatility spikes as politics spills to markets

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By Dani Burger, Brian Chappatta, and Nabila Ahmed

For the first time, a Wall Street that’s been giddy over Donald Trump is starting to ask some hard questions.

From Day 1, markets have rallied, defying what many of the same Wall Street types said would be a disastrous election outcome. Since then, U.S. stocks have hit record after record, driving up shares of Goldman Sachs to JPMorgan Chase to Apple, as investors quickly focused on what his pro-business, tax-cutting agenda would mean for corporate profits.

But the steady drumbeat of bad news may finally be taking its toll. On Wednesday, stocks tumbled, Treasuries soared and volatility came roaring back as a series of damaging revelations -- from Trump’s disclosure of classified information to Russian officials to reports that he pressed FBI Director James Comey to drop a probe into former National Security Adviser Michael Flynn -- prompted many on Wall Street to wonder whether the turbulence that has shattered the market’s calm might be the start of something bigger. And that was before news broke that former FBI Director Robert Mueller was named special counsel to oversee the probe of Russia’s efforts to influence the 2016 election.

It’s all also left many to ask whether the market was blinded by its own optimism over Trump’s business-friendly agenda.

“Crazy times, huh?” said Matt Maley, an equity strategist at Miller Tabak & Co. “I’ve talked to a few personal friends and a few customers who I know are supportive of Trump that are saying, boy, this isn’t good.”

Of course, financial markets are often punctuated by bouts of alarm that have unsettled traders during normal times. And up to now, it’s been easy to dismiss the president’s missteps as the price of electing an outsider. But now, the biggest question is whether Trump’s presidency is in trouble.

For some of the world’s largest banks, Trump’s firing of Comey last week was a signal moment. At least two global firms have started mapping out how financial markets might react to an impeachment -- a scenario they still saw as improbable, according to people with knowledge of the matter, who declined to speak publicly because such deliberations are politically sensitive. While their work is just beginning and it’s too early to draw conclusions, the people said, it’s a telling sign of just how serious things have become.

“The political risk has been upped here -- things sound more ominous and serious than a week ago,” said Gary Pollack, the head of fixed-income trading at Deutsche Bank AG’s Private Wealth Management unit.

Much of the problem is how pervasively investors had tuned out Trump in the months before the latest scandal broke. The CBOE Volatility Index’s average level since December has been 25 percent below that of 2016 -- not exactly a turbulent year to begin with. Everything from Treasuries to currencies and stocks had been limping along without a care -- before Wednesday.

“Markets are very blasé about political risk until the very last moment,” former Federal Reserve Chairman Ben S. Bernanke said at the SkyBridge Alternatives Conference, known as SALT, in Las Vegas. “They go along until something happens that pulls the rug out from under their assumptions.”

The S&P 500 Index, which set another all-time high just two days ago, was routed in the worst selloff in eight months, while the Dow Jones Industrial Average’s 372-point slide was its steepest since the election. The dollar fell a sixth day, while yields on 10-year Treasuries tumbled by the most since the day after the Brexit vote.

Trump is facing the deepest crisis of his presidency after contents of a memo written by Comey surfaced Tuesday, alleging that the president asked him to drop an investigation of Flynn. That came after Trump disclosed highly classified intelligence to Russian officials in a meeting last week.

“The market is running with politics,” said Bret Barker, who oversees U.S. fixed-income at TCW Group Inc., which manages $194 billion. “There’s just not much out there to change fundamentals right now.”

A vacuum of catalysts faced anyone hoping the traditional saviors of markets would step up to calm things down. Earnings season is over, the next report on U.S. employment is 16 days away, and the Fed doesn’t meet again for a month. That’s potentially bad news for a stock market whose 10 percent rally since Election Day has pushed valuations to the highest levels since just after the dot-com bubble.

The biggest beneficiaries of the Trump trade were bearing the brunt of the carnage on Wednesday. Exchange-traded funds tuned to stocks with the most sensitivity to market swings were having their worst day in two months. Bank shares in the S&P 500 plunged 3 percent, bringing the slide from a March 1 record to 8.6 percent.

“That’s one of the problems with rather a quiet market that even a small ripple could look pretty big,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. “Sometimes if it’s too quiet, people think things can only get worse.”

Any Half-Decent Hacker Could Break Into Mar-a-Lago

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By Jeff Larson, ProPublica, Surya Mattu, Gizmodo, and Julia Angwin, ProPublica

This story was co-published with Gizmodo.

Two weeks ago, on a sparkling spring morning, we went trawling along Florida’s coastal waterway. But not for fish.

We parked a 17-foot motor boat in a lagoon about 800 feet from the back lawn of The Mar-a-Lago Club in Palm Beach and pointed a 2-foot wireless antenna that resembled a potato gun toward the club. Within a minute, we spotted three weakly encrypted Wi-Fi networks. We could have hacked them in less than five minutes, but we refrained.

A few days later, we drove through the grounds of the Trump National Golf Club in Bedminster, New Jersey, with the same antenna and aimed it at the clubhouse. We identified two open Wi-Fi networks that anyone could join without a password. We resisted the temptation.

We have also visited two of President Donald Trump’s other family-run retreats, the Trump International Hotel in Washington, D.C., and a golf club in Sterling, Virginia. Our inspections found weak and open Wi-Fi networks, wireless printers without passwords, servers with outdated and vulnerable software, and unencrypted login pages to back-end databases containing sensitive information.

The risks posed by the lax security, experts say, go well beyond simple digital snooping. Sophisticated attackers could take advantage of vulnerabilities in the Wi-Fi networks to take over devices like computers or smart phones and use them to record conversations involving anyone on the premises.

“Those networks all have to be crawling with foreign intruders, not just ProPublica,” said Dave Aitel, chief executive officer of Immunity, Inc., a digital security company, when we told him what we found.

Security lapses are not uncommon in the hospitality industry, which — like most industries and government agencies — is under increasing attack from hackers. But they are more worrisome in places where the president of the United States, heads of state and public officials regularly visit.

U.S. leaders can ill afford such vulnerabilities. As both the U.S. and French presidential campaigns showed, hackers increasingly exploit weaknesses in internet security systems in an effort to influence elections and policy. Last week, cyberattacks using software stolen from the National Security Agency paralyzed operations in at least a dozen countries, from Britain’s National Health Service to Russia’s Interior Ministry.

Since the election, Trump has hosted Chinese President Xi Jinping, Japanese Prime Minister Shinzo Abe and British politician Nigel Farage at his properties. The cybersecurity issues we discovered could have allowed those diplomatic discussions — and other sensitive conversations at the properties — to be monitored by hackers.

The Trump Organization follows “cybersecurity best practices,” said spokeswoman Amanda Miller. “Like virtually every other company these days, we are routinely targeted by cyberterrorists whose only focus is to inflict harm on great American businesses. While we will not comment on specific security measures, we are confident in the steps we have taken to protect our business and safeguard our information. Our teams work diligently to deploy best-in-class firewall and anti-vulnerability platforms with constant 24/7 monitoring.”

The White House did not respond to repeated requests for comment.

Trump properties have been hacked before. Last year, the Trump hotel chain paid $50,000 to settle charges brought by the New York attorney general that it had not properly disclosed the loss of more than 70,000 credit card numbers and 302 Social Security numbers. Prosecutors alleged that hotel credit card systems were “the target of a cyber-attack” due to poor security. The company agreed to beef up its security; it’s not clear if the vulnerabilities we found violate that agreement. A spokesman for the New York attorney general declined comment.

Our experience also indicates that it’s easy to gain physical access to Trump properties, at least when the president is not there. As Politico has previously reported, Trump hotels and clubs are poorly guarded. We drove a car past the front of Mar-a-Lago and parked a boat near its lawn. We drove through the grounds of the Bedminster golf course and into the parking lot of the golf course in Sterling, Virginia. No one questioned us.

Both President Obama and President Bush often vacationed at the more traditional presidential retreat, the military-run Camp David. The computers and networks there and at the White House are run by the Defense Information Systems Agency.

In 2016, the military spent $64 million on maintaining the networks at the White House and Camp David, and more than $2 million on “defense solutions, personnel, techniques, and best practices to defend, detect, and mitigate cyber-based threats” from hacking those networks.

Even after spending millions of dollars on security, the White House admitted in 2015that it was hacked by Russians. After the hack, the White House replaced all its computer systems, according to a person familiar with the matter. All staffers who work at the White House are told that “there are people who are actively watching what you are doing,” said Mikey Dickerson, who ran the U.S. Digital Service in the Obama administration.

By comparison, Mar-a-Lago budgeted $442,931 for security in 2016 — slightly more than double the $200,000 initiation fee for one new member. The Trump Organization declined to say how much Mar-a-Lago spends specifically on digital security. The club, last reported to have almost 500 members paying annual dues of $14,000 apiece, allotted $1,703,163 for all administration last year, according to documents filed in a lawsuit Trump brought against Palm Beach County in an effort to halt commercial flights from flying over Mar-a-Lago. The lawsuit was dropped, but the FAA now restricts flights over the club when the president is there.

It is not clear whether Trump connects to the insecure networks while at his family’s properties. When he travels, the president is provided with portable secure communications equipment. Trump tracked the military strike on a Syrian air base last month from a closed-door situation room at Mar-a-Lago with secure video equipment.

However, Trump has held sensitive meetings in public spaces at his properties. Most famously, in February, he and the Japanese prime minister discussed a North Korean missile test on the Mar-a-Lago patio. Over the course of that weekend in February, the president’s Twitter account posted 21 tweets from an Android phone. An analysis by an Android-focused website showed that Trump had used the same make of phone since 2015. That phone is an older model that isn’t approved by the NSA for classified use.

Photos of Trump and Abe taken by diners on that occasion prompted four Democratic senators to ask the Government Accountability Office to investigate whether electronic communications were secure at Mar-a-Lago.

In March, the GAO agreed to open an investigation. Chuck Young, a spokesman for the office, said in an interview that the work was in “the early stages,” and did not offer an estimate for when the report would be completed.

So, we decided to test the cybersecurity of Trump’s favorite hangouts ourselves.

Our first stop was Mar-a-Lago, a Trump country club in Palm Beach, Florida, where the president has spent most weekends since taking office. Driving past the club, we picked up the signal for a Wi-Fi-enabled combination printer and scanner that has been accessible since at least February 2016, according to a public Wi-Fi database.

An open printer may sound innocuous, but it can be used by hackers for everything from capturing all the documents sent to the device to trying to infiltrate the entire network.

To prevent such attacks, the Defense Information Systems Agency, which secures the White House and other military networks, forbids installing printers that anyone can connect to from outside networks. It also warns against using printers that do more than printing, such as faxing. “If an attacker gains network access to one of these devices, a wide range of exploits may be possible,” the agency warns in its security guide.

We also were able to detect a misconfigured and unencrypted router, which could potentially provide a gateway for hackers.

To get a better line of sight, we rented a boat and piloted it to within sight of the club. There, we picked up signals from the club’s wireless networks, three of which were protected with a weak and outmoded form of encryption known as WEP. In 2005, an FBI agent publicly broke this type of encryption in minutes.

By comparison, the military limits the signal strength of networks at places such as Camp David and the White House so that they are not reachable from a car driving by. It also requires wireless networks to use the strongest available form of encryption.

From our desks in New York, we were also able to determine that the club’s website hosts a database with an insecure login page that is not protected by standard internet encryption. Login forms like this are considered a severe security risk, according to the Defense Information Systems Agency.

Without encryption, spies could eavesdrop on the network until a club employee logs in, and then steal his or her username and password. They then could download a database that appears to include sensitive information on the club’s members and their families, according to videos posted by the club’s software provider.

This is “bad, very bad,” said Jeremiah Grossman, chief of Security Strategy for cybersecurity firm SentinelOne, when we described Mar-a-Lago’s systems. “I’d assume the data is already stolen and systems compromised.”

A few days later, we took our equipment to another Trump club in Bedminster, New Jersey. During the transition, Trump had interviewed candidates for top administration positions there, including James Mattis, now secretary of defense.

We drove on a dirt access road through the middle of the golf course and spotted two open Wi-Fi networks, TrumpMembers and WelcomeToTrumpNationalGolfClub, that did not require a password to join.

Such open networks allow anyone within range to scoop up all unencrypted internet activity taking place there, which could, on insecure sites, include usernames, passwords and emails.

Robert Graham, an Atlanta, Georgia, cybersecurity expert, said that hackers could use the open Wi-Fi to remotely turn on the microphones and cameras of devices connected to the network. “What you’re describing is typical hotel security,” he said, but “it’s pretty concerning” that an attacker could listen to sensitive national security conversations.

Two days after we visited the Bedminster club, Trump arrived for a weekend stay.

Then we visited the Trump International Hotel in Washington, D.C., where Trump often dines with his son-in-law and senior adviser Jared Kushner, whose responsibilities range from Middle East diplomacy to revamping the federal bureaucracy. We surveyed the networks from a Starbucks in the hotel basement.

From there, we could tell there were two Wi-Fi networks at the hotel protected with what’s known as a captive portal. These login screens are often used at airports and hotels to ensure that only paying customers can access the network.

However, we gained access to both networks just by typing “457” into the room number field. Because we provided a room number, the system assumed we were guests. We looked up the hotel’s public IP address before logging off.

From our desks in New York, we could also tell that the hotel is using a server that is accessible from the public internet. This server is running software that was released almost 13 years ago.

Finally, we visited the Trump National Golf Club in Sterling, Virginia, where the president sometimes plays golf. From the parking lot, we recognized three encrypted wireless networks, an encrypted wireless phone and two printers with open Wi-Fi access.

The Trump club websites are hosted by an Ohio-based company called Clubessential. It offers everything from back-office management and member communications to tee time and room reservations.

In a 2014 presentation, a company sales director warned that the club industry as a whole is “too lax” in managing and protecting passwords. There has been a “rising number of attacks on club websites over the last two years,” according to the presentation. Clubessential “performed [an] audit of security in the club industry” and “found thousands of sensitive documents from clubs exposed on [the] Internet,” such as “lists of members and staff, and their contact info; board minutes, financial statements, etc.”

Still, the club software company has set up a backend server accessible on the internet, and configured its encryption incorrectly. Anyone who reaches the login page is greeted with a warning that the encryption is broken. In its documentation, the company advises club administrators to ignore these warnings and log in regardless. That means that anybody snooping on the unprotected connection could intercept the administrators’ passwords and gain access to the entire system.

The company also publishes online, without a password, many of the default settings and usernames for its software — essentially providing a roadmap for intruders.

Clubessential declined comment.

Aitel, the CEO of Immunity, said the problems at Trump properties would be difficult to fix: “Once you are at a low level of security it is hard to develop a secure network system. You basically have to start over.”

Ford to cut as many as 20,000 jobs worldwide

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By Jerry White

Just days after shareholders and investors criticized the top executives of Ford Motor Company for the “pathetic performance” of its stock price, the Wall Street Journal reported that Ford is planning to cut 10 percent of its global workforce. The jobs massacre, primarily targeting salaried workers, could affect up to 20,000 of the company’s 201,000 workers worldwide.

The number two US automaker has reported steady profits for seven straight years, including record earnings and operating margins in the last two years, and $1.6 billion in profits in the first quarter of 2017. Nevertheless, Wall Street has punished the Dearborn, Michigan-based corporation by driving down its share value by 40 percent since mid-2014.

Investors anticipating an end to the long boom in US vehicle sales want automakers to quickly slash the number of salaried and hourly employees they hired to meet growing demand since 2010.

While it more than halved its US hourly workforce, from 88,386 in 2004 to 40,398 in 2010, the automaker added roughly 15,000 mostly low-paid hourly workers over the last seven years. It also has 30,000 salaried workers in the US, and a 10 percent cut would wipe out 3,000 jobs.

Insiders who spoke to the Journal said Ford would outline its job cuts as early as this week. They said it was unclear whether the plan would include reductions in the hourly workforce at Ford’s factories in the US and abroad. “Ford has said it expects its profits to fall in 2017 and has flagged slowing sales in the U.S. and China—two of the world’s largest auto markets,” the Journal noted.

GM has already responded to a growing inventory of unsold cars by slashing thousands of jobs and eliminating shifts in Michigan, Ohio and other states. It has also spun off its German-based Opel and UK-based Vauxhall divisions to French carmaker Peugeot-Citroen, ending nearly 90 years of GM manufacturing in Europe.

The job cuts explode the myth propagated by the Trump administration and the news media about supposed “full employment” in the United States. Trump, with the full backing of the United Auto Workers (UAW) and other unions, claims that his “America First” nationalism and threats of trade war against China and Mexico, along with proposals for drastic deregulation of business, would be a boon for American workers.

The stock market boom has only concealed the crisis of the real economy in the US, which is profoundly impacted by the global economic slowdown and the decades-long decay of American industry. The fall in auto sales, which is closely bound up with rising interest rates, record car loan defaults and increased sales of used and formerly leased vehicles to large numbers of Americans who cannot afford new cars, could signal a far broader economic downturn.

In a statement, Ford said it would not speculate on any “new people efficiency actions,” a euphemism for mass layoffs, but would remain focused on its three strategic priorities to “create value and drive profitable growth.” This included: “[F]ortifying the profit pillars of our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities.” The statement added that “reducing costs and becoming as lean and efficient as possible also remain part of that work.”

During Ford’s Investor Day event last September, the company’s chief financial officer, Bob Shanks, said Ford expects to cut “about $3 billion annually in 2016, 2017 and 2018” to support investments and expansions into capital-heavy investments in the areas of electrification, autonomy and mobility, which Ford calls “emerging opportunities.”

Reuters, citing a person briefed on the new job cuts, reported that Ford plans to “offer generous early retirement incentives” to reduce its salaried headcount by October 1, but does not plan cuts to its hourly workforce or its production.

Ford, however, is already reducing the number of its hourly workers in Europe. In Germany, where the company employs 24,000 workers, Ford has made voluntary buyout offers to “a limited number of staff over the past few months,” according to the IG Metall union, which claims it has not been informed of a bigger job-cut program.

Ford has already discussed job cuts with the Unite union in the United Kingdom. The company plans to cut 1,160 jobs from its Bridgend plant by 2021, leaving only 600 workers at the Welsh engine facility and casting doubt on its future. The site makes small engines for Ford and more-powerful V6 and V8 engines for Jaguar Land Rover.

“The company’s performance has been lagging, even during times when the US market was doing extremely well,” Sascha Gommel, a Frankfurt-based automotive analyst with Commerzbank, told Reuters. “Ford, like other carmakers, is under pressure to stem increasing investments in future technologies, so they need to make adjustments elsewhere,” he said, adding that the US and South America could see the biggest hits.

At the close of the day on US markets Tuesday, Ford and General Motors were trading at $10.94 and $33.42 per share respectively, a fraction of the stock price of specialty carmaker Tesla ($317.01 per share), which has yet to make a profit.

The descent of the Detroit automakers’ share value—despite record profits—is part of a longer trend, in which financial parasitism has surpassed industrial production as the main means through which the American ruling elite accumulates its vast fortunes.

The Ford job cuts were announced the same day the New York Times reported that hedge fund manager Ray Dalio made $1.4 billion in 2016. Summing up the ruling elite’s contempt for production and the working class, Dalio once said, “The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around.”

Like Ford CEO Mark Fields, General Motors top executive Mary Barra has been under pressure from Wall Street to funnel even more money into the pockets of its richest investors. Having failed to push up its share value, despite squandering some $10 billion on a stock buyback program, Barra is facing demands by Greenlight Capital Inc., a hedge fund run by David Einhorn, to restructure GM’s debt and bring in new board members.

In 2015, Harry Wilson, a former member of President Obama’s auto taskforce, led the charge of four hedge funds to demand that GM increase its stock buyback program. This underscored the essential meaning of Obama’s auto industry restructuring in 2009, when the Democratic president handed GM and Chrysler over to Wall Street sharks like Wilson to halve the wages of young autoworkers, wipe out tens of thousands of jobs, free the auto companies of their retiree health care obligations and impose brutal speedup on workers to enrich the financial aristocracy. Although Ford did not go into bankruptcy, with the backing of the UAW it followed the same cost-cutting path.

Commenting on the Ford CEO, the Wall Street Journal noted, “Mr. Fields, a 28-year veteran of the company, ran Ford’s core North American unit for several years and served as architect of many of those downsizing efforts. He has overseen several tense negotiations with United Auto Worker officials. He also shrank the company’s European operation earlier last decade, earning a reputation as a hard-nosed leader willing to attack the cumbersome cost structure that long burdened Detroit’s car companies.”

Far from engaging in “tense negotiations” with the UAW, Ford has relied on the union apparatus to suppress opposition to its downsizing plans. Following the ratification of the UAW-Ford contract in 2015, which workers said passed only due to ballot-stuffing by the UAW, Ford executives hailed their union “partners” for pushing through a deal that kept labor cost increases below the rate of inflation—despite a push by workers to recoup lost income after a decade-long wage freeze—and expanded the number of part-time and temporary employees who could be quickly sacked at the first sign of declining sales.

“We’ve just had a bunch of new people hire in,” James, a worker with five years at Ford’s Chicago Assembly Plant, told the World Socialist Web Site. “I can’t imagine how that would affect you, if you had just started getting your financials in order, and now you’re about to lose your job.

“At the end of the day, investors’ dividends have been breaking records. They’ve got plenty of money. The company and us, we have different needs altogether, but they’re more concerned about the investors’ profits. That’s the problem with capitalism, this whole society and the powers that be.”

For the First Time, a Majority of Americans Polled Want Trump Impeached

What would it take for the naysayers to turn on him?

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By Kali Holloway

For the first time, more Americans would say “yea” to impeaching Donald Trump than would say “nay,” according to a new poll.

A survey from Public Policy Polling released Tuesday finds 48 percent of those questioned support impeaching the president, while just 41 percent would oppose the move. The negative feelings about Trump also affected prognostications about how long his presidency will last. Just 43 percent of respondents think Trump will remain in office for four years, while 45 percent think he won’t complete his term. Another 12 percent “aren't sure one way or the other.”

Researchers behind the poll attribute the gloomy outlook on Trump to several obvious reasons; namely, respondents don’t buy the reasons given for FBI director James Comey’s firing; they suspect the Russians helped put Trump in office; they don’t like the GOP's American Health Care Act; and they think Trump is dishonest. Plus, lots of Americans just think Trump is doing a bad job in general. The survey found “40 percent of voters approve of the job Trump is doing to 54 percent who disapprove.”

While a number of congressional Democrats have proposed impeaching Trump, no Republicans have echoed those calls. Many of those who call for articles of impeachment to be prepared point to questions about Trump's mental competency. Under the 25th Amendment, the president can be removed from office if he (they’ve all been he) is “unable to discharge the powers and duties of his office." The language in full states:

Whenever the Vice President and a majority of either the principal officers of the executive departments or of such other body as Congress may by law provide, transmit to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office, the Vice President shall immediately assume the powers and duties of the office as Acting President.

In April, a group of 35 psychiatrists gathered at Yale School of Medicine to address what they label Trump's “dangerous mental illness."

“As some prominent psychiatrists have noted, [Trump’s mental health] is the elephant in the room,” Dr. Bandy Lee reportedly stated. “I think the public is really starting to catch on and widely talk about this now.”

Obama Called Trump a 'Bullsh*tter'

The former president isn't impressed by the Disaster-in-Chief.

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By Kali Holloway

President Barack Obama held his tongue about the incoming calamity of the Trump administration as he was exiting office. In his last speech, he even tried to offer soothing words, stating, “I believe in this country. I believe in the American people. I think we’re going to be okay.”

Behind the scenes, though, Obama offered a more honest—and blistering—assessment of the incoming president. People magazine reports that sources close to Obama recalled his precise description of Donald Trump as follows:

“He’s nothing but a bullshitter,” Obama told two friends early last November, describing an election night phone call with Trump, in which the businessman suddenly professed his "respect" and "admiration" for Obama—after years of hectoring.

Trump launched his political career by pushing the racist birther lie, which served to undermine the first black president by implying he was ineligible for the role. "Make America Great Again," Trump’s campaign motto, played directly to white American resentment about Obama’s presidency and imagined fears about the decline of white power. On Twitter, Trump frequently criticized Obama on decisions large and small, from his handling of Syria to his vacation schedule.

When Trump entered office as the only president without any previous military or political experience, he was reportedly so unprepared for the task that Obama extended the mentoring period before he handed off the role.

“Mr. Obama realized the Republican needs more guidance,” the Wall Street Journal reported. “He plans to spend more time with his successor than presidents typically do, people familiar with the matter said.”

Trump’s time in office has been marked by scandal and confusion, incompetence and corruption. As he is wont to do, the reality TV star has often fallen back on blaming his predecessor for his failures. He has also accused the Obama administration of spying on him, a charge he’s never been able to prove yet continues to repeat.

Obama tacitly acknowledged the Trump disaster in his first public appearance after leaving the presidency. Taking the stage at an event in Chicago in April, Obama opened by coyly asking, "So, uh, what's been going on while I've been gone?"

The former president's critical take hasn't improved based on Trump's disastrous few months in office. Asked how Obama's opinion has changed over the last 100-plus days, People's source reportedly stated, “Well, it hasn’t gotten any better.”

Deputy attorney general appoints special counsel to oversee probe of Russian interference in election

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By Devlin Barrett, Sari Horwitz and Matt Zapotosky

The Justice Department has decided to appoint a special counsel to investigate possible coordination between Trump associates and Russian officials seeking to meddle in last year’s election, according to Deputy Attorney General Rod Rosenstein.

Robert Mueller, a former prosecutor who served as the FBI director from 2001 to 2013, has agreed to serve in the role, Rosenstein said. The move marks a concession by the Trump administration to Democratic demands for the investigation to be run independently of the Justice Department. Calls for a special counsel have increased since Trump fired FBI Director James Comey last week.

“In my capacity as acting attorney general I determined that it is in the public interest for me to exercise my authority and appoint a special counsel to assume responsibility for this matter,’’ Rosenstein said in a statement. “My decision is not a finding that crimes have been committed or that any prosecution is warranted. I have made no such determination. What I have determined is that based upon the unique circumstances the public interest requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of command.’’

He said Mueller has agreed to resign from his private law firm to avoid any conflict of interest.

Rosenstein is overseeing the Russia probe after Attorney General Jeff Sessions recused himself. Democrats have challenged Rosenstein’s impartiality in the Russia probe because he wrote a memorandum used as the rationale for Comey’s firing. In the memo, Rosenstein said Comey had violated longstanding Justice Department practices in his handling of the investigation into Hillary Clinton’s use of a private email server, but shortly after the announcement of the firing the president said he’d decided to fire Comey before he received the recommendation from Rosenstein.

Under the order signed Wednesday by Rosenstein, Mueller is tasked with investigating “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump’’ as well as “any matters that arose or may arise directly from the investigation’’ and any other matters that fall under the scope of the Justice Department regulation covering special counsel appointments.

“If the special counsel believes it is necessary and appropriate, the special counsel is authorized to prosecute federal crimes arising from the investigation of these matters,’’ the order states.

Officials said the appointment was being made under a Justice Department statute that has only been used once, in 1999, though the Justice Department has made other special counsel appointments more recently under different authority.

Peter Zeidenberg, who has worked for a past special counsel, called Mueller an “inspired choice’’ because he comes to the job with automatic credibility among both parties.

“He’s nominally a Republican, but he’s really not a political person at all,’’ said Zeidenberg, a lawyer now in private practice, who cautioned that such an investigation is likely to take a long time, and may not ultimately satisfy the public’s demand for a full accounting. “People are waiting for public answers to what happened, but that’s not his job. There won’t be a report or a press conference at the end of this from him, that’s not his role.’’

El Daily Stormer: Neo-Nazi website is now in Spanish, too

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How does a leading neo-Nazi website that has railed against Hispanic immigrants expand its audience beyond a loyal base of U.S. white supremacists? By publishing a Spanish-language edition, of course.

The Daily Stormer — infamous for orchestrating internet harassment campaigns by its “Troll Army” of readers — recently launched El Daily Stormer as a “news portal” tailoring its racist, anti-Semitic content for readers in Spain and Latin America.

Andrew Auernheimer, a notorious computer hacker and internet troll who writes for the English-language site, says the Spanish edition fits their mission to spread Hitlerism across the world.

“We want our message to reach millions more people,” he said in a telephone interview.

Hate sites have realized that the U.S. has no monopoly on white nationalists and other far-right extremists, says Heidi Beirich, director of the Southern Poverty Law Center’s Intelligence Project. Others, such as Stormfront, already created multilingual forums.

“The white supremacist movement has really viewed itself as past borders, reaching out to white people in other countries,” Beirich said.

The law center represents a Montana real estate agent who sued The Daily Stormer’s founder, Andrew Anglin, last month for unleashing an anti-Semitic “campaign of terror” against her family.

Anonymous trolls bombarded Tanya Gersh’s family with hateful and threatening messages after Anglin published the family’s personal information in a December post that accused Gersh and other Jewish residents of Whitefish, Montana, of engaging in an “extortion racket” against the mother of white nationalist Richard Spencer.

Anglin’s site takes its name from Der Stūrmer, a newspaper that published Nazi propaganda. It includes sections called “Jewish Problem” and “Race War.”

El Daily Stormer titles its anti-Semitic section “Judiadas,” an offensive term with roots in medieval Spain, where it was invoked to justify genocidal attacks on Jews.

The Spanish site also includes appeals for donations and unpaid articles, and a forum where people complain about Chile and Argentina filling up with “negros,” referring to people from Peru, Bolivia, Paraguay.

Auernheimer, known online as “weev,” said a team of volunteers is writing original content for the Spanish-language site. The site’s appeal for unpaid collaborators says being a dissident “has never been a lucrative activity,” and that it is looking for writers “willing to risk everything for the survival of our race.”

“We have a big Spanish-speaking population on our forums, so it was an easy direction to branch out into,” he said.

About 40 percent of The Daily Stormer’s 3.2 million unique monthly visitors are in the U.S.; the Spanish edition has added fewer than 10,000 since its recent launch, Auernheimer said.

Surpassing Stormfront as the top U.S. hate site hasn’t been a financial boon for The Daily Stormer, which calls itself “100 percent reader-supported.” Anglin complained in January that a Ukrainian advertising company had banned them, leaving an Australian electrician as the site’s only advertiser.

“We don’t have revenue commensurate with a publication of our size,” Auernheimer said.

Feds Subpoena Records for $3.5M Mystery Mortgage on Manafort’s Home

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By TOM WINTER and KENZI ABOU-SABE

Federal investigators have subpoenaed records related to a $3.5 million mortgage that former Trump campaign manager Paul Manafort took out on his Hamptons home just after leaving the campaign, according to a source familiar with the matter.

The mortgage document that explains how Manafort would pay back the loan was never filed with Suffolk County, New York — and Manafort's company never paid up to $36,000 in taxes that would be due on the loan.

In addition, despite telling NBC News previously that all his real estate transactions are transparent and include his name and signature, Manafort's name and signature do not appear on any of the loan documents that are publicly available. A Manafort spokesperson said the $3.5 million loan, which was taken out through a shell company, was repaid in December, but also said that paperwork showing the repayment was not filed until he was asked about the loan by NBC News.

New York Attorney General Eric Schneiderman is also taking a "preliminary look" at Manafort's real estate transactions, according to a separate source. The Wall Street Journal reported Friday that the Justice Department has requested Manafort's banking records.

Jason Maloni, a spokesperson for Manafort, said, "Mr. Manafort has not been contacted by any authorities other than the United States Congress and officials responsible for FARA guidance, and he is cooperating with those inquiries."

On August 19, 2016, Manafort left the Trump campaign amid media reports about his previous work for a pro-Russian political party in Ukraine, including allegations he received millions of dollars in payments.

That same day, Manafort created a holding company called Summerbreeze LLC. Several weeks later, a document called a UCC filed with the state of New York shows that Summerbreeze took out a $3.5 million loan on Manafort's home in the tony beach enclave of Bridgehampton.

Manafort's name does not appear on the UCC filing, but Summerbreeze LLC gives his Florida address as a contact, and lists his Bridgehampton home as collateral.

A review of New York state and Suffolk County records shows the loan was made by S C 3, a subsidiary of Spruce Capital, which was co-founded by Joshua Crane, who has partnered with Donald Trump on real estate deals. Spruce is also partially funded by Ukrainian-American real-estate magnate Alexander Rovt, who tried to donate $10,000 to Trump's presidential campaign on Election Day but had all but the legal maximum of $2,700 returned.

The mortgage notice for the loan, however, was never entered into government records by the lender. A mortgage notice normally names the lender, and gives the interest rate, the frequency with which payments must be made, and the length of the mortgage.

Real estate experts contacted by NBC News called the omission "highly unusual," though not illegal.

David Reiss, a professor at Brooklyn Law School who specializes in real estate law, said, "It would be totally ill-advised to not record the loan on the property that is being secured. … Recording the mortgage on the property protects the lender."

Without it, there's no public record that the borrower owes money.

The mortgage notice would also show the mortgage tax has been paid. A party who does not file a mortgage notice but does pay tax would have to file a separate affidavit, which would be in the county's property file. Suffolk County records do not show that the tax was paid.

Suffolk County charges a 1.05 percent tax rate on mortgages. Absent any exemptions, the amount owed would be about $36,750.

Manafort's spokesperson, Jason Maloni, said the loan was only meant to serve as a bridge loan. A copy of another required filing, the UCC 3, made available to NBC News by Maloni shows that the loan was repaid in December. Maloni said the UCC 3 was not filed until May 2, after NBC News asked about the loan. The UCC 3 has not yet appeared in state or Suffolk County records.

Why was there no mortgage notice? Manafort's real estate attorney, Bruce Baldinger, said that the loan was sent for recording, "in due course," by the title company but was returned by the county recording clerk "due to deficiencies in accompanying documents. Mr. Manafort had no role in this process other than assisting counsel in remedying the deficiencies."

Suffolk County does not keep records of failed or improper mortgage filings.

Baldinger said Spruce Capital had required that Manafort create the LLC to receive the loan, and that the Hamptons property had previously been held in the name of Kathleen Manafort, Paul's wife. Baldinger said that Manafort himself was never the borrower.

The deed for the Bridgehampton house was transferred from Kathleen Manafort to Summberbreeze LLC in December 2016.

There is also a question as to how the loan came about and how the lender and borrower were introduced. Two people involved say that independent broker Millenium Estates LLC brought the deal to Spruce.

However, Manafort's spokesperson Maloni said Millenium wasn't the independent broker.

Baldinger said that the relationship with Spruce Capital originated with an independent mortgage broker who was introduced to Manafort by Manafort's son-in-law. "The broker then introduced me to Spruce Capital," said Baldinger.

"Prior to the transaction, Mr. Manafort had no knowledge of either the broker, Spruce Capital, or its principals. After the repayment of the loan, Mr. Manafort had no further dealings or contact with Spruce Capital or its principals, nor had he any reason to be in any contact with them."

A spokesperson for Spruce Capital said the loan came from an unnamed independent broker. Asked about Spruce backer Alexander Rovt and whether he had any role in the deal, the spokesperson said "We are unaware of any connection to Alexander Rovt."

Rovt is a Ukrainian émigré to the U.S. who earned more than $1 billion selling fertilizer in Ukraine and buying real estate in New York. In 2011, he sold all his overseas interests to Dmytro Firtash, a Ukrainian oligarch who had been Manafort's business partner in a failed $850 million hotel redevelopment deal.

Firtash is under U.S. indictment in an unrelated case and facing extradition from Vienna, Austria.

A spokesperson for Alexander Rovt said, "As far as he knows, [Manafort's loan] came to Spruce through an unrelated broker like any other deal."

Manafort's LLC, Summerbreeze, took out a new $9.5 million loan in December using the Hamptons property as part of the collateral. The lender is Federal Savings Bank of Chicago, whose chief executive Steve Calk was an economic adviser to the Trump campaign.

NBC News and other media outlets reported in March that Manafort had used LLCs to buy four properties in New York City between 2006 and 2014 for cash, and had then taken out mortgages on them.

Manafort said through a spokesman at the time that his real-estate transactions were "executed in a transparent fashion and my identity was disclosed — in fact my name is right there on the documents in one of today's news reports."