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09/12/2015

For the week 9/7-9/11

[Posted 12:00 AM ET, Saturday]

*Note: As I’ve mentioned the past few months, there are large costs associated with this site, including for subscriptions to all the newspapers and journals I read that then give you such a large cross-section of opinion and facts. What hurt my cause in a big way was the ending of my 15-year relationship with BuyandHold.com back in February as they folded up.

Last week I said anyone contributing $100 (both through GoFundMe and checks) was ‘in.’ Today I’m announcing that means 1/10th of one percent per $100 of any net income I gain over time. For someone contributing $500, as a few of you have, that means ½ of one percent. $1,000 is one percent, etc.

There are no written shareholder agreements in this. No guarantees whatsoever. I have some investors. I need more.

There is great hidden value in this site. Maybe not for everyone, but it’s my job, with the help of my advisers, to unlock it.

It's hard work putting all these columns together (and don’t forget Dr. Bortrum, whose work is sterling).  But my spirits were buoyed on Friday when I heard a regular on CNBC slam a major content provider, saying, “there is nothing original on it...they just rip off (other sites).”

Ergo, StocksandNews’ day will come. There is literally no one else in the world doing what I do as it pertains to this specific column. No one. Period. The true history of our times, both world financial markets and geopolitics. [Bar Chat, as a one-man compilation, ain’t all bad either. Over 1,800 of those, by the way.]

So regarding the above deal, no guarantees, but you know who I am and my dedication. I will not take a week off the rest of the time I am doing this...unless I can first return every dollar donated (including donations under $100), and hopefully a solid return on top of that (over $100).

If I drop dead...well...some friends and family know where the jewels are hidden and they’ll do their best to make good on my promise.

Click on the link above or send checks to PO Box 990, New Providence, NJ 07974. If you choose the latter, please supply your email address.

*Sometime this week I will be updating the GoFundMe profile reflecting the terms, as much as I am allowed to on that site.

**Special thanks to Scott, Dominic and Kirk for their contributions this week.

And that’s a memo....for reaction, Charles Krauthammer is here....

Edition 857

Washington and Wall Street

As the world watched the exploding refugee crisis in Europe, once again a reminder.

WIR...8/18/2012

Syria: The intensity of the civil war seems to grow by the day as hundreds were reported to have been killed in just the past few days. The prime minister who defected, Riad Hijab, claims the Bashar Assad regime is near collapse and that it controls just 30% of the country, which is accurate, but Assad obviously has enough loyalists to call on in the army....

“William Perry, former defense secretary under President Bill Clinton, warned that if America continued to sit on its hands, ‘we’ll be in no position to influence the post-Assad government.’ Perry has recommended that the U.S. impose a no-fly, no-drive zone in northern Syria.

“President Obama just wants the war to stay out of the American public’s mindset until after the first week in November...”

WIR...8/26/2012

Syria: In a totally embarrassing performance at an impromptu press briefing, President Barack Obama said that any Syrian use of its chemical or biological weapons would be a ‘red line’ for the U.S. and that the Pentagon had contingency plans.

“ ‘We cannot have a situation in which chemical or biological weapons are falling into the hands of the wrong people.’”

WIR...9/8/2012

Syria: The killing continues, now estimated at anywhere from 23,000 to 26,000 in the civil war, with the UN pegging the official refugee figure at over 230,000, which is destabilizing to neighbors Turkey, Iraq, Jordan and Lebanon, while there is a true humanitarian catastrophe developing in Syria itself as 1.2 million have been displaced and 2.5 million are in dire need of aid. I’ll just say this in terms of the political debate taking place in the U.S. One of the Democrats’ campaign slogans is ‘Bin Laden is dead and GM is alive.’ It needs to be pointed out that at least 20,000 of the Syrian deaths could have been prevented if the White House had taken coordinated humanitarian action with Turkey early on. Not a military invasion but just the establishment of safe havens and the Obama administration could have significantly reduced the human toll.

“But it’s too late now. We missed our opportunity. The situation is indeed far more dangerous.

“It was the same situation in 2009 when President Obama missed an opportunity in Iran to support the Greens, but instead when the United States just sat back, the mullahs crushed the uprising and now look where we are.

“It’s pathetic. It’s what infuriates me about how the president is getting a pass on his foreign policy....

“In Ankara, Turkish Prime Minister Erdogan accused the world of indifference on Syria, adding ‘The regime in Syria has now become a terrorist state.’”

---

So we progress to the present. The death toll in Syria is now over 250,000. The number of refugees far in excess of 4 million, with another 7 million+ displaced. Turkey, Iraq and Lebanon are in far worse shape three years later, while Jordan is teetering on a precipice. Europe is convulsed in turmoil, unable to handle the crush of migrants, and there will be vast political changes on the continent as many begin to second-guess putting out the welcome mat.

Meanwhile, our president could claim victory this week on the Iran nuclear deal in winning over just 42 Senators out of 100, which is unbelievable that on such a serious issue Obama played games with the Constitution once again.

Yes, as I’ve been writing it was long over, especially in Syria. Europe and the Middle East are reaping the whirlwind, and it’s just a matter of time before the U.S. does. 

We have a president dangerously playing out the string, while our enemies feverishly plot as to how best to take advantage of this final 16-month window before there is a change in leadership.

America has had two of its worst presidents in our history, back-to-back, at a most critical 16-year period of time and we will be paying a heavy price for generations to come.  

---

Turning to Wall Street, this was a quiet week on the data and earnings front and a needed break, given everything else that is going on. But that is all about to change. While it’s popular to say the next Fed meeting is always the most important one, this coming week’s Fed Open Market Committee confab is indeed critical and the Street is totally split on what the Fed will do. Will it hike rates, finally, or will it stay the course a little while longer to make sure there is global stability before they move? [I say yes...they hike.] 

All of the data points say the Fed should act, despite the warnings from the likes of the International Monetary Fund and the World Bank that it should hold off in the interest of world markets.

The WB’s chief economist, Kaushik Basu, said the Fed risked triggering “panic and turmoil” in emerging markets and should hold its fire until the global economy is on firmer footing.

“The world economy is looking so troubled that if the U.S. goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly,” Basu said in an interview with the Financial Times.

“There is a concern in emerging economies all around in case China takes a hit. This is the problem right now in the world...Overall we are going to get into a slower global growth phase.”

In recent weeks the IMF had issued a similar warning.

As for the stock market...edge fund king David Tepper of Appaloosa Management appeared on CNBC, Thursday, and while he admits to being almost perennially bullish, this time he was clearly cautious.

“I’m not as bullish as I could be because I have problems with earnings growth, problems with multiples (price-earnings ratios). I can’t really call myself a bull.”

He’s not actually bearish, but he did recommend that those who are currently fully invested take some money off the table. At the same time he said if the market corrected 20%, he’d be a buyer.

Looking ahead to the third quarter earnings reports, Thomson Reuters projects earnings for the S&P 500 will decline 3.4%, while revenues drop 2.8%. Energy sector revenues are expected to plummet 33%, while materials revenues fall 10%.

Meanwhile, as you’ve noticed Washington is back in session and Congress needs to fund the government for the next fiscal year by Sept. 30 or risk another government shutdown the following day. Increasingly it’s looking like there will be one, even if for just a day or two, which would still be more than enough to convulse the markets, no doubt.

And as I’ve been writing it comes down to the fight over funding for Planned Parenthood. Since anti-abortion advocacy groups leaked videos of officials from the women’s health provider talking in despicable tones about fetal tissue, this has become target number one owing in no small part to some of those on the Republican presidential campaign trail, like Sen. Ted Cruz. The odds of Republican leaders, namely Sen. Maj. Leader Mitch McConnell and House Speaker John Boehner, somehow isolating funding for PP and passing a continuing resolution to fund the rest through year end at existing budget levels seems pretty slim.

It’s also not clear just what Republicans could do on the Iran nuclear accord front to force a showdown, despite Obama’s “victory” this week.

And then in October and for the balance of the year, you have a potential big fight over replenishing the highway trust fund, extending certain tax breaks, and raising the debt ceiling.

Europe and Asia

Before getting to the migration crisis, a few notes on the eurozone economy. Second-quarter GDP was revised upward a tick to 0.4% quarter-on-quarter, and is now up 1.5% year-on-year. First-quarter GDP was also revised to 0.5%, 1.2% yoy, according to Eurostat.

Germany’s second-quarter GDP was 0.4%, 1.6% yoy; Italy’s Q2 was 0.3%, 0.7% yoy; Spain’s 1.0%, 3.1% yoy; but France confirmed no growth, 1.0% yoy. Plus industrial production in France was down 0.8% in July, yoy, when growth was expected.

In Germany, exports rose a solid 2.4% in July, month-on-month, with industrial production up 0.7% in July (though only up 0.5% yoy). Factory orders fell unexpectedly, down 1.4% in July.

Meanwhile, Greece’s GDP was revised up for the second quarter to 0.9%, 1.6% yoy, but you’ve seen the sickly PMIs for July and August and now there is further political uncertainty with the snap election on Sept. 20, which clearly isn’t going to yield a strong coalition government.

[Two polls released Friday show Syriza with less than a one-point lead over New Democracy.]

So on to the migrant crisis. I’ve been warning for a long time of the issues on this front that were coming but I had no idea of the speed, nor did a single official in Europe see the flows exploding as they have.

While time is of the essence, in trying to analyze the situation, my adage of ‘wait 24 hours’ was never more appropriate. It’s easy to get caught up in the initial desire to play humanitarian; just take them all in, from a demographic standpoint Europe needs all the refugees it can get or the continent will never grow, etc.

But it’s just not that simple. For years I’ve told you of my personal experiences overseas and the inability of many populations to assimilate into the native culture, and you compound this with today’s dynamic of a still largely Christian Europe being inundated with Muslims, in this age of Islamic fundamentalism and terrorism, and part of me can’t help but sympathize with some on the far right (I’m not talking neo-Nazis...I’m referring to the far right segment of, say, Angela Merkel’s own governing coalition).

You can express sympathy, and make sure women and children are properly cared for before deciding where they will end up, but leaders also must be very guarded. It’s not just the obvious – ISIS and al Qaeda slipping terrorists into the mix – but the simple fact you have no idea who these people are.

Folks, they are not all Syrians! There are thousands upon thousands claiming to be Syrians, but they aren’t! Reports are just beginning to filter out on how many as they migrate through Macedonia and Serbia are tossing their identities aside at the Hungarian border and starting a new life as a “Syrian,” even if they are a Pakistani or Bangladeshi (true story), because they know it will be easier to gain asylum. A Pakistani isn’t supposed to be granted it. There is no political crisis there, for example, a la Syria or Iraqis fleeing ISIS.

So how can you blame someone like Hungarian Prime Minister Victor Orban for his tough stance when, literally, 42,000 migrants crossed into his country in a 10-day period (37,000 of whom initially landed in Greece), and he is supposed to register everyone before letting them pass through under EU rules.

Hungary, at last word, had registered 159,000 asylum requests this year vs. 42,800 for all of 2014! Hungary wants to stay largely Christian. It is their right to do so.

What of Greece and Italy? 232,000 have entered Greece this year and that number keeps exploding. There is mass chaos on the island of Lesbos, with over 25,000 on this little place. A Greek minister said Lesbos was “on the verge of an explosion.”

20,000 entered Germany just last weekend. The Merkel government said it was prepared to accept 800,000, but that figure now seems conservative. Bavarian officials, bearing the initial brunt with the flood entering through Munich, are fuming at Merkel, and they are largely political allies.

European Commission President Jean-Claude Juncker said the European Union would set quotas of 160,000, spread over 22 nations, but the actual number, see Germany, dwarfs this figure.

The backlash is building just as quickly as the flood appeared and it’s this that threatens to change the political landscape on the entire continent, and likely not for the better.

All this tumult comes at a time when the European Union still has a bitter conflict at the heart of the monetary union. Juncker said one thing that was true in his State of the Union speech the other day. “Our Union is not in a good situation.”

Ambrose Evans-Pritchard / Daily Telegraph

“Mr. Juncker wishes to invoke treaty powers to force countries to accept 160,000 refugees by a quota, whether or not they agree with his solutions, or indeed whether or not they think it is highly dangerous given the state of total war that now exists between Western liberal civilization and Jihadi fundamentalism.

“Personally, I think Europe’s nations should open their doors to those fleeing war and persecution, with proper screening, in accordance with international treaties on refugees, and in keeping with moral tradition.

“Those countries that etched the lines of Sykes-Picot on the map of the Middle East in 1916 as the Ottoman Empire was crumbling, or those that uncorked chaos by toppling nasty but stable regimes in Iraq and Libya, have a special duty of care. But the point is where the final authority lies.

“By invoking EU law to impose quotas under pain of sanctions, Brussels has unwisely brought home the reality that states have given up sovereignty over their borders, police and judicial systems, just as they gave up economic sovereignty by joining the euro.

“This comes as a rude shock, creating a new East-West rift within European affairs to match the North-South battles over EMU. With certain nuances, the peoples of Hungary, Slovakia, the Czech Republic and the Baltic states do not accept the legitimacy of the demands being made upon them....

“(The project) is disintegrating at the core. Marine Le Pen’s Front National in France has lost no time seizing on events, insisting that nearly all the refugees are in fact migrants, and claiming for good measure that Germany is letting them in only to work as ‘economic slaves.’

“She continues to lead the polls in France, rock solid at 29 percent in the latest Figaro survey despite expelling her own father from the party in an astonishing spectacle of political patricide. [Ed. Jean-Marie is a bastard and deserved this.]

“There is a high chance that her lead will increase as the initial burst of generosity and warm feelings in parts of French society start to fade, and the long slog begins.”

Even if a quota system is introduced, there is nothing to keep these people in their assigned country. If a Syrian in Dublin learns of a thriving community in Hamburg where there is ample work, that guy is hopping on the next Ryanair flight to Hamburg with zero restrictions. “How long do you plan on visiting,” the customs official will ask at passport control. “Just the weekend,” the ‘Syrian’ will say...snicker snicker.

French President Francois Hollande and his cabinet warned that it would be a mistake for Europe to take in all refugees persecuted by ISIS in Iraq and Syria.

Foreign Minister Laurent Fabius told RTL radio, “It’s very difficult, but if all these refugees come to Europe or elsewhere, then Daesh (ISIS) has won the game. (The) Middle East must remain a region of diversity,” he said.

Hollande said at an emergency meeting, “If we do not give more support to the families that are in these refugee camps or are displaced in neighboring countries, then not only will there be tragedies [Ed. in crossing the waters into Greece and elsewhere]...but there will be this exodus.”

The message...Europe must do more to keep the refugees in the Middle East, first and foremost.

Back to Hungarian Prime Minister Orban:

“Every nation and state has the right to decide itself about its own development. Thus we have no right to express an opinion about other nations if they decide – as France – that they are willing to live together with a large Muslim community that makes up 8% to 10% of the total population.

“But they cannot have a say in whether Hungary wishes to change its current cultural and ethnic makeup with its immigration policy. If Hungarians decided that no thank you, it is fine the way it is now, nobody has the right to tell us to change.”

Meanwhile, Spain said it would accept 15,000. France said 24,000. Britain 20,000. [And the U.S. 10,000.] But these governments and the others want a real procedure in place before they do, not utter chaos, and the European Union has fallen flat on its face.

You’re also beginning to see the likes of Austria ending emergency measures that led it to be so hospitable to the hordes just days earlier. After rapidly accepting 12,000 (10,000 in Vienna last Saturday alone), Austrian Chancellor Werner Faymann said it was time to turn “towards normality.” It’s also a fact that Austria’s right-wing Freedom Party will continue to register gains.

Finally, I repeat...just as the Iran nuclear deal is now on the Democrats, Syria, and its consequences, is on Barack Obama.

Edward Luce / Financial Times

“When historians weigh President Obama’s record, the word Syria looks set to be a negative. It is four years since Mr. Obama called for Bashar al-Assad’s ejection from power. The U.S. president did almost nothing to follow through on it – and the little he tried arguably tightened Mr. Assad’s grip.

“More than 200,000 deaths and 4m refugees later, it is hard to distinguish America’s response from that of other Western democracies. With the notable exceptions of Germany and Sweden, the West has denied succor to Syria’s fleeing masses.

“Mr. Obama should be wary. Syria is not some footnote to a respectable diplomatic legacy. It is an indictment....

“America’s brand in the Middle East is as tarnished under Mr. Obama as it was under George W. Bush. It may be unfair to compare them. Mr. Bush’s were errors of commission – chiefly in his Iraq invasion. Mr. Obama’s are errors of omission in how he has handled Mr. Bush’s legacy. But their costs are real.

“From imprisoned democrats in Egypt, to Libyans fleeing their country’s disintegration, the U.S. is not a beacon under Mr. Obama. The feeling – once articulated by the president himself – that the U.S. could disentangle itself is mocked every day by the hordes escaping Syria and elsewhere. The spillover does not stop at Europe. In today’s world no region is an island, let alone the Middle East.”

---

Turning to China, more data rolled in and it wasn’t good. August exports declined 6.1%, year-on-year, vs. July’s 8.9% dip, while imports fell 14.3% vs. 8.6%, the 10th consecutive month of declines.

Consumer prices rose 2% in August, still below the government’s 3% target, but better than recent months, however...pork prices rose 20% from a year ago, with food accounting for a large percentage of the overall CPI increase.

Producer / factory gate prices fell 5.9% in August, the 42nd consecutive month of declines and this is not good at all, kids.

The government also revised 2014 GDP down to 7.3% from 7.4% as it attempts to meet new international accounting standards on measuring gross domestic product.

Chinese auto sales ticked up 0.6% in August after declines in June and July, according to the China Passenger Car Association, but General Motors’ were down 4.8% there last month, while Ford’s fell 3%.

At least a meeting of G20 finance ministers supported the government’s moves on the currency front, while Premier Li Keqiang told a World Economic Forum meeting in Dalian that China was committed to reform despite slower growth and won’t resort to a currency war to boost exports.

Li did act like GDP would fall short of the 7% target in the second half of this year. Societe Generale issued a report this week saying it could fall to 6%.

“China’s structural growth deceleration is only halfway through, and under the weight of debt and excess capacity, weakening investment demand will remain the main culprit.” [Xie Yu / South China Morning Post]

In Japan, the Nikkei average soared 7.7% on Wednesday, its best day since October 2008, as further stimulus is expected, with Prime Minister Shinzo Abe promising corporate taxes would be cut 3.3% in fiscal 2016.

But the producer price index here fell 3.6% year-on-year, the fastest decline since 2009. Again, not good.

Abe did get re-elected president of his Liberal Democratic Party, remaining leader for a second three-year term. Abe told reporters, “Abenomics is still halfway through. I would like to bring the virtuous circle of the economic recovery to every corner of the country, promote revitalizing local economies and accelerate the recovery process from the disaster,” referring to the earthquake and tsunami of 2011.

Abe also pledged to push forward with his plan to permit Japan’s military to be dispatched to conflicts abroad, which has been banned for 70 years under the pacifist Constitution, but this remains highly unpopular among the people.

Street Bytes

--For a ninth straight week the major averages followed their up/down/up/down/up pattern, with the Dow Jones rising 2.1% to 16433, while the S&P gained an equal amount and Nasdaq added 3.0%. For the Dow it was the biggest gain since March.

But next week is about the Fed. And the recent pattern tells you stocks will....cough cough.

--U.S. Treasury Yields

6-mo. 0.23% 2-yr. 0.71% 10-yr. 2.19% 30-yr. 2.95%

Producer prices in August were unchanged, up 0.3% ex-food and energy. Year-over-year, the PPI is down 0.8%, up 0.9% on the core. 

--The International Energy Agency said this week that oil supplies outside OPEC will decline next year by the most in two decades as U.S. shale output declines. At the same time, record-high oil inventories in developed markets won’t begin to diminish until the second half of next year, while Iran is expected to significantly increase its oil output.

The IEA in its monthly report said it appears Saudi Arabia’s strategy of maintaining market share by pressuring rivals, like the U.S., with lower prices, is “having the intended effect.”

The agency said: “The big story this month is one of tightening supply. The lower price environment is forcing the market to behave as it should by shutting in output and coaxing demand.”

U.S. shale output is projected to fall by almost 400,000 barrels a day next year. Just two months ago, the IEA had predicted U.S. supply would expand by 60,000 barrels a day in 2016.  [Bloomberg]

From Ed Crooks / Financial Times:

“U.S. shale producers reported a cash outflow of more than $30bn in the first half of the year, in a sign of the challenges facing the U.S.’s once-booming industry....

“The shortfall points to a rise in bankruptcies and restructurings in the U.S. shale oil industry, which has expanded rapidly in the past seven years but has never covered its capital expenditures from its cash flow.

“Capital spending by listed U.S. independent oil and gas companies exceeded their cash from operations by about $32bn in the six months to June, approaching the deficit of $37.7bn reported for the whole of 2014, according to data from Factset, an information service....

“Edward Morse, global head of commodities research at Citigroup, said there would have to be a shake-up in the U.S. shale oil industry to separate the good companies from the bad.”

At the same time, U.S. shale oil producers are reporting greatly improved productivity from the rigs they use and the wells they drill.

That last point is critical.

So, with the above in mind, Goldman Sachs issued a forecast this week:

“The oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016 on further OPEC production growth, resilient non-OPEC supply and slowing demand growth, with risks skewed to even weaker demand given China’s slowdown and its negative EM (emerging market) feedback loop.”

Goldman now expects West Texas Intermediate to be $38 in one month, $42 in three months. In six months, $40.

Goldman adds $20 is also a possibility. [Financial Times]

Back to Saudi Arabia, the IMF has forecast the kingdom’s budget deficit will hit 20% of GDP this year, due to tumbling oil prices, with GDP growth easing to 2.8% this year and 2.4% in 2016, according to IMF forecasts.

--For the record, the average price of gasoline on Labor Day nationwide was $2.40, $1.04 less than last year. The U.S. Energy Information Agency said Wednesday that the national average could hit $2.03 by December, though due to refinery issues, California will see nowhere near this level.

--Apple held another showcase demonstration, this one of its new iPhone 6S model and a $99 pencil (stylus) for its iPad Pro upgrade. And the company talked about its TV box (Apple TV), which will be significant, but it’s the iPhone that really keeps its share price up, with China being the key growth market, by far, and since I’m negative on China, you have to excuse me for being less than enthusiastic about Apple. [I have a Samsung phone.]

CEO Tim Cook said iPhone sales did grow 75% on the mainland year on year, a growth rate more than double that in other markets, though Apple is third in China behind domestic rivals Xiaomi and Huawei.

Cook maintains, “Growth in iPhone activations has actually accelerated over the past few weeks.” [South China Morning Post]

--Alibaba Group Holding Ltd. had its IPO in Sept. 2014, priced at $68 and closing the first day at $94. By Nov. 13 of that year, it hit $120 intraday. This week it closed at $64.70. I told you the week of the IPO I wouldn’t touch this stock and this week the company lowered its estimates of second-quarter gross revenue (technically “gross merchandise volume”) due to weaker consumer spending in China. The company also cited weaker markets in Russia and Brazil.

[David Tepper on CNBC said he sold his stake in Alibaba by July. He also mentioned he had made mistakes regarding his outlook on China and the competence of policy makers there.]

--The CEO and other top executives at United Airlines suddenly resigned Tuesday in connection with an ongoing federal corruption investigation into dealings with the Port Authority of New York and New Jersey, which runs the regional airports in the area, aside from other things as all of America learned with the Bridgegate scandal.

Speaking of which, this latest news hurts Gov. Chris Christie because a key figure is the Port Authority’s former chairman, David Samson, a Christie political appointee whose name surfaced in Bridgegate as well.

United’s CEO Jeff Smisek, who had done a lousy job in integrating United and Continental Airlines, apparently approved a twice-weekly, non-profitable, flight from Newark to Columbia, because Samson had a second home in the area, in exchange for an expansion of service to Atlantic City and an extension of the PATH train to Newark Airport. Once Samson stepped down, United canceled the Columbia flight. That’s a classic example of corruption, sports fans.

United named Oscar Munoz as president and CEO to replace Smisek. Munoz was previously president and COO of CSX.

Smisek is in line to walk away with $28.6 million in cash and prizes, as long as he cooperates with all investigations. If he’s convicted or pleads guilty to a felony or “any crime involving moral turpitude,” the company can rescind the payments. He has not been accused of wrongdoing, as yet, and he has been cooperating.

--Commodities giant Glencore PLC is scrapping dividends and planning a large stock sale as part of an effort to reduce net debt by billions and shore up its balance sheet; all due to the slump in commodities prices.

In scrapping its final dividend this year and next year’s interim payout, the company is saving $2.4 billion.

This is emblematic of the upheaval in the global commodities space, with Glencore also saying it was suspending copper production at its mines in the Congo and Zambia.

Not surprisingly, copper has been rallying about 10% the past two weeks on hopes production will finally begin to decline.

Glencore shares rallied 10%.

--Macy’s is closing 35 to 40 underperforming stores in 2016, with the locations to be identified at a later date. Macy’s has closed a net 40 over the past five years. 

There are now 770 Macy’s stores in 45 states.

--Ryanair, Europe’s biggest discount airline, raised its full-year profit guidance due to strong summer ticket sales. The Dublin-based carrier also increased its full-year traffic target to 104 million passengers. What a remarkable story this company has been under the direction of CEO Michael O’Leary.

I didn’t realize August was the U.K.’s wettest in a century, which helped bolster sales.

--Timothy W. Martin / Wall Street Journal

“Public pension funds from California to New York are cutting investment-return predictions to their lowest levels since the 1980s, a shift that portends greater hardships for employees and cash-strapped governments as Americans age.

“New upheavals in global markets and a sustained period of low interest rates are forcing officials who manage retirements for nearly 20 million U.S. beneficiaries to abandon a long-held belief that stocks, bonds and other holdings would earn 8% each year, as well as expectations that those gains would fund hundreds of billions of dollars in liabilities.”

Now while we’ve known this for some time, it’s also part of the argument I’ve made for years. If you have $100,000 and you’re a retiree, and you could earn just 2% in your money market or savings account, you’d spend that full $2,000 a year on entertainment, a little trip, the movies, whatever. I have said that $2,000 would have provided a bigger fillip for the economy than what the Fed has done...and I’ve been right.

And as Timothy Martin writes:

“Moving expectations below 8% isn’t just an arcane accounting move. It has real-life consequences for systems that use these predictions to calculate the present value of obligations to retirees. Even slight cutbacks in return targets often mean budget-strained governments or workers are asked to pay significantly more to account for liabilities that are expected to rise as lifespans increase and more Americans retire. A drop of one percentage point will typically boost pension liabilities by 12%, said Jean-Pierry Aubry, an assistant director at the Center for Retirement Research at Boston College.”

Mr. Martin notes that Boulder, Colo., recently eliminated 100 positions as a result of the state’s investment forecast and a rise in pension contributions.

--Australia has now had 96 quarters of consecutive growth, second only to Netherlands’ streak of 103 quarters.

What’s extraordinary in the case of Australia is that it has gone through a major shock with the fall in commodity exports, but overall economic output continues to grow. The unemployment rate ticked down to 6.2% in August.

Aussie Aussie Aussie!!!

[Paid for by Foster’s Lager... ‘It’s Australian for beer.’]

--President Obama is giving Americans access to paid sick leave by ordering contractors working for the federal government to provide the benefit to staff. He did this by executive order, of course, because that is how he has rolled during his presidency.

Obama said parents had to choose between “staying home with their sick child” or getting paid.

--Ticket sales at North American cinemas rose an estimated 10.4% to $4.48 billion, for the period between the first weekend in May and Labor Day, according to analytics firm Rentrak. Summer traditionally makes up 40% of annual domestic ticket sales.

But as Brooks Barnes of the New York Times reports, the vast majority of ticket sales came from just two of Hollywood’s six major studios. Universal had eight of the 12 movies that took in more than $100 million in the U.S. and Canada, with “Jurassic World” the No. 1 draw, taking in nearly $647 million.

--The Weather Channel continues to shrink amid an uncertain future. It’s general-interest morning show with former “Good Morning America” forecaster Sam Champion is being shelved Oct. 30, and the cable network will no longer be in the market for unscripted series programs. “Wake Up With Al,” with Al Roker, is also going by the boards Oct. 2.

Weather Channel said it needs to focus on what it does best...the weather. The number of cable subscribers it reaches is down 10.6% in two years, according to Nielsen data, due to changing viewer habits. [Stephen Battaglio / Los Angeles Times]

--National Geographic magazine, a nonprofit publication since its founding in 1888, announced a new for-profit partnership with 21st Century Fox. The venture includes the Nat Geo cable channel and other media assets, and Fox will own 73% of what will be called National Geographic Partners, National Geographic Society owing the balance. Fox is paying $725 million for its stake in the partnership.

I’m thinking this has tremendous potential on the animal front. Animal uprisings are good television and Fox is about ratings. Let the Nat Geo folks create the right situations, like elephant stampedes against ISIS...things of that sort.

--So I’m watching the NASCAR race at Darlington last Sunday night, which was a ‘throwback’ event, including with the broadcasters wearing 1970s outfits, and suddenly they played the full 1979 classic “Mean Joe Greene” Coca-Cola commercial. A brilliant move by Coke. Don’t be surprised to see it at the Super Bowl or other top events because I’m guessing the reception was great. That really was a brilliant ad. 

Interviewed for Adweek following the airing Sunday, Greene said he knew right away it was good but had no idea it would take on “a life of its own.”

--Brian Williams is returning to the airwaves on Sept. 22 in his new role as live breaking news anchor for MSNBC during its coverage of Pope Francis’ visit to the U.S.

I’m assuming Williams won’t claim he was the second choice of the cardinals.

Foreign Affairs

Iran: Senate Democrats successfully blocked passage of a resolution disapproving of the Iran nuclear deal. The agreement is to be formally adopted on Oct. 19, at which point the parties to the agreement, including Iran, will begin taking steps to comply. It is then expected to take six to nine months for the P5+1 (U.S., Russia, China, France, U.K. and Germany) to agree that the deal can be implemented, though Iran is of course looking to accomplish this earlier in order to get hold of the $100bn (up to $150bn) in assets that have been frozen during the sanctions regime.

But it now all comes down to inspections and the two “side agreements” between Iran and the International Atomic Energy Agency that have been kept secret. For example, regarding the long-discussed military site of Parchin, Iran is supposedly responsible for providing samples, rather than IAEA inspectors collecting them. It’s clearly a farce. The IAEA is also supposed to be allowed to interview Iranian nuclear scientists. It seems highly unlikely they will be allowed to do so.

At the end of the process, it’s the IAEA that is to advise the P5+1 that Iran has complied, including the reduction of the number of centrifuges and its low-enriched uranium stockpile to agreed-upon limits.

For his part, Supreme Leader Ayatollah Ali Khamenei said some of the following in a meeting with visiting Austrian President Heinz Fischer on Tuesday:

“The U.S. government is an enemy to the Islamic Republic because it has lost interests in Iran...

“Well-wishing by Iran has found many enemies around the world who attempt to create conflict among people.”

He said Iran was in the hands of Americans before the 1979 revolution and the “Islamic Revolution” robbed them of their privileges in the country, causing Americans’ hostility toward Iran. [Tehran Times]

In separate remarks, Khamenei said America remains the “Great Satan” bent on undermining the nation. The ayatollah then said of Israel, “God willing in the next 25 years such a thing as the Zionist regime won’t exist.”

Khamenei also reiterated that following the nuclear deal, there is no reason to negotiate with the United States on anything.

Charles Krauthammer / Washington Post

“Congress is finally having its say on the Iran deal. It will be an elaborate charade, however, because, having first gone to the United Nations, President Obama has largely drained congressional action of relevance. At the Security Council, he pushed through a resolution ratifying the deal, thus officially committing the United States as a nation in its implementation – in advance of any congressional action.

“The resolution abolishes the entire legal framework, built over a decade, underlying the international sanctions against Iran. A few months from now, they will be gone.

“The script is already written: The International Atomic Energy Agency, relying on Iran’s self-inspection (!) of the most sensitive nuclear facility, will declare Iran in compliance. The agreement then goes into effect and Iran’s nuclear program is officially deemed peaceful.

“Sanctions are lifted. The mullahs receive $100 billion of frozen assets as a signing bonus. Iran begins reaping the economic bonanza, tripling its oil exports and welcoming a stampede of foreign companies back into the country.

“It is all precooked....

“As a matter of constitutional decency, the president should have submitted the deal to Congress first. And submitted it as a treaty. Which it obviously is. No international agreement in a generation matches this one in strategic significance and geopolitical gravity.

“Obama did not submit it as a treaty because he knew he could never get the constitutionally required votes for ratification. He’s not close to getting two-thirds of the Senate. He’s not close to getting a simple majority. No wonder: In the latest Pew Research Center poll, the American people oppose the deal by a staggering 28-point margin.

“To get around the Constitution, Obama negotiated a swindle that requires him to garner a mere one-third of one house of Congress. Indeed, on Thursday, with just 42 Senate supporters – remember, a treaty requires 67 – the Democrats filibustered and prevented, at least for now, the Senate from voting on the deal at all....

“(Separately), Secretary of State John Kerry has darkly warned Israel to not even think about a military strike on the nuclear facilities of a regime whose leader said just Wednesday that Israel will be wiped out within 25 years.”

Caroline B. Glick / Jerusalem Post

“Why is Prime Minister Benjamin Netanyahu still fighting (the nuclear deal) even though there is no longer any way to stop Obama from enabling Iran to sprint across the nuclear finish line? By fighting Obama, Israel seeks to advance two larger efforts. First, it uses the battle to expand its capacity to act without the U.S. to prevent Iran from acquiring nuclear weapons. Second, it is shaping its relations with the U.S. both for the duration of Obama’s presidency and for the day after he leaves office....

“By fighting so strenuously against Obama’s nuclear deal, Israel improved its ability to carry out a military strike against Iran’s nuclear installations in two ways.

“First, it removed the most serious domestic obstacle to carrying out such a strike.

“Last week’s publication of audio recordings of former defense minister Ehud Barak discussing Iran’s nuclear program revealed that for the past several years, Israel’s military and intelligence brass have blocked operations against Iran’s nuclear installations three times. In 2010, 2011 and 2012 the IDF chief of General Staff and senior generals supported by hesitant cabinet members refused to carry out instructions they received from Netanyahu and Barak to prepare to carry out such a strike.

“There is no doubt that one of the main reasons they opposed lawful instructions was their faith in Obama’s security pledges.

“For their part, the Americans did their best to subvert the authority of Israel’s elected leadership.

“Over the past seven years Washington has sent a steady stream of senior officials to ‘oversee joint Israeli-American efforts’ regarding Iran. It is now obvious that this ‘unprecedented cooperation’ was never aimed at strengthening Israel against Iran. Rather, its aim has been to erode the government’s power to make independent decisions regarding Iran’s nuclear installations.

“Had Netanyahu kept his criticism of Obama’s decision to give Iran a free hand to develop nuclear weapons quiet, the generals might have shrugged their shoulders and expressed gratitude for the shiny new weapons Obama will throw at them to ‘compensate’ for giving nukes to a regime sworn to annihilate the country.

“By making his opposition public, Netanyahu alerted the nation to the dangers. The top commanders can no longer pretend that U.S. security guarantees are credible. Now they will be forced to kick their psychological addiction to worthless American security guarantees, accept reality and act accordingly.

“Better eight years late than never.”

Separately, appearing in London with British Prime Minister David Cameron this week, Netanyahu called on the European Union to “cease pressuring and attacking Israel...which is the only true defense that Europe has against the rising tide of radical Islam.”

Garry Kasparov / Wall Street Journal

“A quick glance at the latest headlines suggests a jarring disconnect from the stream of foreign-policy successes touted by the Obama White House and its allies. President Obama has been hailed by many as a peacemaker for eschewing the use of military force and for signing accords with several of America’s worst enemies. The idea that things will work out better if the U.S. declines to act in the world also obeys Mr. Obama’s keen political instincts. A perpetual campaigner in office, he realizes that it is much harder to criticize an act not taken.

“But what is good for Mr. Obama’s media coverage is not necessarily good for America or the world. From the unceasing violence in eastern Ukraine to the thousands of Syrian refugees streaming into Europe, it is clear that inaction can also have terrible consequences. The nuclear agreement with Iran is also likely to have disastrous and far-reaching effects. But in every case of Mr. Obama’s timidity and procrastination, the response to criticism amounts to this: It could have been worse.

“Looking at the wreckage of the Middle East, including the flourishing of Islamic State, it takes great imagination to see how things would be worse today if the U.S. had acted on Mr. Obama’s ‘red line’ threat in 2013 [Ed. 2012, then repeated] and moved against Syria’s Bashar Assad after he defied the U.S. president and used chemical weapons.

“Or farther east, one would need to have believed Moscow’s overheated nuclear threats to think that Ukraine would be worse off now if NATO had moved immediately to secure the Ukrainian border with Russia as soon as Vladimir Putin invaded Crimea in 2014.

“Over the past year, especially in the past few months, Mr. Obama’s belief that American force in the world should be constrained and reduced has reached its ultimate manifestation in U.S. relations with Iran, Russia and Cuba. Each of these American adversaries has been on the receiving end of the president’s helping hand; normalization with Cuba, releasing Iran from sanctions, treating the Putin Ukraine-invasion force as a partner for peace in the futile Minsk cease-fire agreements.

“In exchange for giving up precisely nothing, these countries have been rewarded with the international legitimacy and domestic credibility dictatorships crave....

“Power abhors a vacuum, and as the U.S. retreats the space is being filled. After years of the White House leading from behind, Secretary of State John Kerry’s timid warning to the Kremlin this week to stay out of Syria will be as effective as Mr. Obama’s ‘red line.’ Soon Iran – flush with billions of dollars liberated by the nuclear deal – will add even more heft to its support for Mr. Assad.

“Dead refugee children are on the shores of Europe, bringing home the Syrian crisis that has been in full bloom for years. There could be no more tragic symbol that it is time to stop being paralyzed by the Obama-era mantra that things could be worse – and to start acting instead to make things better.”

Iraq/ISIS/Syria: Last Friday night I wrote: “There have been reports Russian troops are fighting with Assad’s forces and there have been published photographs of Russian planes and drones in the skies over Syria. [On Friday, Putin denied Russian forces were in Syria. Of course he’s denied they were in Ukraine, too.]”

Well that was spot on. Two days later the story was all over the place. Secretary of State Kerry called his Russian counterpart Sergei Lavrov to express concern, not that Lavrov really cared how Kerry felt. There was strong evidence Russia was building a military base near the international airport in Latakia, Assad’s stronghold.

Tuesday, Russia lashed out at Bulgaria over its refusal to allow Russian cargo planes bound for Syria to fly over its territory, saying the move has cast doubts on the nation’s independence, a rather harsh statement made by Russia’s deputy foreign minister, Mikhail Bogdanov, who also said Greece is facing pressure from Washington.

“If they make some restrictive or banning measures at American request, that raises a question about their sovereign right to make decisions about foreign planes crossing its airspace.”

Meanwhile, a U.S. official told the BBC there is a growing belief within the government that Islamic State is making and using crude chemical weapons in both Iraq and Syria.

“The U.S. has identified at least four occasions on both sides of the Iraq-Syria border where IS has used mustard agents, the official said....

“A BBC team on the Turkey-Syria border has seen evidence backing these claims.

“The U.S. believes the group has a cell dedicated to building these weapons.”

It would seem they are packing powder forms of mustard agents into traditional explosives like mortar rounds.

The U.S. doesn’t believe ISIS seized the chemical agent from the Syrian regime and is just making it on its own.

Editorial / Wall Street Journal

“President Obama told Americans he was staying out of the civil war in Syria, but the Syrian war is not staying out of America. The White House announced Thursday that Mr. Obama now wants the U.S. to accept 10,000 Syrian refugees in the next year.

“That’s a six-fold increase from the number already in the U.S., and don’t expect that to be the last arrivals. The conflict may get worse, especially as Russia ignores U.S. objections and moves in to prop up Bashar Assad’s rule. Mr. Obama will be under growing pressure from a besieged Europe to accept tens of thousands given America’s larger space and economy.

“Americans are generous, and there’s little doubt the U.S. can absorb these people who might otherwise be killed. But rest assured that Islamic State and al Qaeda will attempt to place some of their agents among those who will seek asylum....

“All of this is the bitter fruit of Mr. Obama’s catastrophic Syrian policy and the illusion that the U.S. can retire from the world’s crises without consequence. Mr. Obama told the public he was bringing America home from the traumas of the Middle East – recall ‘the tide of war is receding’ from 2012. The result of his abdication is that the human tide of Syria’s war is now rolling onto American shores.”

Editorial / Washington Post

“In July, President Obama said he had been ‘encouraged’ by a telephone call Russian President Vladimir Putin had initiated to discuss Syria. The Russians, Mr. Obama confidently declared, ‘get a sense that the Assad regime is losing a grip over greater and greater swaths of territory’ and ‘that offers us an opportunity to have a serious conversation with them.’ Not for the first time, Mr. Obama was supposing that Mr. Putin could be enlisted in a diplomatic settlement to the Syrian civil war along lines Washington and its Arab allies support. Not for the first time, the president appears to have badly misread the Russian ruler.

“Far from abandoning its support for the Assad regime, Moscow appears to be doubling down....Analysts believe Russia may be preparing to deploy 1,000 or more military personnel to Syria and to carry out air operations in support of Assad forces....

“As it is, Mr. Putin likely believes that U.S. weakness gives him an opportunity to tilt the military balance back toward the Assad regime.”

Hugh Naylor / Washington Post

“President Bashar al-Assad’s government has killed far more people in Syria this year than the Islamic State, monitoring organizations and analysts say....

“Between January and July, Assad’s military and pro-government militias killed 7,894 people while Islamic State killed 1,131, according to the Syrian Network for Human Rights, a monitoring group based in Britain. In a single day last month, government airstrikes killed more than 100 people in a residential area of Douma, a suburb of the capital, Damascus....

“ ‘For all the Islamic State’s horrendous brutality, we can’t forget that the Assad regime has been the main source of death and destruction in Syria since 2011,’ said Emile Hokayem, a Middle East analyst at the London-based International Institute for Strategic Studies. ‘You can’t solve the conflict unless you find a way to address this, which the world hasn’t yet.’”

And now Russia is in the picture on the side of Assad, while the flow of refugees picks up. Putin admitted mid-week that Russian forces were training and supplying Syrian troops.

As to Iran and its actions in Iraq....

Marcus Weisgerber / Defense One

“Explosively formed penetrators – a particularly deadly form of roadside bomb – killed 196 American soldiers in Iraq over a five-and-a-half-year period, according to recently declassified Pentagon documents.” 861 were injured.

This figure is about half the one used by politicians, but nonetheless that is over 1,000 killed and wounded in essence by Iran’s Quds Force, the special forces arm of the Iranian Revolutionary Guard led by Qasem Soleimani.

[Note to radio talk show host Hugh Hewitt, who asked Donald Trump if he knew who Soleimani was. The Economist is reporting Soleimani is on the outs...that he’s had a fallout with Iran’s leadership.]

Yemen: The death toll from a Houthi rebel missile strike on troops from the U.A.E. rose to 45 after I posted last week. Despite the huge loss, the U.A.E. will remain part of the Saudi-led coalition that is attempting to restore President Mansur Hadi to power after the Iran-backed Houthis captured the capital, Sanaa, forcing him to flee.

10 Saudis and 5 Bahraini soldiers also died in the missile strike. In response, the coalition stepped up airstrikes. The U.N. continues to warn Yemen is on the brink of famine. [Obama once bragged of success here.]

Israel: Prime Minister Netanyahu rejected calls from opposition leaders to take in Middle Eastern migrants. While he said Israel is not indifferent to the human suffering, “Israel is a small country, very small. It does not have demographic depth. It does not have geographic depth.

“That is why we have to control our borders against both illegal work infiltrators and instigators of terror. We will not allow Israel to be flooded with illegal migrants and terrorists.” [Wall Street Journal]

Turkey: The Kurdistan Workers Party (PKK) militant group said Monday it had killed 31 Turkish soldiers in clashes in southeast Turkey on Sunday. Turkish warplanes bombed PKK targets in retaliation in the deadliest attacks since the collapse of a two-year-old ceasefire in July.

President Tayyip Erdogan called for a snap election that is taking place Nov. 1 as he gambles his ruling AK Party can regain its parliamentary majority.

Over 70 Turkish soldiers have been killed in the renewed fighting and hundreds of PKK militants.

Saudi Arabia: Just a terrible accident at Mecca’s Grand Mosque on Friday, as a crane toppled in a storm and crashed through the mosque, killing at least 107 as I go to post. At least 180 more were injured.

This occurred just two weeks before the annual hajj pilgrimage. Worshippers had gathered for Friday prayers so the mosque was crowded.

China: As reported by Jun Mai in the South China Morning Post, “Beijing accomplished its goal of bolstering national pride at home with the war anniversary parade, but the event has only increased mistrust across the Taiwan Strait, analysts say.”

As one Taiwan-based expert told Jun Mai: “Most Taiwanese don’t share any collective memories of the war, since it was a Japanese colony then. They will only feel threatened by the rise of China when seeing the parade, at the time when anti-Beijing sentiment is high.”

Recall, it was Chiang Kai-shek’s soldiers that deserve credit for driving the Japanese out of China, but the Communist Party has long attributed the victory to Mao’s army. Chiang’s Nationalists suffered heavy losses, which then made it easier for Mao to prevail in the civil war that followed, forcing the Nationalists’ to retreat to Taiwan.

Taiwan has a big presidential election in January. They should indeed be very afraid. It would take a minimal amount of force to take Taiwan’s key airports (including a few missile strikes fired from Fujian province), grounding Taiwan’s air force, and then it’s over. It’s not like the U.S. will come to Taiwan’s aid, even though it’s technically obligated to do so.

Russia/Ukraine: In yet another sign Russia is digging in for the long haul, it has begun building a huge military base housing ammunition depots and barracks for several thousand soldiers near the Ukrainian border. Of course the Kremlin continues to deny its soldiers are even in Ukraine. The death toll in the conflict has risen to 8,000, according to some estimates (7,000 in others).  

The level of violence has fallen significantly since Sept. 1, with an agreement by Kiev to grant the eastern regions more autonomy (a win for Putin).

Separately, the chief of Russian oil giant Rosneft, Igor Sechin, the man who I’ve felt would take down his buddy Vlad the Impaler, was in the news this week, saying Rosneft will not work with OPEC to curb a global oil glut. In an interview with the Financial Times, Sechin said the “golden age” of the oil producers’ cartel had passed. “They fail to observe their own quotas [for oil output.] If quotas had been observed, global oil markets would have been rebalanced by now.”

Australia: Prime Minister Tony Abbott announced his government will permanently resettle 12,000 refugees from Syria, a radical turnaround from comments he made about a month earlier. Australia has already taken in 13,750. Abbott said priority will be given to those currently in Lebanon, Turkey and Jordan.

Mexico: The government is under intense pressure after a damning report by a panel of experts blasted the government’s assertion that 43 missing students were burnt to ashes on a giant funeral pyre after disappearing at the hands of corrupt police a year ago.

As reported by Jude Webber of the Financial Times: “A commission of experts appointed by the Inter-American Commission on Human Rights declared that it was scientifically impossible for the students to have been incinerated on a rubbish dump in the western state of Guerrero after being attacked and abducted by police and handed to a drug gang, as the government concluded....

“(The experts) catalogued a litany of flaws in the official investigation, including evidence that was covered up, lost or destroyed.”

Amnesty International weighed in, saying the report “reveals the government’s absolute incompetence and lack of will to find and punish those responsible.”

The whereabouts of the students is still a mystery. A missing bus is the key, with any mention of it vanishing from official files.

[If I’m Trump, I use this story heavily to supplement his existing line on the government there. It’s right up his alley.]

Northern Ireland: In a still developing story, the government here, the Stormont Assembly, is on the brink of collapse over the shock arrest of influential Sinn Fein leader Bobby Storey in connection with the brutal murder of Kevin McGuigan. The issue is dragging down Sinn Fein chiefs Gerry Adams and Martin McGuinness who are under huge pressure to finally come clean on all their knowledge of past IRA activities, Bobby Storey being a trusted confidante.

For his part, McGuinness has long been linked to the horrific 1987 Enniskillen bombing that killed 11 people.

The Stormont power-sharing agreement was left teetering at week’s end amid fears the Provisional IRA will become a headliner again and that a return of The Troubles could be near.

[Remember, the IRA has long had links with the worst terrorists in the world.]

Random Musings

--For about the fourth or fifth time, someone or some group from China launched an attack on my site this week. I was down about 1 ½ hours on Thursday. We know this because the large company hosting StocksandNews identified the origin, just no specifics as yet. I’m really tired of this.

Friday, China reacted angrily after Director of National Intelligence James Clapper said the U.S. must beef up cyber security against Chinese hackers targeting a range of interests to raise the cost to China of engaging in such activities.

In turn, China said the United States should stop “groundless accusations.”

I really want to say a lot more, but moving along....

--In a new national Monmouth University Poll of Democrats and Democratic-leaning voters, Hillary Clinton received just 42%, down from 52% just one month ago, while Joe Biden garnered 22% and Bernie Sanders 20%, an increase of 10% for Biden.

But when asked if they would back Biden if he got into the race, another 7% said they would be very likely to consider him and a further 34% would be somewhat likely. So as Patrick Murray, director of polling for the Monmouth Univ. Polling Institute said, “For a guy who is not running for president, Biden sure is making headway against the frontrunner.”

23% of Democratic voters said they would be more likely to support Biden if he promised to name Sen. Elizabeth Warren as his running mate; 7% would be less likely.

--In a CNN/ORC national poll released Thursday, Donald Trump became the first Republican presidential candidate to top 30% support at 32%, versus 19% for Ben Carson...two non-politicians thus representing a majority of Republicans and Republican-leaning independents. Jeb Bush was third at 9%, followed by Ted Cruz (7%), Mike Huckabee (5%) and Scott Walker (5%).

But the biggest figure for this survey is the number of Republican voters who think Trump is most likely to emerge as the GOP winner...51%, well ahead of the 19% who think Bush will top the party ticket.

CNN has the next debate on Wednesday, minus Rick Perry in the happy hour segment...Perry having suspended his campaign on Friday. I said weeks ago he was already out. He was. Key staffers said he stopped contacting them.

--In an NBC News/Marist College poll, Trump increased his lead in both Iowa and New Hampshire. Trump leads Carson in Iowa, 29-22. In July Trump trailed Scott Walker 19-17, while Carson was fourth at 8%.

In New Hampshire, Trump leads John Kasich, 28-12, with Carson third at 11%.

Scott Walker is down to 5% in Iowa and 4% in New Hampshire, while Jeb Bush is at 6% in Iowa and 8% in New Hampshire.

Back in February, the same NBC/Marist survey had Mike Huckabee leading in Iowa at 17%, followed by Bush at 16% and Walker 15%.

In New Hampshire, Bush led then with 18%, followed by Walker at 15% and Rand Paul 14%.

Of course back in February there was no Trump candidacy.

By the way, Marco Rubio must be in a state of shock, polling just 4% in Iowa and 3% in New Hampshire. [He’s my second choice behind Kasich. But it’s fluid...he typed with a smile.]

On the Democratic side, in the NBC/Marist survey, Bernie Sanders leads Clinton in New Hampshire, 41-32, with Biden at 16%. Back in July, Clinton led Sanders 42-32, with Biden at 12%.

In Iowa, Clinton still leads Sanders, 38-27, but this is a big comedown from July’s 49-25 margin. Biden is at 20%.

Meanwhile, in hypothetical matchups, the NBC/Marist poll found that Bush beat Clinton in Iowa, 50-39, while Trump prevails only 48-43.

But Biden beats Trump in Iowa 49-45.

In New Hampshire, Clinton beats Trump 46-45, but Biden whips The Donald 50-41.

--Hillary Clinton finally apologized for using a private email server while she was secretary of state, telling ABC’s David Muir, “That was a mistake. I’m sorry about that. I take responsibility.”

But this was a day after she told the Associated Press she did not need to apologize, saying, “What I did was allowed.” Last week on NBC News, Clinton said she was “sorry” people were confused by the issue.

Clearly, some of her advisers finally got to her and said she needed to use stronger terms. But....

Edward Luce / Financial Times

“Apologies are meant to draw a line under a problem. Yet Hillary Clinton’s admission on Tuesday night that it was a mistake to route her official correspondence through a private email account is unlikely to pass that test.

“It took six months of denial before the Clinton campaign realized the controversy was not going to go away. Mrs. Clinton has now admitted it was a mistake both to use a separate account and to have evaded questions about it.

“But she did not explain why. The questions will thus continue.

“Her problems are both legal and political. With or without the apology, Mrs. Clinton has no control over how the investigations will unfold. That is in the hands of FBI investigators who are trying to unlock 30,000 ‘personal’ emails that were deleted from Mrs. Clinton’s private server. It is also in the hands of federal judges who are assessing now fewer than 35 lawsuits against the U.S. state department to release further emails from Mrs. Clinton’s trove....

“Mrs. Clinton maintains that none of the emails included content that was classified at the time. This has already been disproved.

“Now it turns out that at least two had information deemed ‘Top Secret’ – one of which was about North Korea’s nuclear weapons program. If more come out, doubts will only escalate.

“Likewise, if FBI investigators turn up deleted emails that included conflicts of interest between the Clinton Foundation’s work and Mrs. Clinton’s role as secretary of state, these could also prove toxic....

“There is no easy way for Mrs. Clinton to regain her ascendancy. Last week, Robert Redford, the normally reliably liberal movie star, praised Donald Trump for ‘shaking up’ the 2016 Republican race. He quickly denied he was endorsing Mr. Trump for president.

“Less noticed was Mr. Redford’s sideswipe at Mrs. Clinton. ‘On the other side [the Democratic race], it’s so bland, it’s so boring, it’s so empty,’ he said.

“Even without the email controversy, in other words, Mrs. Clinton’s campaign is in trouble.”

--Bruce Bartlett (former Reagan adviser) / Washington Post

“It’s safe to say that virtually all political professionals think Donald Trump’s presidential campaign is doomed. The odds of him winning the Republican nomination are long, and the odds of him winning the general election are nonexistent, they say. The key reason is that Trump’s campaign is based on alienating Latinos, a large and fast-growing voter bloc, by supporting the deportation of 11 million undocumented immigrants and building a wall along the border with Mexico to prevent further emigration. If the eventual Republican nominee needs 47 percent of the Latino vote to win the general election – the threshold set by two political scientists in a study for Latino Decisions – what chance does Trump have?

“But if Trump could replace Latino votes with those of another large minority group that traditionally votes Democratic, he might have a fighting chance at victory. And even without changing his message, black voters could be that group.

“African Americans have long been receptive to the anti-immigrant concepts behind Trump’s campaign. Simply put, the jobs, housing and other opportunities that immigrants take come largely at the expense of blacks who were born in the United States....

“Translating potential black support for anti-immigration policy into votes for Trump would not be easy. Black voters overwhelmingly pick Democrats in presidential elections. On the other hand, Republicans have not seriously competed for African American votes since 1960, when Richard Nixon received one-third of the black vote....

“But immigration gives Trump entrée to African Americans with an issue that will resonate with many and at least give him a hearing. An aggressive effort by him to court black voters could change the political dynamics and hit Democrats where they least expect it.”

I totally agree, and Trump is already polling very well among blacks in some national surveys.

--And now some anti-Trump opinion....

Editorial / The Economist

“The country has flirted with populists in the past, but none has won a major-party presidential nomination since William Jennings Bryan in 1908.   The closest any true firebrand has come was in 1996, when Pat Buchanan, whose slogan was ‘The peasants are coming with pitchforks,’ won the Republican primary in New Hampshire against a dull establishment candidate, Bob Dole. (Mr. Dole later won the nomination.)

“Mr. Trump is far more dangerous than Pitchfork Pat, for two reasons. First, as a billionaire, he will not run out of money to finance his campaign. Second, he faces so many Republican opponents that he could grab the nomination with only a modest plurality of the vote. The smart money still says that Republicans will eventually unite behind a mainstream candidate, as they always have in the past. But the world cannot take this for granted. Demagogues in other countries sometimes win elections, and there is no compelling reason why America should always be immune. Republicans should listen carefully to Mr. Trump, and vote for someone else.”

--George Will / Washington Post

“Donald Trump, whose promises are probably as malleable as his principles, promises to support the Republican nominee. Some of his rivals for the nomination, disoriented by their fears and envy of him, are making the GOP seem like the party of boneless wonders.

“Some, who loudly lament how illegal immigrations damage the rule of law, have found a heroine in Kentucky. A county clerk, whose devotion to her faith is not stronger than her desire to keep her paycheck, chose jail rather than resignation when confronted with having to comply with the U.S. Supreme Court and the Constitution regarding same-sex marriage.

“Mike Huckabee, Rand Paul, Bobby Jindal and Scott Walker think her religious freedom is being trampled. So does Ted Cruz, who surely knows better. He clerked for Chief Justice William Rehnquist and must remember the 1892 case in which a Massachusetts policeman claimed that rules restricting political activity by police violated his constitutional rights. Rejecting this claim, Justice Oliver Wendell Holmes Jr. of the Massachusetts Supreme Judicial Court wrote that the officer ‘may have a constitutional right to talk politics, but he has no constitutional right to be a policeman.’”

I stand with Mr. Will on the issue of Kim Davis, the county clerk.

Similarly, I in no way support the Muslim flight attendant for ExpressJet who said she was suspended for refusing to serve alcohol, a practice that is against her religious beliefs.

Charee Stanley is her name and she filed a discrimination complaint with the EEOC, saying she wants to do her job without serving alcohol, as apparently was the case before her suspension.

What a crock. You all know that on many of these planes there is only one flight attendant, for starters. Her attorney told CNN no one “should have to choose between their career and religion.”

Bull. If I’m proven to be way off base, I’ll apologize.

--Pope Francis issued guidelines making it simpler to get a marriage annulled, an attempt to ease a complicated process, but the reforms do not change or ease the criteria for seeking the annulment and there is no shift in Church doctrine. The decisions, made by a bishop, will instead be fast-tracked.

--Baltimore reached a settlement of $6.4 million with the family of Freddie Gray, a staggering sum that will be paid $2.8 million this fiscal year, $3.6 million the next (fiscal year beginning in July of 2016). Mayor Stephanie Rawlings-Blake announced she will not seek re-election in 2016.

--Homicides are up 23% in Chicago this year. There were eight in a single day, Sept. 2. Much of the carnage remains gang related.

Get this: “Authorities have said a reputed leader of the Simon City Royals gang used some of the winnings from a $25-million verdict for a wrongful murder conviction to recruit new members through intimidation and $50,000 cash bonuses. Last month, Thaddeus Jimenez was arrested on charges he shot a former gang member in the legs in a brazen daylight attack after the victim refused efforts to rejoin the gang.” [Lolly Bowean / Chicago Tribune]

Oh brother.

--According to a paper published in JAMA, about half of all Americans have either diabetes or pre-diabetes, but this is actually viewed as good news because the prevalence of diabetes in the U.S. has begun to plateau. Progress is attributed to implementation of food, nutrition and physical activity policies and regulations by state and local governments, among other efforts to curb obesity.

--And on Friday came word of a landmark federal study that urges doctors to bring their patients’ blood pressure – the top number – from the benchmark 140 to 120.

Forever, clinical guidelines have called for a systolic blood pressure of 140 for healthy adults, but in a study, blood pressure medication to keep systolic pressure at 120 “cut the rate of heart attacks, strokes and heart failure by a third and the risk of death by almost 25 percent,” as reported by Lenny Bernstein of the Washington Post.

The data was so compelling, researchers cut the study short by about a year to report the news.

Basically, this is more important than keeping your cholesterol down, though both are key, mused the editor who is not a real doctor, but plays one on the web.

--NASA’s Jet Propulsion Laboratory is still predicting that El Nino is on track to become one of the most powerful on record, though some changes in the wind patterns are still necessary to drive heavy rainfall into California. Other forecasts are unanimous that the state will receive drought-busting rain.

The effects of El Nino have already been felt with an increased number of hurricanes in the eastern Pacific.

--There have been a slew of stories concerning the latest data that shows a 14% surge in fatal accidents the first half of the year, which is due in large part to texting. I want to go Charles Bronson on everyone I see doing this. That AT&T commercial of the woman getting into a crash while texting is a terrific one. I hope the message begins to get across, but I doubt it will.

I saw a piece in the Wall Street Journal that notes two of the three largest car insurers, Geico and Allstate, have been hiking premiums due to the unexpected new accident claims. Now I’m even more pissed that I’ll be paying extra for a bunch of a-holes. 

Warren Buffett, whose Berkshire Hathaway owns Geico, said distracted driving is the cause of the big jump in fatalities. The National Safety Council estimates one in four car crashes involves cellphone use.

So if you’re an offender, especially with kids in the car, cut the crap!

--From Amy Ellis Nutt / Washington Post:

“The two amateur cavers had to feel their way along the cave’s winding passages, crawl on their stomachs through an opening less than 10 inches high, ascend a jagged wall, cross a narrow ledge dubbed the ‘Dragon’s Back,’ and make a 400-foot descent, sideways, through a vertical crack before finally arriving at the prize: a 30-foot-long chamber probably between 2 million and 3 million years old.

“American paleoanthropologist Lee Berger had asked the men to keep their eyes open for fossils....

“What they found in September 2013 nearly took their breath away: fossil fragments of a relative of the human species...

“After a month of excavation under some of the most difficult and dangerous of conditions, then two years of analysis by more than 50 international experts, (the leaders) of the expedition announced Thursday that those fossil fragments do indeed belong to a new species of human relative they are calling Homo naledi.”

Donald Trump has not had an opportunity to insult Naledi as yet, but I’m sure it will be a doozy when he gets around to it. “Would you invite that Homo Naledi guy to your dinner party? I mean look at that face!”

--Finally, Happy Birthday to Arnold Palmer, who turned 86 on Thursday. We love you, Arnie!

---

Pray for the men and women of our armed forces...and all the fallen.

*We remember 9/11 and those going up while the rest were coming down.

God bless America.
---

Gold $1103
Oil $44.63

Returns for the week 9/7-9/11

Dow Jones +2.05% [16433]
S&P 500 +2.1% [1961]
S&P MidCap +2.0%
Russell 2000 +1.9%
Nasdaq +3.0% [4822]

Returns for the period 1/1/15-9/11/15

Dow Jones -7.8%
S&P 500 -4.75%
S&P MidCap -2.6%
Russell 2000 -3.9%
Nasdaq +1.8%

Bulls 25.7
Bears 27.9 [Source: Investors Intelligence...lowest bull number since Oct. 2008 (22.4)...]

Have a great week. I appreciate your support.

Brian Trumbore

 



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Week in Review

09/12/2015

For the week 9/7-9/11

[Posted 12:00 AM ET, Saturday]

*Note: As I’ve mentioned the past few months, there are large costs associated with this site, including for subscriptions to all the newspapers and journals I read that then give you such a large cross-section of opinion and facts. What hurt my cause in a big way was the ending of my 15-year relationship with BuyandHold.com back in February as they folded up.

Last week I said anyone contributing $100 (both through GoFundMe and checks) was ‘in.’ Today I’m announcing that means 1/10th of one percent per $100 of any net income I gain over time. For someone contributing $500, as a few of you have, that means ½ of one percent. $1,000 is one percent, etc.

There are no written shareholder agreements in this. No guarantees whatsoever. I have some investors. I need more.

There is great hidden value in this site. Maybe not for everyone, but it’s my job, with the help of my advisers, to unlock it.

It's hard work putting all these columns together (and don’t forget Dr. Bortrum, whose work is sterling).  But my spirits were buoyed on Friday when I heard a regular on CNBC slam a major content provider, saying, “there is nothing original on it...they just rip off (other sites).”

Ergo, StocksandNews’ day will come. There is literally no one else in the world doing what I do as it pertains to this specific column. No one. Period. The true history of our times, both world financial markets and geopolitics. [Bar Chat, as a one-man compilation, ain’t all bad either. Over 1,800 of those, by the way.]

So regarding the above deal, no guarantees, but you know who I am and my dedication. I will not take a week off the rest of the time I am doing this...unless I can first return every dollar donated (including donations under $100), and hopefully a solid return on top of that (over $100).

If I drop dead...well...some friends and family know where the jewels are hidden and they’ll do their best to make good on my promise.

Click on the link above or send checks to PO Box 990, New Providence, NJ 07974. If you choose the latter, please supply your email address.

*Sometime this week I will be updating the GoFundMe profile reflecting the terms, as much as I am allowed to on that site.

**Special thanks to Scott, Dominic and Kirk for their contributions this week.

And that’s a memo....for reaction, Charles Krauthammer is here....

Edition 857

Washington and Wall Street

As the world watched the exploding refugee crisis in Europe, once again a reminder.

WIR...8/18/2012

Syria: The intensity of the civil war seems to grow by the day as hundreds were reported to have been killed in just the past few days. The prime minister who defected, Riad Hijab, claims the Bashar Assad regime is near collapse and that it controls just 30% of the country, which is accurate, but Assad obviously has enough loyalists to call on in the army....

“William Perry, former defense secretary under President Bill Clinton, warned that if America continued to sit on its hands, ‘we’ll be in no position to influence the post-Assad government.’ Perry has recommended that the U.S. impose a no-fly, no-drive zone in northern Syria.

“President Obama just wants the war to stay out of the American public’s mindset until after the first week in November...”

WIR...8/26/2012

Syria: In a totally embarrassing performance at an impromptu press briefing, President Barack Obama said that any Syrian use of its chemical or biological weapons would be a ‘red line’ for the U.S. and that the Pentagon had contingency plans.

“ ‘We cannot have a situation in which chemical or biological weapons are falling into the hands of the wrong people.’”

WIR...9/8/2012

Syria: The killing continues, now estimated at anywhere from 23,000 to 26,000 in the civil war, with the UN pegging the official refugee figure at over 230,000, which is destabilizing to neighbors Turkey, Iraq, Jordan and Lebanon, while there is a true humanitarian catastrophe developing in Syria itself as 1.2 million have been displaced and 2.5 million are in dire need of aid. I’ll just say this in terms of the political debate taking place in the U.S. One of the Democrats’ campaign slogans is ‘Bin Laden is dead and GM is alive.’ It needs to be pointed out that at least 20,000 of the Syrian deaths could have been prevented if the White House had taken coordinated humanitarian action with Turkey early on. Not a military invasion but just the establishment of safe havens and the Obama administration could have significantly reduced the human toll.

“But it’s too late now. We missed our opportunity. The situation is indeed far more dangerous.

“It was the same situation in 2009 when President Obama missed an opportunity in Iran to support the Greens, but instead when the United States just sat back, the mullahs crushed the uprising and now look where we are.

“It’s pathetic. It’s what infuriates me about how the president is getting a pass on his foreign policy....

“In Ankara, Turkish Prime Minister Erdogan accused the world of indifference on Syria, adding ‘The regime in Syria has now become a terrorist state.’”

---

So we progress to the present. The death toll in Syria is now over 250,000. The number of refugees far in excess of 4 million, with another 7 million+ displaced. Turkey, Iraq and Lebanon are in far worse shape three years later, while Jordan is teetering on a precipice. Europe is convulsed in turmoil, unable to handle the crush of migrants, and there will be vast political changes on the continent as many begin to second-guess putting out the welcome mat.

Meanwhile, our president could claim victory this week on the Iran nuclear deal in winning over just 42 Senators out of 100, which is unbelievable that on such a serious issue Obama played games with the Constitution once again.

Yes, as I’ve been writing it was long over, especially in Syria. Europe and the Middle East are reaping the whirlwind, and it’s just a matter of time before the U.S. does. 

We have a president dangerously playing out the string, while our enemies feverishly plot as to how best to take advantage of this final 16-month window before there is a change in leadership.

America has had two of its worst presidents in our history, back-to-back, at a most critical 16-year period of time and we will be paying a heavy price for generations to come.  

---

Turning to Wall Street, this was a quiet week on the data and earnings front and a needed break, given everything else that is going on. But that is all about to change. While it’s popular to say the next Fed meeting is always the most important one, this coming week’s Fed Open Market Committee confab is indeed critical and the Street is totally split on what the Fed will do. Will it hike rates, finally, or will it stay the course a little while longer to make sure there is global stability before they move? [I say yes...they hike.] 

All of the data points say the Fed should act, despite the warnings from the likes of the International Monetary Fund and the World Bank that it should hold off in the interest of world markets.

The WB’s chief economist, Kaushik Basu, said the Fed risked triggering “panic and turmoil” in emerging markets and should hold its fire until the global economy is on firmer footing.

“The world economy is looking so troubled that if the U.S. goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly,” Basu said in an interview with the Financial Times.

“There is a concern in emerging economies all around in case China takes a hit. This is the problem right now in the world...Overall we are going to get into a slower global growth phase.”

In recent weeks the IMF had issued a similar warning.

As for the stock market...edge fund king David Tepper of Appaloosa Management appeared on CNBC, Thursday, and while he admits to being almost perennially bullish, this time he was clearly cautious.

“I’m not as bullish as I could be because I have problems with earnings growth, problems with multiples (price-earnings ratios). I can’t really call myself a bull.”

He’s not actually bearish, but he did recommend that those who are currently fully invested take some money off the table. At the same time he said if the market corrected 20%, he’d be a buyer.

Looking ahead to the third quarter earnings reports, Thomson Reuters projects earnings for the S&P 500 will decline 3.4%, while revenues drop 2.8%. Energy sector revenues are expected to plummet 33%, while materials revenues fall 10%.

Meanwhile, as you’ve noticed Washington is back in session and Congress needs to fund the government for the next fiscal year by Sept. 30 or risk another government shutdown the following day. Increasingly it’s looking like there will be one, even if for just a day or two, which would still be more than enough to convulse the markets, no doubt.

And as I’ve been writing it comes down to the fight over funding for Planned Parenthood. Since anti-abortion advocacy groups leaked videos of officials from the women’s health provider talking in despicable tones about fetal tissue, this has become target number one owing in no small part to some of those on the Republican presidential campaign trail, like Sen. Ted Cruz. The odds of Republican leaders, namely Sen. Maj. Leader Mitch McConnell and House Speaker John Boehner, somehow isolating funding for PP and passing a continuing resolution to fund the rest through year end at existing budget levels seems pretty slim.

It’s also not clear just what Republicans could do on the Iran nuclear accord front to force a showdown, despite Obama’s “victory” this week.

And then in October and for the balance of the year, you have a potential big fight over replenishing the highway trust fund, extending certain tax breaks, and raising the debt ceiling.

Europe and Asia

Before getting to the migration crisis, a few notes on the eurozone economy. Second-quarter GDP was revised upward a tick to 0.4% quarter-on-quarter, and is now up 1.5% year-on-year. First-quarter GDP was also revised to 0.5%, 1.2% yoy, according to Eurostat.

Germany’s second-quarter GDP was 0.4%, 1.6% yoy; Italy’s Q2 was 0.3%, 0.7% yoy; Spain’s 1.0%, 3.1% yoy; but France confirmed no growth, 1.0% yoy. Plus industrial production in France was down 0.8% in July, yoy, when growth was expected.

In Germany, exports rose a solid 2.4% in July, month-on-month, with industrial production up 0.7% in July (though only up 0.5% yoy). Factory orders fell unexpectedly, down 1.4% in July.

Meanwhile, Greece’s GDP was revised up for the second quarter to 0.9%, 1.6% yoy, but you’ve seen the sickly PMIs for July and August and now there is further political uncertainty with the snap election on Sept. 20, which clearly isn’t going to yield a strong coalition government.

[Two polls released Friday show Syriza with less than a one-point lead over New Democracy.]

So on to the migrant crisis. I’ve been warning for a long time of the issues on this front that were coming but I had no idea of the speed, nor did a single official in Europe see the flows exploding as they have.

While time is of the essence, in trying to analyze the situation, my adage of ‘wait 24 hours’ was never more appropriate. It’s easy to get caught up in the initial desire to play humanitarian; just take them all in, from a demographic standpoint Europe needs all the refugees it can get or the continent will never grow, etc.

But it’s just not that simple. For years I’ve told you of my personal experiences overseas and the inability of many populations to assimilate into the native culture, and you compound this with today’s dynamic of a still largely Christian Europe being inundated with Muslims, in this age of Islamic fundamentalism and terrorism, and part of me can’t help but sympathize with some on the far right (I’m not talking neo-Nazis...I’m referring to the far right segment of, say, Angela Merkel’s own governing coalition).

You can express sympathy, and make sure women and children are properly cared for before deciding where they will end up, but leaders also must be very guarded. It’s not just the obvious – ISIS and al Qaeda slipping terrorists into the mix – but the simple fact you have no idea who these people are.

Folks, they are not all Syrians! There are thousands upon thousands claiming to be Syrians, but they aren’t! Reports are just beginning to filter out on how many as they migrate through Macedonia and Serbia are tossing their identities aside at the Hungarian border and starting a new life as a “Syrian,” even if they are a Pakistani or Bangladeshi (true story), because they know it will be easier to gain asylum. A Pakistani isn’t supposed to be granted it. There is no political crisis there, for example, a la Syria or Iraqis fleeing ISIS.

So how can you blame someone like Hungarian Prime Minister Victor Orban for his tough stance when, literally, 42,000 migrants crossed into his country in a 10-day period (37,000 of whom initially landed in Greece), and he is supposed to register everyone before letting them pass through under EU rules.

Hungary, at last word, had registered 159,000 asylum requests this year vs. 42,800 for all of 2014! Hungary wants to stay largely Christian. It is their right to do so.

What of Greece and Italy? 232,000 have entered Greece this year and that number keeps exploding. There is mass chaos on the island of Lesbos, with over 25,000 on this little place. A Greek minister said Lesbos was “on the verge of an explosion.”

20,000 entered Germany just last weekend. The Merkel government said it was prepared to accept 800,000, but that figure now seems conservative. Bavarian officials, bearing the initial brunt with the flood entering through Munich, are fuming at Merkel, and they are largely political allies.

European Commission President Jean-Claude Juncker said the European Union would set quotas of 160,000, spread over 22 nations, but the actual number, see Germany, dwarfs this figure.

The backlash is building just as quickly as the flood appeared and it’s this that threatens to change the political landscape on the entire continent, and likely not for the better.

All this tumult comes at a time when the European Union still has a bitter conflict at the heart of the monetary union. Juncker said one thing that was true in his State of the Union speech the other day. “Our Union is not in a good situation.”

Ambrose Evans-Pritchard / Daily Telegraph

“Mr. Juncker wishes to invoke treaty powers to force countries to accept 160,000 refugees by a quota, whether or not they agree with his solutions, or indeed whether or not they think it is highly dangerous given the state of total war that now exists between Western liberal civilization and Jihadi fundamentalism.

“Personally, I think Europe’s nations should open their doors to those fleeing war and persecution, with proper screening, in accordance with international treaties on refugees, and in keeping with moral tradition.

“Those countries that etched the lines of Sykes-Picot on the map of the Middle East in 1916 as the Ottoman Empire was crumbling, or those that uncorked chaos by toppling nasty but stable regimes in Iraq and Libya, have a special duty of care. But the point is where the final authority lies.

“By invoking EU law to impose quotas under pain of sanctions, Brussels has unwisely brought home the reality that states have given up sovereignty over their borders, police and judicial systems, just as they gave up economic sovereignty by joining the euro.

“This comes as a rude shock, creating a new East-West rift within European affairs to match the North-South battles over EMU. With certain nuances, the peoples of Hungary, Slovakia, the Czech Republic and the Baltic states do not accept the legitimacy of the demands being made upon them....

“(The project) is disintegrating at the core. Marine Le Pen’s Front National in France has lost no time seizing on events, insisting that nearly all the refugees are in fact migrants, and claiming for good measure that Germany is letting them in only to work as ‘economic slaves.’

“She continues to lead the polls in France, rock solid at 29 percent in the latest Figaro survey despite expelling her own father from the party in an astonishing spectacle of political patricide. [Ed. Jean-Marie is a bastard and deserved this.]

“There is a high chance that her lead will increase as the initial burst of generosity and warm feelings in parts of French society start to fade, and the long slog begins.”

Even if a quota system is introduced, there is nothing to keep these people in their assigned country. If a Syrian in Dublin learns of a thriving community in Hamburg where there is ample work, that guy is hopping on the next Ryanair flight to Hamburg with zero restrictions. “How long do you plan on visiting,” the customs official will ask at passport control. “Just the weekend,” the ‘Syrian’ will say...snicker snicker.

French President Francois Hollande and his cabinet warned that it would be a mistake for Europe to take in all refugees persecuted by ISIS in Iraq and Syria.

Foreign Minister Laurent Fabius told RTL radio, “It’s very difficult, but if all these refugees come to Europe or elsewhere, then Daesh (ISIS) has won the game. (The) Middle East must remain a region of diversity,” he said.

Hollande said at an emergency meeting, “If we do not give more support to the families that are in these refugee camps or are displaced in neighboring countries, then not only will there be tragedies [Ed. in crossing the waters into Greece and elsewhere]...but there will be this exodus.”

The message...Europe must do more to keep the refugees in the Middle East, first and foremost.

Back to Hungarian Prime Minister Orban:

“Every nation and state has the right to decide itself about its own development. Thus we have no right to express an opinion about other nations if they decide – as France – that they are willing to live together with a large Muslim community that makes up 8% to 10% of the total population.

“But they cannot have a say in whether Hungary wishes to change its current cultural and ethnic makeup with its immigration policy. If Hungarians decided that no thank you, it is fine the way it is now, nobody has the right to tell us to change.”

Meanwhile, Spain said it would accept 15,000. France said 24,000. Britain 20,000. [And the U.S. 10,000.] But these governments and the others want a real procedure in place before they do, not utter chaos, and the European Union has fallen flat on its face.

You’re also beginning to see the likes of Austria ending emergency measures that led it to be so hospitable to the hordes just days earlier. After rapidly accepting 12,000 (10,000 in Vienna last Saturday alone), Austrian Chancellor Werner Faymann said it was time to turn “towards normality.” It’s also a fact that Austria’s right-wing Freedom Party will continue to register gains.

Finally, I repeat...just as the Iran nuclear deal is now on the Democrats, Syria, and its consequences, is on Barack Obama.

Edward Luce / Financial Times

“When historians weigh President Obama’s record, the word Syria looks set to be a negative. It is four years since Mr. Obama called for Bashar al-Assad’s ejection from power. The U.S. president did almost nothing to follow through on it – and the little he tried arguably tightened Mr. Assad’s grip.

“More than 200,000 deaths and 4m refugees later, it is hard to distinguish America’s response from that of other Western democracies. With the notable exceptions of Germany and Sweden, the West has denied succor to Syria’s fleeing masses.

“Mr. Obama should be wary. Syria is not some footnote to a respectable diplomatic legacy. It is an indictment....

“America’s brand in the Middle East is as tarnished under Mr. Obama as it was under George W. Bush. It may be unfair to compare them. Mr. Bush’s were errors of commission – chiefly in his Iraq invasion. Mr. Obama’s are errors of omission in how he has handled Mr. Bush’s legacy. But their costs are real.

“From imprisoned democrats in Egypt, to Libyans fleeing their country’s disintegration, the U.S. is not a beacon under Mr. Obama. The feeling – once articulated by the president himself – that the U.S. could disentangle itself is mocked every day by the hordes escaping Syria and elsewhere. The spillover does not stop at Europe. In today’s world no region is an island, let alone the Middle East.”

---

Turning to China, more data rolled in and it wasn’t good. August exports declined 6.1%, year-on-year, vs. July’s 8.9% dip, while imports fell 14.3% vs. 8.6%, the 10th consecutive month of declines.

Consumer prices rose 2% in August, still below the government’s 3% target, but better than recent months, however...pork prices rose 20% from a year ago, with food accounting for a large percentage of the overall CPI increase.

Producer / factory gate prices fell 5.9% in August, the 42nd consecutive month of declines and this is not good at all, kids.

The government also revised 2014 GDP down to 7.3% from 7.4% as it attempts to meet new international accounting standards on measuring gross domestic product.

Chinese auto sales ticked up 0.6% in August after declines in June and July, according to the China Passenger Car Association, but General Motors’ were down 4.8% there last month, while Ford’s fell 3%.

At least a meeting of G20 finance ministers supported the government’s moves on the currency front, while Premier Li Keqiang told a World Economic Forum meeting in Dalian that China was committed to reform despite slower growth and won’t resort to a currency war to boost exports.

Li did act like GDP would fall short of the 7% target in the second half of this year. Societe Generale issued a report this week saying it could fall to 6%.

“China’s structural growth deceleration is only halfway through, and under the weight of debt and excess capacity, weakening investment demand will remain the main culprit.” [Xie Yu / South China Morning Post]

In Japan, the Nikkei average soared 7.7% on Wednesday, its best day since October 2008, as further stimulus is expected, with Prime Minister Shinzo Abe promising corporate taxes would be cut 3.3% in fiscal 2016.

But the producer price index here fell 3.6% year-on-year, the fastest decline since 2009. Again, not good.

Abe did get re-elected president of his Liberal Democratic Party, remaining leader for a second three-year term. Abe told reporters, “Abenomics is still halfway through. I would like to bring the virtuous circle of the economic recovery to every corner of the country, promote revitalizing local economies and accelerate the recovery process from the disaster,” referring to the earthquake and tsunami of 2011.

Abe also pledged to push forward with his plan to permit Japan’s military to be dispatched to conflicts abroad, which has been banned for 70 years under the pacifist Constitution, but this remains highly unpopular among the people.

Street Bytes

--For a ninth straight week the major averages followed their up/down/up/down/up pattern, with the Dow Jones rising 2.1% to 16433, while the S&P gained an equal amount and Nasdaq added 3.0%. For the Dow it was the biggest gain since March.

But next week is about the Fed. And the recent pattern tells you stocks will....cough cough.

--U.S. Treasury Yields

6-mo. 0.23% 2-yr. 0.71% 10-yr. 2.19% 30-yr. 2.95%

Producer prices in August were unchanged, up 0.3% ex-food and energy. Year-over-year, the PPI is down 0.8%, up 0.9% on the core. 

--The International Energy Agency said this week that oil supplies outside OPEC will decline next year by the most in two decades as U.S. shale output declines. At the same time, record-high oil inventories in developed markets won’t begin to diminish until the second half of next year, while Iran is expected to significantly increase its oil output.

The IEA in its monthly report said it appears Saudi Arabia’s strategy of maintaining market share by pressuring rivals, like the U.S., with lower prices, is “having the intended effect.”

The agency said: “The big story this month is one of tightening supply. The lower price environment is forcing the market to behave as it should by shutting in output and coaxing demand.”

U.S. shale output is projected to fall by almost 400,000 barrels a day next year. Just two months ago, the IEA had predicted U.S. supply would expand by 60,000 barrels a day in 2016.  [Bloomberg]

From Ed Crooks / Financial Times:

“U.S. shale producers reported a cash outflow of more than $30bn in the first half of the year, in a sign of the challenges facing the U.S.’s once-booming industry....

“The shortfall points to a rise in bankruptcies and restructurings in the U.S. shale oil industry, which has expanded rapidly in the past seven years but has never covered its capital expenditures from its cash flow.

“Capital spending by listed U.S. independent oil and gas companies exceeded their cash from operations by about $32bn in the six months to June, approaching the deficit of $37.7bn reported for the whole of 2014, according to data from Factset, an information service....

“Edward Morse, global head of commodities research at Citigroup, said there would have to be a shake-up in the U.S. shale oil industry to separate the good companies from the bad.”

At the same time, U.S. shale oil producers are reporting greatly improved productivity from the rigs they use and the wells they drill.

That last point is critical.

So, with the above in mind, Goldman Sachs issued a forecast this week:

“The oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016 on further OPEC production growth, resilient non-OPEC supply and slowing demand growth, with risks skewed to even weaker demand given China’s slowdown and its negative EM (emerging market) feedback loop.”

Goldman now expects West Texas Intermediate to be $38 in one month, $42 in three months. In six months, $40.

Goldman adds $20 is also a possibility. [Financial Times]

Back to Saudi Arabia, the IMF has forecast the kingdom’s budget deficit will hit 20% of GDP this year, due to tumbling oil prices, with GDP growth easing to 2.8% this year and 2.4% in 2016, according to IMF forecasts.

--For the record, the average price of gasoline on Labor Day nationwide was $2.40, $1.04 less than last year. The U.S. Energy Information Agency said Wednesday that the national average could hit $2.03 by December, though due to refinery issues, California will see nowhere near this level.

--Apple held another showcase demonstration, this one of its new iPhone 6S model and a $99 pencil (stylus) for its iPad Pro upgrade. And the company talked about its TV box (Apple TV), which will be significant, but it’s the iPhone that really keeps its share price up, with China being the key growth market, by far, and since I’m negative on China, you have to excuse me for being less than enthusiastic about Apple. [I have a Samsung phone.]

CEO Tim Cook said iPhone sales did grow 75% on the mainland year on year, a growth rate more than double that in other markets, though Apple is third in China behind domestic rivals Xiaomi and Huawei.

Cook maintains, “Growth in iPhone activations has actually accelerated over the past few weeks.” [South China Morning Post]

--Alibaba Group Holding Ltd. had its IPO in Sept. 2014, priced at $68 and closing the first day at $94. By Nov. 13 of that year, it hit $120 intraday. This week it closed at $64.70. I told you the week of the IPO I wouldn’t touch this stock and this week the company lowered its estimates of second-quarter gross revenue (technically “gross merchandise volume”) due to weaker consumer spending in China. The company also cited weaker markets in Russia and Brazil.

[David Tepper on CNBC said he sold his stake in Alibaba by July. He also mentioned he had made mistakes regarding his outlook on China and the competence of policy makers there.]

--The CEO and other top executives at United Airlines suddenly resigned Tuesday in connection with an ongoing federal corruption investigation into dealings with the Port Authority of New York and New Jersey, which runs the regional airports in the area, aside from other things as all of America learned with the Bridgegate scandal.

Speaking of which, this latest news hurts Gov. Chris Christie because a key figure is the Port Authority’s former chairman, David Samson, a Christie political appointee whose name surfaced in Bridgegate as well.

United’s CEO Jeff Smisek, who had done a lousy job in integrating United and Continental Airlines, apparently approved a twice-weekly, non-profitable, flight from Newark to Columbia, because Samson had a second home in the area, in exchange for an expansion of service to Atlantic City and an extension of the PATH train to Newark Airport. Once Samson stepped down, United canceled the Columbia flight. That’s a classic example of corruption, sports fans.

United named Oscar Munoz as president and CEO to replace Smisek. Munoz was previously president and COO of CSX.

Smisek is in line to walk away with $28.6 million in cash and prizes, as long as he cooperates with all investigations. If he’s convicted or pleads guilty to a felony or “any crime involving moral turpitude,” the company can rescind the payments. He has not been accused of wrongdoing, as yet, and he has been cooperating.

--Commodities giant Glencore PLC is scrapping dividends and planning a large stock sale as part of an effort to reduce net debt by billions and shore up its balance sheet; all due to the slump in commodities prices.

In scrapping its final dividend this year and next year’s interim payout, the company is saving $2.4 billion.

This is emblematic of the upheaval in the global commodities space, with Glencore also saying it was suspending copper production at its mines in the Congo and Zambia.

Not surprisingly, copper has been rallying about 10% the past two weeks on hopes production will finally begin to decline.

Glencore shares rallied 10%.

--Macy’s is closing 35 to 40 underperforming stores in 2016, with the locations to be identified at a later date. Macy’s has closed a net 40 over the past five years. 

There are now 770 Macy’s stores in 45 states.

--Ryanair, Europe’s biggest discount airline, raised its full-year profit guidance due to strong summer ticket sales. The Dublin-based carrier also increased its full-year traffic target to 104 million passengers. What a remarkable story this company has been under the direction of CEO Michael O’Leary.

I didn’t realize August was the U.K.’s wettest in a century, which helped bolster sales.

--Timothy W. Martin / Wall Street Journal

“Public pension funds from California to New York are cutting investment-return predictions to their lowest levels since the 1980s, a shift that portends greater hardships for employees and cash-strapped governments as Americans age.

“New upheavals in global markets and a sustained period of low interest rates are forcing officials who manage retirements for nearly 20 million U.S. beneficiaries to abandon a long-held belief that stocks, bonds and other holdings would earn 8% each year, as well as expectations that those gains would fund hundreds of billions of dollars in liabilities.”

Now while we’ve known this for some time, it’s also part of the argument I’ve made for years. If you have $100,000 and you’re a retiree, and you could earn just 2% in your money market or savings account, you’d spend that full $2,000 a year on entertainment, a little trip, the movies, whatever. I have said that $2,000 would have provided a bigger fillip for the economy than what the Fed has done...and I’ve been right.

And as Timothy Martin writes:

“Moving expectations below 8% isn’t just an arcane accounting move. It has real-life consequences for systems that use these predictions to calculate the present value of obligations to retirees. Even slight cutbacks in return targets often mean budget-strained governments or workers are asked to pay significantly more to account for liabilities that are expected to rise as lifespans increase and more Americans retire. A drop of one percentage point will typically boost pension liabilities by 12%, said Jean-Pierry Aubry, an assistant director at the Center for Retirement Research at Boston College.”

Mr. Martin notes that Boulder, Colo., recently eliminated 100 positions as a result of the state’s investment forecast and a rise in pension contributions.

--Australia has now had 96 quarters of consecutive growth, second only to Netherlands’ streak of 103 quarters.

What’s extraordinary in the case of Australia is that it has gone through a major shock with the fall in commodity exports, but overall economic output continues to grow. The unemployment rate ticked down to 6.2% in August.

Aussie Aussie Aussie!!!

[Paid for by Foster’s Lager... ‘It’s Australian for beer.’]

--President Obama is giving Americans access to paid sick leave by ordering contractors working for the federal government to provide the benefit to staff. He did this by executive order, of course, because that is how he has rolled during his presidency.

Obama said parents had to choose between “staying home with their sick child” or getting paid.

--Ticket sales at North American cinemas rose an estimated 10.4% to $4.48 billion, for the period between the first weekend in May and Labor Day, according to analytics firm Rentrak. Summer traditionally makes up 40% of annual domestic ticket sales.

But as Brooks Barnes of the New York Times reports, the vast majority of ticket sales came from just two of Hollywood’s six major studios. Universal had eight of the 12 movies that took in more than $100 million in the U.S. and Canada, with “Jurassic World” the No. 1 draw, taking in nearly $647 million.

--The Weather Channel continues to shrink amid an uncertain future. It’s general-interest morning show with former “Good Morning America” forecaster Sam Champion is being shelved Oct. 30, and the cable network will no longer be in the market for unscripted series programs. “Wake Up With Al,” with Al Roker, is also going by the boards Oct. 2.

Weather Channel said it needs to focus on what it does best...the weather. The number of cable subscribers it reaches is down 10.6% in two years, according to Nielsen data, due to changing viewer habits. [Stephen Battaglio / Los Angeles Times]

--National Geographic magazine, a nonprofit publication since its founding in 1888, announced a new for-profit partnership with 21st Century Fox. The venture includes the Nat Geo cable channel and other media assets, and Fox will own 73% of what will be called National Geographic Partners, National Geographic Society owing the balance. Fox is paying $725 million for its stake in the partnership.

I’m thinking this has tremendous potential on the animal front. Animal uprisings are good television and Fox is about ratings. Let the Nat Geo folks create the right situations, like elephant stampedes against ISIS...things of that sort.

--So I’m watching the NASCAR race at Darlington last Sunday night, which was a ‘throwback’ event, including with the broadcasters wearing 1970s outfits, and suddenly they played the full 1979 classic “Mean Joe Greene” Coca-Cola commercial. A brilliant move by Coke. Don’t be surprised to see it at the Super Bowl or other top events because I’m guessing the reception was great. That really was a brilliant ad. 

Interviewed for Adweek following the airing Sunday, Greene said he knew right away it was good but had no idea it would take on “a life of its own.”

--Brian Williams is returning to the airwaves on Sept. 22 in his new role as live breaking news anchor for MSNBC during its coverage of Pope Francis’ visit to the U.S.

I’m assuming Williams won’t claim he was the second choice of the cardinals.

Foreign Affairs

Iran: Senate Democrats successfully blocked passage of a resolution disapproving of the Iran nuclear deal. The agreement is to be formally adopted on Oct. 19, at which point the parties to the agreement, including Iran, will begin taking steps to comply. It is then expected to take six to nine months for the P5+1 (U.S., Russia, China, France, U.K. and Germany) to agree that the deal can be implemented, though Iran is of course looking to accomplish this earlier in order to get hold of the $100bn (up to $150bn) in assets that have been frozen during the sanctions regime.

But it now all comes down to inspections and the two “side agreements” between Iran and the International Atomic Energy Agency that have been kept secret. For example, regarding the long-discussed military site of Parchin, Iran is supposedly responsible for providing samples, rather than IAEA inspectors collecting them. It’s clearly a farce. The IAEA is also supposed to be allowed to interview Iranian nuclear scientists. It seems highly unlikely they will be allowed to do so.

At the end of the process, it’s the IAEA that is to advise the P5+1 that Iran has complied, including the reduction of the number of centrifuges and its low-enriched uranium stockpile to agreed-upon limits.

For his part, Supreme Leader Ayatollah Ali Khamenei said some of the following in a meeting with visiting Austrian President Heinz Fischer on Tuesday:

“The U.S. government is an enemy to the Islamic Republic because it has lost interests in Iran...

“Well-wishing by Iran has found many enemies around the world who attempt to create conflict among people.”

He said Iran was in the hands of Americans before the 1979 revolution and the “Islamic Revolution” robbed them of their privileges in the country, causing Americans’ hostility toward Iran. [Tehran Times]

In separate remarks, Khamenei said America remains the “Great Satan” bent on undermining the nation. The ayatollah then said of Israel, “God willing in the next 25 years such a thing as the Zionist regime won’t exist.”

Khamenei also reiterated that following the nuclear deal, there is no reason to negotiate with the United States on anything.

Charles Krauthammer / Washington Post

“Congress is finally having its say on the Iran deal. It will be an elaborate charade, however, because, having first gone to the United Nations, President Obama has largely drained congressional action of relevance. At the Security Council, he pushed through a resolution ratifying the deal, thus officially committing the United States as a nation in its implementation – in advance of any congressional action.

“The resolution abolishes the entire legal framework, built over a decade, underlying the international sanctions against Iran. A few months from now, they will be gone.

“The script is already written: The International Atomic Energy Agency, relying on Iran’s self-inspection (!) of the most sensitive nuclear facility, will declare Iran in compliance. The agreement then goes into effect and Iran’s nuclear program is officially deemed peaceful.

“Sanctions are lifted. The mullahs receive $100 billion of frozen assets as a signing bonus. Iran begins reaping the economic bonanza, tripling its oil exports and welcoming a stampede of foreign companies back into the country.

“It is all precooked....

“As a matter of constitutional decency, the president should have submitted the deal to Congress first. And submitted it as a treaty. Which it obviously is. No international agreement in a generation matches this one in strategic significance and geopolitical gravity.

“Obama did not submit it as a treaty because he knew he could never get the constitutionally required votes for ratification. He’s not close to getting two-thirds of the Senate. He’s not close to getting a simple majority. No wonder: In the latest Pew Research Center poll, the American people oppose the deal by a staggering 28-point margin.

“To get around the Constitution, Obama negotiated a swindle that requires him to garner a mere one-third of one house of Congress. Indeed, on Thursday, with just 42 Senate supporters – remember, a treaty requires 67 – the Democrats filibustered and prevented, at least for now, the Senate from voting on the deal at all....

“(Separately), Secretary of State John Kerry has darkly warned Israel to not even think about a military strike on the nuclear facilities of a regime whose leader said just Wednesday that Israel will be wiped out within 25 years.”

Caroline B. Glick / Jerusalem Post

“Why is Prime Minister Benjamin Netanyahu still fighting (the nuclear deal) even though there is no longer any way to stop Obama from enabling Iran to sprint across the nuclear finish line? By fighting Obama, Israel seeks to advance two larger efforts. First, it uses the battle to expand its capacity to act without the U.S. to prevent Iran from acquiring nuclear weapons. Second, it is shaping its relations with the U.S. both for the duration of Obama’s presidency and for the day after he leaves office....

“By fighting so strenuously against Obama’s nuclear deal, Israel improved its ability to carry out a military strike against Iran’s nuclear installations in two ways.

“First, it removed the most serious domestic obstacle to carrying out such a strike.

“Last week’s publication of audio recordings of former defense minister Ehud Barak discussing Iran’s nuclear program revealed that for the past several years, Israel’s military and intelligence brass have blocked operations against Iran’s nuclear installations three times. In 2010, 2011 and 2012 the IDF chief of General Staff and senior generals supported by hesitant cabinet members refused to carry out instructions they received from Netanyahu and Barak to prepare to carry out such a strike.

“There is no doubt that one of the main reasons they opposed lawful instructions was their faith in Obama’s security pledges.

“For their part, the Americans did their best to subvert the authority of Israel’s elected leadership.

“Over the past seven years Washington has sent a steady stream of senior officials to ‘oversee joint Israeli-American efforts’ regarding Iran. It is now obvious that this ‘unprecedented cooperation’ was never aimed at strengthening Israel against Iran. Rather, its aim has been to erode the government’s power to make independent decisions regarding Iran’s nuclear installations.

“Had Netanyahu kept his criticism of Obama’s decision to give Iran a free hand to develop nuclear weapons quiet, the generals might have shrugged their shoulders and expressed gratitude for the shiny new weapons Obama will throw at them to ‘compensate’ for giving nukes to a regime sworn to annihilate the country.

“By making his opposition public, Netanyahu alerted the nation to the dangers. The top commanders can no longer pretend that U.S. security guarantees are credible. Now they will be forced to kick their psychological addiction to worthless American security guarantees, accept reality and act accordingly.

“Better eight years late than never.”

Separately, appearing in London with British Prime Minister David Cameron this week, Netanyahu called on the European Union to “cease pressuring and attacking Israel...which is the only true defense that Europe has against the rising tide of radical Islam.”

Garry Kasparov / Wall Street Journal

“A quick glance at the latest headlines suggests a jarring disconnect from the stream of foreign-policy successes touted by the Obama White House and its allies. President Obama has been hailed by many as a peacemaker for eschewing the use of military force and for signing accords with several of America’s worst enemies. The idea that things will work out better if the U.S. declines to act in the world also obeys Mr. Obama’s keen political instincts. A perpetual campaigner in office, he realizes that it is much harder to criticize an act not taken.

“But what is good for Mr. Obama’s media coverage is not necessarily good for America or the world. From the unceasing violence in eastern Ukraine to the thousands of Syrian refugees streaming into Europe, it is clear that inaction can also have terrible consequences. The nuclear agreement with Iran is also likely to have disastrous and far-reaching effects. But in every case of Mr. Obama’s timidity and procrastination, the response to criticism amounts to this: It could have been worse.

“Looking at the wreckage of the Middle East, including the flourishing of Islamic State, it takes great imagination to see how things would be worse today if the U.S. had acted on Mr. Obama’s ‘red line’ threat in 2013 [Ed. 2012, then repeated] and moved against Syria’s Bashar Assad after he defied the U.S. president and used chemical weapons.

“Or farther east, one would need to have believed Moscow’s overheated nuclear threats to think that Ukraine would be worse off now if NATO had moved immediately to secure the Ukrainian border with Russia as soon as Vladimir Putin invaded Crimea in 2014.

“Over the past year, especially in the past few months, Mr. Obama’s belief that American force in the world should be constrained and reduced has reached its ultimate manifestation in U.S. relations with Iran, Russia and Cuba. Each of these American adversaries has been on the receiving end of the president’s helping hand; normalization with Cuba, releasing Iran from sanctions, treating the Putin Ukraine-invasion force as a partner for peace in the futile Minsk cease-fire agreements.

“In exchange for giving up precisely nothing, these countries have been rewarded with the international legitimacy and domestic credibility dictatorships crave....

“Power abhors a vacuum, and as the U.S. retreats the space is being filled. After years of the White House leading from behind, Secretary of State John Kerry’s timid warning to the Kremlin this week to stay out of Syria will be as effective as Mr. Obama’s ‘red line.’ Soon Iran – flush with billions of dollars liberated by the nuclear deal – will add even more heft to its support for Mr. Assad.

“Dead refugee children are on the shores of Europe, bringing home the Syrian crisis that has been in full bloom for years. There could be no more tragic symbol that it is time to stop being paralyzed by the Obama-era mantra that things could be worse – and to start acting instead to make things better.”

Iraq/ISIS/Syria: Last Friday night I wrote: “There have been reports Russian troops are fighting with Assad’s forces and there have been published photographs of Russian planes and drones in the skies over Syria. [On Friday, Putin denied Russian forces were in Syria. Of course he’s denied they were in Ukraine, too.]”

Well that was spot on. Two days later the story was all over the place. Secretary of State Kerry called his Russian counterpart Sergei Lavrov to express concern, not that Lavrov really cared how Kerry felt. There was strong evidence Russia was building a military base near the international airport in Latakia, Assad’s stronghold.

Tuesday, Russia lashed out at Bulgaria over its refusal to allow Russian cargo planes bound for Syria to fly over its territory, saying the move has cast doubts on the nation’s independence, a rather harsh statement made by Russia’s deputy foreign minister, Mikhail Bogdanov, who also said Greece is facing pressure from Washington.

“If they make some restrictive or banning measures at American request, that raises a question about their sovereign right to make decisions about foreign planes crossing its airspace.”

Meanwhile, a U.S. official told the BBC there is a growing belief within the government that Islamic State is making and using crude chemical weapons in both Iraq and Syria.

“The U.S. has identified at least four occasions on both sides of the Iraq-Syria border where IS has used mustard agents, the official said....

“A BBC team on the Turkey-Syria border has seen evidence backing these claims.

“The U.S. believes the group has a cell dedicated to building these weapons.”

It would seem they are packing powder forms of mustard agents into traditional explosives like mortar rounds.

The U.S. doesn’t believe ISIS seized the chemical agent from the Syrian regime and is just making it on its own.

Editorial / Wall Street Journal

“President Obama told Americans he was staying out of the civil war in Syria, but the Syrian war is not staying out of America. The White House announced Thursday that Mr. Obama now wants the U.S. to accept 10,000 Syrian refugees in the next year.

“That’s a six-fold increase from the number already in the U.S., and don’t expect that to be the last arrivals. The conflict may get worse, especially as Russia ignores U.S. objections and moves in to prop up Bashar Assad’s rule. Mr. Obama will be under growing pressure from a besieged Europe to accept tens of thousands given America’s larger space and economy.

“Americans are generous, and there’s little doubt the U.S. can absorb these people who might otherwise be killed. But rest assured that Islamic State and al Qaeda will attempt to place some of their agents among those who will seek asylum....

“All of this is the bitter fruit of Mr. Obama’s catastrophic Syrian policy and the illusion that the U.S. can retire from the world’s crises without consequence. Mr. Obama told the public he was bringing America home from the traumas of the Middle East – recall ‘the tide of war is receding’ from 2012. The result of his abdication is that the human tide of Syria’s war is now rolling onto American shores.”

Editorial / Washington Post

“In July, President Obama said he had been ‘encouraged’ by a telephone call Russian President Vladimir Putin had initiated to discuss Syria. The Russians, Mr. Obama confidently declared, ‘get a sense that the Assad regime is losing a grip over greater and greater swaths of territory’ and ‘that offers us an opportunity to have a serious conversation with them.’ Not for the first time, Mr. Obama was supposing that Mr. Putin could be enlisted in a diplomatic settlement to the Syrian civil war along lines Washington and its Arab allies support. Not for the first time, the president appears to have badly misread the Russian ruler.

“Far from abandoning its support for the Assad regime, Moscow appears to be doubling down....Analysts believe Russia may be preparing to deploy 1,000 or more military personnel to Syria and to carry out air operations in support of Assad forces....

“As it is, Mr. Putin likely believes that U.S. weakness gives him an opportunity to tilt the military balance back toward the Assad regime.”

Hugh Naylor / Washington Post

“President Bashar al-Assad’s government has killed far more people in Syria this year than the Islamic State, monitoring organizations and analysts say....

“Between January and July, Assad’s military and pro-government militias killed 7,894 people while Islamic State killed 1,131, according to the Syrian Network for Human Rights, a monitoring group based in Britain. In a single day last month, government airstrikes killed more than 100 people in a residential area of Douma, a suburb of the capital, Damascus....

“ ‘For all the Islamic State’s horrendous brutality, we can’t forget that the Assad regime has been the main source of death and destruction in Syria since 2011,’ said Emile Hokayem, a Middle East analyst at the London-based International Institute for Strategic Studies. ‘You can’t solve the conflict unless you find a way to address this, which the world hasn’t yet.’”

And now Russia is in the picture on the side of Assad, while the flow of refugees picks up. Putin admitted mid-week that Russian forces were training and supplying Syrian troops.

As to Iran and its actions in Iraq....

Marcus Weisgerber / Defense One

“Explosively formed penetrators – a particularly deadly form of roadside bomb – killed 196 American soldiers in Iraq over a five-and-a-half-year period, according to recently declassified Pentagon documents.” 861 were injured.

This figure is about half the one used by politicians, but nonetheless that is over 1,000 killed and wounded in essence by Iran’s Quds Force, the special forces arm of the Iranian Revolutionary Guard led by Qasem Soleimani.

[Note to radio talk show host Hugh Hewitt, who asked Donald Trump if he knew who Soleimani was. The Economist is reporting Soleimani is on the outs...that he’s had a fallout with Iran’s leadership.]

Yemen: The death toll from a Houthi rebel missile strike on troops from the U.A.E. rose to 45 after I posted last week. Despite the huge loss, the U.A.E. will remain part of the Saudi-led coalition that is attempting to restore President Mansur Hadi to power after the Iran-backed Houthis captured the capital, Sanaa, forcing him to flee.

10 Saudis and 5 Bahraini soldiers also died in the missile strike. In response, the coalition stepped up airstrikes. The U.N. continues to warn Yemen is on the brink of famine. [Obama once bragged of success here.]

Israel: Prime Minister Netanyahu rejected calls from opposition leaders to take in Middle Eastern migrants. While he said Israel is not indifferent to the human suffering, “Israel is a small country, very small. It does not have demographic depth. It does not have geographic depth.

“That is why we have to control our borders against both illegal work infiltrators and instigators of terror. We will not allow Israel to be flooded with illegal migrants and terrorists.” [Wall Street Journal]

Turkey: The Kurdistan Workers Party (PKK) militant group said Monday it had killed 31 Turkish soldiers in clashes in southeast Turkey on Sunday. Turkish warplanes bombed PKK targets in retaliation in the deadliest attacks since the collapse of a two-year-old ceasefire in July.

President Tayyip Erdogan called for a snap election that is taking place Nov. 1 as he gambles his ruling AK Party can regain its parliamentary majority.

Over 70 Turkish soldiers have been killed in the renewed fighting and hundreds of PKK militants.

Saudi Arabia: Just a terrible accident at Mecca’s Grand Mosque on Friday, as a crane toppled in a storm and crashed through the mosque, killing at least 107 as I go to post. At least 180 more were injured.

This occurred just two weeks before the annual hajj pilgrimage. Worshippers had gathered for Friday prayers so the mosque was crowded.

China: As reported by Jun Mai in the South China Morning Post, “Beijing accomplished its goal of bolstering national pride at home with the war anniversary parade, but the event has only increased mistrust across the Taiwan Strait, analysts say.”

As one Taiwan-based expert told Jun Mai: “Most Taiwanese don’t share any collective memories of the war, since it was a Japanese colony then. They will only feel threatened by the rise of China when seeing the parade, at the time when anti-Beijing sentiment is high.”

Recall, it was Chiang Kai-shek’s soldiers that deserve credit for driving the Japanese out of China, but the Communist Party has long attributed the victory to Mao’s army. Chiang’s Nationalists suffered heavy losses, which then made it easier for Mao to prevail in the civil war that followed, forcing the Nationalists’ to retreat to Taiwan.

Taiwan has a big presidential election in January. They should indeed be very afraid. It would take a minimal amount of force to take Taiwan’s key airports (including a few missile strikes fired from Fujian province), grounding Taiwan’s air force, and then it’s over. It’s not like the U.S. will come to Taiwan’s aid, even though it’s technically obligated to do so.

Russia/Ukraine: In yet another sign Russia is digging in for the long haul, it has begun building a huge military base housing ammunition depots and barracks for several thousand soldiers near the Ukrainian border. Of course the Kremlin continues to deny its soldiers are even in Ukraine. The death toll in the conflict has risen to 8,000, according to some estimates (7,000 in others).  

The level of violence has fallen significantly since Sept. 1, with an agreement by Kiev to grant the eastern regions more autonomy (a win for Putin).

Separately, the chief of Russian oil giant Rosneft, Igor Sechin, the man who I’ve felt would take down his buddy Vlad the Impaler, was in the news this week, saying Rosneft will not work with OPEC to curb a global oil glut. In an interview with the Financial Times, Sechin said the “golden age” of the oil producers’ cartel had passed. “They fail to observe their own quotas [for oil output.] If quotas had been observed, global oil markets would have been rebalanced by now.”

Australia: Prime Minister Tony Abbott announced his government will permanently resettle 12,000 refugees from Syria, a radical turnaround from comments he made about a month earlier. Australia has already taken in 13,750. Abbott said priority will be given to those currently in Lebanon, Turkey and Jordan.

Mexico: The government is under intense pressure after a damning report by a panel of experts blasted the government’s assertion that 43 missing students were burnt to ashes on a giant funeral pyre after disappearing at the hands of corrupt police a year ago.

As reported by Jude Webber of the Financial Times: “A commission of experts appointed by the Inter-American Commission on Human Rights declared that it was scientifically impossible for the students to have been incinerated on a rubbish dump in the western state of Guerrero after being attacked and abducted by police and handed to a drug gang, as the government concluded....

“(The experts) catalogued a litany of flaws in the official investigation, including evidence that was covered up, lost or destroyed.”

Amnesty International weighed in, saying the report “reveals the government’s absolute incompetence and lack of will to find and punish those responsible.”

The whereabouts of the students is still a mystery. A missing bus is the key, with any mention of it vanishing from official files.

[If I’m Trump, I use this story heavily to supplement his existing line on the government there. It’s right up his alley.]

Northern Ireland: In a still developing story, the government here, the Stormont Assembly, is on the brink of collapse over the shock arrest of influential Sinn Fein leader Bobby Storey in connection with the brutal murder of Kevin McGuigan. The issue is dragging down Sinn Fein chiefs Gerry Adams and Martin McGuinness who are under huge pressure to finally come clean on all their knowledge of past IRA activities, Bobby Storey being a trusted confidante.

For his part, McGuinness has long been linked to the horrific 1987 Enniskillen bombing that killed 11 people.

The Stormont power-sharing agreement was left teetering at week’s end amid fears the Provisional IRA will become a headliner again and that a return of The Troubles could be near.

[Remember, the IRA has long had links with the worst terrorists in the world.]

Random Musings

--For about the fourth or fifth time, someone or some group from China launched an attack on my site this week. I was down about 1 ½ hours on Thursday. We know this because the large company hosting StocksandNews identified the origin, just no specifics as yet. I’m really tired of this.

Friday, China reacted angrily after Director of National Intelligence James Clapper said the U.S. must beef up cyber security against Chinese hackers targeting a range of interests to raise the cost to China of engaging in such activities.

In turn, China said the United States should stop “groundless accusations.”

I really want to say a lot more, but moving along....

--In a new national Monmouth University Poll of Democrats and Democratic-leaning voters, Hillary Clinton received just 42%, down from 52% just one month ago, while Joe Biden garnered 22% and Bernie Sanders 20%, an increase of 10% for Biden.

But when asked if they would back Biden if he got into the race, another 7% said they would be very likely to consider him and a further 34% would be somewhat likely. So as Patrick Murray, director of polling for the Monmouth Univ. Polling Institute said, “For a guy who is not running for president, Biden sure is making headway against the frontrunner.”

23% of Democratic voters said they would be more likely to support Biden if he promised to name Sen. Elizabeth Warren as his running mate; 7% would be less likely.

--In a CNN/ORC national poll released Thursday, Donald Trump became the first Republican presidential candidate to top 30% support at 32%, versus 19% for Ben Carson...two non-politicians thus representing a majority of Republicans and Republican-leaning independents. Jeb Bush was third at 9%, followed by Ted Cruz (7%), Mike Huckabee (5%) and Scott Walker (5%).

But the biggest figure for this survey is the number of Republican voters who think Trump is most likely to emerge as the GOP winner...51%, well ahead of the 19% who think Bush will top the party ticket.

CNN has the next debate on Wednesday, minus Rick Perry in the happy hour segment...Perry having suspended his campaign on Friday. I said weeks ago he was already out. He was. Key staffers said he stopped contacting them.

--In an NBC News/Marist College poll, Trump increased his lead in both Iowa and New Hampshire. Trump leads Carson in Iowa, 29-22. In July Trump trailed Scott Walker 19-17, while Carson was fourth at 8%.

In New Hampshire, Trump leads John Kasich, 28-12, with Carson third at 11%.

Scott Walker is down to 5% in Iowa and 4% in New Hampshire, while Jeb Bush is at 6% in Iowa and 8% in New Hampshire.

Back in February, the same NBC/Marist survey had Mike Huckabee leading in Iowa at 17%, followed by Bush at 16% and Walker 15%.

In New Hampshire, Bush led then with 18%, followed by Walker at 15% and Rand Paul 14%.

Of course back in February there was no Trump candidacy.

By the way, Marco Rubio must be in a state of shock, polling just 4% in Iowa and 3% in New Hampshire. [He’s my second choice behind Kasich. But it’s fluid...he typed with a smile.]

On the Democratic side, in the NBC/Marist survey, Bernie Sanders leads Clinton in New Hampshire, 41-32, with Biden at 16%. Back in July, Clinton led Sanders 42-32, with Biden at 12%.

In Iowa, Clinton still leads Sanders, 38-27, but this is a big comedown from July’s 49-25 margin. Biden is at 20%.

Meanwhile, in hypothetical matchups, the NBC/Marist poll found that Bush beat Clinton in Iowa, 50-39, while Trump prevails only 48-43.

But Biden beats Trump in Iowa 49-45.

In New Hampshire, Clinton beats Trump 46-45, but Biden whips The Donald 50-41.

--Hillary Clinton finally apologized for using a private email server while she was secretary of state, telling ABC’s David Muir, “That was a mistake. I’m sorry about that. I take responsibility.”

But this was a day after she told the Associated Press she did not need to apologize, saying, “What I did was allowed.” Last week on NBC News, Clinton said she was “sorry” people were confused by the issue.

Clearly, some of her advisers finally got to her and said she needed to use stronger terms. But....

Edward Luce / Financial Times

“Apologies are meant to draw a line under a problem. Yet Hillary Clinton’s admission on Tuesday night that it was a mistake to route her official correspondence through a private email account is unlikely to pass that test.

“It took six months of denial before the Clinton campaign realized the controversy was not going to go away. Mrs. Clinton has now admitted it was a mistake both to use a separate account and to have evaded questions about it.

“But she did not explain why. The questions will thus continue.

“Her problems are both legal and political. With or without the apology, Mrs. Clinton has no control over how the investigations will unfold. That is in the hands of FBI investigators who are trying to unlock 30,000 ‘personal’ emails that were deleted from Mrs. Clinton’s private server. It is also in the hands of federal judges who are assessing now fewer than 35 lawsuits against the U.S. state department to release further emails from Mrs. Clinton’s trove....

“Mrs. Clinton maintains that none of the emails included content that was classified at the time. This has already been disproved.

“Now it turns out that at least two had information deemed ‘Top Secret’ – one of which was about North Korea’s nuclear weapons program. If more come out, doubts will only escalate.

“Likewise, if FBI investigators turn up deleted emails that included conflicts of interest between the Clinton Foundation’s work and Mrs. Clinton’s role as secretary of state, these could also prove toxic....

“There is no easy way for Mrs. Clinton to regain her ascendancy. Last week, Robert Redford, the normally reliably liberal movie star, praised Donald Trump for ‘shaking up’ the 2016 Republican race. He quickly denied he was endorsing Mr. Trump for president.

“Less noticed was Mr. Redford’s sideswipe at Mrs. Clinton. ‘On the other side [the Democratic race], it’s so bland, it’s so boring, it’s so empty,’ he said.

“Even without the email controversy, in other words, Mrs. Clinton’s campaign is in trouble.”

--Bruce Bartlett (former Reagan adviser) / Washington Post

“It’s safe to say that virtually all political professionals think Donald Trump’s presidential campaign is doomed. The odds of him winning the Republican nomination are long, and the odds of him winning the general election are nonexistent, they say. The key reason is that Trump’s campaign is based on alienating Latinos, a large and fast-growing voter bloc, by supporting the deportation of 11 million undocumented immigrants and building a wall along the border with Mexico to prevent further emigration. If the eventual Republican nominee needs 47 percent of the Latino vote to win the general election – the threshold set by two political scientists in a study for Latino Decisions – what chance does Trump have?

“But if Trump could replace Latino votes with those of another large minority group that traditionally votes Democratic, he might have a fighting chance at victory. And even without changing his message, black voters could be that group.

“African Americans have long been receptive to the anti-immigrant concepts behind Trump’s campaign. Simply put, the jobs, housing and other opportunities that immigrants take come largely at the expense of blacks who were born in the United States....

“Translating potential black support for anti-immigration policy into votes for Trump would not be easy. Black voters overwhelmingly pick Democrats in presidential elections. On the other hand, Republicans have not seriously competed for African American votes since 1960, when Richard Nixon received one-third of the black vote....

“But immigration gives Trump entrée to African Americans with an issue that will resonate with many and at least give him a hearing. An aggressive effort by him to court black voters could change the political dynamics and hit Democrats where they least expect it.”

I totally agree, and Trump is already polling very well among blacks in some national surveys.

--And now some anti-Trump opinion....

Editorial / The Economist

“The country has flirted with populists in the past, but none has won a major-party presidential nomination since William Jennings Bryan in 1908.   The closest any true firebrand has come was in 1996, when Pat Buchanan, whose slogan was ‘The peasants are coming with pitchforks,’ won the Republican primary in New Hampshire against a dull establishment candidate, Bob Dole. (Mr. Dole later won the nomination.)

“Mr. Trump is far more dangerous than Pitchfork Pat, for two reasons. First, as a billionaire, he will not run out of money to finance his campaign. Second, he faces so many Republican opponents that he could grab the nomination with only a modest plurality of the vote. The smart money still says that Republicans will eventually unite behind a mainstream candidate, as they always have in the past. But the world cannot take this for granted. Demagogues in other countries sometimes win elections, and there is no compelling reason why America should always be immune. Republicans should listen carefully to Mr. Trump, and vote for someone else.”

--George Will / Washington Post

“Donald Trump, whose promises are probably as malleable as his principles, promises to support the Republican nominee. Some of his rivals for the nomination, disoriented by their fears and envy of him, are making the GOP seem like the party of boneless wonders.

“Some, who loudly lament how illegal immigrations damage the rule of law, have found a heroine in Kentucky. A county clerk, whose devotion to her faith is not stronger than her desire to keep her paycheck, chose jail rather than resignation when confronted with having to comply with the U.S. Supreme Court and the Constitution regarding same-sex marriage.

“Mike Huckabee, Rand Paul, Bobby Jindal and Scott Walker think her religious freedom is being trampled. So does Ted Cruz, who surely knows better. He clerked for Chief Justice William Rehnquist and must remember the 1892 case in which a Massachusetts policeman claimed that rules restricting political activity by police violated his constitutional rights. Rejecting this claim, Justice Oliver Wendell Holmes Jr. of the Massachusetts Supreme Judicial Court wrote that the officer ‘may have a constitutional right to talk politics, but he has no constitutional right to be a policeman.’”

I stand with Mr. Will on the issue of Kim Davis, the county clerk.

Similarly, I in no way support the Muslim flight attendant for ExpressJet who said she was suspended for refusing to serve alcohol, a practice that is against her religious beliefs.

Charee Stanley is her name and she filed a discrimination complaint with the EEOC, saying she wants to do her job without serving alcohol, as apparently was the case before her suspension.

What a crock. You all know that on many of these planes there is only one flight attendant, for starters. Her attorney told CNN no one “should have to choose between their career and religion.”

Bull. If I’m proven to be way off base, I’ll apologize.

--Pope Francis issued guidelines making it simpler to get a marriage annulled, an attempt to ease a complicated process, but the reforms do not change or ease the criteria for seeking the annulment and there is no shift in Church doctrine. The decisions, made by a bishop, will instead be fast-tracked.

--Baltimore reached a settlement of $6.4 million with the family of Freddie Gray, a staggering sum that will be paid $2.8 million this fiscal year, $3.6 million the next (fiscal year beginning in July of 2016). Mayor Stephanie Rawlings-Blake announced she will not seek re-election in 2016.

--Homicides are up 23% in Chicago this year. There were eight in a single day, Sept. 2. Much of the carnage remains gang related.

Get this: “Authorities have said a reputed leader of the Simon City Royals gang used some of the winnings from a $25-million verdict for a wrongful murder conviction to recruit new members through intimidation and $50,000 cash bonuses. Last month, Thaddeus Jimenez was arrested on charges he shot a former gang member in the legs in a brazen daylight attack after the victim refused efforts to rejoin the gang.” [Lolly Bowean / Chicago Tribune]

Oh brother.

--According to a paper published in JAMA, about half of all Americans have either diabetes or pre-diabetes, but this is actually viewed as good news because the prevalence of diabetes in the U.S. has begun to plateau. Progress is attributed to implementation of food, nutrition and physical activity policies and regulations by state and local governments, among other efforts to curb obesity.

--And on Friday came word of a landmark federal study that urges doctors to bring their patients’ blood pressure – the top number – from the benchmark 140 to 120.

Forever, clinical guidelines have called for a systolic blood pressure of 140 for healthy adults, but in a study, blood pressure medication to keep systolic pressure at 120 “cut the rate of heart attacks, strokes and heart failure by a third and the risk of death by almost 25 percent,” as reported by Lenny Bernstein of the Washington Post.

The data was so compelling, researchers cut the study short by about a year to report the news.

Basically, this is more important than keeping your cholesterol down, though both are key, mused the editor who is not a real doctor, but plays one on the web.

--NASA’s Jet Propulsion Laboratory is still predicting that El Nino is on track to become one of the most powerful on record, though some changes in the wind patterns are still necessary to drive heavy rainfall into California. Other forecasts are unanimous that the state will receive drought-busting rain.

The effects of El Nino have already been felt with an increased number of hurricanes in the eastern Pacific.

--There have been a slew of stories concerning the latest data that shows a 14% surge in fatal accidents the first half of the year, which is due in large part to texting. I want to go Charles Bronson on everyone I see doing this. That AT&T commercial of the woman getting into a crash while texting is a terrific one. I hope the message begins to get across, but I doubt it will.

I saw a piece in the Wall Street Journal that notes two of the three largest car insurers, Geico and Allstate, have been hiking premiums due to the unexpected new accident claims. Now I’m even more pissed that I’ll be paying extra for a bunch of a-holes. 

Warren Buffett, whose Berkshire Hathaway owns Geico, said distracted driving is the cause of the big jump in fatalities. The National Safety Council estimates one in four car crashes involves cellphone use.

So if you’re an offender, especially with kids in the car, cut the crap!

--From Amy Ellis Nutt / Washington Post:

“The two amateur cavers had to feel their way along the cave’s winding passages, crawl on their stomachs through an opening less than 10 inches high, ascend a jagged wall, cross a narrow ledge dubbed the ‘Dragon’s Back,’ and make a 400-foot descent, sideways, through a vertical crack before finally arriving at the prize: a 30-foot-long chamber probably between 2 million and 3 million years old.

“American paleoanthropologist Lee Berger had asked the men to keep their eyes open for fossils....

“What they found in September 2013 nearly took their breath away: fossil fragments of a relative of the human species...

“After a month of excavation under some of the most difficult and dangerous of conditions, then two years of analysis by more than 50 international experts, (the leaders) of the expedition announced Thursday that those fossil fragments do indeed belong to a new species of human relative they are calling Homo naledi.”

Donald Trump has not had an opportunity to insult Naledi as yet, but I’m sure it will be a doozy when he gets around to it. “Would you invite that Homo Naledi guy to your dinner party? I mean look at that face!”

--Finally, Happy Birthday to Arnold Palmer, who turned 86 on Thursday. We love you, Arnie!

---

Pray for the men and women of our armed forces...and all the fallen.

*We remember 9/11 and those going up while the rest were coming down.

God bless America.
---

Gold $1103
Oil $44.63

Returns for the week 9/7-9/11

Dow Jones +2.05% [16433]
S&P 500 +2.1% [1961]
S&P MidCap +2.0%
Russell 2000 +1.9%
Nasdaq +3.0% [4822]

Returns for the period 1/1/15-9/11/15

Dow Jones -7.8%
S&P 500 -4.75%
S&P MidCap -2.6%
Russell 2000 -3.9%
Nasdaq +1.8%

Bulls 25.7
Bears 27.9 [Source: Investors Intelligence...lowest bull number since Oct. 2008 (22.4)...]

Have a great week. I appreciate your support.

Brian Trumbore