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04/09/2016

For the week 4/4-4/8

[Posted 11:00 PM ET, Friday]

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Edition 887

Washington and Wall Street

Despite some Federal Reserve governors continuing to issue statements like St. Louis Fed President James Bullard did this week, that “the committee certainly reserves the right to make a move” on interest rates “at any time,” clearly an April rate hike is off the table, with the just-released minutes from the March 15-16 meeting saying in part:

“Several (FOMC members) expressed the view that a cautious approach to raising rates would be prudent or noted their concern that raising the target range as soon as April would signal a sense of urgency they did not think appropriate....

“Many participants expressed a view that the global economic and financial situation still posed appreciable downside risks to the domestic economic outlook...(Data relevant to the Fed’s thinking) include not only domestic economic releases, but also information about developments abroad and changes in financial conditions.”

As for the current data, it was a light week with February factory orders falling 1.7% as expected, while the ISM reading on services for March was a solid 54.5, better than forecast.

But economic prognosticators have been lowering their forecasts for first-quarter GDP, with the Atlanta Fed’s GDPNow indicator projecting growth of just 0.1% when on March 11 it was forecasting 2.3%.

Then you have earnings, which will start coming in this week for the first quarter.  The forecast for the S&P 500, as measured by S&P Global Market Intelligence, is for a decline of 7.6% year over year, the third straight quarter of weakness, and it’s not just energy.  Ex- this sector, earnings are still projected to be -3.3%, though consumer discretionary is forecast to rise 11.4%.

On the other hand, the dollar has been falling and that is good for U.S. multinationals and exporters, reversing a trend that had the dollar as a hindrance.  If the dollar stabilizes around current levels, eventually the year over year comparisons will become much easier to exceed.

Greg Ip of the Wall Street Journal summarized the impact of the reversal of the dollar’s long rise.

“(The) dollar’s slide, which began before (a G20 meeting in Shanghai back in February) but accelerated thereafter, does signal something important: The worst threats that hung over the global economy at the start of the year – higher U.S. interest rates, an oil-price collapse and a Chinese economic slump – have receded. The global economy isn’t about to take off, but its miserable first quarter may mark the bottom.”

Barring something awful on the geopolitical front, I tend to agree with this.

I believe the Fed will be in a position to raise interest rates in June, though I admit the British referendum on staying in or exiting the European Union may see the Fed waiting further.

Separately, in its latest forecast released on Thursday the World Trade Organization said it expected the volume of international trade to grow by just 2.8 percent this year, in line with the growth recorded in 2015.  But the WTO said downside risks remained.

This would be the fifth straight year of trade growing below 3 percent, in line with the tepid tone of the global economy.

Next week the International Monetary Fund is expected to downgrade its own 3.4 percent forecast for global growth when the IMF and World Bank gather for their spring meetings in Washington.

In a preview of what is coming, IMF managing director Christine Lagarde said growth “remains too slow, too fragile and risks to its durability are increasing,” adding that the threat of a “new mediocre” of weak economic progress had risen.

“Because growth has been too low for too long, too many people are simply not feeling it,” Lagarde said on Tuesday in Frankfurt.

Europe and Asia

Lots of economic data on the eurozone this week.  The unemployment rate, per Eurostat, for the EA19 in February was 10.3%, down from a revised 10.4% in January.  The high was 12.1% at the end of 2013.

Germany had the lowest at 4.3%, but France was 10.2%, Italy 11.7%, Spain 20.4% (down from 23.2% a year earlier), and Greece 24.0% (December).

You also continued to have sky-high youth unemployment rates of 45.3% in Spain and 48.9% in Greece (Dec.).

All in all, still far too many jobless; essentially double that of the U.S. with its 5.0% official rate.

Markit released its final services PMIs for March.  The eurozone reading was 53.1 vs. 53.3 in February (50 being the dividing line between growth and contraction), with Germany at 55.1, France 49.9, Spain 55.3 (up from 54.1 in Feb.), Italy 51.2 (down from 53.8), and non-euro UK 53.7.

Retail trade in the EA19 was up 0.2% in February over January; 2.4% year over year, respectable.  But Markit’s retail PMI for March was only 49.2.

Industrial prices in the eurozone fell 4.2% in February vs. Feb. 2015.  Ex-energy the decline was 0.8%.

In Germany, industrial production was down 0.5% in February over January, with factory orders declining 1.2% for the period.  Exports rose 1.3%.

Italy downgraded its growth outlook for 2016 from 1.6% to 1.2%, but the Italian stock market rose nearly 4% on Friday amid rumors of a bank rescue come Monday.  More on this next time.

Separately, Italian Prime Minister Matteo Renzi could be in a heap of trouble as Telecom Italia SpA, Italy’s biggest phone company, is considering laying off about 15,000 in response to competition from state-controlled utility Enel SpA, as the latter spends $2.9 billion on a network that will be open to Telecom Italia’s competitors who could provide faster Web access.

Enel’s biggest investor is Italy’s Economy Ministry with a 24 percent stake, thus making the Renzi government party to a move that would cause extensive pain for workers at Telecom Italia.

The head of the telecommunications union told Bloomberg that the result is a “potential bloodbath” the government could have avoided by putting money into Telecom Italia instead of favoring a state-owned company operating in a different industry.

Back to the eurozone economy overall, in a speech, European Central Bank chief Mario Draghi reiterated his call for governments across the bloc to take action as monetary policy alone cannot lift the eurozone’s economy, though he thinks monetary policy can still play a positive role.

“The measures we announced on 10 March 2016 will further contribute to achieving our aim of price stability.  Of course, it will take time for these latest measures to start working their way through the economy and delivering their full benefits.  Nevertheless, they constitute a substantial package which gives priority to loans for households and businesses, thus further supporting economic activity in the euro area.”

But the euro currency has been rising against the U.S. dollar, exactly what the likes of the ECB didn’t want.

On a different issue, according to a transcript of an internal IMF teleconference published by WikiLeaks, the IMF is considering forcing Germany’s leadership to quickly grant wide-ranging debt-relief for Greece or the Fund will threaten to exit Athens’ latest bailout program.

German officials have repeatedly said they could not participate in the bailout without the IMF on board, and members of the Bundestag have warned Chancellor Angela Merkel that they will reject any new eurozone loans to Greece without IMF participation.

According to the transcript, Poul (sic) Thomsen, head of the IMF’s European bureau, suggests that the IMF confront Merkel to either agree to the relief or allow the IMF to exit, seeing as Berlin is already under intense pressure because of the refugee crisis.

The point of the IMF in calling for debt relief is the Fund believes this is the only way Greece can survive economically, but a decision has been delayed until July, when Greece is faced with its next big debt payment.

This is where Britain’s referendum on Brexit comes into play since its June 23. 

But Christine Lagarde hit back at Greece over claims the IMF is seeking to push the country towards default.  Lagarde defended the staff quoted in the leaked transcript, which she hints may have been the result of spying on behalf of Greek Prime Minister Alexis Tsipras.

Most importantly, Greece still hasn’t cut a deal on pensions, tax collecting or its fiscal gap, along with issues like non-performing loans and the privatization fund, which has been a huge disappointment thus far, all of which hasn’t exactly endeared it with its creditors.

What are the odds of another Greek crisis this summer?  Pretty high.  Reforms aren’t being implemented, Tsipras’ popularity is sliding and there is little enthusiasm for debt relief among the likes of Germany, so you have a looming problem.  Merkel only won over skeptical members of her conservative political bloc to back the Greek bailout in a parliamentary vote by saying the IMF would take part in the rescue plan.  She reiterated on Tuesday that a debt haircut was not possible as long as Greece remains in the eurozone (because it isn’t legal, say the Germans).

Meanwhile...in other European Union news...

Ireland’s political stalemate continues after the main opposition party (Fianna Fail) rejected an offer of a coalition with rival Fine Gael.

Enda Kenny, the outgoing prime minister and leader of Fine Gael, made the unprecedented offer to form a coalition government with Michael Martin, Fianna Fail leader.  So now it’s up to the two parties to try to win over enough independent MPs, but few expect this to bear fruit.  Another election may be in the offing.

And there was a very ugly incident on the border between France and Spain.  French farmers seized Spanish lorries and drained their cargo of wine, which Spain attacked as a “flagrant violation of the basic principles” of the EU.

Farmers have been protesting against unfair competition and falling prices (in this case cheap wine from Spain and Italy).

Spain declared that France must “adopt all appropriate measures to guarantee, with absolute security, the free movement of people and goods.”

A Spanish association representing the lorry drivers said French police did nothing to prevent the attacks. 

Lastly, at week’s end Italy has another developing issue.  It recalled its ambassador to Egypt for “consultations” amid escalating tensions between the two over the brutal murder in Cairo of a 28-year-old Italian doctoral student.

The Italian, a Cambridge university student researching trade unions in Egypt, was kidnapped, tortured and savagely killed in a case many activists say bears the hallmarks of Egypt’s security services.

Since the body was found in February, Egyptian authorities have offered a variety of contradictory explanations for the killing, but Italian officials and prosecutors don’t believe what the Egyptians are telling them.

Prime Minister Renzi said, “Italy will only stop with the truth.”

This is a big blow to the regime of Abdel Fattah al-Sisi.  Rome has viewed Cairo as an important ally in the fight against terrorism and has sought Sisi’s help in securing a peace deal in Libya.

But Renzi is under intense domestic political pressure to take a tough stance.

On the migrant crisis front, the new deal went into effect on Monday and there have been violent protests, particularly on the Greek islands.  The last thing you want if you’re a migrant is to be sent back to Turkey.  But this new process is just getting started.  [The issue with the refugees on the border with Macedonia continues to get worse as well, with clashes there today.]

Daniel Kehlmann / New York Times

“When I returned to Berlin recently after a few months away, a friend asked me to try a new Chinese restaurant in Kreuzberg, a hip multiethnic neighborhood in the city.  ‘It’s close to the subway station Kottbusser Tor,’ he texted. ‘But take a cab, otherwise it’s too dangerous.’

“I would have thought he was joking, but he is not the type. I asked the cabdriver, a young man of Turkish origin.  Had Kottbusser Tor suddenly become a no-go zone? To my shock, he replied, ‘Yes, now that all these people from North Africa are here it has become really dangerous.’

“I got out of the cab and looked around.  Tourists strolling, a few people on bicycles in spite of the cold, women in head scarves pushing strollers.  Had the city changed?  It looked the same to me.  But my friend is not prone to hysteria, and the cabdriver didn’t seem as if he was either, so the friendly scene suddenly seemed ominous.

“That’s how one often feels in Germany these days.  One tries to constantly make sense of the latest news and the seemingly contradictory reality.

“Last year, a friend from Vienna had a business meeting in Munich. Traveling from Vienna to Munich used to be easy, either four hours on a comfortable train or three hours on the highway, the border crossing noticeable only to those paying attention to the change of train conductors or the welcome signs on the highway. But now Munich had suddenly become impossible to reach. Train service had been suspended because the trains couldn’t handle the high number of refugees and the old border checkpoints on the highway had been put back in place for the moment, armed by police officers checking every single car and passport. After waiting in line for three hours, my friend turned around and drove back to Vienna.

“We all became so used to Europe’s open borders that it seemed unimaginable to turn back the clock. As long as civilization was working it seemed as reliable as a force of nature, so it is baffling when we suddenly see it disappear.

“And then, the terror.  Germans are deeply disturbed by the terrorist attacks in Paris and Brussels, and everyone expects it to be Germany’s turn sooner or later....

“If there is ever a terrorist attack in Germany, and if refugees play a role in carrying it out – exactly what terrorists would be expected to do – chances are high that the new German openness will end.”

[And as I’ve been predicting, Merkel would be toast.]

Finally, Israeli Defense Minister Moshe Ya’alon told his Polish counterpart, Antoni Macierewicz, that there are “hundreds of jihadists planning to strike Western targets on European soil.”

British Prime Minister David Cameron warned ISIS is planning to use drones to spray nuclear material over Western cities in a horrific “dirty bomb” attack.  ISIS is believed to have seized around 90 pounds of low grade uranium from Mosul University in Iraq after taking over the city in 2014, though this particular material wouldn’t cause much serious physical harm but it would sow panic.

The University of Mosul has become a key training facility in the use of various bombs, including the suicide-bomb vests used in Brussels and by some of the Paris attackers.  The U.S. says it has bombed the school.

Turning to Asia, a reading on China’s service economy by Caixin came in at 52.2 for March vs. 51.2 in February, so a further sign of stabilization here.  But this coming week will see telling numbers on trade, inflation and first-quarter GDP.

In Japan, it’s a different story.  The reading on the service sector fell in March to 50.0 from 51.2, and the Japanese yen continued to rise, exactly opposite of what the nation’s central bankers expected when they adopted negative interest rates in January as part of a plan to stimulate growth with a weaker currency that would make exporters more competitive.

But because of the Federal Reserve’s dovish tone, the dollar has fallen 10% against the yen this year.  The resurgence in the yen (after hitting a 13-year low against the dollar last June) has pressured Japanese stocks, with the Nikkei benchmark index down nearly 17% thus far in 2016.

Yes, after three years, Prime Minister Shinzo Abe’s plan for economic revival, Abenomics, has been a failure.  Once again the Japanese economy is dead in the water.  No growth, no inflation, and poor wage growth.

Panama Papers

In the largest data leak ever to be released, eleven million documents, the Panama Papers have exposed how hundreds of world leaders, public officials and billionaires have been hiding their assets in offshore bank accounts.

Released last weekend, the leak was originally shared with the International Consortium of Investigative Journalists and reveals a web of global corruption tied to a Panama-based law firm, Mossack Fonseca, that has been facilitating tax havens and hiding stashes worth billions; Panama being a remaining bastion of bank secrecy.

Many current and former world leaders have been linked to off-shore companies managed by the Panama firm, at least 72 in all.

In addition 29 billionaires on the Forbes 500 richest people list were found to have connections to Mossack Fonseca.

The law firm defended itself, saying it “does not foster or promote illegal acts.”  And just because an individual created a company in Panama, or opened bank accounts there, doesn’t necessarily mean the individuals did anything unlawful, plus some of those named have said they had legitimate business dealings warranting a Panamanian presence.

That said, many of the actions documented suggest an attempt by some to circumvent Western sanctions on regimes or individuals.

But whereas I could write 40 pages alone on this issue, for now I’ll try to summarize some of the key individuals who are involved, particularly the politicians.

Among the chief findings was a large suspected money laundering ring involving close associates of Vladimir Putin, though he himself is not named.  Rather, the likes of concert cellist Sergei Roldugin, who has long known Putin since they were teenagers and is godfather to the president’s daughter Maria, personally made hundreds of millions of dollars in profits on suspicious deals, the proceeds of which were then funneled through companies set up by Mossack Fonseca, with the documents from Roldugin’s companies stating: “The company is a corporate screen established principally to protect the identity and confidentiality of the ultimate beneficial owner of the company.”  Ergo, Roldugin is no doubt acting as a front for someone else.

Bank Rossiya – a Russian bank on the EU and U.S. sanctions list, is the source through which $billions were funneled to various countries including Switzerland and Panama.

In response, Kremlin spokesman Dmitry Peskov said investigative journalists are publishing material linking Putin to offshore companies in an attempt to “destabilize the situation in Russia.”

“Other heads of government are featured but only photographs of Putin are published,” Peskov said.

As for Russians mentioned in the documents, the Prosecutor General’s Office said it would investigate “to find out if Russian nationals acted according to the norms of Russian laws.”  [Ha.]

Regarding China, the documents named the family members of at least eight current or former members of the Communist Party’s elite Politburo Standing Committee, including the brother-in-law of President Xi Jinping.  The issue here is that Xi has waged a far-reaching anti-corruption campaign to restore the party’s credibility in the eyes of a Chinese public fed up with graft, but it is unlikely the public will see much if anything on the Panama Papers given the media crackdown described further below.

But then you have British Prime Minister David Cameron, who was accused of hypocrisy after it was revealed that he profited from an offshore trust set up by his late father Ian Cameron, a stock broker.  While Cameron’s enemies said he could not be held to account for the actions of his father, he “can for hypocrisy.”

Tom Watson, the deputy leader of Britain’s opposition Labour Party, said: “(The prime minister) said sunlight is the best disinfectant and wasn’t entirely straight with the British people about what his own financial arrangements were.  That wouldn’t be so bad if he hadn’t also been lecturing very prominent people about their own tax arrangements, some he called morally wrong.”

Cameron previously refused to say whether he made any money from the fund, called Blairmore Holdings, but then on Thursday, in a televised interview he said that prior to becoming the British leader he sold shares from the fund worth about $48,000.  He said that his father’s fund was not set up to avoid taxes and he himself paid taxes on the shares he sold.

The timing for Cameron could not be worse what with the looming June 23 referendum on Brexit. 

Then you have Argentine President Mauricio Macri.  Macri is the son of an Italian-born tycoon and one of Argentina’s wealthiest people. His name showed up on documents related to two offshore companies.

Macri said there was no wrongdoing and “I have nothing to hide.”

Macri said he was not a shareholder in the offshore entities and that as a director he never received any remuneration and that he revealed the details to the anti-corruption office when he became president.

The only real casualty thus far has been Iceland’s prime minister, who was forced to resign on Tuesday after the documents showed the PM owned an offshore firm with his wife.  The current minister of fisheries and agriculture (which is a big position here) becomes prime minister and the country will try to continue with the current two-party coalition government, though early elections would appear to be on the docket for the fall.

It also needs to be noted that many of the companies set up by Mossack Fonseca were Nevada and Wyoming based; these two becoming secretive havens as much as Bermuda and Switzerland have long been, as USA TODAY put it.  Many of the companies don’t list corporate officers in state records, but instead may have just one address, say in Panama.

Editorial / The Economist

“Corruption makes the world poorer and less equal.  When politicians steal, they reduce the amount of public cash left over for roads or schools. When they give sweetheart contracts to their chums, they defraud taxpayers and deter honest firms from investing in their country. All this hobbles growth.

“Cleaning up tax havens will not end graft.  The prime responsibility for this lies with national governments, many of which should do more to make their finances transparent and their safeguards against cronyism stringent. But it would help if kleptocrats were less able to hide their stashes.  Hence coordinated global efforts are required to crack down on corporate anonymity and to stop the middlemen who make it so easy for crooks to launder their loot.

“Many schemes described in the Panama papers involve anonymous shell companies, whose real owners hide behind hired ‘nominees.’  Such vehicles are known as the ‘getaway cars’ for tax dodgers, launderers and crooked officials.  It is time to untint their windows by creating central registers of beneficial ownership that are open to tax officials, law-enforcers – and the public.  The penalties for lying when registering a firm should be stiff.  Britain and a few smaller countries have led the way in this.  Others should follow.”

Street Bytes

--Stocks fell for a second week in three, with both the Dow Jones and S&P 500 losing 1.2%, while Nasdaq fell 1.3%.  The next few weeks it’s about earnings.

--U.S. Treasury Yields

6-mo. 0.34%  2-yr. 0.69%  10-yr. 1.72%  30-yr. 2.55%

Treasuries rallied a bit as it was a bit of a ‘risk off’ week, plus you had plunging yields around the world.

In fact the German 10-year Bund finished the week with a yield of 0.09%, just off its all-time closing low of 0.073%.  The Bund finished last year with a yield of 0.63%.

The competition for German debt between the ECB and its bond-buying program and private investors is helping to keep yields incredibly low.  But from a risk-reward standpoint, it is nuts to buy euro paper.  Italy with a 10-year yield of 1.31%?  When the bond bubble reverses, and it will at some point, Enzo bar the door.

--According to Bank of America Merrill Lynch, just 19% of U.S. mutual funds that invest in “large-cap” companies like Apple and IBM managed to outperform the S&P 500 in the first quarter, the lowest quarterly “beat rate” (the percentage beating the market) in its data, which stretches back to 1998.

--Shares in Dublin-based Allergan cratered Tuesday following word of the Obama administration’s plans to deter “tax inversions,” which in Allergan’s case killed its proposed merger with Pfizer.

For two years “inversion” deals, that shift the headquarters of U.S. companies to overseas bases with lower tax rates, have been a major controversy and Pfizer’s $160bn takeover of Allergan was the biggest proposed inversion to date, so its collapse sent shockwaves through both Wall Street and Washington.

The Treasury Department is proposing changes that make it harder to reach the ownership threshold necessary to make an inversion deal work.

Kevin Brady, the top Republican tax writer in the House of Representatives, said: “Instead of unveiling commonsense policies to help American employers compete globally and create new jobs for our workers, the Obama administration just announced punitive regulations that will make it even harder for American companies to compete.”

U.S. executives have long argued, correctly, that it is an uncompetitive tax code that puts them at a disadvantage versus foreign rivals and is forcing them to flee.  The top corporate income tax rate of 35 percent compares with 20 percent in the UK, for example, and 12.5 percent in Ireland.

Editorial / Wall Street Journal

“CEOs have learned to keep mum in the Obama era, lest their companies be punished like J.P. Morgan after Jamie Dimon criticized some parts of Dodd-Frank.  So it’s worth noting the candid reaction after a new Treasury rule scuttled the merger between Pfizer Inc. and Allergan PLC. The companies ended their $150 billion tie-up after Treasury Secretary Jack Lew issued new rules that made it harder for companies like Pfizer to move to Ireland to legally lower their taxes.  Pfizer will have to pay Allergan a breakup fee of $150 million, though Allergan shares are still down more than $10 billion since the Treasury ambush.

“Pfizer CEO Ian Read (notes) capricious political power helps explain the economic malaise of the last seven years.  ‘If the rules can be changed arbitrarily and applied retroactively, how can any U.S. company engage in the long-term investment planning necessary to compete,’ Mr. Read writes.  ‘The new ‘rules’ show that there are no set rules.  Political dogma is the only rule.’

“He’s right, as every CEO we know will admit privately.  This politicization has spread across most of the economy during the Obama years, as regulators rewrite longstanding interpretations of longstanding laws in order to achieve the policy goals they can’t or won’t negotiate with Congress. Telecoms, consumer finance, for-profit education, carbon energy, auto lending, auto-fuel economy, truck, emissions, home mortgages, health care and so much more.

“Capital investment in this recovery has been disappointingly low, and one major reason is political intrusion into every corner of business decision-making.  To adapt Mr. Read, the only rule is that the rules are whatever the Obama Administration wants them to be.  The results have been slow growth, small wage gains, and a growing sense that there is no legal restraint on the political class.”

--The Justice Department ruled that Halliburton can’t merge with rival oil-services company Baker Hughes.  Attorney General Loretta Lynch said, “The proposed deal...would eliminate vital competition, skew energy markets and harm American consumers.”

Halliburton and Baker Hughes, in a joint statement, said they intend to ‘vigorously contest’ the lawsuit.

But, in the same statement, the companies said they “may terminate the merger agreement” if the review extends beyond the April 30 date when BH can contractually exit the deal and pocket what appears to be a record break-up fee of $3.5 billion.

This is going to be the result since a trial supposedly wouldn’t begin until August, plus the European Commission is now likely to block the deal which would force a multi-year delay.

The breakup fee is outrageous and way above the norm on a percentage basis.  Ergo, blame Halliburton’s lawyers for putting in such a huge fee in order to get the deal done.  After all, Halliburton and Baker Hughes are two of the three largest integrated oilfield service companies in the world.

--The U.S. oil rig count declined again this week by 8 to 354, according to Baker Hughes.  This is the lowest level since November 2009.

But this report, along with rumors that the Doha oil producers meeting on April 17 may go better than expected, i.e., a real production freeze (which ain’t gonna happen), plus an unexpected decline in U.S. crude inventories for the first time in two months, led to a 6% move up at week’s end to $39.72 on West Texas Intermediate.

--Spending in Canada’s oil and natural gas sector has fallen by a record $38bn over the past two years, according to the Canadian Assoc. of Petroleum Producers, marking the biggest two-year decline since 1947 when the data was first collected.

CAPP projects the total number of wells drilled in Canada’s western provinces, home to the third-largest oil reserves in the world, would fall to 3,500 in 2016 from 10,400 drilled in 2014.

--Russia’s oil production rose to 10.91 million barrels per day in March, its highest level in nearly 30 years, raising questions over Moscow’s commitment to freeze production ahead of the producers’ meeting.  [The record in Russia is 11.47mbpd set in 1987.]

--Once again, being a lifelong owner of Honda Accords (I’m on number nine, I think), with the automaker’s admission this week there was another fatal accident resulting from an exploding air bag made by Takata Corp. in a Honda vehicle (this one a 2002 Civic), all of us who have been driving these cars all these years can just thank their lucky stars they didn’t suffer a similar fate.

This was the 10th known death in the U.S. from a Takata inflator, with more than 100 hurt.

In the latest incident, March 31 in Texas, the Civic collided with another car, setting off the air bags.  Honda’s records show that the car was first recalled in 2011, but that despite several recall notices, repairs were never completed.

--Fiat Chrysler plans to cut 1,300 jobs this summer at the Michigan factory where it assembles a small Chrysler sedan, a blow to the automaker and the United Auto Workers union as it’s the first large-scale cutback since 2009. There simply isn’t demand for certain small-car models these days.

CEO Sergio Marchionne has been shifting the emphasis of Fiat Chrysler to trucks and SUVs and away from small-car production in the U.S.  The company’s strength is in its Jeep SUV and Ram truck brands.  The Dart and Chrysler 200 small cars are being phased out.

Separately, Ford announced it was moving some of its small-car production to Mexico, spending $1.6 billion on a new plant there (with the bulk of the cars sold in the U.S.), though at the same time Ford says it’s committed to building more trucks here, and has previously said it is committed to spending an additional $8 billion to $9 billion in the next four years to support these efforts.

According to the Center for Automotive Research, under the new UAW contract, Ford factory workers earn about $60 an hour in wages and benefits, while auto workers in Mexico average about $8 an hour.  [Bloomberg]

--Bloomberg reported that clean energy investment broke new records in 2015 and is now seeing twice as much global funding as fossil fuels, in no small part due to falling prices for oil and natural gas, as well as coal.

Government subsidies for wind and solar have helped, but economies of scale are the primary driver these days.  The cost of solar power has collapsed to 1/150th of its level in the 1970s, for example.

And as Bloomberg points out, in the case of solar-power generation, “It’s a technology, not a fuel. As such, efficiency increases and prices fall as time goes on.”  Plus the price of batteries to store solar power when the sun isn’t shining is falling.

--Tesla Motor Co. said it has received more than 325,000 reservations for the Model 3 during the past week, which it says represents the “single biggest one-week launch of any product ever,” concluding the figure “corresponds to about $14 billion in implied future sales.”

By comparison, Apple’s iPhone 6 launch in Sept. 2014 netted an implied $6 billion.

Tesla expects each buyer of the mid-price sedan to shell out an average of $43,000.

But will it be available by late 2017 as the company says?  Tesla delivered just 50,580 vehicles last year out of its Fremont, Calif., factory, thouogh the company says it will produce 500,000 cars a year by 2020.

Earlier this week, Tesla announced it had delivered 14,820 Model S and Model X cars during the first quarter, missing its target of 16,000.

--But aside from mammoth preorders, Tesla founder Elon Musk had another reason to crow at week’s end.  His Space Exploration Technologies Corp., SpaceX, successfully landed part of a used rocket on a floating platform Friday, a dramatic development in the company’s long-term goal of significantly reducing the cost and accelerating the pace of launching payloads into outer space.

Friday’s landing occurred minutes after SpaceX successfully launched another unmanned cargo capsule to the international space station under its contract with NASA.

While NASA supports the company’s reusability goals – which SpaceX’s rivals share – it isn’t really clear just how significant reusability is.  If you were sending up a payload on a SpaceX or competitor’s rocket, do you really want to place it on a used rocket?  Just sayin’.

But it is a spectacular achievement.

--Samsung Electronics forecast higher-than-expected first-quarter earnings, up 10%, as its latest flagship smartphone enjoyed a stronger-than-expected debut.  Revenue rose 4% over a year ago.

Samsung had been in a two-year decline in mobile business but the Galaxy S7 and S7 Edge premium phones gained unexpected popularity.

--I’ve written a lot about Chinese tech giant Huawei Technologies Co. and how I expect it to eventually eat Apple’s lunch in China, so this week the company said its profit rose 32% in 2015 as it has become the third-largest smartphone maker by shipments behind Samsung and Apple, plus it’s now become a leader in carrier-network gear, alongside Ericsson and Nokia Corp.

Huawei’s smartphone shipments rose 44% last year to more than 106 million units, the fastest growth among the top-five players in the market, according to IDC.

--The Justice Department said on Friday it will seek a court order to force Apple Inc. to help it unlock an iPhone seized as part of a New York drug investigation.  So the fight over encryption is far from over.

Apple’s lawyers said they intend to press the Feds to explain why they need Apple’s help and can’t get into the iPhone on their own, while demanding the names of any companies that are helping with the effort, especially after the FBI’s announcement it had found a way into the San Bernardino, Calif., terrorist’s cellphone.

I am totally on Apple’s side on this one.

--Verizon Communications Inc. said it plans to make a bid for Yahoo Inc.’s Web business next week.  Google, the main division of Alphabet Inc., is also considering bidding for the core business.  Time Inc. is another potential acquirer.

First-round bids for the main Web assets are due April 11.

--Twitter won a deal to show Thursday night National Football League games online.  The company will stream 10 games to the public for free, while they are also shown on NBC, CBS and the NFL Network.

Twitter thus has a key piece of content it hopes to leverage to make its service the go-to place to react to and discuss live events.

Terms of the deal haven’t been announced but the NFL doesn’t come cheap.  Last season, Yahoo paid $17 million to stream a single game from London.  In the most recent broadcast deal, CBS Corp. and Comcast Corp.’s NBC each paid about $45 million a game for five Thursday night contests for the 2016 and 2017 seasons.

--Last week I said it appeared Alaska Air or JetBlue was going to make a move for Virgin America and it ended up being Alaska Air, a deal valued at $2.6bn; thus making the combined entity the fifth largest U.S. airline, with 1,200 daily departures. It is expected to gain regulatory clearance.

--Donald L. Blankenship, the former leader of Massey Energy Company, was sentenced on Wednesday to a year in prison for conspiring to violate federal mine safety standards.

The sentencing, in Federal District Court in Charleston, W. Va., came six years after an explosion tore through Massey’s Upper Big Branch mine, killing 29 people.

Blankenship was not accused of direct responsibility, but was also fined $250,000. His defense lawyers plan to appeal.

--PayPal announced it canceled a plan for a new facility in Charlotte, N.C., in response to the state’s controversial new law that restricts the rights/anti-discrimination protections of the LGBT community.  Other companies are threatening similar measures. 

--Thomas Staggs, the heir-apparent to Disney CEO Robert Iger, unexpectedly announced his departure on Monday, throwing succession at the world’s largest entertainment company into disarray.

Staggs is stepping down as chief operating officer on May 6.  He had been elected last year to chief operating officer from theme park chairman.

Iger, 65, has said he would step down in June 2018.  Staggs lacked the support of some key Disney shareholders.

Facebook executive Sheryl Sandberg, a member of Disney’s board, is now among those being mentioned as a possible successor to Iger.

Foreign Affairs

Iraq/ISIS/Syria/Russia: Among the developments this week....

ISIS abducted 300 cement workers and contractors in an area northeast of Damascus, as reported by Syrian state TV, while fighting elsewhere in the country intensified.

The abduction took place in Dumeir, an area where ISIS launched a surprise attack against government forces earlier in the week, killing 12 Syrian soldiers in a multiple suicide car bomb operation.

Fighting in and around Dumeir killed at least 30 civilians, according to the Syrian Observatory for Human Rights, as the U.S. said it was “appalled” by reports Syrian government air strikes struck near a school and hospital.

There were also reports Islamic State militants attacked Syrian army troops with mustard gas in an offensive against a military airport in the eastern province of Deir al-Zor that borders Iraq.  Syrian state media did not disclose the level of casualties.  [Reuters]

As for the five-week truce it has been left in tatters as al Qaeda-linked Nusra Front rebels shot down a government warplane and captured its pilot near Aleppo.  Nusra and allied Islamist rebel groups launched a new campaign in the past week to recapture territory from President Bashar al-Assad and his Iran-backed allies.

The Nusra Front had been excluded from the truce (as well as ISIS) and the shootdown suggests they have been supplied with anti-aircraft weapons, long a goal.  Moscow acknowledged its aircraft then hit Nusra Front positions near Aleppo to help repel the offensive by up to 1,500 militants.

In Palmyra, Syrian troops identified at least 45 bodies in a mass grave found after the city was recaptured from ISIL.

In Iraq, security forces claimed to have killed 150 IS fighters near Fallujah, and by week’s end Iraq claimed to have retaken the town of Hit in Anbar province.

At the same time, ISIS claimed responsibility for eight suicide bombings around the country, including an attack on a restaurant  that killed at least 12.

Separately, the Washington Post reported ISIL is facing an unprecedented cash crunch after months of strikes on oil facilities and financial institutions.  U.S. officials are seeing more and more evidence of infighting among senior commanders over allegations of corruption and theft.

Many of the Iraqi and Syrian recruits are on half-pay, while recent defectors talk of not having been paid in months.  Businesses in territory controlled by ISIS complain of ever-higher taxes and fees as well.

But, an Iraqi military strategist, Hisham al-Hashimi, told the Post, “They’re not going through a financial crisis that will lead to their collapse. They still have 60 percent of Syrian oil wells and 5 percent of Iraq’s.”  ISIS has also proved resilient in overcoming obstacles.

Fred Hiatt / Washington Post

“When President Obama brags about defying the foreign policy establishment to craft his Syria policy, he probably doesn’t have people like Vicki Aken and Ahmed Mestow in mind.

“Obama recently said in an interview with Jeffrey Goldberg of the Atlantic that he was ‘very proud’ of his decision not to bomb Syria after its dictator, Bashar al-Assad, killed 1,400 or more people in a chemical gas attack. He said he has been criticized because he refused to follow the ‘playbook that comes out of the foreign-policy establishment,’ which would have counseled greater U.S. intervention. The president believes he should be credited for having the fortitude to sidestep a potential quagmire.

“Aken is Syria country director for GOAL, one of the world’s largest humanitarian aid organizations, based in Ireland, which amazingly manages in the midst of war to keep providing fresh water and bread to as many as 1 million desperate people inside Syria.  Mestow, a Syrian, worked for GOAL inside Syria for three years before he had to flee to Germany, after being threatened by both the Assad regime and its Islamist enemies.

“They visited The Post this week. Their views on U.S. policy differ from Obama’s.

“Mestow...remembers when the protests against Assad’s brutal dictatorship began in 2011.  He remembers peaceful crowds of thousands of people demonstrating at the university in Aleppo, none of them with weapons.  And he remembers how Assad responded with violence, with accusations that anyone opposing the regime was a terrorist – and even, Mestow says, with the release from Syrian prisons of genuine terrorists who went on to seed the Islamic State in Syria and Iraq.

“He also remembers the day that Obama cites with pride – when the United States, after saying the use of chemical weapons was a ‘red line’ that Assad should not cross, decided not to respond militarily.

“ ‘My people were asking, okay, where is the red line for America?’ Mestow said.  ‘It’s not chemical weapons – but how about the ‘barrel bombs’?  How about the snipers?  How about a half-million people killed?’....

“(The) half-million killed?  Well, no one knows for sure how many of Syria’s prewar population of 22 million have died. The United Nations and other groups kept tabs for a while, reaching 250,000, and then stopped counting – so for more than two years, we’ve been writing ‘more than 250,000.’ Certainly the number is far greater.  [Ed. This has been one of my pet peeves.  Leading publications today are still printing 250,000 and not even qualifying it.  An independent group a number of months ago, as I stated at the time, puts the toll at 400,000, which is what I have used since.]

“Meanwhile, at least half of all Syrians have been forced from their homes.  More than 4 million have become refugees; thousands more are trapped at the Turkish border, unable to leave.  Hundreds of thousands have fled to Europe. Together, those refugees and the terrorist attacks spawned by the Islamic State, which took root in the chaos of Syria’s civil war, have fueled a xenophobic politics in Europe unlike anything the continent has seen since World War II.

“Given these consequences, you have to wonder whether Obama really takes pride in his policy, or is trying to convince himself.

“The White House argues there is nothing useful the United States could have done, though along the way Obama’s senior advisers pushed a series of options: destroy the helicopters dropping those barrel bombs, provide training or equipment for moderate rebels, create a safe zone where rebels and displaced people could regroup.

“Aken, who moved to the Turkish side of the Syrian border in 2014 to take charge of GOAL’s aid effort, remembers how Syrians then still believed the United States would create a safe zone....

“Aken said Syrians’ last ‘glimmer of hope’ disappeared when Russia intervened, attacking civilians with a force that was ‘so much more powerful and targeted.’

“In the Washington arguments over doctrine and America’s role, it’s easy to forget that a country is being destroyed. When I asked if it could be put back together, Aken, who previously worked in Sierra Leone and South Sudan, said she thought the talent and resourcefulness of the Syrian people could help them overcome a lot, if the war ended soon enough.

“ ‘If it goes another five or 10 years, then no,’ she said.  ‘There won’t be anyone left.’”

I quoted Mr. Hiatt at length just to show you there are other voices echoing what I have been writing for years.  Though my conclusion is it’s already over.  It’s been too late for a long time.

And President Barack Obama is responsible.

Iran: Yousef Al Otaiba, ambassador of the United Arab Emirates to the U.S., in an op-ed for the Wall Street Journal:

“Since the nuclear deal...Iran has only doubled down on its posturing and provocations.  In October, November and again in early March, Iran conducted ballistic-missile tests in violation of United Nations Security Council resolutions.

“In December, Iran fired rockets dangerously close to a U.S. aircraft carrier in the Strait of Hormuz, just weeks before it detained a group of American sailors.  In February, Iranian Defense Minister Hossein Dehghan visited Moscow for talks to purchase more than $8 billion in Russian fighter jets, planes and helicopters.

“In Yemen, where peace talks now hold some real promise, Iran’s disruptive interference only grows worse.  Last week, the French navy seized a large cache of weapons on its way from Iran to support the Houthis in their rebellion against the U.N.-backed legitimate Yemeni government.  In late February, the Australian navy intercepted a ship off the coast of Oman with thousands of AK-47s and rocket-propelled grenades.  And last month, a senior Iranian military official said Tehran was ready to send military ‘advisers’ to assist the Houthis.

“The interference doesn’t stop there.  Since the beginning of the year, Tehran and its proxies have increased their efforts to provide armor-piercing explosive devices to Shiite cells in Bahrain and Saudi Arabia.  A former Iranian general and close adviser to Supreme Leader Ayatollah Ali Khamenei called for Iran to annex all of Bahrain.  And in Syria, Iran continues to deploy Hizbullah militias and its own Iranian Revolutionary Guard to prop up Syria’s Bashar Assad.

“These are all clear reminders that Iran remains the world’s leading state sponsor of terrorism – a persistent threat not only to the region but to the U.S. as well.  ‘Death to America’ has always been more than an ugly catchphrase; it has been Iranian policy....

“If the carrots of engagement aren’t working, we must not be afraid to bring back the sticks.  Recent half measures against Iran’s violations of the ballistic-missile ban are not enough. If the aggression continues, the U.S. and the global community should make clear that Iran will face the full range of sanctions and other steps available under UN resolutions and in the nuclear deal itself.

“Iran’s destabilizing behavior in the region must stop. Until it does, our hope for a new Iran should not cloud the reality that the old Iran is very much still with us – as dangerous and as disruptive as ever.”

Editorial / Washington Post

“Iran has complied with the principal terms of the nuclear agreement reached last summer, mothballing much of the infrastructure that could be used for weapons production and shipping enriched uranium out of the country.  It also has aggressively exploited loopholes in the agreement and tried to create new ones.  Most seriously, it has repeatedly tested ballistic missiles that could be used for carrying nuclear warheads, even though a UN Security Council resolution approved in tandem with the nuclear accord explicitly called on Iran not to engage in such activity.

“Tehran’s behavior comes as no surprise to the many observers who predicted the deal would not alter its hostility to the West or its defiance of international norms.  Unfortunately, the Obama administration’s response has also been much as critics predicted: It has done its best to play down Iran’s violations and avoid any conflict out of fear that the regime might walk away from a centerpiece of President Obama’s legacy.”

Libya: A UN-backed unity government moved to cement control over the country’s finances and institutions Wednesday after a rival administration in Tripoli ceded power; a move necessary for a united front against militants such as ISIS.

But the Government of National Accord, which is to be headed by prime minister-designate Fayez al-Sarraj, still needs to secure the approval of another rival in the eastern town of Tobruk, which has long claimed international legitimacy because it was appointed by the parliament elected in the last election in 2014.

Generally, the news is encouraging, but there must be action, not just words.

George Will / Washington Post

“Hillary Clinton’s supposedly supreme presidential qualification is not her public prominence, which is derivative from her marriage, or her unremarkable tenure in a similarly derivative Senate seat.  Rather, her supposed credential is her foreign-policy mastery. Well.

“She can’t be blamed for Vladimir Putin’s criminality or, therefore, for the failure of her ‘reset’ with Russia, which was perhaps worth trying. She can’t be blamed for the many defects of the Iran nuclear agreement, which was a presidential obsession.  And she can’t be primarily blamed for the calamities of Iraq, Syria and the Islamic State, which were incubated before her tenure.

“Libya, however, was what is known in tennis as an ‘unforced error,’ and Clinton was, with President Obama, its co-author.

“On March 28, 2011, nine days after the seven-month attack on Libya began and 10 days after saying it would last ‘days, not weeks,’ Obama gave the nation televised assurance that ‘the task that I assigned our forces [is] to protect the Libyan people from immediate danger and to establish a no-fly zone.’

“He said U.S. forces would play only a ‘supporting role’ in what he called a ‘NATO-based’ operation, although only eight of NATO’s 28 members participated: ‘Broadening our military mission to include regime change would be a mistake.’

“Then-Defense Secretary Robert Gates said no vital U.S. interest was at stake. Recently, he told the New York Times ‘the fiction was maintained’ that the goal was to cripple Moammar Khadafy’s ability to attack other Libyans.

“This was supposedly humanitarian imperialism implementing ‘R2P,’ the ‘responsibility to protect.’  Perhaps as many as – many numbers were bandied – 10,000 Libyans.  R2P did not extend to protecting the estimated 200,000 Syrians that have been killed since 2011 by Bashar Assad’s tanks, artillery, bombers, barrel bombs and poison gas.”

But as it turned out, the purpose of the NATO operation was supposed to be to enforce UN resolutions on protecting Libyans from Khadafy, but, according to Micah Zenko, writing for Foreign Policy, the coalition “actively chose not to enforce” the resolution prohibiting arms transfers to either side in the civil war.

Instead, videos emerged showing NATO blatantly allowing the transfers; it was doing exactly the opposite of its mission.

George Will:

“On Oct. 20, 2011, Clinton was told insurgents, assisted by a U.S. Predator drone, had caught and slaughtered Khadafy. She quipped: ‘We came, we saw, he died.’  She later said her words expressed ‘relief’ that the mission ‘had achieved its end.’

“Oh, so this military adventure was, after all, history’s most protracted and least surreptitious assassination.  Regime change was deliberately accomplished, and Libyans are now living in the result – a failed state.  If you seek her presidential credential, look there.”

China: The rift between the media and the regime of President Xi Jinping continues to widen.  A backlash against restrictions is growing bolder.  The mysterious open letter, published online and purportedly signed by “loyal Communist party members” calling for Xi to resign has only exacerbated the situation, with up to 20 having been detained.

Lucy Hornby and Charles Clover / Financial Times

“Since coming to power in 2012, Mr. Xi has shrunk the already claustrophobic zone of press freedoms, and solidified government control over the media.  Social media were some of the first casualties, with the closure or muzzling of thousands of accounts on Weibo, China’s version of Twitter.  New laws make it easier to censor foreign internet sites while an anti-corruption purge has created a climate of fear within the elite and a reluctance to challenge Mr. Xi.

“However, the crackdown is colliding with a society which has tasted openness... Increased commercial pressures on the media and the internet, despite being heavily censored, have pushed the boundaries of party control....

“Journalists say they feel more threatened than at any time since the response to the Tiananmen Square demonstrations.”

North / South Korea: Seoul believes its neighbor to the north may now be able to mount a nuclear warhead onto a medium-range missile, in this case enough miniaturization to fit a warhead on a Rodong missile, which has a range up to 1,243 miles, putting U.S. military bases in South Korea and Japan at risk.  But the official, speaking to CNN, said South Korea doesn’t as yet have the evidence to prove this capability, which is the current assessment of the Pentagon.

Kim Jong Un has claimed his county does have the technology, this as Washington-based monitoring project 38 North said it had detected “suspicious activity” at the North’s Yongbyon nuclear facility.

Pyongyang carried out its fourth nuclear test on January 6.

China’s state-run People’s Daily also significantly noted in a commentary this week that North Korea has become an increasing threat to China.

The opinion piece said it was time for North Korea to rethink its nuclear weapon strategy as it might eventually jeopardize Pyongyang’s political regime.

It also said ties between Pyongyang and Beijing had worsened, especially since the roll out of new sanctions, including the UN’s call to stop imports of iron, coal, gold, titanium and rare earth minerals, as well as the halting of items such as jet fuel.

The People’s Daily Commentary added the North’s actions “will only drive China away.”

Russia: Vladimir Putin has created a new armed force, a National Guard that reports directly to the president.  It has been designed, according to Putin’s decree, to deliver “public order and fight terrorism and extremism.”

The new National Guard will be made up of Russia’s current interior and security troops and will receive a broad spectrum of rights and tools.

So the man Putin chose to head it up is Viktor Zolotov, who, as Mikhail Fishman writes in the Moscow Times, “has no peers” when it comes to having Putin’s personal trust.

Zolotov has headed the Federal Security Guard Service since Putin was elected president for the first time in 2000 and their bond goes back to the early 1990s when both worked in St. Petersburgh for then-mayor Anatoly Sobchak.

Zolotov was first recruited into KGB structures in the 1970s, and hired as a bodyguard for Alexander Korzhakov, Boris Yeltsin’s influential personal guard and political aide.  Zolotov can be seen standing alongside Korzhakov and Yelltsin on the famous tank in front of Moscow crowds during the August 1991 failed coup.  Later, Zolotov was put in charge of guarding Putin.

Meanwhile, along the lines of China’s crackdown on the media, Putin has recommended that all journalists account for their earnings as part of the National Anti-Corruption Plan, published by the Kremlin on April 1.

In response, the trade union of journalists stated they did not intend to follow the recommendation.

Separately, according to the Stockholm International Peace Research Institute (SIPRI), Russia is no longer among the top three spenders on defense, dropping to fourth.

The United States remains the leader by far, accounting for 36% of all military spending in the world, ($596 billion in 2015), with China ranked second at $215 billion, and now Saudi Arabia third at $87.2 billion.

Russia’s defense spending last year was $66.4bn.

Azerbaijan / Armenia: Fighting in the disputed Nagorno-Karabakh region has continued despite a “unilateral ceasefire”.  The Armenia-backed Karabakh forces said that Azerbaijan was continuing to shell the territory.

Nagorno-Karabakh has been in the hands of ethnic-Armenian separatists since a war that ended in 1994.  At least 30 soldiers have been killed in the current fighting as well as many civilians.

The danger, and what bears watching, is you have the likes of Turkish President Erdogan taking sides; in Erdogan’s case, Azerbaijan, which he has said he backs “to the end”.

Recall, Turkey doesn’t have relations with Armenia because of the dispute over mass killings of Armenia during the Ottoman era, which Armenia says was a genocide.  Turkey has never admitted to it.

A war between the two from 1991 to 1994 killed about 30,000 before a ceasefire.

Armenia is Russia’s traditional ally, so this is another potential Russia-Turkey flashpoint, a la Syria and the Kurds.

Both Armenia and Azerbaijan are heavily armed with modern weaponry.

Brazil: The impeachment of President Dilma Rousseff could become more of a reality as soon as Monday with the release of a congressional report recommending impeachment apparently being put to a vote in a special committee.

After this it would be forwarded to the full Congress for discussion and voting.

The lower house must approve the impeachment motion by a two-thirds vote and then it would move to the senate for a formal political trial.

So, Rousseff needs the support of 172 of 513 lower-seat members to defeat the motion.

Separately, security for the Olympics is being called into question following the resignation of a key official in charge of much of the operation over the failure of the government to deliver on promises for the commander’s forces.

Random Musings

--Wisconsin Primary Results:

Republicans: Ted Cruz 48%, Donald Trump 35%, John Kasich 14%

Delegate tally: Trump 743, Cruz 517, Kasich 143 (1,237 needed for the nomination)

Democrats: Bernie Sanders 56.5%, Hillary Clinton 43%

Delegates (including superdelegates): Clinton 1,749, Sanders 1,061 (2,383 needed for the nomination)

Next up...April 19: New York.  April 26: CT, DE, MD, PA, RI

New York Polls: CBS News Battleground Tracker...Trump 52%, Cruz 21%, Kasich 20%.  Monmouth University...Trump 52, Kasich 25, Cruz 17.

CBS / Battleground...Clinton 53, Sanders 43.

Pennsylvania Polls: CBS / Battleground...Trump 47, Cruz 29, Kasich 22.  Quinnipiac University...Trump 39, Cruz 30, Kasich 24.

Quinnipiac...Clinton 50, Sanders 44.

You can expect the above to change quite a bit given the long lag time until voting on April 19 and 26.

--In a recent Pew Research Center survey, 50% of registered voters said Trump would be poor or terrible as president and just 26% said he would be good or great.  But 56% said Hillary Clinton would be poor or terrible, 33% saying she would be good or great. 

Back in January, the splits on Trump were 52-31; Clinton 44-35.

--For the record, I forgot to note Trump’s unfavorables in a recent Washington Post/ABC News poll.  He has an overall unfavorable of 67% among likely voters, 68% among white women, 85% among Hispanics, and 80% among blacks.

Then on Thursday, a new Associated Press-GfK poll revealed seven in 10 people have an unfavorable view of Donald Trump, including nearly half of Republicans.  Even among his key voting bloc, whites without a college education, 55% have a negative opinion.

More than 60% of all registered voters and 31% of Republicans said they definitely would not vote for Trump in the general election.

But 68% of those who describe themselves as both Republicans and supporters of the tea party movement do have a favorable view.

--Ted Cruz said in his victory statement after Wisconsin, “We’re uniting the Republican Party.”  Hardly.  I just have one question.  What has this guy done?

--Reserving the right to change my mind 20 more times until November, given my choices today, I’m voting third party.

--Last week I noted that President Obama’s approval rating is rising (53% in the Gallup poll I cited), which, barring a major terror attack on U.S. soil, and an indictment of Hillary, frankly spells defeat for the Republicans.

So this past Tuesday, William A. Galston wrote from his perch at the Wall Street Journal that an approval rating that is ‘net positive’ “makes a big difference: According to Emory University political scientist Alan Abramowitz, the incumbent president’s job approval has more impact on the vote share of his party’s nominee than does any other variable.”

If Obama’s average approval number in all the polls is 50%, according to Abramowitz, “the Democratic nominee could expect to win a narrow victory in the popular vote – ...with all else equal.”

--Trump offered an explanation this week for how he would force Mexico to pay for a border wall with the U.S.  In a memo to the Washington Post, Trump said he would threaten to change a law to cut off cash transfers that Mexicans in the U.S. send back to the country, a vital source of income that Trump says would force Mexico into a “one-time payment” of $5-$10bn.

--Former House Speaker Newt Gingrich, in an article from the Washington Post, on Trump:

“Either these are the weeks we discovered he had weaknesses he couldn’t overcome, or these are the weeks when he and his team realized they had to get better.  If he makes the transition to being a really professional presidential candidate, he will be really formidable.  And if he does not, he will not be the nominee.”

--George Will / Washington Post

“People here at Sen. Ted Cruz’s campaign headquarters are meticulously preparing to win a contested convention, if there is one.  Because Donald Trump is a low-energy fellow, Cruz will be positioned to trounce him in Cleveland, where Trump’s slide toward earned oblivion would accelerate during a second ballot....

“If, as seemed probable a month ago, Trump had won Wisconsin, he would have been well-positioned to win a first-ballot convention victory.  Now he is up against things to which he is averse: facts. For months Cruz’s national operation has been courting all convention delegates, including Trump’s. Cruz aims to make a third ballot decisive, or unnecessary....

“Trump, whose scant regard for other people’s property rights is writ large in his adoration of eminent domain abuses, mutters darkly about people trying to ‘steal’ delegates that are on his property. But most are only contingently his, until one or more ballots are completed.

“Usually, more than 40 percent of delegates to Republican conventions are seasoned activists who have attended prior conventions. A large majority of all delegates are officeholders – county commissioners, city council members, sheriffs, etc. – and state party officials.  They tend to favor presidential aspirants who have been Republicans for longer than since last Friday.

“Trump is a world-class complainer (he is never being treated ‘fairly’) but a bush-league preparer.  A nomination contest poses policy and process tests, and he is flunking both....

“Cruz’s detractors say he has been lucky in this campaign’s unpredictable political caroms that thinned the competition. But as Branch Rickey – like Coach Bryant, a sportsman-aphorist – said: ‘Luck is the residue of design.’”

--Maureen Dowd / New York Times, on her interview with Donald Trump and his awful stretch, including the abortion comment.

“It’s ridiculous how many mistakes Trump has made in rapid order to alienate women when he was already on thin ice with them – and this in a year when the Republicans will likely have to run against a woman.

“He did a huge favor for Hillary, who had been reeling from losing young women to a 74-year-old guy and from a dearth of feminist excitement. And for Cruz, who started promoting himself as Gloria Steinem, despite his more regressive positions on abortion and other women’s issues.

“Wouldn’t it have been better, I asked, if Trump campaign manager Corey Lewandowski had simply called the reporter Michelle Fields and apologized for yanking her arm?

“ ‘You’re right, but from what I understand it wouldn’t have mattered,’ Trump said....

“Trump doesn’t have a plan to turn it around with women, except to use Ivanka as a character witness and to chant that ‘nobody respects women more than I do.’

“ ‘I’m just going to be myself,’ he said.  ‘That’s all I can do.’

“I asked how he could get past the damage done by his insults about women’s looks.

“ ‘I attack men far more than I attack women,’ he said.  ‘And I attack them tougher.’....

“I mentioned that Megyn Kelly wants him on her show.  ‘I think I’d probably do it,’ he allowed.

“The front-runner has a right to be paranoid, with everyone plotting to steal his prize. He said he doesn’t want to ‘act like someone overly aggrieved,’ but he was stewing in aggrievement about how ‘unbelievably badly’ he gets treated by the press.  The brand expert knows his brand is not so shiny these days....

“Has he missed the moment to moderate, to unite, to be less belligerent, to brush up on his knowledge about important issues?

“ ‘I guess because of the fact that I immediately went to No. 1 and I said, why don’t I just keep the same thing going?’ he mused.  ‘I’ve come this far in life. I’ve had great success.  I’ve done it my way.’

“He added: ‘You know, there are a lot of people who say, ‘Don’t change.’ I can be as presidential as anybody who ever lived. I can be so presidential if I want.’

“Then start.”

Peggy Noonan / Wall Street Journal

“Mr. Trump is hurting himself, in real time and for the first time....

“We’re missing what’s happening because we’re blocked by clichés. The first great Trump cliché, which began seven or eight months ago, was that he’d quickly do himself in with some outrageous comment. So everyone waited. His insults to John McCain, Megyn Kelly – that would do it. But it didn’t. The more outrageous he was the stronger he got.

“So a new cliché was born, the still-reigning one: Whatever Mr. Trump says it won’t hurt him, people will just love him more.

“But that’s not right. It was always a mistake to think one explosive statement would blow his candidacy up. What could damage him, and is damaging him, is the aggregate – a growing pile of statements and attitudes that becomes a mood, a warning, sign, a barrier.

“It’s been going on for four or five weeks, and you can take your pick as to the tipping point.  Maybe it was when he threatened to ‘spill the beans’ on another candidate’s wife, or when he retweeted the jeering pictures of her and his own wife.  Maybe it was his inability to clearly, promptly denounce the KKK; maybe it was when he hinted at riots if he’s cheated out of the nomination.  Maybe it was Corey Lewandowski’s alleged battery of reporter Michelle Fields.  Maybe it was when Mr. Trump referred in debate to his genitals, a true national first.

“It has all added up into a large blob of sheer dumb grossness.  He is now seriously misjudging the room.  The room is still America....

“At the same time Mr. Trump doesn’t even seem to be trying to do the one big thing he has to do now.  He is the front-runner for the nomination. At this point it is his job to keep the support he has and persuade those who don’t like him to give him a second or third look.  To do that he only has to be more thoughtful, stable and mature in his approach – show he may be irrepressible and fun and surprising, even shocking, but at bottom he has within him a plausible president.

“Instead, he is stuck at nutty.  Rather than attempt to win over, he doubles down.  In the process he shows that what occupies his mind isn’t big issues, significant questions or the position of the little guy, but subjects that are small, petty, unworthy.

“Instead of reassuring potential or reluctant supporters, he has given them pause.  Instead of gathering in, he is repelling.  This is political malpractice on a grand scale....

“Once Hillary Clinton was too corrupt to be elected, had too many negatives, too much bad history from her early days in Arkansas to the Clinton Foundation, Benghazi, the emails. She brought and brings quite a mess.

“But his mess cancels out her mess.”

--As for Hillary Clinton, she ripped Bernie Sanders for comments he gave to the New York Daily News on breaking up banks, as Sanders wants to do, though his plan is lacking in details.

So Clinton responded, “The core of his campaign has been ‘break up the banks’ and it didn’t seem in reading his answers that he understood exactly how that would work under Dodd-Frank....I think he hadn’t done his homework and he’d been talking for more than a year about doing things that he obviously hadn’t really studied or understood and that does raise a lot of questions.”

Sanders struggled to explain what mechanisms he would use as president.

But the fact is, Bernie has won seven of the last eight primaries and caucuses and even though he is way behind in the delegate hunt, if he could somehow pull off an upset in New York, that would be earth-shattering, plus he keeps raising huge sums of money.

--Gerald F. Seib / Wall Street Journal

“(Mrs. Clinton’s) problem isn’t merely that Sen. Bernie Sanders is going to hang around for some time to come; it is that he increasingly has turned his campaign message into a dagger aimed right at Mrs. Clinton’s weak spot, which is voter questions about her trustworthiness.

“Increasingly, Mr. Sanders’ main argument is not only that he disagrees with Mrs. Clinton on climate change, the level of the minimum wage and the health-care system.  He argues that she isn’t to be trusted on such issues because she takes campaign contributions from banks, pharmaceutical and energy interests, and then tailors her positions to please them.  In short, he asserts that she isn’t to be trusted, keeping alive an issue that has dogged her campaign.

“In fact, by declining to attest to her honesty, he sometimes seems to be trying to prolong those doubts.  In a meeting with editors of the New York Daily News this week, he declared at one point: ‘I have not attacked her personally.  I will let the American people make a determination about her trustworthiness.’

“A second problem for Mrs. Clinton is that each Sanders win underscores her weakness with young, white voters, while also allowing him to argue louder that Democratic ‘superdelegates’ – party leaders who are automatically convention delegates – should rethink their overwhelming support of Mrs. Clinton.  Already, his camp has begun making the argument that superdelegates from states he has won have an obligation to move his way.”

--Jonah Goldberg / New York Post...on John Kasich, “The Thing That Wouldn’t Leave.”

“After investing everything in New Hampshire, Kasich came in second, doing worse than Jon Huntsman had in his race-ending performance in 2012.  Kasich’s response?  He didn’t just declare victory, he proclaimed, ‘Tonight, the light overcame the darkness.’

“Since then, Kasich has lost some 30 contests and won one – in his home state of Ohio.  But still, he just won’t go.

“It’s not just that Kasich can’t take a hint, it’s that he appears to be living in a kind of fantasy world, largely defined by three myths or delusions.

“The first is the most endearing.  Kasich has the best resume of the remaining candidates.  Heck, he arguably had the best resume of the entire 2016 field, if by ‘best’ you mean the longest and deepest government experience.  He’s not delusional about that.

“What he is confused about is the idea that a lot of people care that he was, say, the chairman of the House Budget Committee two decades ago.

“According to legend, a supporter once shouted at Adlai Stevenson, ‘Gov. Stevenson, all thinking people are for you!’  Stevenson shot back, ‘That’s not enough. I need a majority!’  Even if Kasich is right that his resume makes him the best qualified to be president – a debatable proposition – the simple fact is that after nearly three-dozen contests, relatively few voters agree with him.

“Ah, but what about the delegates?  If it’s a contested convention and neither Donald Trump nor Ted Cruz has enough delegates to lock up the nomination, won’t they turn to Kasich?

“Not necessarily. But don’t tell that to the Ohio governor, who goes from interview to interview insisting that he’d be the natural choice for the convention.  Why would he be? Well, that answer varies.

“Kasich’s most frequently stated reason is that delegates will choose him because he beats Hillary Clinton in the polls. And it’s true that Kasich does marginally better than Ted Cruz in hypothetical matchups against Clinton – and a lot better than Donald Trump.

“Left unanswered is why the delegates – many of them loyal to Trump and Cruz – would gamely back The Thing That Wouldn’t Leave.  After the second or third round of voting, delegates are free to cast their ballots for whomever they want.

“There’s little evidence that they’d want Kasich, and they’d be under no obligation to vote for him over, say, Paul Ryan or Marco Rubio – or, for that matter, Rush Limbaugh or Shaquille O’Neal....

“Maybe Kasich’s denial stems from the fact that he’s never lost a race and can’t contemplate failing this time. I really have no idea.  All I know is that it’s time for him to go.”

I like Kasich, and I am well aware he is not the warm and cuddly guy he wants you to believe he is.

But I have to agree with Jonah Goldberg.  Just leave.  Any shot you had at being vice president (as much as it makes sense politically) is probably also being frittered away.

--Stanford was the most competitive school in terms of admission this year, accepting just 4.7 percent of applicants, below 5 percent for the first time.  Harvard was next, just above 5 percent.

Stanford drew 43,997 applicants, up 1,500 from the year before.  Cornell led the eight Ivy League schools with 44,966 applications.

--Murders in Chicago, the nation’s third-largest city, rose about 72% in the first quarter to 141, compared with 82 last year.

--Oops, that’s kind of a negative way to end the column this week.

Hey, how about that tremendous Villanova win over North Carolina in the NCAA basketball championship?!

And now its baseball season, which means one thing for moi.  A lot less Fox News at night as I follow my Mets.  And that’s a good thing.

---

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

God bless America.

---

Gold closed at $1240
Oil $39.72

Returns for the week 4/4-4/8

Dow Jones  -1.2%  [17576]
S&P 500  -1.2%  [2047]
S&P MidCap  -1.7%
Russell 2000  -1.8%
Nasdaq  -1.3%  [4850]

Returns for the period 1/1/16-4/8/16

Dow Jones  +0.9%
S&P 500  +0.2%
S&P MidCap  +2.1%
Russell 2000  -3.4%
Nasdaq  -3.1%

Bulls 45.4
Bears 27.8 [Source: Investors Intelligence]

Have a great week. Enjoy The Masters...a tradition unlike any other...on CBS.

Brian Trumbore



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Week in Review

04/09/2016

For the week 4/4-4/8

[Posted 11:00 PM ET, Friday]

Note: There are substantial costs associated with the site. If you haven’t already done so, please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974. It’s greatly appreciated.

Edition 887

Washington and Wall Street

Despite some Federal Reserve governors continuing to issue statements like St. Louis Fed President James Bullard did this week, that “the committee certainly reserves the right to make a move” on interest rates “at any time,” clearly an April rate hike is off the table, with the just-released minutes from the March 15-16 meeting saying in part:

“Several (FOMC members) expressed the view that a cautious approach to raising rates would be prudent or noted their concern that raising the target range as soon as April would signal a sense of urgency they did not think appropriate....

“Many participants expressed a view that the global economic and financial situation still posed appreciable downside risks to the domestic economic outlook...(Data relevant to the Fed’s thinking) include not only domestic economic releases, but also information about developments abroad and changes in financial conditions.”

As for the current data, it was a light week with February factory orders falling 1.7% as expected, while the ISM reading on services for March was a solid 54.5, better than forecast.

But economic prognosticators have been lowering their forecasts for first-quarter GDP, with the Atlanta Fed’s GDPNow indicator projecting growth of just 0.1% when on March 11 it was forecasting 2.3%.

Then you have earnings, which will start coming in this week for the first quarter.  The forecast for the S&P 500, as measured by S&P Global Market Intelligence, is for a decline of 7.6% year over year, the third straight quarter of weakness, and it’s not just energy.  Ex- this sector, earnings are still projected to be -3.3%, though consumer discretionary is forecast to rise 11.4%.

On the other hand, the dollar has been falling and that is good for U.S. multinationals and exporters, reversing a trend that had the dollar as a hindrance.  If the dollar stabilizes around current levels, eventually the year over year comparisons will become much easier to exceed.

Greg Ip of the Wall Street Journal summarized the impact of the reversal of the dollar’s long rise.

“(The) dollar’s slide, which began before (a G20 meeting in Shanghai back in February) but accelerated thereafter, does signal something important: The worst threats that hung over the global economy at the start of the year – higher U.S. interest rates, an oil-price collapse and a Chinese economic slump – have receded. The global economy isn’t about to take off, but its miserable first quarter may mark the bottom.”

Barring something awful on the geopolitical front, I tend to agree with this.

I believe the Fed will be in a position to raise interest rates in June, though I admit the British referendum on staying in or exiting the European Union may see the Fed waiting further.

Separately, in its latest forecast released on Thursday the World Trade Organization said it expected the volume of international trade to grow by just 2.8 percent this year, in line with the growth recorded in 2015.  But the WTO said downside risks remained.

This would be the fifth straight year of trade growing below 3 percent, in line with the tepid tone of the global economy.

Next week the International Monetary Fund is expected to downgrade its own 3.4 percent forecast for global growth when the IMF and World Bank gather for their spring meetings in Washington.

In a preview of what is coming, IMF managing director Christine Lagarde said growth “remains too slow, too fragile and risks to its durability are increasing,” adding that the threat of a “new mediocre” of weak economic progress had risen.

“Because growth has been too low for too long, too many people are simply not feeling it,” Lagarde said on Tuesday in Frankfurt.

Europe and Asia

Lots of economic data on the eurozone this week.  The unemployment rate, per Eurostat, for the EA19 in February was 10.3%, down from a revised 10.4% in January.  The high was 12.1% at the end of 2013.

Germany had the lowest at 4.3%, but France was 10.2%, Italy 11.7%, Spain 20.4% (down from 23.2% a year earlier), and Greece 24.0% (December).

You also continued to have sky-high youth unemployment rates of 45.3% in Spain and 48.9% in Greece (Dec.).

All in all, still far too many jobless; essentially double that of the U.S. with its 5.0% official rate.

Markit released its final services PMIs for March.  The eurozone reading was 53.1 vs. 53.3 in February (50 being the dividing line between growth and contraction), with Germany at 55.1, France 49.9, Spain 55.3 (up from 54.1 in Feb.), Italy 51.2 (down from 53.8), and non-euro UK 53.7.

Retail trade in the EA19 was up 0.2% in February over January; 2.4% year over year, respectable.  But Markit’s retail PMI for March was only 49.2.

Industrial prices in the eurozone fell 4.2% in February vs. Feb. 2015.  Ex-energy the decline was 0.8%.

In Germany, industrial production was down 0.5% in February over January, with factory orders declining 1.2% for the period.  Exports rose 1.3%.

Italy downgraded its growth outlook for 2016 from 1.6% to 1.2%, but the Italian stock market rose nearly 4% on Friday amid rumors of a bank rescue come Monday.  More on this next time.

Separately, Italian Prime Minister Matteo Renzi could be in a heap of trouble as Telecom Italia SpA, Italy’s biggest phone company, is considering laying off about 15,000 in response to competition from state-controlled utility Enel SpA, as the latter spends $2.9 billion on a network that will be open to Telecom Italia’s competitors who could provide faster Web access.

Enel’s biggest investor is Italy’s Economy Ministry with a 24 percent stake, thus making the Renzi government party to a move that would cause extensive pain for workers at Telecom Italia.

The head of the telecommunications union told Bloomberg that the result is a “potential bloodbath” the government could have avoided by putting money into Telecom Italia instead of favoring a state-owned company operating in a different industry.

Back to the eurozone economy overall, in a speech, European Central Bank chief Mario Draghi reiterated his call for governments across the bloc to take action as monetary policy alone cannot lift the eurozone’s economy, though he thinks monetary policy can still play a positive role.

“The measures we announced on 10 March 2016 will further contribute to achieving our aim of price stability.  Of course, it will take time for these latest measures to start working their way through the economy and delivering their full benefits.  Nevertheless, they constitute a substantial package which gives priority to loans for households and businesses, thus further supporting economic activity in the euro area.”

But the euro currency has been rising against the U.S. dollar, exactly what the likes of the ECB didn’t want.

On a different issue, according to a transcript of an internal IMF teleconference published by WikiLeaks, the IMF is considering forcing Germany’s leadership to quickly grant wide-ranging debt-relief for Greece or the Fund will threaten to exit Athens’ latest bailout program.

German officials have repeatedly said they could not participate in the bailout without the IMF on board, and members of the Bundestag have warned Chancellor Angela Merkel that they will reject any new eurozone loans to Greece without IMF participation.

According to the transcript, Poul (sic) Thomsen, head of the IMF’s European bureau, suggests that the IMF confront Merkel to either agree to the relief or allow the IMF to exit, seeing as Berlin is already under intense pressure because of the refugee crisis.

The point of the IMF in calling for debt relief is the Fund believes this is the only way Greece can survive economically, but a decision has been delayed until July, when Greece is faced with its next big debt payment.

This is where Britain’s referendum on Brexit comes into play since its June 23. 

But Christine Lagarde hit back at Greece over claims the IMF is seeking to push the country towards default.  Lagarde defended the staff quoted in the leaked transcript, which she hints may have been the result of spying on behalf of Greek Prime Minister Alexis Tsipras.

Most importantly, Greece still hasn’t cut a deal on pensions, tax collecting or its fiscal gap, along with issues like non-performing loans and the privatization fund, which has been a huge disappointment thus far, all of which hasn’t exactly endeared it with its creditors.

What are the odds of another Greek crisis this summer?  Pretty high.  Reforms aren’t being implemented, Tsipras’ popularity is sliding and there is little enthusiasm for debt relief among the likes of Germany, so you have a looming problem.  Merkel only won over skeptical members of her conservative political bloc to back the Greek bailout in a parliamentary vote by saying the IMF would take part in the rescue plan.  She reiterated on Tuesday that a debt haircut was not possible as long as Greece remains in the eurozone (because it isn’t legal, say the Germans).

Meanwhile...in other European Union news...

Ireland’s political stalemate continues after the main opposition party (Fianna Fail) rejected an offer of a coalition with rival Fine Gael.

Enda Kenny, the outgoing prime minister and leader of Fine Gael, made the unprecedented offer to form a coalition government with Michael Martin, Fianna Fail leader.  So now it’s up to the two parties to try to win over enough independent MPs, but few expect this to bear fruit.  Another election may be in the offing.

And there was a very ugly incident on the border between France and Spain.  French farmers seized Spanish lorries and drained their cargo of wine, which Spain attacked as a “flagrant violation of the basic principles” of the EU.

Farmers have been protesting against unfair competition and falling prices (in this case cheap wine from Spain and Italy).

Spain declared that France must “adopt all appropriate measures to guarantee, with absolute security, the free movement of people and goods.”

A Spanish association representing the lorry drivers said French police did nothing to prevent the attacks. 

Lastly, at week’s end Italy has another developing issue.  It recalled its ambassador to Egypt for “consultations” amid escalating tensions between the two over the brutal murder in Cairo of a 28-year-old Italian doctoral student.

The Italian, a Cambridge university student researching trade unions in Egypt, was kidnapped, tortured and savagely killed in a case many activists say bears the hallmarks of Egypt’s security services.

Since the body was found in February, Egyptian authorities have offered a variety of contradictory explanations for the killing, but Italian officials and prosecutors don’t believe what the Egyptians are telling them.

Prime Minister Renzi said, “Italy will only stop with the truth.”

This is a big blow to the regime of Abdel Fattah al-Sisi.  Rome has viewed Cairo as an important ally in the fight against terrorism and has sought Sisi’s help in securing a peace deal in Libya.

But Renzi is under intense domestic political pressure to take a tough stance.

On the migrant crisis front, the new deal went into effect on Monday and there have been violent protests, particularly on the Greek islands.  The last thing you want if you’re a migrant is to be sent back to Turkey.  But this new process is just getting started.  [The issue with the refugees on the border with Macedonia continues to get worse as well, with clashes there today.]

Daniel Kehlmann / New York Times

“When I returned to Berlin recently after a few months away, a friend asked me to try a new Chinese restaurant in Kreuzberg, a hip multiethnic neighborhood in the city.  ‘It’s close to the subway station Kottbusser Tor,’ he texted. ‘But take a cab, otherwise it’s too dangerous.’

“I would have thought he was joking, but he is not the type. I asked the cabdriver, a young man of Turkish origin.  Had Kottbusser Tor suddenly become a no-go zone? To my shock, he replied, ‘Yes, now that all these people from North Africa are here it has become really dangerous.’

“I got out of the cab and looked around.  Tourists strolling, a few people on bicycles in spite of the cold, women in head scarves pushing strollers.  Had the city changed?  It looked the same to me.  But my friend is not prone to hysteria, and the cabdriver didn’t seem as if he was either, so the friendly scene suddenly seemed ominous.

“That’s how one often feels in Germany these days.  One tries to constantly make sense of the latest news and the seemingly contradictory reality.

“Last year, a friend from Vienna had a business meeting in Munich. Traveling from Vienna to Munich used to be easy, either four hours on a comfortable train or three hours on the highway, the border crossing noticeable only to those paying attention to the change of train conductors or the welcome signs on the highway. But now Munich had suddenly become impossible to reach. Train service had been suspended because the trains couldn’t handle the high number of refugees and the old border checkpoints on the highway had been put back in place for the moment, armed by police officers checking every single car and passport. After waiting in line for three hours, my friend turned around and drove back to Vienna.

“We all became so used to Europe’s open borders that it seemed unimaginable to turn back the clock. As long as civilization was working it seemed as reliable as a force of nature, so it is baffling when we suddenly see it disappear.

“And then, the terror.  Germans are deeply disturbed by the terrorist attacks in Paris and Brussels, and everyone expects it to be Germany’s turn sooner or later....

“If there is ever a terrorist attack in Germany, and if refugees play a role in carrying it out – exactly what terrorists would be expected to do – chances are high that the new German openness will end.”

[And as I’ve been predicting, Merkel would be toast.]

Finally, Israeli Defense Minister Moshe Ya’alon told his Polish counterpart, Antoni Macierewicz, that there are “hundreds of jihadists planning to strike Western targets on European soil.”

British Prime Minister David Cameron warned ISIS is planning to use drones to spray nuclear material over Western cities in a horrific “dirty bomb” attack.  ISIS is believed to have seized around 90 pounds of low grade uranium from Mosul University in Iraq after taking over the city in 2014, though this particular material wouldn’t cause much serious physical harm but it would sow panic.

The University of Mosul has become a key training facility in the use of various bombs, including the suicide-bomb vests used in Brussels and by some of the Paris attackers.  The U.S. says it has bombed the school.

Turning to Asia, a reading on China’s service economy by Caixin came in at 52.2 for March vs. 51.2 in February, so a further sign of stabilization here.  But this coming week will see telling numbers on trade, inflation and first-quarter GDP.

In Japan, it’s a different story.  The reading on the service sector fell in March to 50.0 from 51.2, and the Japanese yen continued to rise, exactly opposite of what the nation’s central bankers expected when they adopted negative interest rates in January as part of a plan to stimulate growth with a weaker currency that would make exporters more competitive.

But because of the Federal Reserve’s dovish tone, the dollar has fallen 10% against the yen this year.  The resurgence in the yen (after hitting a 13-year low against the dollar last June) has pressured Japanese stocks, with the Nikkei benchmark index down nearly 17% thus far in 2016.

Yes, after three years, Prime Minister Shinzo Abe’s plan for economic revival, Abenomics, has been a failure.  Once again the Japanese economy is dead in the water.  No growth, no inflation, and poor wage growth.

Panama Papers

In the largest data leak ever to be released, eleven million documents, the Panama Papers have exposed how hundreds of world leaders, public officials and billionaires have been hiding their assets in offshore bank accounts.

Released last weekend, the leak was originally shared with the International Consortium of Investigative Journalists and reveals a web of global corruption tied to a Panama-based law firm, Mossack Fonseca, that has been facilitating tax havens and hiding stashes worth billions; Panama being a remaining bastion of bank secrecy.

Many current and former world leaders have been linked to off-shore companies managed by the Panama firm, at least 72 in all.

In addition 29 billionaires on the Forbes 500 richest people list were found to have connections to Mossack Fonseca.

The law firm defended itself, saying it “does not foster or promote illegal acts.”  And just because an individual created a company in Panama, or opened bank accounts there, doesn’t necessarily mean the individuals did anything unlawful, plus some of those named have said they had legitimate business dealings warranting a Panamanian presence.

That said, many of the actions documented suggest an attempt by some to circumvent Western sanctions on regimes or individuals.

But whereas I could write 40 pages alone on this issue, for now I’ll try to summarize some of the key individuals who are involved, particularly the politicians.

Among the chief findings was a large suspected money laundering ring involving close associates of Vladimir Putin, though he himself is not named.  Rather, the likes of concert cellist Sergei Roldugin, who has long known Putin since they were teenagers and is godfather to the president’s daughter Maria, personally made hundreds of millions of dollars in profits on suspicious deals, the proceeds of which were then funneled through companies set up by Mossack Fonseca, with the documents from Roldugin’s companies stating: “The company is a corporate screen established principally to protect the identity and confidentiality of the ultimate beneficial owner of the company.”  Ergo, Roldugin is no doubt acting as a front for someone else.

Bank Rossiya – a Russian bank on the EU and U.S. sanctions list, is the source through which $billions were funneled to various countries including Switzerland and Panama.

In response, Kremlin spokesman Dmitry Peskov said investigative journalists are publishing material linking Putin to offshore companies in an attempt to “destabilize the situation in Russia.”

“Other heads of government are featured but only photographs of Putin are published,” Peskov said.

As for Russians mentioned in the documents, the Prosecutor General’s Office said it would investigate “to find out if Russian nationals acted according to the norms of Russian laws.”  [Ha.]

Regarding China, the documents named the family members of at least eight current or former members of the Communist Party’s elite Politburo Standing Committee, including the brother-in-law of President Xi Jinping.  The issue here is that Xi has waged a far-reaching anti-corruption campaign to restore the party’s credibility in the eyes of a Chinese public fed up with graft, but it is unlikely the public will see much if anything on the Panama Papers given the media crackdown described further below.

But then you have British Prime Minister David Cameron, who was accused of hypocrisy after it was revealed that he profited from an offshore trust set up by his late father Ian Cameron, a stock broker.  While Cameron’s enemies said he could not be held to account for the actions of his father, he “can for hypocrisy.”

Tom Watson, the deputy leader of Britain’s opposition Labour Party, said: “(The prime minister) said sunlight is the best disinfectant and wasn’t entirely straight with the British people about what his own financial arrangements were.  That wouldn’t be so bad if he hadn’t also been lecturing very prominent people about their own tax arrangements, some he called morally wrong.”

Cameron previously refused to say whether he made any money from the fund, called Blairmore Holdings, but then on Thursday, in a televised interview he said that prior to becoming the British leader he sold shares from the fund worth about $48,000.  He said that his father’s fund was not set up to avoid taxes and he himself paid taxes on the shares he sold.

The timing for Cameron could not be worse what with the looming June 23 referendum on Brexit. 

Then you have Argentine President Mauricio Macri.  Macri is the son of an Italian-born tycoon and one of Argentina’s wealthiest people. His name showed up on documents related to two offshore companies.

Macri said there was no wrongdoing and “I have nothing to hide.”

Macri said he was not a shareholder in the offshore entities and that as a director he never received any remuneration and that he revealed the details to the anti-corruption office when he became president.

The only real casualty thus far has been Iceland’s prime minister, who was forced to resign on Tuesday after the documents showed the PM owned an offshore firm with his wife.  The current minister of fisheries and agriculture (which is a big position here) becomes prime minister and the country will try to continue with the current two-party coalition government, though early elections would appear to be on the docket for the fall.

It also needs to be noted that many of the companies set up by Mossack Fonseca were Nevada and Wyoming based; these two becoming secretive havens as much as Bermuda and Switzerland have long been, as USA TODAY put it.  Many of the companies don’t list corporate officers in state records, but instead may have just one address, say in Panama.

Editorial / The Economist

“Corruption makes the world poorer and less equal.  When politicians steal, they reduce the amount of public cash left over for roads or schools. When they give sweetheart contracts to their chums, they defraud taxpayers and deter honest firms from investing in their country. All this hobbles growth.

“Cleaning up tax havens will not end graft.  The prime responsibility for this lies with national governments, many of which should do more to make their finances transparent and their safeguards against cronyism stringent. But it would help if kleptocrats were less able to hide their stashes.  Hence coordinated global efforts are required to crack down on corporate anonymity and to stop the middlemen who make it so easy for crooks to launder their loot.

“Many schemes described in the Panama papers involve anonymous shell companies, whose real owners hide behind hired ‘nominees.’  Such vehicles are known as the ‘getaway cars’ for tax dodgers, launderers and crooked officials.  It is time to untint their windows by creating central registers of beneficial ownership that are open to tax officials, law-enforcers – and the public.  The penalties for lying when registering a firm should be stiff.  Britain and a few smaller countries have led the way in this.  Others should follow.”

Street Bytes

--Stocks fell for a second week in three, with both the Dow Jones and S&P 500 losing 1.2%, while Nasdaq fell 1.3%.  The next few weeks it’s about earnings.

--U.S. Treasury Yields

6-mo. 0.34%  2-yr. 0.69%  10-yr. 1.72%  30-yr. 2.55%

Treasuries rallied a bit as it was a bit of a ‘risk off’ week, plus you had plunging yields around the world.

In fact the German 10-year Bund finished the week with a yield of 0.09%, just off its all-time closing low of 0.073%.  The Bund finished last year with a yield of 0.63%.

The competition for German debt between the ECB and its bond-buying program and private investors is helping to keep yields incredibly low.  But from a risk-reward standpoint, it is nuts to buy euro paper.  Italy with a 10-year yield of 1.31%?  When the bond bubble reverses, and it will at some point, Enzo bar the door.

--According to Bank of America Merrill Lynch, just 19% of U.S. mutual funds that invest in “large-cap” companies like Apple and IBM managed to outperform the S&P 500 in the first quarter, the lowest quarterly “beat rate” (the percentage beating the market) in its data, which stretches back to 1998.

--Shares in Dublin-based Allergan cratered Tuesday following word of the Obama administration’s plans to deter “tax inversions,” which in Allergan’s case killed its proposed merger with Pfizer.

For two years “inversion” deals, that shift the headquarters of U.S. companies to overseas bases with lower tax rates, have been a major controversy and Pfizer’s $160bn takeover of Allergan was the biggest proposed inversion to date, so its collapse sent shockwaves through both Wall Street and Washington.

The Treasury Department is proposing changes that make it harder to reach the ownership threshold necessary to make an inversion deal work.

Kevin Brady, the top Republican tax writer in the House of Representatives, said: “Instead of unveiling commonsense policies to help American employers compete globally and create new jobs for our workers, the Obama administration just announced punitive regulations that will make it even harder for American companies to compete.”

U.S. executives have long argued, correctly, that it is an uncompetitive tax code that puts them at a disadvantage versus foreign rivals and is forcing them to flee.  The top corporate income tax rate of 35 percent compares with 20 percent in the UK, for example, and 12.5 percent in Ireland.

Editorial / Wall Street Journal

“CEOs have learned to keep mum in the Obama era, lest their companies be punished like J.P. Morgan after Jamie Dimon criticized some parts of Dodd-Frank.  So it’s worth noting the candid reaction after a new Treasury rule scuttled the merger between Pfizer Inc. and Allergan PLC. The companies ended their $150 billion tie-up after Treasury Secretary Jack Lew issued new rules that made it harder for companies like Pfizer to move to Ireland to legally lower their taxes.  Pfizer will have to pay Allergan a breakup fee of $150 million, though Allergan shares are still down more than $10 billion since the Treasury ambush.

“Pfizer CEO Ian Read (notes) capricious political power helps explain the economic malaise of the last seven years.  ‘If the rules can be changed arbitrarily and applied retroactively, how can any U.S. company engage in the long-term investment planning necessary to compete,’ Mr. Read writes.  ‘The new ‘rules’ show that there are no set rules.  Political dogma is the only rule.’

“He’s right, as every CEO we know will admit privately.  This politicization has spread across most of the economy during the Obama years, as regulators rewrite longstanding interpretations of longstanding laws in order to achieve the policy goals they can’t or won’t negotiate with Congress. Telecoms, consumer finance, for-profit education, carbon energy, auto lending, auto-fuel economy, truck, emissions, home mortgages, health care and so much more.

“Capital investment in this recovery has been disappointingly low, and one major reason is political intrusion into every corner of business decision-making.  To adapt Mr. Read, the only rule is that the rules are whatever the Obama Administration wants them to be.  The results have been slow growth, small wage gains, and a growing sense that there is no legal restraint on the political class.”

--The Justice Department ruled that Halliburton can’t merge with rival oil-services company Baker Hughes.  Attorney General Loretta Lynch said, “The proposed deal...would eliminate vital competition, skew energy markets and harm American consumers.”

Halliburton and Baker Hughes, in a joint statement, said they intend to ‘vigorously contest’ the lawsuit.

But, in the same statement, the companies said they “may terminate the merger agreement” if the review extends beyond the April 30 date when BH can contractually exit the deal and pocket what appears to be a record break-up fee of $3.5 billion.

This is going to be the result since a trial supposedly wouldn’t begin until August, plus the European Commission is now likely to block the deal which would force a multi-year delay.

The breakup fee is outrageous and way above the norm on a percentage basis.  Ergo, blame Halliburton’s lawyers for putting in such a huge fee in order to get the deal done.  After all, Halliburton and Baker Hughes are two of the three largest integrated oilfield service companies in the world.

--The U.S. oil rig count declined again this week by 8 to 354, according to Baker Hughes.  This is the lowest level since November 2009.

But this report, along with rumors that the Doha oil producers meeting on April 17 may go better than expected, i.e., a real production freeze (which ain’t gonna happen), plus an unexpected decline in U.S. crude inventories for the first time in two months, led to a 6% move up at week’s end to $39.72 on West Texas Intermediate.

--Spending in Canada’s oil and natural gas sector has fallen by a record $38bn over the past two years, according to the Canadian Assoc. of Petroleum Producers, marking the biggest two-year decline since 1947 when the data was first collected.

CAPP projects the total number of wells drilled in Canada’s western provinces, home to the third-largest oil reserves in the world, would fall to 3,500 in 2016 from 10,400 drilled in 2014.

--Russia’s oil production rose to 10.91 million barrels per day in March, its highest level in nearly 30 years, raising questions over Moscow’s commitment to freeze production ahead of the producers’ meeting.  [The record in Russia is 11.47mbpd set in 1987.]

--Once again, being a lifelong owner of Honda Accords (I’m on number nine, I think), with the automaker’s admission this week there was another fatal accident resulting from an exploding air bag made by Takata Corp. in a Honda vehicle (this one a 2002 Civic), all of us who have been driving these cars all these years can just thank their lucky stars they didn’t suffer a similar fate.

This was the 10th known death in the U.S. from a Takata inflator, with more than 100 hurt.

In the latest incident, March 31 in Texas, the Civic collided with another car, setting off the air bags.  Honda’s records show that the car was first recalled in 2011, but that despite several recall notices, repairs were never completed.

--Fiat Chrysler plans to cut 1,300 jobs this summer at the Michigan factory where it assembles a small Chrysler sedan, a blow to the automaker and the United Auto Workers union as it’s the first large-scale cutback since 2009. There simply isn’t demand for certain small-car models these days.

CEO Sergio Marchionne has been shifting the emphasis of Fiat Chrysler to trucks and SUVs and away from small-car production in the U.S.  The company’s strength is in its Jeep SUV and Ram truck brands.  The Dart and Chrysler 200 small cars are being phased out.

Separately, Ford announced it was moving some of its small-car production to Mexico, spending $1.6 billion on a new plant there (with the bulk of the cars sold in the U.S.), though at the same time Ford says it’s committed to building more trucks here, and has previously said it is committed to spending an additional $8 billion to $9 billion in the next four years to support these efforts.

According to the Center for Automotive Research, under the new UAW contract, Ford factory workers earn about $60 an hour in wages and benefits, while auto workers in Mexico average about $8 an hour.  [Bloomberg]

--Bloomberg reported that clean energy investment broke new records in 2015 and is now seeing twice as much global funding as fossil fuels, in no small part due to falling prices for oil and natural gas, as well as coal.

Government subsidies for wind and solar have helped, but economies of scale are the primary driver these days.  The cost of solar power has collapsed to 1/150th of its level in the 1970s, for example.

And as Bloomberg points out, in the case of solar-power generation, “It’s a technology, not a fuel. As such, efficiency increases and prices fall as time goes on.”  Plus the price of batteries to store solar power when the sun isn’t shining is falling.

--Tesla Motor Co. said it has received more than 325,000 reservations for the Model 3 during the past week, which it says represents the “single biggest one-week launch of any product ever,” concluding the figure “corresponds to about $14 billion in implied future sales.”

By comparison, Apple’s iPhone 6 launch in Sept. 2014 netted an implied $6 billion.

Tesla expects each buyer of the mid-price sedan to shell out an average of $43,000.

But will it be available by late 2017 as the company says?  Tesla delivered just 50,580 vehicles last year out of its Fremont, Calif., factory, thouogh the company says it will produce 500,000 cars a year by 2020.

Earlier this week, Tesla announced it had delivered 14,820 Model S and Model X cars during the first quarter, missing its target of 16,000.

--But aside from mammoth preorders, Tesla founder Elon Musk had another reason to crow at week’s end.  His Space Exploration Technologies Corp., SpaceX, successfully landed part of a used rocket on a floating platform Friday, a dramatic development in the company’s long-term goal of significantly reducing the cost and accelerating the pace of launching payloads into outer space.

Friday’s landing occurred minutes after SpaceX successfully launched another unmanned cargo capsule to the international space station under its contract with NASA.

While NASA supports the company’s reusability goals – which SpaceX’s rivals share – it isn’t really clear just how significant reusability is.  If you were sending up a payload on a SpaceX or competitor’s rocket, do you really want to place it on a used rocket?  Just sayin’.

But it is a spectacular achievement.

--Samsung Electronics forecast higher-than-expected first-quarter earnings, up 10%, as its latest flagship smartphone enjoyed a stronger-than-expected debut.  Revenue rose 4% over a year ago.

Samsung had been in a two-year decline in mobile business but the Galaxy S7 and S7 Edge premium phones gained unexpected popularity.

--I’ve written a lot about Chinese tech giant Huawei Technologies Co. and how I expect it to eventually eat Apple’s lunch in China, so this week the company said its profit rose 32% in 2015 as it has become the third-largest smartphone maker by shipments behind Samsung and Apple, plus it’s now become a leader in carrier-network gear, alongside Ericsson and Nokia Corp.

Huawei’s smartphone shipments rose 44% last year to more than 106 million units, the fastest growth among the top-five players in the market, according to IDC.

--The Justice Department said on Friday it will seek a court order to force Apple Inc. to help it unlock an iPhone seized as part of a New York drug investigation.  So the fight over encryption is far from over.

Apple’s lawyers said they intend to press the Feds to explain why they need Apple’s help and can’t get into the iPhone on their own, while demanding the names of any companies that are helping with the effort, especially after the FBI’s announcement it had found a way into the San Bernardino, Calif., terrorist’s cellphone.

I am totally on Apple’s side on this one.

--Verizon Communications Inc. said it plans to make a bid for Yahoo Inc.’s Web business next week.  Google, the main division of Alphabet Inc., is also considering bidding for the core business.  Time Inc. is another potential acquirer.

First-round bids for the main Web assets are due April 11.

--Twitter won a deal to show Thursday night National Football League games online.  The company will stream 10 games to the public for free, while they are also shown on NBC, CBS and the NFL Network.

Twitter thus has a key piece of content it hopes to leverage to make its service the go-to place to react to and discuss live events.

Terms of the deal haven’t been announced but the NFL doesn’t come cheap.  Last season, Yahoo paid $17 million to stream a single game from London.  In the most recent broadcast deal, CBS Corp. and Comcast Corp.’s NBC each paid about $45 million a game for five Thursday night contests for the 2016 and 2017 seasons.

--Last week I said it appeared Alaska Air or JetBlue was going to make a move for Virgin America and it ended up being Alaska Air, a deal valued at $2.6bn; thus making the combined entity the fifth largest U.S. airline, with 1,200 daily departures. It is expected to gain regulatory clearance.

--Donald L. Blankenship, the former leader of Massey Energy Company, was sentenced on Wednesday to a year in prison for conspiring to violate federal mine safety standards.

The sentencing, in Federal District Court in Charleston, W. Va., came six years after an explosion tore through Massey’s Upper Big Branch mine, killing 29 people.

Blankenship was not accused of direct responsibility, but was also fined $250,000. His defense lawyers plan to appeal.

--PayPal announced it canceled a plan for a new facility in Charlotte, N.C., in response to the state’s controversial new law that restricts the rights/anti-discrimination protections of the LGBT community.  Other companies are threatening similar measures. 

--Thomas Staggs, the heir-apparent to Disney CEO Robert Iger, unexpectedly announced his departure on Monday, throwing succession at the world’s largest entertainment company into disarray.

Staggs is stepping down as chief operating officer on May 6.  He had been elected last year to chief operating officer from theme park chairman.

Iger, 65, has said he would step down in June 2018.  Staggs lacked the support of some key Disney shareholders.

Facebook executive Sheryl Sandberg, a member of Disney’s board, is now among those being mentioned as a possible successor to Iger.

Foreign Affairs

Iraq/ISIS/Syria/Russia: Among the developments this week....

ISIS abducted 300 cement workers and contractors in an area northeast of Damascus, as reported by Syrian state TV, while fighting elsewhere in the country intensified.

The abduction took place in Dumeir, an area where ISIS launched a surprise attack against government forces earlier in the week, killing 12 Syrian soldiers in a multiple suicide car bomb operation.

Fighting in and around Dumeir killed at least 30 civilians, according to the Syrian Observatory for Human Rights, as the U.S. said it was “appalled” by reports Syrian government air strikes struck near a school and hospital.

There were also reports Islamic State militants attacked Syrian army troops with mustard gas in an offensive against a military airport in the eastern province of Deir al-Zor that borders Iraq.  Syrian state media did not disclose the level of casualties.  [Reuters]

As for the five-week truce it has been left in tatters as al Qaeda-linked Nusra Front rebels shot down a government warplane and captured its pilot near Aleppo.  Nusra and allied Islamist rebel groups launched a new campaign in the past week to recapture territory from President Bashar al-Assad and his Iran-backed allies.

The Nusra Front had been excluded from the truce (as well as ISIS) and the shootdown suggests they have been supplied with anti-aircraft weapons, long a goal.  Moscow acknowledged its aircraft then hit Nusra Front positions near Aleppo to help repel the offensive by up to 1,500 militants.

In Palmyra, Syrian troops identified at least 45 bodies in a mass grave found after the city was recaptured from ISIL.

In Iraq, security forces claimed to have killed 150 IS fighters near Fallujah, and by week’s end Iraq claimed to have retaken the town of Hit in Anbar province.

At the same time, ISIS claimed responsibility for eight suicide bombings around the country, including an attack on a restaurant  that killed at least 12.

Separately, the Washington Post reported ISIL is facing an unprecedented cash crunch after months of strikes on oil facilities and financial institutions.  U.S. officials are seeing more and more evidence of infighting among senior commanders over allegations of corruption and theft.

Many of the Iraqi and Syrian recruits are on half-pay, while recent defectors talk of not having been paid in months.  Businesses in territory controlled by ISIS complain of ever-higher taxes and fees as well.

But, an Iraqi military strategist, Hisham al-Hashimi, told the Post, “They’re not going through a financial crisis that will lead to their collapse. They still have 60 percent of Syrian oil wells and 5 percent of Iraq’s.”  ISIS has also proved resilient in overcoming obstacles.

Fred Hiatt / Washington Post

“When President Obama brags about defying the foreign policy establishment to craft his Syria policy, he probably doesn’t have people like Vicki Aken and Ahmed Mestow in mind.

“Obama recently said in an interview with Jeffrey Goldberg of the Atlantic that he was ‘very proud’ of his decision not to bomb Syria after its dictator, Bashar al-Assad, killed 1,400 or more people in a chemical gas attack. He said he has been criticized because he refused to follow the ‘playbook that comes out of the foreign-policy establishment,’ which would have counseled greater U.S. intervention. The president believes he should be credited for having the fortitude to sidestep a potential quagmire.

“Aken is Syria country director for GOAL, one of the world’s largest humanitarian aid organizations, based in Ireland, which amazingly manages in the midst of war to keep providing fresh water and bread to as many as 1 million desperate people inside Syria.  Mestow, a Syrian, worked for GOAL inside Syria for three years before he had to flee to Germany, after being threatened by both the Assad regime and its Islamist enemies.

“They visited The Post this week. Their views on U.S. policy differ from Obama’s.

“Mestow...remembers when the protests against Assad’s brutal dictatorship began in 2011.  He remembers peaceful crowds of thousands of people demonstrating at the university in Aleppo, none of them with weapons.  And he remembers how Assad responded with violence, with accusations that anyone opposing the regime was a terrorist – and even, Mestow says, with the release from Syrian prisons of genuine terrorists who went on to seed the Islamic State in Syria and Iraq.

“He also remembers the day that Obama cites with pride – when the United States, after saying the use of chemical weapons was a ‘red line’ that Assad should not cross, decided not to respond militarily.

“ ‘My people were asking, okay, where is the red line for America?’ Mestow said.  ‘It’s not chemical weapons – but how about the ‘barrel bombs’?  How about the snipers?  How about a half-million people killed?’....

“(The) half-million killed?  Well, no one knows for sure how many of Syria’s prewar population of 22 million have died. The United Nations and other groups kept tabs for a while, reaching 250,000, and then stopped counting – so for more than two years, we’ve been writing ‘more than 250,000.’ Certainly the number is far greater.  [Ed. This has been one of my pet peeves.  Leading publications today are still printing 250,000 and not even qualifying it.  An independent group a number of months ago, as I stated at the time, puts the toll at 400,000, which is what I have used since.]

“Meanwhile, at least half of all Syrians have been forced from their homes.  More than 4 million have become refugees; thousands more are trapped at the Turkish border, unable to leave.  Hundreds of thousands have fled to Europe. Together, those refugees and the terrorist attacks spawned by the Islamic State, which took root in the chaos of Syria’s civil war, have fueled a xenophobic politics in Europe unlike anything the continent has seen since World War II.

“Given these consequences, you have to wonder whether Obama really takes pride in his policy, or is trying to convince himself.

“The White House argues there is nothing useful the United States could have done, though along the way Obama’s senior advisers pushed a series of options: destroy the helicopters dropping those barrel bombs, provide training or equipment for moderate rebels, create a safe zone where rebels and displaced people could regroup.

“Aken, who moved to the Turkish side of the Syrian border in 2014 to take charge of GOAL’s aid effort, remembers how Syrians then still believed the United States would create a safe zone....

“Aken said Syrians’ last ‘glimmer of hope’ disappeared when Russia intervened, attacking civilians with a force that was ‘so much more powerful and targeted.’

“In the Washington arguments over doctrine and America’s role, it’s easy to forget that a country is being destroyed. When I asked if it could be put back together, Aken, who previously worked in Sierra Leone and South Sudan, said she thought the talent and resourcefulness of the Syrian people could help them overcome a lot, if the war ended soon enough.

“ ‘If it goes another five or 10 years, then no,’ she said.  ‘There won’t be anyone left.’”

I quoted Mr. Hiatt at length just to show you there are other voices echoing what I have been writing for years.  Though my conclusion is it’s already over.  It’s been too late for a long time.

And President Barack Obama is responsible.

Iran: Yousef Al Otaiba, ambassador of the United Arab Emirates to the U.S., in an op-ed for the Wall Street Journal:

“Since the nuclear deal...Iran has only doubled down on its posturing and provocations.  In October, November and again in early March, Iran conducted ballistic-missile tests in violation of United Nations Security Council resolutions.

“In December, Iran fired rockets dangerously close to a U.S. aircraft carrier in the Strait of Hormuz, just weeks before it detained a group of American sailors.  In February, Iranian Defense Minister Hossein Dehghan visited Moscow for talks to purchase more than $8 billion in Russian fighter jets, planes and helicopters.

“In Yemen, where peace talks now hold some real promise, Iran’s disruptive interference only grows worse.  Last week, the French navy seized a large cache of weapons on its way from Iran to support the Houthis in their rebellion against the U.N.-backed legitimate Yemeni government.  In late February, the Australian navy intercepted a ship off the coast of Oman with thousands of AK-47s and rocket-propelled grenades.  And last month, a senior Iranian military official said Tehran was ready to send military ‘advisers’ to assist the Houthis.

“The interference doesn’t stop there.  Since the beginning of the year, Tehran and its proxies have increased their efforts to provide armor-piercing explosive devices to Shiite cells in Bahrain and Saudi Arabia.  A former Iranian general and close adviser to Supreme Leader Ayatollah Ali Khamenei called for Iran to annex all of Bahrain.  And in Syria, Iran continues to deploy Hizbullah militias and its own Iranian Revolutionary Guard to prop up Syria’s Bashar Assad.

“These are all clear reminders that Iran remains the world’s leading state sponsor of terrorism – a persistent threat not only to the region but to the U.S. as well.  ‘Death to America’ has always been more than an ugly catchphrase; it has been Iranian policy....

“If the carrots of engagement aren’t working, we must not be afraid to bring back the sticks.  Recent half measures against Iran’s violations of the ballistic-missile ban are not enough. If the aggression continues, the U.S. and the global community should make clear that Iran will face the full range of sanctions and other steps available under UN resolutions and in the nuclear deal itself.

“Iran’s destabilizing behavior in the region must stop. Until it does, our hope for a new Iran should not cloud the reality that the old Iran is very much still with us – as dangerous and as disruptive as ever.”

Editorial / Washington Post

“Iran has complied with the principal terms of the nuclear agreement reached last summer, mothballing much of the infrastructure that could be used for weapons production and shipping enriched uranium out of the country.  It also has aggressively exploited loopholes in the agreement and tried to create new ones.  Most seriously, it has repeatedly tested ballistic missiles that could be used for carrying nuclear warheads, even though a UN Security Council resolution approved in tandem with the nuclear accord explicitly called on Iran not to engage in such activity.

“Tehran’s behavior comes as no surprise to the many observers who predicted the deal would not alter its hostility to the West or its defiance of international norms.  Unfortunately, the Obama administration’s response has also been much as critics predicted: It has done its best to play down Iran’s violations and avoid any conflict out of fear that the regime might walk away from a centerpiece of President Obama’s legacy.”

Libya: A UN-backed unity government moved to cement control over the country’s finances and institutions Wednesday after a rival administration in Tripoli ceded power; a move necessary for a united front against militants such as ISIS.

But the Government of National Accord, which is to be headed by prime minister-designate Fayez al-Sarraj, still needs to secure the approval of another rival in the eastern town of Tobruk, which has long claimed international legitimacy because it was appointed by the parliament elected in the last election in 2014.

Generally, the news is encouraging, but there must be action, not just words.

George Will / Washington Post

“Hillary Clinton’s supposedly supreme presidential qualification is not her public prominence, which is derivative from her marriage, or her unremarkable tenure in a similarly derivative Senate seat.  Rather, her supposed credential is her foreign-policy mastery. Well.

“She can’t be blamed for Vladimir Putin’s criminality or, therefore, for the failure of her ‘reset’ with Russia, which was perhaps worth trying. She can’t be blamed for the many defects of the Iran nuclear agreement, which was a presidential obsession.  And she can’t be primarily blamed for the calamities of Iraq, Syria and the Islamic State, which were incubated before her tenure.

“Libya, however, was what is known in tennis as an ‘unforced error,’ and Clinton was, with President Obama, its co-author.

“On March 28, 2011, nine days after the seven-month attack on Libya began and 10 days after saying it would last ‘days, not weeks,’ Obama gave the nation televised assurance that ‘the task that I assigned our forces [is] to protect the Libyan people from immediate danger and to establish a no-fly zone.’

“He said U.S. forces would play only a ‘supporting role’ in what he called a ‘NATO-based’ operation, although only eight of NATO’s 28 members participated: ‘Broadening our military mission to include regime change would be a mistake.’

“Then-Defense Secretary Robert Gates said no vital U.S. interest was at stake. Recently, he told the New York Times ‘the fiction was maintained’ that the goal was to cripple Moammar Khadafy’s ability to attack other Libyans.

“This was supposedly humanitarian imperialism implementing ‘R2P,’ the ‘responsibility to protect.’  Perhaps as many as – many numbers were bandied – 10,000 Libyans.  R2P did not extend to protecting the estimated 200,000 Syrians that have been killed since 2011 by Bashar Assad’s tanks, artillery, bombers, barrel bombs and poison gas.”

But as it turned out, the purpose of the NATO operation was supposed to be to enforce UN resolutions on protecting Libyans from Khadafy, but, according to Micah Zenko, writing for Foreign Policy, the coalition “actively chose not to enforce” the resolution prohibiting arms transfers to either side in the civil war.

Instead, videos emerged showing NATO blatantly allowing the transfers; it was doing exactly the opposite of its mission.

George Will:

“On Oct. 20, 2011, Clinton was told insurgents, assisted by a U.S. Predator drone, had caught and slaughtered Khadafy. She quipped: ‘We came, we saw, he died.’  She later said her words expressed ‘relief’ that the mission ‘had achieved its end.’

“Oh, so this military adventure was, after all, history’s most protracted and least surreptitious assassination.  Regime change was deliberately accomplished, and Libyans are now living in the result – a failed state.  If you seek her presidential credential, look there.”

China: The rift between the media and the regime of President Xi Jinping continues to widen.  A backlash against restrictions is growing bolder.  The mysterious open letter, published online and purportedly signed by “loyal Communist party members” calling for Xi to resign has only exacerbated the situation, with up to 20 having been detained.

Lucy Hornby and Charles Clover / Financial Times

“Since coming to power in 2012, Mr. Xi has shrunk the already claustrophobic zone of press freedoms, and solidified government control over the media.  Social media were some of the first casualties, with the closure or muzzling of thousands of accounts on Weibo, China’s version of Twitter.  New laws make it easier to censor foreign internet sites while an anti-corruption purge has created a climate of fear within the elite and a reluctance to challenge Mr. Xi.

“However, the crackdown is colliding with a society which has tasted openness... Increased commercial pressures on the media and the internet, despite being heavily censored, have pushed the boundaries of party control....

“Journalists say they feel more threatened than at any time since the response to the Tiananmen Square demonstrations.”

North / South Korea: Seoul believes its neighbor to the north may now be able to mount a nuclear warhead onto a medium-range missile, in this case enough miniaturization to fit a warhead on a Rodong missile, which has a range up to 1,243 miles, putting U.S. military bases in South Korea and Japan at risk.  But the official, speaking to CNN, said South Korea doesn’t as yet have the evidence to prove this capability, which is the current assessment of the Pentagon.

Kim Jong Un has claimed his county does have the technology, this as Washington-based monitoring project 38 North said it had detected “suspicious activity” at the North’s Yongbyon nuclear facility.

Pyongyang carried out its fourth nuclear test on January 6.

China’s state-run People’s Daily also significantly noted in a commentary this week that North Korea has become an increasing threat to China.

The opinion piece said it was time for North Korea to rethink its nuclear weapon strategy as it might eventually jeopardize Pyongyang’s political regime.

It also said ties between Pyongyang and Beijing had worsened, especially since the roll out of new sanctions, including the UN’s call to stop imports of iron, coal, gold, titanium and rare earth minerals, as well as the halting of items such as jet fuel.

The People’s Daily Commentary added the North’s actions “will only drive China away.”

Russia: Vladimir Putin has created a new armed force, a National Guard that reports directly to the president.  It has been designed, according to Putin’s decree, to deliver “public order and fight terrorism and extremism.”

The new National Guard will be made up of Russia’s current interior and security troops and will receive a broad spectrum of rights and tools.

So the man Putin chose to head it up is Viktor Zolotov, who, as Mikhail Fishman writes in the Moscow Times, “has no peers” when it comes to having Putin’s personal trust.

Zolotov has headed the Federal Security Guard Service since Putin was elected president for the first time in 2000 and their bond goes back to the early 1990s when both worked in St. Petersburgh for then-mayor Anatoly Sobchak.

Zolotov was first recruited into KGB structures in the 1970s, and hired as a bodyguard for Alexander Korzhakov, Boris Yeltsin’s influential personal guard and political aide.  Zolotov can be seen standing alongside Korzhakov and Yelltsin on the famous tank in front of Moscow crowds during the August 1991 failed coup.  Later, Zolotov was put in charge of guarding Putin.

Meanwhile, along the lines of China’s crackdown on the media, Putin has recommended that all journalists account for their earnings as part of the National Anti-Corruption Plan, published by the Kremlin on April 1.

In response, the trade union of journalists stated they did not intend to follow the recommendation.

Separately, according to the Stockholm International Peace Research Institute (SIPRI), Russia is no longer among the top three spenders on defense, dropping to fourth.

The United States remains the leader by far, accounting for 36% of all military spending in the world, ($596 billion in 2015), with China ranked second at $215 billion, and now Saudi Arabia third at $87.2 billion.

Russia’s defense spending last year was $66.4bn.

Azerbaijan / Armenia: Fighting in the disputed Nagorno-Karabakh region has continued despite a “unilateral ceasefire”.  The Armenia-backed Karabakh forces said that Azerbaijan was continuing to shell the territory.

Nagorno-Karabakh has been in the hands of ethnic-Armenian separatists since a war that ended in 1994.  At least 30 soldiers have been killed in the current fighting as well as many civilians.

The danger, and what bears watching, is you have the likes of Turkish President Erdogan taking sides; in Erdogan’s case, Azerbaijan, which he has said he backs “to the end”.

Recall, Turkey doesn’t have relations with Armenia because of the dispute over mass killings of Armenia during the Ottoman era, which Armenia says was a genocide.  Turkey has never admitted to it.

A war between the two from 1991 to 1994 killed about 30,000 before a ceasefire.

Armenia is Russia’s traditional ally, so this is another potential Russia-Turkey flashpoint, a la Syria and the Kurds.

Both Armenia and Azerbaijan are heavily armed with modern weaponry.

Brazil: The impeachment of President Dilma Rousseff could become more of a reality as soon as Monday with the release of a congressional report recommending impeachment apparently being put to a vote in a special committee.

After this it would be forwarded to the full Congress for discussion and voting.

The lower house must approve the impeachment motion by a two-thirds vote and then it would move to the senate for a formal political trial.

So, Rousseff needs the support of 172 of 513 lower-seat members to defeat the motion.

Separately, security for the Olympics is being called into question following the resignation of a key official in charge of much of the operation over the failure of the government to deliver on promises for the commander’s forces.

Random Musings

--Wisconsin Primary Results:

Republicans: Ted Cruz 48%, Donald Trump 35%, John Kasich 14%

Delegate tally: Trump 743, Cruz 517, Kasich 143 (1,237 needed for the nomination)

Democrats: Bernie Sanders 56.5%, Hillary Clinton 43%

Delegates (including superdelegates): Clinton 1,749, Sanders 1,061 (2,383 needed for the nomination)

Next up...April 19: New York.  April 26: CT, DE, MD, PA, RI

New York Polls: CBS News Battleground Tracker...Trump 52%, Cruz 21%, Kasich 20%.  Monmouth University...Trump 52, Kasich 25, Cruz 17.

CBS / Battleground...Clinton 53, Sanders 43.

Pennsylvania Polls: CBS / Battleground...Trump 47, Cruz 29, Kasich 22.  Quinnipiac University...Trump 39, Cruz 30, Kasich 24.

Quinnipiac...Clinton 50, Sanders 44.

You can expect the above to change quite a bit given the long lag time until voting on April 19 and 26.

--In a recent Pew Research Center survey, 50% of registered voters said Trump would be poor or terrible as president and just 26% said he would be good or great.  But 56% said Hillary Clinton would be poor or terrible, 33% saying she would be good or great. 

Back in January, the splits on Trump were 52-31; Clinton 44-35.

--For the record, I forgot to note Trump’s unfavorables in a recent Washington Post/ABC News poll.  He has an overall unfavorable of 67% among likely voters, 68% among white women, 85% among Hispanics, and 80% among blacks.

Then on Thursday, a new Associated Press-GfK poll revealed seven in 10 people have an unfavorable view of Donald Trump, including nearly half of Republicans.  Even among his key voting bloc, whites without a college education, 55% have a negative opinion.

More than 60% of all registered voters and 31% of Republicans said they definitely would not vote for Trump in the general election.

But 68% of those who describe themselves as both Republicans and supporters of the tea party movement do have a favorable view.

--Ted Cruz said in his victory statement after Wisconsin, “We’re uniting the Republican Party.”  Hardly.  I just have one question.  What has this guy done?

--Reserving the right to change my mind 20 more times until November, given my choices today, I’m voting third party.

--Last week I noted that President Obama’s approval rating is rising (53% in the Gallup poll I cited), which, barring a major terror attack on U.S. soil, and an indictment of Hillary, frankly spells defeat for the Republicans.

So this past Tuesday, William A. Galston wrote from his perch at the Wall Street Journal that an approval rating that is ‘net positive’ “makes a big difference: According to Emory University political scientist Alan Abramowitz, the incumbent president’s job approval has more impact on the vote share of his party’s nominee than does any other variable.”

If Obama’s average approval number in all the polls is 50%, according to Abramowitz, “the Democratic nominee could expect to win a narrow victory in the popular vote – ...with all else equal.”

--Trump offered an explanation this week for how he would force Mexico to pay for a border wall with the U.S.  In a memo to the Washington Post, Trump said he would threaten to change a law to cut off cash transfers that Mexicans in the U.S. send back to the country, a vital source of income that Trump says would force Mexico into a “one-time payment” of $5-$10bn.

--Former House Speaker Newt Gingrich, in an article from the Washington Post, on Trump:

“Either these are the weeks we discovered he had weaknesses he couldn’t overcome, or these are the weeks when he and his team realized they had to get better.  If he makes the transition to being a really professional presidential candidate, he will be really formidable.  And if he does not, he will not be the nominee.”

--George Will / Washington Post

“People here at Sen. Ted Cruz’s campaign headquarters are meticulously preparing to win a contested convention, if there is one.  Because Donald Trump is a low-energy fellow, Cruz will be positioned to trounce him in Cleveland, where Trump’s slide toward earned oblivion would accelerate during a second ballot....

“If, as seemed probable a month ago, Trump had won Wisconsin, he would have been well-positioned to win a first-ballot convention victory.  Now he is up against things to which he is averse: facts. For months Cruz’s national operation has been courting all convention delegates, including Trump’s. Cruz aims to make a third ballot decisive, or unnecessary....

“Trump, whose scant regard for other people’s property rights is writ large in his adoration of eminent domain abuses, mutters darkly about people trying to ‘steal’ delegates that are on his property. But most are only contingently his, until one or more ballots are completed.

“Usually, more than 40 percent of delegates to Republican conventions are seasoned activists who have attended prior conventions. A large majority of all delegates are officeholders – county commissioners, city council members, sheriffs, etc. – and state party officials.  They tend to favor presidential aspirants who have been Republicans for longer than since last Friday.

“Trump is a world-class complainer (he is never being treated ‘fairly’) but a bush-league preparer.  A nomination contest poses policy and process tests, and he is flunking both....

“Cruz’s detractors say he has been lucky in this campaign’s unpredictable political caroms that thinned the competition. But as Branch Rickey – like Coach Bryant, a sportsman-aphorist – said: ‘Luck is the residue of design.’”

--Maureen Dowd / New York Times, on her interview with Donald Trump and his awful stretch, including the abortion comment.

“It’s ridiculous how many mistakes Trump has made in rapid order to alienate women when he was already on thin ice with them – and this in a year when the Republicans will likely have to run against a woman.

“He did a huge favor for Hillary, who had been reeling from losing young women to a 74-year-old guy and from a dearth of feminist excitement. And for Cruz, who started promoting himself as Gloria Steinem, despite his more regressive positions on abortion and other women’s issues.

“Wouldn’t it have been better, I asked, if Trump campaign manager Corey Lewandowski had simply called the reporter Michelle Fields and apologized for yanking her arm?

“ ‘You’re right, but from what I understand it wouldn’t have mattered,’ Trump said....

“Trump doesn’t have a plan to turn it around with women, except to use Ivanka as a character witness and to chant that ‘nobody respects women more than I do.’

“ ‘I’m just going to be myself,’ he said.  ‘That’s all I can do.’

“I asked how he could get past the damage done by his insults about women’s looks.

“ ‘I attack men far more than I attack women,’ he said.  ‘And I attack them tougher.’....

“I mentioned that Megyn Kelly wants him on her show.  ‘I think I’d probably do it,’ he allowed.

“The front-runner has a right to be paranoid, with everyone plotting to steal his prize. He said he doesn’t want to ‘act like someone overly aggrieved,’ but he was stewing in aggrievement about how ‘unbelievably badly’ he gets treated by the press.  The brand expert knows his brand is not so shiny these days....

“Has he missed the moment to moderate, to unite, to be less belligerent, to brush up on his knowledge about important issues?

“ ‘I guess because of the fact that I immediately went to No. 1 and I said, why don’t I just keep the same thing going?’ he mused.  ‘I’ve come this far in life. I’ve had great success.  I’ve done it my way.’

“He added: ‘You know, there are a lot of people who say, ‘Don’t change.’ I can be as presidential as anybody who ever lived. I can be so presidential if I want.’

“Then start.”

Peggy Noonan / Wall Street Journal

“Mr. Trump is hurting himself, in real time and for the first time....

“We’re missing what’s happening because we’re blocked by clichés. The first great Trump cliché, which began seven or eight months ago, was that he’d quickly do himself in with some outrageous comment. So everyone waited. His insults to John McCain, Megyn Kelly – that would do it. But it didn’t. The more outrageous he was the stronger he got.

“So a new cliché was born, the still-reigning one: Whatever Mr. Trump says it won’t hurt him, people will just love him more.

“But that’s not right. It was always a mistake to think one explosive statement would blow his candidacy up. What could damage him, and is damaging him, is the aggregate – a growing pile of statements and attitudes that becomes a mood, a warning, sign, a barrier.

“It’s been going on for four or five weeks, and you can take your pick as to the tipping point.  Maybe it was when he threatened to ‘spill the beans’ on another candidate’s wife, or when he retweeted the jeering pictures of her and his own wife.  Maybe it was his inability to clearly, promptly denounce the KKK; maybe it was when he hinted at riots if he’s cheated out of the nomination.  Maybe it was Corey Lewandowski’s alleged battery of reporter Michelle Fields.  Maybe it was when Mr. Trump referred in debate to his genitals, a true national first.

“It has all added up into a large blob of sheer dumb grossness.  He is now seriously misjudging the room.  The room is still America....

“At the same time Mr. Trump doesn’t even seem to be trying to do the one big thing he has to do now.  He is the front-runner for the nomination. At this point it is his job to keep the support he has and persuade those who don’t like him to give him a second or third look.  To do that he only has to be more thoughtful, stable and mature in his approach – show he may be irrepressible and fun and surprising, even shocking, but at bottom he has within him a plausible president.

“Instead, he is stuck at nutty.  Rather than attempt to win over, he doubles down.  In the process he shows that what occupies his mind isn’t big issues, significant questions or the position of the little guy, but subjects that are small, petty, unworthy.

“Instead of reassuring potential or reluctant supporters, he has given them pause.  Instead of gathering in, he is repelling.  This is political malpractice on a grand scale....

“Once Hillary Clinton was too corrupt to be elected, had too many negatives, too much bad history from her early days in Arkansas to the Clinton Foundation, Benghazi, the emails. She brought and brings quite a mess.

“But his mess cancels out her mess.”

--As for Hillary Clinton, she ripped Bernie Sanders for comments he gave to the New York Daily News on breaking up banks, as Sanders wants to do, though his plan is lacking in details.

So Clinton responded, “The core of his campaign has been ‘break up the banks’ and it didn’t seem in reading his answers that he understood exactly how that would work under Dodd-Frank....I think he hadn’t done his homework and he’d been talking for more than a year about doing things that he obviously hadn’t really studied or understood and that does raise a lot of questions.”

Sanders struggled to explain what mechanisms he would use as president.

But the fact is, Bernie has won seven of the last eight primaries and caucuses and even though he is way behind in the delegate hunt, if he could somehow pull off an upset in New York, that would be earth-shattering, plus he keeps raising huge sums of money.

--Gerald F. Seib / Wall Street Journal

“(Mrs. Clinton’s) problem isn’t merely that Sen. Bernie Sanders is going to hang around for some time to come; it is that he increasingly has turned his campaign message into a dagger aimed right at Mrs. Clinton’s weak spot, which is voter questions about her trustworthiness.

“Increasingly, Mr. Sanders’ main argument is not only that he disagrees with Mrs. Clinton on climate change, the level of the minimum wage and the health-care system.  He argues that she isn’t to be trusted on such issues because she takes campaign contributions from banks, pharmaceutical and energy interests, and then tailors her positions to please them.  In short, he asserts that she isn’t to be trusted, keeping alive an issue that has dogged her campaign.

“In fact, by declining to attest to her honesty, he sometimes seems to be trying to prolong those doubts.  In a meeting with editors of the New York Daily News this week, he declared at one point: ‘I have not attacked her personally.  I will let the American people make a determination about her trustworthiness.’

“A second problem for Mrs. Clinton is that each Sanders win underscores her weakness with young, white voters, while also allowing him to argue louder that Democratic ‘superdelegates’ – party leaders who are automatically convention delegates – should rethink their overwhelming support of Mrs. Clinton.  Already, his camp has begun making the argument that superdelegates from states he has won have an obligation to move his way.”

--Jonah Goldberg / New York Post...on John Kasich, “The Thing That Wouldn’t Leave.”

“After investing everything in New Hampshire, Kasich came in second, doing worse than Jon Huntsman had in his race-ending performance in 2012.  Kasich’s response?  He didn’t just declare victory, he proclaimed, ‘Tonight, the light overcame the darkness.’

“Since then, Kasich has lost some 30 contests and won one – in his home state of Ohio.  But still, he just won’t go.

“It’s not just that Kasich can’t take a hint, it’s that he appears to be living in a kind of fantasy world, largely defined by three myths or delusions.

“The first is the most endearing.  Kasich has the best resume of the remaining candidates.  Heck, he arguably had the best resume of the entire 2016 field, if by ‘best’ you mean the longest and deepest government experience.  He’s not delusional about that.

“What he is confused about is the idea that a lot of people care that he was, say, the chairman of the House Budget Committee two decades ago.

“According to legend, a supporter once shouted at Adlai Stevenson, ‘Gov. Stevenson, all thinking people are for you!’  Stevenson shot back, ‘That’s not enough. I need a majority!’  Even if Kasich is right that his resume makes him the best qualified to be president – a debatable proposition – the simple fact is that after nearly three-dozen contests, relatively few voters agree with him.

“Ah, but what about the delegates?  If it’s a contested convention and neither Donald Trump nor Ted Cruz has enough delegates to lock up the nomination, won’t they turn to Kasich?

“Not necessarily. But don’t tell that to the Ohio governor, who goes from interview to interview insisting that he’d be the natural choice for the convention.  Why would he be? Well, that answer varies.

“Kasich’s most frequently stated reason is that delegates will choose him because he beats Hillary Clinton in the polls. And it’s true that Kasich does marginally better than Ted Cruz in hypothetical matchups against Clinton – and a lot better than Donald Trump.

“Left unanswered is why the delegates – many of them loyal to Trump and Cruz – would gamely back The Thing That Wouldn’t Leave.  After the second or third round of voting, delegates are free to cast their ballots for whomever they want.

“There’s little evidence that they’d want Kasich, and they’d be under no obligation to vote for him over, say, Paul Ryan or Marco Rubio – or, for that matter, Rush Limbaugh or Shaquille O’Neal....

“Maybe Kasich’s denial stems from the fact that he’s never lost a race and can’t contemplate failing this time. I really have no idea.  All I know is that it’s time for him to go.”

I like Kasich, and I am well aware he is not the warm and cuddly guy he wants you to believe he is.

But I have to agree with Jonah Goldberg.  Just leave.  Any shot you had at being vice president (as much as it makes sense politically) is probably also being frittered away.

--Stanford was the most competitive school in terms of admission this year, accepting just 4.7 percent of applicants, below 5 percent for the first time.  Harvard was next, just above 5 percent.

Stanford drew 43,997 applicants, up 1,500 from the year before.  Cornell led the eight Ivy League schools with 44,966 applications.

--Murders in Chicago, the nation’s third-largest city, rose about 72% in the first quarter to 141, compared with 82 last year.

--Oops, that’s kind of a negative way to end the column this week.

Hey, how about that tremendous Villanova win over North Carolina in the NCAA basketball championship?!

And now its baseball season, which means one thing for moi.  A lot less Fox News at night as I follow my Mets.  And that’s a good thing.

---

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

God bless America.

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Gold closed at $1240
Oil $39.72

Returns for the week 4/4-4/8

Dow Jones  -1.2%  [17576]
S&P 500  -1.2%  [2047]
S&P MidCap  -1.7%
Russell 2000  -1.8%
Nasdaq  -1.3%  [4850]

Returns for the period 1/1/16-4/8/16

Dow Jones  +0.9%
S&P 500  +0.2%
S&P MidCap  +2.1%
Russell 2000  -3.4%
Nasdaq  -3.1%

Bulls 45.4
Bears 27.8 [Source: Investors Intelligence]

Have a great week. Enjoy The Masters...a tradition unlike any other...on CBS.

Brian Trumbore