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08/27/2016

For the week 8/22-8/26

[Posted 11:30 PM ET]

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Edition 907

I’m a Bigot...You’re a Bigot...

What a campaign, boys and girls.  What a pathetic joke.  This week Hillary Clinton takes the brunt of the fire in this fine column, most deservedly so. 

Charles Krauthammer / Washington Post

“Bernie Sanders never understood the epic quality of the Clinton scandals. In his first debate, he famously dismissed the email issue, it being beneath the dignity of a great revolutionary to deal in things so tawdry and straightforward.

“Sanders failed to understand that Clinton scandals are sprawling, multi-layered, complex things.  They defy time and space. They grow and burrow.

“The central problem with Hillary Clinton’s emails was not the classified material.  It wasn’t the headline-making charge by the FBI director of her extreme carelessness in handling it.

“That’s a serious offense, to be sure, and could very well have been grounds for indictment.  And it did damage her politically, exposing her sense of above-the-law entitlement and – in her dodges and prevarications, her parsing and evasions – demonstrating her arm’s-length relationship with the truth.

“But it was always something of a sideshow. The real question wasn’t classification but: Why did she have a private server in the first place?  She obviously lied about the purpose.  It wasn’t convenience. It was concealment. What exactly was she hiding?....

“It’s (now) clear what she wanted to protect from scrutiny: Clinton Foundation business.

“The foundation is a massive family enterprise disguised as a charity, an opaque and elaborate mechanism for sucking money from the rich and the tyrannous to be channeled to Clinton Inc.  Its purpose is to maintain the Clintons’ lifestyle (offices, travel, accommodations, etc.), secure profitable connections, produce favorable publicity and reliably employ a vast entourage of retainers, ready to serve today and at the coming Clinton Restoration.”

I get into the Associated Press’ findings regarding pay-for-play, pay-for-access and such in detail below.

As for her opponent, the other day Jerry Falwell, Jr., in an opinion piece for the Washington Post, compared Donald Trump to Winston Churchill.  That notion is so absurd I almost spit up my Frosted Flakes upon reading it.  I also won’t bother to reprint a line of it, it’s that ludicrous.

Far more on this farcical race down below, including a potential solution.  Move to Proxima b.

Washington and Wall Street

Before I get to the Federal Reserve and Chair Janet Yellen’s much-anticipated speech from Jackson Hole, Wyoming, Friday, there was some important economic data prior to her discussion on the direction of the economy and interest rates.

July new home sales surged to their highest level since October 2007, 654,000 annualized, but existing home sales for the month, while solid, 5.59 million* and slightly above expectations, were nonetheless down 3.2% from June and down 1.6% year over year.  But still they are near post-recession highs.  That said, some markets are softening, with San Francisco’s sales down 10% in the first half of 2016 and at the slowest pace since 2008.

The median existing national home price of $244,100 is up 5.3% from July 2015.

*Existing home sales on an annualized basis peaked in 2005 at 7 million.

Durable goods (big-ticket items) rose a solid 4.4% in July, with this volatile figure ahead of expectations.  Ex-transportation, the number was a strong 1.5%.

And then you had a second reading on second-quarter GDP, revised down a tick to 1.1% (ann.), with the first quarter at 0.8%.  Consumer spending did rebound in the second to 4.4% from 1.6% in the first.

So the last four quarters (annualized):

Q2 2016... 1.1%
Q1 2016... 0.8%
Q4 2015... 0.9%
Q3 2015... 2.0%

Ergo, a 1.2% average for the 12 months.  Hardly the 2.6% pace of 2015, or 2.4% of 2014, which were themselves both well below what a normal recovery from a deep recession is supposed to look like.  Democrats on the campaign stump will tout respectable job growth during the past eight years once the economy bottomed, but they can do little more than that.

In looking ahead to the third quarter, the Atlanta Fed’s GDPNow indicator forecasts a 3.4% ann. rate, a nice pickup, primarily because a prior drawdown in inventories, which hurts GDP, would appear to be complete and now shelves should be restocked, a positive.  [That’s the view of economists, not necessarily of how the Atlanta Fed comes up with its calculation.]

So with all the above in mind, Chair Janet Yellen signaled that the Fed is going to raise short-term interest rates in the months ahead, possibly as early as September, because it is more confident that the economy is on a firmer footing.

“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.”

Yellen added: “Our decisions always depend on the degree to which incoming data continues to confirm the [Fed’s] outlook.”

Longer-term, Yellen added: “The [Fed] expects moderate growth in real gross domestic product, additional strengthening in the labor market, and inflation rising to 2% over the next few years.  Based on this economic outlook, the [Fed] continues to anticipate gradual increases in the federal funds rate will be appropriate over time.”

[The rest of Yellen’s speech was focused on how the Fed might deal with future downturns and for this space, that kind of talk is irrelevant.  As for her statement inflation will rise to 2%, it already is 2% to some of us.]

After Yellen’s comments, traders put the probability of a September rate hike at 24% and a 57% probability for a raise by December.

But then a little after Yellen spoke, and after traders had initially weighed in, Fed Vice Chair Stanley Fischer said on CNBC that September was very much in play and the stock market, which had responded to Yellen with gains, reversed course thinking maybe two rate hikes, not one, the rest of the year was in the cards.

So the Fed next meets Sept. 20-21, and this coming Friday’s labor report for August is critical.  If it came in at over 200,000, with no big downward revisions to prior months, the Fed will be under pressure to act, but I continue to believe there is no way the Fed is doing so before the election.  I reserve the right to change my mind, but I will only do so if next Friday’s number is way above expectations.  

[The Fed is forgetting how much Donald Trump will be blasting them ahead of the Sept. decision, including threats to disband the board if elected.  He has been talking of low interest rates, forever, as well as how much he loathes Chair Yellen’s band of merry pranksters.]

Related to the above discussion on the Fed and interest rates, the Congressional Budget Office said a slowdown in tax receipts, especially from lower corporate profits, will lead to a federal budget deficit that is wider than expected this year (fiscal year ending Sept. 30), $549 billion, or 3% of GDP, vs. last year’s $438bn, 2.5%, the lowest since 2007.

But, the CBO now forecasts interest rates will remain much lower than forecast, for longer, thus big savings in interest expense, which will slash projected spending by $1.1 trillion over the next decade and exceed a new forecast for slower growth and revenues, though the national debt will still rise to 86% of GDP from its current 77%.  [Take this CBO forecast with a grain of salt.]

Europe and Asia

I continue to get a kick out of some of the headlines out of Europe, post-Brexit, as in ‘so far, so  good,’ and ‘the impact seems limited.’

For starters, ‘post-Brexit’ is kind of a misnomer because nothing has happened, people!  Brexit doesn’t technically begin until Britain says so and invokes Article 50 of the EU Treaty that then starts the ‘two-year’ timetable for negotiations, which in itself is just a rough figure because, remember, not only can individual key issues, such as border/visa policies between nations take years to negotiate, but the remaining EU nations must all approve any final accords.

This isn’t a matter of Britain sitting down with Germany and France over a few weekends, this is going to be a painful, unending mess, and there isn’t a soul in the region who can tell you today how it’s going to play out, let alone someone in his hideaway in Summit, New Jersey, until you know how the politics in the likes of the Netherlands, France and Germany will take shape, given these are among the key players with major parliamentary elections next year.  Britain itself is not starting the Brexit process probably until April at the earliest because it not only wants to take time to formulate its negotiating positions on a zillion issues, I imagine Prime Minister Theresa May and her team also want to get a better handle on the success, or failure, of anti-EU movements in the likes of the Netherlands and France next spring.

So from time to time, you are going to hear a commentator stupidly look at a data point or two and say, “Ha, looks like Brexit is no big deal.”  When you catch that, just remember what your editor has been saying. 

That said we’ll still look at the data.  The ‘flash’ readings on manufacturing and the service economies for the eurozone for August were released by Markit and the comp (mfg. and services together) was 53.3 for August vs. 53.2 for July, which is what has a lot of folks saying ‘Brexit is no problemo’ [50 being the dividing line between growth and contraction.]  The manufacturing PMI was 51.8, while the services reading was 53.1.  [You can’t just average these two and come up with the ‘comp’ reading...it’s more complicated than that.]

The flash readings also look at France and Germany, individually.

France: 48.5 mfg. for August vs. 48.6 in July; 52.0 services vs. 50.5.

Germany: 53.6 mfg. vs. 53.8; 53.3 services vs. 54.4.

Germany’s comp of 54.4 vs. 55.3 in July was a second straight down month, but far from concerning.

More importantly, Germany’s GDP for the second quarter was 0.4% over the first quarter, which was 0.7%, according to the official statistics folks.  Business confidence in August was weak.

Spain’s GDP for Q2 was a solid 0.8%, 3.2% annualized, which was down slightly from the first quarter’s annualized pace of 3.4%

Italy, however, needed this week’s tragic earthquake that devastated Amatrice and surrounding villages like a hole in the head.  This region had escaped major damage in big earthquakes in the past, but they are sitting on a major fault line and given the medieval nature of some of the buildings, tragedy was inevitable (281 dead at last count).

But now, just as Prime Minister Matteo Renzi has been dealing with a political crisis and an upcoming referendum on constitutional reform, which, if approved, should lead to job losses among Italy’s politicos (ergo, they don’t want the referendum to succeed), Renzi has to deal with a massive cleanup and the potential for the government to look bad if things don’t proceed smoothly (which they never do in these situations).  So waves of criticism are about to sweep over him in this regard, probably through no fault of his own.

As for Britain, there has indeed been a ton of economic data this week, but it’s virtually all pre-Brexit.

GDP for the second quarter was 0.6%, 2.2% annualized, same as a preliminary reading, according to the Office of National Statistics.  Consumer spending was a robust 0.9%, 3.0% annualized, the best since the end of 2007.

Car production in July, post-Brexit, was up 7.6%, year over year, but this was down from June’s pace of 10.4%.  Year-to-date, car production in the U.K. is up 12.3%, best in 16 years (though many of these are being exported).

Industry surveys of manufacturing seem to indicate firms had a boost in July, but this is owing to the pound’s depreciation.

Perhaps more of a post-Brexit indicator is mortgage approvals, which for July were at their lowest levels since Jan. 2015, not good for homebuilders and agents, but, again, it’s very early days.

The Financial Times’ Lex column had some thoughts on Brexit and why shoppers appear to still be out in force.

“Here are three theories.  Call them the deluded shopper, the cowardly director and the phony war.  Under the first, shoppers are myopic, only influenced by what actually happens to them. No one is being fired, bank loans are available and the cheaper pound has made spending at home more attractive.  Far-sighted business is by contrast worried, and understands that a cheaper pound means a hit to the national income.  Little is being cancelled, but the wisest course is to not to venture anything new – hence those gloomy (confidence) surveys.  Soon the penny will drop and consumers will catch the pessimism in company boardrooms.

“Or maybe these businessmen are a bunch of Chicken Littles, no better at judging Brexit than they were at predicting it.  If so, the survey responses are more of a kind of virtual-signal for Europhiles to express their disapproval of the vote.  Should consumers hold their nerve and foreign demand stay steady (so far, Europe is calm in the face of its sulkiest member leaving), they will return to those investment plans.

“The wisest theory is the phony war. What has happened since the referendum?  A vote, some political brutality, the creation of new departments, and then everyone went on holiday....It depends on a competent handling of Brexit.  Recall how the credit crunch began in August 2007 – and the Great Recession a full year after that.”

Meanwhile, German Chancellor Angela Merkel said the European Union needs to work hard to overcome the shock of Britain’s vote to leave, calling it a watershed moment as EU leaders ponder the way forward.

“We have begun a so-called process of reflection to explore in which areas we should develop further as a priority,” she told reporters on Thursday.  A key EU summit, sans Britain, is being held in Bratislava on Sept. 16 and Merkel traveled through the Baltics and elsewhere this week gauging opinion; holding meetings with 12 fellow EU leaders in all.

Merkel said she “can allow the time” for the U.K. to decide what it wants from the EU in Brexit talks.  The other 27 member states will press ahead with “the European project” in the meantime, she said.  [Bloomberg]

Personally, Bratislava could prove to be explosive as the eastern members such as Hungary and Poland don’t want migrant targets rammed down their throats.

For her part, Merkel has major problems at home with public opinion continuing to move against her on her handling of the migrant crisis.

On a different issue, you still have the likes of France and Italy wanting greater flexibility to help boost growth, which means a break on hitting deficit targets, which Germany is loath to grant.

A few other tidbits....

In France, Nicolas Sarkozy announced his candidacy for the 2017 French presidential elections (April 23 and May 7), four years after he pledged to retire from politics when he was defeated by Socialist Francois Hollande.

Sarkozy is the leader of the conservative Les Republicains party, but former Prime Minister Alain Juppe remains the favorite to head the center-right ticket and party primaries to select a candidate for next spring’s vote are in November (Nov. 20 and 27).

The winner, Sarkozy or Juppe, not only goes up against Hollande, but also the National Front’s Marine Le Pen, who is expected to be one of the two candidates in the run-off (where it is assumed she would get her butt kicked).

Among center-right voters today, Juppe has a 74% approval rating and Sarkozy 57%.

Sarkozy has just released a book, “Everything for France,” which dedicates a full chapter to identifying what he believes is one of the threats to the French way of life: Islam.

“Let’s say it clearly without any polemic, it’s not with religions that the Republic has difficulties today, but with one of them that has not done the work, necessary as well as inevitable, to integrate,” Sarkozy writes.

The Catholic church (of which he is a member) went through a transition long ago, he writes, and it was painful.  [France expelled thousands of priests in the early 20th century.]

“We have to do the same work with Islam, which cannot exonerate itself from rules that the other religions respect perfectly,” he concludes.  [Anne-Sylvaine Chassany / Financial Times]

Back to Le Pen, she’ll point out Sarkozy’s failings when he was in power the first time.

Separately, the terror attacks in Paris and elsewhere in France have done a number on tourism (even the Paris floods hurt some as you saw museum closures for a week or so in some cases).  Paris is located in the Ile-de-France region and about 500,000 have jobs linked to tourism, making it the biggest industry.

Nationally, tourism in France generates over 7% of gross domestic product and that figure is over 13% in the Ile-de-France region.

Nightly hotel stays were down 8.5% in Paris-Ile-de-France in the first half of the year, with an 11.5% decline in foreign tourists.

Japanese visitors were down 46.2% in the first half compared with the same period in 2015, while Russians were down 35%, Chinese down 20%, and Americans down 6%, according to the Paris region tourism board.

--And a few notes on Ireland, which is expected to post the fastest economic growth in Europe for a third year in a row, though the rate of growth is easing.  The unemployment rate, which had a post-crisis peak of 15%, is down to 8.3%-8.4%, where it seems to have plateaued since February, according to the Central Statistics Office, while the revived Celtic Tiger just recorded its first month of net inward migration since 2009.

In April, inward migration reached 3,100 compared to the same month in 2015.  This compared to a net outward migration in April 2015 of 11,600.

Overall, Ireland’s population has grown back to 4.67 million.

---

Virtually zero economic news of interest out of Asia this week, especially from China and Japan, with a flash reading on Japanese manufacturing for Aug. coming in at 49.6 vs. 49.3 in July (via Markit).

Street Bytes

--The Dow Jones and S&P 500 fell for a second consecutive week, -0.8% and -0.7%, respectively, while Nasdaq’s eight-week winning streak was snapped with a -0.4% decline.

--U.S. Treasury Yields

6-mo. 0.46%  2-yr. 0.84%  10-yr. 1.63%  30-yr. 2.29%

In case you’re wondering, the 1.63% yield on the 10-year compares with 2.27% last Dec. 31, as the editor searches for filler for this space, given what he’s already written on the Fed and interest rates.

--Lots of volatility in the oil market the past few weeks, and a lot of noise.  Oil was rallying on news that OPEC may finally be putting together a plan to limit production, with some believing Iran may go along with it; OPEC holding an informal meeting next month

But Iran has been steadily adding to its exports, post-sanctions being lifted in January, and I can’t see them actually suddenly holding the line, though it seems the last data on their production levels has them stabilizing and no longer rising (not necessarily because this was a government decision). 

Actually, the International Energy Agency said Iran’s production fell to 3.6 million barrels a day in July, which is below their stated target of four million.

At the same time, Iraq is increasing its production 5% after an agreement to resume shipments from three oil fields in Kirkuk that are controlled by the semi-autonomous Kurdistan Regional Government.  This is a potentially significant move as it seems to mark improved relations between the KRG and Baghdad.

But back to a production meeting, the key player, as always, is Saudi Arabia and they are showing no signs of abandoning their stance of defending their market share above price support.

--China’s two major oil drillers, PetroChina Co.  and Cnooc Ltd., both reported weak earnings, as the two have been the hardest hit in the country with the commodities slump and sliding global oil prices.  Weaker demand at home for gasoline hasn’t helped either.

PetroChina, in seeing its net profit fall 98% to $80 million in the six months ended June 30, said it expected “the recovery of the global economy to remain weak” in the second half and for oil prices to remain depressed due to continued oversupply in the markets.  [Whaddya know...a Chinese company that I think is telling the truth.]

--Speaking of commodities, wheat fell to its cheapest level in a decade, below $4 a bushel at one point this week, a price not seen since Sept. 2006, which certainly adds to the farmland value woes I discussed the prior two weeks in this space.  [The record high is $9.43 in July 2012...I have this on a post-it note. Corn’s high the same month?  $7.93.  It closed the week at $3.25...wheat closed at $4.07.]

Wheat has been negatively impacted by strong harvest prospects in major exporters such as Australia, Canada and Russia, as well as the U.S.

--Mylan Labs came under immense pressure amid the skyrocketing cost of its emergency allergy injection device, EpiPen.  Mylan discounted the price of the drug a day after drawing fierce condemnation from the likes of Hillary Clinton on down over the “outrageous” cost.

Mylan had jacked up the price about 500% in the past six years to $600 for a pack of two.  But Thursday, Mylan said it would introduce a savings card that would cover up to $300 for a two-pack, in effect reducing the out of pocket cost by 50%.  The company also said it would loosen the criteria for its patient assistance program.

Mylan CEO Heather Bresch, the daughter of Democratic West Virginia Sen. Joe Manchin, used Thursday’s announcement to call for structural reforms of the U.S. healthcare system.

“Price is only one part of the problem that we are addressing with today’s actions.  All involved must also take steps to help meaningfully address the U.S. healthcare crisis.”

Mylan is best known for making cheaper generic drugs, but EpiPen accounts for approximately 13% of earnings and 20% of total sales.  [Financial Times]

Clinton has promised to crack down on high prices if elected, sending the shares of drugmakers into a tailspin.

--Tesla Motors CEO Elon Musk said there was a major product announcement coming the other day.  Turned out Tesla has a new upgraded battery option, the “P100” version of the Model S, which when upgraded to “Ludicrous Mode,” will be able to go from 0 to 60 mph in 2.5 seconds.....

Whatever....mused the longtime Honda Accord owner.

Understand this is a $10,000 upgrade for both the S and X models.

--Toll Brothers reported better than expected results amid the latest data that new home sales hit a multi-year record.

The Pennsylvania-based company said revenues rose 24% from a year earlier, with net income up 58%.

--H.P. Inc. reported further declines in revenue and earnings for its most recent quarter, but PC sales were up 4%, stability in a declining business, while revenue fell 14% in its printing business – which generates most of HP’s profits – as email and file-sharing continues to gain more use vs. printing documents.

--Best Buy reported a surge in online sales growth in the second quarter and its shares rose sharply.

The electronic goods retailer has been focusing on integrating its physical and online operations and domestic comparable store sales rose 0.8%, while U.S. online sales jumped 23.7%.  Ecommerce now accounts for 10.6% of total Best Buy sales compared with 8.6% last year.

It seems Best Buy is doing a good job in getting its customers to buy online and pick-up in-store, where, you know, they might buy something else, too.

--Shares in Dollar General and Dollar Tree dropped on weaker-than-expected sales growth in the last quarter.

Dollar General’s same-store sales increased 0.7%, well below forecasts, and there was declining traffic.

For Dollar Tree Inc., its same-store sales rose 1.2%, compared with a 2.7% increase a year ago.  I’ve been working with my local Dollar Tree store manager to get my favorite horseradish sauce stocked again. I have been assured that the next time I go it will be there.  If it’s not, I may have to riot. [Just kidding, local law enforcement!]

--Sears slumped to a loss in the second quarter as it continues to struggle mightily.  Comp-store sales fell 5.2%.  Sales at its discount store division, Kmart, declined 3.3% during the period. 

Same-store sales at Sears’ department stores fell 7%, amid declines in sales of home appliances, clothing, consumer electronics and footwear.

I’ve had a post-it note reminder to visit my local Sears store (about 10 minutes away), which I literally haven’t walked into in over 20 years, at least, just to see what’s happening.  But now I’m afraid I’d be so depressed, it would impact me the rest of my life.

--I go through a lot of post-it notes, by the way.  I’m staring at about 20 of them right in front of me.

--Tiffany suffered its seventh straight quarter of sales declines as it continues to suffer from the impact of lower spending among Chinese tourists in particular.

Global net sales for the three months to July fell 6% year on year, slightly below analysts’ forecasts, with same-store sales down 8%.

Comp sales in the Americas fell 9%.  But they rose 13% in Japan.

The shares rose, however, because the company’s guidance was better for the second half than currently projected by the Street.

--Pfizer is acquiring Medivation for $14 billion.  Medivation is a biotech, though one with an established drug, the prostate cancer treatment Xtandi, on the market and some others in late stage development, so a far less risky bet for Pfizer than some others in the biotech sector.

--Japan’s ANA airlines said it grounded ten Boeing 787s (Dreamliners) because it needed to replace damaged compressor blades in the Rolls-Royce engines.  Under certain flying conditions the blades in the engine’s interior showed corrosion.

Well this would suck, seeing as the 787 can carry about 42,000 passengers.  Don’t want one of them going down.

Of the 445 Dreamliners in operation, 168 use Rolls-Royce Trent 1000 engines.  ANA is the biggest operator with 49.  [Reuters]

--David Jolly of the New York Times reported on French military manufacturer DCNS and a hack of some 22,400 pages detailing “the entire secret combat capability” of six Scorpene-class diesel-electric submarines being built for the Indian navy that were leaked to The Australian newspaper; Australia having just signed a multibillion dollar deal to have DCNS build submarines for it.

“The data was reportedly taken from France in 2011 by a former French Navy officer, and it then made its way to a company in Southeast Asia, but it was unclear how widely the leaked data had been shared.”

It’s unclear how the lost data could impact India’s fleet capabilities, but this is a classic case of corporate espionage, the kind taking place routinely here in the U.S., as in 2014, the Justice Department indicted five members of the Chinese People’s Liberation Army and charged them with hacking into the networks of Westinghouse Electric, U.S. Steel and others.

As for the $38bn deal with Australia, DCNS had won out over stiff competition from Germany and Japan.

--NBCUniversal formally completed its $3.8 billion acquisition of DreamWorks Animation.  Jeffrey Katzenberg, CEO of DreamWorks, will remain a consultant to Comcast, the parent company of NBCUniversal.

Katzenberg leaves the studio with a nice payday, approximately $391 million, according to a regulatory filing.  [He deserves it.  This is how capitalism is supposed to work, as opposed to the Viacom CEO’s pay package I described last week for a job poorly done.]

Jeff Shell, chairman of Universal Filmed Entertainment Group, takes over the integrated DreamWorks operation.

--Not much news on the Zika front this week, which is good, though you did have a case reported some 260 miles from Miami, and if you’re a pregnant woman in Miami itself, you’re on pins and needles and trying to stay inside as much as possible.

But then late word Friday that the FDA wants all states to check their blood supplies for Zika.

--The Earthquake in the Apennine Mountains of Italy that I discussed above is causing great concern among California officials as well because it is an example of the pummeling older buildings in the state would take....the next Big One there.

The structural issues of ancient stone homes are not much different from those of unreinforced brick buildings built in California before 1933, say experts.  That year, an earthquake in Long Beach flattened many structures and left 120 dead; though it was slightly more powerful than the 6.2 that hit Amatrice.  [Rong-Gong Lin II / Los Angeles Times]

--I don’t personally use Windows 10 and refuse to download it, yet, and now it seems a certain update for the software has stopped millions of webcams from working, or is blocking broadcast and stream footage.  Plus, according to the BBC, Microsoft made it difficult to roll back to a prior version.  Instead of 30 days, the update that is causing the problems cut it to 10 days, giving people little chance to switch back to an earlier version of Windows 10 under which there wasn’t a webcam or streaming issue.

Microsoft hasn’t given a timeline on when a fix will be available.

--Andrea Tantaros, former Fox News broadcaster, filed a sexual harassment suit against her old employer and former CEO Roger Ailes, as well as other Fox executives.

Her lawsuit read in part: “Fox News masquerades as defender of traditional family values, but behind the scenes, it operates like a sex-fueled, Playboy Mansion-like cult, steeped in intimidation, indecency and misogyny.”

Yeah, when the Mets aren’t on, or a good college basketball game, I watch Fox from 7-11, but I know they are all a bunch of jerks, including Megyn...save for Greta.  We love Greta!  [Had a funny episode with her, ages ago, at LAX...how long ago?  We were at adjoining phone booths (remember them?) during the OJ trial.]

--Last week I talked about the release of the remake of “Ben-Hur.”  Well it bombed, big time...just $11.4 million its opening weekend amid poor reviews.  [People who went, though, liked it.]  The flick cost about $100 million to produce and represents another poor showing for Paramount.

--One of the last two Howard Johnson restaurants in existence is closing in a couple of weeks, the Bangor, Maine, location.  So that will leave only one location left, in Lake George, New York.

This used to be a travel staple for so many families.  While they were known for their fried clam strips, I’ll always remember the burgers (the only food I liked as a kid) and darn good ice cream.

At its peak, there were 800 orange-roofed eateries across America, with the restaurants predating the HoJo hotels, which were really crappy, but I seem to remember they were at least clean.

But you didn’t care, at least as a kid, about the lousy room because you had that cool restaurant attached.

The business was started in 1925 by Howard Deering Johnson, when he inherited a soda fountain outside Boston.

Author Stephen King, who lives in Bangor, said he liked to frequent the place for its patty melts and milkshakes. [David Sharp / AP]

By the way, I was trying to find something I know I wrote on Howard Johnson’s before and I stumbled on one of Dr. Bortrum’s more informative pieces from June 2002.  All about the Pennsylvania Turnpike.  Just plug Howard Johnson into the search engine and you’ll quickly find it. 

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: Last weekend, ISIS launched an attack on a wedding party in the Turkish city of Gaziantep that left 54 dead, many of them children.  There were conflicting reports that the suicide bomber may have been a child as young as 12.  In a world of terror, this attack was as heinous as any and, finally, the government in Ankara responded full force.

Turkey sent tanks and ground forces into Syria, warning a Kurdish militia to withdraw from frontline positions a day after pro-Ankara Syrian opposition fighters captured a key border town from extremists.

The tanks were part of what Ankara is calling Operation Euphrates Shield, which Turkey says is aimed at ridding a northern Syria border area of both ISIS and the Kurds.  Special forces and jet fighters are part of the move in support of Syrian rebels favored by Ankara.

On Wednesday, Turkish President Erdogan said the offensive had expelled ISIS from the Syrian town of Jarablus, but Turkey warned the Kurdish People’s Protection Units (YPG) militia – which also has designs on Jarablus – to pull back or face a fight.

There were reports up to 15,000 Turkish troops could enter Syria in the coming days and weeks in an attempt to finally secure the border, which the U.S. has been asking for for years, as Ankara has been accused of turning a blind eye to the rise of ISIS.

But to Turkey, the biggest threat along the border is Syria’s increasingly assertive Kurds, who are carving out an autonomous territory.  Syria, which long commended the YPG for its fight against terrorism, is now calling them members of the PKK, the Kurdistan Workers’ Party, which has been behind the civil war in Turkey the past few decades; but the YPG is not the PKK.

So the Syrian Kurds took control of Hasaka city on Tuesday, ending a weeklong fight with the government, consolidating the YPG’s grip of the northeast, but Turkey keeps trying to check its influence.

Confused?  Remember, earlier in the month, it was the YPG, backed by the U.S., that captured the city of Manbij from ISIS, which is west of the Euphrates, but Turkey said it expects the Kurds to withdraw back to the east bank of the river.

Again, the Turks are concerned the Syrian Kurds, the YPG, with their control of territory in Syria’s northeast, on the border with Turkey, will add momentum to the insurgency by Kurds on its own territory (that’s the PKK).

Sorry to repeat some of this, but, heck, I continually have to remind myself who is who, and where.

Like on Friday, a large car bomb hit a police headquarters in Cizre, southeast Turkey, killing 11 policemen and injuring over 70. Turkish media is blaming the PKK for this one.

Cizre is a poor town close to the Syrian border and the U.N. and human rights activists have demanded an investigation into allegations that more than 100 were burned to death while sheltering in basements.

Separately, a deal was struck to allow rebel fighters and thousands of civilians to leave the Syrian town of Daraya, a suburb of Damascus, after four years of being under siege, in a defeat for the rebels.  Residents and fighters were said to be in tears on Friday, after four years of constant bombardment and shortages of food, water and power.

8,000 people are thus giving up the fight and in exchange the Syrian government retakes the town.

Daraya was one of the first areas to stage peaceful protests against the Assad regime in 2011 and to face a violent response.  It was also a rare example of the rebel groups in the town accepting the authority of a civilian local council all this time.

In Aleppo, the U.N. is still attempting to bring humanitarian relief to the divided city. Russia again said it would agree to a 48-hour ceasefire, which of course the White House agrees to, but it’s really up to Assad.  [Late Friday, it was reported the U.S. and Russia failed to reach a deal when it was assumed one was teed up.]

In Iraq last Sunday, the government executed 36 men convicted of taking part in the Islamic State group’s massacre of up to 1,700 soldiers who had fled from Saddam Hussein’s hometown of Tikrit as ISIS was taking it in 2014.

Bret Stephens / Wall Street Journal

“In the fall of 1940 the governments of Japan, Italy and Germany – bitter enemies in World War I – signed the Tripartite Pact, pledging mutual support to ‘establish and maintain a new order of things’ in Europe and Asia. Within five years, 70 million people would be killed in the effort to build, and then destroy, that new order....

“So it’s worth noting our new era of cooperation between dictatorships – and to think about where it could lead.

“The era began in July 2015, when Iran’s Quds Force commander Qasem Soleimani paid a visit to Moscow to propose a plan to save Bashar Assad’s regime in Syria from collapse. Iran and Russia are not natural allies, even if they have a common client in Damascus.  Iranians have bitter memories of the Soviet occupation of Afghanistan in the 1980s, and the Kremlin has never been fond of Islamists, even of the Shiite variety.

“But what tipped the scales in favor of a joint operation was a shared desire to humiliate the U.S. and kick it out of the Middle East.  ‘America’s long-term scheme for the region is detrimental to all nations and countries, particularly Iran and Russia, and it should be thwarted through vigilance and closer interaction,’ Supreme Leader Ali Khamenei told Vladimir Putin during the Russian’s visit to Tehran last November.

“Since then, Tehran has agreed to purchase $8 billion in top-shelf Russian weapons and is seeking Moscow’s help to build another 10 nuclear reactors – useful reminders of how the mullahs are spending their sanctions-relief windfall....

“All this is happening as the nuclear deal was supposed to be nudging Iran in a more pro-American direction. It’s also happening as Moscow and Ankara are moving toward rapprochement and even a possible alliance...Russian media outlets are touting the possibility that Russian jets might use the air base at Incirlik to bomb targets in Syria.  That all but presumes U.S. withdrawal.

“Would Turkish President Recep Tayyip Erdogan forfeit a U.S. alliance for the sake of a condominium with Russia, his country’s historic enemy?  The real marvel is that it hasn’t happened already.  Washington first proved useless to Ankara by failing to depose Mr. Assad.  It’s again proving useless by failing to destroy Islamic State....

“Then there’s China.  On Monday, a Russian military spokesman announced that his country’s Pacific fleet would conduct joint operations with the Chinese navy in the South China Sea....another reminder that the Kremlin’s overriding foreign policy goal is to hobble and diminish the U.S.  It’s a goal Beijing appears to share.

“And why not?  President Obama and his advisers continue to insist that the world has never been a better, safer, happier place than under their benign stewardship, meaning they no longer even register the continuous embarrassments of their foreign policy.  The administration has become the Black Knight from ‘Monty Python and the Holy Grail,’ comically indifferent to his own dismemberment.  Arms and legs all hacked off?  ‘Tis but a scratch!’....

“Readers searching for historical analogies with the present would be wrong to reach for the Tripartite Pact.  But the ingredients from which that foul soup was made have now been laid on the table.”

David Gardner / Financial Times

“Ever since Russia sent its air force into Syria last September to salvage the regime of Bashar al-Assad, President Vladimir Putin has been exploiting the widespread perception that the U.S. under President Barack Obama has lost the ability to shape events in the Middle East.  For Russian fighter-bombers to fly sorties into Syria out of an air base in Iran, southwest of Tehran is presumably meant to rub that message in.  Those air raids were on jihadi and U.S.-backed rebel targets in northwest Syria. But even more provocative were air strikes by the Assad regime in northeast Syria, on Syrian Kurdish allies of Washington in which U.S. special forces are embedded....

“Russia and Iran, despite a complex history of enmity in the past century, are allied behind the Assad clan.  Moscow wishes to revive Russia’s status as a world and regional power, and to keep the west off-balance over its aggression in Crimea and Ukraine.  Tehran is determined to consolidate the Shia Arab alliance it has forged from Baghdad to Beirut.”

Iran: Tensions have been ratcheting up in the Arabian Gulf between Iran and the United States, with a U.S. Navy ship firing three warning shots in the direction of an Iranian boat on Wednesday that was approaching another American ship head-on.

According to Navy Commander Bill Urban, the Iranian vessel came within 200 yards of the USS Tempest and ignored several bridge-to-bridge radio calls and warning flares.  It finally turned away after the USS Squall fired three warning shots from its .50-caliber gun, said Urban, a spokesman for the Navy’s 5th Fleet.

The U.S. had three separate encounters with Iranian vessels in the Gulf on Wednesday, which came a day after four small Iranian boats approached the USS Nitze at high speed in the Strait of Hormuz.  The boats veered off after the U.S. fired flares.  [New York Post]

Much of the above on Iraq, Syria, Russia and Turkey of course pertains to Iran as well.  But I just wanted to note this excerpt from an extensive piece by Jay Solomon in the Wall Street Journal, Mr. Solomon doing yeoman’s work on the topic of Iran and author of the new book, “The Iran Wars: Spy Games, Bank Battles, and the Secret Deals That Reshaped the Middle East.”

“(Supreme Leader) Khamenei has sworn off any collaboration with the U.S. in the Middle East, even against shared regional enemies like Islamic State.  Instead, he has continued Iran’s campaign to control the oil-rich Persian Gulf and weaken the influence of the U.S., Israel and its Sunni Arab allies across the region.  U.S. military commanders say that they have seen no tapering off of Revolutionary Guard support for its allies in Yemen, Iraq or the Palestinian territories.

“Mr. Khamenei cannot know how the U.S. will respond to his uncompromising stance, especially with a new administration soon to take office.  But he may figure that he wins either way.  If the deal falls apart, he could call it proof that the Americans never could be trusted and figure that another round of biting U.N. sanctions will prove too difficult to assemble.  If the deal survives, he will have his military continue to develop missiles and conventional arms to position Iran to become a latent nuclear weapons power in 10 years.

“Either way, it is Mr. Khamenei, not his more moderate rivals, who are acting as if they have been strengthened by the nuclear deal.  ‘Our problems with America and the likes of America...on regional matters and on various other matters are not solved through negotiations,’ Mr. Khamenei said in his Aug. 1 speech.  ‘We ourselves should choose a path and then take it.  You should make the enemy...run after you.’”

Israel: The Turkish parliament approved a deal to normalize ties with Israel after a six-year halt in relations.  Under the terms, Israel will pay Turkey $20 million in compensation for a botched Israeli commando raid on a Gaza-bound Turkish aid ship in 2010 that left 10 Turks dead.

In addition, both sides agreed that individual Israeli citizens or those acting on behalf of the Israeli government would not be held liable – either criminally or financially – for the raid.

Israel’s parliament previously approved the deal back in June, but it was held up by Turkey’s legislature in the wake of the failed July 15 coup attempt.  [Agence France Presse]

Afghanistan: An overnight attack on the country’s top university left 14 people – including seven students (at least one American) – dead.  The 10-year-old American University of Afghanistan in Kabul was attacked by the Taliban...at least that is the belief as I go to post.

The university has long been a symbol of hope for Afghanistan’s future, but why it has the name “American University...” is beyond me.  That’s lunacy. [‘Here, attack me.’]

Russia/Ukraine: CNN’s Christiane Amanpour interviewed Ukrainian President Petro Poroshenko the other day and he warned Vladimir Putin wanted “the whole Ukraine” to be part of the “Russian Empire.”

“It is absolutely the same situation like Russian bombardment in Aleppo,” he told her.  “They have only one purpose – [the] world should be less stable, less secured.”

Poroshenko said if he was asked prior to Russia’s moves, he never would have thought Putin would take, first, Crimea, and then, second, the eastern part of the country.

For his part, President Putin ordered snap military drills after German Chancellor Angela Merkel accused him of breaking international law in Ukraine, while saying NATO will defend member states (i.e., the Baltics) against attack.

Russian Defense Minister Sergei Shoigu said in a statement Thursday that combat readiness exercises are taking place “to defend the interests of the Russian Federation amid increasing threats to its security.”

Oh puh-leeze.  Merkel told reporters Thursday, while Germany wants a “constructive relationship” with Russia, “we have to live with the reality” of its actions in annexing Crimea and backing separatists in the eastern part of the country.

North Korea: Pyongyang test-fired a submarine-launched ballistic missile toward the Sea of Japan on Wednesday and the missile flew a reported 300 miles, a major achievement as other sub-launched attempts have fallen far short.

The U.S. State Department strongly condemned the launch, with a spokesperson saying the test violated U.N. Security Council resolutions barring such activity.  [Cough cough]

Editorial / Wall Street Journal

“Wednesday’s launch...was an operational success, representing a clear advance in Kim Jong Un’s weapons arsenal.

“The KN-11 missile flew some 300 miles off North Korea’s east coast, toward Japan, before falling into the sea, say U.S. and South Korean officials.  That’s the longest flight by far since Pyongyang started testing its submarine launch systems in 2014....

“Analysts in South Korea who, like their U.S. counterparts, have often underestimated North Korean capabilities, believe Pyongyang could deploy operational sub-launched missiles by 2020.

“The North’s Gorae submarine, based on old Yugoslavian designs, may be relatively unsophisticated and noisy. But it could threaten South Korea, Japan and tens of thousands of U.S. troops simply by deploying around North Korea’s coast with the KN-11. The missile has an estimated top range of 550 miles.

“Wednesday’s achievement follows another recent milestone for Pyongyang’s missile program.  In June it successfully launched for the first time a medium-range Musudan missile from a road-mobile carrier.

“The missile reached the highest altitude the North has achieved.  This is especially worrisome because the intercontinental ballistic missile Pyongyang is developing – with an estimated 10,000-mile range that could reach half the continental U.S. – uses Musudan-type engines in its initial booster phase.”

China: ...Meanwhile, Chinese Foreign Minister Wang Yi, in Tokyo where he met his Japanese and South Korean counterparts, said Beijing “firmly opposes” the deployment of a U.S.-developed anti-missile system on the Korean peninsula.

Wang was quoted as saying by the Chinese Foreign Ministry in Beijing that China hopes South Korea and China can meet each other half way and find an appropriate resolution acceptable to both.

But especially in light of the North’s moves on the missile front, the missile system (THAAD) is needed, while China continues to say it poses a threat to its own security.

On a different topic, China is in the process of reorganizing its 1.55 million land force troops into 25 to 30 divisions, rather than 18 existing Army Corps to make the force more nimble.  [The size of a corps is anywhere from 30,000 to 100,000 soldiers.]

According to a study by the South China Morning Post, China is apparently studying the style of the U.S. 101st Airborne Division as an example of a force capable of quick deployment, equipment and logistics support.

Of China’s current 1.55 million soldiers, 850,000 are mobile troops, while the rest are regional garrison troops.

President Xi Jinping issued his marching orders back in December 2012 when he inspected the Guangzhou Military Command.  “When you are summoned, you must come at once; when you come, make sure you can fight, and when you fight, be certain to win.”  [SCMP]

Japan / Australia: Defense ministers from both countries agreed Thursday to strengthen security cooperation in the wake of China’s growing maritime assertiveness in the region and North Korea’s repeated missile tests.

Colombia: The government and the largest rebel group in the country have reached a deal to end more than 50 years of conflict, the two sides announced on Wednesday.

For four years the two have talked and come close to a final agreement a number of occasions, but this time it is supposedly done.

It outlines a timetable in which the Revolutionary Armed Forces of Colombia, or FARC, will abandon their arms, and it also sets out a pathway in which former fighters will enter civilian life and even run for public office.

But for most Colombians, the agreement just means that the conflict which claimed 220,000 lives over 52 years, while displacing five million, is finally over.

The deal requires rebels to leave their hideouts and in giving up their weapons, move to 23 “relocation zones” and eight existing rebel camps.

However, first the public has to agree to the deal in a referendum in October.  President Juan Manuel Santos’ predecessor, former President Alvaro Uribe, is against the accord; Uribe having been widely credited during his eight years in office with greatly reducing the threat from FARC through military gains that forced it to the negotiating table.

A big hang-up for those opposing the deal is that leaders of FARC will spend no time in prison.

And even if the public votes to approve it, there is no guarantee of success, as the below editorial notes when it comes to some rebel factions.

Editorial / Wall Street Journal

“The world is hailing the prospective end of the 52-year Colombian insurgency announced Wednesday night by President Juan Manual Santos and the FARC guerrillas, and we’d like to believe in peace, too.  But skepticism toward the deal inside Colombia and the emerging details make clear that keeping the peace won’t be as easy as announcing it....

“On paper, the deal sets out a six-month timetable for the FARC to lay down its arms and turn itself into a political party.  Ten seats in Colombia’s Congress will be guaranteed to FARC representatives for eight years, a galling concession to terrorists who spent a lifetime waging war on democracy. The FARC has also pledged to get out of the drug trade that is its main source of funding, in exchange for promises of rural development.

“Most controversially, FARC leaders won’t spend time in jail, provided they attest truthfully to their crimes in special truth-and-reconciliation tribunals.  That’s an especially bitter pill for the millions of Colombians who had a relative or friend killed, abducted or brutalized during the FARC’s long reign of terror.

“No wonder Colombians are having second thoughts endorsing the deal in October’s national plebiscite.”

Santos’ approval rating is barely 25%, and some breakaway FARC factions have announced they won’t lay down their arms, especially since complying would mean getting out of their most lucrative business, the drug trade.

This isn’t a done deal yet by a long shot.  Wait 24 hours.

Zimbabwe: There have been large anti-government demonstrations that have turned violent.  I have no problem continuing to say this.  President Robert Mugabe needs to die.  The sooner for mankind the better, though I’d prefer he was devoured by lions in his private chambers.

Since day one of this column, I have called for his demise.  Since day one, his people have suffered under his tyranny.  He will go down in history as one of the truly awful people of all time.

Random Musings

--Presidential Polls....

In a Reuters/Ipsos national poll released Tuesday, Clinton garnered 45% to Trump’s 33%, whereas earlier in the month, Clinton’s lead was 3 to 9 points.

If you added Gary Johnson and Jill Stein, among likely voters, Clinton leads 41-33, with Johnson at 7% and Stein 2%.

But wait...on Friday, the same tracking survey had it 41-36, Hillary; 39-36 in a four-way race, Johnson at 7%, Stein 3%.

In an NBC News/Survey Monkey Weekly Online Tracking Poll, Clinton leads 50-42, similar to the week before (9 points).

In a four-way matchup, it’s Clinton 43-38, Johnson 11% and Stein 5%.

Clinton leads Trump among black voters in this one, 87-8, and leads among Hispanic voters, 73-22.

She polls only 41% of white voters to Trump’s 50%.

In a USC Dornsife/Los Angeles Times national tracking poll, however, Trump leads Clinton 45-43.

Also in this one, “For the first time in three weeks, more Trump supporters said they planned to vote than Clinton supporters by a slight margin, 83%-82%.

In a CNN/ORC poll of battleground states, Trump is the choice of 43% of registered voters in Arizona, leading Clinton 43-38.  Gary Johnson is at 12%, Jill Stein 4%.

In North Carolina, Clinton edges Trump 44-43, with Johnson at 11%.  Stein will not appear on the ballot there.

Among blacks in North Carolina, Trump received only 3%, to Clinton’s 88% and Johnson’s 7%.

Among Hispanic voters in Arizona, Clinton got 57%, Trump 20%, Johnson 15%.

In a CBS News Battleground Tracker poll, Clinton leads Trump 46-40 in Ohio, up 2 points from last time this one was conducted.

--Clinton, cont’d....

In Randall W. Forsyth’s weekly Barron’s column (Aug. 20), he has a quote from Greg Valliere, the chief strategist at Horizon Investments, that fits to a tee when it comes to Hillary Clinton.

“Her campaign looks theme-less and stale – and the Clinton Foundation is a growing liability.”

An exclusive report by the Associated Press’ Stephen Braun and Eileen Sullivan found the following:

“More than half the people outside the government who met with Hillary Clinton while she was secretary of state gave money – either personally or through companies or groups – to the Clinton Foundation.  It’s an extraordinary proportion indicating her possible ethics challenges if elected president....

“Clinton met with representatives of at least 16 foreign governments that donated as much as $170 million to the Clinton charity, but they were not included in AP’s calculations because such meetings would presumably have been part of her diplomatic duties....

“State Department officials have said they are not aware of any agency actions influenced by the Clinton Foundation.”

Further details from the AP investigation are contained in the following opinion pieces.

In addition, the FBI has uncovered almost 15,000 previously undisclosed documents sent directly to or from Clinton, part of the FBI’s probe into her use of the personal server.  But it’s not known if and when all 15,000 will be released, i.e., how many before the election.  [A judge ruled Friday that it had to be soon.]

The chorus has been growing for the Clintons to shut down their foundation over perceptions of “Pay-for-play.”  Despite plans early in the week to reorganize it if Hillary wins the White House, USA TODAY editorialized the charity must close for Hillary to avoid any appearance of unethical ties, with the paper suggesting the “important charitable work (be transferred) to another large charity such as the Bill & Melinda Gates Foundation.”

The Washington Post opined the Clinton Foundation’s planned steps should have occurred far sooner.

Editorial / New York Post

“Step back from the endless news of Clinton Foundation/Clinton State Department sleaze and Clinton e-mail abuse, and shake your head at this: Hillary Clinton still believes she did absolutely nothing wrong.

“That jaw-dropper surfaced in Annie Karni’s report for Politico on the campaign’s damage-control efforts on the candidate’s scandals: Hillary’s minions plan to just ‘ride out’ the clock to Election Day – ‘a strategy born...of a belief held deeply by Clinton herself that the e-mail controversy is a fake scandal.’

“A year and a half after news of her use of a home-brewed server – plainly, to shield her work communications from Freedom of Information laws – Clinton still sees the whole thing as ‘nothing more than a partisan attack,’ Karni writes after talking to top campaign aides.

“Right, because FBI Director Jim Comey was a Republican tool when he condemned Clinton’s conduct – which exposed thousands of classified e-mails to hackers – as ‘extremely careless.’

“The Associated Press  must be partisan, too: This week it reported that more than half of the people outside government who met with Secretary of State Clinton had donated in some way to the Clinton Foundation....

“Combined, the contributions total as much as $156 million.

“And this, on top of multiple e-mail dumps showing Clinton’s top aides at State scrambling to arrange meetings and even jobs to please foundation donors....

“Never mind the promises Clinton broke at State – to have the foundation take no foreign cash and insulate State decision-making from foundation influence; to safeguard classified info and ensure State had its own copies of all her work communiques...

“If she makes it to the White House, be warned: Hillary Clinton will never stop breaking her word and the rules whenever she pleases, because in her mind whatever she does is ethical.”

Jennifer Rubin / Washington Post

“More than half the people outside the government who met with Hillary Clinton while she was secretary of state gave money – either personally or through companies or groups – to the Clinton Foundation.  It’s an extraordinary proportion indicating her possible ethics challenges if elected president....At least 40 donated more than $100,000 each, and 20 gave more than #1 million.

“Let’s get one thing out of the way up front: This is almost certainly not illegal.  For that, Clinton should send bushels of roses to former Virginia governor Bob McDonnell, his lawyers and their legal defense fund donors, who won a ruling from the Supreme Court that setting up a meeting is not an official act under federal bribery statutes.

“Would she have had these meetings anyway?  In some cases, yes.  Many of the donors were longtime Clinton friends and donors, international philanthropists and prominent public figures.  She also did not see every big donor.  But the jumble of public and private interests and the appearance of conflicts of interest were why the whole enterprise was dodgy from the start.

“This foundation scandal is in the realm in between ‘perfectly ethical and legal’ behavior and illegal behavior.  Call it sleaze or the appearance of corruption.  Chalk it up to the Clinton’s habitual blindness to impropriety. Never do they say, ‘Well I could do that, but better that I don’t.....

“Like the pallets of cash to Iran, the latest emails just add juicy details to an existing tale. The Clintons have always felt both entitled and persecuted.  In their decades in public life, they have played fast and loose with rules and norms that inhibit others, always winding up just a smidgen short of illegality.  Their sense of self-righteousness leads them to conclude that they are being ‘hounded’ for inconsequential matters.

“The lesson they learn is invariably the wrong one: We can get away with it.  They rationalize that it’s just the vast right-wing conspiracy at work – and the Republicans usually chip in by wildly overplaying their hand (e.g. asking her repetitive questions for 11 hours in a Benghazi hearing, demanding a special prosecutor).

“I doubt this new tidbit about the foundation will change many voters’ minds.  Those siding with her are either true Hillary Clinton believers, Democratic die-hards and/or people convinced that Donald Trump is nuts and a danger to the republic.  In short, she has already nailed down the segment of voters who prefer ‘corrupt’ over ‘unhinged.’  So long as Trump is her opponent, she sails along.”

John Podhoretz / New York Post

“The singular Nebraska politician (and later New School president) Bob Kerrey once observed of a fellow moderate Democrat: ‘Bill Clinton is an unusually good liar.  Unusually good.’

“I don’t think this is something people would say about his wife.

“That Hillary Clinton is a liar is now inarguable.  Indeed, it’s gotten so inarguable that people who dare argue she isn’t a liar are almost certainly lying, too – though, perhaps, only to themselves, to keep their spirits up.

“The problem for Hillary’s apologists is that she’s so incredibly bad at it.

“Bill’s brilliant lies provided cover for his defenders.  Hillary’s lousy lies make her defenders look like fools.  The pair of revelations in the past week demonstrates this.

“First we learned she had told the FBI her plan to set up a private server for her e-mails had been presented to her as a welcome gift by her predecessor Colin Powell at a State Department dinner. At that point, the defenders came out in full force – see, it wasn’t her idea, and it had been done before, and so what!

“Whereupon Powell first said he had no recollection of saying any such thing to her, and then angrily told a reporter he’d mentioned using AOL for his private correspondence a year after she’d set up the private server at home to handle all her communications.

“ ‘They’re trying to pin it on me,’ said Powell, who has no dog in this fight and no reason to lie.  Unlike Hillary....

“(Then there) was the discovery that her two chief aides, Cheryl Mills and Huma Abedin, were serving as transmission points between the State Department and the Clinton Foundation – the issue being what favors might be granted at State to the foundation’s donors and intimates.

“ ‘There is absolutely no connection between anything that I did as secretary of state and the Clinton Foundation,’ Mrs. Clinton said last month.  Bzzzzzzt!  And there goes the lie detector!  Indeed, on Tuesday the AP revealed that more than half of the non-governmental meetings Clinton took while secretary of state were foundation donors.

“The lie detector also buzzed when she said she’d never forwarded any e-mails ‘marked classified,’ which we now know she did.”

Editorial / Wall Street Journal

“When Bill and Hillary Clinton get caught for bad behavior, they follow a familiar pattern. First deny, then call it old news, then roll out the attack machine of media and political allies to trash whoever needs to be collateral damage to save them. The private e-mail-Clinton Foundation saga is now in phase three, and no less than Colin Powell has been drafted as roadkill.

“The Powell-made-Hillary-do-it defense emerged late last week in two parts. The New York Times reported that FBI interview notes turned over to Congress last week show that Mrs. Clinton told the G-men that Mr. Powell had advised her to use a personal email account. The Times didn’t name its source, but in these cases always ask who benefits from the leak?  Answer: Mrs. Clinton.

“The Times also reported in the same story that the advance copy of a new book by Joe Conason backs up the blame-it-on-Powell story. Aficionados of Clinton scandals will remember Mr. Conason as the most dedicated stenographer in the Clinton stable.

“Mr. Conason has written a biography of Bill Clinton, ‘Man of the World.’  And the Times reports that the book relates a conversation early in Mrs. Clinton’s time at State at a dinner party hosted by Madeleine Albright, another former Secretary of State.  Mr. Conason writes that Mr. Powell ‘told [Mrs. Clinton] to use her own email, as he had done, except for classified communications, which he had sent and received via a State Department computer.’

“Mr. Conason writes that this conversation ‘confirmed a decision she had made months earlier – to keep her personal account and use it for most messages.’  The Times notes that Mr. Conason ‘interviewed both Mr. and Mrs. Clinton for the book.’  Voila, the Clintons are back at their old standby, the everybody-does-it defense.

“Mr. Powell’s office released a statement saying he doesn’t recall that dinner conversation. And at a weekend event on Long Island, Mr. Powell told People magazine and the New York Post that Mrs. Clinton ‘was using [the private email server] for a year before I sent her a memo telling her what I did.’  He added: ‘Her people have been trying to pin it on me.’....

“(The) Clintons have never had any scruple about tarnishing someone else’s reputation to protect their path to power.  Maybe they’ll make it up to him with an invitation to a State Dinner for the Crown Prince of Bahrain.”

Kathleen Parker / Washington Post

“When I wrote the headline ‘Hillary’s heel,’ I was thinking of Achilles, not Bill, though the former president is usually within nipping range of his wife’s pantsuit hem.

“Hillary Clinton’s Achilles’ heel is her very Clinton-ness. Rather than tell the truth as soon as possible, a reluctance shared by her husband during his presidency, she has mastered the art of teetering along the knife’s edge of truth.  Like a gymnast on a balance beam, she manages to stay within the narrow parameters of lawfulness without losing her footing.

“But her long history of avoiding provable infractions despite hundreds of hours of investigations and millions in taxpayer expense – from Whitewater to Benghazi to her private email server – may soon come to an end, not with a gold medal but with an Olympian loss of whatever faith remained in her integrity....

“One crucial fact is no longer in dispute: Foundation donors got access to the State Department....

“But Clinton has bigger worries as more emails continue to trickle out, revealing who knows what. What we already know from FBI Director James B. Comey is that his agency’s investigation found insufficient evidence to charge Clinton, though he did say her handling of classified information was ‘extremely careless’ and that she falsely testified to the House Select Committee on Benghazi that there was no classified material in any of her email.

“Other than that, Mrs. Lincoln...

“To Republicans, Clinton is a serial liar.  To Democrats, she is the perennial target of a right-wing conspiracy.  The question for voters may come down to this: how much, if any, substantive harm has Clinton’s lack of absolute clarity on a given subject or event caused?

“The only definitive answer thus far is that she has deeply damaged whatever public trust remained – and for a candidate, this can be fatal.”

--Meanwhile, after saying it was going to stop accepting corporate and foreign donations and reduce family involvement as a way to insulate Hillary Clinton from potential conflicts of interest if elected president, there was talk of Bill Clinton and Chelsea Clinton leaving the board, should Hillary win.  But now it appears Chelsea will stay on, while Bill said he still plans to leave, and Wednesday, foundation officials said the largest project, the Clinton Health Access Initiative, might continue to accept foreign government and corporate funding.

This will hardly be good enough for critics.

--Trump, cont’d....

British politician Nigel Farage, outgoing U.K. Independence Party leader in Britain and a man credited with leading the Brexit movement, spoke in support of Donald Trump in Jackson, Miss., Wednesday.

“You have a fantastic opportunity here,” said Farage.  “You can go out, you can beat the pollsters, you can beat the commentators, you can beat Washington, and you’ll do it by doing what we did for Brexit in Britain.”  Farage added, “Anything is possible if enough decent people are prepared to stand up to the establishment.”

Trump, in his stump speech, then said of his opponent: “Hillary Clinton is a bigot who sees people of color only as votes, not as human beings worthy of a better future.”

Trump also pounded away on his new theme of attempting to appeal to African-American voters, saying, “I fully recognize that outreach to the African-American community is an area where the Republican Party must do better, and will do better....I want our party to be a home of the African-American voter once again.”

Trump also accused Hillary Clinton of taking black voters for granted.

Well it’s a little late for all this, and it’s not like Trump has been walking through urban areas, pressing the flesh the past year of his campaign.  [It’s not like Obama ever did this either, for eight years, which continually amazes me.]

But then Trump keeps sending mixed signals on his immigration policy, speaking early in the week of easing his plan to deport all illegal immigrants, and then flip-flopping by week’s end; all of which is causing his closest supporters agita.

And just where Trump is going to get 270 Electoral College votes is looking increasingly dicey, as he trails in four key battleground states he needs to sweep – Ohio, Florida, Pennsylvania and North Carolina.

--Marc A. Thiessen / Washington Post

“President Obama has accomplished something previously unimaginable: He helped Donald Trump look more presidential than the president of the United States.

“On Friday (Aug. 19), while residents of Baton Rouge were recovering from a historic flood that damaged some 40,000 homes, Obama was on Martha’s Vineyard watching fireworks, following 10 rounds of golf in 16 days.  Donald Trump, by contrast, was on the ground in the flood zone...focusing much-needed attention on a disaster that has been largely ignored by the media.

“Why wasn’t Obama there?  According to the White House statement, ‘The President is mindful of the impact that his travel has on first responders and wants to ensure that his presence does not interfere with ongoing recovery efforts.’

“Funny, that’s precisely why President George W. Bush didn’t come to New Orleans immediately after Hurricane Katrina.  And Democrats – including Barack Obama – hammered Bush for it.  Unlike Obama, Bush actually canceled his vacation and got on a plane to return to Washington.  But he decided not to land in Louisiana so as not to draw resources away from the ongoing rescue efforts and flew Air Force One low over the flood zone so that he could see the devastation firsthand.

“Democrats howled. Then-House Speaker Nancy Pelosi said Bush was ‘oblivious, in denial, dangerous.’  Obama later called Bush ‘a president who only saw the people [of Louisiana] from the window of an airplane, instead of down here on the ground trying to provide comfort.’

“Well, I have news for Obama.  You can’t see the people of Louisiana at all from a golf course on Martha’s Vineyard....

“It was only after Trump was on the ground in Louisiana that Obama finally announced he would visit himself.

“How pathetic.

“One of the most important jobs a president has is to be ‘consoler in chief’ in times of tragedy.  Many Americans, who previously could not imagine Trump as president, finally saw him in that role Friday.  They watched him touring the devastation, hugging victims and promising to rally the country to help them rebuild.  That’s what the president should have been doing, but instead Americans saw Trump doing it.

“Through his cool indifference, Obama gave Trump an opening – and Trump seized it.”

--The New York Times has identified ten Senate seats that are “competitive” and will be the difference between Republicans retaining their majority or Democrats regaining it.

Illinois (80% chance Democrats win), New Hampshire (64% Dem. chance), Indiana (62% Dem. chance), Pennsylvania (52% Dem. chance), Nevada (62% Rep. chance), North Carolina (71% Rep. chance), Arizona (72% Rep. chance), Missouri (82% Rep. chance), Ohio (84% Rep. chance), Florida (84% Rep. chance).

Some of us are going to be on pins and needles over the Senate come Election night for sure.

--The New York Times had a story on Mayor Bill de Blasio’s family vacation to New England this week, which no one begrudges him for.  Yes, he had a security detail, as he should, and he hasn’t been known for taking an inordinate amount of time off, plus it’s August.

But what I found interesting was this passage: “Few in the city’s political class felt the need to criticize the travels of a mayor who two years ago demonstrated his willingness to work hard but also take time off, and who has not been beholden to the workaholism of his predecessors, Michael R. Bloomberg and Rudolph W. Giuliani.  Neither appeared to take a full week off during his term in office – two decades of vacationless summers for the city’s chief executive – though Mr. Bloomberg, a billionaire, had other methods of relieving stress, frequently jetting to his Bermuda home on weekends.”

Your editor, who has missed one column in 17 ½ years (one announced week off), appreciates this.   

--Talk about a jerk.  Brooklyn District Attorney Ken Thompson is paying a $15,000 fine for using office funds for his meals, as a city watchdog group revealed on Wednesday.

I first saw this story on the local news and, unbelievably, he not only used the funds for his own meals, he forced his security detail to use their own money for his food purchases.

Thompson, who became DA on Jan. 1, 2014, used office funds to pay for weekday meals from January 2014 through May 2014, for a total of $2,043. The district attorney repaid the funds in July 2014.

But he also used funds during a different period to pay for dinners and weekend meals. He later repaid those too.

While Thompson ate modestly, it is amazing the top prosecutor in his borough thought this was acceptable, and forced his security detail to pay for his meals, though they were reimbursed.

--According to a report in the New York Post, via RadarOnline, President Obama is “furious” with daughter Malia for puffing on what appeared to be a marijuana cigarette at a concert.  [Then she was whisked away from a party on Martha’s Vineyard that was busted up by local police.]

Yes, the First Family has cultivated a best-family-on-the-planet image, but, like father, like daughter.

Malia, recall, is taking a “gap” year before she matriculates at Harvard.  Perhaps it will be a “joint” year.  [She’s 18...no longer “hands off” for some of us.]

--Joel Stein had an extensive piece in the August 29 issue of TIME on the web and trolls.  Personally, I hate social media.  But I have to use it to promote myself.  Ever so slowly, I do gain new readers as a result, and because I don’t make it that easy to do so, I have limited the negative talkback to moi.  Anyway, Joel Stein:

“This story is not a good idea.  Not for society and certainly not for me. Because what trolls feed on is attention. And this little bit – these several thousand words – is like leaving bears a pan of baklava.

“It would be smarter to be cautious, because the Internet’s personality has changed.  Once it was a geek with lofty ideals about the free flow of information.  Now the web is a sociopath with Asperger’s.  If you need help improving your upload speeds it’s eager to help with technical details, but if you tell it you’re struggling with depression it will try to goad you into killing yourself.  Psychologists call this the online disinhibition effect, in which factors like anonymity, invisibility, a lack of authority and not communicating in real time strip away the mores society spent millennia building. And it’s seeping from our smartphones into every aspect of our lives.”

--Traffic fatalities rose 9%  in the first six months of 2016, compared with a year earlier, according to the National Safety Council.  With a relatively solid economy and lower gas prices, we’re driving a lot more, thus more people on the road.

While you have the usual suspects of speeding and drug- or alcohol-related driving, as Troy Coastales, safety division administrator at the Oregon Department of Transportation, told the Wall Street Journal, “Distraction is one that we’re talking a lot about, you just get a sense that distraction is playing a part and is a compounding factor,” he said.

Nationwide, about 19,100 people died between January and June this year.

--A Pew Research Center poll released Wednesday found that 49 percent who have left their church no longer believe in God, with nearly one quarter of the nation now having no affiliation with any religion, according to the survey.

--Billionaire entrepreneur Richard Branson is one lucky guy.  He said on Friday he thought he was going to die after flying head first off his bicycle in the British Virgin Islands the other day.

Branson hit a bump in the road on Virgin Gorda, catapulting him into the road.  He could have been paralyzed, or dead, but the 66-year-old posted pictures of his bloody face and his injuries included a cracked cheek, torn ligaments and severe cuts.

Sir Richard noted his helmet saved his life.  He traveled to Miami for medical treatment.  He’s been training for a big charity event involving hiking, cycling, swimming and a run from the base of the Matterhorn in the Alps to the summit of Mount Etna in Sicily in September and he has vowed to take part in it.

“My attitude has always been, if you fall flat on your face, at least you’re moving forward,” he said.  [Bloomberg]

--Kenneth Changaug / New York Times

“Another Earth could be circling the star right next door to us.

“Astronomers announced on Wednesday, that they had detected a planet orbiting Proxima Centauri, the closest neighbor to our solar system.  Intriguingly, the planet is in the star’s ‘Goldilocks zone,’ where it may not be too hot nor too cold. That means liquid water could exist at the surface, raising the possibility for life.

“Although observations in recent years, particularly by NASA’s Kepler planet-finding mission, have uncovered a bounty of Earth-size worlds throughout the galaxy, this one holds particular promise because it might someday, decades from now, be possible to reach.  It’s 4.2 light-years, or 25 trillion miles, away from Earth, which is extremely close in cosmic terms.”

The planet has been designated Proxima b.  A year on it, as it orbits around the star, is only 11.2 days, though, so this wreaks havoc on all the professional sports schedules, let alone stats.  I’m assuming their baseball season, for example, is seven days, one day off, and then a best of three World Series.  For the Super Bowl, I’m guessing the biggest problem is lining up 35 unique halftime acts in what would be our 365 day year.  And then you’d have Olympics every 44-45 days.  I mean I’m losing interest already.

Then again, we’d only have to put up with a President Trump or Clinton for 44 days!  We could make it that long, I think.

---

Pray for the men and women of our armed forces...we lost a soldier in Afghanistan this week.

God bless America.

---

Gold $1324
Oil $47.29

Returns for the week 8/22-8/26

Dow Jones  -0.8%  [18395]
S&P 500  -0.7%  [2169]
S&P MidCap  -0.2%
Russell 2000  +0.1%
Nasdaq  -0.4%  [5218]

Returns for the period 1/1/16-8/26/16

Dow Jones  +5.6%
S&P 500  +6.1%
S&P MidCap  +11.5%
Russell 2000  +9.0%
Nasdaq  +4.2%

Bulls  56.7
Bears  20.2  [Source: Investors Intelligence]

Have a great week.

Special Happy Birthday to an old friend from my Thomson McKinnon days, Mark R. He turns Sam Huff and Artie Donovan today.  Sports fans will catch my drift.

Brian Trumbore



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Week in Review

08/27/2016

For the week 8/22-8/26

[Posted 11:30 PM ET]

Note: StocksandNews has significant ongoing costs.  Your support is appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Edition 907

I’m a Bigot...You’re a Bigot...

What a campaign, boys and girls.  What a pathetic joke.  This week Hillary Clinton takes the brunt of the fire in this fine column, most deservedly so. 

Charles Krauthammer / Washington Post

“Bernie Sanders never understood the epic quality of the Clinton scandals. In his first debate, he famously dismissed the email issue, it being beneath the dignity of a great revolutionary to deal in things so tawdry and straightforward.

“Sanders failed to understand that Clinton scandals are sprawling, multi-layered, complex things.  They defy time and space. They grow and burrow.

“The central problem with Hillary Clinton’s emails was not the classified material.  It wasn’t the headline-making charge by the FBI director of her extreme carelessness in handling it.

“That’s a serious offense, to be sure, and could very well have been grounds for indictment.  And it did damage her politically, exposing her sense of above-the-law entitlement and – in her dodges and prevarications, her parsing and evasions – demonstrating her arm’s-length relationship with the truth.

“But it was always something of a sideshow. The real question wasn’t classification but: Why did she have a private server in the first place?  She obviously lied about the purpose.  It wasn’t convenience. It was concealment. What exactly was she hiding?....

“It’s (now) clear what she wanted to protect from scrutiny: Clinton Foundation business.

“The foundation is a massive family enterprise disguised as a charity, an opaque and elaborate mechanism for sucking money from the rich and the tyrannous to be channeled to Clinton Inc.  Its purpose is to maintain the Clintons’ lifestyle (offices, travel, accommodations, etc.), secure profitable connections, produce favorable publicity and reliably employ a vast entourage of retainers, ready to serve today and at the coming Clinton Restoration.”

I get into the Associated Press’ findings regarding pay-for-play, pay-for-access and such in detail below.

As for her opponent, the other day Jerry Falwell, Jr., in an opinion piece for the Washington Post, compared Donald Trump to Winston Churchill.  That notion is so absurd I almost spit up my Frosted Flakes upon reading it.  I also won’t bother to reprint a line of it, it’s that ludicrous.

Far more on this farcical race down below, including a potential solution.  Move to Proxima b.

Washington and Wall Street

Before I get to the Federal Reserve and Chair Janet Yellen’s much-anticipated speech from Jackson Hole, Wyoming, Friday, there was some important economic data prior to her discussion on the direction of the economy and interest rates.

July new home sales surged to their highest level since October 2007, 654,000 annualized, but existing home sales for the month, while solid, 5.59 million* and slightly above expectations, were nonetheless down 3.2% from June and down 1.6% year over year.  But still they are near post-recession highs.  That said, some markets are softening, with San Francisco’s sales down 10% in the first half of 2016 and at the slowest pace since 2008.

The median existing national home price of $244,100 is up 5.3% from July 2015.

*Existing home sales on an annualized basis peaked in 2005 at 7 million.

Durable goods (big-ticket items) rose a solid 4.4% in July, with this volatile figure ahead of expectations.  Ex-transportation, the number was a strong 1.5%.

And then you had a second reading on second-quarter GDP, revised down a tick to 1.1% (ann.), with the first quarter at 0.8%.  Consumer spending did rebound in the second to 4.4% from 1.6% in the first.

So the last four quarters (annualized):

Q2 2016... 1.1%
Q1 2016... 0.8%
Q4 2015... 0.9%
Q3 2015... 2.0%

Ergo, a 1.2% average for the 12 months.  Hardly the 2.6% pace of 2015, or 2.4% of 2014, which were themselves both well below what a normal recovery from a deep recession is supposed to look like.  Democrats on the campaign stump will tout respectable job growth during the past eight years once the economy bottomed, but they can do little more than that.

In looking ahead to the third quarter, the Atlanta Fed’s GDPNow indicator forecasts a 3.4% ann. rate, a nice pickup, primarily because a prior drawdown in inventories, which hurts GDP, would appear to be complete and now shelves should be restocked, a positive.  [That’s the view of economists, not necessarily of how the Atlanta Fed comes up with its calculation.]

So with all the above in mind, Chair Janet Yellen signaled that the Fed is going to raise short-term interest rates in the months ahead, possibly as early as September, because it is more confident that the economy is on a firmer footing.

“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.”

Yellen added: “Our decisions always depend on the degree to which incoming data continues to confirm the [Fed’s] outlook.”

Longer-term, Yellen added: “The [Fed] expects moderate growth in real gross domestic product, additional strengthening in the labor market, and inflation rising to 2% over the next few years.  Based on this economic outlook, the [Fed] continues to anticipate gradual increases in the federal funds rate will be appropriate over time.”

[The rest of Yellen’s speech was focused on how the Fed might deal with future downturns and for this space, that kind of talk is irrelevant.  As for her statement inflation will rise to 2%, it already is 2% to some of us.]

After Yellen’s comments, traders put the probability of a September rate hike at 24% and a 57% probability for a raise by December.

But then a little after Yellen spoke, and after traders had initially weighed in, Fed Vice Chair Stanley Fischer said on CNBC that September was very much in play and the stock market, which had responded to Yellen with gains, reversed course thinking maybe two rate hikes, not one, the rest of the year was in the cards.

So the Fed next meets Sept. 20-21, and this coming Friday’s labor report for August is critical.  If it came in at over 200,000, with no big downward revisions to prior months, the Fed will be under pressure to act, but I continue to believe there is no way the Fed is doing so before the election.  I reserve the right to change my mind, but I will only do so if next Friday’s number is way above expectations.  

[The Fed is forgetting how much Donald Trump will be blasting them ahead of the Sept. decision, including threats to disband the board if elected.  He has been talking of low interest rates, forever, as well as how much he loathes Chair Yellen’s band of merry pranksters.]

Related to the above discussion on the Fed and interest rates, the Congressional Budget Office said a slowdown in tax receipts, especially from lower corporate profits, will lead to a federal budget deficit that is wider than expected this year (fiscal year ending Sept. 30), $549 billion, or 3% of GDP, vs. last year’s $438bn, 2.5%, the lowest since 2007.

But, the CBO now forecasts interest rates will remain much lower than forecast, for longer, thus big savings in interest expense, which will slash projected spending by $1.1 trillion over the next decade and exceed a new forecast for slower growth and revenues, though the national debt will still rise to 86% of GDP from its current 77%.  [Take this CBO forecast with a grain of salt.]

Europe and Asia

I continue to get a kick out of some of the headlines out of Europe, post-Brexit, as in ‘so far, so  good,’ and ‘the impact seems limited.’

For starters, ‘post-Brexit’ is kind of a misnomer because nothing has happened, people!  Brexit doesn’t technically begin until Britain says so and invokes Article 50 of the EU Treaty that then starts the ‘two-year’ timetable for negotiations, which in itself is just a rough figure because, remember, not only can individual key issues, such as border/visa policies between nations take years to negotiate, but the remaining EU nations must all approve any final accords.

This isn’t a matter of Britain sitting down with Germany and France over a few weekends, this is going to be a painful, unending mess, and there isn’t a soul in the region who can tell you today how it’s going to play out, let alone someone in his hideaway in Summit, New Jersey, until you know how the politics in the likes of the Netherlands, France and Germany will take shape, given these are among the key players with major parliamentary elections next year.  Britain itself is not starting the Brexit process probably until April at the earliest because it not only wants to take time to formulate its negotiating positions on a zillion issues, I imagine Prime Minister Theresa May and her team also want to get a better handle on the success, or failure, of anti-EU movements in the likes of the Netherlands and France next spring.

So from time to time, you are going to hear a commentator stupidly look at a data point or two and say, “Ha, looks like Brexit is no big deal.”  When you catch that, just remember what your editor has been saying. 

That said we’ll still look at the data.  The ‘flash’ readings on manufacturing and the service economies for the eurozone for August were released by Markit and the comp (mfg. and services together) was 53.3 for August vs. 53.2 for July, which is what has a lot of folks saying ‘Brexit is no problemo’ [50 being the dividing line between growth and contraction.]  The manufacturing PMI was 51.8, while the services reading was 53.1.  [You can’t just average these two and come up with the ‘comp’ reading...it’s more complicated than that.]

The flash readings also look at France and Germany, individually.

France: 48.5 mfg. for August vs. 48.6 in July; 52.0 services vs. 50.5.

Germany: 53.6 mfg. vs. 53.8; 53.3 services vs. 54.4.

Germany’s comp of 54.4 vs. 55.3 in July was a second straight down month, but far from concerning.

More importantly, Germany’s GDP for the second quarter was 0.4% over the first quarter, which was 0.7%, according to the official statistics folks.  Business confidence in August was weak.

Spain’s GDP for Q2 was a solid 0.8%, 3.2% annualized, which was down slightly from the first quarter’s annualized pace of 3.4%

Italy, however, needed this week’s tragic earthquake that devastated Amatrice and surrounding villages like a hole in the head.  This region had escaped major damage in big earthquakes in the past, but they are sitting on a major fault line and given the medieval nature of some of the buildings, tragedy was inevitable (281 dead at last count).

But now, just as Prime Minister Matteo Renzi has been dealing with a political crisis and an upcoming referendum on constitutional reform, which, if approved, should lead to job losses among Italy’s politicos (ergo, they don’t want the referendum to succeed), Renzi has to deal with a massive cleanup and the potential for the government to look bad if things don’t proceed smoothly (which they never do in these situations).  So waves of criticism are about to sweep over him in this regard, probably through no fault of his own.

As for Britain, there has indeed been a ton of economic data this week, but it’s virtually all pre-Brexit.

GDP for the second quarter was 0.6%, 2.2% annualized, same as a preliminary reading, according to the Office of National Statistics.  Consumer spending was a robust 0.9%, 3.0% annualized, the best since the end of 2007.

Car production in July, post-Brexit, was up 7.6%, year over year, but this was down from June’s pace of 10.4%.  Year-to-date, car production in the U.K. is up 12.3%, best in 16 years (though many of these are being exported).

Industry surveys of manufacturing seem to indicate firms had a boost in July, but this is owing to the pound’s depreciation.

Perhaps more of a post-Brexit indicator is mortgage approvals, which for July were at their lowest levels since Jan. 2015, not good for homebuilders and agents, but, again, it’s very early days.

The Financial Times’ Lex column had some thoughts on Brexit and why shoppers appear to still be out in force.

“Here are three theories.  Call them the deluded shopper, the cowardly director and the phony war.  Under the first, shoppers are myopic, only influenced by what actually happens to them. No one is being fired, bank loans are available and the cheaper pound has made spending at home more attractive.  Far-sighted business is by contrast worried, and understands that a cheaper pound means a hit to the national income.  Little is being cancelled, but the wisest course is to not to venture anything new – hence those gloomy (confidence) surveys.  Soon the penny will drop and consumers will catch the pessimism in company boardrooms.

“Or maybe these businessmen are a bunch of Chicken Littles, no better at judging Brexit than they were at predicting it.  If so, the survey responses are more of a kind of virtual-signal for Europhiles to express their disapproval of the vote.  Should consumers hold their nerve and foreign demand stay steady (so far, Europe is calm in the face of its sulkiest member leaving), they will return to those investment plans.

“The wisest theory is the phony war. What has happened since the referendum?  A vote, some political brutality, the creation of new departments, and then everyone went on holiday....It depends on a competent handling of Brexit.  Recall how the credit crunch began in August 2007 – and the Great Recession a full year after that.”

Meanwhile, German Chancellor Angela Merkel said the European Union needs to work hard to overcome the shock of Britain’s vote to leave, calling it a watershed moment as EU leaders ponder the way forward.

“We have begun a so-called process of reflection to explore in which areas we should develop further as a priority,” she told reporters on Thursday.  A key EU summit, sans Britain, is being held in Bratislava on Sept. 16 and Merkel traveled through the Baltics and elsewhere this week gauging opinion; holding meetings with 12 fellow EU leaders in all.

Merkel said she “can allow the time” for the U.K. to decide what it wants from the EU in Brexit talks.  The other 27 member states will press ahead with “the European project” in the meantime, she said.  [Bloomberg]

Personally, Bratislava could prove to be explosive as the eastern members such as Hungary and Poland don’t want migrant targets rammed down their throats.

For her part, Merkel has major problems at home with public opinion continuing to move against her on her handling of the migrant crisis.

On a different issue, you still have the likes of France and Italy wanting greater flexibility to help boost growth, which means a break on hitting deficit targets, which Germany is loath to grant.

A few other tidbits....

In France, Nicolas Sarkozy announced his candidacy for the 2017 French presidential elections (April 23 and May 7), four years after he pledged to retire from politics when he was defeated by Socialist Francois Hollande.

Sarkozy is the leader of the conservative Les Republicains party, but former Prime Minister Alain Juppe remains the favorite to head the center-right ticket and party primaries to select a candidate for next spring’s vote are in November (Nov. 20 and 27).

The winner, Sarkozy or Juppe, not only goes up against Hollande, but also the National Front’s Marine Le Pen, who is expected to be one of the two candidates in the run-off (where it is assumed she would get her butt kicked).

Among center-right voters today, Juppe has a 74% approval rating and Sarkozy 57%.

Sarkozy has just released a book, “Everything for France,” which dedicates a full chapter to identifying what he believes is one of the threats to the French way of life: Islam.

“Let’s say it clearly without any polemic, it’s not with religions that the Republic has difficulties today, but with one of them that has not done the work, necessary as well as inevitable, to integrate,” Sarkozy writes.

The Catholic church (of which he is a member) went through a transition long ago, he writes, and it was painful.  [France expelled thousands of priests in the early 20th century.]

“We have to do the same work with Islam, which cannot exonerate itself from rules that the other religions respect perfectly,” he concludes.  [Anne-Sylvaine Chassany / Financial Times]

Back to Le Pen, she’ll point out Sarkozy’s failings when he was in power the first time.

Separately, the terror attacks in Paris and elsewhere in France have done a number on tourism (even the Paris floods hurt some as you saw museum closures for a week or so in some cases).  Paris is located in the Ile-de-France region and about 500,000 have jobs linked to tourism, making it the biggest industry.

Nationally, tourism in France generates over 7% of gross domestic product and that figure is over 13% in the Ile-de-France region.

Nightly hotel stays were down 8.5% in Paris-Ile-de-France in the first half of the year, with an 11.5% decline in foreign tourists.

Japanese visitors were down 46.2% in the first half compared with the same period in 2015, while Russians were down 35%, Chinese down 20%, and Americans down 6%, according to the Paris region tourism board.

--And a few notes on Ireland, which is expected to post the fastest economic growth in Europe for a third year in a row, though the rate of growth is easing.  The unemployment rate, which had a post-crisis peak of 15%, is down to 8.3%-8.4%, where it seems to have plateaued since February, according to the Central Statistics Office, while the revived Celtic Tiger just recorded its first month of net inward migration since 2009.

In April, inward migration reached 3,100 compared to the same month in 2015.  This compared to a net outward migration in April 2015 of 11,600.

Overall, Ireland’s population has grown back to 4.67 million.

---

Virtually zero economic news of interest out of Asia this week, especially from China and Japan, with a flash reading on Japanese manufacturing for Aug. coming in at 49.6 vs. 49.3 in July (via Markit).

Street Bytes

--The Dow Jones and S&P 500 fell for a second consecutive week, -0.8% and -0.7%, respectively, while Nasdaq’s eight-week winning streak was snapped with a -0.4% decline.

--U.S. Treasury Yields

6-mo. 0.46%  2-yr. 0.84%  10-yr. 1.63%  30-yr. 2.29%

In case you’re wondering, the 1.63% yield on the 10-year compares with 2.27% last Dec. 31, as the editor searches for filler for this space, given what he’s already written on the Fed and interest rates.

--Lots of volatility in the oil market the past few weeks, and a lot of noise.  Oil was rallying on news that OPEC may finally be putting together a plan to limit production, with some believing Iran may go along with it; OPEC holding an informal meeting next month

But Iran has been steadily adding to its exports, post-sanctions being lifted in January, and I can’t see them actually suddenly holding the line, though it seems the last data on their production levels has them stabilizing and no longer rising (not necessarily because this was a government decision). 

Actually, the International Energy Agency said Iran’s production fell to 3.6 million barrels a day in July, which is below their stated target of four million.

At the same time, Iraq is increasing its production 5% after an agreement to resume shipments from three oil fields in Kirkuk that are controlled by the semi-autonomous Kurdistan Regional Government.  This is a potentially significant move as it seems to mark improved relations between the KRG and Baghdad.

But back to a production meeting, the key player, as always, is Saudi Arabia and they are showing no signs of abandoning their stance of defending their market share above price support.

--China’s two major oil drillers, PetroChina Co.  and Cnooc Ltd., both reported weak earnings, as the two have been the hardest hit in the country with the commodities slump and sliding global oil prices.  Weaker demand at home for gasoline hasn’t helped either.

PetroChina, in seeing its net profit fall 98% to $80 million in the six months ended June 30, said it expected “the recovery of the global economy to remain weak” in the second half and for oil prices to remain depressed due to continued oversupply in the markets.  [Whaddya know...a Chinese company that I think is telling the truth.]

--Speaking of commodities, wheat fell to its cheapest level in a decade, below $4 a bushel at one point this week, a price not seen since Sept. 2006, which certainly adds to the farmland value woes I discussed the prior two weeks in this space.  [The record high is $9.43 in July 2012...I have this on a post-it note. Corn’s high the same month?  $7.93.  It closed the week at $3.25...wheat closed at $4.07.]

Wheat has been negatively impacted by strong harvest prospects in major exporters such as Australia, Canada and Russia, as well as the U.S.

--Mylan Labs came under immense pressure amid the skyrocketing cost of its emergency allergy injection device, EpiPen.  Mylan discounted the price of the drug a day after drawing fierce condemnation from the likes of Hillary Clinton on down over the “outrageous” cost.

Mylan had jacked up the price about 500% in the past six years to $600 for a pack of two.  But Thursday, Mylan said it would introduce a savings card that would cover up to $300 for a two-pack, in effect reducing the out of pocket cost by 50%.  The company also said it would loosen the criteria for its patient assistance program.

Mylan CEO Heather Bresch, the daughter of Democratic West Virginia Sen. Joe Manchin, used Thursday’s announcement to call for structural reforms of the U.S. healthcare system.

“Price is only one part of the problem that we are addressing with today’s actions.  All involved must also take steps to help meaningfully address the U.S. healthcare crisis.”

Mylan is best known for making cheaper generic drugs, but EpiPen accounts for approximately 13% of earnings and 20% of total sales.  [Financial Times]

Clinton has promised to crack down on high prices if elected, sending the shares of drugmakers into a tailspin.

--Tesla Motors CEO Elon Musk said there was a major product announcement coming the other day.  Turned out Tesla has a new upgraded battery option, the “P100” version of the Model S, which when upgraded to “Ludicrous Mode,” will be able to go from 0 to 60 mph in 2.5 seconds.....

Whatever....mused the longtime Honda Accord owner.

Understand this is a $10,000 upgrade for both the S and X models.

--Toll Brothers reported better than expected results amid the latest data that new home sales hit a multi-year record.

The Pennsylvania-based company said revenues rose 24% from a year earlier, with net income up 58%.

--H.P. Inc. reported further declines in revenue and earnings for its most recent quarter, but PC sales were up 4%, stability in a declining business, while revenue fell 14% in its printing business – which generates most of HP’s profits – as email and file-sharing continues to gain more use vs. printing documents.

--Best Buy reported a surge in online sales growth in the second quarter and its shares rose sharply.

The electronic goods retailer has been focusing on integrating its physical and online operations and domestic comparable store sales rose 0.8%, while U.S. online sales jumped 23.7%.  Ecommerce now accounts for 10.6% of total Best Buy sales compared with 8.6% last year.

It seems Best Buy is doing a good job in getting its customers to buy online and pick-up in-store, where, you know, they might buy something else, too.

--Shares in Dollar General and Dollar Tree dropped on weaker-than-expected sales growth in the last quarter.

Dollar General’s same-store sales increased 0.7%, well below forecasts, and there was declining traffic.

For Dollar Tree Inc., its same-store sales rose 1.2%, compared with a 2.7% increase a year ago.  I’ve been working with my local Dollar Tree store manager to get my favorite horseradish sauce stocked again. I have been assured that the next time I go it will be there.  If it’s not, I may have to riot. [Just kidding, local law enforcement!]

--Sears slumped to a loss in the second quarter as it continues to struggle mightily.  Comp-store sales fell 5.2%.  Sales at its discount store division, Kmart, declined 3.3% during the period. 

Same-store sales at Sears’ department stores fell 7%, amid declines in sales of home appliances, clothing, consumer electronics and footwear.

I’ve had a post-it note reminder to visit my local Sears store (about 10 minutes away), which I literally haven’t walked into in over 20 years, at least, just to see what’s happening.  But now I’m afraid I’d be so depressed, it would impact me the rest of my life.

--I go through a lot of post-it notes, by the way.  I’m staring at about 20 of them right in front of me.

--Tiffany suffered its seventh straight quarter of sales declines as it continues to suffer from the impact of lower spending among Chinese tourists in particular.

Global net sales for the three months to July fell 6% year on year, slightly below analysts’ forecasts, with same-store sales down 8%.

Comp sales in the Americas fell 9%.  But they rose 13% in Japan.

The shares rose, however, because the company’s guidance was better for the second half than currently projected by the Street.

--Pfizer is acquiring Medivation for $14 billion.  Medivation is a biotech, though one with an established drug, the prostate cancer treatment Xtandi, on the market and some others in late stage development, so a far less risky bet for Pfizer than some others in the biotech sector.

--Japan’s ANA airlines said it grounded ten Boeing 787s (Dreamliners) because it needed to replace damaged compressor blades in the Rolls-Royce engines.  Under certain flying conditions the blades in the engine’s interior showed corrosion.

Well this would suck, seeing as the 787 can carry about 42,000 passengers.  Don’t want one of them going down.

Of the 445 Dreamliners in operation, 168 use Rolls-Royce Trent 1000 engines.  ANA is the biggest operator with 49.  [Reuters]

--David Jolly of the New York Times reported on French military manufacturer DCNS and a hack of some 22,400 pages detailing “the entire secret combat capability” of six Scorpene-class diesel-electric submarines being built for the Indian navy that were leaked to The Australian newspaper; Australia having just signed a multibillion dollar deal to have DCNS build submarines for it.

“The data was reportedly taken from France in 2011 by a former French Navy officer, and it then made its way to a company in Southeast Asia, but it was unclear how widely the leaked data had been shared.”

It’s unclear how the lost data could impact India’s fleet capabilities, but this is a classic case of corporate espionage, the kind taking place routinely here in the U.S., as in 2014, the Justice Department indicted five members of the Chinese People’s Liberation Army and charged them with hacking into the networks of Westinghouse Electric, U.S. Steel and others.

As for the $38bn deal with Australia, DCNS had won out over stiff competition from Germany and Japan.

--NBCUniversal formally completed its $3.8 billion acquisition of DreamWorks Animation.  Jeffrey Katzenberg, CEO of DreamWorks, will remain a consultant to Comcast, the parent company of NBCUniversal.

Katzenberg leaves the studio with a nice payday, approximately $391 million, according to a regulatory filing.  [He deserves it.  This is how capitalism is supposed to work, as opposed to the Viacom CEO’s pay package I described last week for a job poorly done.]

Jeff Shell, chairman of Universal Filmed Entertainment Group, takes over the integrated DreamWorks operation.

--Not much news on the Zika front this week, which is good, though you did have a case reported some 260 miles from Miami, and if you’re a pregnant woman in Miami itself, you’re on pins and needles and trying to stay inside as much as possible.

But then late word Friday that the FDA wants all states to check their blood supplies for Zika.

--The Earthquake in the Apennine Mountains of Italy that I discussed above is causing great concern among California officials as well because it is an example of the pummeling older buildings in the state would take....the next Big One there.

The structural issues of ancient stone homes are not much different from those of unreinforced brick buildings built in California before 1933, say experts.  That year, an earthquake in Long Beach flattened many structures and left 120 dead; though it was slightly more powerful than the 6.2 that hit Amatrice.  [Rong-Gong Lin II / Los Angeles Times]

--I don’t personally use Windows 10 and refuse to download it, yet, and now it seems a certain update for the software has stopped millions of webcams from working, or is blocking broadcast and stream footage.  Plus, according to the BBC, Microsoft made it difficult to roll back to a prior version.  Instead of 30 days, the update that is causing the problems cut it to 10 days, giving people little chance to switch back to an earlier version of Windows 10 under which there wasn’t a webcam or streaming issue.

Microsoft hasn’t given a timeline on when a fix will be available.

--Andrea Tantaros, former Fox News broadcaster, filed a sexual harassment suit against her old employer and former CEO Roger Ailes, as well as other Fox executives.

Her lawsuit read in part: “Fox News masquerades as defender of traditional family values, but behind the scenes, it operates like a sex-fueled, Playboy Mansion-like cult, steeped in intimidation, indecency and misogyny.”

Yeah, when the Mets aren’t on, or a good college basketball game, I watch Fox from 7-11, but I know they are all a bunch of jerks, including Megyn...save for Greta.  We love Greta!  [Had a funny episode with her, ages ago, at LAX...how long ago?  We were at adjoining phone booths (remember them?) during the OJ trial.]

--Last week I talked about the release of the remake of “Ben-Hur.”  Well it bombed, big time...just $11.4 million its opening weekend amid poor reviews.  [People who went, though, liked it.]  The flick cost about $100 million to produce and represents another poor showing for Paramount.

--One of the last two Howard Johnson restaurants in existence is closing in a couple of weeks, the Bangor, Maine, location.  So that will leave only one location left, in Lake George, New York.

This used to be a travel staple for so many families.  While they were known for their fried clam strips, I’ll always remember the burgers (the only food I liked as a kid) and darn good ice cream.

At its peak, there were 800 orange-roofed eateries across America, with the restaurants predating the HoJo hotels, which were really crappy, but I seem to remember they were at least clean.

But you didn’t care, at least as a kid, about the lousy room because you had that cool restaurant attached.

The business was started in 1925 by Howard Deering Johnson, when he inherited a soda fountain outside Boston.

Author Stephen King, who lives in Bangor, said he liked to frequent the place for its patty melts and milkshakes. [David Sharp / AP]

By the way, I was trying to find something I know I wrote on Howard Johnson’s before and I stumbled on one of Dr. Bortrum’s more informative pieces from June 2002.  All about the Pennsylvania Turnpike.  Just plug Howard Johnson into the search engine and you’ll quickly find it. 

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: Last weekend, ISIS launched an attack on a wedding party in the Turkish city of Gaziantep that left 54 dead, many of them children.  There were conflicting reports that the suicide bomber may have been a child as young as 12.  In a world of terror, this attack was as heinous as any and, finally, the government in Ankara responded full force.

Turkey sent tanks and ground forces into Syria, warning a Kurdish militia to withdraw from frontline positions a day after pro-Ankara Syrian opposition fighters captured a key border town from extremists.

The tanks were part of what Ankara is calling Operation Euphrates Shield, which Turkey says is aimed at ridding a northern Syria border area of both ISIS and the Kurds.  Special forces and jet fighters are part of the move in support of Syrian rebels favored by Ankara.

On Wednesday, Turkish President Erdogan said the offensive had expelled ISIS from the Syrian town of Jarablus, but Turkey warned the Kurdish People’s Protection Units (YPG) militia – which also has designs on Jarablus – to pull back or face a fight.

There were reports up to 15,000 Turkish troops could enter Syria in the coming days and weeks in an attempt to finally secure the border, which the U.S. has been asking for for years, as Ankara has been accused of turning a blind eye to the rise of ISIS.

But to Turkey, the biggest threat along the border is Syria’s increasingly assertive Kurds, who are carving out an autonomous territory.  Syria, which long commended the YPG for its fight against terrorism, is now calling them members of the PKK, the Kurdistan Workers’ Party, which has been behind the civil war in Turkey the past few decades; but the YPG is not the PKK.

So the Syrian Kurds took control of Hasaka city on Tuesday, ending a weeklong fight with the government, consolidating the YPG’s grip of the northeast, but Turkey keeps trying to check its influence.

Confused?  Remember, earlier in the month, it was the YPG, backed by the U.S., that captured the city of Manbij from ISIS, which is west of the Euphrates, but Turkey said it expects the Kurds to withdraw back to the east bank of the river.

Again, the Turks are concerned the Syrian Kurds, the YPG, with their control of territory in Syria’s northeast, on the border with Turkey, will add momentum to the insurgency by Kurds on its own territory (that’s the PKK).

Sorry to repeat some of this, but, heck, I continually have to remind myself who is who, and where.

Like on Friday, a large car bomb hit a police headquarters in Cizre, southeast Turkey, killing 11 policemen and injuring over 70. Turkish media is blaming the PKK for this one.

Cizre is a poor town close to the Syrian border and the U.N. and human rights activists have demanded an investigation into allegations that more than 100 were burned to death while sheltering in basements.

Separately, a deal was struck to allow rebel fighters and thousands of civilians to leave the Syrian town of Daraya, a suburb of Damascus, after four years of being under siege, in a defeat for the rebels.  Residents and fighters were said to be in tears on Friday, after four years of constant bombardment and shortages of food, water and power.

8,000 people are thus giving up the fight and in exchange the Syrian government retakes the town.

Daraya was one of the first areas to stage peaceful protests against the Assad regime in 2011 and to face a violent response.  It was also a rare example of the rebel groups in the town accepting the authority of a civilian local council all this time.

In Aleppo, the U.N. is still attempting to bring humanitarian relief to the divided city. Russia again said it would agree to a 48-hour ceasefire, which of course the White House agrees to, but it’s really up to Assad.  [Late Friday, it was reported the U.S. and Russia failed to reach a deal when it was assumed one was teed up.]

In Iraq last Sunday, the government executed 36 men convicted of taking part in the Islamic State group’s massacre of up to 1,700 soldiers who had fled from Saddam Hussein’s hometown of Tikrit as ISIS was taking it in 2014.

Bret Stephens / Wall Street Journal

“In the fall of 1940 the governments of Japan, Italy and Germany – bitter enemies in World War I – signed the Tripartite Pact, pledging mutual support to ‘establish and maintain a new order of things’ in Europe and Asia. Within five years, 70 million people would be killed in the effort to build, and then destroy, that new order....

“So it’s worth noting our new era of cooperation between dictatorships – and to think about where it could lead.

“The era began in July 2015, when Iran’s Quds Force commander Qasem Soleimani paid a visit to Moscow to propose a plan to save Bashar Assad’s regime in Syria from collapse. Iran and Russia are not natural allies, even if they have a common client in Damascus.  Iranians have bitter memories of the Soviet occupation of Afghanistan in the 1980s, and the Kremlin has never been fond of Islamists, even of the Shiite variety.

“But what tipped the scales in favor of a joint operation was a shared desire to humiliate the U.S. and kick it out of the Middle East.  ‘America’s long-term scheme for the region is detrimental to all nations and countries, particularly Iran and Russia, and it should be thwarted through vigilance and closer interaction,’ Supreme Leader Ali Khamenei told Vladimir Putin during the Russian’s visit to Tehran last November.

“Since then, Tehran has agreed to purchase $8 billion in top-shelf Russian weapons and is seeking Moscow’s help to build another 10 nuclear reactors – useful reminders of how the mullahs are spending their sanctions-relief windfall....

“All this is happening as the nuclear deal was supposed to be nudging Iran in a more pro-American direction. It’s also happening as Moscow and Ankara are moving toward rapprochement and even a possible alliance...Russian media outlets are touting the possibility that Russian jets might use the air base at Incirlik to bomb targets in Syria.  That all but presumes U.S. withdrawal.

“Would Turkish President Recep Tayyip Erdogan forfeit a U.S. alliance for the sake of a condominium with Russia, his country’s historic enemy?  The real marvel is that it hasn’t happened already.  Washington first proved useless to Ankara by failing to depose Mr. Assad.  It’s again proving useless by failing to destroy Islamic State....

“Then there’s China.  On Monday, a Russian military spokesman announced that his country’s Pacific fleet would conduct joint operations with the Chinese navy in the South China Sea....another reminder that the Kremlin’s overriding foreign policy goal is to hobble and diminish the U.S.  It’s a goal Beijing appears to share.

“And why not?  President Obama and his advisers continue to insist that the world has never been a better, safer, happier place than under their benign stewardship, meaning they no longer even register the continuous embarrassments of their foreign policy.  The administration has become the Black Knight from ‘Monty Python and the Holy Grail,’ comically indifferent to his own dismemberment.  Arms and legs all hacked off?  ‘Tis but a scratch!’....

“Readers searching for historical analogies with the present would be wrong to reach for the Tripartite Pact.  But the ingredients from which that foul soup was made have now been laid on the table.”

David Gardner / Financial Times

“Ever since Russia sent its air force into Syria last September to salvage the regime of Bashar al-Assad, President Vladimir Putin has been exploiting the widespread perception that the U.S. under President Barack Obama has lost the ability to shape events in the Middle East.  For Russian fighter-bombers to fly sorties into Syria out of an air base in Iran, southwest of Tehran is presumably meant to rub that message in.  Those air raids were on jihadi and U.S.-backed rebel targets in northwest Syria. But even more provocative were air strikes by the Assad regime in northeast Syria, on Syrian Kurdish allies of Washington in which U.S. special forces are embedded....

“Russia and Iran, despite a complex history of enmity in the past century, are allied behind the Assad clan.  Moscow wishes to revive Russia’s status as a world and regional power, and to keep the west off-balance over its aggression in Crimea and Ukraine.  Tehran is determined to consolidate the Shia Arab alliance it has forged from Baghdad to Beirut.”

Iran: Tensions have been ratcheting up in the Arabian Gulf between Iran and the United States, with a U.S. Navy ship firing three warning shots in the direction of an Iranian boat on Wednesday that was approaching another American ship head-on.

According to Navy Commander Bill Urban, the Iranian vessel came within 200 yards of the USS Tempest and ignored several bridge-to-bridge radio calls and warning flares.  It finally turned away after the USS Squall fired three warning shots from its .50-caliber gun, said Urban, a spokesman for the Navy’s 5th Fleet.

The U.S. had three separate encounters with Iranian vessels in the Gulf on Wednesday, which came a day after four small Iranian boats approached the USS Nitze at high speed in the Strait of Hormuz.  The boats veered off after the U.S. fired flares.  [New York Post]

Much of the above on Iraq, Syria, Russia and Turkey of course pertains to Iran as well.  But I just wanted to note this excerpt from an extensive piece by Jay Solomon in the Wall Street Journal, Mr. Solomon doing yeoman’s work on the topic of Iran and author of the new book, “The Iran Wars: Spy Games, Bank Battles, and the Secret Deals That Reshaped the Middle East.”

“(Supreme Leader) Khamenei has sworn off any collaboration with the U.S. in the Middle East, even against shared regional enemies like Islamic State.  Instead, he has continued Iran’s campaign to control the oil-rich Persian Gulf and weaken the influence of the U.S., Israel and its Sunni Arab allies across the region.  U.S. military commanders say that they have seen no tapering off of Revolutionary Guard support for its allies in Yemen, Iraq or the Palestinian territories.

“Mr. Khamenei cannot know how the U.S. will respond to his uncompromising stance, especially with a new administration soon to take office.  But he may figure that he wins either way.  If the deal falls apart, he could call it proof that the Americans never could be trusted and figure that another round of biting U.N. sanctions will prove too difficult to assemble.  If the deal survives, he will have his military continue to develop missiles and conventional arms to position Iran to become a latent nuclear weapons power in 10 years.

“Either way, it is Mr. Khamenei, not his more moderate rivals, who are acting as if they have been strengthened by the nuclear deal.  ‘Our problems with America and the likes of America...on regional matters and on various other matters are not solved through negotiations,’ Mr. Khamenei said in his Aug. 1 speech.  ‘We ourselves should choose a path and then take it.  You should make the enemy...run after you.’”

Israel: The Turkish parliament approved a deal to normalize ties with Israel after a six-year halt in relations.  Under the terms, Israel will pay Turkey $20 million in compensation for a botched Israeli commando raid on a Gaza-bound Turkish aid ship in 2010 that left 10 Turks dead.

In addition, both sides agreed that individual Israeli citizens or those acting on behalf of the Israeli government would not be held liable – either criminally or financially – for the raid.

Israel’s parliament previously approved the deal back in June, but it was held up by Turkey’s legislature in the wake of the failed July 15 coup attempt.  [Agence France Presse]

Afghanistan: An overnight attack on the country’s top university left 14 people – including seven students (at least one American) – dead.  The 10-year-old American University of Afghanistan in Kabul was attacked by the Taliban...at least that is the belief as I go to post.

The university has long been a symbol of hope for Afghanistan’s future, but why it has the name “American University...” is beyond me.  That’s lunacy. [‘Here, attack me.’]

Russia/Ukraine: CNN’s Christiane Amanpour interviewed Ukrainian President Petro Poroshenko the other day and he warned Vladimir Putin wanted “the whole Ukraine” to be part of the “Russian Empire.”

“It is absolutely the same situation like Russian bombardment in Aleppo,” he told her.  “They have only one purpose – [the] world should be less stable, less secured.”

Poroshenko said if he was asked prior to Russia’s moves, he never would have thought Putin would take, first, Crimea, and then, second, the eastern part of the country.

For his part, President Putin ordered snap military drills after German Chancellor Angela Merkel accused him of breaking international law in Ukraine, while saying NATO will defend member states (i.e., the Baltics) against attack.

Russian Defense Minister Sergei Shoigu said in a statement Thursday that combat readiness exercises are taking place “to defend the interests of the Russian Federation amid increasing threats to its security.”

Oh puh-leeze.  Merkel told reporters Thursday, while Germany wants a “constructive relationship” with Russia, “we have to live with the reality” of its actions in annexing Crimea and backing separatists in the eastern part of the country.

North Korea: Pyongyang test-fired a submarine-launched ballistic missile toward the Sea of Japan on Wednesday and the missile flew a reported 300 miles, a major achievement as other sub-launched attempts have fallen far short.

The U.S. State Department strongly condemned the launch, with a spokesperson saying the test violated U.N. Security Council resolutions barring such activity.  [Cough cough]

Editorial / Wall Street Journal

“Wednesday’s launch...was an operational success, representing a clear advance in Kim Jong Un’s weapons arsenal.

“The KN-11 missile flew some 300 miles off North Korea’s east coast, toward Japan, before falling into the sea, say U.S. and South Korean officials.  That’s the longest flight by far since Pyongyang started testing its submarine launch systems in 2014....

“Analysts in South Korea who, like their U.S. counterparts, have often underestimated North Korean capabilities, believe Pyongyang could deploy operational sub-launched missiles by 2020.

“The North’s Gorae submarine, based on old Yugoslavian designs, may be relatively unsophisticated and noisy. But it could threaten South Korea, Japan and tens of thousands of U.S. troops simply by deploying around North Korea’s coast with the KN-11. The missile has an estimated top range of 550 miles.

“Wednesday’s achievement follows another recent milestone for Pyongyang’s missile program.  In June it successfully launched for the first time a medium-range Musudan missile from a road-mobile carrier.

“The missile reached the highest altitude the North has achieved.  This is especially worrisome because the intercontinental ballistic missile Pyongyang is developing – with an estimated 10,000-mile range that could reach half the continental U.S. – uses Musudan-type engines in its initial booster phase.”

China: ...Meanwhile, Chinese Foreign Minister Wang Yi, in Tokyo where he met his Japanese and South Korean counterparts, said Beijing “firmly opposes” the deployment of a U.S.-developed anti-missile system on the Korean peninsula.

Wang was quoted as saying by the Chinese Foreign Ministry in Beijing that China hopes South Korea and China can meet each other half way and find an appropriate resolution acceptable to both.

But especially in light of the North’s moves on the missile front, the missile system (THAAD) is needed, while China continues to say it poses a threat to its own security.

On a different topic, China is in the process of reorganizing its 1.55 million land force troops into 25 to 30 divisions, rather than 18 existing Army Corps to make the force more nimble.  [The size of a corps is anywhere from 30,000 to 100,000 soldiers.]

According to a study by the South China Morning Post, China is apparently studying the style of the U.S. 101st Airborne Division as an example of a force capable of quick deployment, equipment and logistics support.

Of China’s current 1.55 million soldiers, 850,000 are mobile troops, while the rest are regional garrison troops.

President Xi Jinping issued his marching orders back in December 2012 when he inspected the Guangzhou Military Command.  “When you are summoned, you must come at once; when you come, make sure you can fight, and when you fight, be certain to win.”  [SCMP]

Japan / Australia: Defense ministers from both countries agreed Thursday to strengthen security cooperation in the wake of China’s growing maritime assertiveness in the region and North Korea’s repeated missile tests.

Colombia: The government and the largest rebel group in the country have reached a deal to end more than 50 years of conflict, the two sides announced on Wednesday.

For four years the two have talked and come close to a final agreement a number of occasions, but this time it is supposedly done.

It outlines a timetable in which the Revolutionary Armed Forces of Colombia, or FARC, will abandon their arms, and it also sets out a pathway in which former fighters will enter civilian life and even run for public office.

But for most Colombians, the agreement just means that the conflict which claimed 220,000 lives over 52 years, while displacing five million, is finally over.

The deal requires rebels to leave their hideouts and in giving up their weapons, move to 23 “relocation zones” and eight existing rebel camps.

However, first the public has to agree to the deal in a referendum in October.  President Juan Manuel Santos’ predecessor, former President Alvaro Uribe, is against the accord; Uribe having been widely credited during his eight years in office with greatly reducing the threat from FARC through military gains that forced it to the negotiating table.

A big hang-up for those opposing the deal is that leaders of FARC will spend no time in prison.

And even if the public votes to approve it, there is no guarantee of success, as the below editorial notes when it comes to some rebel factions.

Editorial / Wall Street Journal

“The world is hailing the prospective end of the 52-year Colombian insurgency announced Wednesday night by President Juan Manual Santos and the FARC guerrillas, and we’d like to believe in peace, too.  But skepticism toward the deal inside Colombia and the emerging details make clear that keeping the peace won’t be as easy as announcing it....

“On paper, the deal sets out a six-month timetable for the FARC to lay down its arms and turn itself into a political party.  Ten seats in Colombia’s Congress will be guaranteed to FARC representatives for eight years, a galling concession to terrorists who spent a lifetime waging war on democracy. The FARC has also pledged to get out of the drug trade that is its main source of funding, in exchange for promises of rural development.

“Most controversially, FARC leaders won’t spend time in jail, provided they attest truthfully to their crimes in special truth-and-reconciliation tribunals.  That’s an especially bitter pill for the millions of Colombians who had a relative or friend killed, abducted or brutalized during the FARC’s long reign of terror.

“No wonder Colombians are having second thoughts endorsing the deal in October’s national plebiscite.”

Santos’ approval rating is barely 25%, and some breakaway FARC factions have announced they won’t lay down their arms, especially since complying would mean getting out of their most lucrative business, the drug trade.

This isn’t a done deal yet by a long shot.  Wait 24 hours.

Zimbabwe: There have been large anti-government demonstrations that have turned violent.  I have no problem continuing to say this.  President Robert Mugabe needs to die.  The sooner for mankind the better, though I’d prefer he was devoured by lions in his private chambers.

Since day one of this column, I have called for his demise.  Since day one, his people have suffered under his tyranny.  He will go down in history as one of the truly awful people of all time.

Random Musings

--Presidential Polls....

In a Reuters/Ipsos national poll released Tuesday, Clinton garnered 45% to Trump’s 33%, whereas earlier in the month, Clinton’s lead was 3 to 9 points.

If you added Gary Johnson and Jill Stein, among likely voters, Clinton leads 41-33, with Johnson at 7% and Stein 2%.

But wait...on Friday, the same tracking survey had it 41-36, Hillary; 39-36 in a four-way race, Johnson at 7%, Stein 3%.

In an NBC News/Survey Monkey Weekly Online Tracking Poll, Clinton leads 50-42, similar to the week before (9 points).

In a four-way matchup, it’s Clinton 43-38, Johnson 11% and Stein 5%.

Clinton leads Trump among black voters in this one, 87-8, and leads among Hispanic voters, 73-22.

She polls only 41% of white voters to Trump’s 50%.

In a USC Dornsife/Los Angeles Times national tracking poll, however, Trump leads Clinton 45-43.

Also in this one, “For the first time in three weeks, more Trump supporters said they planned to vote than Clinton supporters by a slight margin, 83%-82%.

In a CNN/ORC poll of battleground states, Trump is the choice of 43% of registered voters in Arizona, leading Clinton 43-38.  Gary Johnson is at 12%, Jill Stein 4%.

In North Carolina, Clinton edges Trump 44-43, with Johnson at 11%.  Stein will not appear on the ballot there.

Among blacks in North Carolina, Trump received only 3%, to Clinton’s 88% and Johnson’s 7%.

Among Hispanic voters in Arizona, Clinton got 57%, Trump 20%, Johnson 15%.

In a CBS News Battleground Tracker poll, Clinton leads Trump 46-40 in Ohio, up 2 points from last time this one was conducted.

--Clinton, cont’d....

In Randall W. Forsyth’s weekly Barron’s column (Aug. 20), he has a quote from Greg Valliere, the chief strategist at Horizon Investments, that fits to a tee when it comes to Hillary Clinton.

“Her campaign looks theme-less and stale – and the Clinton Foundation is a growing liability.”

An exclusive report by the Associated Press’ Stephen Braun and Eileen Sullivan found the following:

“More than half the people outside the government who met with Hillary Clinton while she was secretary of state gave money – either personally or through companies or groups – to the Clinton Foundation.  It’s an extraordinary proportion indicating her possible ethics challenges if elected president....

“Clinton met with representatives of at least 16 foreign governments that donated as much as $170 million to the Clinton charity, but they were not included in AP’s calculations because such meetings would presumably have been part of her diplomatic duties....

“State Department officials have said they are not aware of any agency actions influenced by the Clinton Foundation.”

Further details from the AP investigation are contained in the following opinion pieces.

In addition, the FBI has uncovered almost 15,000 previously undisclosed documents sent directly to or from Clinton, part of the FBI’s probe into her use of the personal server.  But it’s not known if and when all 15,000 will be released, i.e., how many before the election.  [A judge ruled Friday that it had to be soon.]

The chorus has been growing for the Clintons to shut down their foundation over perceptions of “Pay-for-play.”  Despite plans early in the week to reorganize it if Hillary wins the White House, USA TODAY editorialized the charity must close for Hillary to avoid any appearance of unethical ties, with the paper suggesting the “important charitable work (be transferred) to another large charity such as the Bill & Melinda Gates Foundation.”

The Washington Post opined the Clinton Foundation’s planned steps should have occurred far sooner.

Editorial / New York Post

“Step back from the endless news of Clinton Foundation/Clinton State Department sleaze and Clinton e-mail abuse, and shake your head at this: Hillary Clinton still believes she did absolutely nothing wrong.

“That jaw-dropper surfaced in Annie Karni’s report for Politico on the campaign’s damage-control efforts on the candidate’s scandals: Hillary’s minions plan to just ‘ride out’ the clock to Election Day – ‘a strategy born...of a belief held deeply by Clinton herself that the e-mail controversy is a fake scandal.’

“A year and a half after news of her use of a home-brewed server – plainly, to shield her work communications from Freedom of Information laws – Clinton still sees the whole thing as ‘nothing more than a partisan attack,’ Karni writes after talking to top campaign aides.

“Right, because FBI Director Jim Comey was a Republican tool when he condemned Clinton’s conduct – which exposed thousands of classified e-mails to hackers – as ‘extremely careless.’

“The Associated Press  must be partisan, too: This week it reported that more than half of the people outside government who met with Secretary of State Clinton had donated in some way to the Clinton Foundation....

“Combined, the contributions total as much as $156 million.

“And this, on top of multiple e-mail dumps showing Clinton’s top aides at State scrambling to arrange meetings and even jobs to please foundation donors....

“Never mind the promises Clinton broke at State – to have the foundation take no foreign cash and insulate State decision-making from foundation influence; to safeguard classified info and ensure State had its own copies of all her work communiques...

“If she makes it to the White House, be warned: Hillary Clinton will never stop breaking her word and the rules whenever she pleases, because in her mind whatever she does is ethical.”

Jennifer Rubin / Washington Post

“More than half the people outside the government who met with Hillary Clinton while she was secretary of state gave money – either personally or through companies or groups – to the Clinton Foundation.  It’s an extraordinary proportion indicating her possible ethics challenges if elected president....At least 40 donated more than $100,000 each, and 20 gave more than #1 million.

“Let’s get one thing out of the way up front: This is almost certainly not illegal.  For that, Clinton should send bushels of roses to former Virginia governor Bob McDonnell, his lawyers and their legal defense fund donors, who won a ruling from the Supreme Court that setting up a meeting is not an official act under federal bribery statutes.

“Would she have had these meetings anyway?  In some cases, yes.  Many of the donors were longtime Clinton friends and donors, international philanthropists and prominent public figures.  She also did not see every big donor.  But the jumble of public and private interests and the appearance of conflicts of interest were why the whole enterprise was dodgy from the start.

“This foundation scandal is in the realm in between ‘perfectly ethical and legal’ behavior and illegal behavior.  Call it sleaze or the appearance of corruption.  Chalk it up to the Clinton’s habitual blindness to impropriety. Never do they say, ‘Well I could do that, but better that I don’t.....

“Like the pallets of cash to Iran, the latest emails just add juicy details to an existing tale. The Clintons have always felt both entitled and persecuted.  In their decades in public life, they have played fast and loose with rules and norms that inhibit others, always winding up just a smidgen short of illegality.  Their sense of self-righteousness leads them to conclude that they are being ‘hounded’ for inconsequential matters.

“The lesson they learn is invariably the wrong one: We can get away with it.  They rationalize that it’s just the vast right-wing conspiracy at work – and the Republicans usually chip in by wildly overplaying their hand (e.g. asking her repetitive questions for 11 hours in a Benghazi hearing, demanding a special prosecutor).

“I doubt this new tidbit about the foundation will change many voters’ minds.  Those siding with her are either true Hillary Clinton believers, Democratic die-hards and/or people convinced that Donald Trump is nuts and a danger to the republic.  In short, she has already nailed down the segment of voters who prefer ‘corrupt’ over ‘unhinged.’  So long as Trump is her opponent, she sails along.”

John Podhoretz / New York Post

“The singular Nebraska politician (and later New School president) Bob Kerrey once observed of a fellow moderate Democrat: ‘Bill Clinton is an unusually good liar.  Unusually good.’

“I don’t think this is something people would say about his wife.

“That Hillary Clinton is a liar is now inarguable.  Indeed, it’s gotten so inarguable that people who dare argue she isn’t a liar are almost certainly lying, too – though, perhaps, only to themselves, to keep their spirits up.

“The problem for Hillary’s apologists is that she’s so incredibly bad at it.

“Bill’s brilliant lies provided cover for his defenders.  Hillary’s lousy lies make her defenders look like fools.  The pair of revelations in the past week demonstrates this.

“First we learned she had told the FBI her plan to set up a private server for her e-mails had been presented to her as a welcome gift by her predecessor Colin Powell at a State Department dinner. At that point, the defenders came out in full force – see, it wasn’t her idea, and it had been done before, and so what!

“Whereupon Powell first said he had no recollection of saying any such thing to her, and then angrily told a reporter he’d mentioned using AOL for his private correspondence a year after she’d set up the private server at home to handle all her communications.

“ ‘They’re trying to pin it on me,’ said Powell, who has no dog in this fight and no reason to lie.  Unlike Hillary....

“(Then there) was the discovery that her two chief aides, Cheryl Mills and Huma Abedin, were serving as transmission points between the State Department and the Clinton Foundation – the issue being what favors might be granted at State to the foundation’s donors and intimates.

“ ‘There is absolutely no connection between anything that I did as secretary of state and the Clinton Foundation,’ Mrs. Clinton said last month.  Bzzzzzzt!  And there goes the lie detector!  Indeed, on Tuesday the AP revealed that more than half of the non-governmental meetings Clinton took while secretary of state were foundation donors.

“The lie detector also buzzed when she said she’d never forwarded any e-mails ‘marked classified,’ which we now know she did.”

Editorial / Wall Street Journal

“When Bill and Hillary Clinton get caught for bad behavior, they follow a familiar pattern. First deny, then call it old news, then roll out the attack machine of media and political allies to trash whoever needs to be collateral damage to save them. The private e-mail-Clinton Foundation saga is now in phase three, and no less than Colin Powell has been drafted as roadkill.

“The Powell-made-Hillary-do-it defense emerged late last week in two parts. The New York Times reported that FBI interview notes turned over to Congress last week show that Mrs. Clinton told the G-men that Mr. Powell had advised her to use a personal email account. The Times didn’t name its source, but in these cases always ask who benefits from the leak?  Answer: Mrs. Clinton.

“The Times also reported in the same story that the advance copy of a new book by Joe Conason backs up the blame-it-on-Powell story. Aficionados of Clinton scandals will remember Mr. Conason as the most dedicated stenographer in the Clinton stable.

“Mr. Conason has written a biography of Bill Clinton, ‘Man of the World.’  And the Times reports that the book relates a conversation early in Mrs. Clinton’s time at State at a dinner party hosted by Madeleine Albright, another former Secretary of State.  Mr. Conason writes that Mr. Powell ‘told [Mrs. Clinton] to use her own email, as he had done, except for classified communications, which he had sent and received via a State Department computer.’

“Mr. Conason writes that this conversation ‘confirmed a decision she had made months earlier – to keep her personal account and use it for most messages.’  The Times notes that Mr. Conason ‘interviewed both Mr. and Mrs. Clinton for the book.’  Voila, the Clintons are back at their old standby, the everybody-does-it defense.

“Mr. Powell’s office released a statement saying he doesn’t recall that dinner conversation. And at a weekend event on Long Island, Mr. Powell told People magazine and the New York Post that Mrs. Clinton ‘was using [the private email server] for a year before I sent her a memo telling her what I did.’  He added: ‘Her people have been trying to pin it on me.’....

“(The) Clintons have never had any scruple about tarnishing someone else’s reputation to protect their path to power.  Maybe they’ll make it up to him with an invitation to a State Dinner for the Crown Prince of Bahrain.”

Kathleen Parker / Washington Post

“When I wrote the headline ‘Hillary’s heel,’ I was thinking of Achilles, not Bill, though the former president is usually within nipping range of his wife’s pantsuit hem.

“Hillary Clinton’s Achilles’ heel is her very Clinton-ness. Rather than tell the truth as soon as possible, a reluctance shared by her husband during his presidency, she has mastered the art of teetering along the knife’s edge of truth.  Like a gymnast on a balance beam, she manages to stay within the narrow parameters of lawfulness without losing her footing.

“But her long history of avoiding provable infractions despite hundreds of hours of investigations and millions in taxpayer expense – from Whitewater to Benghazi to her private email server – may soon come to an end, not with a gold medal but with an Olympian loss of whatever faith remained in her integrity....

“One crucial fact is no longer in dispute: Foundation donors got access to the State Department....

“But Clinton has bigger worries as more emails continue to trickle out, revealing who knows what. What we already know from FBI Director James B. Comey is that his agency’s investigation found insufficient evidence to charge Clinton, though he did say her handling of classified information was ‘extremely careless’ and that she falsely testified to the House Select Committee on Benghazi that there was no classified material in any of her email.

“Other than that, Mrs. Lincoln...

“To Republicans, Clinton is a serial liar.  To Democrats, she is the perennial target of a right-wing conspiracy.  The question for voters may come down to this: how much, if any, substantive harm has Clinton’s lack of absolute clarity on a given subject or event caused?

“The only definitive answer thus far is that she has deeply damaged whatever public trust remained – and for a candidate, this can be fatal.”

--Meanwhile, after saying it was going to stop accepting corporate and foreign donations and reduce family involvement as a way to insulate Hillary Clinton from potential conflicts of interest if elected president, there was talk of Bill Clinton and Chelsea Clinton leaving the board, should Hillary win.  But now it appears Chelsea will stay on, while Bill said he still plans to leave, and Wednesday, foundation officials said the largest project, the Clinton Health Access Initiative, might continue to accept foreign government and corporate funding.

This will hardly be good enough for critics.

--Trump, cont’d....

British politician Nigel Farage, outgoing U.K. Independence Party leader in Britain and a man credited with leading the Brexit movement, spoke in support of Donald Trump in Jackson, Miss., Wednesday.

“You have a fantastic opportunity here,” said Farage.  “You can go out, you can beat the pollsters, you can beat the commentators, you can beat Washington, and you’ll do it by doing what we did for Brexit in Britain.”  Farage added, “Anything is possible if enough decent people are prepared to stand up to the establishment.”

Trump, in his stump speech, then said of his opponent: “Hillary Clinton is a bigot who sees people of color only as votes, not as human beings worthy of a better future.”

Trump also pounded away on his new theme of attempting to appeal to African-American voters, saying, “I fully recognize that outreach to the African-American community is an area where the Republican Party must do better, and will do better....I want our party to be a home of the African-American voter once again.”

Trump also accused Hillary Clinton of taking black voters for granted.

Well it’s a little late for all this, and it’s not like Trump has been walking through urban areas, pressing the flesh the past year of his campaign.  [It’s not like Obama ever did this either, for eight years, which continually amazes me.]

But then Trump keeps sending mixed signals on his immigration policy, speaking early in the week of easing his plan to deport all illegal immigrants, and then flip-flopping by week’s end; all of which is causing his closest supporters agita.

And just where Trump is going to get 270 Electoral College votes is looking increasingly dicey, as he trails in four key battleground states he needs to sweep – Ohio, Florida, Pennsylvania and North Carolina.

--Marc A. Thiessen / Washington Post

“President Obama has accomplished something previously unimaginable: He helped Donald Trump look more presidential than the president of the United States.

“On Friday (Aug. 19), while residents of Baton Rouge were recovering from a historic flood that damaged some 40,000 homes, Obama was on Martha’s Vineyard watching fireworks, following 10 rounds of golf in 16 days.  Donald Trump, by contrast, was on the ground in the flood zone...focusing much-needed attention on a disaster that has been largely ignored by the media.

“Why wasn’t Obama there?  According to the White House statement, ‘The President is mindful of the impact that his travel has on first responders and wants to ensure that his presence does not interfere with ongoing recovery efforts.’

“Funny, that’s precisely why President George W. Bush didn’t come to New Orleans immediately after Hurricane Katrina.  And Democrats – including Barack Obama – hammered Bush for it.  Unlike Obama, Bush actually canceled his vacation and got on a plane to return to Washington.  But he decided not to land in Louisiana so as not to draw resources away from the ongoing rescue efforts and flew Air Force One low over the flood zone so that he could see the devastation firsthand.

“Democrats howled. Then-House Speaker Nancy Pelosi said Bush was ‘oblivious, in denial, dangerous.’  Obama later called Bush ‘a president who only saw the people [of Louisiana] from the window of an airplane, instead of down here on the ground trying to provide comfort.’

“Well, I have news for Obama.  You can’t see the people of Louisiana at all from a golf course on Martha’s Vineyard....

“It was only after Trump was on the ground in Louisiana that Obama finally announced he would visit himself.

“How pathetic.

“One of the most important jobs a president has is to be ‘consoler in chief’ in times of tragedy.  Many Americans, who previously could not imagine Trump as president, finally saw him in that role Friday.  They watched him touring the devastation, hugging victims and promising to rally the country to help them rebuild.  That’s what the president should have been doing, but instead Americans saw Trump doing it.

“Through his cool indifference, Obama gave Trump an opening – and Trump seized it.”

--The New York Times has identified ten Senate seats that are “competitive” and will be the difference between Republicans retaining their majority or Democrats regaining it.

Illinois (80% chance Democrats win), New Hampshire (64% Dem. chance), Indiana (62% Dem. chance), Pennsylvania (52% Dem. chance), Nevada (62% Rep. chance), North Carolina (71% Rep. chance), Arizona (72% Rep. chance), Missouri (82% Rep. chance), Ohio (84% Rep. chance), Florida (84% Rep. chance).

Some of us are going to be on pins and needles over the Senate come Election night for sure.

--The New York Times had a story on Mayor Bill de Blasio’s family vacation to New England this week, which no one begrudges him for.  Yes, he had a security detail, as he should, and he hasn’t been known for taking an inordinate amount of time off, plus it’s August.

But what I found interesting was this passage: “Few in the city’s political class felt the need to criticize the travels of a mayor who two years ago demonstrated his willingness to work hard but also take time off, and who has not been beholden to the workaholism of his predecessors, Michael R. Bloomberg and Rudolph W. Giuliani.  Neither appeared to take a full week off during his term in office – two decades of vacationless summers for the city’s chief executive – though Mr. Bloomberg, a billionaire, had other methods of relieving stress, frequently jetting to his Bermuda home on weekends.”

Your editor, who has missed one column in 17 ½ years (one announced week off), appreciates this.   

--Talk about a jerk.  Brooklyn District Attorney Ken Thompson is paying a $15,000 fine for using office funds for his meals, as a city watchdog group revealed on Wednesday.

I first saw this story on the local news and, unbelievably, he not only used the funds for his own meals, he forced his security detail to use their own money for his food purchases.

Thompson, who became DA on Jan. 1, 2014, used office funds to pay for weekday meals from January 2014 through May 2014, for a total of $2,043. The district attorney repaid the funds in July 2014.

But he also used funds during a different period to pay for dinners and weekend meals. He later repaid those too.

While Thompson ate modestly, it is amazing the top prosecutor in his borough thought this was acceptable, and forced his security detail to pay for his meals, though they were reimbursed.

--According to a report in the New York Post, via RadarOnline, President Obama is “furious” with daughter Malia for puffing on what appeared to be a marijuana cigarette at a concert.  [Then she was whisked away from a party on Martha’s Vineyard that was busted up by local police.]

Yes, the First Family has cultivated a best-family-on-the-planet image, but, like father, like daughter.

Malia, recall, is taking a “gap” year before she matriculates at Harvard.  Perhaps it will be a “joint” year.  [She’s 18...no longer “hands off” for some of us.]

--Joel Stein had an extensive piece in the August 29 issue of TIME on the web and trolls.  Personally, I hate social media.  But I have to use it to promote myself.  Ever so slowly, I do gain new readers as a result, and because I don’t make it that easy to do so, I have limited the negative talkback to moi.  Anyway, Joel Stein:

“This story is not a good idea.  Not for society and certainly not for me. Because what trolls feed on is attention. And this little bit – these several thousand words – is like leaving bears a pan of baklava.

“It would be smarter to be cautious, because the Internet’s personality has changed.  Once it was a geek with lofty ideals about the free flow of information.  Now the web is a sociopath with Asperger’s.  If you need help improving your upload speeds it’s eager to help with technical details, but if you tell it you’re struggling with depression it will try to goad you into killing yourself.  Psychologists call this the online disinhibition effect, in which factors like anonymity, invisibility, a lack of authority and not communicating in real time strip away the mores society spent millennia building. And it’s seeping from our smartphones into every aspect of our lives.”

--Traffic fatalities rose 9%  in the first six months of 2016, compared with a year earlier, according to the National Safety Council.  With a relatively solid economy and lower gas prices, we’re driving a lot more, thus more people on the road.

While you have the usual suspects of speeding and drug- or alcohol-related driving, as Troy Coastales, safety division administrator at the Oregon Department of Transportation, told the Wall Street Journal, “Distraction is one that we’re talking a lot about, you just get a sense that distraction is playing a part and is a compounding factor,” he said.

Nationwide, about 19,100 people died between January and June this year.

--A Pew Research Center poll released Wednesday found that 49 percent who have left their church no longer believe in God, with nearly one quarter of the nation now having no affiliation with any religion, according to the survey.

--Billionaire entrepreneur Richard Branson is one lucky guy.  He said on Friday he thought he was going to die after flying head first off his bicycle in the British Virgin Islands the other day.

Branson hit a bump in the road on Virgin Gorda, catapulting him into the road.  He could have been paralyzed, or dead, but the 66-year-old posted pictures of his bloody face and his injuries included a cracked cheek, torn ligaments and severe cuts.

Sir Richard noted his helmet saved his life.  He traveled to Miami for medical treatment.  He’s been training for a big charity event involving hiking, cycling, swimming and a run from the base of the Matterhorn in the Alps to the summit of Mount Etna in Sicily in September and he has vowed to take part in it.

“My attitude has always been, if you fall flat on your face, at least you’re moving forward,” he said.  [Bloomberg]

--Kenneth Changaug / New York Times

“Another Earth could be circling the star right next door to us.

“Astronomers announced on Wednesday, that they had detected a planet orbiting Proxima Centauri, the closest neighbor to our solar system.  Intriguingly, the planet is in the star’s ‘Goldilocks zone,’ where it may not be too hot nor too cold. That means liquid water could exist at the surface, raising the possibility for life.

“Although observations in recent years, particularly by NASA’s Kepler planet-finding mission, have uncovered a bounty of Earth-size worlds throughout the galaxy, this one holds particular promise because it might someday, decades from now, be possible to reach.  It’s 4.2 light-years, or 25 trillion miles, away from Earth, which is extremely close in cosmic terms.”

The planet has been designated Proxima b.  A year on it, as it orbits around the star, is only 11.2 days, though, so this wreaks havoc on all the professional sports schedules, let alone stats.  I’m assuming their baseball season, for example, is seven days, one day off, and then a best of three World Series.  For the Super Bowl, I’m guessing the biggest problem is lining up 35 unique halftime acts in what would be our 365 day year.  And then you’d have Olympics every 44-45 days.  I mean I’m losing interest already.

Then again, we’d only have to put up with a President Trump or Clinton for 44 days!  We could make it that long, I think.

---

Pray for the men and women of our armed forces...we lost a soldier in Afghanistan this week.

God bless America.

---

Gold $1324
Oil $47.29

Returns for the week 8/22-8/26

Dow Jones  -0.8%  [18395]
S&P 500  -0.7%  [2169]
S&P MidCap  -0.2%
Russell 2000  +0.1%
Nasdaq  -0.4%  [5218]

Returns for the period 1/1/16-8/26/16

Dow Jones  +5.6%
S&P 500  +6.1%
S&P MidCap  +11.5%
Russell 2000  +9.0%
Nasdaq  +4.2%

Bulls  56.7
Bears  20.2  [Source: Investors Intelligence]

Have a great week.

Special Happy Birthday to an old friend from my Thomson McKinnon days, Mark R. He turns Sam Huff and Artie Donovan today.  Sports fans will catch my drift.

Brian Trumbore