Week in Review

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Week in Review

02/04/2017

For the week 1/30-2/3

[Posted 11:30 PM, Friday]

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Edition 930

Washington, Trump and Week Two

Briefly, before I enter the meat of this latest opus, I reread what I wrote last Friday night on President Donald Trump’s executive order on immigration and I was kind of amazed how much I got in, without having time to digest it all.  I wouldn’t change a thing in what I wrote then, including my statement in favor of a “temporary suspension in the (vetting) process.”

But then like everyone else, I awoke Saturday to find that the implementation of the order was a fiasco with far-reaching unintended consequences, a historic screw-up because it became immediately clear key officials in the government, let alone the line staff, had no idea what was coming.  Oh sure, some administration officials and members of Congress may have been involved in drafting language, but they too had no idea on the timing and our allies were embarrassingly caught off-guard as well.

Saturday and Sunday, in an effort to douse the flames, administration officials included the following in their talking points.

Chief of Staff Reince Priebus on CBS’ “Face the Nation”: “Some people have suggested that, well, maybe we should have given everyone a three-day warning.  But that would just mean that a terrorist would just move up their travel plans by three days.”

When you first heard this, Saturday, for a split second, I, like I’m sure many of you, thought, ‘Well that makes sense.’  But then hopefully you immediately said, ‘No!  That’s not how it works!’  You still have to apply for a visa.  Even in our current sometimes shoddy system these aren’t handed out like candy, especially those applying from the Middle East, and it was another example of a straw man.

I mean we just got finished with eight years of Obama straw men.  ‘Some of you are hopelessly naïve,’ he’d say.  ‘The solution isn’t to put hundreds of thousands of ground troops in Syria.’

But no one in their right mind was calling for hundreds of thousands of troops! Mr. President.  That doesn’t mean you can’t still do X,Y and Z!

So here we have a new administration, trying to bamboozle us with the same logic when they, to put it mildly, f’ed up!

And as I get into below, lumping Iran and Iraq in the same travel ban was a mistake of disastrous proportions.

Look, I agree with House Speaker Paul Ryan, who said over the weekend, “We are a compassionate nation, and I support the refugee resettlement program, but it’s time to reevaluate and strengthen the visa-vetting process.”

Yes, from what we’ve heard, including extensive congressional testimony from our leading law enforcement and homeland security folks, we needed to strengthen the process.  A big hole in the system was the failure to examine the web browsing history and social media profiles of visa applicants from countries where there was little confidence in local law enforcement agencies, as Homeland Security chief John Kelly put it last weekend.

But as Ryan said separately, “No one wanted to see people with Green Cards or special immigrant visas, like translators, get caught up in all of this.”

Trump himself defended the way his executive order was implemented.

“If the ban were announced with a one week notice, the ‘bad’ would rush into our country during that week.  A lot of bad ‘dudes’ out there!” he tweeted on Monday.

No!

Last Monday night, I had an annual dinner with two dear friends of mine, a couple from Montclair, the husband and I knowing each other since our Thomson McKinnon and PIMCO days together.  Both of them voted for and support Trump, and they were kind of shocked when I told them I didn’t vote for the man. 

They talked of how they’ve lost friends over the election, the same story you’ve all heard across the country, and I sure as heck know I’ve lost readers (though thankfully I am always picking up new ones).

But I’m not about to change after all these years.  I study the issues as carefully as possible, consuming both sides, and give you an opinion.

My opinion today?  I’m more fearful about the direction of the country than ever, if that seems possible.  And when it comes to the geopolitical climate, let’s just say I’ll be sleeping with one eye open.

Hopefully the Super Bowl gives us all a little break.  But as I write this last bit before posting, there is our president, down in Mar-a-Lago with Melania, a woman he hasn’t been with in weeks, and he’s tweeting!  I know he says by his own admission he is “easily bored,” but, Mr. President...are you nuts?!!!

On to our running history....

The Immigration Ban

Following the executive order late Friday afternoon, protesters hit the airports nationwide, while the order triggered lawsuits that sought to block parts of Trump’s travel ban.

At the same time, you saw immediate detention of many arrivals at America’s major international airports, and some deportations back to countries of origin.

The order includes a 90-day ban on travel to the United States by citizens of seven countries – Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen – as well as a 120-day suspension of the U.S. refugee program for all nations.  Refugee entry from Syria, however, is suspended indefinitely.

Additionally, the total number of refugees allowed to enter the U.S. this fiscal year (Sept. 30) is now 50,000, down from 110,000, though the average the past few years has been closer to 80,000.

Trump also said he would give priority to Christian refugees over those of other religions, according to the Christian Broadcasting Network.

Trump faced fierce criticism for issuing the order with little consultation among government officials who have to carry it out.

Saturday....

The president placed a number of phone calls with world leaders, including a one-hour chat with Russian President Vladimir Putin, the two vowing to join forces to fight terrorism in Syria and elsewhere.  They also discussed Ukraine, and a few days later that conflict erupted in renewed violence, as covered below.  Sanctions against Russia supposedly weren’t brought up on the call.

In addition to a call with Putin, Trump held calls with the leaders of Australia, France, Germany and Japan, but the directive on immigration from the night before became a topic with the likes of France, Germany and, as we learned later in the week, Australia.

At least in his chat with German Chancellor Angela Merkel, Trump agreed with her on NATO’s “fundamental importance to the broader transatlantic relationship and its role in ensuring the peace and stability of our North Atlantic community,” read a White House statement.

Trump accepted Merkel’ invite to visit Germany in July for the G-20 summit.

Japanese Prime Minister Shinzo Abe agreed to meet with Trump in Washington on a trip slated for Feb. 10.  A pressing issue here, aside from trade, is North Korea.

Trump also signed a presidential memorandum directing the Pentagon to submit a plan within 30 days to defeat ISIS, while in a separate directive, Trump reorganized the National Security Council to give White House chief strategist Stephen Bannon a regular seat on the principals committee – meetings of the most senior national security officials, including the secretaries of defense and state.

Controversially, as if the move to elevate Bannon wasn’t enough, the memo states the director of national intelligence and the chairman of the Joints Chiefs of Staff will sit in on the principals confabs only when the issues to be discussed pertained to their fields of expertise.  Previously, under both Bush 43 and Obama, these two sat in as regular attendees.

Trump said the changes would bring “a lot of efficiency and, I think, a lot of additional safety,” which is laughable.

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Late Saturday, a federal judge in Brooklyn, N.Y., issued a temporary injunction that blocked the deportation of those detained as a result of Friday’s order, though the judge stopped short of allowing them into the country.  Other judicial decisions followed, calling into question various aspects of the order, which will mean long reviews.

Former New York mayor Rudy Giuliani, appearing on Fox News late Saturday night, said President Trump had approached him to assemble a commission to show him the “right way to do” a “Muslim ban.”

Giuliani was asked whether the ban had anything to do with religion.

“So when [Trump] first announced it, he said, ‘Muslim ban.’  He called me up.  He said, ‘Put a commission together. Show me the right way to do it legally.’”

Giuliani told Fox News that he assembled a group including former U.S. attorney general Michael Mukasey, Rep. Mike McCaul (R-Tex.) and Rep. Peter King (R-N.Y.).

“And what we did was, we focused on, instead of religion, danger – the areas of the world that create danger for us,” Giuliani told Fox’s Jeanine Pirro.  “Which is a factual basis, not a religious basis.  Perfectly legal, perfectly sensible. And that’s what the ban is based on.  It’s not based on religion.”

Sunday....

Protests at airports in New York, Dallas, Atlanta, San Francisco, Seattle, Chicago, Los Angeles and near Washington, D.C. continued. Some travelers remained in detention, with a few refusing to board flights back to their home countries.

“Our country needs strong borders and extreme vetting, NOW,” Trump tweeted.  “Look what is happening all over Europe and, indeed, the world – a horrible mess.”

Later, Trump issued a written statement disputing the idea that he has issued a Muslim ban: “This is not about religion – this is about terror and keeping our country safe.”

White House Chief of Staff Reince Priebus, speaking on NBC’s “Meet the Press,” said the order “doesn’t affect green card holders moving forward.”  Priebus added border agents do have the authority to “ask a few more questions” of people returning from suspicious countries, even if they have a green card giving them resident status in the United States.

If people “shouldn’t be in this country they’re going to be detained,” Priebus said.  “And, so, (we) apologize for nothing here.”

Presidential counselor Kellyanne Conway said on “Fox News Sunday” that anyone being held up would be given screenings and released if they are not considered terrorist threats.

Conway said it was all about “preventing, not detaining,” while calling the detentions “a small price to pay” for security.

“325,000 people from overseas came into this country just yesterday through our airports. ...You’re talking about 300 and some who have been detained or are prevented from gaining access to an aircraft in their home countries,” Conway added, parroting the administration line of the day.

Another point the administration wanted to make: “As to these seven countries, what about the 46 majority Muslim countries that are not included. Right there, it totally undercuts this nonsense that this is a Muslim ban,” Conway said.

Sen. Dick Durbin (D-Ill.), also appearing on “Fox News Sunday,” said Middle East refugees, particularly from Syria, are already the most “carefully vetted” visitors to the U.S.  “It was an impulsive move by the president,” Durbin said.

Former Secretary of State Hilary Clinton tweeted: “Stand with the people gathered across the country tonight defending our values & our Constitution. This is not who we are.”

GOP senators John McCain and Lindsey Graham issued a joint statement that Trump’s order was “not properly vetted,” and could become a “self-inflicted wound” by limiting cooperation from Muslim allies and inflaming Muslim extremists.

“We fear this executive order may do more to help terrorist recruitment than improve our security,” McCain and Graham said.  “We should not stop green-card holders from returning to the country they call home. We should not stop those who have served as interpreters for our military and diplomats from seeking refuge in the country they risked their lives to help,” the senators continued.

“And we should not turn our backs on those refugees who have been shown through extensive vetting to pose no demonstrable threat to our nation, and who have suffered unspeakable horrors, most of them women and children,” they added.

On CBS’ “Face the Nation,” McCain asked: “What about the Iraqi pilots training in Tucson, Arizona, learning to fly the F-16?”

And, “Finally, lumping Iraq with Iran, right now, we have several thousand Americans who are fighting in Iraq against ISIS alongside Iraqi men and women. The battle of Mosul has taken an enormous toll on the Iraqi military.

“Is Iraq the same as Iran is? Of course not. So, it’s been a very confusing process,” said McCain.  “I’m very concerned about our effect on the Iraqis... The dominant influence in Iraq today is not the United States of America.  It’s Iran. So, what will the Iraqi parliament do?”

Trump later tweeted McCain and Graham are “wrong” about the policy and “weak” on immigration.  They “should focus their energies on ISIS, illegal immigration and border security instead of always looking to start World War III.”

Senate Republican leader Mitch McConnell (R-Ky.) told ABC’s “This Week” that while he favors increased vetting, there shouldn’t be “religious tests” in the United States.

“The courts are going to determine whether this is too broad,” McConnell said.

Later in the day, Homeland Security Secretary John Kelly issued a statement declaring that the entry of green-card holders is in the national interest. He said such individuals would be allowed into the country barring any significant evidence that they pose “a serious threat to public safety and welfare.”

Sunday, Trump spoke to the leaders of Saudi Arabia and the United Arab Emirates, two Muslim countries not on the banned list.

But across the Middle East, the order sent the sign that the new administration is anti-Islam.

A lawmaker and former Iraqi national security adviser in Iraq told the New York Times’ Declan Walsh, “I think this is going to alienate the whole Muslim world.”

Ilter Turan, a professor of international relations at Bilgi University in Istanbul, said, “Terrorists can say, ‘See, their aim is not terror but Muslims.”

Ryan Crocker, former U.S. ambassador to five Muslim countries, including Afghanistan, Iraq and Lebanon, said, “The Islamic State says it is leading the war against the U.S.  Now it only has to pump out our press releases to prove that.”

Crocker said the order also broke promises to people who have risked their lives to help American soldiers or diplomats.

President Trump told Christian Broadcasting News on Friday, until recently, “If you were a Muslim you could come in, but if you were a Christian, it was almost impossible.”

But according to the Pew Research Center, almost as many Christian refugees (37,521) were admitted as Muslim refugees (38,901) in the 2016 fiscal year.

The leaders of the conservative network aligned with the billionaire Koch brothers, Charles and David, said they opposed President Trump’s order.

“We believe it is possible to keep Americans safe without excluding people who wish to come here to contribute and pursue a better life for their families.

“The travel ban is the wrong approach and will likely be counterproductive,” a statement read.

U.S. tech leaders weighed in.

Elon Musk, CEO of Tesla and SpaceX who is sitting on President Trump’s strategic advisory group, said the order would negatively affect “strong supporters” of the U.S.

Jeff Immelt, chairman and CEO of GE, wrote in an internal email that the company has “many employees from the named countries” who are “critical to our success and they are our friends and partners.”

Goldman Sachs CEO Lloyd Blankfein blasted the order in a Sunday voicemail to the firm’s 34,400 employees.

“This is not a policy we support,” he said.

Starbucks CEO Howard Schultz wrote he had a “heavy heart” over Trump’s immigration order, saying the company plans to hire 10,000 refugees over five years around the world.

Google CEO Sundar Pichai, an immigrant from India, called the policy “painful” and Microsoft Corp.’s Satya Nadella took to the company’s LinkedIn to highlight “the positive impact that immigration has on our company, for the country, for the world.”

Canadian Prime Minister Justin Trudeau said his country would welcome those fleeing persecution, “regardless of your faith.”

German Chancellor Angela Merkel, who spoke to Trump on Saturday, said the fight against terrorism “doesn’t justify placing people of a particular origin or faith under general suspicion.”

Monday....

All manner of folks emerged to say they had not been consulted before the president’s unilateral action Friday barring travelers from seven predominantly Muslim countries, including the offices of Speaker Paul Ryan.

House Homeland Security Chairman Mike McCaul and Judiciary Chairman Bob Goodlatte were left in the dark as well, though McCaul was involved in the drafting of the memo.

Senate Foreign Relations Committee Chairman Bob Corker also was not given a heads-up.

California Republican Rep. Darrell Issa said he was “extremely disappointed” in how the executive order was carried out.

“I would hope in the future that there is a lot more care that those fine points are thought out and announced in advance.”

Fellow California Republican Rep. Duncan Hunter, a former Marine Corps artillery office who deployed to Iraq and Afghanistan, said he supports a request to Trump from Secretary of Defense James Mattis to exempt Iraqis who assist the American military from the travel ban.

Trump spokesman Sean Spicer said Monday that people who have helped U.S. forces should be helped out, but they should also be vetted and it “doesn’t mean that we just give them a pass.”

As for the ‘temporary’ nature of bans and suspensions, Republican Rep. Ileana Ros Lehtinen (Fla.) criticized the orders, warning that they might not be as short-term as Trump has said.

“I worry this temporary ban may become a permanent ban,” she told CNN.  “People will say, ‘Gee, we’ve had these 90 days, these 10 days, and we’ve been kept safe, so let’s keep it up.’  When in fact that ban and prohibition would have nothing to do with keeping us safe.”

Monday night, Trump fired acting Attorney General Sally Yates, hours after she told Justice Department staff not to defend the executive order in court because she didn’t think it was legal.  The White House said, Yates, an Obama administration holdover, was removed for “refusing to enforce a legal order designed to protect the citizens of the United States.”

Trump then named another Obama appointee to the post, Dana Boente, the U.S. attorney for the Eastern District of Virginia, who instructed the department’s lawyers to defend the immigration ban against legal challenges.  Boente is only staying until Sen. Jeff Sessions wins confirmation as Attorney General.

This move on the part of the administration was totally appropriate.

Also Monday, Senate Minority Leader Charles Schumer (N.Y.) was unsuccessful in seeking a delay on the nomination of former ExxonMobil CEO Rex Tillerson for secretary of state, with the Senate voting 56-43 to open debate.  [Tillerson was then confirmed on Wednesday.]

CEOs continued to weigh in on the immigration ban.  Amazon’s Jeff Bezos said:

“We’re a nation of immigrants whose diverse backgrounds, ideas, and points of view have helped us build and invent as a nation for over 240 years.  It’s a distinctive competitive advantage for our country – one we should not weaken.”

Apple CEO Tim Cook noted Apple was created by Steve Jobs, the son of a Syrian immigrant.

“I’ve heard from many of you who are deeply concerned about the executive order restricting immigration from seven Muslim majority countries.  I share your concerns.  It is not a policy we support.”

Ford Motor CEO Mark Fields and chairman Bill Ford, in a joint statement:

“Respect for all people is a core value of Ford Motor Company, and we are proud of the rich diversity of our company here at home and around the world.

“That is why we do not support this policy or any other that goes against our values as a company.”

Trump on Monday blamed a computer outage at Delta Air Lines for disruptions at the airports over the weekend.  Both he and Secretary Kelly said the implementation of the new restrictions were going well.  “MAKE AMERICA SAFE AGAIN!” Trump tweeted.

In Iraq, the parliament’s foreign committee said in a statement: “Iraq is on the front line of the war on terrorism. It is unfair that the Iraqis are treated in this way.”

Powerful Iraqi Shiite cleric, Moqtada Sadr, who I wrote years ago the U.S. should have taken out when it was easily doable (and appropriate), blasted the Trump order on his website.  “It would be arrogance for you to enter freely Iraq and other countries while barring to them the entrance to your country...and therefore you should get your nationals out.” 

Meshan Jboori, a lawmaker from a Sunni faction, said: “Why is it on us Iraqis?  No Iraqi has ever conducted any terrorist attack in the U.S.

“As for those Americans who are here, I think they should leave....yes, even the fighters.  I’m sure Russia will be willing to take their place and give us the support we need to defeat terrorism.”  [Bloomberg]

Man, that’s a dangerous sentiment.

Tuesday....

There was growing concern the whole immigration order fiasco had helped upset the broader Trump agenda.

Holman W. Jenkins, Jr. / Wall Street Journal

“At some point, the incoming Trump administration will achieve a greater smoothness in its consideration and implementation of policy – unlike the chaotic rollout of its travel ban.

“The opportunity before Mr. Trump and the Republican Congress, for a major overhaul and rejuvenation of American institutions in the direction of a faster, more dynamic economy, remains in hand.

“But the actual signs have always been more ambiguous and less encouraging than many would like to believe....

“In the short weeks since Mr. Trump was elected, the vision of clean, straight tax reform has gone out the window. Instead of merely lowering or, ideally, ending the corporate rate, we may get a 20% border-adjustment tax to go along with a 20% corporate income tax.  That is, two taxes instead of one, which Congress can immediately start peppering with exemptions, exclusions and deductions.

“His promise of deregulation for the auto industry in return for job promises has been notably scant on details of the deregulation.  A rationally ‘disruptive’ president would seek a legislative end to the 40-year experiment in regulating fuel consumption, phenomenally bureaucratic and ineffectual.  Here’s betting, when all is said and done, Team Trump will be satisfied with rejiggering the rules to increase the favoritism toward Detroit’s pickups and justify the large investments of Tesla, GM and others in electric vehicles.

“Health-care reform already may have been fatally undermined by the repeal circus – repeal being an unnecessary diversion and political show.  It would be quite a bit easier and more efficient for Republicans simply to graft their priorities onto ObamaCare – first, by deregulating the ‘essential benefits’ list so insurers could design economical policies the public would actually find worth buying.

“But those who noticed the absence of the words ‘liberty’ and ‘freedom’ in his inaugural address identified the real problem.  Missing is any vision of how America came to be great in the first place.

“Mr. Trump has ideas but they are ankle-deep. His transactional presidency may disrupt for the purpose of disrupting, but not clear yet is whether it’s really leading anywhere.  Ronald Reagan created a lasting legacy.  In his parting address to his staff, he linked his vision of lower marginal tax rates and reduced regulation to the eternal fight against those seeking to drag us a ‘mile or two down what Friedrich Hayek called the road to serfdom.’....

“Mr. Trump’s election is at least the biggest sign yet that Western electorates have figured out something has gone wrong with the Western economic model, even if they are divided over exactly what the trouble is.”

But Tuesday night, Trump unveiled his pick for the Supreme Court to fill the seat of the late Antonin Scalia, Judge Neil Gorsuch, who prevailed over the other finalist, Thomas Hardiman of Pennsylvania, both currently federal appeals court judges.

Gorsuch sailed through the Senate 98-0 back in 2006 when he was confirmed to the Denver-based 10th U.S. Circuit Court of Appeals, but it’s a different position and harshly different environment today.  Senate Minority Leader Chuck Schumer said Gorsuch will have to win over some Democratic senators to get the 60 votes needed.

Senate Majority Leader Mitch McConnell said of the Gorsuch selection: “The president made an outstanding choice.”

Republicans control 52 Senate seats to the Democrats’ 48, meaning eight Democrats would have to agree to advance the nomination under current rules.

As you’ve heard nonstop, and will continue to over the coming two years, 10 Democratic Senate seats are up for re-election in 2018 in states that Trump carried by sizable margins, such as West Virginia, where Democratic Senator Joe Manchin holds sway, with Manchin known to be a moderate. 

Editorial / Wall Street Journal

“No one can replace Antonin Scalia on the Supreme Court, but President Trump has made an excellent attempt by nominating appellate Judge Neil Gorsuch as the ninth Justice. The polarized politics of the Court guarantees a confirmation fight, but based on his record the 49-year-old judge is a distinguished choice who will adhere to the original meaning of the Constitution.

“Judge Gorsuch...is well known in legal circles for his sharp prose, as well as for his arguments for religious liberty and his skepticism toward judicial doctrines that give too much power to the administrative state.  He is also noted for a Scalia-like approach to criminal law that takes a dim view of vague statutes that can entrap the innocent.

“This paper trail is important, especially given Mr. Trump’s relatively recent embrace of conservative judicial principles.  Every recent Republican President has disappointed supporters with at least one of his Supreme Court picks.  Sandra Day O’Connor and Anthony Kennedy drifted left over the years as they were feted by Washington elites, while David Souter was a disaster from the start.

“Judge Gorsuch’s judicial record makes such a transformation on the High Court unlikely. When the Tenth Circuit heard Hobby Lobby v. Sebelius, a case that eventually went to the Supreme Court, Judge Gorsuch wrote a powerful concurrence supporting religious freedom and the right of a company to opt out of ObamaCare’s contraception mandate based on conscience. While the religious convictions at issue may be contestable or unpopular, Judge Gorsuch wrote, ‘no one disputes that they are sincerely held religious beliefs.’

“Once such sincere beliefs are demonstrated, he added, we know the Religious Freedom Restoration Act applies.  ‘The Act doesn’t just apply to protect popular religious beliefs: it does perhaps its most important work in protecting unpopular religious beliefs, vindicating this nation’s long-held aspiration to serve as a refuge of religious tolerance.’

“This defense of a core First Amendment right is especially important today when so many progressives want to subjugate religious practice to the will of the state....

“As qualified as he is...Democrats won’t forgive Republicans for declining to vote on Mr. Obama’s nomination of Merrick Garland last year, though Democrats would have done the same to a GOP nominee in the last year of a presidential term.

“Republicans have a 52-seat Senate majority, and without some revelation the presumption will be to confirm Judge Gorsuch.  Democrats could attempt a filibuster, but then the GOP will have to be prepared to break it.  Mr. Trump won in major part because he promised to appoint judges in Justice Scalia’s mold, and in Neil Gorsuch it appears he has.”

Wednesday....

Trump said that when it came to Judge Gorsuch and his confirmation hearings, if Senate Republicans needed to “go nuclear” to get him through, then they should, as it seemed clear the two parties were headed towards a major showdown over the nomination.

“It’s up to Mitch, but I would say, ‘Go for it,’” Trump said, referring to Senate leader Mitch McConnell to eliminate the 60-vote hurdle.

McConnell does not want to go this route, but will no doubt if he has to.  The aforementioned Joe Manchin is potentially one of the eight he needs, however, with Manchin saying Judge Gorsuch had “impeccable” credentials and should have a chance to make his case.

But other Democrats aren’t as reasonable.

Senate Republicans pushed through two Cabinet nominees, Steven Mnuchin at Treasury and Rep. Tom Price as secretary of Health and Human Services, by unanimous consent, with Republicans changing the committee’s standing rules, which normally require at least one member of each party to be in attendance for committee work to proceed.

Democrats continue to boycott confirmation hearings, with committee Chairman Orrin Hatch (R-Utah) saying Democrats “have been treated fairly. We have not been treated fairly.”

Thursday and Friday had largely better optics, save for the National Prayer Breakfast, Thursday, touched on below.  Wall Street was heartened by the meetings with CEOs, but you had the story of the poor phone call between Trump and Australia’s prime minister, as well as the saber-rattling with Iran, both issues covered in detail later.

Friday, following a meeting with some Wall Street leaders, President Trump signed executive orders/memorandums on exploring changes to Dodd-Frank, with particular attention paid to the Volcker Rule limits on banks making speculative bets with their own funds. The Treasury Department is to conduct the review, with the administration looking for moves that would have an immediate impact.

Trump’s directive also stalls the so-called fiduciary rule, which was set to take hold in April, that the Obama administration had said would prevent retirees from being steered into high-cost or high-risk investments that generate bigger commissions for brokers.  But the requirement that advisers on such accounts work in the best interests of their clients had the Street and financial planning industry in a tizzy because most advisers would be too gun-shy to do what was really right for their clientele for fear of being sued if something went wrong.

At 2:00 Friday, Trump left Washington for a little break down in Mar-a-Lago and some of us breathed a sigh of relief.  Then again he has Twitter.

But despite the seeming speed in which the new administration is moving, Trump’s agenda is really getting off to a slow start in terms of repealing ObamaCare, tax reform, an infrastructure bill or legislation to build a wall on the southern border.

And while many of the executive orders, like the travel ban, have an immediate impact, others, such as on financial deregulation, will require action by Congress.

None of this is going to happen overnight, and as we know Trump has the patience of a gnat, this is problematic.

Then there is the Supreme Court nomination.

Opinion...

Editorial / Wall Street Journal

“President Trump seems determined to conduct a shock and awe campaign to fulfill his campaign promises as quickly as possible, while dealing with the consequences later.  This may work for a pipeline approval, but the bonfire over his executive order on refugees shows that government by deliberate disruption can blow up in damaging ways.

“Mr. Trump campaigned on a promise of ‘extreme vetting’ for refugees from countries with a history of terrorism, and his focus on protecting Americans has popular support.  But his refugee ban is so blunderbuss and broad, and so poorly explained and prepared for, that it has produced confusion and fear at airports, an immediate legal defeat, and political fury at home and abroad.  Governing is more complicated than a campaign rally.

“Start with the rollout late Friday with barely an explanation for the public, or apparently even for border agents or customs officials. The order immediately suspended entry for nationals from seven countries for 90 days, except for exceptions authorized by the secretaries of State or Homeland Security.  It also banned refugee entries from Syria indefinitely.

“The airwaves were suddenly full of stories of scientists, business travelers and even approved visa holders detained at the airport and denied entry to the U.S.  Tech companies immediately recalled employees for fear that they may not be able to return.

“Even some green-card holders – who have permanent legal residency in the U.S. – were swept up in the border confusion. The White House scrambled Sunday to say green-card holders are exempt from the order, but that should have been made clear from the start....

“The larger problem with the order is its breadth.  Contrary to much bad media coverage, the order is not a ‘Muslim ban.’  But by suspending all entries from seven Muslim-majority nations, it lets the jihadists portray the order as applying to all Muslims even though it does not.  The smarter play would have been simply to order more diligent screening without a blanket ban.

“The order does say the government should ‘prioritize refugee claims made by individuals on the basis of religious-based persecution, provided that the religion of the individual is a minority religion’ in that country.

“That could apply to Christians, whom the Obama Administration neglected in its refugee admissions despite their persecution in much of the Middle East. But it could also apply to minority Sunni Muslims in Iraq who have fought with the U.S.  Yet that wasn’t explained, and in an interview with a Christian broadcast network Mr. Trump stressed a preference for Christian refugees.

“The order also fails to make explicit exceptions for Iraqis, Afghans and others who have fought side by side with Americans.  These include translators and others who helped save American lives and whose own lives may now be at risk for assisting GIs. The U.S. will fight wars in foreign lands in the future, and we will need local allies who will be watching how we treat Iraqis, Kurds and other battle comrades now.

“The U.S. is in a long war with jihadists that is as much ideological as military.  The U.S. needs Muslim allies, while the jihadists want to portray America as the enemy of all Muslims.  Overly broad orders send the wrong signal to millions of Muslims who aren’t jihadists but who might be vulnerable to recruitment if they conclude the U.S. is at war with Islam, rather than with Islamist radicals.

“The reaction to the refugee order is also a warning that controversial policy changes can’t merely be dropped on the public like a stun grenade. They need their own extreme internal vetting to make sure everyone knows what’s going on.  They need to be sold and explained to the public – again and again.

“Mr. Trump is right that the government needs shaking up, but the danger of moving too fast without careful preparation and competent execution is that he is building up formidable political forces in opposition.  The danger isn’t so much that any single change could be swept away by bipartisan opposition, but that he will alienate the friends and allies at home and abroad he needs to succeed.  Political disruption has its uses but not if it consumes your Presidency in the process.”

Editorial / Financial Times

“As a statement of moral and political principle, President Trump’s latest executive order is abundantly clear. It bans people from Iran, Iraq, Libya, Somalia, Sudan and Yemen from entering the U.S.  for three months. Syrians are banned indefinitely. The U.S. refugee admission program will be shut for four months.  When refugee admissions resume, those who are religious minorities in their country of origin will be given priority. Given the countries singled out, this can only mean Christians.

“These are presented as temporary measures to ‘reduce investigative burdens’ during a review of immigration procedures. The message is unmistakable, though: refugees from Muslim countries riven by war and bad government have been singled out for punishment. They can look elsewhere for shelter. When the doors open again, refugees’ place in line will be determined by their religion.

“Anyone concluding that the executive order is consistent with America’s best values, or those of liberal democracy more generally, is unlikely to modify their view on the basis of an indignant editorial. The order speaks plainly and leaves those who read it to make a plain judgment.  This newspaper can only point out that the U.S. has long been the world’s strongest voice for freedom of conscience and human dignity, and note, with alarm and sorrow, that Mr. Trump has departed violently from that tradition.

“As unambiguous as the ethical issues are, the construction of the order and its implications bear analysis. It is striking in its arbitrariness. None of the attackers from the 9/11, Orlando, San Bernardino or Boston attacks came from the countries picked out.  If Mr. Trump is concerned about countries whose nationals have been involved in recent atrocities, the absence of nations such as Saudi Arabia, the United Arab Emirates and Pakistan is hard to explain.  That the president has business interests in several of the countries notably omitted, and in none of the ones included, lends the list no legitimacy.  It appears to consist of states excluded from an Obama administration visa waiver program. Why that group would be chosen in the current context is mysterious.

“The order was not heralded by a detailed speech nor justified by a cogent explanation when it landed.  The heads of the departments of state, defense and homeland security, and the director of the Central Intelligence Agency are barely in their seats. It appears from their silence on the topic that they had little to do with the drafting of the order, in which their departments are deeply implicated.  The administration, it seems, is making it up as it goes along, and is in a great hurry.  This is a terrible combination.

“Fighting extremism with illiberalism has dangerous consequences.  Iraqis, now tarred as enemies of the U.S., will see Iran as a more natural ally. Syrian Christians, to pick but one vulnerable group, will now be more natural targets of anti-American sentiment.  ISIS has been handed a propaganda victory.  Little Trumps in the developing world will take the lead from the U.S.’s newfound indifference to basic fairness.”

Michael Gerson / Washington Post

“A number of policies emerge from (Trump’s) convictions: a walled country, a closed economy and highly restricted immigration.  Traditional U.S. commitments – to the special relationship with Britain, to a strong and growing NATO and European Union, to the United States’ Pacific security umbrella – seem up for grabs. The trumpet always calls retreat.

“Every U.S. president since World War II has disagreed with the stunted and self-defeating view of the country now held by Trump.  Over the past century – in some ways from the beginning – the United States has been a cheerfully abnormal nation.  American identity (in this view) is not based mainly on blood or soil, but rather on the patriotic acceptance of a unifying creed.  American leaders, Democratic and Republican, have believed that a world where the realm of freedom is growing is more prosperous and secure; a world where freedom is retreating is more dangerous.  The reason is not mystical.  Dictators tend to be belligerent.  Governments accountable to their people are generally more peaceful.

“It is the lesson of hard experience. The United States found – twice – that it could not avoid the bloody disorders of Europe by ignoring them. It found that a Pacific dominated by a single, hostile power is a direct threat to its economy and security. It found that Russian aggression in Europe is like Newton’s First Law – moving until some force stops it.

“And the United States has often accepted refugees, reflecting its deepest values and building reserves of trust and respect.  The Soviet Union or Cuba under Fidel Castro were not working out unique and special ‘ways of life.’  They were producing fleeing victims who would be imprisoned or murdered at home.  It is in the United States’ nature to offer at least some of them a home and refuge. The same should be true for Bashar al-Assad’s victims, including the children of a broken country.

“This is the difference a creed can make:  When Ronald Reagan spoke on foreign policy, tyrants sat uneasy on their thrones and dissidents and refugees took heart.  When Donald Trump speaks on foreign policy, tyrants rest easier and dissidents and refugees lose hope.”

Editorial / Washington Post

“The executive order that President Trump signed on Friday calling a temporary halt to travel to the United States from seven predominantly Muslim nations – and indefinitely blocking refugees from the world’s largest humanitarian crisis, in Syria – is an affront to values upon which the nation was founded and that have made it a beacon of hope around the world.  George Washington declared in 1783 that the ‘bosom of America is open’ not only to the ‘opulent and respectable stranger’ but also ‘the oppressed and persecuted.’  Now Mr. Trump has slammed the door on the oppressed and persecuted in a fit of irrational xenophobia.

“He ordered foreign nationals from Syria, Iran, Sudan, Libya, Somalia, Yemen and Iraq be barred immediately from entry into the United States for 90 days while more rigorous visa screening is put into place.  This touched off panic and chaos at airports on Saturday as people with already-issued visas were turned away from boarding flights and others detained on arrival.  Among those caught in the mess...was an Iraqi who had worked for the United States in Iraq for a decade.  Green card holders, already permanent residents in the United States who happened to be overseas, were told they could no longer re-enter.  Untold thousands of people who have applied for visas – including translators and interpreters who have worked with U.S. forces in Iraq – were left wondering if they would ever make it to American shores....

“Mr. Trump’s four-month ban on refugees from these predominantly Muslim nations was accompanied by an instruction to prioritize refugee claims made by religious minorities facing persecution, chiefly Christians whose communities have suffered greatly over many decades.  We think there’s a legitimate place in refugee policy for favoring persecuted minorities, but favoring one faith while blocking people from another is demeaning to all and runs counter to the basic tenet that the United States does not discriminate by religion....

“Mr. Trump’s actions pander to rage and fear of outsiders.  Yet our long history shows these fears are unfounded. The diversity, experience and striving of immigrants and refugees have immeasurably strengthened the United States; outbursts of anti-alien sentiment have only weakened it.”

Daniel Henninger / Wall Street Journal

“ ‘Shock and awe,’ a term of art from U.S. war doctrine, has been deployed by advocates of Donald Trump to describe the pace of executive actions the past two weeks....

“Put political actions in motion and force the world to adjust.

“The Trump White House believed it was important for the president to fulfill his campaign commitments immediately, whether the border wall or the immigrant ban.  Problems or objections could be dealt with later as the details got worked out.

“So far, the White House’s shock and awe of executive orders mainly has effected a popular uprising, and not just in the streets.

“To be sure, the political system, especially the bureaucracies, needed to be challenged and shaken up.  Almost certainly one reason Team Trump didn’t pass the travel order through normal interagency vetting review is they believed – and experience bears them out – that agency lawyers might have tried to dilute or kill it.  Instead, the Trump template will dominate their post-order implementation.

“But the aftershocks from Mexico and now the executive order on travelers from seven mostly Muslim countries reveal the liabilities in transferring war-fighting doctrine to politics.

“A well-understood law of political motion holds that every political act by a U.S. president puts other significant political forces in motion.

“Mr. Trump’s partisan opposition, notably the organized squads of street people, was already on hair trigger.  But the fallout from the Trump order on immigrant and refugee restrictions may be bringing to life too many disparate forces against him and his young presidency....

“All political battles are won or lost at the margin, including the 2016 presidential election.  Just now, the Republicans’ margin of success for future initiatives looks tighter than it did two weeks ago.  If this backlash siphons political capital from the administration’s ability to achieve pro-growth tax cuts, for instance, Mr. Trump’s presidency will be in trouble by fall.

“It may be true that the forces arrayed against Mr. Trump now are predictable – Democrats, career progressives and the media. But the half-done visa order has politicized people the administration didn’t need among the disaffected.

“That includes the management and employees of the entire tech industry and of many other American companies. It includes some Republicans and important staff in Congress, numerous U.S. universities and research scientists, ambivalent pro-Trump voters, and foreign leaders such as Theresa May, Angela Merkel and Enrique Pena Nieto.  Not to mention the men and women now rethinking offers to take subcabinet positions after watching the public humiliation of an unprepared federal attorney in a Brooklyn courtroom Saturday.

“One can minimize the importance of any of these alone.  But allowing networks of disaffection to form and spread could start tipping the political scales away from the Trump government’s goals.

“The Democrats, dead in the water before Inauguration Day, have been given new energy....

“It is early days for Mr. Trump.  This storm may pass. But Lyndon Johnson...was never able to get control of similar forces, which undid his presidency when the antiwar movement of the 1960s took on a life of its own.  This White House should not want an anti-Trump psychology, inflamed by the limitless gasoline of social media, to compete with and weaken the president’s support.

“The White House could argue that clarifying battle lines in the public mind is important, and doing what’s right will win.  But you had better be sure the correlation of forces stays in your favor. The graveyards are filled with generals who thought they had the right idea, before they were overrun.”

Editorial / Wall Street Journal

“In 2015 David Petraeus surfaced from political exile to warn about the ‘geopolitical Chernobyl’ of Syria and other rising global dangers. Barack Obama ignored the counsel, and let’s hope President Trump won’t repeat the error.

“International order, Mr. Petraeus said Wednesday before the House Armed Services Committee, is facing ‘unprecedented’ and ‘increasingly complex and serious threats’ from what he called ‘revisionist powers.’  By that he means actors challenging the postwar status quo – the system of global alliances with the U.S. as the anchor; the open, rules-based trading system; and an American foreign policy that promoted freedom and human rights.

“Mr. Petraeus’ revisionist powers include China, Iran and Russia, which are ‘working to establish a kind of sphere of influence over their respective near-abroads.’  Another is Islamic radicalism, whose power owes to its ‘conviction, resilience, resourcefulness and ferocity.  In its hydra-like qualities, it is unlike any adversary we have faced before.’

This analysis won’t be news to anyone paying attention.  But Mr. Petraeus’ more troubling warning was about ‘a loss of self-confidence, resolve and strategic clarity on America’s part about our vital interest in preserving and protecting the system we sacrificed so much to bring into being and have sacrificed so much to preserve.’

“World order can’t be taken ‘for granted,’ he said.  ‘It did not will itself into existence.  We created it.  Likewise, it is not naturally self-sustaining.  We have sustained it.  If we stop doing so, it will fray and, eventually, collapse.’

“Mr. Trump sent conflicting signals during the campaign... Mr. Petraeus is offering advice that the new President ignores at America’s peril.”

Editorial / The Economist

“To understand Mr. Trump’s insurgency, start with the uses of outrage. In a divided America, where the other side is not just mistaken but malign, conflict is a political asset. The more Mr. Trump used his stump speeches to offend polite opinion, the more his supporters were convinced that he really would evict the treacherous, greedy elite from their Washington salons.

“His grenade-chuckers-in-chief, Stephen Bannon and Stephen Miller, have now carried that logic into government.  Every time demonstrators and the media rail against Mr. Trump, it is proof that he must be doing something right. If the outpourings of the West Wing are chaotic, it only goes to show that Mr. Trump is a man of action just as he promised. The secrecy and confusion of the immigration ban are a sign not of failure, but of how his people shun the self-serving experts who habitually subvert the popular will.

“The politics of conflict are harnessed to a world view that rejects decades of American foreign policy.  Tactically, Mr. Trump has little time for the multilateral bodies that govern everything from security to trade to the environment. He believes that lesser countries reap most of the rewards while America foots the bill.  It can exploit its bargaining power to get a better deal by picking off countries one by one.

“Mr. Bannon and others reject American diplomacy strategically, too.  They believe multilateralism embodies an obsolete liberal internationalism.  Today’s ideological struggle is not over universal human rights, but the defense of ‘Judeo-Christian’ culture from the onslaught of other civilizations, in particular, Islam. Seen through this prism, the U.N. and the EU are obstacles and Vladimir Putin, for the moment, a potential ally.

“Nobody can say how firmly Mr. Trump believes all this.  Perhaps, amid the trappings of power, he will tire of guerrilla warfare.  Perhaps a stock market correction will so unsettle the nation’s CEO that he will cast Mr. Bannon out.  Perhaps a crisis will force him into the arms of his chief of staff and his secretaries of defense and state, none of whom is quite the insurgent type.  But don’t count on it happening soon. And don’t underestimate the harm that could be done first....

“If Mr. Trump truly wants to put America First, his priority should be strengthening ties, not treating allies with contempt.

“And if this advice is ignored?  America’s allies must strive to preserve multilateral institutions for the day after Mr. Trump, by bolstering their finances and limiting the strife within them.  And they must plan for a world without American leadership. If anyone is tempted to look to China to take on the mantle, it is not ready, even if that were desirable. Europe will no longer have the luxury of underfunding NATO and undercutting the EU’s foreign service – the closest it has to a State Department.  Brazil, the regional power, must be prepared to help lead Latin America.  In the Middle East fractious Arab states will together have to find a formula for living at peace with Iran.

“A web of bilateralism and a jerry-rigged regionalism are palpably worse for America than the world Mr. Trump inherited.  It is not too late for him to conclude how much worse, to ditch his bomb-throwers and switch course. The world should hope for that outcome.  But it must prepare for trouble.”

Wall Street

Stocks, after taking it on the chin early in the week largely on the abysmal immigration rollout, finished strongly on Friday to finish mixed, as the employment data released today, was solid, but not too strong to have the Federal Reserve feel the need to hike rates in March.

Additionally, you had much better optics with the CEO meetings at the White House and plans on executive action on the regulatory front that are pleasing to Corporate America and the Street, including scaling back the 2010 Dodd-Frank financial-overhaul that punished banks.

The Labor Department reported employers added 227,000 jobs last month, better than expected, and higher than the average monthly gain of 187,000 last year.

But wage growth, 0.1%, 2.5% year over year, was muted, thus the feeling the Fed shouldn’t panic over inflation.  The jobless rate ticked up from 4.7% to 4.8%, though this was for the right reason...more people entered the labor force, a sign of optimism.  U6, the underemployment rate, also ticked up to 9.4%.

In other economic news, December personal income rose 0.3% and consumption 0.5%, both largely in line with expectations.

The Chicago purchasing managers survey for January came in at 50.3 (50 being the dividing line between growth and contraction), well below expectations, while the January ISM manufacturing index was 56.0, better than forecast, and the services reading was 55.6, basically in line with both strong.

December construction spending was down 0.2%, much worse than expected, while factory orders for the month came in up 1.3%

As for the Federal Reserve, it held its first meeting of the year this week and on Wednesday it said it remains on track to gradually raise short-term rates this year, but it gave no hint about when the next increase would come.

The Fed has been talking of three rate hikes in 2017 (I’m going with four), but as for the next meeting on March 14-15 there is uncertainty, though I’m not giving up on my prediction they would definitely hike a ¼-point then.  The Atlanta Fed’s GDPNow barometer is forecasting first-quarter growth of 3.4%, and while they missed badly last quarter (2.9% vs. 1.9%), this indicator is normally pretty accurate and, while it’s early, the Fed can’t ignore such a forecast.

But clearly they are focused on wage growth and the fact it is now 2.5% and not 3% will have an impact on their decision-making.  Still a slew more economic data before mid-March, however, including another jobs report, and another nearly six weeks to observe the optics in the Trump White House and CEO and consumer confidence across the land.  Ergo, I believe the Fed will be convinced it needs to move soon and not wait until May.  Heck, I’ve already said they were caught with their pants down.  I just think they’ll be scrambling trying to find them before they’re exposed further.

[The Fed meets in early May and then mid-June following the March confab.]

Europe and Asia

Before I get to the political situation in Euroland, particularly the suddenly chaotic presidential race in France, there was a slew of economic data for the EA19 (eurozone).

Eurostat reported that GDP for the EA19 rose 1.7% for 2016 (1.8% year over year for Q4), which compares to the U.S., up 1.6% for last year (1.9% yoy Q4).

Eurostat also reported consumer prices rose 1.8% in January, year over year, up from December’s 1.1%, so this set off alarm bells when weighed with the strong PMI data below and solid growth rates (in relative terms) across much of the eurozone.

However, core inflation in the EA19 for January, ex-food and energy, is 0.9% annualized, and this is what the European Central Bank continues to focus on as it maintains it will keep its quantitative easing (bond-buying) program in place through December (though after April at a slightly reduced rate).  The likes of Germany do not agree and it’s calling on the ECB to begin normalizing monetary policy immediately, arguing it is falling behind the curve (just like our central bank).

Markit released final PMIs for the month of January and for the eurozone as a whole, with the manufacturing PMI coming in at a solid 55.2 vs. 54.9 in December and the services reading at 53.7.

Germany had a manufacturing PMI of 56.4 (36-month high) with services at 53.4.
France was 53.6 on mfg. (68-mo. high), 54.1 services (67-mo. high).
Italy was 53.0 mfg., 52.4 services.
Spain 55.6 mfg. (20-mo. high), 54.2 services.
Greece 46.6 mfg. (16-mo. low)

The U.K. came in at 55.9 mfg. (off slightly from December’s 2 ½-year peak of 56.1), 54.5 services, though analysts continue to argue rising prices will eventually crimp consumer spending.

Also, Eurostat released the December unemployment rate for the EA19, 9.6% vs. 9.7% in November, and compared with 10.5% in December 2015; the lowest since May 2009.

Germany’s jobless rate is a record low 3.9% (Berlin pegs it at a record 5.9%), with France at 9.6%, Italy 12.0% (11.6% a year earlier...thus, not good), Spain 18.4 (down from 20.7% a year earlier), Portugal 10.2% (12.2% year earlier), and Greece 23.0% (October).

[For my friends in Ireland, 7.2% vs. 8.9% a year earlier.]

But there are still sky-high youth unemployment rates across parts of Euroland, with Greece at 44.2% (Oct.), Spain 42.9%, and Italy 40.1%.

Back to inflation, Spain reported its rate in January was up to 3%, while France’s annualized rate for last month was 1.6%.

Chris Williamson, Chief Economist, Markit

“Eurozone manufacturing is off to a strong start to the year, enjoying the fastest rate of expansion for almost six years in January....

“Optimism about the year ahead has risen to the highest since the region’s debt crisis, suggesting companies are maintaining a buoyant mood despite the heightened political uncertainty caused by Brexit and looming general elections in the Netherlands, France and Germany.

“Inflationary pressures are also picking up.  Much of the increase in costs and prices can be linked to the weakened exchange rate and higher global commodity prices.  However, there are also signs of demand running ahead of supply, which hints at a tentative build-up of core inflationary pressures.

“If current growth of manufacturing activity and the associated rise in prices is sustained, rhetoric at the ECB is likely to become more hawkish, albeit tempered with caution over the potential for political developments to cloud the outlook.”

EuroBits....

--Zut alors!  The favorite for France’s presidential election, Francois Fillon, is suddenly on the ropes, weeks before the first round of voting April 23, and he may not survive another week, let alone the weekend.

Fillon and his wife have been caught up in a scandal, with Fillon facing calls to quit the race over allegations his wife was paid more than 800,000 euro ($850,000) for a “fictitious job” as his parliamentary aide.  By week’s end, a 2007 interview with the Daily Telegraph had been uncovered wherein the wife, Penelope, said she had “never been his assistant,” the interview conducted a week before her husband became prime minister for then president Nicolas Sarkozy, which has fueled allegations she had little to do with his political life.

Penelope said then she helped him informally: “I always went with him on the election campaign whenever he needed help doling out leaflets and things like that.  I like being myself at the back of the room and listening to things said about him.”

On Monday, Mr. and Mrs. Fillon were questioned separately as part of a preliminary inquiry into whether she was paid more than 500,000 euro for a job as his parliamentary assistant; the amount later hiked to 800,000.  Fillon has said he would withdraw from the race if he were put under formal investigation, which seems a certainty, but....not necessarily before April 23! 

But while Fillon’s serious problems should redound to the benefit of Marine Le Pen of the Front National, she is facing a crisis of her own for failure to pay 300,00 euro ($321,000) the European Parliament says she owes it.

Parliament says she wrongly used the funds she receives as a member to pay an aide at the National Front’s headquarters in Paris.  She says she is the victim of a political vendetta.

If she does not repay the money, the parliament could respond by withholding as much as half of her salary and allowances, said to total 11,000 euro a month.

An even bigger issue for Le Pen is the fact her party has no money.  Not one French bank will lend to her because it doesn’t want its name associated with the campaign, and the Russian bank that lent the FN over $9 million in 2014 collapsed last year.

This week, Le Pen said that if elected she would take the country out of the eurozone in six months, “Frexit,” claiming the French state would redenominate its more than $2 trillion in outstanding debt into a new franc and “guarantee” companies will still have access to the debt markets to help with the transition.  If Brussels didn’t cooperate, the FN would hold a referendum on a unilateral exit from the single currency area.

But the eurozone enjoys record popularity in France, with 70% approval ratings.

So what happens now with the race overall?  Suddenly, Emmanuel Macron, the maverick ex-economy minister running on a centrist ticket, is essentially even with Fillon in the last poll I saw, Le Pen first, though all three were between 21 and 25 percent.  Assuming Fillon is forced to drop out, I would still think Le Pen gets whipped in a runoff with Macron.  He is just 39, a populist but hardly in the style of Donald Trump.

Benoit Hamon won the Socialist Party nod last weekend over Manuel Valls, but, for now, Hamon doesn’t stand a chance.

Lastly, the attack at the Louvre on Friday certainly doesn’t hurt Le Pen’s campaign.  An Egyptian man, 29, who arrived in France last month from Dubai, shouted “Allahu Akbar” while in the Louvre’s shopping center as he wielded a machete and lunged at a soldier.  Police eventually shot him, seriously wounding the guy, with no serious injuries to anyone else.  But what an awful scene, especially if you were a tourist there at the time.

--Greek bonds sold off anew this week on fears the debt crisis could return this summer, with Greece perhaps being unable to meet its obligations on debt that comes due.

The Greek government is again at a standstill with its creditors in the eurozone and the International Monetary Fund.

Greece is OK for now, but only until early July without further aid and the IMF says Greece’s debt is too high for it to receive more bailout funds.  Eurozone creditors, namely Germany, do not want to commit to major debt relief, which the IMF has been demanding Greece be granted.  Germany says it will only act on this front if the IMF is a  partner; the IMF not participating in the latest bailout.

The situation worsened this week when a member of the ruling Syriza party brought up the topic of Greece leaving the eurozone, which would mean huge losses for current debtholders. 

Greece feels as if it has cut to the bone already in terms of austerity measures, with the IMF calling for more, though the IMF wants this coupled with the relief the others don’t want to grant.

Talks are now likely to stall until after elections in the Netherlands, March 15.

--MPs in the U.K. voted 498 to 114 to allow Prime Minister Theresa May to proceed with Brexit negotiations.  The bill still must clear a few more hurdles, including debate in the House of Lords, before it can become law, with Mrs. May setting a deadline of March 31 for invoking Article 50 of the Lisbon Treaty, talks with the EU then commencing on a two-year timetable.  But few now believe Britain’s exit from the EU can be blocked.

Opposition Labour leader Jeremy Corbyn backed the bill, though 47 of his MPs rebelled, with Corbyn saying: “Now the battle of the weeks ahead is to shape Brexit negotiations to put jobs, living standards and accountability center stage.”

Labour will now attempt to attach all manner of amendments to whatever May and the Tories come up with.

Ken Clarke, the only Conservative MP to defy his party by voting against the bill, said the result was “historic,” but the “mood could change” when the “real action” of negotiations with the EU starts.  I can’t disagree with that.

Issues such as immigration, state support for farms and businesses and free trade policies are going to divide Britain for years to come.

Separately, Mrs. May faced a political storm on her return from visiting President Trump and for her repeated failure to condemn him over his immigration executive order.  Britain is 5% Muslim.  After ignoring questions on the topic while in Istanbul, she said she did “not agree” with the refugee ban and will appeal to the U.S. if it affects British citizens.  [Friday, in a meeting on Malta, Mrs. May told her fellow EU leaders to be patient with Trump.]

--Peter Navarro, the head of President Trump’s new National Trade Council, blasted Germany for using a “grossly undervalued” euro to “exploit” the U.S. and its EU partners.  Chancellor Merkel responded by saying Germany could not influence the euro.  [Separately, in a meeting with pharmaceutical industry execs, President Trump accused Japan and China of using monetary policy to pursue “devaluation” to gain an advantage over the U.S., which is basically true.]

--Romania saw its largest ever anti-government protests after a decree was passed that could free dozens of officials jailed for corruption.

150,000 protested in Bucharest, with rallies elsewhere across the country.

The leftist government said the measure was needed to ease overcrowding in prisons (with other non-violent types being released as well).

Turning to Asia, some PMI data.

In China, the official manufacturing PMI for Jan. was 51.3 vs. 51.4 in December, not bad.  Caixin’s private look at the sector came in at 51.0 vs. 51.9.

China’s official services reading for last month was 54.6.

Japan had a manufacturing PMI of 52.7 for January vs. 52.4; services 51.9 vs. 52.3.

Both China and Japan are doing fine, certainly much better in the case of the latter.

In South Korea, the reading on January manufacturing was 49.0 vs. 49.4 in December, not so good, though January exports were up a better than expected 11.2% over December, up 8.7% year over year.

Taiwan reported a strong 55.6 PMI for manufacturing, which compared with December’s 56.2, though this was a 68-mo. high.  [All of the above PMI data, unless otherwise noted, courtesy of Markit.]

Back to China, there are growing signs of what I have long forecast.  Foreign firms moving out of the country due to increasingly hostile attitudes towards outsiders operating in the country.  U.S.-based Seagate, the world’s biggest maker of hard disk drives, closed its factory in Suzhou, near Shanghai, last month with the loss of 2,000 jobs.

Like I told you at the time, President Xi Jinping’s speech at the World Economic Forum last month was a crock of s—t. 

Most of the companies pulling out, such as Panasonic in 2015 after 37 years of operating in China, cite the country’s high tax regime, rising labor costs and fierce competition from domestic companies.

In November, Japan’s Sony sold all its shares in Sony Electronics Huanan, a Guangzhou factory that makes consumer electronics, and British high-street retailer Marks & Spencer announced it was closing all its China stores amid continuing China losses.

The likes of Home Depot, Best Buy, L’Oreal, Microsoft and Sharp have also either pulled out or are drastically cutting back.

Professor Chong Tai-Leung from the Chinese University of Hong Kong told the South China Morning Post, “China doesn’t need foreign companies so badly now in terms of acquiring advanced technology and capital as in previous years, so of course, the government is likely to gradually phase out more of (its) preferential policies for foreign firms.”

In essence, China has stolen much of what it needed in terms of intellectual property and now it’s a matter of convincing the Chinese consumer that domestic products are just as good as the foreign variety.  Chinese authorities have increasingly been leaning towards their own ‘Children,” as another academic told the SCMP.

Well, I nailed this a long time ago.  U.S. and European companies remain in China at their own risk.  [See Apple below...see Starbucks, the week before.]

Street Bytes

--As alluded to above, stocks finished mixed, with the Dow Jones falling 0.1% to 20071, while the S&P 500 rose 0.1% and Nasdaq added 0.1% to a record 5666.

Fourth-quarter earnings are coming in up about 7%, with revenues rising around 4%.  The current forecast for first-quarter EPS is up 10.5%, hefty.

--U.S. Treasury Yields

6-mo. 0.63%  2-yr. 1.20%  10-yr. 2.46%  30-yr. 3.09%

Another week with yields essentially unchanged.  This marked the sixth straight week where the yield on the 10-year closed between 2.40% and 2.48%

--Exxon Mobil Corp. beat earnings expectations in the fourth quarter, but revenues were short of the Street’s forecasts. 

The world’s largest publicly traded oil producer did boost its 2017 capital budget to $22 billion from $19.3bn last year.  Production fell 3% per day.

But for all of 2016, earnings came in at the lowest yearly total in 20 years, $7.8bn; the lowest since 1996.  [Q4 profit was $1.68bn, down from $2.78bn a year earlier, though revenue increased for the first time in more than two years, up 2% to $61bn.]

Exxon has also been writing down the value of its assets, which it never has in the past, at least to the extent of other major oil producers.  For example, Tuesday, the company signaled it might eventually recognize 4.6bn barrels of its reserves, mostly in Canada’s oil sands, as unprofitable to produce, according to SEC mandates.

Bradley Olson / Wall Street Journal:

“The SEC requires companies to evaluate their future prospects based on the average price of the previous year, in this case about $43 a barrel.  That is a 15% drop from 2015.”

You don’t have to account for the value immediately, but it depends on Exxon’s view of future prices in coming decades.

And your quiz of the day: Who took over as CEO from Rex Tillerson?  Darren Woods.

--U.S. automakers sold 1.14 million vehicles in January, down 1.8% from a torrid pace in January 2016, according to Autodata.  Each of the Big 3 posted sales declines, with General Motors down 3.9%, Ford 0.7% and Fiat Chrysler tumbling 11.2% compared to the same month last year.  The next largest, Toyota, saw its sales fall 11.3%.

But for 2017, Kelley Blue Book estimates full-year auto sales of 17 million, just short of the past two years.

Discounts, though, are a sign of rising competitiveness, while compromising profitability. Average incentives per vehicle are up 21.6% from a year earlier, according to TrueCar subsidiary ALG’s estimates.

Meanwhile, other automakers did OK.  Nissan’s January sales rose 6.2% (though with heavy incentives), Honda’s rose 5.9%, Subaru’s 6.8% and Hyundai’s 3.3%, though sister brand Kia’s sales fell 7%.

Volkswagen Group reported a 17.1% increase as it rebounds from the emissions scandal.

--Amazon.com Inc. forecast a greater-than-expected dip in operating income for the current year, a sign it will continue to spend large sums to build new warehouses and create video content.  Amazon also reported lower-than-expected revenue for the fourth quarter.

Fourth-quarter net did jump 55% to $749 million.

Amazon said net sales rose 22.4% to $43.74 billion in Q4, compared with an average estimate of $44.68bn; with Amazon commanding a 42% share of total holiday online spending growth, according to Slice Intelligence and the Wall Street Journal.  [Apple was second at 5%.]

The shares fell 4% after the news as investors worry about the level of capital investment.  Aside from the commitment to continue building warehouses, this week Amazon announced it was building its first air cargo hub in Kentucky, a $1.5bn project, as part of an effort to better handle goods at Christmastime. 

--Shares in Apple rose 7% after the company reported fiscal first-quarter net income of $17.89 billion, a per-share profit of $3.36 that handily beat Wall Street’s expectations.  Apple posted record revenue of $78.35 billion, up 3%, also exceeding Street forecasts.

After three straight quarters of falling revenue, strong demand for the iPhone 7 raised hopes the company is snapping out of its doldrums.  Shipments of iPhones rose 5% to a record during the three months through December, with the product accounting for two-thirds of Apple’s sales.

The company’s services business – which includes its App Store sales and music and payments services, saw revenue rise 18% to $7.2 billion, larger than many big corporations; three times the sales of Netflix Inc. during the same period.

But Apple’s China business fell 12% to $16.2bn in the quarter, as, per the above, Apple is increasingly losing out to local rivals like Oppo Electronics and Huawei Technologies Co.  And yet this still doesn’t fully address the elephant in the room for Apple and others...President Xi Jinping can turn on the spigot of economic nationalism any time he wants.

--Facebook reported revenue in the fourth quarter jumped 51% to $8.81 billion in the fourth quarter.

In 2016, Facebook added nearly 270 million users, bringing its monthly user base to 1.86 billion, the strongest increase in the number of users since Facebook went public in 2012.

Facebook’s quarterly profit surged to $3.57 billion from $1.56bn a year earlier.

The company said political spending did not crack the top 10 advertising categories during Q4, which was a bit surprising to moi.

Facebook has been promoting what CEO Mark Zuckerberg calls a “video-first” strategy.  Zuckerberg has directed the company ‘weave’ video across all its products, which mirrors its big push into mobile around the time of its initial public offering in 2012.

Zuckerberg said on Wednesday, “I see video as a mega trend on the same order as mobile.”

Meanwhile, a court in Dallas found that Facebook’s virtual reality unit, Oculus, was found guilty of unfairly using the code of a videogame publisher, ZeniMax Media Inc., to build its headset. The court awarded ZeniMax $500 million, which isn’t chump change, boys and girls.

Separately, the European Union warned Facebook and other social media companies to take a stronger stance against fake news or face action from Brussels.

--Snap, the owner of Snapchat, selected the New York Stock Exchange for its initial public offering, a big blow to tech-heavy Nasdaq.

Snap is aiming for a valuation of between $20bn-$25bn, closer to the latter, which is higher than rival Twitter’s $18bn valuation at IPO in 2013.  Morgan Stanley and Goldman Sachs are leading the offering, with the company looking to raise $3-$4bn.

Thursday, Snap Inc. released details of the finances of the company not known before and said it generated sales of $404.5 million in 2016, up from $58.7 million in 2015.  It had a net loss of $514.6m last year, up from $372.9m in 2015.

We also learned Snap has 158 million daily active users.  The company is looking to go public as soon as March.

--Macy’s Inc. has been approached by Canada’s Hudson’s Bay Co. about a takeover, according to the Wall Street Journal, with Macy’s shares jumping 7% Friday.

Hudson’s Bay has been an acquirer of marquee names in retail including Lord & Taylor and Saks Fifth Avenue.  The company has nowhere near the market value of Macy’s, but it could leverage its real estate portfolio to raise debt and equity.

Macy’s itself, though, is saddled with $7.5bn in debt and it’s been struggling in recent years with increased competition and changing consumer habits.  Longtime CEO Terry Lundgren is stepping down later in 2017.

--Shares in Under Armour Inc. fell more than 20% Tuesday as the company missed its revenue target after 26 straight quarters of at least 20% revenue growth.  Instead, sales increased just 12% over the holiday period and UA said revenue would increase half as much as anticipated this year.

Under Armour had been on a roll, riding strong demand for its apparel, which it then parlayed into sponsorships with high-profile athletes such as Stephen Curry and Tom Brady.

Annual revenue is up to $4.8bn, but when the company didn’t hit its 20%-plus target, the shorts had a field day, as they have the past year or so, but now it has guided lower for 2017 in a big way, expecting revenues to increase just 11% to 12%.

During the last quarter, sales in North America rose 5.9%, while the much smaller international business surged 55%.

Admittedly, Under Armour continues to be hit hard by the bankruptcies of retailers like Sports Authority.

--UPS fell short on both earnings and revenues for the fourth quarter, though shipping volumes were up 7.1% for the three months to December, with revenue up 5.4% to $16.93bn. Amazon’s announcement of a Kentucky air cargo hub doesn’t help the outlook for UPS and FedEx.

--Eli Lilly and Co. reported fourth-quarter net that fell short of Wall Street expectations, but revenues beat.

--Pfizer Inc. did the same...fell short on earnings and beat on revenues.

--Caterpillar announced it is moving its headquarters to the Chicago area from Peoria later this year, with 300 workers to be based in Chicagoland as the company looks to be closer to a major transportation hub.  But needless to say, folks in Peoria are extremely upset.

--Sony warned it will take a $978m writedown on its film business, though this is largely due to an accounting charge dating back almost three decades ago (a goodwill impairment charge).  That said, its movie and television studio did have few movie hits, as an attempt to reboot the Ghostbusters franchise and a sequel to Dan Brown’s The Da Vinci Code, were notable box office disappointments.

The impairment charge relates to Sony’s acquisition of Columbia Pictures way back.

--New York state officials pegged the cost of the Jacob K. Javits Center expansion in Manhattan at $1.55bn, a half-billion more than what was originally announced last year.  So typical.

Last year, Gov. Andrew Cuomo said the project, designed to make the facility more competitive, would be self-financed by the Javits Center.  Now, as reported by Joe Anuta of Crain’s New York Business, funding is up in the air, though the operator/owner of the center owns adjacent real estate that could be sold.

--Growth in Macau’s gaming revenues slowed further in January, continuing a decline from November’s peak of double-digit growth.  Gross revenues last month grew 3.1% year on year to $2.4bn, down from a rise of 8% in December.

One potential reason for the decline was the rumor, unfounded thus far, that Macau was about to halve the daily money withdrawal limit from ATMs as some players took it as a sign Beijing was still concerned about capital flight.

--Russian vodka exports soared 14% last year, with the country selling 49 million liters abroad.

Germany was first among importers of the stuff; followed by Ukraine, Britain and the U.S.  But Ukraine had been the biggest importer before the annexation of Crimea.

--Advertisers will be paying up to $5 million per spot on the Super Bowl, up from last year’s $4.8 million that CBS averaged.  Fox, this year’s network, will have its highest revenue day in history.

This season’s softer NFL ratings for the regular season had little effect on Super Bowl ad rates.

--I didn’t get a chance to watch HBO’s documentary on Warren Buffett yet, but Andrew Bary of Barron’s had a review and I liked these quotes.  Concerning his age, 86, Buffett conceded it is taking a toll physically.  “I’m pretty well depreciated.  I’m getting down to salvage value.”

On integrity, he says, “It takes 20 years to build a reputation, and it takes five minutes to lose it.”

Ain’t that the truth.

--Oprah Winfrey is joining CBS as a special contributor on “60 Minutes,” starting this fall.  She adds marquee value, lacking since the deaths of Morley Safer and Bob Simon.  But in its 49th season (remarkable), “60 Minutes” remains the top-rated news program on television, averaging 14 million viewers a week.

--Lastly, we have the chaos at NBC and the “Today” show after the hiring of former Fox News star Megyn Kelly.  I wrote as soon as this happened that Savannah Guthrie’s position alongside Matt Lauer would be in jeopardy, even though Ms. Guthrie had recently signed an extension, and that certainly seems to be the growing possibility, according to the New York Post.  But Noah Oppenheim, SVP of “Today,” told the paper, “Let me say this for the last time and as clearly as possible. This is never ever going to happen.”  Bull.

What set off the latest stage of despair at the network was anchor Tamron Hall’s sudden departure rather than take a new role at “Today” as part of a new multiyear contract. Hall learned she was losing her co-anchor slot on the 9 a.m. hour as “Today” is being cut by an hour to make room for Megyn’s new daytime talk show.

Al Roker, who co-anchored the 9 a.m. hour with Hall will continue to perform the same duties until Kelly’s program airs at 10:00 a.m.  Hoda Kotb and Kathie Lee Gifford will move to 9 a.m.

Hall was denied a farewell on “Today” and is gone.

By the way, talk about overrated.  Megyn (who I never liked) was handed a $12 million a year contract at NBC, yet her replacement at Fox, Tucker Carlson, nearly doubled her ratings after her departure.

Foreign Affairs

Iran: President Trump’s national security adviser, Michael Flynn, said Wednesday that the United States was “officially putting Iran on notice” after Iran launched a ballistic missile on Sunday and an Iranian-backed militia attacked a Saudi naval vessel off Yemen as part of the war there.  But Flynn didn’t elaborate.

Trump then repeated the warning Thursday in a tweet: “Iran has been formally PUT ON NOTICE for firing a ballistic missile. Should have been thankful for the terrible deal the U.S. made with them!”

Friday, Trump tweeted: “Iran is playing with fire – they don’t appreciate how ‘kind’ President Obama was to them.  Not me!”

Iran has said the test launch is not a violation of the nuclear deal signed with the United States and the other members of the P5+1 (Russia, China, France, Britain and Germany).  But of course it is, as it’s a missile capable of carrying a nuclear warhead and that is strictly prohibited (Resolution 2231), though the other signatories have largely remained silent, save for France.

Senator Bob Corker, chairman of the foreign relations committee, said: “No longer will Iran be given a pass for its repeated ballistic missile violations.” Sen. Lindsey Graham told CNN he thought Trump should go to Congress to request additional sanctions.  Instead, the White House announced....

Fred Kagan, an analyst with the American Enterprise Institute, told USA TODAY’s Jim Michael: “If you’re going to make a threat, you need to be prepared to carry through with it. The question is: Are they prepared to carry through?”

Michael Rubin, another analyst at the AEI, said Trump risks “replicating (President) Obama’s biggest mistake, which is issuing a red line without being prepared to defend it.”

In addressing both Flynn’s and Trump’s lack of specifics, Rubin said: “The lack of clarity is dangerous. It could encourage Iran to test the ‘red line’ because it is not defined.”

Friday, Iran’s Foreign Minister Mohammad Javad Zarif tweeted: “Iran unmoved by threats as we derive security from our people.  Will never initiate war, but we can only rely on our own means of defense.”

Friday afternoon, the Treasury Department published a list of 13 individuals and 12 entities facing new restrictions for supporting the missile program, having links to terrorism or providing support for Iran’s Revolutionary Guard.

In response, Iran’s Foreign Ministry announced it “will take action against a number of American individuals and companies that have played a role in generating and supporting extremist terrorist groups in the region or have helped in the killing and suppression of defenseless people in the region.”  In the statement published by the state-run Islamic Republic News Agency, Iran said it would name its targets later.

The U.S. move was limited in scope and wouldn’t affect a deal signed between Boeing Co. and Iran’s national carrier in December.

David Ignatius / Washington Post

“By putting Iran ‘on notice’ for its aggressive behavior, President Trump has taken aim at a country that’s opposed by many U.S. allies. But he has begun this confrontation without much preparation or strategic planning, continuing the haphazard pattern of his first two weeks in office.

“Iran is a convenient enemy for Trump.  Israel and the Gulf Arab states share the administration’s antipathy toward Iran, and the regime’s hard-liners gave Trump a pretext with a ballistic-missile test last weekend that arguably violated a U.N. Security Council resolution.  Trump’s challenge also comes at a moment when Russia, Iran’s only major ally, is seeking better relations with the new administration.  That may be a useful point of leverage. Some American, Israeli and Arab officials hope Russia might be persuaded to accept limits on Iranian behavior as the price of rapprochement with the United States. But some senior intelligence officials are skeptical.

“Confronting Iran carries significant dangers. The U.S. Central Command has thousands of troops in Iraq and the gulf who could be vulnerable to Iranian reprisals.  The White House, however, didn’t coordinate its actions with Centom before national security adviser Michael Flynn announced Wednesday his nonspecific but menacing ‘notice’ about Iran’s ‘destabilizing’ behavior....

“(U.S.) and foreign officials caution that any attempt to contain Iran needs to be carefully planned and implemented.  Iran is a hardened adversary, despite its political isolation.  Any confrontation has to take into account Iran’s strong position in Syria and Iraq, and its ability to thwart Trump’s pledge to eradicate the Islamic State there.

“The administration ‘wanted to send a message, but they have no idea what it means,’ says a top Republican former foreign policy official.

“With just two weeks in office, the administration hasn’t had time to fill some key national security posts, let alone plan a strategy.  Take Syria: Administration officials don’t like Obama’s strategy, but they don’t yet have an alternative....

“(And) Iran holds some choke points.  Its strongest leverage is in Iraq.  With the victory over the Islamic State in Mosul probably six months away, the Iranians can mobilize thousands of Iraqi Shiite militiamen across Iraq.  U.S. advisers are vulnerable to attack by these Iran-backed militias, as happened a decade ago in Iraq....

“Moderating the Iranian threat in the Middle East has been an American aim since the 1979 revolution.  Arabs and Israelis alike will cheer Trump’s hard line. But Iran is among the toughest foreign policy challenges Trump will face, and he should be careful to avoid ill-planned early actions that would make it his Bay of Pigs.”

Iranian President Hassan Rouhani is visiting Moscow in March for talks with Vladimir Putin.

Iraq/Syria/ISIS/Russia/Turkey: The ceasefire is increasingly shaky, with one rebel group fighting under the Free Syrian Army banner in northwest Syria withdrawing from it, blaming the government and its allies for violations.

“Due to Russia’s lack of commitment as a guarantor...we announce that, as of today, we are not bound by this agreement,” Jaish al-Ezza, a signatory to the deal brokered by Russia and Turkey, said in a statement last Sunday.

The group said it had come under heavy Russian bombardment of its positions, which tells you everything about Russia’s intentions. 

Despite an overall reduction in violence since the truce began, the Syrian Observatory for Human Rights said more than 400 civilians have died in clashes.  [Reuters / Daily Star]

Separately, the Syrian government has denied rumors that President Bashar al-Assad is suffering from ill health, saying he was “carrying out his duties quite normally.”  Some Arab websites said Assad had suffered a stroke, or even that he had been shot.

Regarding President Trump and his plan for safe zones in Syria, he had called for Gulf states to pay for protecting Syrian refugees.  In talks last weekend with Saudi and UAE leaders, there’s no word if this was discussed.

Friday, Lebanese President Michel Aoun called for the creation of safe zones in Syria so refugees can return to their country; Lebanon having taken in 1 million since 2011.

Josh Rogin / Washington Post

“The Bashar al-Assad regime in Syria has had a quiet but well-funded lobbying effort in Washington since well before he began murdering his own people.  But that influence campaign’s clearest triumph came only this month, when it succeeded in bringing Rep. Tulsi Gabbard (D-Hawaii) to Damascus and having her parrot Assad’s propaganda on her return.”

Rogin talks about two Syrians on the trip, a Cleveland businessman Bassam Khawam and his brother, who have long connections to the Assad regime, yet were described by Gabbard as “longtime peace advocates.”

“The actual source of the funding of the trip is murky, too. But there’s no doubt the Assad regime facilitated it.  Not only did the group [Ed. which included former Congressman Dennis Kucinich] get an audience with the president, but they also received access to sensitive areas under the protection of government forces.  In several arranged meetings, Syrians told Gabbard that Assad is a benevolent ruler fighting terrorists and that the U.S. policy of opposing him is unjust.

“Upon her turn, Gabbard referenced those Syrians in interviews and op-eds to reinforce her long-held opposition to what she calls the U.S. ‘regime change’ policy in Syria.  She also asserted there are no moderate rebels in Syria and that the United States is funding and arming al-Qaeda and the Islamic State.  Neither is true, but both match the talking points that the Assad regime has been pushing for the entirety of the war.

“Principled opposition to U.S. intervention in Syria is one thing. Becoming a tool of a mass murderer’s propaganda and influence campaign is another.  Gabbard’s cooperation with the Syrian regime damages her effort to promote herself as a legitimate foreign policy voice.

“If Gabbard really didn’t know the men who sponsored her ‘fact-finding mission’ to Syria, she should have. To many, the entire affair proves that Assad’s Washington influence campaign is alive and well and now has a sitting congresswomen for a mouthpiece, whether she realizes it or not.”

I saw Gabbard’s interviews and videos from Syria upon her return.  I totally concur with Mr. Rogin.

Israel: The White House suddenly warned Israel on Thursday that new or expanded settlements in the West Bank “may not be helpful” in achieving peace, while insisting it has no “official position on settlement activity,” per a statement by press secretary Sean Spicer, which noted, settlements are “an impediment to peace, the construction of new settlements or the expansion of existing settlements beyond their current borders may not be helpful in achieving that goal.”

“The American desire for peace between the Israelis and the Palestinians has remained unchanged for 50 years,” Spicer’s statement said, referring to President Trump’s insistence that a return to the negotiating table is a chief goal of his.

It seems that Israeli Prime Minister Benjamin Netanyahu’s rush to build new settlements since Trump’s inauguration has ticked off some in the White House who fear it will interfere with Trump’s plans to work toward a peace plan.  The Israeli government approved 3,000 more housing units late Tuesday, the largest number in a wave of new construction plans, only a week after it had approved 2,500 homes in the West Bank and 566 in East Jerusalem.  [Four settlement expansion notices in all since Trump took office.]

At the same time, Israeli police were met with violence as they began evicting dozens of hardline Jewish settlers from an illegal outpost in the West Bank.

Netanyahu is scheduled to visit Trump on Feb. 15.

Lastly, I read this scary story in Haaretz the other day, where “An internationally renowned chemist has warned that an ammonia tank in the Haifa bay could ‘fall apart even tomorrow morning,’ killing over ten thousand people.”

A ship brings ammonia to Israel about once a month, docking at Haifa’s port, and it takes most of a day to unload the cargo to the storage facility.

“The ammonia on the ship is carried in five storage tanks.  According to (Prof. Ehud) Keinan, damage to a single tank could cause a disaster whose effects could exceed that of the atom bombs dropped on Hiroshima and Nagasaki...If all five storage tanks were to be compromised, the resultant deadly cloud of ammonia could cover the Haifa area for at least eight hours: Every person in the danger zone would choke to death within one hour, according to the paper prepared by Keinan.”

Think Hizbullah missile strike on either the storage tank or the cargo ship. Or the fact that the storage tank itself is falling apart.

Why does Israel need the ammonia in such a fashion? It doesn’t.  95% of the ammonia imported to Israel is meant for fertilizer and other products that are sold. So it’s purely about business.  As a source told Haaretz: “Nothing will happen to Israel if this business doesn’t exist, other than there will be a plant that won’t run and workers who won’t work. It’s not pleasant when a factory closes, but nothing will happen to Israel’s functioning.”

Hizbullah has about 130,000 rockets of various types.  The Israel Defense Forces estimate that in the next war Hizbullah will be able to fire up to 1,500 rockets a day, compared to about 200 during the 2006 war.

Yemen: Yes, always wait 24 hours.  Such is the case here as we’ve learned the raid in Yemen on an al-Qaeda (AQAP) stronghold killed as many as 23 civilians, including 10 children, according to one rights group.  There initially were reports the daughter of Anwar al-Awlaki, a militant killed by a U.S. strike in 2011, was one of the victims, but now it seems far more civilians than her were as well.

The White House initially said that the raid, the first such operation under President Trump (though long planned, first, by the Obama administration) was “successful” in taking out 14 militants and gaining invaluable information on future plans by AQAP, though Navy SEAL, William ‘Ryan’ Owens, 36, was killed in the firefight.  But now the story is shifting.

However, in terms of the number of women killed, some of them were heavily engaged in the fight.

In other words, I wouldn’t take any account as the gospel truth as yet, though it was pathetic Centcom released videos that were about ten years old, initially claiming this was part of what was just captured in the raid.

Meanwhile, there has been heavy fighting between government forces and the Iranian-backed Shiite rebels, the Houthis, with more than 100 dying in a battle on the west coast last weekend, 90 of them Houthis, according to the government.

The U.N. also reported this week that as a result of the fighting in Yemen, 2.2 million children are suffering from acute malnutrition, including 460,000 under the age of five.

The health system is a shambles, after a decade’s worth of gains, according to UNICEF.  63 of every 1,000 live births are now dying before their fifth birthday.

Overall, more than seven million of Yemen’s 28 million inhabitants are enduring hunger.  UNICEF has been frantically trying to deliver supplies of energy-rich foods for severely malnourished children.

Egypt: ISIS claimed its fighters killed and wounded 20 Egyptian soldiers in recent clashes in the northern Sinai.  The government said nothing.  Media is prohibited from the area.

Russia / Ukraine: Russian President Vladimir Putin accused Kiev on Thursday of provoking this week’s flare up in fighting in eastern Ukraine, saying it was a ploy to win the support of the new Trump administration.

Heavy fighting erupted last weekend, with Russian-backed rebels launching a massive attack on the town of Avdiivka, which contains a major coal coking facility important to Ukraine’s vital steel industry.

Editorial / Wall Street Journal

“Donald Trump says he knows a bad deal when he sees it, and Vladimir Putin is offering him one on Ukraine.  That’s the meaning of this week’s escalation by Kremlin-backed rebels in eastern Ukraine that has resulted in some of the worst fighting since the Russian strongman launched his invasion in 2014.

“At least 12 Ukrainian soldiers have been killed* since Monday in clashes around the government-held city of Avdiivka, north of the Russian-occupied Donetsk region. The Organization for Security and Cooperation in Europe, which oversees implementation of a 2015 ceasefire agreement, says it has recorded more than 10,000 explosions in the area in recent days.  Civilians, including 2,500 children, are caught in the crossfire without basic services.

“The ceasefire agreement, known as Minsk II, prohibits the use of heavy artillery and requires the parties to withdraw heavy weapons.  The Kiev government says the Russian-backed separatists are firing Grad rockets and heavy artillery.

“Mr. Putin accuses Ukrainian forces of doing the same, but that reveals the main flaw of Minsk II, which is that it treats the warring parties as moral equivalents. The accords, negotiated by Angela Merkel and Francois Hollande and supported by the Obama Administration, didn’t take into account that Moscow is the aggressor while Kiev is trying to regain sovereign territory.  This week’s Russian escalation further discredits Minsk II, which was already a diplomatic fiction to most people outside the German Chancellery.

“Mr. Putin is a master of strategic unpredictability, but he may be trying to consolidate his territorial gains in eastern Ukraine ahead of a ‘grand bargain’ with Washington that could entail lifting Ukraine-related sanctions in return for Moscow’s cooperation in other areas, such as terrorism and nuclear disarmament.

“Mr. Trump has hinted at such a deal in interviews... The trouble with such an arrangement (is) it could also create the precedent that Moscow can violate sovereign European soil and then bargain its way out of the consequences.”

*The death toll, including civilians, could be much higher.  Avdiivka, with a population of 22,000, has been left without water and electricity in freezing conditions as a result of the shelling.

Rebel officials said Donetsk was under heavy shelling late on Thursday, with rising civilian casualties there.

At least U.S. Ambassador to the U.N., Nikki Haley, said in her first formal presentation to the body, that with regards to Russia, “the dire situation in eastern Ukraine is one that demands clear and strong condemnation of Russian actions.”

Ukrainian President Petro Poroshenko has his own reasons for aggressive action on the part of his own forces, though.  He seems to be willing to do anything to ensure that sanctions aren’t lifted against Russia, while trying to increase his nation’s prospects for joining NATO, which, according to some polls, show a majority of Ukrainians now want to do (not that NATO itself will admit Ukraine).

Leonid Bershidsky / Bloomberg

“For Putin, there is a much more important goal than lifting sanctions: establishing a pro-Russian government in Kiev.  That cannot be achieved by a massive first strike, which is why Putin has abstained from it even though his inaction allowed Ukraine to build up its military. Without popular support – and the majority of Ukrainians are strongly anti-Russian now – military gains would be costly and unsustainable.  A retaliatory strike and subsequent withdrawal, like in Georgia in 2008, would be quite a different matter.

“If Putin can provoke Poroshenko into moving first, having made sure an indifferent U.S. and a preoccupied, Ukraine-fatigued Europe won’t interfere, he can deal the Poroshenko government a deadly blow.  The 2008 war destroyed (Georgian president Mikhail) Saakashvili’s political future in Georgia, and soon his government was replaced with a less anti-Russian, more pliable one.  Poroshenko is already unpopular, and a Russian blitzkrieg – without a protracted occupation – can change the Ukrainian political balance.

“Putin is waiting for the desperate Ukrainian president to go too far in trying to enlist Western support.  He can afford to be patient, and more clarity from Washington and the European capitals can’t hurt.  Poroshenko, a hostage to the public mood he helped create, which rejects the possibility of any compromise with Putin, has to thread a thin line to avoid disaster.  But it’s not clear whether continuing to walk this tightrope indefinitely has any upside for him or for his country.”

Separately, following last Saturday’s call between Putin and Trump, the Kremlin said the two plan to meet soon to discuss “joining forces” in the Syrian conflict and “partnering” to solve a range of global issues.

And then there is the case of Oleg Erovinkin, a former general in the KGB and its successor the FSB, who was found dead in the back of his car in Moscow on Dec. 26 in mysterious circumstances.

Erovinkin was a key aide to Igor Sechin (remember that name?), the head of state-owned oil company Rosneft and one of Putin’s lifelong friends who I have said will one day take out Vlad (through a dark Third Force).

The probable murder (the Kremlin calls it a heart attack) is in the news because it’s come to light that the former MI6 spy Christopher Steele, who compiled the dossier on Donald Trump, wrote in an intelligence report dated July 19, 2016, that he had a source close to Sechin, who had disclosed alleged links between Trump’s supporters and Moscow. 

So did the Kremlin kill Erovinkin and then cover it up?  He has been described as the ‘go-between between Putin and Sechin.’

Putin would have had the dossier and would have tried to find the mole behind it, let alone whether the report was factual or not.

[I’ll get into the possible poisoning, for a second time, of Russian opposition figure Vladimir Kara-Murza next time.]

North Korea: Defense Secretary Mattis, on his first overseas trip to South Korea and Japan, said North Korea would face an “effective and overwhelming” response if Pyongyang chose to use nuclear weapons, as he reassured leaders in Seoul of America’s steadfast support.

“Any attack on the United States, or our allies, will be defeated, and any use of nuclear weapons would be met with a response that would be effective and overwhelming.”

South Korean officials said Pyongyang’s state security minister was sacked last month, presumably over corruption, abuse of power and torture committed by his agency.  The sacking of Kim Won Hong, seen as a close associate of Kim Jong Un, could cause instability in the country’s leadership by further frightening the ruling elite.  Seoul’s Unification Ministry said there was a possibility the minister will face stronger punishment.  North Korea has not said anything about Kim Wong Hong.

But South Korea’s track record on such pronouncements isn’t the best.

Another close aide to Kim Jong Un, Choe Ryong Hae, was believed to have been sent to a re-education camp in 2015, only to regain his political standing.

Separately, in South Korea, Ban Ki-moon, the former secretary general of the United Nations, announced he will not run in an anticipated presidential election, once the impeachment of president Park Geun-hye is formalized by the Constitutional Court.  Ban’s approval ratings had been falling.

China: A China-born billionaire was abducted from the Four Seasons hotel in Hong Kong last weekend, but then Xiao Jianhua was quoted by state media on Tuesday as saying he had not been abducted by mainland Chinese agents and was instead receiving medical treatment.  This is exactly the scenario that has played out before, such as with the Hong Kong booksellers who were abducted and taken to the mainland to be taught a lesson.

Editorial / Washington Post

“Here’s one sure way to know when Xi Jinping’s secret police have illegally abducted someone outside the country and then forcibly transported them to China: when the victim is obliged to issue a statement denying that any such thing occurred.  That’s what has happened to billionaire investor Xiao Jianhua....

“The regime certainly has cause to hide this particular kidnapping, and for more than one reason.  It represents another major violation of the legal autonomy Beijing guaranteed to Hong Kong when it obtained sovereignty over the former British colony 20 years ago.  It is an affront to Canada, of which Mr. Xiao is a citizen, though he has spent most of his life on the mainland and no doubt is considered Chinese by the regime.”

Xiao has a connection to Xi Jinping, having invested in a firm held by Xi’s relatives, according to various reports.  It’s possible, though, that Xiao is the target of a legitimate corruption probe, but as the Post editorial reads:

“Chinese analysts believe it is as likely that (Xiao) knows too much about Mr. Xi, who has been striving to consolidate his personal power and eliminate all opposition to his regime.”

The Four Seasons, by the way, turned over to Hong Kong police CCTV footage of Xiao being led away by the Chinese security agents.  Xiao was living at the hotel, with some Chinese billionaires reportedly taking entire floors there.

Australia: Regarding the aforementioned phone call between President Trump and Australian Prime Minister Malcolm Turnbull over a refugee agreement, the call included Trump boasting of the magnitude of his electoral college win, Trump blasting Turnbull, and then saying “this was the worst call by far,” senior U.S. officials briefed on the Saturday exchange told the Washington Post.

Trump told Turnbull that regarding the United States’ pledge to take in 1,250 refugees from an Australian detention center, “This is the worst deal ever” and that Trump was “going to get killed” politically and accused Australia of seeking to export the “next Boston bombers.”

Trump then returned to the topic late Wednesday night, tweeting: “Do you believe it? The Obama Administration agreed to take thousands of illegal immigrants from Australia.  Why?  I will study this dumb deal!”

Australia has refused to accept asylum seekers held in the camps on the Pacific nations of Naura and Papua New Guinea and instead pays for them to be housed on the impoverished islands.

Trump did pledge to honor the deal, though it’s not clear how the refugees will be resettled in the U.S.  Under the agreement with the Obama administration, U.S. officials have already visited Nauru to conduct a first round of interviews.

Canada: The university student charged with killing six Muslim men during evening prayers at a mosque in Quebec City was known for far-right, nationalist views and his support of French National Front party leader Marine Le Pen, as well as Donald Trump, according to his Facebook page.

Finland: My contact, Mark N., confirmed my suspicions.  “There are plenty of dual citizens (Russia, Finland) living in Finland.  It has been discovered that there are several Russians that are part of critical organizations such as the military, police, security and local government.  There is the fear that Russia may find a reason to defend its own citizens abroad.  And it would be easy since the defenders are already in the country.”

Yes, think Ukraine.  Or the very real fear that exists in the Baltics.  Vlad the Impaler is an expert on ginning up a crisis.

Random Musings

--A CNN/ORC poll released Friday had President Trump with a 44% approval rating, the lowest ever for a new president. 

The travel ban was favored by 47% of those surveyed, 53% opposed.  [Among those who favored it, 88% of Republicans did, 46% of Independents, and 12% of Democrats.]

38% favored the building of a wall between the U.S. and Mexico, 60% opposed.

The importance of the low initial approval rating is that if it stays at those levels, it will just embolden Democrats to be more obstructionist.

--According to a new Gallup poll released today, 47% of those polled said Trump is “moving too fast to address the major problems facing the country today.”  35% said he is moving at the right speed, and 10% said he isn’t moving fast enough.

--Editorial / Wall Street Journal

“If you had 11 days and the ‘over,’ you lost. We’re referring to the bet on how long it would take Barack Obama to criticize his presidential successor.  For the record our wager was 30 days, but then we always expected more from the former President than he delivered.

“Mr. Obama couldn’t even wait until he finished his post-inaugural vacation before he had a spokesman issue a statement Monday afternoon reporting that the former President ‘is heartened by the level of engagement taking place in communities around the country’ against President Trump’s refugee order.

“ ‘Citizens exercising their Constitutional right to assemble, organize and have their voices heard by their elected officials is exactly what we expect to see when American values are at stake,’ added spokesman Kevin Lewis.  ‘With regard to comparisons to President Obama’s foreign policy decisions, as we’ve heard before, the President fundamentally disagrees with the notion of discriminating against individuals because of their faith or religion.’

“No one doubts that, but then Syrian refugees became a global crisis in large part because Mr. Obama did almost nothing for five years as President to stop the civil war, much less help refugees.  Here are the number of Syrians his Administration admitted: fiscal year 2011, 29; 2012, 31; 2013, 36; 2014, 105; 2015, 1,682.  Only in 2016 did he increase the target to 13,000, though actual admissions haven’t been disclosed.  Mr. Obama also barely lifted a hand to help resettle translators who worked with GIs in Iraq or Afghanistan.

“We oppose Mr. Trump’s refugee order, but it takes a special kind of gall for Mr. Obama and his advisers like Susan Rice to lecture anyone about ‘American values’ and refugees from chaos in the Middle East.”

--Rex Tillerson was confirmed by the Senate 56-43 to become secretary of state.  Previous to this, in the last 50 years the most contentious confirmations for the position were Condoleezza Rice in 2005, who passed 85-13, and Henry Kissinger in 1973, who was confirmed 78-7.

--Many Republicans on Capitol Hill are increasingly uneasy over the growing influence of Stephen Bannon inside the White House.

One GOP lawmaker who spoke to The Hill on condition of anonymity, said, “The president has the right to be his adviser, but I think there is a lot of concern about his influence.”

One former GOP leadership aide said, “We clearly see what Bannon is doing. There’s no secret in it.  He’s increasing his people inside and aligning with (Trump son-in-law and aide Jared) Kushner.  And the person to look at is really Kushner, because at the end of the day, he’s the person Trump trusts most. And together, those two guys seem like they want to knock everyone else over.”

Republicans on Capitol Hill also see scant evidence that chief of staff Reince Priebus and Bannon are working together as “equal partners,” as Trump first touted the duo.  [Jonathan Eisely / The Hill]

David J. Rothkopf / Washington Post

“While demonstrators poured into airports to protest the Trump administration’s draconian immigration policies, another presidential memorandum signed this weekend may have even more lasting, wide-ranging and dangerous consequences.  The document sounds like a simple bureaucratic shuffle, outlining the shape the National Security Council will take under President Trump.  Instead, it is deeply worrisome.

“The idea of the National Security Council (NSC), established in 1947, is to ensure that the president has the best possible advice from his Cabinet, the military and the intelligence community before making consequential decisions, and to ensure that, once those decisions are made, a centralized mechanism exists to guarantee their effective implementation.  The NSC is effectively the central nervous system of the U.S. foreign policy and national security apparatus....

“The problem lies in the changes that he made.

“First, he essentially demoted the highest-ranking military officer in the United States, the chairman of the Joint Chiefs of Staff, and the highest-ranking intelligence officer in the United States, the director of national intelligence.  In previous administrations, those positions or their equivalent (before the creation of the director of national intelligence, the CIA director occupied that role) held permanent positions on the NSC.

“Now, those key officials will be invited only when their specific expertise is seen to be required.  Hard as it to imagine any situation in which their views would not add value, this demotion is even harder to countenance given the threats the United States currently faces and the frayed state of the president’s relations with the intelligence community.  A president who has no national security experience and can use all the advice he can get has decided to limit the input he receives from two of the most important advisers any president could have....

“Even as he pushed away professional security advice, Trump decided to make his top political advisor, Stephen K. Bannon, a permanent member of the NSC.  Although the White House chief of staff is typically a participant in NSC deliberations, I do not know of another situation in which a political adviser has been a formal permanent member of the council.  Further, Bannon is the precisely wrong person for this wrong role.  His national security experience consists of a graduate degree and seven years in the Navy.  More troubling, Bannon’s role as chairman of Breitbart.com, with its racist, misogynist and Islamophobic perspectives, and his avowed desire to blow up our system of government, suggests this is someone who not only has no business being a permanent member of the most powerful consultative body in the world – he has no business being in a position of responsibility in any government....

“(Rumors) are already circulating that Bannon and senior adviser Jared Kushner are the go-to people on national security issues for the administration, again despite the lack of experience, temperament or institutional support for either.  Kushner has been given key roles on Israel, Mexico and China already.  History suggests all this will not end well, with rivalries emerging with State, Defense, the Trade Representative and other agencies.

“Combine all this with the president’s own shoot-from-the-lip impulses, his flair for improvisation and his well-known thin skin.  You end up with a bad NSC structure being compromised by a kitchen cabinet-type superstructure and the whole thing likely being made even more dysfunctional by a president who, according to multiple reports, does not welcome advice in the first place – especially when it contradicts his own views.

“The executive order on immigration and refugees was un-American, counterproductive and possibly illegal. The restructuring of the NSC, and the way in which this White House is threatening to operate outside the formal NSC structure, all but guarantees that it will not be the last bad decision to emerge from the Trump administration.”

David Ignatius / Washington Post

“At the red-hot center of President Trump’s first 11 days in office has been his chief strategist Stephen K. Bannon, who seeks to organize a global populist movement for ‘Judeo-Christian’ values and against radical Islam.

“Bannon is the intellectual center of the new administration.  For nearly a decade he has been advertising his desire to turn America and the world upside down.  He’s now doing exactly that.  Trump’s ‘America First’ trade policies and his anti-refugee travel ban are early glimmers of the revolution Bannon has long been advocating.

“As the uproar over Trump’s actions grows, it’s important to distinguish between policies that are politically controversial and those that actually undermine the country’s foundations.

“The haphazard executive order banning travel by people from seven Muslim-majority countries seems to me the latter: It strikes at America’s core values.

“The folly of the travel ban is that it is producing the opposite of what Trump says he wanted.  It weakens U.S. alliances, emboldens our adversaries and puts the country at greater risk.  It’s not just misguided and heartless; it’s dangerous.  It affirms the Islamic State’s narrative that it is at war with an anti-Muslim America.

“The weakness of Bannon’s strategy in these first days of Trump’s presidency has been its impatience and disorganization.  The White House’s opening salvos have been rushed, poorly planned shots that resulted in what Sen. John McCain called a ‘self-inflicted wound.’  In his seeming counsel to Trump, Bannon appears to have overlooked Benjamin Franklin’s famous advice that haste makes waste....

“Last Friday’s travel ban echoed themes Bannon has developed over a half-dozen years. It brought cheers from the right-wing parties in Europe that are Bannon’s allies.  ‘Well done,’ tweeted Cutch populist Geert Wilders.  ‘What annoys the media and the politicians is that Trump honors his promises,’ tweeted French right-wing leader Marine Le Pen.

“Bannon undeniably has a powerful radical vision.  But this time, he may have blundered. The travel ban has triggered a counterrevolt among millions of Americans who saw his target as the Statue of Liberty.”

Editorial / New York Times

“As a candidate, Mr. Trump was immensely gratified by the applause at his rallies for Mr. Bannon’s jingoism.  Yet now casually weaponized in executive orders, those same ideas are alienating American allies and damaging the presidency.

“Presidents are entitled to pick their advisers. But Mr. Trump’s first spasms of policy making have supplied ample evidence that he needs advisers who can think strategically and weigh second- and third-order consequences beyond the immediate domestic political effects.  Imagine tomorrow if Mr. Trump is faced with a crisis involving China in the South China Sea or Russia in Ukraine.  Will he look to his chief political provocateur, Mr. Bannon, with his penchant for blowing things up, or will he turn at last for counsel to the few more thoughtful experienced hands in his administration, like Defense Secretary Jim Mattis and General Dunford?”

--Roughly 3,000 marched on Sen. Chuck Schumer’s Brooklyn home the other day, holding up signs and chanting “What the f—k, Chuck?!” to protest his seemingly moderate stance on some of President Trump’s cabinet picks.

Schumer is catching heat for voting ‘Yes’ on General Mattis, General John Kelly, and Mike Pompeo.

--Anthony Scaramucci, the former investment company executive who sold his operation to take a senior job in the White House, is not taking the job after all due to issues in the sale of his firm, SkyBridge Capital, to a division of HNA Group, a politically connected Chinese conglomerate that would become SkyBridge’s majority owner.  The sale is not complete and it was expected it would take months for Scaramucci to be cleared of potential ethics conflicts.

According to the New York Times, HNA has strong ties to the ruling Communist Party and it seemed clear, with an opaque ownership structure, that HNA was looking for ways to gain influence in the White House.

Scaramucci could receive a position later on after the sale is cleared up one way or another.

--Editorial / Washington Post

“We interrupt coverage of tumult in Congress and the administration with two pieces of good news.  Both reflect progress American society has made in recognizing the dignity of lesbian, gay, bisexual and transgender people.

“The White House announced Tuesday that, contrary to anonymous reports, the president will not reverse executive orders extending workplace protections to LGBT federal workers.  The administration statement accurately and encouragingly recalled that Mr. Trump made a point of standing up for LGBT rights in his speech to the Republican National Convention last July, noting that he was ‘proud’ to have done so....

“The White House announcement came a day after the Boy Scouts of America revealed that it will allow transgender boys to participate in the group’s premier programs, changing a decades-old policy that relied on the gender listed on birth certificates to one that recognizes the gender identity listed on Scouts’ application forms.  The decision will no doubt be a tough one for some in the Scouting movement to accept, yet it was rooted in some of the organization’s core principles – the commitment to tolerance and diversity inherent in the Boy Scouts’ mission to impart life skills to young people who are growing into men.”

--New Jersey Gov. Chris Christie continues to rack up some dreadful approval numbers in what is his last year, even though he seems to be focusing more on drug addiction than taking up more controversial issues.

According to a Fairleigh Dickinson University PublicMind Poll, just 18 percent of my fellow New Jerseyans approve of the job Christie is doing, unchanged from a previous FDU survey.

Democratic Govs. Jim Florio and Brendan Byrne once scored as low as 18% (17% for Byrne).

A Quinnipiac University poll has Christie with just a 17% approval rating, 78% disapproval. 

Among those surveyed for this one, President Trump has a 55% disapproval in Jersey, though state Republicans approve of him 87% to 7%.

Separately, Thursday, a Bergen County (N.J.) municipal court judge said he would consider new evidence and rule next week on whether criminal charges should be filed against Gov. Christie as a result of the 2013 George Washington Bridge lane closures.

Last week, the Bergen County Prosecutor’s Office said it would not pursue charges against Christie based on its “review of the evidence and ethical obligations.”

--Our sympathies to the families of the victims of the “Bowling Green Massacre.”.....

Oh, sorry...there was no Bowling Green Massacre.

[Kellyanne Conway, in the blink of an eye, including with her use of “alternative facts,” is rapidly devolving from a major Washington power player into a laughingstock.  See Warren Buffett’s adage on same.]

--I recognize Trump supporters don’t care, but I really don’t want my president blasting an actor, in this case Arnold Schwarzenegger, for poor ratings at the National Prayer Breakfast.

--I was watching West Virginia Sen. Joe Manchin talk about the opioid epidemic in his state and he said the United States, with 5% of the world’s population, consumes 80% of the world’s opioids.

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Pray for the men and women of our armed forces...and all the fallen, including William ‘Ryan’ Owens.

God bless America.

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Gold $1221
Oil $53.85

Returns for the week 1/30-2/3

Dow Jones  -0.1%  [20071]
S&P 500  +0.1%  [2297]
S&P MidCap  +0.6%
Russell 2000  +0.5%
Nasdaq  +0.1%  [5666]

Returns for the period 1/1/17-2/3/17

Dow Jones  +1.6%
S&P 500  +2.6%
S&P MidCap  +2.8%
Russell 2000  +1.5%
Nasdaq   +5.3%

Bulls 61.8
Bears 17.6  [Source: Investors Intelligence]

Dr. Bortrum posted a new column!

Have a great week.  Pitchers and catchers report in 10 days!!!

Brian Trumbore

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