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Week in Review

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06/24/2017

For the week 6/19-6/23

[Posted 11:00 PM ET, Friday]

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Edition 950

*I just finished reading the extensive Washington Post story that was released Friday afternoon concerning Russian President Putin’s “direct involvement in a cyber campaign to disrupt and discredit the U.S. presidential race,” including “Putin’s specific instructions on the operation’s audacious objectives – defeat or at least damage the Democratic nominee, Hillary Clinton, and help elect her opponent, Donald Trump.”

The material “was so sensitive that CIA Director John Brennan kept it out of the President’s Daily Brief, concerned that even that restricted report’s distribution was too broad.”

But in the end, the Obama administration, namely the president himself, did virtually nothing despite what was in political terms, “the crime of the century, an unprecedented and largely successful destabilizing attack on American democracy.”

More next time. Tonight, though, Democrats are more furious at Obama than they were before at his inaction.

---

It’s About the Agenda, stupid...mostly....

Early in the week, Senate Republican leaders said they had a timeline to vote next week on legislation to repeal much of the Affordable Care Act, and on Thursday it was unveiled, few having seen any details beforehand.

The draft includes cuts to existing Medicaid spending levels and reshapes what is an open-ended government commitment to a system of capped federal payments, limiting federal spending.

The bill would also repeal billions of dollars in taxes that were used to raise money for ACA coverage expansion and abolishes the mandates to buy coverage.

The tax credits would stay, but they wouldn’t be as generous and thus save the government further dollars.

Senate Majority Leader Mitch McConnell said, “It’s time to act because ObamaCare is a direct attack on the middle class and American families deserve better than it’s failing status quo. They deserve better care. That’s just what we’re going to continue to work to bring them.”

Senate Democratic Leader Chuck Schumer countered: “This is a bill designed to strip away healthcare benefits and protections from Americans who need it most in order to give a tax break to the folks who need it least.”

But once again the arguments made in opposition are intellectually dishonest and the American people aren’t being told the truth.

For one thing, as is the case with more than 90% of the budget issues that come up, and in this instance spending on Medicaid, the ‘draconian cuts’ Democrats are talking about today are cuts in the existing rates of growth...not an actual cut!  It’s critical people understand that.

Another key issue was raised by Oklahoma Republican Sen. Jim Lankford in an interview with CNN’s Jake Tapper that I happened to catch.

All we hear about is the Congressional Budget Office’s estimate on the costs of the House plan, and next week the new Senate proposal, and how 23 million are losing their insurance, but as Lankford noted, he has been requesting the CBO give him the model on which the figures are based on for one year and the CBO has yet to turn it over!  This is outrageous.  Lankford talked of his discussion just the other day with the CBO chief, again requesting the model, and how in one case 4 million lose Medicaid the first year even though the first House plan that was graded didn’t change Medicaid for 2017-18!

Yes, it’s beyond nonsensical.  It’s also a massive lie perpetrated on the American people.

Again, the debate is intellectually dishonest.  We aren’t presented with the facts and that sucks.

For now, though, it should be drummed into every schoolchild’s head, and every parent’s.  When someone is talking about cuts to an existing program, is that a cut in the rate of growth, or an actual cut?

We have a massive entitlement crisis looming and if we can’t get this one simple fact right, the national debate on healthcare or any other major budget issue will never be an honest one.

---

The Senate measure phases out funding for the expansion of Medicaid, as currently under ObamaCare, over four years from 2020 to 2024 and includes deeper cuts to Medicaid (again, cuts in the rate of growth) than the House bill, starting in 2025.

It’s this last bit that will most impact the votes of Senate Republican moderates, with one, Sen. Lisa Murkowski (Alaska) having previously said she doesn’t want to phase out Medicaid expansion funding at all.

So now in the coming days, Senate Majority Leader Mitch McConnell will have to figure out if he has the votes to proceed.  With a mere 52-48 margin, he can’t lose more than two GOP votes to gain passage.  But as of this writing, five Republicans are in opposition, while all Democrats will oppose it, though Friday, West Virginia Dem. Joe Manchin said he wanted to work with the White House to improve the proposal.

In the end, though, it’s really about handing President Trump a legislative victory so Republicans can move on to the other agenda items.

If Republicans can’t act on ObamaCare by the July 4 recess, there will be little time to get it through before the August break.

Remember, repealing and replacing the ACA is essential to everything that follows, especially tax reform as Republicans can’t proceed on that without the projected savings from repealing the ACA.  But even before tax reform, you need a budget resolution for 2018, the fiscal year beginning Oct. 1, and as currently scheduled there are now less than 45 legislative days until Sept. 30.

Ergo, there is growing pressure for Congress to stay in town rather than go out on their scheduled August recess.  It wouldn’t be good for Republicans to head out of town with zero legislative accomplishments.  It’s also important to note that folks who follow this say the budget process, which involves individual spending bills requiring passage, is further behind than ever.

And then you have the issue of the debt ceiling....

Editorial / Wall Street Journal

“Senate Republicans released their draft bill to repeal and replace ObamaCare on Thursday, and Majority Leader Mitch McConnell is hoping for a vote next week. The binary choice now is between pushing past the media and Democratic flak to pass a historic achievement, or wilting under the pressure and ratifying the ObamaCare status quo.

“The bill is an imperfect compromise between moderate and conservative Republicans, and it makes pains to accommodate different interests and the Americans, states and businesses that have adapted to ObamaCare over the years. The center-right nature of the details means the Senate won’t be ushering in some free-market utopia.  But the reform is a major improvement over the U.S. health-care status quo that will worsen if the bill fails.

“The Senate bill works off the American Health Care Act that the House passed in May.  Like the House, the legislation replaces ObamaCare’s subsidies with tax credits for people who buy insurance on the individual market, ends Medicaid’s status as an open-ended entitlement, and starts to resolve some of the health-care system’s abiding flaws.

“Medicaid was most divisive for Republicans in their months-long internal debate, so the pleasant surprise is that the Senate’s entitlement overhaul is somewhat stronger than the House’s. The program originally meant for poor women, children and the disabled – which ObamaCare opened to able-bodied, working-age adults above the poverty level – would be modernized for the first time.  This could become the most consequential social reform since the welfare reconstruction of 1996.

“Like the House, the Senate would end the funding formula that rewards states for spending more and transitioni to block grants, allocated on per capita enrollment. Governors would receive far more regulatory flexibility to manage their programs.  Under the final House bill, the grants would max out at the rate of inflation plus one percentage point, starting in 2010.

“The Senate waits four years instead of three but pegs the grants to inflation with no adjuster. The danger of delays is that grants become another phony rule like the old Medicare ‘doc fix’ that Congress refused to enforce.  But the Senate’s structural changes are more ambitious, and the benefits of those revisions will compound over time.....

“The Senate’s (tax) credits are more generous than the House’s, and thus more costly to the federal fisc, and also means-tested.

“The fear among Senators is that the House approach doesn’t prioritize resources and lacks sufficient ‘heart’ for the less affluent, as President Trump has put it.  The House also would create its own work disincentive for people who leave Medicaid as their income rises slightly above the poverty line and would then become exposed to the full out-of-pocket cost of private insurance.

“The opportunity is to show that center-right solutions can get better results than governments in the form of lower premiums and more coverage options. The Senate includes about $100 billion for a ‘stability fund’ that would start to contain ObamaCare’s damage and could be used by creative Governors to support insurance markets, as states like Maine and Alaska have recently demonstrated....

“Republicans have campaigned across four elections against ObamaCare, and now Americans will see if they have the courage of their professed convictions. Conservatives must determine if progress that is politically feasible is preferable to impossible ideological purity, and moderates must defend policy substance from the distortions of critics....

“Failure would expose Republicans as feckless, with conservatives attacking the GOP for having failed and Democrats attacking the GOP for having tried. And don’t think Republicans could then drop the issue. Republicans would be under enormous pressure to shore up the failing insurance markets in this Congress.  The question is whether they do it on their terms with this bill, or later on Democratic leader Chuck Schumer’s.  Republicans would splinter over ‘bailing out’ ObamaCare, while Democrats demand more money in return for help.

“The Senate bill is imperfect, but it includes many conservative policy victories that have long been Republican goals. It’s not too much to say this is a defining moment for whether the GOP can ever reform runaway entitlements. If Republicans fail, the next stop is single payer.”

Editorial / Chicago Tribune

“Buckle up, all you Illinoisans who depend on ObamaCare health coverage. Wednesday is the deadline for rate request proposals from insurers.

“Customers can expect hefty premium hikes for next year’s policies.

“Yes, again. It’ll be this way until this faltering law gets fixed or replaced.

“For 2017, you may recall, Illinois rates leaped by more than 40 percent. For 2018, we’ll see.

“We don’t yet have preliminary increases for 2018 policies. Illinois typically – and infuriatingly – doesn’t release rates until later in the summer.  But large ObamaCare insurers in Delaware, Virginia and Maryland seek average increases greater than 30 percent for next year, the Wall Street Journal reports.  Market leaders in Oregon, North Carolina and Maine propose increases of about 20 percent or more.”

Former President Obama blasted the Senate plan on Thursday in a Facebook post.

“The Senate bill, unveiled today, is not a health care bill. It’s a massive transfer of wealth from middle-class and poor families to the richest people in America.

“Simply put, if there’s a chance you might get sick, get old, or start a family – the bill will do you harm. And small tweaks over the course of the next couple weeks, under the guise of making these bills easier to stomach, cannot change the fundamental meanness at the core of this legislation.”

Wrong!  [But you can see what Obama will be discussing if your company or trade group pays him $250,000 to speak at your next gathering.]

Trumpets (like Crumpets)....

--President Trump announced on Thursday he does not have recordings of his conversations with former FBI Director James Comey, ending weeks of speculation.

“I did not make, and do not have, any such recordings,” he tweeted.

But then he raised the possibility that a third party could have recorded his conversations.

“With all of the recently reported electronic surveillance, intercepts, unmasking and illegal leaking of information, I have no idea whether there are ‘tapes’ or recordings of my conversations with James Comey.”

This all started with Trump’s tweet, “James Comey better hope that there are no ‘tapes’ of our conversations before he starts leaking to the press!”

That led to Comey leaking his memos on his discussions with the president to a friend, who dutifully passed them on to the media, Comey hoping this would lead to a special prosecutor and, voila!  It did!  One of The Donald’s all-time dumb moves.

--Jay Sekulow is a sweet-talking lawyer who has appeared countless times on the likes of “Hannity” over the years and now he is President Trump’s public face in disputing any charges on obstruction of justice and the like emanating from Congressional, FBI or special counsel investigations of same.

So Sekulow went out as the administration spokesperson last Sunday for all the talk shows and he disputed Trump’s tweet last Frieday – “I am being investigated for firing the FBI Director by the man who toldme to fire the FBI Director! Witch Hunt!”

“There’s been no notification of any investigation,” Sekulow told Fox News Sunday.  “Nothing has changed in that regard since James Comey’s testimony.”

But even as he denied any investigation, Sekulow kept referring to an obstruction of justice investigation during his interview with Fox’s Chris Wallace, prompting expressions of incredulity from Wallace.

“Oh, boy,” Wallace said at one point.  “This is weird.”

--I watched President Trump’s rally in Iowa this week and at one point Trump called for a new law barring immigrants from receiving welfare for at least five years, but neither Trump nor anyone in his audience seemed to realize the law has already been on the books for more than 20 years.

So his minions dutifully rose to give him a rousing ovation when he pledged his administration would put the legislation into effect “very shortly.”

It was in 1996 that President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act that prevented immigrants from receiving federal benefits, such as food stamps, Medicaid, and Social Security for five years after entering the country; though there are exceptions for children and pregnant women, refugees and active duty military or veterans.

As for the president taking heat for saying he wants a poor person running the economy, that was nothing and hardly worth the anguish of some on the left. Next.....

Opinion on other issues....

David Brooks / New York Times

“There may be a giant revelation still to come. But as the Trump-Russia story has evolved, it is striking how little evidence there is that any underlying crime occurred – that there was any actual collusion between the Donald Trump campaign and the Russians. Everything seems to be leaking out of this administration, but so far the leaks about actual collusion are meager....

“I’m not saying there shouldn’t be an investigation into potential Russia-Trump links.  Russia’s attack on American democracy was truly heinous, and if the Trump people were involved, that would be treason.  I’m saying first, let’s not get ahead of ourselves and assume that this link exists.

“Second, there is something disturbingly meta about this whole affair.  This is, as Yuval Levin put it, an investigation about itself.  Trump skeptics within the administration laid a legal minefield all around the president, and then Trump – being Trump – stomped all over it, blowing himself up six ways from Sunday.

“Now of course Trump shouldn’t have tweeted about Oval Office tape recordings.  Of course he shouldn’t have fired James Comey....

“There’s just something worrisome every time we find ourselves replacing politics of democracy with the politics of scandal.  In democracy, the issues count, and you try to win by persuasion.  You recognize that your opponents are legitimate, that they will always be there and that some form of compromise is inevitable.

“In the politics of scandal, at least since Watergate, you don’t have to engage in persuasion or even talk about issues.  Political victories are won when you destroy your political opponents by catching them in some wrongdoing.  You get seduced by the delightful possibility that your opponent will be eliminated.  Politics is simply about moral superiority and personal destruction.

“The politics of scandal is delightful for cable news.  It’s hard to build ratings arguing about health insurance legislation.  But it’s easy to build ratings if you are a glorified Court TV, if each whiff of scandal smoke generates hours of ‘Breaking News’ intensity and a deluge of speculation from good-looking former prosecutors....

“The politics of scandal drives a wedge through society.  Political elites get swept up in the scandals.  Most voters don’t really care.

“Donald Trump rose peddling the politics of scandal – oblivious to policy, spreading insane allegations about birth certificates and other things – so maybe it’s just that he gets swallowed by it.  But frankly, on my list of reasons Trump is unfit for the presidency, the Russia-collusion story ranks number 971, well below, for example, the perfectly legal ways he kowtows to thugs and undermines the norms of democratic behavior.”

Rich Lowry / New York Post

“It was possible to imagine Trump, with a head of steam after his upset victory in November, cowing swamp-dwelling Republicans and wooing infrastructure-loving, anti-trade Democrats into supporting a populist congressional agenda.

“Maybe this was always a pipe dream given the instantaneous rise of the #resistance against him.  But this scenario would have required a strong, focused president marshaling his popularity and driving Congress.

“We’ve seen close to the opposite. And, of course, there’s the so-called Russia investigation.  ‘Russia’ is a misnomer.  The controversy is now shifting from being about supported Trump-campaign collusion to alleged obstruction of justice and whatever else special counsel Robert Mueller dredges up in what will probably be a free-ranging, years-long investigation.

“So, whatever Trump’s true ideological predilections, there’s no place for him to go.  Make deals with the Democrats?  At this point, Democrats are more likely to cooperate with Sergey Kislyak on an infrastructure package than with Donald Trump....

“As for congressional Republicans, they, too, don’t have much choice.  Like it or not, whatever they tell reporters privately about their true feelings about Trump, his fate is their fate.

“First, a president’s approval rating heavily influences midterm elections. The outcome in the campaign for the House will presumably be much different depending on whether Trump is at 35 percent or 45 percent.  Republicans dumping Trump wouldn’t make him any more popular.

“Second, such a distancing is not really politically practicable. If Republicans try to skitter away from Trump, their base will roast them. There’s no reason to think that at this point the dynamic would be any different than after the release of the ‘Access Hollywood’ tape, when Republicans dumping Trump were quickly forced to pick him right back up again.

“Third, Republicans want to get some things done legislatively. A poisonous split with the White House wouldn’t help.  Trump may be a mercurial and frustrating partner, but he is a partner all the same.

“Finally, most Republicans – quite legitimately – think the Russian controversy is a media-driven travesty. If there were a smoking gun, this posture would probably change (obviously, in that circumstance, it should change).

“But Democrats are in no position to lecture Republicans on cutting loose a president of their own party when they twisted themselves in knots to defend Bill Clinton after he lied under oath over an affair that violated every feminist principle the party professed to hold.”

Editorial / Washington Post

“Congress rarely takes the lead in foreign affairs, but senators in both parties have risen to the occasion in recent weeks, exhibiting an uncommonly independent and disciplined response to the tumult of President Trump’s administration.  The latest votes and hearings are a welcome sign that Congress can act as a responsible counterweight to Mr. Trump’s more erratic impulses.

“Last week the Senate voted 98 to 2 – how often does that happen? – for the first major piece of foreign policy legislation the chamber has considered this year, a bill stepping up sanctions against Iran and Russia.  While Mr. Trump has broadly declared a desire  to improve ties with the Kremlin and was seen recently joshing in the Oval Office with the Russian foreign minister and ambassador, the Senate vote reflects a far more sober assessment of President Vladimir Putin’s meddling in the U.S. election, subversion of Ukraine and intervention to save the brutal leader of Syria.  The legislation, with bipartisan backing, will make it impossible for Mr. Trump to lift sanctions against Russia without congressional approval, and places new penalties on Russian energy exports. There’s been much debate lately about whether Mr. Putin’s hacking against the United States last year was a shrewd move for him and for Russia; the Senate vote suggests it has badly backfired.  Another example was a Senate vote that can be seen only as a rebuke to Mr. Trump’s handling of a bedrock issue, the Atlantic alliance.  Mr. Trump delivered a speech May 25 at NATO’s new headquarters in which he omitted a sentence affirming the long-standing U.S. commitment to Article 5 of the North Atlantic Treaty, the pledge that ar armed attack against one will be considered an attack against all.  Mr. Trump made a lame attempt to recover June 9, once back at the White House, but the damage had been done.  His omission was dangerous and could lead allies to doubt American resolve at a time of growing tension with Russia. The Senate, wanting to make sure there is no ambiguity, voted 100 to 0 for an amendment reaffirming U.S. support for the alliance.

“Meanwhile, Mr. Trump has proposed a debilitating 30 percent cut in the fiscal 2018 budget of the State Department, one of the deepest cuts in any federal agency. When Secretary of State Rex Tillerson went before the Senate Foreign Relations Committee last week, he got a truckload of bipartisan criticism about the risk of such cuts in a department dedicated to defending American interests abroad....The senators repeatedly and wisely pointed out to Mr. Tillerson that U.S. security is enhanced not only by military might but also programs that promote democracy and prevent nuclear proliferation.  They also questioned him about the snail’s pace of filling the department’s top jobs.

“Everyone ought to be grateful that Congress, so often fractious and hyper-partisan, has seen fit to grab the foreign policy wheel, and steady it.”

Finally, real estate titan Sam Zell had an interview in Barron’s on his new book, “Am I Being too Subtle?” and other things, the book a tribute to his refugee parents and to immigration.

Barron’s: What grade would you give this president?

Zell: “An incomplete. He’s learning on the job. They all do, but most of them came from a political environment. In politics, you are very sensitive about hiring and firing.  In the business world, and particularly for him, firing people was a daily occurrence.  His ability to say, ‘Let’s take a risk on this guy, and if we don’t like him, we’ll get rid of him’ is a very different mind-set.  He should stop tweeting.  Never pick a fight with somebody who buys ink by the barrel.  Not that I’m a great fan of the press, but I can’t imagine there’s a long-term positive in taking on the people whose job it is to cover you.  The strength of our society is predicated on respect for his office. That’s missing right now.”

Barron’s: Your book is a love song to immigration. What’s your view of today’s rhetoric?

Zell: “We know what happens to an anti-immigration society. Japan is being emptied out.  If you don’t propagate, and don’t immigrate, you shrivel.  The enormous growth of this country was built on immigration and the mental set of an immigrant.  My parents each had six siblings.  They pleaded with them to leave Poland [before World War II].  They turned them down.

“Immigrants are the ultimate consumers of what we’ve historically sold: freedom.  Maybe 75% would use their freedom to watch TV.  But the rest would start a business and work 20 hours a day, instead of 10.  Our immigration policy needs to encourage people like this who are contributors. We need to encourage the students who come to our universities to stay here.”

Speaking of Japan, I’ve been meaning to include a piece by the New York Times’ Jonathan Soble from June 2, 2017, and it’s been ending up on the cutting-room floor.  You all know this story, as I’ve written of it at least ten other times in these pages, but it bears repeating.

“After Japan’s population hit a peak of 128 million at the start of the current decade, it shrank by close to a million in the five years through 2015, according to census data.  Demographers expect it to plunge by a third by 2060, to as few as 80 million people – a net loss of a million a year, on average.

“About 40 percent fewer children were born in Japan last year than in 1949, at the peak of the country’s post-World War II baby boom. The number had not fallen below one million since 1899, when comprehensive record-keeping began. At that time, Japan’s population was smaller than it is today.”

Of course the solution is mass immigration, everyone knows that, but there is virtually zero support for it in Japan, and so they’ll pay the price.

But therein is also a lesson for us.

Wall Street

Stocks finished up, with the Dow Jones and S&P 500 hitting new highs during the week, seemingly on optimism the Trump agenda will be enacted this year.

On the economic front, just a little news on housing, with May existing home sales up 1.1% to 5.62 million annualized, better than expected and breaking a trend of slowing numbers, while May new home sales rose 2.9% to 610,000, also better than forecast. The median price of a new home hit an all-time record of $345,800.

Europe and Asia

We’re nearing quarter end and the economic data will be arriving fast and furiously. For this week, the flash reading on eurozone activity for June was released by IHS Markit and it revealed a composite PMI of 55.7 (50 being the dividing line between growth and contraction) vs. May’s 56.8, another solid rise in business activity, making it the strongest quarter of expansion for over six years.  May’s 56.8 was a six-year high as well.

The flash manufacturing PMI was 57.3 vs. 57.0, a 74-month high, while the service reading declined to 54.7 from 56.3, a 5-month low.

Chris Williamson / IHS Markit

“Although the PMI data point to some loss of growth momentum in June, the latest reading needs to be looked at in the context of recent elevated levels. Despite the June dip, the average expansion in the second quarter...is historically consistent with GDP growth accelerating from 0.6% in the first quarter to 0.7%.

“The upturn is also broad-based, with the surveys signaling an acceleration of GDP growth in both France and Germany in the second quarter, as well as across the rest of the region as a whole.”

The flash readings hand out specifics for just Germany and France and in the latter, the composite index was 55.3 vs. 56.9, with a manufacturing PMI of 55.0 vs. 53.8, and services of 55.3 vs. 57.2 last month.

In Germany, the composite was 56.1 vs. 57.4, while the flash manufacturing PMI was 59.3 vs. 59.5 and services 53.7 vs. 55.4.

Separately, German exports to Asia, as figures released Wednesday showed, rose 12% in the first four months of the year compared with the same period in 2016.  Exports to India rose a similar rate. To the EU they were up 4.8%, 3.9% to the United States, and -4.0% to the U.K., according to the Federal Statistics Office.

Eurobits....

On the Brexit front...talks finally commenced this week and not to beat a dead horse, but, again, this process is going to be truly chaotic and not good for the U.K. economy, period.

British Prime Minister Theresa May and the EU are clashing on the first major issue, protecting the rights of each other’s citizens, and while Mrs. May said she offered a “fair and serious” proposal on citizens’ rights, EU chief Donald Tusk dismissed it as falling “below our expectations.” Dutch Prime Minister Mark Rutte said “thousands of questions” remained on this critical topic.

Mrs. May is insisting that the EU needs to give the 1.5 million Britons living on the continent equal respect and is preparing a more detailed proposal for Monday, when May addresses parliament on the matter, but aside from this area, Brexit negotiators are discussing the amount Britain is going to have to pay to quit the EU (for things like future pension costs) and the serious issues concerning the border in Ireland.

May said, “I want to reassure all those EU citizens who are in the U.K., who’ve made their lives and homes in the U.K., that no one will have to leave, we won’t be seeing families split apart.  This is a fair and serious offer.”

Under May’s proposal, EU citizens with legal residence in the U.K., an estimated 3 million, will not be asked to leave and will be offered a chance to regularize their situation after Brexit.  May also promised to cut the paperwork involved. Today, an EU citizen faces an 85-page form if they want to stay.

Remember, Britain is breaking away from the European Union.  All rights technically go away. No longer an open border.  You have to negotiate everything.  And the main point of Brexit in the first place, aside from the U.K. unburdening itself from some of the European Union’s regulations and costs, was the issue of restricting immigration, so think about current EU residents from countries that many Brits don’t favor (read eastern Europe).

The issue of citizen rights must be resolved first before trade talks can commence leading up to Britain’s March 2019 scheduled exit.

[One tidbit: Britain’s Brexit Secretary David Davis and his EU counterpart, chief negotiator Michel Barnier, held their first 7 hours of discussions in Brussels on Monday and what did they have for lunch? According to Bloomberg News, Belgian asparagus, red mullet and meringue cake with strawberries.  Just had to throw in a little obligatory food porn.]

Separately, officials declared on Friday that the fire that engulfed the London tower block, killing at least 79, started in a Hotpoint (Whirlpool) fridge freezer and that cladding on the building failed all safety tests.  The Hotpoint model FF175BP was not subject to recall and the manufacturer is doing further tests.  So, the fire was definitely not deliberately set, but the real crime is in how flammable the building materials used in a recent extensive renovation at the tower were.

London police said manslaughter charges could be pending, as well as criminal offenses.  The blaze, Britain’s worst since World War II, has heaped further political pressure on Prime Minister May.

And President Trump finally announced that New York Jets owner Woody Johnson was his choice to serve as U.S. ambassador to the U.K., in what is a truly idiotic move for such a crucial position.

Johnson has been a pathetic owner of my favorite football team and the only reason why he is getting the position is because he was a big ‘bundler’ during the campaign.

And what the heck Johnson knows about foreign policy, or what is involved in Brexit, is beyond me.  The Senate should turn him down unanimously.

Lastly, President Trump’s planned state visit to Britain late this summer or early fall has been postponed amid fears it would attract mass protests that would undermine Prime Minister May’s efforts to build a closer relationship with Trump, let alone her own agenda, namely dealing with Brexit.

As for the French Elections, part deux, President Emmanuel Macron’s year-old Republic on the Move party, La Republique en Marche (LREM), scored an impressive triumph in the second, and final, round of voting last Sunday, capturing an outright majority, 350 of 577 seats in the National Assembly, though this was a full 65-100 seats below some estimates.  Nonetheless it is the biggest majority in 15 years.

The center-right Republicans captured 113 seats (137 with their allies), down from 225 in 2012, while the Socialists took a putrid 29 (45 with allies), down from 328!

Marine Le Pen’s National Front (Front National), did manage 8 seats (up from 2 in 2012), though less than their goal of 15+, but better than the single seat some had predicted.  Ms. Le Pen won her own seat, importantly, giving her a direct say in debate, which will keep her voice out in public.  [Ditto far-left leader Jean-Luc Melenchon, who also won a seat for the first time, his party and others of its ilk gaining 27 seats, up 12 from last election.]

But here’s the key. Turnout in round two was abysmal, 42.6%, more than 10 points below the previous record low.  And this, sports fans, is what I’ll be harping on for the next year, at least.

Because it shows you that Macron’s support is actually paper thin.  While I expect his first approval numbers will be solid, watch what happens when he begins trying to enact his labor reform agenda, France’s labor code being 3,000 pages long!  I can guarantee one thing.  This is far from a united nation, and there will be violence in the streets over some of his labor proposals, which are largely free-market ones, that many of us here will like.

But when you’ve had a lifetime job, with 100% security and a healthy pension allowing you to retire at 60, or earlier, you aren’t going to easily accept changes that would require you to work longer, retire later, and at not as hefty a pension, while at the same time many of your bosses will find it easier to fire you.  This is the debate that is going to take place in France. 

One thing Macron has going for him, however, is the economy is back on track, with consumer confidence at its highest in a decade.

Meanwhile, Macron began to lay out his foreign policy, and national security will be at the heart of it, not necessarily the interventionist policies of his predecessor, such as in places like Libya, Mali and Central African Republic.  [There was another terror attack in Mali this week on a popular resort with a number of dead, including a Portuguese soldier.]

This week, Macron dropped demands for Bashar Assad’s ouster as a condition for any peace agreement in Syuria, and he appears to be broadly aligning his foreign policy with that of the U.S., in terms of tackling terrorism while seeking better ties with Russia, which he considers a long-term partner rather than a direct threat to Europe.

The president only wants diplomatic initiatives that bring concrete results.  As they say, developing....

One last item, while Europe had another series of terror attacks, including in London and Paris that thankfully weren’t as deadly as they could have been, there was an incident near Calais, at a major migrant gathering ground for those seeking to sneak into Britain via the Chunnel (Channel Tunnel), that was most disturbing.

“French authorities say a truck driver was killed in a highway accident prompted by a roadblock installed by migrants trying to board trucks traveling across to Britain.

“The administration for the Pas-de-Calais region said in a statement that nine Eritrean migrants have been detained.

“It says that migrants placed tree trunks on the A16 highway leading to Calais early Tuesday, forcing three large trucks to stop. It said a smaller truck then crashed into one of those trucks and caught fire.”

Sickening, and remember how the huge migrant camps in Calais were dismantled roughly a year ago by the French government?  They are back.  Incidents such as this are a reason why the far-right cause in France, and elsewhere in Europe, won’t die.

Turning to Asia...China’s 70-city housing index for May showed prices rose 10.4% year-over-year, according to the Bureau of National Statistics, which actually continues a trend of deceleration, the peak having been up 12.6% in November.  Month-on-month, average prices rose in 56 of the 70.  Beijing’s housing prices have risen 14.6% yoy.

In Japan, the flash reading on manufacturing for June was 52.0 vs. 53.1 in May, a seven-month low, but still growth, and external demand remains solid.

In keeping with that, May exports came in up 14.9%, the fastest rate in 2 years on higher shipments of cars and steel.  Exports to Asia rose 16.8% (23.9% to China and 22.9% to South Korea), while exports to North America rose 12.7%.  Imports also soared, up 17.8%.

Street Bytes

--All three major indices rose, with the Dow Jones up 0.05%, 10 points, to 21394.  It hit a new high of 21528 on Monday before sliding back. The S&P 500 hit a new high Monday as well, 2453, before finishing today at 2438, up 0.2% on the week.  Nasdaq rebounded 1.8% after two rough weeks.

--U.S. Treasury Yields

6-mo. 1.10%  2-yr. 1.34%  10-yr. 2.14%  30-yr. 2.72%

--Oil prices continued to tumble a fifth week in a row from the $50+ level on West Texas Intermediate to $43.17 at Friday’s close.

Despite the decline, however, most experts don’t expect a significant reduction in U.S. production, which has been acting against OPEC’s cutbacks on same. The theme “lower-for-longer” instead is now predominating forecasts, and this has an impact on the auto industry and the popularity of SUVs.

--Until this week, it’s been a mystery to some why bank shares were rallying, even as the yield curve flattened further, because it’s clear bond trading business across the board sucked in the second quarter.  Jefferies, a boutique Wall Street bank, has already said its second-quarter bond business slid by a full third from a year ago.  Other Wall Street execs announced last month that their fixed income operation, a large profit center for most, will be down 10-15%, and June was certainly no better.

--I’m sorry, there’s only so many Uber stories I can take these days.  Yes, with the departure of CEO and co-founder Tavis Kalanick, who stepped down late Tuesday after taking a leave of absence the week before, it’s a big fall from grace.  But he’s a dirtball, and most of the time in life, dirtballs eventually get their comeuppance.

The thing is Uber has had a huge impact on the transportation sector, worldwide, in such a short period of time, the ultimate disruptor, and with all the other turmoil at the company in recent months, with a mass executive exodus, the company is indeed a mess and it needs some stability in the C-suite quickly.

Even venture capitalist Bill Gurley, whose firm Benchmark Capital was one of Uber’s earliest investors, is stepping down from the board of directors. Gurley had been a supporter of Kalanick, but ended up being one of those forcing his exit.

A week earlier another board member, TPG Capital’s David Bonderman, was replaced after being forced to step down following a sexist remark during a crisis meeting at Uber.

Meanwhile, a movement to bring Kalanick back was gathering steam at week’s end, with more than 1,000 employees signing a petition asking the board to reinstate him in some role.

One investor, Mood Rowghani, a partner with Kleiner Perkins, said, “Founder DNA is a precious asset and cannot be under-estimated.  Founders may not always play the role of CEO but several great companies – most notably Apple and Twitter – that severed all ties to their founder eventually came to regret it.”

--Oracle beat the Street handily with its earnings release Wednesday and the shares soared 9%.

Fiscal fourth-quarter net rose 15% to $3.23 billion, 89 cents per share, adjusted, better than the Street’s forecast of 78 cents.

Revenue rose 2.8% to $10.89 billion, also beating analysts’ estimates.

The company has been successful in bringing in new customers to its web-based, on-demand computing services, with this annually recurring revenue, ARR, hitting $855 million in the quarter. For the year ARR brought in $2.1 billion, Oracle co-CEO Mark Hurd said during a conference call with analysts.

Oracle’s cloud business saw revenue climb 67% to $1.15 billion, though it’s a little confusing how the company is combining all this related business vs. the way some of its competitors report it.

To keep up in cloud, Oracle will need to match the spending of Amazon, Microsoft and Goggle, who combined spent $31.5 billion last year on everything related to building out data centers.

--FedEx Corp. on Tuesday reported earnings for its fiscal fourth quarter that beat the Street, ditto revenue, which came in at $15.73 billion in the period vs. expectations of $15.56 billion.

For the year, earnings were $11.07 on revenue of $60.32 billion.  For the current year, the company expects earnings to fall in the range of $12.45 to $13.25 per share.

--Ford announced it is moving U.S. production of its new Ford Focus car to China in 2019, despite the pressure to keep production in America.  Ford said the decision would not lead to layoffs in the U.S.

It was just in January that Ford scrapped plans to move U.S. production to a new plant in Mexico after criticism from President Trump.

Currently, Ford makes its Focus cars in Michigan, Germany and China.  It still has a large plant in Hermosillo, Mexico producing other models.

The Michigan plant currently producing the Focus will switch to making trucks in 2018, with the same number of workers.

The day of the Ford announcement, U.S. Trade Representative Robert LIghthizer said he was concerned about Ford’s move.  “I find that very troubling.  I want to look and see whaat incentives there are.  It doesn’t necessarily make sense to me,” Lighthizer told a congressional panel on Capitol Hill.  “If it happened for reasons that are non-economic reasons, then I think the administration should take action.”

--Qatar Airways announced Thursday it intended to buy a stake of up to 4.75% in American Airlines, increasing it to as much as 10% over time, but American CEO Doug Parker said he was “not happy” about the prospect and found the approach “puzzling and strange.”  Parker has railed in the past about the subsidies the Middle East’s largest carriers receive from their governments that makes it difficult for the likes of American and United to compete.

Qatar tried to assure American that it was building a “passive position in the company with no involvement in management, operations or governance.”  It can buy 4.75% without board approval, but needs it for anything more.  [The board will shut this down.]

--Canada’s Bombardier plans to cut around 2,200 jobs in Germany, or around a quarter of its workforce in the country, as part of a sweeping cost-cutting plan.

--MSCI Inc., a leading index provider, has decided to include mainland Chinese shares in its global benchmarks for the first time, which one hopes will change the way Chinese companies are run in terms of transparency and following basic accounting rules, though I wouldn’t count on it.  For every Enron here, there are 20 there.  Trust me.

But MSCI said it would admit 222 Chinese stocks to benchmarks such as its Emerging Markets Index, which is tracked by funds with some $1.6 trillion of assets under management worldwide, according to the Wall Street Journal’s Gregor Stuart Hunter, though the actual flows initially are expected to be pretty light.

Separately, an official with the China Banking Regulatory Commission said on Thursday that some of China’s largest companies may pose a systemic risk to the country’s banks.  While none of the companies were mentioned by name, shares in some of the larger ones tanked, specifically the deal makers, who the regulator said are plagued with hidden debt from their acquisitions.

--California has built out so much solar power that it is often paying neighboring states, such as Arizona, to take the excess in order to avoid overloading its own power lines, as reported by the Los Angeles Times’ Ivan Penn.  This happened on 14 days in March, eight days in January and nine in February, and it helped Arizona electricity customers save millions of dollars.

But because there is no single entity in charge of energy policy in California, Californians are paying about 50% more than the national average for their electricity.

Today, one-fourth of the electricity comes from renewables, with a mandate of one-half by 2030, which experts say is “laughably easy” to achieve, especially as the cost of solar panels comes way down.

But at the same time, state regulators have been greenlighting utility company proposals to build more natural gas power plants.  It’s screwed up...and a good B-School study for you kids out there looking for an interesting thesis topic.

Also, looking at Trump’s statement in Iowa that he may build the wall with Mexico using solar panels, “My idea,” he crowed, this could cost the government even more!

--British securities regulators charged Barclays and four former executives with fraud over their actions in the 2008 financial crisis.  The Serious Fraud Office said the cases relate to two capital raises by the bank, billions of pounds from Qatari investors that enabled it to avoid a government bailout.

The four execs are John Varley, former CEO, former senior investment banker Roger Jenkins, Thomas Kalaris, a former head of Barclays’ wealth division, and Richard Boath, the ex-European head of financial institutions...all charged with conspiracy to commit fraud

Barclays is accused of conspiracy related to “advisory” fees paid to Qatar, and the second charge, “unlawful assistance,” is related to a 2bn pound loan advanced to Qatar after the fundraisings were negotiated, which is more than fish and chippy.  [“Fun with Fraud,” another free feature of ‘Week in Review.’]

The key to the 12bn pounds that Barclays took from Qatar in 2008, was to avoid nationalization, at a time Lloyds and Royal Bank of Scotland were forced to rely on taxpayer bailouts.  [BBC News]

--Last week when I noted that Amazon is looking to dominate every part of a consumer’s shopping experience, with its acquisition of Whole Foods Market, Wake Forest frat bro Ken S. passed along that Jeff Bezos’ boys have software, according to Marketplace Business Report, that prevents one from checking out the competition on your smartphone when you are in an Amazon store, of which Amazon will now have 460 with the Whole Foods move.  Yes, jamming software.

[Wal-Mart, by the way, said late Friday it would not make a competing bid for Whole Foods.]

--Intel has replaced McDonald’s as a new global sponsor of the Olympic Games until 2024.  Past deals have typically generated $100m over each four-year Olympic cycle.  I told you last week that McDonald’s was exiting after decades of sponsorship.

The IOC is having a hard time finding cities to take on the multibillion-dollar costs of staging the Games and last week, it moved to award the 2024 and 2028 summer Olympics to Paris and Los Angeles, after a slew of cities dropped out of the bidding citing cost concerns.

--Sears Canada Inc., which was spun off from Sears Holdings Corp in 2012, announced its own set of store closings and layoffs; shuttering 59 of its 225 stores and laying off 2,900 of its 17,000 workers as part of a restructuring effort approved by an Ontario bankruptcy court.  Many don’t believe the chain will make it in the Great White North.

--Ripped from the pages of the South China Morning Post: “A bike-sharing company has shut down in China after about 90 percent of its cycles went missing, presumed stolen,” according to Caixin.

--George Clooney and his two partners are selling their tequila company, Casamigos Tequila, to Diageo for $1 billion. 

Partner Randy Gerber told the New York Post, “We created Casamigos four years ago for us to drink personally and selling it for $1 billion is something we never could have imagined.”

--So how did Megyn Kelly do with her Alex Jones interview last Sunday?  Not well, just 3.5 million viewers, the lowest of her first three weeks.  In fact, “Sunday Night With Megyn Kelly” attracted 1.3 million fewer viewers than a repeat of “60 Minutes,” which is beyond embarrassing.  [Seeing as I don’t miss a single “60 Minutes” during its regular season, I don’t watch repeats.]

Well at least on the East Coast, the U.S. Open was wrapping up during Megyn’s show, so that cost some viewers for sure.

Kelly’s premiere with Vlad the Impaler had 6.1 million viewers.

Look, a lot of us knew from day one this was a stupid hire, especially at as much as $15 million per.

Maybe Megyn should interview Charlie Brown and Linus.

I mean wouldn’t you like to know what really happened on set when Charlie Brown was first shown the scrawny tree in “A Charlie Brown Christmas”?

“I went to director Bill Melendez and said, ‘You’ve got to be kidding me?  This won’t work.’ And Melendez goes, ‘Trust me, kid, it will.’  And darned if he wasn’t right.”

Foreign Affairs

Syria, Iraq, Iran, Turkey and Russia: The crisis in Syria ratcheted up several levels last Sunday as an American warplane shot down a Syrian government jet that had attacked members of American-backed Syrian fighters leading the assault on Raqqa, the self-declared capital of Islamic State.  It was the first time in Syria’s civil war the U.S. had shot down a Syrian regime plane. About two hours later, a regime SU-22 jet dropped bombs on U.S.-backed forces in the same area.

Syrian state media called the U.S. attack a “flagrant aggression” and said the jet was carrying out a mission against Islamic State militants when it was downed.

The Russians then threatened to target any U.S. aircraft flying west of the Euphrates River in Syria. Russia also suspended a hotline between the two armed forces designed to reduce the risk of a mistake.

Aaron Stein, a resident senior fellow at the Atlantic Council think tank in Washington, told the Wall Street Journal that the strike was an outgrowth of an ill-defined administration strategy.

“Nobody has thought this through,” he said.  “There doesn’t seem to be any policy guidance,” rather it is battlefield tactics that are driving policy.

Is the U.S. willing to shoot down a Russian or Turkish fighter jet carrying out a similar attack?

Meanwhile, also on Sunday, Iran announced its Revolutionary Guards had launched multiple missiles strike against ISIS in one of its last Syrian strongholds, Deir Ezzour province. Tehran said it was in retaliation for the June 7 attack on Iran’s parliament and a shrine in the capital claimed by IS.  The missiles had to have traveled over 500 miles, flying over Iraq.

Amos Harel / Haaretz

“In the span of just a few short hours, two unprecedented developments occurred in the Syrian civil war on Sunday. One: A U.S. warplane shot down a Syrian air force jet.... Two: Iran fired medium-range ground-to-ground missiles, ostensibly at Islamic State targets in Syria....

“The war in Syria, which has now lasted longer than World War II, continues to metamorphose. The only thing that stays the same is that Syria remains an arena for regional and world powers fighting over status, image and influence....

‘Americans are always worried about mission creep, as happened in Vietnam in the 1960s. The concern is that tactical decisions, mainly made to defend specific interests here and there, will ultimately bog America down in a major war that it doesn’t want. With Trump, this is a real possibility.”

Ralph Peters / New York Post

“The stakes in Syria just jumped mighty high. Syrian troops attacked the anti-ISIS fighters we back. We warned them to knock it off.  In reply, a Syrian aircraft struck our allies. An American jet shot it down.

“Now the Russian government says it will view as hostile any manned aircraft or drone flying west of the Euphrates River.  That means us.

“Were we to accept Russia’s ultimatum, we could not support our allies and we’d be shut out of the endgame battle with ISIS when, as Raqqa falls, the terrorists make a last stand at Deir ez-Zor....

“The technical wording of their threat allows the Russians a little bit of leeway, but what makes the pronouncement dangerous is that it’s public – making it hard for Vladimir Putin to back down.  Of course, Putin’s a gambler, and a canny one. He may be bluffing. But we can’t count on it.  We must assume his forces in Syria are already setting ambushes for our aviators.

“Meanwhile, the Russian media, in a Big Lie mode excessive even by Moscow’s shameless standards, insists U.S. troops on the ground are supporting ISIS, while the noble Syrian forces – alongside their selfless Russian and Iranian comrades – are the only ones fighting the terrorists.

“In reality, Bashar al-Assad and his backers cynically dumped the burden of wrecking ISIS on us and our local allies to concentrate on slaughtering civilians, exterminating freedom fighters and torturing thousands of prisoners to death.  Now that we’ve done the anti-ISIS heavy lifting, they want to exclude us from the endgame and crush our Kurdish and Arab allies.

“Russian media have also been giving a platform to Putin’s generals and their alarming tone. It doesn’t sound like the Cold War I remember.  It sounds worse. Having won again and again over the past decade, from Georgia to Crimea and now Syria, Russia’s officer corps appears to be itching for a bout for the world championship, convinced we don’t have the guts to stand up to them.

“What’s wryly striking is that the Russians, who see themselves as master strategists, are blind to the way Iran has been manipulating them: Iran got us to fight ISIS and may get Putin to fight us.  Guess who wins, either way?

“This could spin out of control very, very fast. If it does, we have to win rapidly and decisively – and keep it within Syria....

“What happens now? Our military is war-gaming contingencies to ensure that, should the Russians fire on us, we’ll be prepared. We cannot let the Russians dictate where we fly and who we can protect. We’ve gone out of our way to avoid confrontations with Putin’s war criminals, but there’s a limit. And we may be about to reach it.

“This situation could become President Trump’s own Cuban Missile Crisis: If the Russians pull the trigger, will our president stand up to Putin?

“Putin may be betting that he won’t.”

Editorial / Wall Street Journal

“A bipartisan conceit has been that the U.S. can defeat Islamic State by ducking the larger conflict in Syria, and now we’re finding out that may not be possible....

“The risk of escalation is real, but this isn’t a skirmish the U.S. can easily avoid. Mr. Assad and his allies in Moscow and Tehran know that ISIS’s days controlling Raqqa in Syria are numbered.  They want to assert control over as much territory as possible in the interim, and that means crushing the SDF (Syrian Democratic Forces)....

“This is the predicament President Obama put the U.S. in when his Syrian abdication created an opening for Vladimir Putin to intervene.  Had the U.S. established a no-fly or other safe zone to protect refugees, the Kremlin might have been more cautious.  Mr. Putin took the measure of Mr. Obama and gambled the former U.S. President would protest and do nothing. He was right. Now the Russian is testing President Trump as everyone maneuvers for post-ISIS advantage.

“As a candidate, Mr. Trump supported ‘safe zones’ for refugees and opposition forces. But he’s also shown no interest in a larger strategic goal than defeating ISIS. Now is the time for thinking through such a strategy because Syria, Russia and Iran know what they want....

“Our guess is that Russia doesn’t want a military engagement with the U.S. any more than the U.S. wants one with Russia, but Russia will keep pressing for advantage unless President Trump shows more firmness than his predecessor.”

Charles Krauthammer / Washington Post

“The U.S. shoots down a Syrian fighter-bomber. Iran launches missiles into eastern Syria.  Russia threatens to attack coalition aircraft west of the Euphrates. What is going on?

“It might appear a mindless mess, but the outlines are clear. The great Muslim civil war, centered in Syria, is approaching its post-Islamic State phase. It’s the end of the beginning.  The parties are maneuvering to shape what comes next.

“It’s Europe, 1945, when the war was still raging against a Nazi Germany, but everyone already knew the outcome. The maneuvering was largely between the approaching victors – the Soviet Union and the Western democracies – to determine postwar boundaries and spheres of influence.

“So it is today in Syria. Everyone knows that the Islamic State is finished.  Not that it will disappear as an ideology, insurgency and source of continuing terrorism both in the region and the West. But it will disappear as an independent, organized, territorial entity in the heart of the Middle East....

“Much of the fighting today is about who inherits.  Take the Syrian jet the United States shot down. It had been attacking a pro-Western Kurdish and Arab force (the Syrian Democratic Forces) not far from Islamic State territory.

“Why? Because the Bashar al-Assad regime, backed by Iran, Hizbullah and Russia, having gained the upper hand on the non-jihadist rebels in the Syrian heartland (most notably in Aleppo), feels secure enough to set its sights on eastern Syria.  If it hopes to restore its authority over the whole country, it will need to control Raqqa and surrounding Islamic State areas.  But the forces near Raqqa are pro-Western and anti-regime. Hence the Syrian figher-bomber attack.

“Hence the U.S. shoot-down. We are protecting our friends. Hence the Russian threats to now target U.S. planes. The Russians are protecting their friends.

“On the same day as the shoot-down, Iran launched six surface-to-surface missiles into Syrian territory controlled by the Islamic State.  Why?  Ostensibly to punish the jihadists for terrorist attacks two weeks ago inside Iran.

“Perhaps.  But one obvious objective was to demonstrate to Saudi Arabia and the other Sunni Arabs the considerable reach of both Iran’s arms and territorial ambitions.

“For Iran, Syria is the key, the central theater of a Shiite-Sunni war for regional hegemony.  Iran (which is non-Arab) leads the Shiite side, attended by its Arab auxiliaries – Hizbbullah in Lebanon, the Shiite militias in Iraq and the highly penetrated government of Iraq, and Assad’s Alawite regime.

“Taken together, they comprise a vast arc – the Shiite Crescent – stretching from Iran through Iraq, Syria and Lebanon to the Mediterranean....

“This alliance operates under the patronage and protection of Russia, which supplies the Iranian-allied side with cash, weapons and, since 2015, air cover from its new bases in Syria.

“Arrayed on the other side of the great Muslim civil war are the Sunnis, moderate and Western-allied, led by Saudi Arabia, the Gulf states, Egypt and Jordan – with their Great Power patron, the United States, now (post-Obama) back in action.

“At stake is consolidation of the Shiite Crescent....

“Imagine the scenario: a unified Syria under Assad, the ever more pliant client of Iran and Russia; Hizbullah, tip of the Iranian spear, dominant in Lebanon; Iran, the regional arbiter; and Russia, with its Syrian bases, the outside hegemon.

“Our preferred outcome is radically different: a loosely federated Syria, partitioned and cantonized, in which Assad might be left in charge of an Alawite rump.

“The Iranian-Russian strategy is a nightmare for the entire Sunni Middle East.  And for us too. The Pentagon seems bent on preventing it....

“Which is why we need a national debate before we commit too deeply.  Perhaps we might squeeze one in amid the national obsession with every James Comey memo-to-self?”

In other news...the United States told Turkey that it will take back weapons supplied to the Kurds’ YPG militia in northern Syria after the defeat of ISIS, an attempt by Defense Secretary Jim Mattis to allay Turkey’s fears about arming Kurds on its border.

Turkish President Erdogan has said he would target the YPG if it felt threatened by the group.

As for the battle to retake Mosul from Islamic State, which has been grinding on for over seven months, with losses in lives and infrastructure piling up, ISIS blew up the iconic Al Nuri Grand Mosque, where Baghdadi was last seen in public, in the summer of 2014, declaring a caliphate.

On Wednesday night, with the terror group barely holding on to some final neighborhoods in the Old City, IS fighters packed the mosque with explosives and took it down, though they claimed it was destroyed by allied air strikes. A video of the explosion clearly showed otherwise.

The destruction of the mosque and famous leaning minaret – which has dominated Mosul’s skyline for nearly 1,000 years, the minaret having been completed in 1172, and which is pictured on Iraqi bank notes – was a huge blow to not just the city’s cultural heritage but also Iraq’s overall, ISIS having damaged or destroyed hundreds of other historic sites elsewhere.

But the major human concern in the next few weeks is how many civilians in its final strongholds ISIS is prepared to take with it.  Today, a suicide bomber blew himself up among civilians fleeing the fighting, killing at least 12, according to Iraqi officials.  Thousands of civilians, many of them children, remain hostage.

Lastly, Israel is concerned about Bashar Assad’s forces eventually making inroads into the Golan Heights and support for militants such as Hizbullah that will be encroaching on another Israeli border, the Golan having long-served as a buffer of sorts.  There are the sounds of war off in the distance.

And it doesn’t help when Iran’s Supreme Leader Ayatollah Ali Khmanei lashes out against Israel on Thursday ahead of the Iranian-initiated ‘Al Quds day,” which protests Israel’s existence.

“There is no doubt that we will witness the demise of the Zionist entity,” read a post on his Twitter account.

Addressing a meeting of scientists and academics in Tehran on Wednesday, Khamenei said that defending the Palestinians was tantamount to “defending the truth.”

Saudi Arabia, Qatar et al:

At week’s end, Saudi Arabia, Egypt, the United Arab Emirates and Bahrain asked Qatar to submit to a list of 13 demands if it wanted them to lift their sanctions, foremost among them, shutting down its broadcaster, Al Jazeera.

The four are also insisting Qatar reduce its ties with Iran and close a Turkish military base – all within 10 days.

Qatar continues to deny it is financing terrorism, but for two weeks it has been subject to sweeping diplomatic and economic sanctions.

But the big story on the week in Saudi Arabia was the naming of Deputy Crown Prince Mohammed Bin Salman to replace his cousin as heir to the throne in a shakeup that consolidates the 31-year-old leader’s power in the world’s biggest oil exporter.

Prince Mohammed already controlled the defense, oil and economy portfolios, but King Salman acted perhaps a little sooner than expected as the decision to elevate the son was supported by 31 of the 34 members of the Allegiance Council, made up of senior members of the ruling Al Saud family.

King Salman also relieved Crown Prince Muhammad bin Nayef of his post as Interior Minister.

The king’s son, known as MBS, turns 32 in August and has been leading the country in essence since being named Crown Prince and it is expected that soon King Salman, who is ill, will officially hand the scepter to his son.

MBS is a very popular figure among his nation’s young people as he is seen as a reformer.

Mohammed bin Salman is also seen as a friend of both the United States and Israel with his firm anti-Iranian positions. And he agrees with Washington on thwarting Russian influence in the region, as well as the need to topple Bashar Assad.  There have been reports he has met with top Israeli officials in the past two years.

There have also been rumors that MBS is plotting with the heir to the Abu Dhabi throne to stage a coup in Qatar.

Editorial / Wall Street Journal

“Saudi Arabia has resisted modernity since its founding in 1932. But the political sands are shifting, and the change will accelerate with Wednesday’s appointment of Mohammed bin Salman as Crown Prince.

“King Salman broke with decades of tradition with his royal decree that ousted his nephew, security czar Mohammed bin Nayef, in favor of Salman’s son...the Saudi crown has typically passed from one octogenarian or septuagenarian brother to another, so the rise of the 31-year-old son as heir designate is a monumental development.

“This is all the more remarkable given the young leader’s reformist inclinations.  The Saudis face a triple challenge in falling oil prices, a youth demographic bulge and Iranian imperialism. The Crown Prince believes the answer is an assertive foreign policy that unites Sunni Arab states against Tehran, combined with domestic reform that weans the Kingdom off oil....

“A moderate and prosperous Saudi Arabia would bolster stability across the Arab world and is squarely in the U.S. national interest. Washington should support and encourage the young prince as he pursues change.”

MBS, as defense minister, has been leading the war in Yemen, which has seen decidedly mixed results.  But the U.S. military on Thursday said it carried out an air strike there that killed Abu Khattab al Awlaqi, the emir for al Qaeda in the Arabian Peninsula (AQAP) along with twoother militants.

“Al Awlaqi was a senior leader responsible for planning and conducting terrorist attacks against civilians,” the U.S. Military’s Central Command said in a statement.

This was a big deal and I’m surprised more hasn’t been made of it.  Then again, these groups just regenerate their leadership.

Afghanistan: Another bad week here.  Last Saturday, seven American soldiers were wounded in an insider attack by an Afghan soldier.  The attacker was shot and killed when soldiers returned fire. There were no U.S. fatalities.  [The prior week three U.S. soldiers were killed in a similar attack.]

Thursday, a car bomb exploded outside a bank in restive Helmand province, killing 29 waiting to collect their monthly salaries. This was a Taliban attack; Helmand a scene of fierce fighting against them for years involving British, U.S. and Afghan forces.

Editorial / Washington Post

“President Trump’s resolution to delegate decisions on troop levels in Afghanistan to the Pentagon is a worthy corrective to the approach of President Barack Obama, who micromanaged U.S. military forces in a way that badly undercut their ability to achieve their goals.  By politicizing force levels in Iraq and Afghanistan and setting timetables for withdrawal unlinked to conditions on the ground, Mr. Obama helped to ensure failure on his watch in both countries. The Islamic State gained control over much of Iraq, forcing the redeployment of U.S. troops, while a  Taliban resurgence in Afghanistan now demands a similar reversal of previous withdrawals.

“After what appeared to be a prolonged internal debate, Mr. Trump empowered Defense Secretary Jim Mattis to decide how many American troops will go back and what their specific objectives will be.  Mr. Mattis, in turn, has promised to deliver a strategy to the White House next month, while taking interim measures to ensure that the military situation does not deteriorate further. As he told Congress this week, the Taliban is ‘surging’: By U.S. estimates, it controls or is contesting about 40 percent of Afghanistan’s territory....

“Ultimately, success – or even the avoidance of disaster – will require years more of commitment by the United States, including more work on building Afghan political institutions. That effort must be led by the White House, not the Defense Department.  While Mr. Trump is right to delegate decisions about troop levels, he cannot – as he has so far in his presidency – detach himself from a mission that continues to cost the country $3 billion a month. When Mr. Mattis’ strategy is ready, the president should make his own public commitment to it and explain to the country why it is necessary to continue a war that has already lasted nearly 16 years and cost more than 2,000 American lives.

“Mr. Obama did his best to distance himself from the Afghan war, with the result that key political objectives in Afghanistan and Pakistan remained out of reach, while domestic support for the mission steadily declined. That’s another mistake that Mr. Trump has the opportunity to correct.”

North Korea: China and the U.S. held high-level security talks on Wednesday and called on Pyongyang to halt its missile and nuclear program, despite President Trump’s tweet a day earlier that Beijing’s efforts to rein in the North have “not worked out.”

U.S. Secretary of State Rex Tillerson said after that the U.S. has made a commitment to hold North Korea accountable for multiple violations of UN Security Council resolutions that “explicitly prohibited its nuclear weapons and missile program.”

“We both agreed that our companies should not do business with any UN-designated North Korean entities in accordance with these resolutions,” Tillerson said.

China restated its position that the Korean peninsula should be denuclearized, but added the issue should be resolved through dialogue.

The statement released by the Chinese embassy in the U.S. also restated China’s opposition to the deployment of a U.S. developed anti-missile shield in South Korea (THAAD).

Tensions rose again after Otto Warmbier, a 22-year-old American student held by North Korea for nearly 18 months, died six days after returning to the U.S. on June 13.  During the joint press conference with Tillerson, Defense Secretary Mattis accused Pyongyang of being “beyond any kind of understanding of law and order and humanity.”  [North Korea claimed at week’s end that it was the victim in Warmbier’s death.]

Meanwhile, South Korean President Moon Jae-in said on Thursday that China should do more to rein in the North’s nuclear program and that he would call on President Xi Jinping to lift measures against South Korean companies taken in retaliation against Seoul’s decision to host a U.S. anti-missile defense system.

Moon, the liberal former human rights lawyer who was elected in May after campaigning for a more moderate approach to the North, issued his most hawkish comments yet this week in also saying North Korea would have the technology to deploy a nuclear-tipped ballistic missile capable of hitting the U.S. mainland “in the not too distant future.”

President Moon is heading to Washington for a summit with President Trump in Washington this coming week.

Portugal: Wildfires last Sunday killed a staggering 64 people (at last count), many of the victims trapped in their cars as flames overwhelmed the roads they were trying to escape on.

Random Musings

According to a new CBS News Poll, President Trump’s job approval rating is 36%, his lowest in this survey since becoming president.  57% disapprove.

Only 72% of Republicans approve of the president’s performance and 35% of Independents, which is the critical figure to me.  At the 100-day mark, the figures were 83% Republicans, 38% Independents.

Just 28% approve of Trump’s handling of the Russia matter, 63% disapprove.  Only 57% of Republicans approve on this topic, vs. 80% on the economy and 77% on terrorism.

56% of Americans believe that the special counsel’s investigation will be impartial.

44% believe Russia interfered to favor Trump
18% believe Russia interfered, but not to favor Trump
31% see no Russian interference

71% believe Trump is receiving more criticism that other recent presidents, 6% ‘less.’

42% of Americans approve of Mr. Trump’s handling of the economy, but it’s 80% among Republicans...81% of Democrats disapprove.

Democrats in Congress receive a 30% approval rating, 63% disapprove.

Republicans in Congress have a 26% approval rating, 68% disapproval.

In a new NBC News/Wall Street Journal, 40% approved of Trump’s job performance, essentially unchanged from the 39% mark a month earlier.  55% disapproved.

But by a 41%-to-38% margin, more people said they thought the Affordable Care Act is a good idea than a bad one. The poll was done with the House GOP bill in mind and before the Senate version was put forward and only 16% thought the House bill was a good idea, down from 23% a month ago.

[Rasmussen’s daily tracking poll has Trump with a 46% job approval, Gallup’s 42% at week’s end.]

--Republican Karen Handel won Georgia’s special House election over 30-year-old Democrat Jon Ossoff, 52-48, a big blow to Democrats who had targeted this race nationally, pouring $50 million into the campaign (5 times more than Handel spent), making it the most expensive House race in history.  Republicans point to the result as evidence the Dems have zero shot at retaking the House in the 2018 midterms.

Granted, the Georgia 6th District has been a Republican stronghold for decades, with the likes of former House Speaker Newt Gingrich and current HHS Secretary Tom Price among those holding the seat, but Trump won it by just 2 points in 2016 and thus the importance for the elephants to hold off the donkeys.

Also on Tuesday, in South Carolina, Republican Ralph Norman held on in a special election to replace former Rep. Mick Mulvaney, who was appointed head of the White House Office of Management and Budget.  Norman defeated Democrat Archie Parnell by only three points...so this makes four special elections where Democrats failed to capture a Republican seat this year.

House Democrats are none too pleased with their ancient leadership team and they just don’t have a strategy of any kind outside of taking out Trump.

Thursday, House Minority Leader Nancy Pelosi defended her leadership.

“I thrive on competition and I welcome the discussion. But I am honored by the support,” speaking of widespread support that I see no real evidence of, though at the same time there isn’t an obvious choice to replace her.

Instead, Pelosi emphasized Republicans won their House races on Tuesday with significantly smaller margins than in past years.

“By all accounts, if you’re a Republican, this is not good news to you,” she said.

--Government data published Tuesday showed that there were 1.27 million emergency room visits or inpatient stays for opioid-related issues in 2014, nationally, the last year available for such detailed data, which was a 64% increase in inpatient care and a 99% jump for emergency room treatment compared to figures from 2005.  Of course the numbers since 2014 have only skyrocketed further.

A state report for Maryland released earlier showed that opioid-related deaths in that state had nearly quadrupled since 2010, and deaths from fentanyl had increased 38-fold in the past decade.  Baltimore City saw 694 deaths from drug and alcohol-related overdoses in 2016 – up from 393 in 2015.

Back in 2014, Maryland led the nation in opioid-related hospital admissions, with other top states including Massachusetts, Rhode Island, New York and West Virginia.  [Washington Post]

--An Associated Press-NORC Center for Public Affairs Research survey found that less than one-third of Americans support President Trump’s decision to withdraw from the Paris climate accord, and just 18% of respondents agree with his claim that pulling out of the agreement will help the U.S. economy.

But on the last item, 78% of Democrats think withdrawing will hurt the national economy, while just 24% of Republicans feel the same way.

Overall, 44% of Americans are very concerned and 26% moderately concerned that withdrawing from the agreement will hurt the nation’s standing in the world. [AP]

--I do have to note for the archives, seeing as Bill Cosby was such a big figure in the world of entertainment for decades, that a judge declared a mistrial last Saturday in his sex assault trial after jurors failed to reach a verdict on the sixth day of deliberations.

Montgomery County (Pa.) Judge Steven O’Neill said, “This is not a victory for anyone.  This is the justice system, it does not matter what the justice is.”

Cosby, 79, faced up to 30 years in prison on three charges of aggravated indecent assault.

Prosecutors immediately said they will retry him.

Cosby then said he plans to conduct a series of free public seminars about sexual assault this summer.  Andrew Wyatt, Cosby’s spokesman, said, “I received hundreds of calls from civic organizations and churches requesting for Mr. Cosby to speak to young men and women about the judicial system.”

--We note the passing of 93-year-old NBC local reporter Gabe Pressman, a true legend in these parts.  He was going to the office every day until just a week ago.

I’ve been an NBC man all my life and while he hasn’t been really active for well over ten years, every now and then they’d trot him out for one of his people stories.  He loved parades and interviewing politicians, for example, and he was tough.

Forever he’ll be known for his Christmas tale, “Yes, Virginia, there is a Santa Claus...” that the station aired every year and I imagine will continue to do so the next century.

But I’ll never forget New Hampshire, 2004, when I was up there to do some writing for you all on the primary and at one of the rallies I went to, outside was Gabe Pressman, who you have to picture was 80 then...a tiny little guy.

I was excited to see him there and went up to him, “Gabe!”  He looked at me quizzically but after I introduced myself and explained what a huge fan I was, and how my family loved his work, he was beaming.  He was just shocked someone recognized him up in New Hampshire, but he shouldn’t have been.  He was Gabe Pressman.  RIP.

--Finally....the USS Fitzgerald, an Aegis guided missile destroyer, collided with a Philippine-flagged merchant vessel, ACX Crystal, some 56 nautical miles southwest of Yokosuka, Japan early on Saturday, killing seven U.S. sailors in a terrible accident that will be investigated to the fullest.  There was clear negligence on the part of the Fitzgerald’s crew, early reports indicating the captain wasn’t awakened as the vessel approached.

There was a disturbing early report by Japan’s public broadcaster, NHK, echoed separately by the BBC, that the container ship had made a sharp turn shortly before the collision but the ship’s skipper denied this, saying “We were sailing in the same direction as the U.S. destroyer was and then collided.”

Aside from the human tragedy the Fitzgerald suffered significant damage and came close to sinking were it not for the heroics of the crew, one of them being Fire Controlman 1st Class Gary Leo Rehm Jr., 37, who was three months shy of retiring when he was killed.  The Navy told his mother that Rehm died trying to rescue fellow sailors trapped in flooding compartments, possibly as many as 20 before he himself succumbed.

---

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

God bless America.

---

Gold $1257
Oil $43.17

Returns for the week 6/19-6/23

Dow Jones  +0.05%  [21394]
S&P 500  +0.2%  [2438]
S&P MidCap  -0.5%
Russell 2000  +0.6%
Nasdaq  +1.8%  [6265]

Returns for the period 1/1/17-6/23/17

Dow Jones  +8.3%
S&P 500  +8.9%
S&P MidCap  +5.0%
Russell 2000  +4.3%
Nasdaq  +16.4%

Bulls 51.5
Bears 19.4 [Source: Investors Intelligence]

Have a great week.

Brian Trumbore



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Week in Review

06/24/2017

For the week 6/19-6/23

[Posted 11:00 PM ET, Friday]

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

Edition 950

*I just finished reading the extensive Washington Post story that was released Friday afternoon concerning Russian President Putin’s “direct involvement in a cyber campaign to disrupt and discredit the U.S. presidential race,” including “Putin’s specific instructions on the operation’s audacious objectives – defeat or at least damage the Democratic nominee, Hillary Clinton, and help elect her opponent, Donald Trump.”

The material “was so sensitive that CIA Director John Brennan kept it out of the President’s Daily Brief, concerned that even that restricted report’s distribution was too broad.”

But in the end, the Obama administration, namely the president himself, did virtually nothing despite what was in political terms, “the crime of the century, an unprecedented and largely successful destabilizing attack on American democracy.”

More next time. Tonight, though, Democrats are more furious at Obama than they were before at his inaction.

---

It’s About the Agenda, stupid...mostly....

Early in the week, Senate Republican leaders said they had a timeline to vote next week on legislation to repeal much of the Affordable Care Act, and on Thursday it was unveiled, few having seen any details beforehand.

The draft includes cuts to existing Medicaid spending levels and reshapes what is an open-ended government commitment to a system of capped federal payments, limiting federal spending.

The bill would also repeal billions of dollars in taxes that were used to raise money for ACA coverage expansion and abolishes the mandates to buy coverage.

The tax credits would stay, but they wouldn’t be as generous and thus save the government further dollars.

Senate Majority Leader Mitch McConnell said, “It’s time to act because ObamaCare is a direct attack on the middle class and American families deserve better than it’s failing status quo. They deserve better care. That’s just what we’re going to continue to work to bring them.”

Senate Democratic Leader Chuck Schumer countered: “This is a bill designed to strip away healthcare benefits and protections from Americans who need it most in order to give a tax break to the folks who need it least.”

But once again the arguments made in opposition are intellectually dishonest and the American people aren’t being told the truth.

For one thing, as is the case with more than 90% of the budget issues that come up, and in this instance spending on Medicaid, the ‘draconian cuts’ Democrats are talking about today are cuts in the existing rates of growth...not an actual cut!  It’s critical people understand that.

Another key issue was raised by Oklahoma Republican Sen. Jim Lankford in an interview with CNN’s Jake Tapper that I happened to catch.

All we hear about is the Congressional Budget Office’s estimate on the costs of the House plan, and next week the new Senate proposal, and how 23 million are losing their insurance, but as Lankford noted, he has been requesting the CBO give him the model on which the figures are based on for one year and the CBO has yet to turn it over!  This is outrageous.  Lankford talked of his discussion just the other day with the CBO chief, again requesting the model, and how in one case 4 million lose Medicaid the first year even though the first House plan that was graded didn’t change Medicaid for 2017-18!

Yes, it’s beyond nonsensical.  It’s also a massive lie perpetrated on the American people.

Again, the debate is intellectually dishonest.  We aren’t presented with the facts and that sucks.

For now, though, it should be drummed into every schoolchild’s head, and every parent’s.  When someone is talking about cuts to an existing program, is that a cut in the rate of growth, or an actual cut?

We have a massive entitlement crisis looming and if we can’t get this one simple fact right, the national debate on healthcare or any other major budget issue will never be an honest one.

---

The Senate measure phases out funding for the expansion of Medicaid, as currently under ObamaCare, over four years from 2020 to 2024 and includes deeper cuts to Medicaid (again, cuts in the rate of growth) than the House bill, starting in 2025.

It’s this last bit that will most impact the votes of Senate Republican moderates, with one, Sen. Lisa Murkowski (Alaska) having previously said she doesn’t want to phase out Medicaid expansion funding at all.

So now in the coming days, Senate Majority Leader Mitch McConnell will have to figure out if he has the votes to proceed.  With a mere 52-48 margin, he can’t lose more than two GOP votes to gain passage.  But as of this writing, five Republicans are in opposition, while all Democrats will oppose it, though Friday, West Virginia Dem. Joe Manchin said he wanted to work with the White House to improve the proposal.

In the end, though, it’s really about handing President Trump a legislative victory so Republicans can move on to the other agenda items.

If Republicans can’t act on ObamaCare by the July 4 recess, there will be little time to get it through before the August break.

Remember, repealing and replacing the ACA is essential to everything that follows, especially tax reform as Republicans can’t proceed on that without the projected savings from repealing the ACA.  But even before tax reform, you need a budget resolution for 2018, the fiscal year beginning Oct. 1, and as currently scheduled there are now less than 45 legislative days until Sept. 30.

Ergo, there is growing pressure for Congress to stay in town rather than go out on their scheduled August recess.  It wouldn’t be good for Republicans to head out of town with zero legislative accomplishments.  It’s also important to note that folks who follow this say the budget process, which involves individual spending bills requiring passage, is further behind than ever.

And then you have the issue of the debt ceiling....

Editorial / Wall Street Journal

“Senate Republicans released their draft bill to repeal and replace ObamaCare on Thursday, and Majority Leader Mitch McConnell is hoping for a vote next week. The binary choice now is between pushing past the media and Democratic flak to pass a historic achievement, or wilting under the pressure and ratifying the ObamaCare status quo.

“The bill is an imperfect compromise between moderate and conservative Republicans, and it makes pains to accommodate different interests and the Americans, states and businesses that have adapted to ObamaCare over the years. The center-right nature of the details means the Senate won’t be ushering in some free-market utopia.  But the reform is a major improvement over the U.S. health-care status quo that will worsen if the bill fails.

“The Senate bill works off the American Health Care Act that the House passed in May.  Like the House, the legislation replaces ObamaCare’s subsidies with tax credits for people who buy insurance on the individual market, ends Medicaid’s status as an open-ended entitlement, and starts to resolve some of the health-care system’s abiding flaws.

“Medicaid was most divisive for Republicans in their months-long internal debate, so the pleasant surprise is that the Senate’s entitlement overhaul is somewhat stronger than the House’s. The program originally meant for poor women, children and the disabled – which ObamaCare opened to able-bodied, working-age adults above the poverty level – would be modernized for the first time.  This could become the most consequential social reform since the welfare reconstruction of 1996.

“Like the House, the Senate would end the funding formula that rewards states for spending more and transitioni to block grants, allocated on per capita enrollment. Governors would receive far more regulatory flexibility to manage their programs.  Under the final House bill, the grants would max out at the rate of inflation plus one percentage point, starting in 2010.

“The Senate waits four years instead of three but pegs the grants to inflation with no adjuster. The danger of delays is that grants become another phony rule like the old Medicare ‘doc fix’ that Congress refused to enforce.  But the Senate’s structural changes are more ambitious, and the benefits of those revisions will compound over time.....

“The Senate’s (tax) credits are more generous than the House’s, and thus more costly to the federal fisc, and also means-tested.

“The fear among Senators is that the House approach doesn’t prioritize resources and lacks sufficient ‘heart’ for the less affluent, as President Trump has put it.  The House also would create its own work disincentive for people who leave Medicaid as their income rises slightly above the poverty line and would then become exposed to the full out-of-pocket cost of private insurance.

“The opportunity is to show that center-right solutions can get better results than governments in the form of lower premiums and more coverage options. The Senate includes about $100 billion for a ‘stability fund’ that would start to contain ObamaCare’s damage and could be used by creative Governors to support insurance markets, as states like Maine and Alaska have recently demonstrated....

“Republicans have campaigned across four elections against ObamaCare, and now Americans will see if they have the courage of their professed convictions. Conservatives must determine if progress that is politically feasible is preferable to impossible ideological purity, and moderates must defend policy substance from the distortions of critics....

“Failure would expose Republicans as feckless, with conservatives attacking the GOP for having failed and Democrats attacking the GOP for having tried. And don’t think Republicans could then drop the issue. Republicans would be under enormous pressure to shore up the failing insurance markets in this Congress.  The question is whether they do it on their terms with this bill, or later on Democratic leader Chuck Schumer’s.  Republicans would splinter over ‘bailing out’ ObamaCare, while Democrats demand more money in return for help.

“The Senate bill is imperfect, but it includes many conservative policy victories that have long been Republican goals. It’s not too much to say this is a defining moment for whether the GOP can ever reform runaway entitlements. If Republicans fail, the next stop is single payer.”

Editorial / Chicago Tribune

“Buckle up, all you Illinoisans who depend on ObamaCare health coverage. Wednesday is the deadline for rate request proposals from insurers.

“Customers can expect hefty premium hikes for next year’s policies.

“Yes, again. It’ll be this way until this faltering law gets fixed or replaced.

“For 2017, you may recall, Illinois rates leaped by more than 40 percent. For 2018, we’ll see.

“We don’t yet have preliminary increases for 2018 policies. Illinois typically – and infuriatingly – doesn’t release rates until later in the summer.  But large ObamaCare insurers in Delaware, Virginia and Maryland seek average increases greater than 30 percent for next year, the Wall Street Journal reports.  Market leaders in Oregon, North Carolina and Maine propose increases of about 20 percent or more.”

Former President Obama blasted the Senate plan on Thursday in a Facebook post.

“The Senate bill, unveiled today, is not a health care bill. It’s a massive transfer of wealth from middle-class and poor families to the richest people in America.

“Simply put, if there’s a chance you might get sick, get old, or start a family – the bill will do you harm. And small tweaks over the course of the next couple weeks, under the guise of making these bills easier to stomach, cannot change the fundamental meanness at the core of this legislation.”

Wrong!  [But you can see what Obama will be discussing if your company or trade group pays him $250,000 to speak at your next gathering.]

Trumpets (like Crumpets)....

--President Trump announced on Thursday he does not have recordings of his conversations with former FBI Director James Comey, ending weeks of speculation.

“I did not make, and do not have, any such recordings,” he tweeted.

But then he raised the possibility that a third party could have recorded his conversations.

“With all of the recently reported electronic surveillance, intercepts, unmasking and illegal leaking of information, I have no idea whether there are ‘tapes’ or recordings of my conversations with James Comey.”

This all started with Trump’s tweet, “James Comey better hope that there are no ‘tapes’ of our conversations before he starts leaking to the press!”

That led to Comey leaking his memos on his discussions with the president to a friend, who dutifully passed them on to the media, Comey hoping this would lead to a special prosecutor and, voila!  It did!  One of The Donald’s all-time dumb moves.

--Jay Sekulow is a sweet-talking lawyer who has appeared countless times on the likes of “Hannity” over the years and now he is President Trump’s public face in disputing any charges on obstruction of justice and the like emanating from Congressional, FBI or special counsel investigations of same.

So Sekulow went out as the administration spokesperson last Sunday for all the talk shows and he disputed Trump’s tweet last Frieday – “I am being investigated for firing the FBI Director by the man who toldme to fire the FBI Director! Witch Hunt!”

“There’s been no notification of any investigation,” Sekulow told Fox News Sunday.  “Nothing has changed in that regard since James Comey’s testimony.”

But even as he denied any investigation, Sekulow kept referring to an obstruction of justice investigation during his interview with Fox’s Chris Wallace, prompting expressions of incredulity from Wallace.

“Oh, boy,” Wallace said at one point.  “This is weird.”

--I watched President Trump’s rally in Iowa this week and at one point Trump called for a new law barring immigrants from receiving welfare for at least five years, but neither Trump nor anyone in his audience seemed to realize the law has already been on the books for more than 20 years.

So his minions dutifully rose to give him a rousing ovation when he pledged his administration would put the legislation into effect “very shortly.”

It was in 1996 that President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act that prevented immigrants from receiving federal benefits, such as food stamps, Medicaid, and Social Security for five years after entering the country; though there are exceptions for children and pregnant women, refugees and active duty military or veterans.

As for the president taking heat for saying he wants a poor person running the economy, that was nothing and hardly worth the anguish of some on the left. Next.....

Opinion on other issues....

David Brooks / New York Times

“There may be a giant revelation still to come. But as the Trump-Russia story has evolved, it is striking how little evidence there is that any underlying crime occurred – that there was any actual collusion between the Donald Trump campaign and the Russians. Everything seems to be leaking out of this administration, but so far the leaks about actual collusion are meager....

“I’m not saying there shouldn’t be an investigation into potential Russia-Trump links.  Russia’s attack on American democracy was truly heinous, and if the Trump people were involved, that would be treason.  I’m saying first, let’s not get ahead of ourselves and assume that this link exists.

“Second, there is something disturbingly meta about this whole affair.  This is, as Yuval Levin put it, an investigation about itself.  Trump skeptics within the administration laid a legal minefield all around the president, and then Trump – being Trump – stomped all over it, blowing himself up six ways from Sunday.

“Now of course Trump shouldn’t have tweeted about Oval Office tape recordings.  Of course he shouldn’t have fired James Comey....

“There’s just something worrisome every time we find ourselves replacing politics of democracy with the politics of scandal.  In democracy, the issues count, and you try to win by persuasion.  You recognize that your opponents are legitimate, that they will always be there and that some form of compromise is inevitable.

“In the politics of scandal, at least since Watergate, you don’t have to engage in persuasion or even talk about issues.  Political victories are won when you destroy your political opponents by catching them in some wrongdoing.  You get seduced by the delightful possibility that your opponent will be eliminated.  Politics is simply about moral superiority and personal destruction.

“The politics of scandal is delightful for cable news.  It’s hard to build ratings arguing about health insurance legislation.  But it’s easy to build ratings if you are a glorified Court TV, if each whiff of scandal smoke generates hours of ‘Breaking News’ intensity and a deluge of speculation from good-looking former prosecutors....

“The politics of scandal drives a wedge through society.  Political elites get swept up in the scandals.  Most voters don’t really care.

“Donald Trump rose peddling the politics of scandal – oblivious to policy, spreading insane allegations about birth certificates and other things – so maybe it’s just that he gets swallowed by it.  But frankly, on my list of reasons Trump is unfit for the presidency, the Russia-collusion story ranks number 971, well below, for example, the perfectly legal ways he kowtows to thugs and undermines the norms of democratic behavior.”

Rich Lowry / New York Post

“It was possible to imagine Trump, with a head of steam after his upset victory in November, cowing swamp-dwelling Republicans and wooing infrastructure-loving, anti-trade Democrats into supporting a populist congressional agenda.

“Maybe this was always a pipe dream given the instantaneous rise of the #resistance against him.  But this scenario would have required a strong, focused president marshaling his popularity and driving Congress.

“We’ve seen close to the opposite. And, of course, there’s the so-called Russia investigation.  ‘Russia’ is a misnomer.  The controversy is now shifting from being about supported Trump-campaign collusion to alleged obstruction of justice and whatever else special counsel Robert Mueller dredges up in what will probably be a free-ranging, years-long investigation.

“So, whatever Trump’s true ideological predilections, there’s no place for him to go.  Make deals with the Democrats?  At this point, Democrats are more likely to cooperate with Sergey Kislyak on an infrastructure package than with Donald Trump....

“As for congressional Republicans, they, too, don’t have much choice.  Like it or not, whatever they tell reporters privately about their true feelings about Trump, his fate is their fate.

“First, a president’s approval rating heavily influences midterm elections. The outcome in the campaign for the House will presumably be much different depending on whether Trump is at 35 percent or 45 percent.  Republicans dumping Trump wouldn’t make him any more popular.

“Second, such a distancing is not really politically practicable. If Republicans try to skitter away from Trump, their base will roast them. There’s no reason to think that at this point the dynamic would be any different than after the release of the ‘Access Hollywood’ tape, when Republicans dumping Trump were quickly forced to pick him right back up again.

“Third, Republicans want to get some things done legislatively. A poisonous split with the White House wouldn’t help.  Trump may be a mercurial and frustrating partner, but he is a partner all the same.

“Finally, most Republicans – quite legitimately – think the Russian controversy is a media-driven travesty. If there were a smoking gun, this posture would probably change (obviously, in that circumstance, it should change).

“But Democrats are in no position to lecture Republicans on cutting loose a president of their own party when they twisted themselves in knots to defend Bill Clinton after he lied under oath over an affair that violated every feminist principle the party professed to hold.”

Editorial / Washington Post

“Congress rarely takes the lead in foreign affairs, but senators in both parties have risen to the occasion in recent weeks, exhibiting an uncommonly independent and disciplined response to the tumult of President Trump’s administration.  The latest votes and hearings are a welcome sign that Congress can act as a responsible counterweight to Mr. Trump’s more erratic impulses.

“Last week the Senate voted 98 to 2 – how often does that happen? – for the first major piece of foreign policy legislation the chamber has considered this year, a bill stepping up sanctions against Iran and Russia.  While Mr. Trump has broadly declared a desire  to improve ties with the Kremlin and was seen recently joshing in the Oval Office with the Russian foreign minister and ambassador, the Senate vote reflects a far more sober assessment of President Vladimir Putin’s meddling in the U.S. election, subversion of Ukraine and intervention to save the brutal leader of Syria.  The legislation, with bipartisan backing, will make it impossible for Mr. Trump to lift sanctions against Russia without congressional approval, and places new penalties on Russian energy exports. There’s been much debate lately about whether Mr. Putin’s hacking against the United States last year was a shrewd move for him and for Russia; the Senate vote suggests it has badly backfired.  Another example was a Senate vote that can be seen only as a rebuke to Mr. Trump’s handling of a bedrock issue, the Atlantic alliance.  Mr. Trump delivered a speech May 25 at NATO’s new headquarters in which he omitted a sentence affirming the long-standing U.S. commitment to Article 5 of the North Atlantic Treaty, the pledge that ar armed attack against one will be considered an attack against all.  Mr. Trump made a lame attempt to recover June 9, once back at the White House, but the damage had been done.  His omission was dangerous and could lead allies to doubt American resolve at a time of growing tension with Russia. The Senate, wanting to make sure there is no ambiguity, voted 100 to 0 for an amendment reaffirming U.S. support for the alliance.

“Meanwhile, Mr. Trump has proposed a debilitating 30 percent cut in the fiscal 2018 budget of the State Department, one of the deepest cuts in any federal agency. When Secretary of State Rex Tillerson went before the Senate Foreign Relations Committee last week, he got a truckload of bipartisan criticism about the risk of such cuts in a department dedicated to defending American interests abroad....The senators repeatedly and wisely pointed out to Mr. Tillerson that U.S. security is enhanced not only by military might but also programs that promote democracy and prevent nuclear proliferation.  They also questioned him about the snail’s pace of filling the department’s top jobs.

“Everyone ought to be grateful that Congress, so often fractious and hyper-partisan, has seen fit to grab the foreign policy wheel, and steady it.”

Finally, real estate titan Sam Zell had an interview in Barron’s on his new book, “Am I Being too Subtle?” and other things, the book a tribute to his refugee parents and to immigration.

Barron’s: What grade would you give this president?

Zell: “An incomplete. He’s learning on the job. They all do, but most of them came from a political environment. In politics, you are very sensitive about hiring and firing.  In the business world, and particularly for him, firing people was a daily occurrence.  His ability to say, ‘Let’s take a risk on this guy, and if we don’t like him, we’ll get rid of him’ is a very different mind-set.  He should stop tweeting.  Never pick a fight with somebody who buys ink by the barrel.  Not that I’m a great fan of the press, but I can’t imagine there’s a long-term positive in taking on the people whose job it is to cover you.  The strength of our society is predicated on respect for his office. That’s missing right now.”

Barron’s: Your book is a love song to immigration. What’s your view of today’s rhetoric?

Zell: “We know what happens to an anti-immigration society. Japan is being emptied out.  If you don’t propagate, and don’t immigrate, you shrivel.  The enormous growth of this country was built on immigration and the mental set of an immigrant.  My parents each had six siblings.  They pleaded with them to leave Poland [before World War II].  They turned them down.

“Immigrants are the ultimate consumers of what we’ve historically sold: freedom.  Maybe 75% would use their freedom to watch TV.  But the rest would start a business and work 20 hours a day, instead of 10.  Our immigration policy needs to encourage people like this who are contributors. We need to encourage the students who come to our universities to stay here.”

Speaking of Japan, I’ve been meaning to include a piece by the New York Times’ Jonathan Soble from June 2, 2017, and it’s been ending up on the cutting-room floor.  You all know this story, as I’ve written of it at least ten other times in these pages, but it bears repeating.

“After Japan’s population hit a peak of 128 million at the start of the current decade, it shrank by close to a million in the five years through 2015, according to census data.  Demographers expect it to plunge by a third by 2060, to as few as 80 million people – a net loss of a million a year, on average.

“About 40 percent fewer children were born in Japan last year than in 1949, at the peak of the country’s post-World War II baby boom. The number had not fallen below one million since 1899, when comprehensive record-keeping began. At that time, Japan’s population was smaller than it is today.”

Of course the solution is mass immigration, everyone knows that, but there is virtually zero support for it in Japan, and so they’ll pay the price.

But therein is also a lesson for us.

Wall Street

Stocks finished up, with the Dow Jones and S&P 500 hitting new highs during the week, seemingly on optimism the Trump agenda will be enacted this year.

On the economic front, just a little news on housing, with May existing home sales up 1.1% to 5.62 million annualized, better than expected and breaking a trend of slowing numbers, while May new home sales rose 2.9% to 610,000, also better than forecast. The median price of a new home hit an all-time record of $345,800.

Europe and Asia

We’re nearing quarter end and the economic data will be arriving fast and furiously. For this week, the flash reading on eurozone activity for June was released by IHS Markit and it revealed a composite PMI of 55.7 (50 being the dividing line between growth and contraction) vs. May’s 56.8, another solid rise in business activity, making it the strongest quarter of expansion for over six years.  May’s 56.8 was a six-year high as well.

The flash manufacturing PMI was 57.3 vs. 57.0, a 74-month high, while the service reading declined to 54.7 from 56.3, a 5-month low.

Chris Williamson / IHS Markit

“Although the PMI data point to some loss of growth momentum in June, the latest reading needs to be looked at in the context of recent elevated levels. Despite the June dip, the average expansion in the second quarter...is historically consistent with GDP growth accelerating from 0.6% in the first quarter to 0.7%.

“The upturn is also broad-based, with the surveys signaling an acceleration of GDP growth in both France and Germany in the second quarter, as well as across the rest of the region as a whole.”

The flash readings hand out specifics for just Germany and France and in the latter, the composite index was 55.3 vs. 56.9, with a manufacturing PMI of 55.0 vs. 53.8, and services of 55.3 vs. 57.2 last month.

In Germany, the composite was 56.1 vs. 57.4, while the flash manufacturing PMI was 59.3 vs. 59.5 and services 53.7 vs. 55.4.

Separately, German exports to Asia, as figures released Wednesday showed, rose 12% in the first four months of the year compared with the same period in 2016.  Exports to India rose a similar rate. To the EU they were up 4.8%, 3.9% to the United States, and -4.0% to the U.K., according to the Federal Statistics Office.

Eurobits....

On the Brexit front...talks finally commenced this week and not to beat a dead horse, but, again, this process is going to be truly chaotic and not good for the U.K. economy, period.

British Prime Minister Theresa May and the EU are clashing on the first major issue, protecting the rights of each other’s citizens, and while Mrs. May said she offered a “fair and serious” proposal on citizens’ rights, EU chief Donald Tusk dismissed it as falling “below our expectations.” Dutch Prime Minister Mark Rutte said “thousands of questions” remained on this critical topic.

Mrs. May is insisting that the EU needs to give the 1.5 million Britons living on the continent equal respect and is preparing a more detailed proposal for Monday, when May addresses parliament on the matter, but aside from this area, Brexit negotiators are discussing the amount Britain is going to have to pay to quit the EU (for things like future pension costs) and the serious issues concerning the border in Ireland.

May said, “I want to reassure all those EU citizens who are in the U.K., who’ve made their lives and homes in the U.K., that no one will have to leave, we won’t be seeing families split apart.  This is a fair and serious offer.”

Under May’s proposal, EU citizens with legal residence in the U.K., an estimated 3 million, will not be asked to leave and will be offered a chance to regularize their situation after Brexit.  May also promised to cut the paperwork involved. Today, an EU citizen faces an 85-page form if they want to stay.

Remember, Britain is breaking away from the European Union.  All rights technically go away. No longer an open border.  You have to negotiate everything.  And the main point of Brexit in the first place, aside from the U.K. unburdening itself from some of the European Union’s regulations and costs, was the issue of restricting immigration, so think about current EU residents from countries that many Brits don’t favor (read eastern Europe).

The issue of citizen rights must be resolved first before trade talks can commence leading up to Britain’s March 2019 scheduled exit.

[One tidbit: Britain’s Brexit Secretary David Davis and his EU counterpart, chief negotiator Michel Barnier, held their first 7 hours of discussions in Brussels on Monday and what did they have for lunch? According to Bloomberg News, Belgian asparagus, red mullet and meringue cake with strawberries.  Just had to throw in a little obligatory food porn.]

Separately, officials declared on Friday that the fire that engulfed the London tower block, killing at least 79, started in a Hotpoint (Whirlpool) fridge freezer and that cladding on the building failed all safety tests.  The Hotpoint model FF175BP was not subject to recall and the manufacturer is doing further tests.  So, the fire was definitely not deliberately set, but the real crime is in how flammable the building materials used in a recent extensive renovation at the tower were.

London police said manslaughter charges could be pending, as well as criminal offenses.  The blaze, Britain’s worst since World War II, has heaped further political pressure on Prime Minister May.

And President Trump finally announced that New York Jets owner Woody Johnson was his choice to serve as U.S. ambassador to the U.K., in what is a truly idiotic move for such a crucial position.

Johnson has been a pathetic owner of my favorite football team and the only reason why he is getting the position is because he was a big ‘bundler’ during the campaign.

And what the heck Johnson knows about foreign policy, or what is involved in Brexit, is beyond me.  The Senate should turn him down unanimously.

Lastly, President Trump’s planned state visit to Britain late this summer or early fall has been postponed amid fears it would attract mass protests that would undermine Prime Minister May’s efforts to build a closer relationship with Trump, let alone her own agenda, namely dealing with Brexit.

As for the French Elections, part deux, President Emmanuel Macron’s year-old Republic on the Move party, La Republique en Marche (LREM), scored an impressive triumph in the second, and final, round of voting last Sunday, capturing an outright majority, 350 of 577 seats in the National Assembly, though this was a full 65-100 seats below some estimates.  Nonetheless it is the biggest majority in 15 years.

The center-right Republicans captured 113 seats (137 with their allies), down from 225 in 2012, while the Socialists took a putrid 29 (45 with allies), down from 328!

Marine Le Pen’s National Front (Front National), did manage 8 seats (up from 2 in 2012), though less than their goal of 15+, but better than the single seat some had predicted.  Ms. Le Pen won her own seat, importantly, giving her a direct say in debate, which will keep her voice out in public.  [Ditto far-left leader Jean-Luc Melenchon, who also won a seat for the first time, his party and others of its ilk gaining 27 seats, up 12 from last election.]

But here’s the key. Turnout in round two was abysmal, 42.6%, more than 10 points below the previous record low.  And this, sports fans, is what I’ll be harping on for the next year, at least.

Because it shows you that Macron’s support is actually paper thin.  While I expect his first approval numbers will be solid, watch what happens when he begins trying to enact his labor reform agenda, France’s labor code being 3,000 pages long!  I can guarantee one thing.  This is far from a united nation, and there will be violence in the streets over some of his labor proposals, which are largely free-market ones, that many of us here will like.

But when you’ve had a lifetime job, with 100% security and a healthy pension allowing you to retire at 60, or earlier, you aren’t going to easily accept changes that would require you to work longer, retire later, and at not as hefty a pension, while at the same time many of your bosses will find it easier to fire you.  This is the debate that is going to take place in France. 

One thing Macron has going for him, however, is the economy is back on track, with consumer confidence at its highest in a decade.

Meanwhile, Macron began to lay out his foreign policy, and national security will be at the heart of it, not necessarily the interventionist policies of his predecessor, such as in places like Libya, Mali and Central African Republic.  [There was another terror attack in Mali this week on a popular resort with a number of dead, including a Portuguese soldier.]

This week, Macron dropped demands for Bashar Assad’s ouster as a condition for any peace agreement in Syuria, and he appears to be broadly aligning his foreign policy with that of the U.S., in terms of tackling terrorism while seeking better ties with Russia, which he considers a long-term partner rather than a direct threat to Europe.

The president only wants diplomatic initiatives that bring concrete results.  As they say, developing....

One last item, while Europe had another series of terror attacks, including in London and Paris that thankfully weren’t as deadly as they could have been, there was an incident near Calais, at a major migrant gathering ground for those seeking to sneak into Britain via the Chunnel (Channel Tunnel), that was most disturbing.

“French authorities say a truck driver was killed in a highway accident prompted by a roadblock installed by migrants trying to board trucks traveling across to Britain.

“The administration for the Pas-de-Calais region said in a statement that nine Eritrean migrants have been detained.

“It says that migrants placed tree trunks on the A16 highway leading to Calais early Tuesday, forcing three large trucks to stop. It said a smaller truck then crashed into one of those trucks and caught fire.”

Sickening, and remember how the huge migrant camps in Calais were dismantled roughly a year ago by the French government?  They are back.  Incidents such as this are a reason why the far-right cause in France, and elsewhere in Europe, won’t die.

Turning to Asia...China’s 70-city housing index for May showed prices rose 10.4% year-over-year, according to the Bureau of National Statistics, which actually continues a trend of deceleration, the peak having been up 12.6% in November.  Month-on-month, average prices rose in 56 of the 70.  Beijing’s housing prices have risen 14.6% yoy.

In Japan, the flash reading on manufacturing for June was 52.0 vs. 53.1 in May, a seven-month low, but still growth, and external demand remains solid.

In keeping with that, May exports came in up 14.9%, the fastest rate in 2 years on higher shipments of cars and steel.  Exports to Asia rose 16.8% (23.9% to China and 22.9% to South Korea), while exports to North America rose 12.7%.  Imports also soared, up 17.8%.

Street Bytes

--All three major indices rose, with the Dow Jones up 0.05%, 10 points, to 21394.  It hit a new high of 21528 on Monday before sliding back. The S&P 500 hit a new high Monday as well, 2453, before finishing today at 2438, up 0.2% on the week.  Nasdaq rebounded 1.8% after two rough weeks.

--U.S. Treasury Yields

6-mo. 1.10%  2-yr. 1.34%  10-yr. 2.14%  30-yr. 2.72%

--Oil prices continued to tumble a fifth week in a row from the $50+ level on West Texas Intermediate to $43.17 at Friday’s close.

Despite the decline, however, most experts don’t expect a significant reduction in U.S. production, which has been acting against OPEC’s cutbacks on same. The theme “lower-for-longer” instead is now predominating forecasts, and this has an impact on the auto industry and the popularity of SUVs.

--Until this week, it’s been a mystery to some why bank shares were rallying, even as the yield curve flattened further, because it’s clear bond trading business across the board sucked in the second quarter.  Jefferies, a boutique Wall Street bank, has already said its second-quarter bond business slid by a full third from a year ago.  Other Wall Street execs announced last month that their fixed income operation, a large profit center for most, will be down 10-15%, and June was certainly no better.

--I’m sorry, there’s only so many Uber stories I can take these days.  Yes, with the departure of CEO and co-founder Tavis Kalanick, who stepped down late Tuesday after taking a leave of absence the week before, it’s a big fall from grace.  But he’s a dirtball, and most of the time in life, dirtballs eventually get their comeuppance.

The thing is Uber has had a huge impact on the transportation sector, worldwide, in such a short period of time, the ultimate disruptor, and with all the other turmoil at the company in recent months, with a mass executive exodus, the company is indeed a mess and it needs some stability in the C-suite quickly.

Even venture capitalist Bill Gurley, whose firm Benchmark Capital was one of Uber’s earliest investors, is stepping down from the board of directors. Gurley had been a supporter of Kalanick, but ended up being one of those forcing his exit.

A week earlier another board member, TPG Capital’s David Bonderman, was replaced after being forced to step down following a sexist remark during a crisis meeting at Uber.

Meanwhile, a movement to bring Kalanick back was gathering steam at week’s end, with more than 1,000 employees signing a petition asking the board to reinstate him in some role.

One investor, Mood Rowghani, a partner with Kleiner Perkins, said, “Founder DNA is a precious asset and cannot be under-estimated.  Founders may not always play the role of CEO but several great companies – most notably Apple and Twitter – that severed all ties to their founder eventually came to regret it.”

--Oracle beat the Street handily with its earnings release Wednesday and the shares soared 9%.

Fiscal fourth-quarter net rose 15% to $3.23 billion, 89 cents per share, adjusted, better than the Street’s forecast of 78 cents.

Revenue rose 2.8% to $10.89 billion, also beating analysts’ estimates.

The company has been successful in bringing in new customers to its web-based, on-demand computing services, with this annually recurring revenue, ARR, hitting $855 million in the quarter. For the year ARR brought in $2.1 billion, Oracle co-CEO Mark Hurd said during a conference call with analysts.

Oracle’s cloud business saw revenue climb 67% to $1.15 billion, though it’s a little confusing how the company is combining all this related business vs. the way some of its competitors report it.

To keep up in cloud, Oracle will need to match the spending of Amazon, Microsoft and Goggle, who combined spent $31.5 billion last year on everything related to building out data centers.

--FedEx Corp. on Tuesday reported earnings for its fiscal fourth quarter that beat the Street, ditto revenue, which came in at $15.73 billion in the period vs. expectations of $15.56 billion.

For the year, earnings were $11.07 on revenue of $60.32 billion.  For the current year, the company expects earnings to fall in the range of $12.45 to $13.25 per share.

--Ford announced it is moving U.S. production of its new Ford Focus car to China in 2019, despite the pressure to keep production in America.  Ford said the decision would not lead to layoffs in the U.S.

It was just in January that Ford scrapped plans to move U.S. production to a new plant in Mexico after criticism from President Trump.

Currently, Ford makes its Focus cars in Michigan, Germany and China.  It still has a large plant in Hermosillo, Mexico producing other models.

The Michigan plant currently producing the Focus will switch to making trucks in 2018, with the same number of workers.

The day of the Ford announcement, U.S. Trade Representative Robert LIghthizer said he was concerned about Ford’s move.  “I find that very troubling.  I want to look and see whaat incentives there are.  It doesn’t necessarily make sense to me,” Lighthizer told a congressional panel on Capitol Hill.  “If it happened for reasons that are non-economic reasons, then I think the administration should take action.”

--Qatar Airways announced Thursday it intended to buy a stake of up to 4.75% in American Airlines, increasing it to as much as 10% over time, but American CEO Doug Parker said he was “not happy” about the prospect and found the approach “puzzling and strange.”  Parker has railed in the past about the subsidies the Middle East’s largest carriers receive from their governments that makes it difficult for the likes of American and United to compete.

Qatar tried to assure American that it was building a “passive position in the company with no involvement in management, operations or governance.”  It can buy 4.75% without board approval, but needs it for anything more.  [The board will shut this down.]

--Canada’s Bombardier plans to cut around 2,200 jobs in Germany, or around a quarter of its workforce in the country, as part of a sweeping cost-cutting plan.

--MSCI Inc., a leading index provider, has decided to include mainland Chinese shares in its global benchmarks for the first time, which one hopes will change the way Chinese companies are run in terms of transparency and following basic accounting rules, though I wouldn’t count on it.  For every Enron here, there are 20 there.  Trust me.

But MSCI said it would admit 222 Chinese stocks to benchmarks such as its Emerging Markets Index, which is tracked by funds with some $1.6 trillion of assets under management worldwide, according to the Wall Street Journal’s Gregor Stuart Hunter, though the actual flows initially are expected to be pretty light.

Separately, an official with the China Banking Regulatory Commission said on Thursday that some of China’s largest companies may pose a systemic risk to the country’s banks.  While none of the companies were mentioned by name, shares in some of the larger ones tanked, specifically the deal makers, who the regulator said are plagued with hidden debt from their acquisitions.

--California has built out so much solar power that it is often paying neighboring states, such as Arizona, to take the excess in order to avoid overloading its own power lines, as reported by the Los Angeles Times’ Ivan Penn.  This happened on 14 days in March, eight days in January and nine in February, and it helped Arizona electricity customers save millions of dollars.

But because there is no single entity in charge of energy policy in California, Californians are paying about 50% more than the national average for their electricity.

Today, one-fourth of the electricity comes from renewables, with a mandate of one-half by 2030, which experts say is “laughably easy” to achieve, especially as the cost of solar panels comes way down.

But at the same time, state regulators have been greenlighting utility company proposals to build more natural gas power plants.  It’s screwed up...and a good B-School study for you kids out there looking for an interesting thesis topic.

Also, looking at Trump’s statement in Iowa that he may build the wall with Mexico using solar panels, “My idea,” he crowed, this could cost the government even more!

--British securities regulators charged Barclays and four former executives with fraud over their actions in the 2008 financial crisis.  The Serious Fraud Office said the cases relate to two capital raises by the bank, billions of pounds from Qatari investors that enabled it to avoid a government bailout.

The four execs are John Varley, former CEO, former senior investment banker Roger Jenkins, Thomas Kalaris, a former head of Barclays’ wealth division, and Richard Boath, the ex-European head of financial institutions...all charged with conspiracy to commit fraud

Barclays is accused of conspiracy related to “advisory” fees paid to Qatar, and the second charge, “unlawful assistance,” is related to a 2bn pound loan advanced to Qatar after the fundraisings were negotiated, which is more than fish and chippy.  [“Fun with Fraud,” another free feature of ‘Week in Review.’]

The key to the 12bn pounds that Barclays took from Qatar in 2008, was to avoid nationalization, at a time Lloyds and Royal Bank of Scotland were forced to rely on taxpayer bailouts.  [BBC News]

--Last week when I noted that Amazon is looking to dominate every part of a consumer’s shopping experience, with its acquisition of Whole Foods Market, Wake Forest frat bro Ken S. passed along that Jeff Bezos’ boys have software, according to Marketplace Business Report, that prevents one from checking out the competition on your smartphone when you are in an Amazon store, of which Amazon will now have 460 with the Whole Foods move.  Yes, jamming software.

[Wal-Mart, by the way, said late Friday it would not make a competing bid for Whole Foods.]

--Intel has replaced McDonald’s as a new global sponsor of the Olympic Games until 2024.  Past deals have typically generated $100m over each four-year Olympic cycle.  I told you last week that McDonald’s was exiting after decades of sponsorship.

The IOC is having a hard time finding cities to take on the multibillion-dollar costs of staging the Games and last week, it moved to award the 2024 and 2028 summer Olympics to Paris and Los Angeles, after a slew of cities dropped out of the bidding citing cost concerns.

--Sears Canada Inc., which was spun off from Sears Holdings Corp in 2012, announced its own set of store closings and layoffs; shuttering 59 of its 225 stores and laying off 2,900 of its 17,000 workers as part of a restructuring effort approved by an Ontario bankruptcy court.  Many don’t believe the chain will make it in the Great White North.

--Ripped from the pages of the South China Morning Post: “A bike-sharing company has shut down in China after about 90 percent of its cycles went missing, presumed stolen,” according to Caixin.

--George Clooney and his two partners are selling their tequila company, Casamigos Tequila, to Diageo for $1 billion. 

Partner Randy Gerber told the New York Post, “We created Casamigos four years ago for us to drink personally and selling it for $1 billion is something we never could have imagined.”

--So how did Megyn Kelly do with her Alex Jones interview last Sunday?  Not well, just 3.5 million viewers, the lowest of her first three weeks.  In fact, “Sunday Night With Megyn Kelly” attracted 1.3 million fewer viewers than a repeat of “60 Minutes,” which is beyond embarrassing.  [Seeing as I don’t miss a single “60 Minutes” during its regular season, I don’t watch repeats.]

Well at least on the East Coast, the U.S. Open was wrapping up during Megyn’s show, so that cost some viewers for sure.

Kelly’s premiere with Vlad the Impaler had 6.1 million viewers.

Look, a lot of us knew from day one this was a stupid hire, especially at as much as $15 million per.

Maybe Megyn should interview Charlie Brown and Linus.

I mean wouldn’t you like to know what really happened on set when Charlie Brown was first shown the scrawny tree in “A Charlie Brown Christmas”?

“I went to director Bill Melendez and said, ‘You’ve got to be kidding me?  This won’t work.’ And Melendez goes, ‘Trust me, kid, it will.’  And darned if he wasn’t right.”

Foreign Affairs

Syria, Iraq, Iran, Turkey and Russia: The crisis in Syria ratcheted up several levels last Sunday as an American warplane shot down a Syrian government jet that had attacked members of American-backed Syrian fighters leading the assault on Raqqa, the self-declared capital of Islamic State.  It was the first time in Syria’s civil war the U.S. had shot down a Syrian regime plane. About two hours later, a regime SU-22 jet dropped bombs on U.S.-backed forces in the same area.

Syrian state media called the U.S. attack a “flagrant aggression” and said the jet was carrying out a mission against Islamic State militants when it was downed.

The Russians then threatened to target any U.S. aircraft flying west of the Euphrates River in Syria. Russia also suspended a hotline between the two armed forces designed to reduce the risk of a mistake.

Aaron Stein, a resident senior fellow at the Atlantic Council think tank in Washington, told the Wall Street Journal that the strike was an outgrowth of an ill-defined administration strategy.

“Nobody has thought this through,” he said.  “There doesn’t seem to be any policy guidance,” rather it is battlefield tactics that are driving policy.

Is the U.S. willing to shoot down a Russian or Turkish fighter jet carrying out a similar attack?

Meanwhile, also on Sunday, Iran announced its Revolutionary Guards had launched multiple missiles strike against ISIS in one of its last Syrian strongholds, Deir Ezzour province. Tehran said it was in retaliation for the June 7 attack on Iran’s parliament and a shrine in the capital claimed by IS.  The missiles had to have traveled over 500 miles, flying over Iraq.

Amos Harel / Haaretz

“In the span of just a few short hours, two unprecedented developments occurred in the Syrian civil war on Sunday. One: A U.S. warplane shot down a Syrian air force jet.... Two: Iran fired medium-range ground-to-ground missiles, ostensibly at Islamic State targets in Syria....

“The war in Syria, which has now lasted longer than World War II, continues to metamorphose. The only thing that stays the same is that Syria remains an arena for regional and world powers fighting over status, image and influence....

‘Americans are always worried about mission creep, as happened in Vietnam in the 1960s. The concern is that tactical decisions, mainly made to defend specific interests here and there, will ultimately bog America down in a major war that it doesn’t want. With Trump, this is a real possibility.”

Ralph Peters / New York Post

“The stakes in Syria just jumped mighty high. Syrian troops attacked the anti-ISIS fighters we back. We warned them to knock it off.  In reply, a Syrian aircraft struck our allies. An American jet shot it down.

“Now the Russian government says it will view as hostile any manned aircraft or drone flying west of the Euphrates River.  That means us.

“Were we to accept Russia’s ultimatum, we could not support our allies and we’d be shut out of the endgame battle with ISIS when, as Raqqa falls, the terrorists make a last stand at Deir ez-Zor....

“The technical wording of their threat allows the Russians a little bit of leeway, but what makes the pronouncement dangerous is that it’s public – making it hard for Vladimir Putin to back down.  Of course, Putin’s a gambler, and a canny one. He may be bluffing. But we can’t count on it.  We must assume his forces in Syria are already setting ambushes for our aviators.

“Meanwhile, the Russian media, in a Big Lie mode excessive even by Moscow’s shameless standards, insists U.S. troops on the ground are supporting ISIS, while the noble Syrian forces – alongside their selfless Russian and Iranian comrades – are the only ones fighting the terrorists.

“In reality, Bashar al-Assad and his backers cynically dumped the burden of wrecking ISIS on us and our local allies to concentrate on slaughtering civilians, exterminating freedom fighters and torturing thousands of prisoners to death.  Now that we’ve done the anti-ISIS heavy lifting, they want to exclude us from the endgame and crush our Kurdish and Arab allies.

“Russian media have also been giving a platform to Putin’s generals and their alarming tone. It doesn’t sound like the Cold War I remember.  It sounds worse. Having won again and again over the past decade, from Georgia to Crimea and now Syria, Russia’s officer corps appears to be itching for a bout for the world championship, convinced we don’t have the guts to stand up to them.

“What’s wryly striking is that the Russians, who see themselves as master strategists, are blind to the way Iran has been manipulating them: Iran got us to fight ISIS and may get Putin to fight us.  Guess who wins, either way?

“This could spin out of control very, very fast. If it does, we have to win rapidly and decisively – and keep it within Syria....

“What happens now? Our military is war-gaming contingencies to ensure that, should the Russians fire on us, we’ll be prepared. We cannot let the Russians dictate where we fly and who we can protect. We’ve gone out of our way to avoid confrontations with Putin’s war criminals, but there’s a limit. And we may be about to reach it.

“This situation could become President Trump’s own Cuban Missile Crisis: If the Russians pull the trigger, will our president stand up to Putin?

“Putin may be betting that he won’t.”

Editorial / Wall Street Journal

“A bipartisan conceit has been that the U.S. can defeat Islamic State by ducking the larger conflict in Syria, and now we’re finding out that may not be possible....

“The risk of escalation is real, but this isn’t a skirmish the U.S. can easily avoid. Mr. Assad and his allies in Moscow and Tehran know that ISIS’s days controlling Raqqa in Syria are numbered.  They want to assert control over as much territory as possible in the interim, and that means crushing the SDF (Syrian Democratic Forces)....

“This is the predicament President Obama put the U.S. in when his Syrian abdication created an opening for Vladimir Putin to intervene.  Had the U.S. established a no-fly or other safe zone to protect refugees, the Kremlin might have been more cautious.  Mr. Putin took the measure of Mr. Obama and gambled the former U.S. President would protest and do nothing. He was right. Now the Russian is testing President Trump as everyone maneuvers for post-ISIS advantage.

“As a candidate, Mr. Trump supported ‘safe zones’ for refugees and opposition forces. But he’s also shown no interest in a larger strategic goal than defeating ISIS. Now is the time for thinking through such a strategy because Syria, Russia and Iran know what they want....

“Our guess is that Russia doesn’t want a military engagement with the U.S. any more than the U.S. wants one with Russia, but Russia will keep pressing for advantage unless President Trump shows more firmness than his predecessor.”

Charles Krauthammer / Washington Post

“The U.S. shoots down a Syrian fighter-bomber. Iran launches missiles into eastern Syria.  Russia threatens to attack coalition aircraft west of the Euphrates. What is going on?

“It might appear a mindless mess, but the outlines are clear. The great Muslim civil war, centered in Syria, is approaching its post-Islamic State phase. It’s the end of the beginning.  The parties are maneuvering to shape what comes next.

“It’s Europe, 1945, when the war was still raging against a Nazi Germany, but everyone already knew the outcome. The maneuvering was largely between the approaching victors – the Soviet Union and the Western democracies – to determine postwar boundaries and spheres of influence.

“So it is today in Syria. Everyone knows that the Islamic State is finished.  Not that it will disappear as an ideology, insurgency and source of continuing terrorism both in the region and the West. But it will disappear as an independent, organized, territorial entity in the heart of the Middle East....

“Much of the fighting today is about who inherits.  Take the Syrian jet the United States shot down. It had been attacking a pro-Western Kurdish and Arab force (the Syrian Democratic Forces) not far from Islamic State territory.

“Why? Because the Bashar al-Assad regime, backed by Iran, Hizbullah and Russia, having gained the upper hand on the non-jihadist rebels in the Syrian heartland (most notably in Aleppo), feels secure enough to set its sights on eastern Syria.  If it hopes to restore its authority over the whole country, it will need to control Raqqa and surrounding Islamic State areas.  But the forces near Raqqa are pro-Western and anti-regime. Hence the Syrian figher-bomber attack.

“Hence the U.S. shoot-down. We are protecting our friends. Hence the Russian threats to now target U.S. planes. The Russians are protecting their friends.

“On the same day as the shoot-down, Iran launched six surface-to-surface missiles into Syrian territory controlled by the Islamic State.  Why?  Ostensibly to punish the jihadists for terrorist attacks two weeks ago inside Iran.

“Perhaps.  But one obvious objective was to demonstrate to Saudi Arabia and the other Sunni Arabs the considerable reach of both Iran’s arms and territorial ambitions.

“For Iran, Syria is the key, the central theater of a Shiite-Sunni war for regional hegemony.  Iran (which is non-Arab) leads the Shiite side, attended by its Arab auxiliaries – Hizbbullah in Lebanon, the Shiite militias in Iraq and the highly penetrated government of Iraq, and Assad’s Alawite regime.

“Taken together, they comprise a vast arc – the Shiite Crescent – stretching from Iran through Iraq, Syria and Lebanon to the Mediterranean....

“This alliance operates under the patronage and protection of Russia, which supplies the Iranian-allied side with cash, weapons and, since 2015, air cover from its new bases in Syria.

“Arrayed on the other side of the great Muslim civil war are the Sunnis, moderate and Western-allied, led by Saudi Arabia, the Gulf states, Egypt and Jordan – with their Great Power patron, the United States, now (post-Obama) back in action.

“At stake is consolidation of the Shiite Crescent....

“Imagine the scenario: a unified Syria under Assad, the ever more pliant client of Iran and Russia; Hizbullah, tip of the Iranian spear, dominant in Lebanon; Iran, the regional arbiter; and Russia, with its Syrian bases, the outside hegemon.

“Our preferred outcome is radically different: a loosely federated Syria, partitioned and cantonized, in which Assad might be left in charge of an Alawite rump.

“The Iranian-Russian strategy is a nightmare for the entire Sunni Middle East.  And for us too. The Pentagon seems bent on preventing it....

“Which is why we need a national debate before we commit too deeply.  Perhaps we might squeeze one in amid the national obsession with every James Comey memo-to-self?”

In other news...the United States told Turkey that it will take back weapons supplied to the Kurds’ YPG militia in northern Syria after the defeat of ISIS, an attempt by Defense Secretary Jim Mattis to allay Turkey’s fears about arming Kurds on its border.

Turkish President Erdogan has said he would target the YPG if it felt threatened by the group.

As for the battle to retake Mosul from Islamic State, which has been grinding on for over seven months, with losses in lives and infrastructure piling up, ISIS blew up the iconic Al Nuri Grand Mosque, where Baghdadi was last seen in public, in the summer of 2014, declaring a caliphate.

On Wednesday night, with the terror group barely holding on to some final neighborhoods in the Old City, IS fighters packed the mosque with explosives and took it down, though they claimed it was destroyed by allied air strikes. A video of the explosion clearly showed otherwise.

The destruction of the mosque and famous leaning minaret – which has dominated Mosul’s skyline for nearly 1,000 years, the minaret having been completed in 1172, and which is pictured on Iraqi bank notes – was a huge blow to not just the city’s cultural heritage but also Iraq’s overall, ISIS having damaged or destroyed hundreds of other historic sites elsewhere.

But the major human concern in the next few weeks is how many civilians in its final strongholds ISIS is prepared to take with it.  Today, a suicide bomber blew himself up among civilians fleeing the fighting, killing at least 12, according to Iraqi officials.  Thousands of civilians, many of them children, remain hostage.

Lastly, Israel is concerned about Bashar Assad’s forces eventually making inroads into the Golan Heights and support for militants such as Hizbullah that will be encroaching on another Israeli border, the Golan having long-served as a buffer of sorts.  There are the sounds of war off in the distance.

And it doesn’t help when Iran’s Supreme Leader Ayatollah Ali Khmanei lashes out against Israel on Thursday ahead of the Iranian-initiated ‘Al Quds day,” which protests Israel’s existence.

“There is no doubt that we will witness the demise of the Zionist entity,” read a post on his Twitter account.

Addressing a meeting of scientists and academics in Tehran on Wednesday, Khamenei said that defending the Palestinians was tantamount to “defending the truth.”

Saudi Arabia, Qatar et al:

At week’s end, Saudi Arabia, Egypt, the United Arab Emirates and Bahrain asked Qatar to submit to a list of 13 demands if it wanted them to lift their sanctions, foremost among them, shutting down its broadcaster, Al Jazeera.

The four are also insisting Qatar reduce its ties with Iran and close a Turkish military base – all within 10 days.

Qatar continues to deny it is financing terrorism, but for two weeks it has been subject to sweeping diplomatic and economic sanctions.

But the big story on the week in Saudi Arabia was the naming of Deputy Crown Prince Mohammed Bin Salman to replace his cousin as heir to the throne in a shakeup that consolidates the 31-year-old leader’s power in the world’s biggest oil exporter.

Prince Mohammed already controlled the defense, oil and economy portfolios, but King Salman acted perhaps a little sooner than expected as the decision to elevate the son was supported by 31 of the 34 members of the Allegiance Council, made up of senior members of the ruling Al Saud family.

King Salman also relieved Crown Prince Muhammad bin Nayef of his post as Interior Minister.

The king’s son, known as MBS, turns 32 in August and has been leading the country in essence since being named Crown Prince and it is expected that soon King Salman, who is ill, will officially hand the scepter to his son.

MBS is a very popular figure among his nation’s young people as he is seen as a reformer.

Mohammed bin Salman is also seen as a friend of both the United States and Israel with his firm anti-Iranian positions. And he agrees with Washington on thwarting Russian influence in the region, as well as the need to topple Bashar Assad.  There have been reports he has met with top Israeli officials in the past two years.

There have also been rumors that MBS is plotting with the heir to the Abu Dhabi throne to stage a coup in Qatar.

Editorial / Wall Street Journal

“Saudi Arabia has resisted modernity since its founding in 1932. But the political sands are shifting, and the change will accelerate with Wednesday’s appointment of Mohammed bin Salman as Crown Prince.

“King Salman broke with decades of tradition with his royal decree that ousted his nephew, security czar Mohammed bin Nayef, in favor of Salman’s son...the Saudi crown has typically passed from one octogenarian or septuagenarian brother to another, so the rise of the 31-year-old son as heir designate is a monumental development.

“This is all the more remarkable given the young leader’s reformist inclinations.  The Saudis face a triple challenge in falling oil prices, a youth demographic bulge and Iranian imperialism. The Crown Prince believes the answer is an assertive foreign policy that unites Sunni Arab states against Tehran, combined with domestic reform that weans the Kingdom off oil....

“A moderate and prosperous Saudi Arabia would bolster stability across the Arab world and is squarely in the U.S. national interest. Washington should support and encourage the young prince as he pursues change.”

MBS, as defense minister, has been leading the war in Yemen, which has seen decidedly mixed results.  But the U.S. military on Thursday said it carried out an air strike there that killed Abu Khattab al Awlaqi, the emir for al Qaeda in the Arabian Peninsula (AQAP) along with twoother militants.

“Al Awlaqi was a senior leader responsible for planning and conducting terrorist attacks against civilians,” the U.S. Military’s Central Command said in a statement.

This was a big deal and I’m surprised more hasn’t been made of it.  Then again, these groups just regenerate their leadership.

Afghanistan: Another bad week here.  Last Saturday, seven American soldiers were wounded in an insider attack by an Afghan soldier.  The attacker was shot and killed when soldiers returned fire. There were no U.S. fatalities.  [The prior week three U.S. soldiers were killed in a similar attack.]

Thursday, a car bomb exploded outside a bank in restive Helmand province, killing 29 waiting to collect their monthly salaries. This was a Taliban attack; Helmand a scene of fierce fighting against them for years involving British, U.S. and Afghan forces.

Editorial / Washington Post

“President Trump’s resolution to delegate decisions on troop levels in Afghanistan to the Pentagon is a worthy corrective to the approach of President Barack Obama, who micromanaged U.S. military forces in a way that badly undercut their ability to achieve their goals.  By politicizing force levels in Iraq and Afghanistan and setting timetables for withdrawal unlinked to conditions on the ground, Mr. Obama helped to ensure failure on his watch in both countries. The Islamic State gained control over much of Iraq, forcing the redeployment of U.S. troops, while a  Taliban resurgence in Afghanistan now demands a similar reversal of previous withdrawals.

“After what appeared to be a prolonged internal debate, Mr. Trump empowered Defense Secretary Jim Mattis to decide how many American troops will go back and what their specific objectives will be.  Mr. Mattis, in turn, has promised to deliver a strategy to the White House next month, while taking interim measures to ensure that the military situation does not deteriorate further. As he told Congress this week, the Taliban is ‘surging’: By U.S. estimates, it controls or is contesting about 40 percent of Afghanistan’s territory....

“Ultimately, success – or even the avoidance of disaster – will require years more of commitment by the United States, including more work on building Afghan political institutions. That effort must be led by the White House, not the Defense Department.  While Mr. Trump is right to delegate decisions about troop levels, he cannot – as he has so far in his presidency – detach himself from a mission that continues to cost the country $3 billion a month. When Mr. Mattis’ strategy is ready, the president should make his own public commitment to it and explain to the country why it is necessary to continue a war that has already lasted nearly 16 years and cost more than 2,000 American lives.

“Mr. Obama did his best to distance himself from the Afghan war, with the result that key political objectives in Afghanistan and Pakistan remained out of reach, while domestic support for the mission steadily declined. That’s another mistake that Mr. Trump has the opportunity to correct.”

North Korea: China and the U.S. held high-level security talks on Wednesday and called on Pyongyang to halt its missile and nuclear program, despite President Trump’s tweet a day earlier that Beijing’s efforts to rein in the North have “not worked out.”

U.S. Secretary of State Rex Tillerson said after that the U.S. has made a commitment to hold North Korea accountable for multiple violations of UN Security Council resolutions that “explicitly prohibited its nuclear weapons and missile program.”

“We both agreed that our companies should not do business with any UN-designated North Korean entities in accordance with these resolutions,” Tillerson said.

China restated its position that the Korean peninsula should be denuclearized, but added the issue should be resolved through dialogue.

The statement released by the Chinese embassy in the U.S. also restated China’s opposition to the deployment of a U.S. developed anti-missile shield in South Korea (THAAD).

Tensions rose again after Otto Warmbier, a 22-year-old American student held by North Korea for nearly 18 months, died six days after returning to the U.S. on June 13.  During the joint press conference with Tillerson, Defense Secretary Mattis accused Pyongyang of being “beyond any kind of understanding of law and order and humanity.”  [North Korea claimed at week’s end that it was the victim in Warmbier’s death.]

Meanwhile, South Korean President Moon Jae-in said on Thursday that China should do more to rein in the North’s nuclear program and that he would call on President Xi Jinping to lift measures against South Korean companies taken in retaliation against Seoul’s decision to host a U.S. anti-missile defense system.

Moon, the liberal former human rights lawyer who was elected in May after campaigning for a more moderate approach to the North, issued his most hawkish comments yet this week in also saying North Korea would have the technology to deploy a nuclear-tipped ballistic missile capable of hitting the U.S. mainland “in the not too distant future.”

President Moon is heading to Washington for a summit with President Trump in Washington this coming week.

Portugal: Wildfires last Sunday killed a staggering 64 people (at last count), many of the victims trapped in their cars as flames overwhelmed the roads they were trying to escape on.

Random Musings

According to a new CBS News Poll, President Trump’s job approval rating is 36%, his lowest in this survey since becoming president.  57% disapprove.

Only 72% of Republicans approve of the president’s performance and 35% of Independents, which is the critical figure to me.  At the 100-day mark, the figures were 83% Republicans, 38% Independents.

Just 28% approve of Trump’s handling of the Russia matter, 63% disapprove.  Only 57% of Republicans approve on this topic, vs. 80% on the economy and 77% on terrorism.

56% of Americans believe that the special counsel’s investigation will be impartial.

44% believe Russia interfered to favor Trump
18% believe Russia interfered, but not to favor Trump
31% see no Russian interference

71% believe Trump is receiving more criticism that other recent presidents, 6% ‘less.’

42% of Americans approve of Mr. Trump’s handling of the economy, but it’s 80% among Republicans...81% of Democrats disapprove.

Democrats in Congress receive a 30% approval rating, 63% disapprove.

Republicans in Congress have a 26% approval rating, 68% disapproval.

In a new NBC News/Wall Street Journal, 40% approved of Trump’s job performance, essentially unchanged from the 39% mark a month earlier.  55% disapproved.

But by a 41%-to-38% margin, more people said they thought the Affordable Care Act is a good idea than a bad one. The poll was done with the House GOP bill in mind and before the Senate version was put forward and only 16% thought the House bill was a good idea, down from 23% a month ago.

[Rasmussen’s daily tracking poll has Trump with a 46% job approval, Gallup’s 42% at week’s end.]

--Republican Karen Handel won Georgia’s special House election over 30-year-old Democrat Jon Ossoff, 52-48, a big blow to Democrats who had targeted this race nationally, pouring $50 million into the campaign (5 times more than Handel spent), making it the most expensive House race in history.  Republicans point to the result as evidence the Dems have zero shot at retaking the House in the 2018 midterms.

Granted, the Georgia 6th District has been a Republican stronghold for decades, with the likes of former House Speaker Newt Gingrich and current HHS Secretary Tom Price among those holding the seat, but Trump won it by just 2 points in 2016 and thus the importance for the elephants to hold off the donkeys.

Also on Tuesday, in South Carolina, Republican Ralph Norman held on in a special election to replace former Rep. Mick Mulvaney, who was appointed head of the White House Office of Management and Budget.  Norman defeated Democrat Archie Parnell by only three points...so this makes four special elections where Democrats failed to capture a Republican seat this year.

House Democrats are none too pleased with their ancient leadership team and they just don’t have a strategy of any kind outside of taking out Trump.

Thursday, House Minority Leader Nancy Pelosi defended her leadership.

“I thrive on competition and I welcome the discussion. But I am honored by the support,” speaking of widespread support that I see no real evidence of, though at the same time there isn’t an obvious choice to replace her.

Instead, Pelosi emphasized Republicans won their House races on Tuesday with significantly smaller margins than in past years.

“By all accounts, if you’re a Republican, this is not good news to you,” she said.

--Government data published Tuesday showed that there were 1.27 million emergency room visits or inpatient stays for opioid-related issues in 2014, nationally, the last year available for such detailed data, which was a 64% increase in inpatient care and a 99% jump for emergency room treatment compared to figures from 2005.  Of course the numbers since 2014 have only skyrocketed further.

A state report for Maryland released earlier showed that opioid-related deaths in that state had nearly quadrupled since 2010, and deaths from fentanyl had increased 38-fold in the past decade.  Baltimore City saw 694 deaths from drug and alcohol-related overdoses in 2016 – up from 393 in 2015.

Back in 2014, Maryland led the nation in opioid-related hospital admissions, with other top states including Massachusetts, Rhode Island, New York and West Virginia.  [Washington Post]

--An Associated Press-NORC Center for Public Affairs Research survey found that less than one-third of Americans support President Trump’s decision to withdraw from the Paris climate accord, and just 18% of respondents agree with his claim that pulling out of the agreement will help the U.S. economy.

But on the last item, 78% of Democrats think withdrawing will hurt the national economy, while just 24% of Republicans feel the same way.

Overall, 44% of Americans are very concerned and 26% moderately concerned that withdrawing from the agreement will hurt the nation’s standing in the world. [AP]

--I do have to note for the archives, seeing as Bill Cosby was such a big figure in the world of entertainment for decades, that a judge declared a mistrial last Saturday in his sex assault trial after jurors failed to reach a verdict on the sixth day of deliberations.

Montgomery County (Pa.) Judge Steven O’Neill said, “This is not a victory for anyone.  This is the justice system, it does not matter what the justice is.”

Cosby, 79, faced up to 30 years in prison on three charges of aggravated indecent assault.

Prosecutors immediately said they will retry him.

Cosby then said he plans to conduct a series of free public seminars about sexual assault this summer.  Andrew Wyatt, Cosby’s spokesman, said, “I received hundreds of calls from civic organizations and churches requesting for Mr. Cosby to speak to young men and women about the judicial system.”

--We note the passing of 93-year-old NBC local reporter Gabe Pressman, a true legend in these parts.  He was going to the office every day until just a week ago.

I’ve been an NBC man all my life and while he hasn’t been really active for well over ten years, every now and then they’d trot him out for one of his people stories.  He loved parades and interviewing politicians, for example, and he was tough.

Forever he’ll be known for his Christmas tale, “Yes, Virginia, there is a Santa Claus...” that the station aired every year and I imagine will continue to do so the next century.

But I’ll never forget New Hampshire, 2004, when I was up there to do some writing for you all on the primary and at one of the rallies I went to, outside was Gabe Pressman, who you have to picture was 80 then...a tiny little guy.

I was excited to see him there and went up to him, “Gabe!”  He looked at me quizzically but after I introduced myself and explained what a huge fan I was, and how my family loved his work, he was beaming.  He was just shocked someone recognized him up in New Hampshire, but he shouldn’t have been.  He was Gabe Pressman.  RIP.

--Finally....the USS Fitzgerald, an Aegis guided missile destroyer, collided with a Philippine-flagged merchant vessel, ACX Crystal, some 56 nautical miles southwest of Yokosuka, Japan early on Saturday, killing seven U.S. sailors in a terrible accident that will be investigated to the fullest.  There was clear negligence on the part of the Fitzgerald’s crew, early reports indicating the captain wasn’t awakened as the vessel approached.

There was a disturbing early report by Japan’s public broadcaster, NHK, echoed separately by the BBC, that the container ship had made a sharp turn shortly before the collision but the ship’s skipper denied this, saying “We were sailing in the same direction as the U.S. destroyer was and then collided.”

Aside from the human tragedy the Fitzgerald suffered significant damage and came close to sinking were it not for the heroics of the crew, one of them being Fire Controlman 1st Class Gary Leo Rehm Jr., 37, who was three months shy of retiring when he was killed.  The Navy told his mother that Rehm died trying to rescue fellow sailors trapped in flooding compartments, possibly as many as 20 before he himself succumbed.

---

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

God bless America.

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Gold $1257
Oil $43.17

Returns for the week 6/19-6/23

Dow Jones  +0.05%  [21394]
S&P 500  +0.2%  [2438]
S&P MidCap  -0.5%
Russell 2000  +0.6%
Nasdaq  +1.8%  [6265]

Returns for the period 1/1/17-6/23/17

Dow Jones  +8.3%
S&P 500  +8.9%
S&P MidCap  +5.0%
Russell 2000  +4.3%
Nasdaq  +16.4%

Bulls 51.5
Bears 19.4 [Source: Investors Intelligence]

Have a great week.

Brian Trumbore