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04/08/2017

For the week 4/3-4/7

[Posted 11:30 PM ET, Friday]

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Edition 939

I support President Trump in his actions on Thursday night to take out the Syrian air base where this week’s horrendous poison gas attack originated.  But like many of you I am asking ‘What’s next?’ ‘What’s the strategy?’

Thursday’s move obviously has zero impact on ending the conflict, but then I told you back in 2012, as I’ve been screaming ever since, that it was over.  It was beyond hope.

It wasn’t the story of crossing a red line set down by President Obama that Syria then violated in 2013 without any consequences.  It was the fact that Obama was too scared to work with Turkish President Erdogan, who was begging the United States for help in setting up a no-fly on the Turkish-Syria border so that the refugees could be protected, inside Syria.

But Obama said the risks were too great, which was total bull----.  We had operated no-fly zones successfully in the Balkans and Iraq for years.  And remember, Russia was years from entering the conflict.

No, you recall it was about “Bin Laden is dead, GM is alive” and the 2012 election.  This one move, not the red line, is what I have been telling you ever since historians will finally settle on as the single biggest blunder of the century. 

Remember, it’s all documented in these pages.  There were 20,000 deaths in the nascent Syrian civil war as of the summer of 2012.  There are 500,000 by some estimates today.  The bloodshed would have largely been stopped in its tracks, at minimal cost to the United States.  Erdogan would have become a stauncher ally, instead of turning against us in so many respects in the years since.

There would have been no ISIS.  The Russians wouldn’t be there.  And as important as anything else, there would not have been a refugee crisis in Europe!  Period.

Instead, as I warned, Syria is forever broken.

But we still have to do our best to rout ISIS.  The Trump administration must fund the Kurds in the right way so they can do the lion’s share of the work (Erdogan has to be brought in so he’s reassured these same Kurds will stick to Syria), and the U.S., European Union and NATO must do all they can to properly fund and support both Jordan and Turkey, and to a lesser extent Lebanon, so that they can deal with the massive refugee problems in their countries to, No. 1, prevent another mass exodus to Europe.  Erdogan keeps threatening to unleash a second wave on the continent and the EU needs to start meeting its financial obligations in this regard.  Admittedly, a lot is going to depend on how Turkey’s April 16 referendum goes, but that’s for next week.

For now...I cover it all below, including the goings on in Washington.

Syria

According to the most recent statistics from the United Nations, Syria’s six-year-long civil war has cost over 470,000 lives.  4.9 million have fled the country.  6.3 million have been internally displaced.  13.5 million Syrians are in need of humanitarian assistance.

And on Tuesday, more than 80 people died in a chemical weapons, poison gas attack in northwest Syria, Idlib province, which straddles the Turkish border.  Turkey took in at least 60 of the victims of the attack for treatment and a number of them died in hospital.  Turkey’s justice minister confirmed autopsies determined that a chemical weapon was used, specifically sarin.

Syria denied they were responsible and Russia’s defense ministry joined it in blaming the rebels, saying a Syrian air strike hit a chemical stockpile controlled by the armed opposition.  The Kremlin said the Syrian government doesn’t have any chemical weapons in storage and that the U.S. was rushing to judgement in blaming President Bashar al-Assad.

Russian state TV reported on the Syria attack, but no victims were shown.

Syria’s Foreign Minister Walid Muallem said Thursday: “I stress to you once again: the Syrian army has not, did not and will not use this kind of weapons – not just against our own people, but even against the terrorists that attack our civilians with their mortar rounds,” he said.

U.S. UN Ambassador Nikki Haley said Syrian chemical attacks would continue if nothing was done.

“Time and time again Russia uses the same false narrative to deflect attention from their ally in Damascus,” she said.

Hinting at possible unilateral action by the U.S., she added: “When the United Nations consistently fails in its duty to act collectively, there are times in the life of states that we are compelled to take our own action.”

[The following opinion pieces were written prior to Thursday’s cruise missile strike.]

Editorial / Wall Street Journal

“Just when Western leaders think they can forget about the Syrian civil war, Bashar Assad drags them back in.  A suspected poison gas attack widely blamed on the Syrian regime killed at least 58 people in opposition-held territory Tuesday, including 11 children.

“Syria’s army denied using chemical weapons, but then that’s what the regime said in 2013 when it used them against civilians in opposition territory in a Damascus suburb. This time bombs dropped by warplanes hit the town of Khan Sheikhoun in northwestern Syria, spreading an unknown gas that caused people to faint, foam in the mouth and suffocate, according to doctors and rescue workers.

“ ‘All pieces of evidence indicate that the raid was carried out by the regime,’ said Raed Saleh, director of the White Helmets civil-defense organization that operates in rebel-controlled Syria.  As far as we know, the Syrian opposition doesn’t have warplanes.

“Such an attack isn’t supposed to be possible now because President Obama, John Kerry and Vladimir Putin claimed to have rid Syria of its chemical-weapons stockpiles.  Mr. Obama took up the Russian strongman’s arms-control offer in 2013 after Mr. Obama flinched on a military strike to enforce his famous ‘red line’ against Mr. Assad’s use of chemical weapons.

“The two nations and the United Nations then made a great show of destroying the stockpiles that Mr. Assad claimed not to have.  But U.S. intelligence believed the regime was holding some weapons in reserve, and the use of chlorine gas has become almost routine.  Tuesday’s attack seems to have been a deadlier gas, perhaps sarin that was used in 2013.

“The Russian defense ministry, which is Mr. Assad’s military patron, dismissed reports of the attack as ‘absolutely fake,’ but the victims on video from Syria look real enough. The attack again shows the folly of relying on arms-control promises form men like Messrs. Assad or Putin.  The Russian is violating the1988 INF Treaty by introducing new missiles in Europe, so why would he fret about more poison gas in Syria?....

“The attack comes after the Administration has been publicly signaling that deposing Mr. Assad is no longer a goal of U.S. policy.  It’s possible the regime took those comments as license to unleash more hell.

“Mr. Trump inherited a mess in Syria, but if he doesn’t want to preside over endless civil war and more war crimes, he’ll need a better strategy than Mr. Obama’s default of moral denunciation and trusting Russia.”

Thomas L. Friedman / New York Times

“With each passing day our new president is discovering that every big problem he faces is like ObamaCare – if there were a good, easy solution it would have been found already, and even the less good solutions are more than his own party is ready to pay for or the country is ready to tolerate.

“But on Tuesday, tragically, Trump got this lesson in foreign policy via a truly vile poison-gas attack on Syrian civilians, many of them children, reportedly perpetrated by the pro-Russian, pro-Iranian, murderous regime of Bashar al-Assad.

“President Trump came to office with the naïve view that he could make fighting ISIS the centerpiece of his Middle  East policy – and just drop more bombs and send more special forces than President Barack Obama did to prove his toughness. Trump also seemed to think that fighting ISIS would be a bridge to building a partnership with President Vladimir Putin of Russia.

“It was naïve because ISIS does not exist in a vacuum – nor is it the only bad actor in the region.  ISIS was produced as a Sunni Muslim reaction to massive overreach by Iran in Iraq, where Iranian-backed Shiite militias and the Iraqi government forces of Nouri al-Maliki tried to crush all vestiges of Sunni power in that country and make it a vassal of Iran....

“The Iranian/Shiite onslaught against Iraqi Sunnis ran parallel with Assad’s Shiite-Alawite regime in Syria, turning what started out as a multisectarian democracy movement in Syria into a sectarian war between Sunnis and Shiites.  Assad figured that if he just gunned down or poison-gassed enough Syrian Sunnis he could turn their democracy efforts into sectarian struggle against his Shiite-Alawite regime – and presto, it worked.

“The opposition almost toppled him, but with the aid of  Russia, Iran and Iran’s Hizbullah militia, Assad was able to pummel the Syrian Sunnis into submission as well.

“ISIS was the deformed creature created by a pincers movement – Russia, Iran, Assad and Hizbullah in Syria on one flank and Iran and pro-Iranian militias in Iraq on the other. When Trump said he wanted to partner with Russia to crush ISIS, it was music to the ears of Assad, Russia, Iran and Hizbullah.  Like everyone else, they figured they could manipulate Trump’s ignorance to their advantage....

“So, last week, someone named ‘Rex Tillerson’ (who, I am told, is the U.S. secretary of state) declared that the ‘longer-term status of President Assad will be decided by the Syrian people’ – as if the Syrian people will be having an Iowa-like primary on that subject soon.  U.N. Ambassador Nikki Haley made the same point even more cravenly, telling reporters that the United States’ ‘priority is no longer to sit there and focus on getting Assad out.’

“Is there any wonder that Assad felt no compunction about perpetrating what this paper described as ‘one of the deadliest chemical weapons attacks in years in Syria,’ killing dozens of people in Idlib Province, the last major holdout for Syrian rebels.

“Mind you, Donald Trump did not cause this Syria problem, and he is right to complain that it was left in his lap by the Obama team, which had its own futile strategy for dealing with Syria – trying to negotiate with Russia and Iran, the key players there, without creating any leverage on the ground.

“But if you’re looking for a culprit for why America has refused to intervene in Syria, you have to look both to your left and to your right.”

Editorial / Washington Post

“Perhaps it is just a coincidence that the worst chemical weapons attack in Syria since 2013 came only a few days after the Trump administration confirmed that it would not seek to remove blood-drenched dictator Bashar al-Assad from power.  Like Sen. John McCain (R-Ariz.), we suspect not.  Either way, the horrific assault Tuesday on a rebel-held town will test whether President Trump will tolerate flagrant crimes against humanity by the Assad regime. So far, the signs are not good....

“United Nations investigations have established that the Assad regime has dropped barrel bombs filled with chlorine gas on civilians on multiple occasions since agreeing in 2013 to hand over its chemical arsenal and abide by a treaty banning chemical-weapons use.  The Tuesday attack appeared even more serious: Medical personnel on the scene cited symptoms consistent with exposure to nerve agents, such as sarin.

“It was a sarin attack near Damascus in August 2013 that prompted President Barack Obama first to propose, and then to retreat from, punitive military action against the Assad regime.  Mr. Obama later described himself as ‘very proud’ of his decision, because it led to a deal that supposedly eliminated the Syrian chemical stockpile.  Tuesday’s attack underlined that Mr. Obama failed to accomplish even that goal, while his withdrawal from the scene opened the way to the destruction of the moderate Syrian opposition, the growth of the Islamic State and the intervention in Syria by Russia.

“Now it is Mr. Trump’s turn to decide whether to stand up to Mr. Assad and his Iranian and Russian sponsors....

“To its credit, the new administration excoriated Russia and China on Feb. 28 when they blocked a UN Security Council resolution sanctioning Syria for its documented use of chlorine.  The two governments, charged U.S. Ambassador Nikki Haley, ‘turned away from defenseless men, women and children who died gasping for breath when Assad’s forces dropped their poisonous gas.  They ignored the facts. They put their friends in the Assad regime ahead of our global security.’

“Will Mr. Trump now do the same?”

Ralph Peters / New York Post

“Remember the date: April 4, 2017.  That’s when nerve-gas bombs fell on a Syrian town, killing dozens – including children, women and the elderly – with no effort to disguise the crime. And the world did nothing.

“That date marks the beginning of the collapse of a ban on chemical weapons that has endured for nearly a century. Even the worst dictators feared using chemical weapons, and did so furtively, if at all.  Now the Geneva Protocol of 1925, buttressed by later accords, has collapsed atop Syrian infants.

“Standing beside King Abdullah of Jordan on Wednesday, President Trump stated that Syria’s behavior ‘cannot be tolerated.’  He sounded like President Barack Obama.

“Deeds, not words, Mr. President.

“If we do not respond forcefully, chemical weapons will be used against our military in the future, by one rogue state or another.  Worse, if the ban on chemical weapons is allowed to crumble, the taboos on biological weapons (germ warfare) and nuclear use will be the next to dissolve.

“Those agonized deaths in Syria weren’t far away.  They happened next door.

“In the brutal world beyond our shores, where the human animal is barely caged by laws, our grimmest endeavor, warfare, has largely (albeit never completely) been governed by rules agreed to in the common interest.

“Syrian dictator and war criminal Bashar al-Assad is tearing away the last façade of humanity in war.

“What should we do? As with the president’s rhetoric, UN Ambassador Nikki Haley’s heartfelt address to the Security Council on Wednesday was no substitute for applying force.  We know which Syrian air base those attack planes flew from.  We should destroy every aircraft in every bunkered hangar in that facility.  Call Vladimir Putin’s bluff. Let the empty rhetoric be Putin’s this time around.

“Why us? Who else? Russia, Iran and Hizbullah are the three horsemen of Assad’s apocalypse.  Strike Assad even if those nerve-gas victims mean nothing to you. Do it in our own interests, for the benefit of the living. Those who use chemical weapons must pay an exemplary price.

“And do it because we bear a measure of responsibility for that chemical attack.

“Yes, Trump’s right that a succession of (lesser) chemical attacks erased Obama’s infamous red line as Obama cowered. But blaming the former president helps nothing (as Obama blaming George W. Bush helped nothing).  Trump is president now. This is his problem....

“Our immediate responsibility traces to Secretary of State Rex Tillerson’s careless remarks last week. He took regime change in Syria off the table and, worse, made the preposterous statement that Syria’s future will be decided by the Syrian people.

“Living or dead, the people have no say. Russia, Iran, Hizbullah and Assad are deciding Syria’s future, to the extent the corpse-strewn country has a tomorrow.

“Such gaffes matter. We’ve been here before and paid the price in blood. When our diplomats speak loosely, all hell breaks loose.  In the summer of 1990, our ambassador to Iraq, April Glaspie, told Saddam Hussein, ‘We have no opinion on your Arab-Arab conflicts, such as your dispute with Kuwait.’  Eight days later, Saddam invaded Kuwait....

“The world pays attention to every word our diplomats – and our presidents – say.

“Assad’s use of nerve gas on his own people was strategically gratuitous: He’s winning.  But the attack did serve three purposes:

“First, sheer vengeance.  The factional hatred in Syria today gorges on massacre.

“Second, he showed the opposition the extent of its powerlessness, abandoned by Western well-wishers.

“Third, Assad was rubbing our faces in it. The nerve-gas attack was his thank-you note to our secretary of state for tacitly acknowledging his regime (which was also a gift to Moscow, consigning Syria to Russia’s sphere of influence).

“Sloppy language and empty threats from two administrations got us into this mess, but words won’t get us out.  If we don’t act, Assad’s behavior will worsen, and the ban on the use of weapons of mass destruction, nuclear, biological and chemical, will fall apart. And we’ll tumble into hell.

“Those tiny corpses in Syria were your children.”

---

Thursday afternoon, President Trump told reporters traveling with him on Air Force One: “I think what Assad did is terrible.  I think what happened in Syria is a disgrace to humanity and he’s there and I guess he’s running things, so something should happen.”

Sec. of State Tillerson telegraphed something was imminent when he denounced Assad and said he should go in a rare public statement around the same time.

Thursday night, Trump said he ordered a missile strike against a Syrian airfield from which the Assad regime had launched the deadly chemical attack.  59 Tomahawk cruise missiles were launched from the USS Porter and USS Ross around 8:40 p.m. ET, striking multiple targets on the Shayrat Air Base, which the Pentagon says was used to store chemical weapons.

The strikes occurred as Trump and Xi were wrapping up a dinner at Mar-a-Lago.

Trump: “On Tuesday, Syrian dictator Bashar al-Assad launched a horrible chemical weapons attack on innocent civilians.  Using a deadly nerve agent, Assad choked out the lives of helpless men, women and children.  It was a slow and brutal death for so many.  Even beautiful babies were cruelly murdered in this very barbaric attack.  No child of God should ever suffer such horror....Tonight I ordered a targeted military strike on the airfield in Syria from where the chemical attack was launched.”

“It is in this vital national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons.   There can be no dispute that Syria used banned chemical weapons, violated its obligations under the chemical weapons convention and ignored the urging of the UN Security Council.”

A Pentagon spokesman said, “Initial indications are that this strike has severely damaged or destroyed Syrian aircraft (perhaps 20 destroyed) and support infrastructure and equipment at Shayrat Airfield, reducing the Syrian government’s ability to deliver chemical weapons.”

The Syrian military said at least 16 died in the strikes (7 military personnel, 9 civilians in the nearby town) with several hundred wounded, though this couldn’t be independently confirmed.

Russian President Putin condemned the airstrike as an act of “aggression against a sovereign state” and suspended an agreement with the U.S. to avoid hostile incidents in the skies above its Syrian ally.  Through a spokesman, Putin said the actions “against a sovereign country violated the norms of international law, and under a trumped-up pretext at that,” Dmitry Peskov told reporters.

The Kremlin added the U.S. action will cause “considerable damage” to ties between Moscow and Washington, and that “Putin sees the strikes on Syria by the U.S. as an attempt to divert the attention of the international community from numerous civilian casualties in Iraq,” Peskov added.

Prime Minister Benjamin Netanyahu’s office said in a statement: “In both word and action, President Trump sent a strong and clear message today that the use and spread of chemical weapons will not be tolerated.”

Saudi Arabia, which supports the Syrian opposition, welcomed the missile strike, calling it a “courageous decision” by Trump.  Iran, which supports the other side of the six-year war, condemned the strike, describing “unilateral action” as “dangerous.”

Iranian Foreign Ministry spokesman Bahram Ghasemi warned the strikes would “strengthen terrorists,” further complicating the situation in Syria.

Sens. John McCain and Lindsey Graham said in a joint statement: “We salute the skills and professionalism of the U.S. Armed Forces who carried out tonight’s strikes in Syria.  Acting on the orders of their commander-in-chief, they have sent an important message the United States will no longer stand idly by as Assad, aided and abetted by Putin’s Russia, slaughters innocent Syrians with chemical weapons and barrel bombs.”

Senate Minority Leader Chuck Schumer, despite having criticized Trump’s policies in the past, endorsed his decision.

“Making sure Assad knows that when he commits such despicable atrocities he will pay a price is the right thing to do,” Schumer said.  “I salute the professionalism and skill of our Armed Forces who took action today.”

Friday, Russia vowed to help beef up the Syrian regime’s air defenses.

[The following opinion pieces are post-strike.]

Editorial / Wall Street Journal

“President Trump inherited the Syrian catastrophe from Barack Obama, and his initial instincts were to accept the awful status quo.  But Bashar Assad’s  latest chemical attack has galvanized his Administration to think anew, and Mr. Trump’s decision Thursday to launch a retaliatory missile strike is an important first step to save lives, enforce global order, and improve the strategic outlook for the U.S. and its allies.

“Mr. Trump starts with the reality that Mr. Obama’s long abdication has left the U.S. with far less leverage than it had when the civil war began in 2011.  Iran has become Mr. Assad’s protector on the ground via arms supplies and Hizbullah, and Russia has moved in as a military patron and patroller of the skies.   The Muslim opposition the U.S. has been feebly trying to train and arm has been degraded while Mr. Assad and the Russians leave Islamic State to the Kurds and the U.S.-led coalition.

“As recently as last week Mr. Trump seemed willing to surrender to this circumstance and do nothing beyond defeating ISIS in Syria’s east. This was reflected in Secretary of State Rex Tillerson’s comments last week that Mr. Assad was here to stay and the future of Syria would be ‘decided by the Syrian people.’  That’s John Kerry-speak for capitulation, and it may have led Mr. Assad to believe he could unleash more chemical hell.

“Mr. Trump also seemed to be courting an accommodation with Russia in Syria, but that road leads to more strategic retreat.  Vladimir Putin’s price for restraining Mr. Assad would be steep: U.S. recognition of his conquests in Ukraine and the end of sanctions. This would erode the U.S.-Europe alliance and make Mr. Putin look like a hero back home.  Iran might not cooperate in any case, and its goal is an arc of Shiite power from Tehran through Iraq and Syria to the Mediterranean.

“The alternative to this surrender is to reassert U.S. influence with diplomacy and military force, and Mr. Assad’s chemical attack is the opening, Mr. Trump may understand this as he ordered an attack on the air base from which the chemical attack was launched, and Mr. Tillerson said Thursday that Mr. Assad has no future in Syria.

“The quickest way to punish Mr. Assad for his aerial chemical attacks, and to ensure they won’t happen again, is to destroy his air power....

“On Thursday, the U.S. struck only a single airfield, though Mr. Assad has six active airfields used in the war....

“Every military operation carries risks but this one could also have major political and strategic benefits if Mr. Trump follows the air strike with some forceful diplomacy. The demonstration of renewed U.S. purpose in the region could have an electrifying impact across the Middle East. The Saudis, the Gulf Sunni states and Turkey would begin to rethink their accommodation to the Russia-Assad-Iran axis of dominance that none of them wants.

“Mr. Trump also needs to make Russia and Iran begin to pay a price for their support for Mr. Assad’s depredations.  They have had no incentive to negotiate an end to the civil war because they see themselves on the road to a relatively cost-free victory.  That calculus may change if it looks like the costs of intervening are rising and Mr. Assad is no longer a sure winner....

“The larger point for Mr. Trump to recognize is that he is being tested.  The world – friend and foe – is watching to see how he responds to Mr. Assad’s war crime.  His quick air strike on the evening he was having dinner with Chinese President Xi Jinping makes clear that the Obama era is over.  If he now follows with action to protect Syrian civilians and construct an anti-Assad coalition, he may find that new strategic possibilities open up to enhance U.S. interests and make the Middle East more stable.”

Editorial / Washington Post

“By now, the nation has grown accustomed to – if not accepting of – President Trump’s bombast and exaggeration.  Plenty of his overstatements are best forgotten.  But in recent days Mr. Trump’s rhetoric, from the White House, has crossed into very serious territory about two intractable crises overseas.  This is where words become dangerous if untethered to action or strategy.

“In Syria, the regime of President Bashar al-Assad unleashed toxic nerve agents that killed innocent civilians, including children whose corpses were a shocking testament to the awful toll of the war.  Mr. Trump’s first instinct was to blame former president Barack Obama, saying the Syrian attack was ‘a consequence of the past administration’s weakness and irresolution.’  Leave aside for the moment that Mr. Trump repeatedly argued against the military action in Syria several years ago when Mr. Obama was mulling the response to his own ‘red line’ against the use of chemical weapons. What is most interesting now is how Mr. Trump responded to the new attack....

“Thursday night, the United States launched...the first direct strike on Syrian forces since the civil war began six years ago. The next steps will have to be carefully considered so a spasm of reaction does not simply make things worse on a battlefield where Russia and Iran are backing the Syrian regime.  Similarly, Mr. Trump faces an escalating standoff with North Korea over its missile and nuclear weapons programs.  He has recognized the dead end of Mr. Obama’s policy of ‘strategic patience’ but not announced a new policy to replace it.  Interviewed by the Financial Times, he was asked about the role of China, benefactor to Pyongyang, in slowing the nuclear and missile threat.  ‘Well,’ he replied, ‘if China is not going to solve North Korea, we will.  That is all I am telling you.’  Could he do it without China’s help?  ‘Totally,’ he replied....

“On Jan. 2, Mr. Trump also declared on Twitter, ‘North Korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the U.S. It won’t happen!’  These are unequivocal declarations that raise expectations for action.  Mr. Trump cannot afford to drop them like so many of his past promises.”

John Podhoretz / New York Post

“Thursday night’s U.S. military strike against the Syrian airbase from which the barbaric Assad regime’s sarin-gas attack against its own people was launched was both earth-shaking and modest.

“It was modest because it was focused, targeted and limited.

“It’s specific purpose was to degrade the regime’s ability to work its evil again....

“Chemical weapons need not, after all, be delivered by plane.  They can be carried by individuals and released in confined spaces like the Tokyo subway system, where a 1995 sarin attack by terrorists resulted in death and horrible injury to dozens and incidental injuries to more than 5,000 people.

“Over the past four years, Assad has been making commonplace what was once all but unthinkable – the deployment of a weapon of mass destruction against a civilian population.

“And he has been able to make it commonplace because the United States under Barack Obama repeatedly refused to respond to these acts of savage barbarity.

“And this is why I say the military strike was earth-shaking as well as modest.  In the first major test of Trump’s mettle as president, he has just put the world on notice: He is charting his own course in response to real-world events.

“This response seems to contradict many things he has said over the past four years about what the United States should do in Syria, and to overrun the words his own secretary of state spoke about Syria last week.

“That makes this militarily modest action even more geopolitically meaningful.  Trump is signaling that his Obama-era tweets and his campaign’s naked appeals to isolationism may now be past their sell-by date.

‘Indeed, he sounded less like a cynical realist than a – dare I say it? – neoconservative.

“The rhetoric of his brief statement was striking for its moralism: ‘We ask for God’s wisdom as we face the challenge of our very troubled world,’ he said.  ‘We hope that as long as America stands for justice, then peace and harmony will in the end prevail.’

“Contrast this with two months ago, when he responded to Bill O’Reilly asking him about Vladimir Putin’s record of killing people with shocking insouciance: ‘What,’ Trump said, ‘do you think our country’s so innocent?’

“What a difference a sarin gas attack makes. And North Korean missile tests....

“Trump’s action last night sends a message to Xi and to the rest of the world: Take me seriously.”

David Ignatius / Washington Post

“Even for a president who advertised his coldblooded pragmatism, the moral dimensions of leadership find a way of penetrating the Oval Office.  In the case of President Trump, the emotional distance seems to have been shattered by simple, indelible images of suffering children in Idlib, Syria.

“ ‘When you kill innocent children, innocent babies – babies! – little babies...that crosses many, many lines. Beyond a red line, many, many lines,’ Trump said Wednesday, his voice high and stretched, after pictures surfaced of lifeless infants choked to death by poison gas.

“The recognition: The Syria slaughter ‘is now my responsibility.’ And the admission: ‘I do change.’

“With that conviction, Trump took military action Thursday night, ordering retaliatory missile attacks on a Syrian air base....

“Why did Assad use nerve gas in Idlib?  It’s impossible to know. Maybe it was a signal to an increasingly aggressive Israel that he still had chemical weapons, or maybe it was a warning to Russia that he wasn’t a pawn to be traded in a grand bargain with Trump.  But most likely, it was a reaction to the free hand he was seemingly given when Secretary of State Rex Tillerson said a few days earlier during a visit to Turkey that Assad’s future ‘will be decided by the Syrian people’ – meaning that the United States no longer demanded his departure....

“Trump might study the example of Harry S. Truman, another president who came to office radically unprepared for the global responsibilities he faced.  World War I had made Truman.  He commanded an artillery battery in the Argonne Forest.  Like so many people caught up in war, he didn’t know what he could do until he was tested.  Trump now better appreciates the truth of Truman’s famous line: ‘The buck stops here.’”

Secretary of State Tillerson is expected to meet Putin on his first visit to Moscow next week.  The Kremlin said today that it expects him to explain Washington’s stance.

Justice Gorsuch

Sunday, on “Meet the Press,” Senate Minority Leader Chuck Schumer said it does not appear President Trump’s Supreme Court nominee, Neil Gorsuch, will get the 60 votes needed to overcome a procedural hurdle to his nomination.

“So instead of changing the rules – which is up to [Senate Majority Leader] McConnell and the Republican majority – why doesn’t President Trump, Democrats and Republicans in the Senate sit down and try to come up with a mainstream nominee?”

McConnell said on “Fox News Sunday, “Judge Gorsuch deserves to be confirmed (and) ultimately” will.

“I think it is noteworthy that no Supreme Court justice has ever, in the history of our country, been stopped by a partisan filibuster – ever.”

But Sunday, Republicans didn’t have the eight Democrats to avoid a filibuster.

Monday, the Senate Judiciary Committee voted 11-9 along party lines to advance the nomination of Gorsuch.  Senate Democrats then clinched enough support to block it, setting up the “nuclear” showdown over Senate rules that came to a head on Thursday.  Democrats needed 41 votes out of 48 Democratic senators, and only four, Sens. Heidi Heitkamp (N.D.), Joe Donnelly (Ind.), Joe Manchin (W. Va.) and Michael Bennet (Colo.) said they would support Trump’s nominee. 

The first three of the four are up for reelection in states carried by Trump in 2016.  Bennet won reelection last year, but he is linked with Gorsuch due to the latter’s ties to Colorado.

“If we have to, we will change the rules, and it looks like we’re going to have to,” Sen. Lindsey Graham (R-S.C.) said during Judiciary Committee hearings.

Sen. Bennet in a statement Monday said he would not support the filibuster of Gorsuch because, “Changing the Senate rules now will only further politicize the Supreme Court and prevent the Senate from blocking more extreme judges in the future,” he warned.

Sen. John McCain said he was going to go along with a change in the rules ending a tradition of 60 votes needed to advance Supreme Court nominees to a final vote.  McCain in the past had strongly opposed such a change.

Wednesday, McCain said the nuclear option was the next step in the inexorable slide to crushing the chamber’s bipartisan traditions.  McCain thought those, like Sen. McConnell, who thought the nuclear option was good, were, well, let’s have McCain say it:

“Idiot, whoever says that is a stupid idiot, who has not been here and seen what I’ve been through and how we were able to avoid that on several occasions,” recalling past efforts to defuse judicial confirmation wars.  “And they are stupid and they’ve deceived their voters because they are so stupid.”

But McCain said he’d support McConnell.

So Thursday, the Senate voted 55-45 to end debate on Gorsuch’s nomination, setting up a final vote Friday, after Democrats had blocked Gorsuch from getting to 60.  Now it will be a simple majority.

Sen. Jeff Merkley (D-Ore.) blasted GOP tactics, saying it “is just wrong to pack the court through this stolen seat,” referring to Merrick Garland.

Edward Luce / Financial Times

“The doctrine of mutually assured destruction no longer applies to U.S. politics. Before the end of this week, Mitch McConnell, the Republican Senate majority leader, will almost certainly exercise the ‘nuclear option’ to end the opposition’s right to filibuster Supreme Court nominees.  With it he will end one of the most sacred traditions of a chamber that used to be known as the world’s greatest deliberative body.  But the biggest casualty will be the U.S. judiciary. Mr. McConnell’s action will strip the last fig leaf from a politicized Supreme Court.

“The initial beneficiary will be Neil Gorsuch, Donald Trump’s first nominee to the U.S. apex court. Mr. Gorsuch, who is 49, and one of America’s most conservative justices, will keep the job for life. He is unlikely to be Mr. Trump’s last.  Mr. Trump inherited a Supreme Court that is split 4-4 between conservatives and liberals – the ninth seat has been open since the death last year of the conservative Antonin Scalia. Mr. Gorsuch’s confirmation would restore the 5-4 conservative majority. But the biggest effect will be on the next two Supreme Court vacancies, the first of which is likely to be created by Ruth Bader Ginsburg, a liberal justice, who is 83 and has suffered from poor health.  Mr. McConnell’s action will enable Mr. Trump to push through whomever he wants. By the end of his first term the tilt could be 7-2, which would lock in a conservative majority for decades.

“Mr. McConnell’s action will also give two immediate boosts to Mr. Trump’s presidency.  The first will be to soften the judicial branch, which is the main check on Mr. Trump’s agenda.  Since taking office, Mr. Trump has run into repeated judicial roadblocks.  Several courts, most recently in Hawaii, have blocked Mr. Trump’s so called ‘Muslim ban’ to deny visas temporarily to citizens of seven – since reduced to six – Muslim countries.  The case could well end up in the Supreme Court.  The same applies to a string of executive orders Mr. Trump has issued to undo Barack Obama’s actions on the environment and immigration.  Last week, for example, Mr. Trump scrapped an order that required coal companies to clean up pollutants from mountain-top strip mining and other forms of excavation....

“The second consequence will be to negate whatever prospects there were of bipartisan cooperation during the Trump administration.  Mr. McConnell’s action will come in response to the decision by Chuck Schumer, the Senate Democratic leader, to filibuster Mr. Gorsuch’s nomination.  That in turn, was prompted by last year’s Republican decision to deny a vote to Merrick Garland, Mr. Obama’s nominee for the vacancy.  Mutually assured destruction only works when each party realizes they both lose.  By pressing the button, Mr. McConnell would entrench a never ending cycle of partisan revenge.  The space for bipartisan vision will vanish. As Mahatma Gandhi reputedly said, an eye for an eye and pretty soon the whole world is blind.”

Rich Lowry / New York Post

“A Gorsuch filibuster would be an act of sheer partisan pique against the wrong target, with the wrong method, at the wrong time.

“The effort to portray Gorsuch as out of the mainstream has fallen flat.  He has the support of President Barack Obama’s former solicitor general, Neal Katyal.  He got the American Bar Association’s highest rating. He’s been endorsed by USA TODAY.  He will receive the votes of at least three Democratic senators. Some radical.

“From the moment of his announcement by President Trump to the very last question at his confirmation hearings, Gorsuch has been an exemplary performer, whose deep knowledge has been matched by his winning temperament....

“In short, Democrats are departing from the Senate’s longtime practices and excoriating the GOP for responding with a tactic Democrats themselves pioneered.  Process questions are always a festival for partisan hypocrisy. This is still a bit much.

“Regardless, Ed Whelan of the Ethics and Public Policy Center notes that there isn’t much of a rationale for keeping the filibuster for Supreme Court nominees if it has already been eliminated for all other nominations.

“Putting all this aside, a Gorsuch filibuster doesn’t even serve Schumer’s narrow interests, besides placating the left-wing #resistance to Trump demanding it.  It would be shrewder for Schumer to keep his options open for a future nominee.  If there’s another vacancy, perhaps Trump will nominate a lemon, or the Republicans won’t be so united, or the higher stakes of a conservative nominee replacing a liberal justice will create a different political environment....

“Chuck Schumer is about to make Senate history – for astonishing short-sightedness.”

Friday, Gorsuch was confirmed 54-45, a much-needed political victory for Trump.

“He’s going to make an incredible addition to the court,” said Sen. McConnell.  “He’s going to make the American people proud.”

This also represents a huge moment of triumph for McConnell.  When Scalia died suddenly in February 2016, McConnell within hours issued a statement that essentially shut the door on an Obama appointment, stating “this vacancy should not be filled until we have a new president.”

The Senate GOP backed McConnell up, Trump won the election, and months later, nominated Gorsuch.  McConnell then stayed good to his promise to do everything to see the judge confirmed, including invoking the “nuclear option.”

It’s McConnell who kept the court on the GOP side, and possibly for decades to come depending on the fate of some of the left-leaning current justices who could go at any moment.

But now many conservatives want the intensity McConnell displayed in the Gorsuch fight to be in evidence in battles on issues like tax reform.

Gorsuch will be sworn in next week and when he does he will make history, becoming the first former Supreme Court law clerk to ascend to the court and serve alongside his former boss.  Gorsuch was a clerk for Justice Anthony Kennedy in 1994.

Intel Investigation and Susan Rice

Saturday morning, President Trump tweeted: “When will Sleepy Eyes Chuck Todd and @NBCNews start talking about the Obama SURVEILLANCE SCANDAL and stop with the Fake Trump/Russia story?”  Trump followed:

“It is the same Fake News Media that said there is ‘no path to victory for Trump’ that is now pushing the phony Russia story. A total scam!”

An AP-NORC Center for Public Affairs Research survey found 52% of Americans favor an independent investigation into the Russia issue, while 23% oppose.  Another 22% say they neither favor nor oppose an investigation.

Also, according to the same poll, 44% of Americans say they’re very or extremely concerned that Trump or others involved in his campaign had inappropriate contacts with the Russian government.

Sunday, Sen. John McCain slammed Rep. Devin Nunes, saying the House Intelligence Committee chairman “killed” a bipartisan effort to investigate Russia’s interference in the presidential election.

“If we’re really going to get to the bottom of these things, it’s got to be done in a bipartisan fashion.  And as far as I could tell, Congressman Nunes killed that,” McCain said on ABC’s “This Week.”

McCain praised Sens. Mark Warner (D-Va.) and Richard Burr (R-N.C.) for cohesively working together on the Senate Intelligence Committee.  But McCain added, “Every time we turn around, another shoe drops from this centipede.  We need to examine every aspect of it: President Trump’s priorities, and the other priorities many of us believe exist.”

Monday, Trump tweeted that the “real story” is improper surveillance of his team by the Obama administration.

“Such amazing reporting on unmasking and the crooked scheme against us by @foxandfriends,” Trump tweeted, “ ‘Spied on before nomination.’  The real story.”

White House press secretary Sean Spicer said the administration’s concerns about the Obama administration’s role in unmasking identities in the intelligence reports is moving in a ‘troubling direction.’  Spicer declined to comment further.  It was clear, though, that Trump and Spicer were relying on Fox News and Bloomberg News columnist Eli Lake’s report that Obama’s national security adviser, Susan Rice, requested to unmask the names of Trump associates caught up in incidental surveillance collection.

Tuesday, Susan Rice categorically denied that the Obama administration inappropriately spied on members of the Trump transition.

“The allegation is that somehow, Obama administration officials utilized intelligence for political purposes,” Rice told MSNBC’s Andrea Mitchell.  “That’s absolutely false.”

Rice had requested that at least one Trump transition team member be ‘unmasked,’ Bloomberg reported Monday, leading to claims the Obama administration sought to use that intelligence to damage Trump’s transition.

“The notion, which some people are trying to suggest, that by asking for the identity of the American person is the same as leaking it – that’s completely false,” Rice said.  “There is no equivalence between so-called unmasking and leaking.”

Rice also denied exposing former national security adviser, Michael Flynn, who was forced to resign after misleading Vice President Pence about the contents of a phone call with the Russian ambassador.

Bloomberg’s Lake reported that Rice was the one who requested unmaking various officials in intelligence files since viewed by Reps. Devin Nunes (R-Calif.) and Adam Schiff (D-Calif.), the heads of the House Intelligence Committee.

“I don’t solicit reports,” Rice said Tuesday.  “They’re giving it to me, if I read it, and I think that in order for me to understand, is it significant or not so significant, I need to know who the ‘U.S. Person’ is, I can make that request.”

Rice added that nothing in the Bloomberg report backed up President Trump’s claim that President Obama “wiretapped” Trump Tower.

“There was no such collection or surveillance on Trump Tower or Trump individuals.  It is important to understand, directed by the White House or targeted at Trump individuals,” Rice said.  [Katie Bo Williams / The Hill]

For his part, Bloomberg reported that Chairman Nunes briefed Trump on documents he learned about because of concerns that Americans who were caught on routine surveillance were being “unmasked” for no reason.

The Obama administration then reportedly shared the intelligence with officials throughout the government because it feared the information would be covered up in a Trump White House.

Besides the House Intelligence Committee, its Senate counterpart is also looking into Russia’s involvement in the U.S. election and whether Trump associates had any contact with the Kremlin during that time.  Additionally, the FBI is investigating Russia’s interference.

Wednesday, President Trump, in an interview with the New York Times, said he thought Susan Rice may have committed a crime by seeking the identities of Trump associates who were mentioned on intercepted communications.

“I think it’s going to be the biggest story,” Trump told Glenn Thrush and Maggie Haberman in the Oval Office, declining repeated requests for evidence for his allegations.

[Trump then stupidly injected himself into the Bill O’Reilly controversy, which I cover in “Street Bytes.”  Trump said, “I think he’s a person I know well – he is a good person.  I think he shouldn’t have settled; personally I think he shouldn’t have settled.  Because you should have taken it all the way.   I don’t think Bill did anything wrong.”]

But then Thursday, Devin Nunes said he’s temporarily stepping aside from the Russian probe amid accusations he may have divulged classified information.  Nunes said the move was temporary, and in a statement, Nunes said he was taking the action because “several leftwing activist groups have filed accusations against me with the Office of Congressional Ethics.”

Nunes continued: “Despite the baselessness of the charges, I believe it is in the best interests of the House Intelligence Committee and the Congress for me to” step aside from the Russia probe “while the House Ethics Committee looks into this matter.”

Rep. Mike Conaway (R-Tex.) will replace Nunes, with major help from Trey Gowdy (R-S.C.), though Nunes said he would remain chairman of the committee.

Editorial / Wall Street Journal, Monday....

“The news about Ms. Rice’s unmasking role raises a host of questions for the Senate and House intelligence committees to pursue.  What specific surveillance information did Ms. Rice seek and why? Was this information related to President Obama’s decision in January to make it possible for raw intelligence to be widely disbursed throughout the government?  Was this surveillance of Trump officials ‘incidental’ collection gathered while listening to a foreigner, or were some Trump officials directly targeted, or ‘reverse targeted’?”

On the Russia investigation, the Washington Post reported the “United Arab Emirates arranged a secret meeting in January between Blackwater founder Erik Prince and a Russian close to President Vladimir Putin as part of an apparent effort to establish a back-channel line of communication between Moscow and President-elect Donald Trump, according to U.S., European and Arab officials.”

“The meeting took place around Jan. 11 – nine days before Trump’s inauguration – in the Seychelles islands in the Indian Ocean, officials said.  Though the full agenda remains unclear, the UAE agreed to broker the meeting in part to explore whether Russia could be persuaded to curtail its relationship with Iran, including in Syria, a Trump administration objective that would be likely to require major concessions to Moscow on U.S. sanctions.”

I do not like Erik Prince.  Blackwater is a private army, far more than just contractors.  Prince’s sister is Betsy DeVos, now education secretary.

There is nothing wrong with acting as an intermediary and trying to establish contacts for an incoming presidency.  I’m not concerned about the true agenda.

But while Prince sold Blackwater, he has continued building a private paramilitary empire with contracts across the Middle East and Asia.

Editorial / Wall Street Journal, Wednesday....

“Susan Rice returned to the friendly confines of MSNBC Tuesday to respond to softball questions about the news that the Obama national security adviser had ‘unmasked’ the identity of at least one member of the Trump transition team who was surveilled by U.S. intelligence. Her answers make it all the more imperative to hear her under oath before Congress.

“Ms. Rice didn’t deny that she had sought the name of a Trump transition official in intelligence reports, though she said she hadn’t done so ‘for any political purposes. We’ll take this as confirmation that President Obama’s confidante was receiving summaries of surveilled foreign officials that included references to, or conversations with, Donald Trump’s team.

“Ms. Rice insisted that unmasking was a routine part of her job and is necessary to understand the context of some intelligence reports.  Perhaps, but why specifically did she need to see intel summaries dealing with Trump transition plans and policy intentions? And what was the context for seeking the name of any Trump official?  Unmasking is typically the job of professional intelligence analysts, not senior White House officials.

“Ms. Rice was also at pains to say that unmasking is not the same as leaking to the press and that she ‘leaked nothing to nobody, and never have.’  But she hasn’t been accused of leaking the name of the Trump official.  She is responsible for unmasking a U.S. citizen, which made that name more widely disseminated across the government and thus could have been more easily leaked by someone else.  Michael Flynn lost his job as Mr. Trump’s national security adviser because of leaks about his conversations with the Russian ambassador to the U.S.

“Meanwhile, Democrats and the Beltway press are rallying to defend Ms. Rice by claiming that it isn’t news for a senior White House official to unmask the name of a political opponent of an incoming Administration.  Thanks, guys.  If you want to cover only one side of the Trump-Russia-intelligence story, we’ll be happy to cover both.”

David Ignatius / Washington Post

“When Gen. Michael Hayden visited a secret intelligence facility in the United States a decade ago while he was CIA director, the staff gave him a T-shirt emblazoned with the words ‘Admit Nothing.  Deny Everything.  Make Counter Accusations.’

“That motto is much-beloved by covert operators. It also seems to be President Trump’s rubric for responding to the FBI investigation of whether any members of his campaign team cooperated with Russian hackers.  Maybe it’s becoming our national slogan.

“There are now competing narratives for any issue that touches Russia or intelligence. And every day brings a new set of improbable facts: a cloak-and-dagger visit to the White House by a congressman who’s supposedly leading an investigation of the president; a secret meeting in the Seychelles islands between the founder of Blackwater and a Russia emissary.

“Good grief!   The cascade of news is dizzying.  It’s like living inside a tumbling washer-dryer....

“(Trump) spent months insisting that the Russian affair was a ‘hoax’ and ‘fake news.’  But the FBI probe rolled on.  Now Trump is arguing that the real scandal is that the Obama White House spied on his team during the transition and ‘unmasked’ their identities to leak damaging information.  Trump’s claims about surveillance deserve a review by the House and Senate intelligence committees... But it shouldn’t distract the country (much less the FBI) from the larger problem of how Russian intelligence hacked our political system last year, and whether Moscow had any help from Trump’s associates.

“Intelligence officers describe efforts to shift attention as ‘deflection,’ or ‘misdirection.’  Magicians use similar techniques to draw viewers’ eyes toward ‘a bright shiny object’ and away from the concealed trick, says John McLaughlin, a former acting director of the CIA and an accomplished amateur magician....

“The Trump effect was clear in The Post’s scoop about a Jan. 11 meeting in the Seychelles between a prominent Russian and Erik Prince, the founder of Blackwater and a Trump campaign contributor. The Russian was visiting the island resort at the invitation of Sheikh Mohamed bin Zayed al-Nahyan, the military leader of the United Arab Emirates.  MBZ, as he’s known, was interested in encouraging Russia to move away from Iran; Prince apparently hoped to promote quiet contact between Moscow and the new administration.

“This would probably be a nothingburger, if the FBI’s investigation hadn’t focused attention on any intersection between Trump and Russia.  MBZ has been pursuing better relations with Russia for a dozen years, bringing together Russians, Arabs and prominent Americans from both parties.  The Trump administration, similarly, has advertised its interest in better relations.  But the overlay of Russian intelligence operations makes ordinary events seem suspect.”

Michael Goodwin / New York Post

“By my count, at least six people – including Trump himself – have been identified as having their communications intercepted by American law enforcement or intelligence.  Always, it was ‘incidental.’

“Which gets us to Susan Rice and the importance of her role in seeking the unmasking of those Trump officials. Weeks after she denied any knowledge of unmasking, Obama’s national security adviser flip-flopped Tuesday and admitted she had ‘sometimes’ asked intelligence agencies to identify American citizens whose names had been withheld, as required, in initial reports.

“ ‘And sometimes, in that context, in order to understand the importance of the report and assess its significance, it was necessary to find out, or request the information as to find out who that U.S. officials was,’ she told MSNBC.

“Count that as one mystery solved.  But Rice made two other denials.  One, that she didn’t leak any names to the media. And two, that the unmasking was never done for political purposes.

‘Her track record doesn’t help her credibility. Rice infamously went on five Sunday television shows in 2012 to assure the nation that the Benghazi attack that killed four Americans was in response to an Internet video.  That was a flat-out lie – it was a planned terror attack and she had to know as much.

“She also brazenly insisted in 2014 that Bowe Bergdahl, the Army sergeant held by the Taliban for five years, had ‘served with honor and distinction’ to justify the trade of five terrorists from Gitmo for his release.  Her claim was false, and even the Army disagreed with Rice, charging Bergdahl with desertion.

“So when Rice and her defenders insist that SpyGate is much ado about very little, that’s not even close to good enough.  She has to prove it – by testifying under oath to Congress.”

Other items....

Wednesday, Trump approved changes to the National Security Council that removed adviser Steve Bannon from the operations of the White House National Security Council and restored the roles of traditional U.S. security officials.

Two months earlier, Bannon was moved to the position, which caused quite a stir, but now Trump has reorganized the NSC with Bannon no longer part of the “principals committee” – the cabinet officials and top military and intelligence officers who determine policy on national security.

Bannon and Jared Kushner are the two most influential aides in the White House, but it was unclear if this particular move was a signal that Bannon was losing influence.  He was, however, prominent in photos at the Trump-Xi summit.

But most see Trump’s move to remove Bannon as a win for Lt. Gen. H.R. McMaster, the man who replaced Michael Flynn as national security adviser, who clearly orchestrated it.  The chairman of the Joint Chiefs and intelligence director have also been restored to their traditional principals committee positions, and now the energy secretary, CIA director and UN ambassador are included as well, per Trump’s order.  The Homeland Security Council is also under General McMaster.

Helene Cooper / New York Times

“President Trump has let the military know that the buck stops with them, not him. The Pentagon, after eight years of chafing at what many generals viewed as micromanaging from the Obama White House, is so far embracing its new freedom.

“Officials say that much of Defense Secretary Jim Mattis’ plan to defeat the Islamic State, which Mr. Mattis delivered to the White House in February but has yet to make public, consists of proposals for speeding up decision-making to allow the military to move more quickly on raids, airstrikes, bombing missions and arming allies in Iraq, Syria and elsewhere.  Commanders argue that loosening restrictions – as Mr. Trump has already done for American operations in much of Somalia and parts of Yemen – could lead to a faster defeat of Islamic State militants in not only the Middle East but also the Horn of Africa.

“Yet with the new freedoms come new dangers for the military, including the potential of increased civilian casualties, and the possibility that Mr. Trump will shunt blame for things that go wrong to the Pentagon.”

--House Speaker Paul Ryan indicated Wednesday that the Republican caucus hadn’t achieved any breakthroughs on efforts to reach a consensus on repeal and replacement of ObamaCare, but then Thursday, as they headed off to their recess, he sounded far more optimistic.

A Quinnipiac University poll released Monday, by the way, revealed that Ryan is viewed favorably by just 28% of voters, unfavorably by 52%.  Only 21% approved of the job Republicans are doing in Congress, while 70% disapproved.

--As Max Boot pointed out in an op-ed for the Los Angeles Times, of 553 key executive branch positions, “Trump has failed to fill 488 of them – 88%. At the departments of State and Defense, the only confirmed appointees are the Cabinet members.”

Wall Street

Traders took all the action on the global and political fronts in stride, with the market down slightly on the week.

The big news on the economic front was Friday’s jobs report for March, with the nonfarm payroll figure at just 98,000, though this was highly deceptive as the figures on sectors such as leisure and hospitality, and construction, were clearly impacted by the big snowstorm in the month.  When you compare the figures in just these two with recent trends, the number probably would have been closer to the 175,000 figure forecast for March.

The unemployment rate also fell from 4.7% to 4.5%, the lowest level since March 2007, while the key underemployment figure, U6, fell to 8.9%, its best since December 2007.

Average hourly earnings, though, rose just 0.2%, or 2.7% year-over-year, which is down from the recent peak of 2.9% in December.  This is a number closely watched by the Fed.  In a solid expansion you normally see annualized wage growth in the 3.5% range.

January and February jobs figures were revised down so the three-month average for the first quarter was 178,000, vs. an average monthly gain of 187,000 in 2016.

Once again the retail sector was hammered and has lost about 60,000 jobs in the last two months as big-box retailers go through wrenching change, some would say irreversible, as competitors like Amazon.com swallow increasing numbers of their customers.

Separately this week, the ISM PMI figures for manufacturing and services came in at a strong 57.2 and 55.2, respectively, for March, 50 being the dividing line between growth and contraction. 

The thing is, the Atlanta Fed’s GDPNow indicator has first-quarter GDP down to just 0.6%.

Add it all up and I do not expect the Fed to raise interest rates again when it next meets May 2-3, but June 13-14 is certainly on the table.  The payrolls number for March, while skewed by the weather, still will give the Fed pause.  And as BlackRock Inc. CEO Larry Fink said on Thursday on CNBC, U.S. growth is slowing on concern President Trump will not be able to get his pro-growth agenda through Congress.  Trump has made progress on the deregulation front through executive orders, but obviously tax reform is not going to be easy, witness the failure of the health-care bill in March.

But in the minutes from the March Fed meeting, there was talk of trimming its $4.5 trillion balance sheet towards the end of this year, unwinding extraordinary stimulus deployed during the financial crisis, which in effect is like another rate hike, though this would take place over five years, Fed officials said this week.

But now it’s earnings season and eps for the S&P 500 in the first quarter are expected to rise 9.1%, which would be the best performance since Q4 2011.

Europe and Asia

First some news on the eurozone economic front...it being PMI week (all figures courtesy of Markit).

The eurozone composite reading for March was a solid 56.4, with manufacturing at 56.2, a six-year high (April 2011) and services at 56.0.

Germany’s manufacturing PMI was 58.3 (71-mo. high), services 55.6.
France 53.3 mfg., 57.5 services (70-mo. high).
Spain 53.9, 57.4
Italy 55.7 (72-mo. high), 52.9
Ireland 53.6, 59.1
Greece 46.7 mfg.

The UK came in at 54.2 mfg., 55.0 services.

Chris Williamson, chief economist at IHS Markit:

“Eurozone manufacturing is clearly enjoying a sweet spell as we move into spring, but it is also suffering growing pains in the form of supply delays and rising costs.

“All key business activity gauges...are close to six-year highs.”

But supplier delays “send a warning signal about rising inflationary pressures.”

The PMI numbers show EA19 GDP rising by 0.6% in the first three months of 2017.

On the employment front, figures via Eurostat, the euro area unemployment rate for February was down to 9.5%, the lowest since May 2009, vs. 10.3% Feb. 2016.

Germany’s rate is 3.9%; France 10.0%; Italy 11.5%; Spain 18.0% (which is down from a peak of 26% in 2013); Ireland 6.6%; Greece 23.1% (Dec.).

Some of the youth unemployment rates are still distressingly high.  Italy 36.9%; Spain 40.5%; and Greece 45.2% (Dec.).

Meanwhile, European Central Bank chief Mario Draghi said there were no plans to change the ECB’s commitment to keep rates on hold at least until the end of quantitative easing.

Retail banks have called on policymakers to raise the ECB’s lowest rate, its deposit rate which stands at minus 0.4 percent, which they say is eating into bank profit margins.

In the French presidential election race, the candidates held their second debate and centrist Emmanuel Macron kept his position as the favorite after clashing sharply with rival Marine Le Pen over Europe.  Macron was seen as having the best political program in a snap survey after, though ‘most convincing’ was firebrand leftist Jean-Luc Melenchon.  Le Pen was fourth, behind Francois Fillon.

Macron voiced his strong pro-EU views, criticizing Le Pen, the leader of the National Front, who wants to leave the euro, hold a referendum on European Union membership and curb immigration.  Macron said: “Nationalism is war.  I know it.  I come from a region full of graveyards.”  Macron comes from the Somme region, a major battlefield in World War One.

Le Pen hit back: “You shouldn’t pretend to be something new when you are speaking like old fossils that are at least 50 years old.”

Macron retorted: “Sorry to hear you say this, Madame Le Pen, but you are saying the same lies that we’ve heard from your father for 40 years.”  Le Pen has been trying to clean up the image of the party of her father, Jean-Marie Le Pen, and make the National Front more palatable to mainstream voters. [AFP]

Le Pen’s main problem is that while withdrawing from the EU is her most distinguishing proposal, it is also her most difficult to sell as polls consistently show 2/3s of voters want to retain the euro.

A Harris Interactive poll published Thursday had Emmanuel Macron’s lead over his rivals narrowing.  Macron receives 25%, one-point ahead of Le Pen at 24%.  Macron’s margin in a run-off in this one is 62-38.

Far-left candidate Melenchon saw his predicted share of the vote rise to 17% from 13.5%, just one point behind Fillon at 18%.

An Elabe poll published late Wednesday had Macron and Le Pen tied at 23.5%.

Separately, France’s polling watchdog warned over a Russian news agency’s election report that had Fillon in the lead, with every mainstream survey having him third.  Yes, fake news put out by Russian media as it meddles in the vote.  Macron has said he is being targeted by Russia, especially because he backs European sanctions on Moscow over the Ukraine crisis.

Greece and its international creditors made substantial progress toward an agreement that would allow the country to get more bailout funds to avoid a potential bankruptcy this summer, but this probably spells more pain for austerity-weary Greeks.

For months, talks have stalled amid disagreements over the same old pension, tax and labor market reforms that Greece would need to take in order to get more money due from its most recent bailout.

The austerity measures, such as pension cuts in 2019, and increased tax compliance, will be legislated on in the next few weeks.

Without more bailout cash, Greece would struggle to make a debt payment in July, raising the issue of default all over again.  The last time Greece faced potential bankruptcy was in July 2015, when the Tsipras government eventually agreed to a three-year bailout worth up to $91 billion.

Greece has been dependent on international bailouts since 2010 after it was unable to borrow on international bond markets.

On the Brexit front, things will heat up again when the European Union summit takes place end of April, with the European Commission then laying out their formal negotiating stance for their members at that point.

Britain’s parliament is in recess and Prime Minister Theresa May used a three-day visit to the Middle East to soften her stance on Brexit, basically conceding the UK may have to carry on playing by some EU rules after it leaves the bloc in 2019.

The prime minister has accepted that Britain will not be able to sign a trade deal until after it formally leaves the union and becomes a “third country,” meaning there needs to be some kind of transition agreement to bridge the gap.

The EU’s draft negotiating guidelines stipulate that if the UK wants to remain part of a single market during the transition, it would have to stick to existing rules, such as making budget payments and accepting the jurisdiction of the European Court.

Separately, Gibraltar said it would not be used as a bargaining chip in negotiations over Brexit.  Chief Minister Fabian Picardo said the message was “we want to stay British” and this should be clear in every capital of the EU.

Theresa May has said the UK is “committed” to the territory and its sovereignty is not on the table.

In draft Brexit negotiating guidelines, the EU said any decisions affecting Gibraltar would be run past Spain.

And Friday, a suspected terror attack in Stockholm, Sweden killed at least four as one or two individuals hijacked a truck and plowed into a busy department store, mowing down people on the sidewalk.  Details are still sketchy, but the prime minister was quick to rule it terrorism.  Two are under arrest as I go to post.  This will stir up migrant fears, again, all over Europe as Sweden, like Germany, was way too lax in letting the refugee hordes in, especially 2015.  They cracked down last year.

Turning to Asia, China released all of its important economic data last week, so this week we had Japan’s manufacturing PMI for March come in at 52.4, services 52.9, which is OK on both.

South Korea’s manufacturing PMI was 48.4 in March, India’s 52.5.

Street Bytes

--As alluded to above, stocks finished slightly down on the week, with the Dow Jones losing 7 points to 20656, -0.03%, while the S&P 500 lost 0.3% and Nasdaq declined 0.6%.

[The first quarter, by the way, was the calmest since 1965, with the smallest average daily price move among the Dow 30 stocks since the time of Lyndon Johnson.]

--U.S. Treasury Yields

6-mo. 0.94%  2-yr. 1.29%  10-yr. 2.38%  30-yr. 3.01%

--Don Lee of the Los Angeles Times reports that one of the battles within the White House is between Trump’s top economic advisor, former Goldman Sachs President Gary Cohn, who supports free trade and the global economy, and the economic nationalists who are committed to protectionism, led by Peter Navarro of the newly created White House National Trade Council.  The free traders are silently winning out thus far, witness reduced talk on big changes to NAFTA.

--Federal Reserve Bank of Richmond President Jeffrey Lacker resigned on Tuesday as he disclosed his role in the leak of confidential information about the policy options that the Fed was considering in 2012.

This has been a long-simmering case and Lacker said during a phone conversation with an analyst from Medley Global Advisors in October 2012 that she brought up an “important non-public detail” about Fed policy makers’ discussions before a meeting, according to a statement issued by Lacker’s law firm.  Lacker now says that due to the sensitive nature of the information, he should have declined to comment.

“Instead, I did not refuse or express my inability to comment and the interview continues,” he said.

Lacker then failed to tell the rest of the Federal Open Market Committee that an analyst was in possession of confidential information.

The analyst published a report the next day for subscribers, which led to an internal Fed investigation, and Lacker, when questioned by the Fed’s general counsel in December 2012, failed to provide a full account of his conversations with the analyst.

The Justice Department and the FBI later joined the investigation in 2015 under pressure from Congress to get the details about the leak.

The issue was the FOMC’s September 2012 meeting, when the Fed decided to buy $40 billion a month of mortgage securities in the third round of its quantitative easing program.  The Medley report telegraphed the move.

No charges are being brought against Lacker.  He could have received a penalty of up to one year in prison, fines and removal from office.

--I posted the following in my latest “Wall Street History” piece, figures I first saw in the New York Post.

The average growth rates for each president, post-World War Two, courtesy of Jeffrey H. Anderson, Hudson Institute.

Johnson (1964-68)...5.3 percent
Kennedy (1961-63)...4.3
Clinton (1993-2000)...3.9
Reagan (1981-88)...3.5
Carter (1977-80)...3.3
Eisenhower (1953-60)...3.0
Nixon (1969-74)...2.8
Ford (1975-76)...2.6
G.H.W. Bush (1989-92)...2.3
G.W. Bush (2001-08)...2.1
Truman (1946-52)...1.7
Obama (2009-16)...1.6

--U.S. automakers reported lackluster new vehicle sales for March, with Ford reporting a decline of 7% from a year ago on the back of sharply lower fleet sales, and General Motors reporting sales up 1% year-over-year.  Fiat Chrysler said its sales had fallen 5%.

Nissan reported sales rose 3%, Honda’s slipped nearly 1%, and Toyota’s were down 2%.

Michelle Krebs, an analyst at Autotrader.com, said: “March, one of the three biggest sales months of the year, is coming in a bit softer than we expected...(and) demonstrates that the industry has indeed plateaued, albeit at a high level.”

March’s seasonally-adjusted annual sales pace fell to 16.62 million, down significantly from the expectations the month would top 17 million.

--General Motors said on Friday that first quarter sales in China fell 5.2% compared to the same period a year ago due to a shift in the government’s tax policy and Lunar New Year fluctuations.

Demand in 2016 had soared for cars here as people rushed to buy before the planned expiration of a tax cut on vehicles with smaller engines.

Nissan said its China sales rose 5.3 % for the first quarter.  Toyota reported a 1.7% rise.

--Used car prices have been falling, 7.7% year-over-year for February, according to the National Auto Dealers Association’s pricing index.  This is having an adverse impact on car rental companies that depend on decent re-sale values for their fleets. 

--Tesla’s market value overtook Ford’s this week ($49.3bn vs. $44.6bn as of Friday), as the former’s stock rose 7% on Monday on the heels of record vehicle deliveries in the first three months of the year.

Of course many of us believe this is nuts, as Tesla delivered 76,000 electric cars last year, while Ford sold almost 6.7 million vehicles worldwide in 2016.

But it’s about Tesla’s growth potential, say its supporters.

Tesla announced last Sunday that it had first-quarter deliveries of 25,000 units vs. a consensus view of 24,600, which was up 69% from the same period last year.

Tesla said it delivered about 13,450 Model S cars and about 11,550 Model X SUVs.

The figures indicate Tesla is on track to hit its forecast of 47,000 to 50,000 deliveries in the first half of 2017.

--JPMorgan Chase & Co. CEO Jamie Dimon, in his annual shareholder letter, said he has two big pronouncements as the Trump administration starts reshaping the government: “The United States of America is truly an exceptional country,” and “it is clear that something is wrong.”

Dimon said that while he believes America is stronger than ever, there are numerous self-inflicted problems that was “upsetting” to write about.

For starters: “The U.S. has dumped trillions of dollars into wars, piled huge debt onto students, forced legions of foreigners to leave after getting advanced degrees, driven millions of Americans out of the workplace with felonies for sometimes minor offenses and hobbled the housing market with hastily crafted layers of rules.” [Bloomberg]

--California Gov. Jerry Brown lifted the drought emergency in most of the state today, while warning of the need for continued conservation.

--Panera Bread Co. agreed to be acquired for roughly $7.16 billion, excluding debt, by European investment fund JAB Holding Co., a firm with a fast-expanding collection of brands including Caribou Coffee and Jimmy Choo shoes.

Panera has about 2,000 cafes serving pastries, coffee and sandwiches and it will now be taken private.  The shares rose 14% in response.

--Staples Inc. is exploring a sale to possible private-equity bidders, in another effort to revive its turnaround effort after a failed merger with rival Office Depot Inc., while competition stiffens from web retailers like Amazon.com.

If a deal is consummated, it would value the company at around $7 billion or more.

--Shares of U.K. chip-designer Imagination Technologies fell almost 70% after Apple announced that it will no longer be using its chips in its new products within the next two years’ time.

--Canada added a better-than-expected 19,400 jobs in March, while its unemployment rate edged up to 6.7 percent as more people sought work.

--South Africa was cut to “junk” by analysts at S&P Global, sending the country’s currency tumbling anew amid the political turmoil there. 

--Speaking of junk, Oregon’s first-in-the-nation bottle recycling program will now double the payout for used soda cans and glass bottles from 5 cents to 10 cents, so some residents have been stockpiling for months in anticipation.

State residents cashed in more than 1 billion empties in 2015, according to the Oregon Liquor Control Commission.  Oregon introduced its bottle bill in 1971.

--For those of you watching The Masters this weekend, there’s an interesting side story involving Phil Mickelson.  His buddy, infamous Las Vegas gambler William “Billy” Walters, was convicted Friday of insider trading in federal court in New York City.  A prosecutor had said Mickelson earned nearly $1 million after Walters told him to buy Dean Foods Co. stock in 2012, but Mickelson was never charged.  Instead, the SEC cited him in a lawsuit and he agreed to repay the $1 million.

But Walters was convicted of earning over $40 million illegally in the stock.

Phil is right in there at Augusta after two rounds, but I can’t imagine he was told of the verdict as he played Friday afternoon.  While he’d never admit if the decision has an impact on his play, it will be interesting to see how he does Sat. and Sun.

--An investigation by the New York Times first found a total of five women had received payouts totaling $13 million from either Bill O’Reilly or Fox News’ parent company, 21st Century Fox, in the wake of a sexual harassment scandal that began with the dismissal of former Fox chairman Roger Ailes.

Other women, some still working at Fox, came out with accusations against Ailes or O’Reilly, and then advertisers began to flee, some 35 as of Wednesday.

Ads on “The O’Reilly Factor” are the most expensive in cable news at an average of $14,000 per 30-second spot, according to Standard Media Index.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: There were other developments in this theater. ISIS killed 33 people in an execution-style attack in eastern Syria, the terror group’s largest mass killing so far this year.  The Syrian Observatory for Human Rights wasn’t able to determine if the victims, males age 18-25, were Syrian government forces, allied militia or rebel factions.

ISIS also reportedly killed at least 35 in the Iraqi city of Tikrit, also on Wednesday.  There, gunmen opened fire on police and civilians before they blew themselves up.

Iraqi officials said Wednesday that they had removed nearly 300 bodies from the site of an apparent airstrike in west Mosul, the largest civilian death toll since the battle against Islamic State began more than two years ago and among the deadliest incidents in decades of modern warfare.  The U.S.-led coalition is still investigating who was responsible, with Iraqi officials blaming Islamic State.

Previously, the Pentagon has acknowledged 220 civilian deaths from coalition airstrikes in Iraq and Syria since the U.S. campaign against Islamic State began.  Independent monitoring groups put the toll at about 2,700 in both countries.

Egypt: President Abdul Fattah al-Sisis visited the White House for the first time since he led the military’s overthrow of his predecessor in 2013.  President Trump said he was “very much behind” Sisi, whose deadly crackdown on dissent was criticized by the Obama administration.

Sisi led the 2013 overthrow of the country’s first freely elected president, Mohammed Morsi, after mass protests against his rule.

The following month, Sisi oversaw the violent dispersal of protests by supporters of Morsi and his Muslim Brotherhood, which left more than 1,000 people dead.

Barack Obama froze some U.S. military assistance to Egypt in response to the crackdown.

A senior Trump administration official who briefed reporters said human rights concerns would be raised at Monday’s meeting, but in a “private, more discreet way.”

Trump said as he sat beside Sisi in the Oval Office: “We agree on so many things.  I just want to let everybody know in case there was any doubt that we are very much behind President el-Sisi. He’s done a fantastic job in a very difficult situation.  We are very much behind Egypt and the people of Egypt.”

So in that one moment, there was a dramatic shift in U.S.-Egypt policy.

The problem is, aside from the human rights issues, Sisi is in a very weak position at home.

China/North Korea: Needless to say, the U.S. military strike on Syria overshadowed the first face-to-face meeting between President Xi Jinping and Donald Trump, though some observers felt it might take the heat off the Trump administration to act tougher in talks between the two, even as the leaders were to talk about North Korea and China’s growing military presence in the South China Sea, as well as trade.

The Syria action also shifted U.S. public attention away from China, which is not necessarily a bad thing for Beijing.

So Friday, after the completion of the summit, President Trump said he had made progress in talks with Xi and expected them to overcome many problems.  Trump set an entirely different tone from the strident, anti-China rhetoric of the campaign, while Chinese officials didn’t have to scramble over any breaches of protocol.

“We have made tremendous progress in our relationship with China,” Trump told reporters.  “We will be making additional progress.  The relationship developed by President Xi and myself I think is outstanding.  And I believe lots of very potentially bad problems will be going away,” Trump added.

Xi said, “We have engaged in deeper understanding, and have built a trust – a preliminary working relationship and friendship,” he said.

But details on the discussions that were held over North Korea and the South China Sea were initially lacking.  Bizarrely, there was no closing joint statement.  Then, after Xi had left, Trump’s aides insisted he had made good on his pledge to raise concerns about China’s trade practices and said there was some headway, with Xi agreeing to a 100-day plan for trade talks aimed at boosting U.S. exports and reducing China’s trade surplus with the U.S.

Separately, Secretary of State Tillerson said Xi had also agreed to increase cooperation in reining in North Korea’s missile and nuclear programs.  Tillerson said Trump raised concerns about China’s activities in the South China Sea as well.

Meanwhile, North Korea fired a missile into the Sea of Japan, days before the Trump-Xi summit. The missile, believed to a medium-range one, was in the air nine minutes, according to the Pentagon.  Sec. of State Tillerson said, “The United States has spoken enough about North Korea.  We have no further comment.”

Japan and South Korea called the move “provocative” and a blatant challenge to UN resolutions banning Pyongyang’s nuclear and missile activities.

Last weekend at a forum in London, Defense Secretary Jim Mattis said North Korea has “got to be stopped.”

Deputy White House national security adviser, KT McFarland, told the Financial Times, “There is a real possibility that North Korea will be able to hit the U.S. with a nuclear-armed missile by the end of the first Trump term.”

U.S. ambassador to the UN Nikki Haley said America would “no longer take excuses from China.”

Haley added: “They need to show us how concerned they are.  They need to put pressure on North Korea. The only country that can stop North Korea is China, and they know that.”

Russia: A St. Petersburg train was hit by a suicide bomber, killing 14 people and injuring 49.  The bomber was identified as a native of Kyrgyzstan who obtained Russian citizenship. 

Amid the recent anti-corruption protests across Russia, Prime Minister Dmitry Medvedev, the main target of the demonstrations, saw his approval rating fall 10 percent last month to 42 percent, according to a survey by independent pollster the Levada Center.  But President Putin’s approval rating remained steady at 82 percent.

Ukraine: The International Monetary Fund said its executive board had approved another $1 billion loan payment to Kiev, bringing total disbursements to about $8.38bn under the $17.5bn bailout program.  The IMF said Ukraine’s economy was showing signs of improvement, with lower inflation and a doubling of international reserves.

Australia: Cyclone Debbie flooded vast tracts “almost the size of Texas” and left at least six dead.  It then crossed the Tasman Sea and hit New Zealand, with historic flooding there.

The bill for crop loss in Australia will undoubtedly be in the hundreds of $millions.

Philippines: In a dramatic reversal of policy, President Rodrigo Duterte has ordered troops to live on up to 10 unoccupied islands and reefs in the South China Sea. 

Only six months after declaring his “separation” with the United States and “realignment” with China, Duterte said the Philippines needs to assert its jurisdiction over areas it claims, a move likely to provoke rival claimants, including China.

“Let us get what is ours now,” Duterte told reporters during a visit to a military camp.  “It looks like everybody else is making a grab for the islands there, so we better live on those that are vacant.”

Venezuela: Opposition lawmakers sought the dismissal of Supreme Court judges whom they accuse of propping up a dictatorship.  This is a newly-militant position for the opposition, which controls parliament.

Last weekend, President Nicolas Maduro backed down from a threat to strip the assembly of legislative powers, which the Supreme Court had ruled he could do, in an effort to reduce tensions.

But Friday, opposition leader and two-time presidential candidate, Henrique Capriles, said he had been banned from holding political office for 15 years, which is sure to further galvanize protesters gearing up for a massive demonstration on Saturday.  A protester died in Thursday’s marches against Maduro.

Argentina: A general strike paralyzed the nation the other day as protesters clashed with police during marches over government austerity measures as labor unions challenged President Mauricio Macri in the first major job action since he took office 16 months ago. 

Mexico: The other day I talked about the soaring murder rate here, related to the capture of El Chapo and fighting between the cartels for control.  This week I saw that in Tijuana last year, there were 871 homicides, making it the second-most violent city in Mexico, according to a University of San Diego report.

Meanwhile, another newspaper in Mexico is shutting down because the country has become too dangerous for journalists, according to the owner of the Norte publication in the border city of Juarez.  Five Mexican journalists were targeted by violence last month, including the killing of one of Norte’s reporters; a female journalist who covered the cartels and corruption stories.

Separately, the number of people arrested crossing the Mexican border into the U.S. has fallen to the lowest level in 17 years.  There were fewer than 17,000 arrests of undocumented migrants in March, the least since 2000, according to U.S. Customs and Border Protection.

Random Musings

Daniel Henninger / Wall Street Journal

“Asked during an interview with the Financial Times whether he regretted any of his tweets, President Trump said, ‘I don’t regret anything.’ He said Twitter is part of the reason he made it to the White House and on balance the tweeting is worth it: ‘You know if you issue hundreds of tweets, and every once in a while you have a clinker, that’s not so bad.’

“Mr. Trump’s deputy press secretary, Sarah Huckabee Sanders, complained on ‘Fox News Sunday’ that the media’s coverage doesn’t reflect the reality of the new presidency: ‘The media constantly wants to talk about something that doesn’t exist instead of something that does.’  She said, ‘We’ve spent the last couple of months doing major policy initiatives and rollouts in the forms of executive orders, rolling back regulations, creating an environment where businesses are confident in hiring again.’

“All of this is true, not least Mr. Trump’s belief that Twitter helped him into the Oval Office.  Back then, Mr. Trump’s tweets drew free-media attention to himself and his shoestring campaign.  The tweets destabilized his opponents, notably Hillary Clinton, who over-focused on him at the expense of her own message.  The tweets rallied the Trump base and held it together when he had virtually no ground game.  In the campaign, the tweets produced a positive outcome.

“In this presidency, though, Mr. Trump’s tweets are producing the opposite result. They have become presidential speed bumps.

“This time, the tweets are drawing attention to himself as a president in permanent tension with two major American institutions: the U.S. press and the intelligence community.  His furious, highly charged tweets about them produced a reaction.  Both institutions are now in active opposition to his presidency, especially the media.

“The ancient advice, ‘don’t pick fights with people who buy ink by the barrel,’ is still true....

“Tweeting ‘Sleepy Eyes Chuck Todd’ incentivizes every decision-maker at NBC to put anti-Trump reporting at the top of its hourly-news budget across the network. Where is the upside?

“Mr. Trump has many sympathizers in his fight with the media. But for every president back to Lyndon Johnson, this is like waging battle with the tides.  Repetitive negative publicity on this scale will suppress the Trump message and agenda....

“During the primaries, the Trump base emerged as a solid 30%.  It will never abandon him.  But as president, the arena of battle – on taxes, spending and infrastructure – has moved unavoidably to Washington, where the Trump base is a less potent factor.

“Mr. Trump is right. Twitter helped him win the presidency. But the net-negative effects of the president’s tweets are eroding his chances for success in Washington, where every victory is won at the margin.”

--We learned after I posted last time that the driver of a pickup truck that collided with a church minibus in rural Texas, killing 13 people, acknowledged he had been texting while driving, as a witness first said, the same witness who reported the vehicle earlier driving erratically for miles.

So the witness saw the crash and afterward, as he checked on both the bus and the truck, was able to speak with the driver of the truck, who told him, “I’m sorry, I’m sorry, I was texting.”

Texas has no statewide ban on texting while driving.

--Back to Steve Bannon, according to a Politico report, and other outlets, he has been feuding constantly with Jared Kushner over policy differences.  Politico reports that the clashes have gotten so bad, Rebekah Mercer, a Republican mega donor and Trump supporter, had to urge Bannon not to quit.

Then tonight, the Wall Street Journal is reporting that a shakeup in Trump’s staff could be imminent, with Reince Priebus and potentially Bannon in danger.  What’s clear is that Jared Kushner is gaining more influence by the hour.

--A story from the Los Angeles Times notes that across California, “Police recorded the lowest number of arrests in nearly 50 years, according to the California attorney general’s office, with about 1.1 million arrests in 2015 compared with 1.5 million in 2006, down 25% from 2013 to 2015.

Many believe the decline is due to officers having lost motivation in the face of increased scrutiny – from the public as well as their superiors.

Also, a November 2014 ballot measure, Prop 47, downgraded some drug and property felonies to misdemeanors.

--According to a study published in the medical journal The Lancet, smoking causes one in 10 deaths worldwide, half of them in just four countries – China, India, the U.S. and Russia.

The author of the study, “The Global Burden of Diseases,” Dr. Emmanuela Gakidou, noted “one in every four men in the world is a daily smoker.”  It’s one in 20 women.

---

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

God bless America.

---

Gold $1256
Oil $52.29

Returns for the week 4/3-4/7

Dow Jones  -0.03% [20656]
S&P 500   -0.3%  [2355]
S&P MidCap   -0.8%
Russell 2000   -1.5%
Nasdaq   -0.6%  [5877]

Returns for the period 1/1/17-4/7/17

Dow Jones  +4.5%
S&P 500  +5.2%
S&P MidCap  +2.8%
Russell 2000  +0.6%
Nasdaq  +9.2%

Bulls 55.8
Bears  18.3  [Source: Investors Intelligence]

Have a good week.

Brian Trumbore



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Week in Review

04/08/2017

For the week 4/3-4/7

[Posted 11:30 PM ET, Friday]

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

Edition 939

I support President Trump in his actions on Thursday night to take out the Syrian air base where this week’s horrendous poison gas attack originated.  But like many of you I am asking ‘What’s next?’ ‘What’s the strategy?’

Thursday’s move obviously has zero impact on ending the conflict, but then I told you back in 2012, as I’ve been screaming ever since, that it was over.  It was beyond hope.

It wasn’t the story of crossing a red line set down by President Obama that Syria then violated in 2013 without any consequences.  It was the fact that Obama was too scared to work with Turkish President Erdogan, who was begging the United States for help in setting up a no-fly on the Turkish-Syria border so that the refugees could be protected, inside Syria.

But Obama said the risks were too great, which was total bull----.  We had operated no-fly zones successfully in the Balkans and Iraq for years.  And remember, Russia was years from entering the conflict.

No, you recall it was about “Bin Laden is dead, GM is alive” and the 2012 election.  This one move, not the red line, is what I have been telling you ever since historians will finally settle on as the single biggest blunder of the century. 

Remember, it’s all documented in these pages.  There were 20,000 deaths in the nascent Syrian civil war as of the summer of 2012.  There are 500,000 by some estimates today.  The bloodshed would have largely been stopped in its tracks, at minimal cost to the United States.  Erdogan would have become a stauncher ally, instead of turning against us in so many respects in the years since.

There would have been no ISIS.  The Russians wouldn’t be there.  And as important as anything else, there would not have been a refugee crisis in Europe!  Period.

Instead, as I warned, Syria is forever broken.

But we still have to do our best to rout ISIS.  The Trump administration must fund the Kurds in the right way so they can do the lion’s share of the work (Erdogan has to be brought in so he’s reassured these same Kurds will stick to Syria), and the U.S., European Union and NATO must do all they can to properly fund and support both Jordan and Turkey, and to a lesser extent Lebanon, so that they can deal with the massive refugee problems in their countries to, No. 1, prevent another mass exodus to Europe.  Erdogan keeps threatening to unleash a second wave on the continent and the EU needs to start meeting its financial obligations in this regard.  Admittedly, a lot is going to depend on how Turkey’s April 16 referendum goes, but that’s for next week.

For now...I cover it all below, including the goings on in Washington.

Syria

According to the most recent statistics from the United Nations, Syria’s six-year-long civil war has cost over 470,000 lives.  4.9 million have fled the country.  6.3 million have been internally displaced.  13.5 million Syrians are in need of humanitarian assistance.

And on Tuesday, more than 80 people died in a chemical weapons, poison gas attack in northwest Syria, Idlib province, which straddles the Turkish border.  Turkey took in at least 60 of the victims of the attack for treatment and a number of them died in hospital.  Turkey’s justice minister confirmed autopsies determined that a chemical weapon was used, specifically sarin.

Syria denied they were responsible and Russia’s defense ministry joined it in blaming the rebels, saying a Syrian air strike hit a chemical stockpile controlled by the armed opposition.  The Kremlin said the Syrian government doesn’t have any chemical weapons in storage and that the U.S. was rushing to judgement in blaming President Bashar al-Assad.

Russian state TV reported on the Syria attack, but no victims were shown.

Syria’s Foreign Minister Walid Muallem said Thursday: “I stress to you once again: the Syrian army has not, did not and will not use this kind of weapons – not just against our own people, but even against the terrorists that attack our civilians with their mortar rounds,” he said.

U.S. UN Ambassador Nikki Haley said Syrian chemical attacks would continue if nothing was done.

“Time and time again Russia uses the same false narrative to deflect attention from their ally in Damascus,” she said.

Hinting at possible unilateral action by the U.S., she added: “When the United Nations consistently fails in its duty to act collectively, there are times in the life of states that we are compelled to take our own action.”

[The following opinion pieces were written prior to Thursday’s cruise missile strike.]

Editorial / Wall Street Journal

“Just when Western leaders think they can forget about the Syrian civil war, Bashar Assad drags them back in.  A suspected poison gas attack widely blamed on the Syrian regime killed at least 58 people in opposition-held territory Tuesday, including 11 children.

“Syria’s army denied using chemical weapons, but then that’s what the regime said in 2013 when it used them against civilians in opposition territory in a Damascus suburb. This time bombs dropped by warplanes hit the town of Khan Sheikhoun in northwestern Syria, spreading an unknown gas that caused people to faint, foam in the mouth and suffocate, according to doctors and rescue workers.

“ ‘All pieces of evidence indicate that the raid was carried out by the regime,’ said Raed Saleh, director of the White Helmets civil-defense organization that operates in rebel-controlled Syria.  As far as we know, the Syrian opposition doesn’t have warplanes.

“Such an attack isn’t supposed to be possible now because President Obama, John Kerry and Vladimir Putin claimed to have rid Syria of its chemical-weapons stockpiles.  Mr. Obama took up the Russian strongman’s arms-control offer in 2013 after Mr. Obama flinched on a military strike to enforce his famous ‘red line’ against Mr. Assad’s use of chemical weapons.

“The two nations and the United Nations then made a great show of destroying the stockpiles that Mr. Assad claimed not to have.  But U.S. intelligence believed the regime was holding some weapons in reserve, and the use of chlorine gas has become almost routine.  Tuesday’s attack seems to have been a deadlier gas, perhaps sarin that was used in 2013.

“The Russian defense ministry, which is Mr. Assad’s military patron, dismissed reports of the attack as ‘absolutely fake,’ but the victims on video from Syria look real enough. The attack again shows the folly of relying on arms-control promises form men like Messrs. Assad or Putin.  The Russian is violating the1988 INF Treaty by introducing new missiles in Europe, so why would he fret about more poison gas in Syria?....

“The attack comes after the Administration has been publicly signaling that deposing Mr. Assad is no longer a goal of U.S. policy.  It’s possible the regime took those comments as license to unleash more hell.

“Mr. Trump inherited a mess in Syria, but if he doesn’t want to preside over endless civil war and more war crimes, he’ll need a better strategy than Mr. Obama’s default of moral denunciation and trusting Russia.”

Thomas L. Friedman / New York Times

“With each passing day our new president is discovering that every big problem he faces is like ObamaCare – if there were a good, easy solution it would have been found already, and even the less good solutions are more than his own party is ready to pay for or the country is ready to tolerate.

“But on Tuesday, tragically, Trump got this lesson in foreign policy via a truly vile poison-gas attack on Syrian civilians, many of them children, reportedly perpetrated by the pro-Russian, pro-Iranian, murderous regime of Bashar al-Assad.

“President Trump came to office with the naïve view that he could make fighting ISIS the centerpiece of his Middle  East policy – and just drop more bombs and send more special forces than President Barack Obama did to prove his toughness. Trump also seemed to think that fighting ISIS would be a bridge to building a partnership with President Vladimir Putin of Russia.

“It was naïve because ISIS does not exist in a vacuum – nor is it the only bad actor in the region.  ISIS was produced as a Sunni Muslim reaction to massive overreach by Iran in Iraq, where Iranian-backed Shiite militias and the Iraqi government forces of Nouri al-Maliki tried to crush all vestiges of Sunni power in that country and make it a vassal of Iran....

“The Iranian/Shiite onslaught against Iraqi Sunnis ran parallel with Assad’s Shiite-Alawite regime in Syria, turning what started out as a multisectarian democracy movement in Syria into a sectarian war between Sunnis and Shiites.  Assad figured that if he just gunned down or poison-gassed enough Syrian Sunnis he could turn their democracy efforts into sectarian struggle against his Shiite-Alawite regime – and presto, it worked.

“The opposition almost toppled him, but with the aid of  Russia, Iran and Iran’s Hizbullah militia, Assad was able to pummel the Syrian Sunnis into submission as well.

“ISIS was the deformed creature created by a pincers movement – Russia, Iran, Assad and Hizbullah in Syria on one flank and Iran and pro-Iranian militias in Iraq on the other. When Trump said he wanted to partner with Russia to crush ISIS, it was music to the ears of Assad, Russia, Iran and Hizbullah.  Like everyone else, they figured they could manipulate Trump’s ignorance to their advantage....

“So, last week, someone named ‘Rex Tillerson’ (who, I am told, is the U.S. secretary of state) declared that the ‘longer-term status of President Assad will be decided by the Syrian people’ – as if the Syrian people will be having an Iowa-like primary on that subject soon.  U.N. Ambassador Nikki Haley made the same point even more cravenly, telling reporters that the United States’ ‘priority is no longer to sit there and focus on getting Assad out.’

“Is there any wonder that Assad felt no compunction about perpetrating what this paper described as ‘one of the deadliest chemical weapons attacks in years in Syria,’ killing dozens of people in Idlib Province, the last major holdout for Syrian rebels.

“Mind you, Donald Trump did not cause this Syria problem, and he is right to complain that it was left in his lap by the Obama team, which had its own futile strategy for dealing with Syria – trying to negotiate with Russia and Iran, the key players there, without creating any leverage on the ground.

“But if you’re looking for a culprit for why America has refused to intervene in Syria, you have to look both to your left and to your right.”

Editorial / Washington Post

“Perhaps it is just a coincidence that the worst chemical weapons attack in Syria since 2013 came only a few days after the Trump administration confirmed that it would not seek to remove blood-drenched dictator Bashar al-Assad from power.  Like Sen. John McCain (R-Ariz.), we suspect not.  Either way, the horrific assault Tuesday on a rebel-held town will test whether President Trump will tolerate flagrant crimes against humanity by the Assad regime. So far, the signs are not good....

“United Nations investigations have established that the Assad regime has dropped barrel bombs filled with chlorine gas on civilians on multiple occasions since agreeing in 2013 to hand over its chemical arsenal and abide by a treaty banning chemical-weapons use.  The Tuesday attack appeared even more serious: Medical personnel on the scene cited symptoms consistent with exposure to nerve agents, such as sarin.

“It was a sarin attack near Damascus in August 2013 that prompted President Barack Obama first to propose, and then to retreat from, punitive military action against the Assad regime.  Mr. Obama later described himself as ‘very proud’ of his decision, because it led to a deal that supposedly eliminated the Syrian chemical stockpile.  Tuesday’s attack underlined that Mr. Obama failed to accomplish even that goal, while his withdrawal from the scene opened the way to the destruction of the moderate Syrian opposition, the growth of the Islamic State and the intervention in Syria by Russia.

“Now it is Mr. Trump’s turn to decide whether to stand up to Mr. Assad and his Iranian and Russian sponsors....

“To its credit, the new administration excoriated Russia and China on Feb. 28 when they blocked a UN Security Council resolution sanctioning Syria for its documented use of chlorine.  The two governments, charged U.S. Ambassador Nikki Haley, ‘turned away from defenseless men, women and children who died gasping for breath when Assad’s forces dropped their poisonous gas.  They ignored the facts. They put their friends in the Assad regime ahead of our global security.’

“Will Mr. Trump now do the same?”

Ralph Peters / New York Post

“Remember the date: April 4, 2017.  That’s when nerve-gas bombs fell on a Syrian town, killing dozens – including children, women and the elderly – with no effort to disguise the crime. And the world did nothing.

“That date marks the beginning of the collapse of a ban on chemical weapons that has endured for nearly a century. Even the worst dictators feared using chemical weapons, and did so furtively, if at all.  Now the Geneva Protocol of 1925, buttressed by later accords, has collapsed atop Syrian infants.

“Standing beside King Abdullah of Jordan on Wednesday, President Trump stated that Syria’s behavior ‘cannot be tolerated.’  He sounded like President Barack Obama.

“Deeds, not words, Mr. President.

“If we do not respond forcefully, chemical weapons will be used against our military in the future, by one rogue state or another.  Worse, if the ban on chemical weapons is allowed to crumble, the taboos on biological weapons (germ warfare) and nuclear use will be the next to dissolve.

“Those agonized deaths in Syria weren’t far away.  They happened next door.

“In the brutal world beyond our shores, where the human animal is barely caged by laws, our grimmest endeavor, warfare, has largely (albeit never completely) been governed by rules agreed to in the common interest.

“Syrian dictator and war criminal Bashar al-Assad is tearing away the last façade of humanity in war.

“What should we do? As with the president’s rhetoric, UN Ambassador Nikki Haley’s heartfelt address to the Security Council on Wednesday was no substitute for applying force.  We know which Syrian air base those attack planes flew from.  We should destroy every aircraft in every bunkered hangar in that facility.  Call Vladimir Putin’s bluff. Let the empty rhetoric be Putin’s this time around.

“Why us? Who else? Russia, Iran and Hizbullah are the three horsemen of Assad’s apocalypse.  Strike Assad even if those nerve-gas victims mean nothing to you. Do it in our own interests, for the benefit of the living. Those who use chemical weapons must pay an exemplary price.

“And do it because we bear a measure of responsibility for that chemical attack.

“Yes, Trump’s right that a succession of (lesser) chemical attacks erased Obama’s infamous red line as Obama cowered. But blaming the former president helps nothing (as Obama blaming George W. Bush helped nothing).  Trump is president now. This is his problem....

“Our immediate responsibility traces to Secretary of State Rex Tillerson’s careless remarks last week. He took regime change in Syria off the table and, worse, made the preposterous statement that Syria’s future will be decided by the Syrian people.

“Living or dead, the people have no say. Russia, Iran, Hizbullah and Assad are deciding Syria’s future, to the extent the corpse-strewn country has a tomorrow.

“Such gaffes matter. We’ve been here before and paid the price in blood. When our diplomats speak loosely, all hell breaks loose.  In the summer of 1990, our ambassador to Iraq, April Glaspie, told Saddam Hussein, ‘We have no opinion on your Arab-Arab conflicts, such as your dispute with Kuwait.’  Eight days later, Saddam invaded Kuwait....

“The world pays attention to every word our diplomats – and our presidents – say.

“Assad’s use of nerve gas on his own people was strategically gratuitous: He’s winning.  But the attack did serve three purposes:

“First, sheer vengeance.  The factional hatred in Syria today gorges on massacre.

“Second, he showed the opposition the extent of its powerlessness, abandoned by Western well-wishers.

“Third, Assad was rubbing our faces in it. The nerve-gas attack was his thank-you note to our secretary of state for tacitly acknowledging his regime (which was also a gift to Moscow, consigning Syria to Russia’s sphere of influence).

“Sloppy language and empty threats from two administrations got us into this mess, but words won’t get us out.  If we don’t act, Assad’s behavior will worsen, and the ban on the use of weapons of mass destruction, nuclear, biological and chemical, will fall apart. And we’ll tumble into hell.

“Those tiny corpses in Syria were your children.”

---

Thursday afternoon, President Trump told reporters traveling with him on Air Force One: “I think what Assad did is terrible.  I think what happened in Syria is a disgrace to humanity and he’s there and I guess he’s running things, so something should happen.”

Sec. of State Tillerson telegraphed something was imminent when he denounced Assad and said he should go in a rare public statement around the same time.

Thursday night, Trump said he ordered a missile strike against a Syrian airfield from which the Assad regime had launched the deadly chemical attack.  59 Tomahawk cruise missiles were launched from the USS Porter and USS Ross around 8:40 p.m. ET, striking multiple targets on the Shayrat Air Base, which the Pentagon says was used to store chemical weapons.

The strikes occurred as Trump and Xi were wrapping up a dinner at Mar-a-Lago.

Trump: “On Tuesday, Syrian dictator Bashar al-Assad launched a horrible chemical weapons attack on innocent civilians.  Using a deadly nerve agent, Assad choked out the lives of helpless men, women and children.  It was a slow and brutal death for so many.  Even beautiful babies were cruelly murdered in this very barbaric attack.  No child of God should ever suffer such horror....Tonight I ordered a targeted military strike on the airfield in Syria from where the chemical attack was launched.”

“It is in this vital national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons.   There can be no dispute that Syria used banned chemical weapons, violated its obligations under the chemical weapons convention and ignored the urging of the UN Security Council.”

A Pentagon spokesman said, “Initial indications are that this strike has severely damaged or destroyed Syrian aircraft (perhaps 20 destroyed) and support infrastructure and equipment at Shayrat Airfield, reducing the Syrian government’s ability to deliver chemical weapons.”

The Syrian military said at least 16 died in the strikes (7 military personnel, 9 civilians in the nearby town) with several hundred wounded, though this couldn’t be independently confirmed.

Russian President Putin condemned the airstrike as an act of “aggression against a sovereign state” and suspended an agreement with the U.S. to avoid hostile incidents in the skies above its Syrian ally.  Through a spokesman, Putin said the actions “against a sovereign country violated the norms of international law, and under a trumped-up pretext at that,” Dmitry Peskov told reporters.

The Kremlin added the U.S. action will cause “considerable damage” to ties between Moscow and Washington, and that “Putin sees the strikes on Syria by the U.S. as an attempt to divert the attention of the international community from numerous civilian casualties in Iraq,” Peskov added.

Prime Minister Benjamin Netanyahu’s office said in a statement: “In both word and action, President Trump sent a strong and clear message today that the use and spread of chemical weapons will not be tolerated.”

Saudi Arabia, which supports the Syrian opposition, welcomed the missile strike, calling it a “courageous decision” by Trump.  Iran, which supports the other side of the six-year war, condemned the strike, describing “unilateral action” as “dangerous.”

Iranian Foreign Ministry spokesman Bahram Ghasemi warned the strikes would “strengthen terrorists,” further complicating the situation in Syria.

Sens. John McCain and Lindsey Graham said in a joint statement: “We salute the skills and professionalism of the U.S. Armed Forces who carried out tonight’s strikes in Syria.  Acting on the orders of their commander-in-chief, they have sent an important message the United States will no longer stand idly by as Assad, aided and abetted by Putin’s Russia, slaughters innocent Syrians with chemical weapons and barrel bombs.”

Senate Minority Leader Chuck Schumer, despite having criticized Trump’s policies in the past, endorsed his decision.

“Making sure Assad knows that when he commits such despicable atrocities he will pay a price is the right thing to do,” Schumer said.  “I salute the professionalism and skill of our Armed Forces who took action today.”

Friday, Russia vowed to help beef up the Syrian regime’s air defenses.

[The following opinion pieces are post-strike.]

Editorial / Wall Street Journal

“President Trump inherited the Syrian catastrophe from Barack Obama, and his initial instincts were to accept the awful status quo.  But Bashar Assad’s  latest chemical attack has galvanized his Administration to think anew, and Mr. Trump’s decision Thursday to launch a retaliatory missile strike is an important first step to save lives, enforce global order, and improve the strategic outlook for the U.S. and its allies.

“Mr. Trump starts with the reality that Mr. Obama’s long abdication has left the U.S. with far less leverage than it had when the civil war began in 2011.  Iran has become Mr. Assad’s protector on the ground via arms supplies and Hizbullah, and Russia has moved in as a military patron and patroller of the skies.   The Muslim opposition the U.S. has been feebly trying to train and arm has been degraded while Mr. Assad and the Russians leave Islamic State to the Kurds and the U.S.-led coalition.

“As recently as last week Mr. Trump seemed willing to surrender to this circumstance and do nothing beyond defeating ISIS in Syria’s east. This was reflected in Secretary of State Rex Tillerson’s comments last week that Mr. Assad was here to stay and the future of Syria would be ‘decided by the Syrian people.’  That’s John Kerry-speak for capitulation, and it may have led Mr. Assad to believe he could unleash more chemical hell.

“Mr. Trump also seemed to be courting an accommodation with Russia in Syria, but that road leads to more strategic retreat.  Vladimir Putin’s price for restraining Mr. Assad would be steep: U.S. recognition of his conquests in Ukraine and the end of sanctions. This would erode the U.S.-Europe alliance and make Mr. Putin look like a hero back home.  Iran might not cooperate in any case, and its goal is an arc of Shiite power from Tehran through Iraq and Syria to the Mediterranean.

“The alternative to this surrender is to reassert U.S. influence with diplomacy and military force, and Mr. Assad’s chemical attack is the opening, Mr. Trump may understand this as he ordered an attack on the air base from which the chemical attack was launched, and Mr. Tillerson said Thursday that Mr. Assad has no future in Syria.

“The quickest way to punish Mr. Assad for his aerial chemical attacks, and to ensure they won’t happen again, is to destroy his air power....

“On Thursday, the U.S. struck only a single airfield, though Mr. Assad has six active airfields used in the war....

“Every military operation carries risks but this one could also have major political and strategic benefits if Mr. Trump follows the air strike with some forceful diplomacy. The demonstration of renewed U.S. purpose in the region could have an electrifying impact across the Middle East. The Saudis, the Gulf Sunni states and Turkey would begin to rethink their accommodation to the Russia-Assad-Iran axis of dominance that none of them wants.

“Mr. Trump also needs to make Russia and Iran begin to pay a price for their support for Mr. Assad’s depredations.  They have had no incentive to negotiate an end to the civil war because they see themselves on the road to a relatively cost-free victory.  That calculus may change if it looks like the costs of intervening are rising and Mr. Assad is no longer a sure winner....

“The larger point for Mr. Trump to recognize is that he is being tested.  The world – friend and foe – is watching to see how he responds to Mr. Assad’s war crime.  His quick air strike on the evening he was having dinner with Chinese President Xi Jinping makes clear that the Obama era is over.  If he now follows with action to protect Syrian civilians and construct an anti-Assad coalition, he may find that new strategic possibilities open up to enhance U.S. interests and make the Middle East more stable.”

Editorial / Washington Post

“By now, the nation has grown accustomed to – if not accepting of – President Trump’s bombast and exaggeration.  Plenty of his overstatements are best forgotten.  But in recent days Mr. Trump’s rhetoric, from the White House, has crossed into very serious territory about two intractable crises overseas.  This is where words become dangerous if untethered to action or strategy.

“In Syria, the regime of President Bashar al-Assad unleashed toxic nerve agents that killed innocent civilians, including children whose corpses were a shocking testament to the awful toll of the war.  Mr. Trump’s first instinct was to blame former president Barack Obama, saying the Syrian attack was ‘a consequence of the past administration’s weakness and irresolution.’  Leave aside for the moment that Mr. Trump repeatedly argued against the military action in Syria several years ago when Mr. Obama was mulling the response to his own ‘red line’ against the use of chemical weapons. What is most interesting now is how Mr. Trump responded to the new attack....

“Thursday night, the United States launched...the first direct strike on Syrian forces since the civil war began six years ago. The next steps will have to be carefully considered so a spasm of reaction does not simply make things worse on a battlefield where Russia and Iran are backing the Syrian regime.  Similarly, Mr. Trump faces an escalating standoff with North Korea over its missile and nuclear weapons programs.  He has recognized the dead end of Mr. Obama’s policy of ‘strategic patience’ but not announced a new policy to replace it.  Interviewed by the Financial Times, he was asked about the role of China, benefactor to Pyongyang, in slowing the nuclear and missile threat.  ‘Well,’ he replied, ‘if China is not going to solve North Korea, we will.  That is all I am telling you.’  Could he do it without China’s help?  ‘Totally,’ he replied....

“On Jan. 2, Mr. Trump also declared on Twitter, ‘North Korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the U.S. It won’t happen!’  These are unequivocal declarations that raise expectations for action.  Mr. Trump cannot afford to drop them like so many of his past promises.”

John Podhoretz / New York Post

“Thursday night’s U.S. military strike against the Syrian airbase from which the barbaric Assad regime’s sarin-gas attack against its own people was launched was both earth-shaking and modest.

“It was modest because it was focused, targeted and limited.

“It’s specific purpose was to degrade the regime’s ability to work its evil again....

“Chemical weapons need not, after all, be delivered by plane.  They can be carried by individuals and released in confined spaces like the Tokyo subway system, where a 1995 sarin attack by terrorists resulted in death and horrible injury to dozens and incidental injuries to more than 5,000 people.

“Over the past four years, Assad has been making commonplace what was once all but unthinkable – the deployment of a weapon of mass destruction against a civilian population.

“And he has been able to make it commonplace because the United States under Barack Obama repeatedly refused to respond to these acts of savage barbarity.

“And this is why I say the military strike was earth-shaking as well as modest.  In the first major test of Trump’s mettle as president, he has just put the world on notice: He is charting his own course in response to real-world events.

“This response seems to contradict many things he has said over the past four years about what the United States should do in Syria, and to overrun the words his own secretary of state spoke about Syria last week.

“That makes this militarily modest action even more geopolitically meaningful.  Trump is signaling that his Obama-era tweets and his campaign’s naked appeals to isolationism may now be past their sell-by date.

‘Indeed, he sounded less like a cynical realist than a – dare I say it? – neoconservative.

“The rhetoric of his brief statement was striking for its moralism: ‘We ask for God’s wisdom as we face the challenge of our very troubled world,’ he said.  ‘We hope that as long as America stands for justice, then peace and harmony will in the end prevail.’

“Contrast this with two months ago, when he responded to Bill O’Reilly asking him about Vladimir Putin’s record of killing people with shocking insouciance: ‘What,’ Trump said, ‘do you think our country’s so innocent?’

“What a difference a sarin gas attack makes. And North Korean missile tests....

“Trump’s action last night sends a message to Xi and to the rest of the world: Take me seriously.”

David Ignatius / Washington Post

“Even for a president who advertised his coldblooded pragmatism, the moral dimensions of leadership find a way of penetrating the Oval Office.  In the case of President Trump, the emotional distance seems to have been shattered by simple, indelible images of suffering children in Idlib, Syria.

“ ‘When you kill innocent children, innocent babies – babies! – little babies...that crosses many, many lines. Beyond a red line, many, many lines,’ Trump said Wednesday, his voice high and stretched, after pictures surfaced of lifeless infants choked to death by poison gas.

“The recognition: The Syria slaughter ‘is now my responsibility.’ And the admission: ‘I do change.’

“With that conviction, Trump took military action Thursday night, ordering retaliatory missile attacks on a Syrian air base....

“Why did Assad use nerve gas in Idlib?  It’s impossible to know. Maybe it was a signal to an increasingly aggressive Israel that he still had chemical weapons, or maybe it was a warning to Russia that he wasn’t a pawn to be traded in a grand bargain with Trump.  But most likely, it was a reaction to the free hand he was seemingly given when Secretary of State Rex Tillerson said a few days earlier during a visit to Turkey that Assad’s future ‘will be decided by the Syrian people’ – meaning that the United States no longer demanded his departure....

“Trump might study the example of Harry S. Truman, another president who came to office radically unprepared for the global responsibilities he faced.  World War I had made Truman.  He commanded an artillery battery in the Argonne Forest.  Like so many people caught up in war, he didn’t know what he could do until he was tested.  Trump now better appreciates the truth of Truman’s famous line: ‘The buck stops here.’”

Secretary of State Tillerson is expected to meet Putin on his first visit to Moscow next week.  The Kremlin said today that it expects him to explain Washington’s stance.

Justice Gorsuch

Sunday, on “Meet the Press,” Senate Minority Leader Chuck Schumer said it does not appear President Trump’s Supreme Court nominee, Neil Gorsuch, will get the 60 votes needed to overcome a procedural hurdle to his nomination.

“So instead of changing the rules – which is up to [Senate Majority Leader] McConnell and the Republican majority – why doesn’t President Trump, Democrats and Republicans in the Senate sit down and try to come up with a mainstream nominee?”

McConnell said on “Fox News Sunday, “Judge Gorsuch deserves to be confirmed (and) ultimately” will.

“I think it is noteworthy that no Supreme Court justice has ever, in the history of our country, been stopped by a partisan filibuster – ever.”

But Sunday, Republicans didn’t have the eight Democrats to avoid a filibuster.

Monday, the Senate Judiciary Committee voted 11-9 along party lines to advance the nomination of Gorsuch.  Senate Democrats then clinched enough support to block it, setting up the “nuclear” showdown over Senate rules that came to a head on Thursday.  Democrats needed 41 votes out of 48 Democratic senators, and only four, Sens. Heidi Heitkamp (N.D.), Joe Donnelly (Ind.), Joe Manchin (W. Va.) and Michael Bennet (Colo.) said they would support Trump’s nominee. 

The first three of the four are up for reelection in states carried by Trump in 2016.  Bennet won reelection last year, but he is linked with Gorsuch due to the latter’s ties to Colorado.

“If we have to, we will change the rules, and it looks like we’re going to have to,” Sen. Lindsey Graham (R-S.C.) said during Judiciary Committee hearings.

Sen. Bennet in a statement Monday said he would not support the filibuster of Gorsuch because, “Changing the Senate rules now will only further politicize the Supreme Court and prevent the Senate from blocking more extreme judges in the future,” he warned.

Sen. John McCain said he was going to go along with a change in the rules ending a tradition of 60 votes needed to advance Supreme Court nominees to a final vote.  McCain in the past had strongly opposed such a change.

Wednesday, McCain said the nuclear option was the next step in the inexorable slide to crushing the chamber’s bipartisan traditions.  McCain thought those, like Sen. McConnell, who thought the nuclear option was good, were, well, let’s have McCain say it:

“Idiot, whoever says that is a stupid idiot, who has not been here and seen what I’ve been through and how we were able to avoid that on several occasions,” recalling past efforts to defuse judicial confirmation wars.  “And they are stupid and they’ve deceived their voters because they are so stupid.”

But McCain said he’d support McConnell.

So Thursday, the Senate voted 55-45 to end debate on Gorsuch’s nomination, setting up a final vote Friday, after Democrats had blocked Gorsuch from getting to 60.  Now it will be a simple majority.

Sen. Jeff Merkley (D-Ore.) blasted GOP tactics, saying it “is just wrong to pack the court through this stolen seat,” referring to Merrick Garland.

Edward Luce / Financial Times

“The doctrine of mutually assured destruction no longer applies to U.S. politics. Before the end of this week, Mitch McConnell, the Republican Senate majority leader, will almost certainly exercise the ‘nuclear option’ to end the opposition’s right to filibuster Supreme Court nominees.  With it he will end one of the most sacred traditions of a chamber that used to be known as the world’s greatest deliberative body.  But the biggest casualty will be the U.S. judiciary. Mr. McConnell’s action will strip the last fig leaf from a politicized Supreme Court.

“The initial beneficiary will be Neil Gorsuch, Donald Trump’s first nominee to the U.S. apex court. Mr. Gorsuch, who is 49, and one of America’s most conservative justices, will keep the job for life. He is unlikely to be Mr. Trump’s last.  Mr. Trump inherited a Supreme Court that is split 4-4 between conservatives and liberals – the ninth seat has been open since the death last year of the conservative Antonin Scalia. Mr. Gorsuch’s confirmation would restore the 5-4 conservative majority. But the biggest effect will be on the next two Supreme Court vacancies, the first of which is likely to be created by Ruth Bader Ginsburg, a liberal justice, who is 83 and has suffered from poor health.  Mr. McConnell’s action will enable Mr. Trump to push through whomever he wants. By the end of his first term the tilt could be 7-2, which would lock in a conservative majority for decades.

“Mr. McConnell’s action will also give two immediate boosts to Mr. Trump’s presidency.  The first will be to soften the judicial branch, which is the main check on Mr. Trump’s agenda.  Since taking office, Mr. Trump has run into repeated judicial roadblocks.  Several courts, most recently in Hawaii, have blocked Mr. Trump’s so called ‘Muslim ban’ to deny visas temporarily to citizens of seven – since reduced to six – Muslim countries.  The case could well end up in the Supreme Court.  The same applies to a string of executive orders Mr. Trump has issued to undo Barack Obama’s actions on the environment and immigration.  Last week, for example, Mr. Trump scrapped an order that required coal companies to clean up pollutants from mountain-top strip mining and other forms of excavation....

“The second consequence will be to negate whatever prospects there were of bipartisan cooperation during the Trump administration.  Mr. McConnell’s action will come in response to the decision by Chuck Schumer, the Senate Democratic leader, to filibuster Mr. Gorsuch’s nomination.  That in turn, was prompted by last year’s Republican decision to deny a vote to Merrick Garland, Mr. Obama’s nominee for the vacancy.  Mutually assured destruction only works when each party realizes they both lose.  By pressing the button, Mr. McConnell would entrench a never ending cycle of partisan revenge.  The space for bipartisan vision will vanish. As Mahatma Gandhi reputedly said, an eye for an eye and pretty soon the whole world is blind.”

Rich Lowry / New York Post

“A Gorsuch filibuster would be an act of sheer partisan pique against the wrong target, with the wrong method, at the wrong time.

“The effort to portray Gorsuch as out of the mainstream has fallen flat.  He has the support of President Barack Obama’s former solicitor general, Neal Katyal.  He got the American Bar Association’s highest rating. He’s been endorsed by USA TODAY.  He will receive the votes of at least three Democratic senators. Some radical.

“From the moment of his announcement by President Trump to the very last question at his confirmation hearings, Gorsuch has been an exemplary performer, whose deep knowledge has been matched by his winning temperament....

“In short, Democrats are departing from the Senate’s longtime practices and excoriating the GOP for responding with a tactic Democrats themselves pioneered.  Process questions are always a festival for partisan hypocrisy. This is still a bit much.

“Regardless, Ed Whelan of the Ethics and Public Policy Center notes that there isn’t much of a rationale for keeping the filibuster for Supreme Court nominees if it has already been eliminated for all other nominations.

“Putting all this aside, a Gorsuch filibuster doesn’t even serve Schumer’s narrow interests, besides placating the left-wing #resistance to Trump demanding it.  It would be shrewder for Schumer to keep his options open for a future nominee.  If there’s another vacancy, perhaps Trump will nominate a lemon, or the Republicans won’t be so united, or the higher stakes of a conservative nominee replacing a liberal justice will create a different political environment....

“Chuck Schumer is about to make Senate history – for astonishing short-sightedness.”

Friday, Gorsuch was confirmed 54-45, a much-needed political victory for Trump.

“He’s going to make an incredible addition to the court,” said Sen. McConnell.  “He’s going to make the American people proud.”

This also represents a huge moment of triumph for McConnell.  When Scalia died suddenly in February 2016, McConnell within hours issued a statement that essentially shut the door on an Obama appointment, stating “this vacancy should not be filled until we have a new president.”

The Senate GOP backed McConnell up, Trump won the election, and months later, nominated Gorsuch.  McConnell then stayed good to his promise to do everything to see the judge confirmed, including invoking the “nuclear option.”

It’s McConnell who kept the court on the GOP side, and possibly for decades to come depending on the fate of some of the left-leaning current justices who could go at any moment.

But now many conservatives want the intensity McConnell displayed in the Gorsuch fight to be in evidence in battles on issues like tax reform.

Gorsuch will be sworn in next week and when he does he will make history, becoming the first former Supreme Court law clerk to ascend to the court and serve alongside his former boss.  Gorsuch was a clerk for Justice Anthony Kennedy in 1994.

Intel Investigation and Susan Rice

Saturday morning, President Trump tweeted: “When will Sleepy Eyes Chuck Todd and @NBCNews start talking about the Obama SURVEILLANCE SCANDAL and stop with the Fake Trump/Russia story?”  Trump followed:

“It is the same Fake News Media that said there is ‘no path to victory for Trump’ that is now pushing the phony Russia story. A total scam!”

An AP-NORC Center for Public Affairs Research survey found 52% of Americans favor an independent investigation into the Russia issue, while 23% oppose.  Another 22% say they neither favor nor oppose an investigation.

Also, according to the same poll, 44% of Americans say they’re very or extremely concerned that Trump or others involved in his campaign had inappropriate contacts with the Russian government.

Sunday, Sen. John McCain slammed Rep. Devin Nunes, saying the House Intelligence Committee chairman “killed” a bipartisan effort to investigate Russia’s interference in the presidential election.

“If we’re really going to get to the bottom of these things, it’s got to be done in a bipartisan fashion.  And as far as I could tell, Congressman Nunes killed that,” McCain said on ABC’s “This Week.”

McCain praised Sens. Mark Warner (D-Va.) and Richard Burr (R-N.C.) for cohesively working together on the Senate Intelligence Committee.  But McCain added, “Every time we turn around, another shoe drops from this centipede.  We need to examine every aspect of it: President Trump’s priorities, and the other priorities many of us believe exist.”

Monday, Trump tweeted that the “real story” is improper surveillance of his team by the Obama administration.

“Such amazing reporting on unmasking and the crooked scheme against us by @foxandfriends,” Trump tweeted, “ ‘Spied on before nomination.’  The real story.”

White House press secretary Sean Spicer said the administration’s concerns about the Obama administration’s role in unmasking identities in the intelligence reports is moving in a ‘troubling direction.’  Spicer declined to comment further.  It was clear, though, that Trump and Spicer were relying on Fox News and Bloomberg News columnist Eli Lake’s report that Obama’s national security adviser, Susan Rice, requested to unmask the names of Trump associates caught up in incidental surveillance collection.

Tuesday, Susan Rice categorically denied that the Obama administration inappropriately spied on members of the Trump transition.

“The allegation is that somehow, Obama administration officials utilized intelligence for political purposes,” Rice told MSNBC’s Andrea Mitchell.  “That’s absolutely false.”

Rice had requested that at least one Trump transition team member be ‘unmasked,’ Bloomberg reported Monday, leading to claims the Obama administration sought to use that intelligence to damage Trump’s transition.

“The notion, which some people are trying to suggest, that by asking for the identity of the American person is the same as leaking it – that’s completely false,” Rice said.  “There is no equivalence between so-called unmasking and leaking.”

Rice also denied exposing former national security adviser, Michael Flynn, who was forced to resign after misleading Vice President Pence about the contents of a phone call with the Russian ambassador.

Bloomberg’s Lake reported that Rice was the one who requested unmaking various officials in intelligence files since viewed by Reps. Devin Nunes (R-Calif.) and Adam Schiff (D-Calif.), the heads of the House Intelligence Committee.

“I don’t solicit reports,” Rice said Tuesday.  “They’re giving it to me, if I read it, and I think that in order for me to understand, is it significant or not so significant, I need to know who the ‘U.S. Person’ is, I can make that request.”

Rice added that nothing in the Bloomberg report backed up President Trump’s claim that President Obama “wiretapped” Trump Tower.

“There was no such collection or surveillance on Trump Tower or Trump individuals.  It is important to understand, directed by the White House or targeted at Trump individuals,” Rice said.  [Katie Bo Williams / The Hill]

For his part, Bloomberg reported that Chairman Nunes briefed Trump on documents he learned about because of concerns that Americans who were caught on routine surveillance were being “unmasked” for no reason.

The Obama administration then reportedly shared the intelligence with officials throughout the government because it feared the information would be covered up in a Trump White House.

Besides the House Intelligence Committee, its Senate counterpart is also looking into Russia’s involvement in the U.S. election and whether Trump associates had any contact with the Kremlin during that time.  Additionally, the FBI is investigating Russia’s interference.

Wednesday, President Trump, in an interview with the New York Times, said he thought Susan Rice may have committed a crime by seeking the identities of Trump associates who were mentioned on intercepted communications.

“I think it’s going to be the biggest story,” Trump told Glenn Thrush and Maggie Haberman in the Oval Office, declining repeated requests for evidence for his allegations.

[Trump then stupidly injected himself into the Bill O’Reilly controversy, which I cover in “Street Bytes.”  Trump said, “I think he’s a person I know well – he is a good person.  I think he shouldn’t have settled; personally I think he shouldn’t have settled.  Because you should have taken it all the way.   I don’t think Bill did anything wrong.”]

But then Thursday, Devin Nunes said he’s temporarily stepping aside from the Russian probe amid accusations he may have divulged classified information.  Nunes said the move was temporary, and in a statement, Nunes said he was taking the action because “several leftwing activist groups have filed accusations against me with the Office of Congressional Ethics.”

Nunes continued: “Despite the baselessness of the charges, I believe it is in the best interests of the House Intelligence Committee and the Congress for me to” step aside from the Russia probe “while the House Ethics Committee looks into this matter.”

Rep. Mike Conaway (R-Tex.) will replace Nunes, with major help from Trey Gowdy (R-S.C.), though Nunes said he would remain chairman of the committee.

Editorial / Wall Street Journal, Monday....

“The news about Ms. Rice’s unmasking role raises a host of questions for the Senate and House intelligence committees to pursue.  What specific surveillance information did Ms. Rice seek and why? Was this information related to President Obama’s decision in January to make it possible for raw intelligence to be widely disbursed throughout the government?  Was this surveillance of Trump officials ‘incidental’ collection gathered while listening to a foreigner, or were some Trump officials directly targeted, or ‘reverse targeted’?”

On the Russia investigation, the Washington Post reported the “United Arab Emirates arranged a secret meeting in January between Blackwater founder Erik Prince and a Russian close to President Vladimir Putin as part of an apparent effort to establish a back-channel line of communication between Moscow and President-elect Donald Trump, according to U.S., European and Arab officials.”

“The meeting took place around Jan. 11 – nine days before Trump’s inauguration – in the Seychelles islands in the Indian Ocean, officials said.  Though the full agenda remains unclear, the UAE agreed to broker the meeting in part to explore whether Russia could be persuaded to curtail its relationship with Iran, including in Syria, a Trump administration objective that would be likely to require major concessions to Moscow on U.S. sanctions.”

I do not like Erik Prince.  Blackwater is a private army, far more than just contractors.  Prince’s sister is Betsy DeVos, now education secretary.

There is nothing wrong with acting as an intermediary and trying to establish contacts for an incoming presidency.  I’m not concerned about the true agenda.

But while Prince sold Blackwater, he has continued building a private paramilitary empire with contracts across the Middle East and Asia.

Editorial / Wall Street Journal, Wednesday....

“Susan Rice returned to the friendly confines of MSNBC Tuesday to respond to softball questions about the news that the Obama national security adviser had ‘unmasked’ the identity of at least one member of the Trump transition team who was surveilled by U.S. intelligence. Her answers make it all the more imperative to hear her under oath before Congress.

“Ms. Rice didn’t deny that she had sought the name of a Trump transition official in intelligence reports, though she said she hadn’t done so ‘for any political purposes. We’ll take this as confirmation that President Obama’s confidante was receiving summaries of surveilled foreign officials that included references to, or conversations with, Donald Trump’s team.

“Ms. Rice insisted that unmasking was a routine part of her job and is necessary to understand the context of some intelligence reports.  Perhaps, but why specifically did she need to see intel summaries dealing with Trump transition plans and policy intentions? And what was the context for seeking the name of any Trump official?  Unmasking is typically the job of professional intelligence analysts, not senior White House officials.

“Ms. Rice was also at pains to say that unmasking is not the same as leaking to the press and that she ‘leaked nothing to nobody, and never have.’  But she hasn’t been accused of leaking the name of the Trump official.  She is responsible for unmasking a U.S. citizen, which made that name more widely disseminated across the government and thus could have been more easily leaked by someone else.  Michael Flynn lost his job as Mr. Trump’s national security adviser because of leaks about his conversations with the Russian ambassador to the U.S.

“Meanwhile, Democrats and the Beltway press are rallying to defend Ms. Rice by claiming that it isn’t news for a senior White House official to unmask the name of a political opponent of an incoming Administration.  Thanks, guys.  If you want to cover only one side of the Trump-Russia-intelligence story, we’ll be happy to cover both.”

David Ignatius / Washington Post

“When Gen. Michael Hayden visited a secret intelligence facility in the United States a decade ago while he was CIA director, the staff gave him a T-shirt emblazoned with the words ‘Admit Nothing.  Deny Everything.  Make Counter Accusations.’

“That motto is much-beloved by covert operators. It also seems to be President Trump’s rubric for responding to the FBI investigation of whether any members of his campaign team cooperated with Russian hackers.  Maybe it’s becoming our national slogan.

“There are now competing narratives for any issue that touches Russia or intelligence. And every day brings a new set of improbable facts: a cloak-and-dagger visit to the White House by a congressman who’s supposedly leading an investigation of the president; a secret meeting in the Seychelles islands between the founder of Blackwater and a Russia emissary.

“Good grief!   The cascade of news is dizzying.  It’s like living inside a tumbling washer-dryer....

“(Trump) spent months insisting that the Russian affair was a ‘hoax’ and ‘fake news.’  But the FBI probe rolled on.  Now Trump is arguing that the real scandal is that the Obama White House spied on his team during the transition and ‘unmasked’ their identities to leak damaging information.  Trump’s claims about surveillance deserve a review by the House and Senate intelligence committees... But it shouldn’t distract the country (much less the FBI) from the larger problem of how Russian intelligence hacked our political system last year, and whether Moscow had any help from Trump’s associates.

“Intelligence officers describe efforts to shift attention as ‘deflection,’ or ‘misdirection.’  Magicians use similar techniques to draw viewers’ eyes toward ‘a bright shiny object’ and away from the concealed trick, says John McLaughlin, a former acting director of the CIA and an accomplished amateur magician....

“The Trump effect was clear in The Post’s scoop about a Jan. 11 meeting in the Seychelles between a prominent Russian and Erik Prince, the founder of Blackwater and a Trump campaign contributor. The Russian was visiting the island resort at the invitation of Sheikh Mohamed bin Zayed al-Nahyan, the military leader of the United Arab Emirates.  MBZ, as he’s known, was interested in encouraging Russia to move away from Iran; Prince apparently hoped to promote quiet contact between Moscow and the new administration.

“This would probably be a nothingburger, if the FBI’s investigation hadn’t focused attention on any intersection between Trump and Russia.  MBZ has been pursuing better relations with Russia for a dozen years, bringing together Russians, Arabs and prominent Americans from both parties.  The Trump administration, similarly, has advertised its interest in better relations.  But the overlay of Russian intelligence operations makes ordinary events seem suspect.”

Michael Goodwin / New York Post

“By my count, at least six people – including Trump himself – have been identified as having their communications intercepted by American law enforcement or intelligence.  Always, it was ‘incidental.’

“Which gets us to Susan Rice and the importance of her role in seeking the unmasking of those Trump officials. Weeks after she denied any knowledge of unmasking, Obama’s national security adviser flip-flopped Tuesday and admitted she had ‘sometimes’ asked intelligence agencies to identify American citizens whose names had been withheld, as required, in initial reports.

“ ‘And sometimes, in that context, in order to understand the importance of the report and assess its significance, it was necessary to find out, or request the information as to find out who that U.S. officials was,’ she told MSNBC.

“Count that as one mystery solved.  But Rice made two other denials.  One, that she didn’t leak any names to the media. And two, that the unmasking was never done for political purposes.

‘Her track record doesn’t help her credibility. Rice infamously went on five Sunday television shows in 2012 to assure the nation that the Benghazi attack that killed four Americans was in response to an Internet video.  That was a flat-out lie – it was a planned terror attack and she had to know as much.

“She also brazenly insisted in 2014 that Bowe Bergdahl, the Army sergeant held by the Taliban for five years, had ‘served with honor and distinction’ to justify the trade of five terrorists from Gitmo for his release.  Her claim was false, and even the Army disagreed with Rice, charging Bergdahl with desertion.

“So when Rice and her defenders insist that SpyGate is much ado about very little, that’s not even close to good enough.  She has to prove it – by testifying under oath to Congress.”

Other items....

Wednesday, Trump approved changes to the National Security Council that removed adviser Steve Bannon from the operations of the White House National Security Council and restored the roles of traditional U.S. security officials.

Two months earlier, Bannon was moved to the position, which caused quite a stir, but now Trump has reorganized the NSC with Bannon no longer part of the “principals committee” – the cabinet officials and top military and intelligence officers who determine policy on national security.

Bannon and Jared Kushner are the two most influential aides in the White House, but it was unclear if this particular move was a signal that Bannon was losing influence.  He was, however, prominent in photos at the Trump-Xi summit.

But most see Trump’s move to remove Bannon as a win for Lt. Gen. H.R. McMaster, the man who replaced Michael Flynn as national security adviser, who clearly orchestrated it.  The chairman of the Joint Chiefs and intelligence director have also been restored to their traditional principals committee positions, and now the energy secretary, CIA director and UN ambassador are included as well, per Trump’s order.  The Homeland Security Council is also under General McMaster.

Helene Cooper / New York Times

“President Trump has let the military know that the buck stops with them, not him. The Pentagon, after eight years of chafing at what many generals viewed as micromanaging from the Obama White House, is so far embracing its new freedom.

“Officials say that much of Defense Secretary Jim Mattis’ plan to defeat the Islamic State, which Mr. Mattis delivered to the White House in February but has yet to make public, consists of proposals for speeding up decision-making to allow the military to move more quickly on raids, airstrikes, bombing missions and arming allies in Iraq, Syria and elsewhere.  Commanders argue that loosening restrictions – as Mr. Trump has already done for American operations in much of Somalia and parts of Yemen – could lead to a faster defeat of Islamic State militants in not only the Middle East but also the Horn of Africa.

“Yet with the new freedoms come new dangers for the military, including the potential of increased civilian casualties, and the possibility that Mr. Trump will shunt blame for things that go wrong to the Pentagon.”

--House Speaker Paul Ryan indicated Wednesday that the Republican caucus hadn’t achieved any breakthroughs on efforts to reach a consensus on repeal and replacement of ObamaCare, but then Thursday, as they headed off to their recess, he sounded far more optimistic.

A Quinnipiac University poll released Monday, by the way, revealed that Ryan is viewed favorably by just 28% of voters, unfavorably by 52%.  Only 21% approved of the job Republicans are doing in Congress, while 70% disapproved.

--As Max Boot pointed out in an op-ed for the Los Angeles Times, of 553 key executive branch positions, “Trump has failed to fill 488 of them – 88%. At the departments of State and Defense, the only confirmed appointees are the Cabinet members.”

Wall Street

Traders took all the action on the global and political fronts in stride, with the market down slightly on the week.

The big news on the economic front was Friday’s jobs report for March, with the nonfarm payroll figure at just 98,000, though this was highly deceptive as the figures on sectors such as leisure and hospitality, and construction, were clearly impacted by the big snowstorm in the month.  When you compare the figures in just these two with recent trends, the number probably would have been closer to the 175,000 figure forecast for March.

The unemployment rate also fell from 4.7% to 4.5%, the lowest level since March 2007, while the key underemployment figure, U6, fell to 8.9%, its best since December 2007.

Average hourly earnings, though, rose just 0.2%, or 2.7% year-over-year, which is down from the recent peak of 2.9% in December.  This is a number closely watched by the Fed.  In a solid expansion you normally see annualized wage growth in the 3.5% range.

January and February jobs figures were revised down so the three-month average for the first quarter was 178,000, vs. an average monthly gain of 187,000 in 2016.

Once again the retail sector was hammered and has lost about 60,000 jobs in the last two months as big-box retailers go through wrenching change, some would say irreversible, as competitors like Amazon.com swallow increasing numbers of their customers.

Separately this week, the ISM PMI figures for manufacturing and services came in at a strong 57.2 and 55.2, respectively, for March, 50 being the dividing line between growth and contraction. 

The thing is, the Atlanta Fed’s GDPNow indicator has first-quarter GDP down to just 0.6%.

Add it all up and I do not expect the Fed to raise interest rates again when it next meets May 2-3, but June 13-14 is certainly on the table.  The payrolls number for March, while skewed by the weather, still will give the Fed pause.  And as BlackRock Inc. CEO Larry Fink said on Thursday on CNBC, U.S. growth is slowing on concern President Trump will not be able to get his pro-growth agenda through Congress.  Trump has made progress on the deregulation front through executive orders, but obviously tax reform is not going to be easy, witness the failure of the health-care bill in March.

But in the minutes from the March Fed meeting, there was talk of trimming its $4.5 trillion balance sheet towards the end of this year, unwinding extraordinary stimulus deployed during the financial crisis, which in effect is like another rate hike, though this would take place over five years, Fed officials said this week.

But now it’s earnings season and eps for the S&P 500 in the first quarter are expected to rise 9.1%, which would be the best performance since Q4 2011.

Europe and Asia

First some news on the eurozone economic front...it being PMI week (all figures courtesy of Markit).

The eurozone composite reading for March was a solid 56.4, with manufacturing at 56.2, a six-year high (April 2011) and services at 56.0.

Germany’s manufacturing PMI was 58.3 (71-mo. high), services 55.6.
France 53.3 mfg., 57.5 services (70-mo. high).
Spain 53.9, 57.4
Italy 55.7 (72-mo. high), 52.9
Ireland 53.6, 59.1
Greece 46.7 mfg.

The UK came in at 54.2 mfg., 55.0 services.

Chris Williamson, chief economist at IHS Markit:

“Eurozone manufacturing is clearly enjoying a sweet spell as we move into spring, but it is also suffering growing pains in the form of supply delays and rising costs.

“All key business activity gauges...are close to six-year highs.”

But supplier delays “send a warning signal about rising inflationary pressures.”

The PMI numbers show EA19 GDP rising by 0.6% in the first three months of 2017.

On the employment front, figures via Eurostat, the euro area unemployment rate for February was down to 9.5%, the lowest since May 2009, vs. 10.3% Feb. 2016.

Germany’s rate is 3.9%; France 10.0%; Italy 11.5%; Spain 18.0% (which is down from a peak of 26% in 2013); Ireland 6.6%; Greece 23.1% (Dec.).

Some of the youth unemployment rates are still distressingly high.  Italy 36.9%; Spain 40.5%; and Greece 45.2% (Dec.).

Meanwhile, European Central Bank chief Mario Draghi said there were no plans to change the ECB’s commitment to keep rates on hold at least until the end of quantitative easing.

Retail banks have called on policymakers to raise the ECB’s lowest rate, its deposit rate which stands at minus 0.4 percent, which they say is eating into bank profit margins.

In the French presidential election race, the candidates held their second debate and centrist Emmanuel Macron kept his position as the favorite after clashing sharply with rival Marine Le Pen over Europe.  Macron was seen as having the best political program in a snap survey after, though ‘most convincing’ was firebrand leftist Jean-Luc Melenchon.  Le Pen was fourth, behind Francois Fillon.

Macron voiced his strong pro-EU views, criticizing Le Pen, the leader of the National Front, who wants to leave the euro, hold a referendum on European Union membership and curb immigration.  Macron said: “Nationalism is war.  I know it.  I come from a region full of graveyards.”  Macron comes from the Somme region, a major battlefield in World War One.

Le Pen hit back: “You shouldn’t pretend to be something new when you are speaking like old fossils that are at least 50 years old.”

Macron retorted: “Sorry to hear you say this, Madame Le Pen, but you are saying the same lies that we’ve heard from your father for 40 years.”  Le Pen has been trying to clean up the image of the party of her father, Jean-Marie Le Pen, and make the National Front more palatable to mainstream voters. [AFP]

Le Pen’s main problem is that while withdrawing from the EU is her most distinguishing proposal, it is also her most difficult to sell as polls consistently show 2/3s of voters want to retain the euro.

A Harris Interactive poll published Thursday had Emmanuel Macron’s lead over his rivals narrowing.  Macron receives 25%, one-point ahead of Le Pen at 24%.  Macron’s margin in a run-off in this one is 62-38.

Far-left candidate Melenchon saw his predicted share of the vote rise to 17% from 13.5%, just one point behind Fillon at 18%.

An Elabe poll published late Wednesday had Macron and Le Pen tied at 23.5%.

Separately, France’s polling watchdog warned over a Russian news agency’s election report that had Fillon in the lead, with every mainstream survey having him third.  Yes, fake news put out by Russian media as it meddles in the vote.  Macron has said he is being targeted by Russia, especially because he backs European sanctions on Moscow over the Ukraine crisis.

Greece and its international creditors made substantial progress toward an agreement that would allow the country to get more bailout funds to avoid a potential bankruptcy this summer, but this probably spells more pain for austerity-weary Greeks.

For months, talks have stalled amid disagreements over the same old pension, tax and labor market reforms that Greece would need to take in order to get more money due from its most recent bailout.

The austerity measures, such as pension cuts in 2019, and increased tax compliance, will be legislated on in the next few weeks.

Without more bailout cash, Greece would struggle to make a debt payment in July, raising the issue of default all over again.  The last time Greece faced potential bankruptcy was in July 2015, when the Tsipras government eventually agreed to a three-year bailout worth up to $91 billion.

Greece has been dependent on international bailouts since 2010 after it was unable to borrow on international bond markets.

On the Brexit front, things will heat up again when the European Union summit takes place end of April, with the European Commission then laying out their formal negotiating stance for their members at that point.

Britain’s parliament is in recess and Prime Minister Theresa May used a three-day visit to the Middle East to soften her stance on Brexit, basically conceding the UK may have to carry on playing by some EU rules after it leaves the bloc in 2019.

The prime minister has accepted that Britain will not be able to sign a trade deal until after it formally leaves the union and becomes a “third country,” meaning there needs to be some kind of transition agreement to bridge the gap.

The EU’s draft negotiating guidelines stipulate that if the UK wants to remain part of a single market during the transition, it would have to stick to existing rules, such as making budget payments and accepting the jurisdiction of the European Court.

Separately, Gibraltar said it would not be used as a bargaining chip in negotiations over Brexit.  Chief Minister Fabian Picardo said the message was “we want to stay British” and this should be clear in every capital of the EU.

Theresa May has said the UK is “committed” to the territory and its sovereignty is not on the table.

In draft Brexit negotiating guidelines, the EU said any decisions affecting Gibraltar would be run past Spain.

And Friday, a suspected terror attack in Stockholm, Sweden killed at least four as one or two individuals hijacked a truck and plowed into a busy department store, mowing down people on the sidewalk.  Details are still sketchy, but the prime minister was quick to rule it terrorism.  Two are under arrest as I go to post.  This will stir up migrant fears, again, all over Europe as Sweden, like Germany, was way too lax in letting the refugee hordes in, especially 2015.  They cracked down last year.

Turning to Asia, China released all of its important economic data last week, so this week we had Japan’s manufacturing PMI for March come in at 52.4, services 52.9, which is OK on both.

South Korea’s manufacturing PMI was 48.4 in March, India’s 52.5.

Street Bytes

--As alluded to above, stocks finished slightly down on the week, with the Dow Jones losing 7 points to 20656, -0.03%, while the S&P 500 lost 0.3% and Nasdaq declined 0.6%.

[The first quarter, by the way, was the calmest since 1965, with the smallest average daily price move among the Dow 30 stocks since the time of Lyndon Johnson.]

--U.S. Treasury Yields

6-mo. 0.94%  2-yr. 1.29%  10-yr. 2.38%  30-yr. 3.01%

--Don Lee of the Los Angeles Times reports that one of the battles within the White House is between Trump’s top economic advisor, former Goldman Sachs President Gary Cohn, who supports free trade and the global economy, and the economic nationalists who are committed to protectionism, led by Peter Navarro of the newly created White House National Trade Council.  The free traders are silently winning out thus far, witness reduced talk on big changes to NAFTA.

--Federal Reserve Bank of Richmond President Jeffrey Lacker resigned on Tuesday as he disclosed his role in the leak of confidential information about the policy options that the Fed was considering in 2012.

This has been a long-simmering case and Lacker said during a phone conversation with an analyst from Medley Global Advisors in October 2012 that she brought up an “important non-public detail” about Fed policy makers’ discussions before a meeting, according to a statement issued by Lacker’s law firm.  Lacker now says that due to the sensitive nature of the information, he should have declined to comment.

“Instead, I did not refuse or express my inability to comment and the interview continues,” he said.

Lacker then failed to tell the rest of the Federal Open Market Committee that an analyst was in possession of confidential information.

The analyst published a report the next day for subscribers, which led to an internal Fed investigation, and Lacker, when questioned by the Fed’s general counsel in December 2012, failed to provide a full account of his conversations with the analyst.

The Justice Department and the FBI later joined the investigation in 2015 under pressure from Congress to get the details about the leak.

The issue was the FOMC’s September 2012 meeting, when the Fed decided to buy $40 billion a month of mortgage securities in the third round of its quantitative easing program.  The Medley report telegraphed the move.

No charges are being brought against Lacker.  He could have received a penalty of up to one year in prison, fines and removal from office.

--I posted the following in my latest “Wall Street History” piece, figures I first saw in the New York Post.

The average growth rates for each president, post-World War Two, courtesy of Jeffrey H. Anderson, Hudson Institute.

Johnson (1964-68)...5.3 percent
Kennedy (1961-63)...4.3
Clinton (1993-2000)...3.9
Reagan (1981-88)...3.5
Carter (1977-80)...3.3
Eisenhower (1953-60)...3.0
Nixon (1969-74)...2.8
Ford (1975-76)...2.6
G.H.W. Bush (1989-92)...2.3
G.W. Bush (2001-08)...2.1
Truman (1946-52)...1.7
Obama (2009-16)...1.6

--U.S. automakers reported lackluster new vehicle sales for March, with Ford reporting a decline of 7% from a year ago on the back of sharply lower fleet sales, and General Motors reporting sales up 1% year-over-year.  Fiat Chrysler said its sales had fallen 5%.

Nissan reported sales rose 3%, Honda’s slipped nearly 1%, and Toyota’s were down 2%.

Michelle Krebs, an analyst at Autotrader.com, said: “March, one of the three biggest sales months of the year, is coming in a bit softer than we expected...(and) demonstrates that the industry has indeed plateaued, albeit at a high level.”

March’s seasonally-adjusted annual sales pace fell to 16.62 million, down significantly from the expectations the month would top 17 million.

--General Motors said on Friday that first quarter sales in China fell 5.2% compared to the same period a year ago due to a shift in the government’s tax policy and Lunar New Year fluctuations.

Demand in 2016 had soared for cars here as people rushed to buy before the planned expiration of a tax cut on vehicles with smaller engines.

Nissan said its China sales rose 5.3 % for the first quarter.  Toyota reported a 1.7% rise.

--Used car prices have been falling, 7.7% year-over-year for February, according to the National Auto Dealers Association’s pricing index.  This is having an adverse impact on car rental companies that depend on decent re-sale values for their fleets. 

--Tesla’s market value overtook Ford’s this week ($49.3bn vs. $44.6bn as of Friday), as the former’s stock rose 7% on Monday on the heels of record vehicle deliveries in the first three months of the year.

Of course many of us believe this is nuts, as Tesla delivered 76,000 electric cars last year, while Ford sold almost 6.7 million vehicles worldwide in 2016.

But it’s about Tesla’s growth potential, say its supporters.

Tesla announced last Sunday that it had first-quarter deliveries of 25,000 units vs. a consensus view of 24,600, which was up 69% from the same period last year.

Tesla said it delivered about 13,450 Model S cars and about 11,550 Model X SUVs.

The figures indicate Tesla is on track to hit its forecast of 47,000 to 50,000 deliveries in the first half of 2017.

--JPMorgan Chase & Co. CEO Jamie Dimon, in his annual shareholder letter, said he has two big pronouncements as the Trump administration starts reshaping the government: “The United States of America is truly an exceptional country,” and “it is clear that something is wrong.”

Dimon said that while he believes America is stronger than ever, there are numerous self-inflicted problems that was “upsetting” to write about.

For starters: “The U.S. has dumped trillions of dollars into wars, piled huge debt onto students, forced legions of foreigners to leave after getting advanced degrees, driven millions of Americans out of the workplace with felonies for sometimes minor offenses and hobbled the housing market with hastily crafted layers of rules.” [Bloomberg]

--California Gov. Jerry Brown lifted the drought emergency in most of the state today, while warning of the need for continued conservation.

--Panera Bread Co. agreed to be acquired for roughly $7.16 billion, excluding debt, by European investment fund JAB Holding Co., a firm with a fast-expanding collection of brands including Caribou Coffee and Jimmy Choo shoes.

Panera has about 2,000 cafes serving pastries, coffee and sandwiches and it will now be taken private.  The shares rose 14% in response.

--Staples Inc. is exploring a sale to possible private-equity bidders, in another effort to revive its turnaround effort after a failed merger with rival Office Depot Inc., while competition stiffens from web retailers like Amazon.com.

If a deal is consummated, it would value the company at around $7 billion or more.

--Shares of U.K. chip-designer Imagination Technologies fell almost 70% after Apple announced that it will no longer be using its chips in its new products within the next two years’ time.

--Canada added a better-than-expected 19,400 jobs in March, while its unemployment rate edged up to 6.7 percent as more people sought work.

--South Africa was cut to “junk” by analysts at S&P Global, sending the country’s currency tumbling anew amid the political turmoil there. 

--Speaking of junk, Oregon’s first-in-the-nation bottle recycling program will now double the payout for used soda cans and glass bottles from 5 cents to 10 cents, so some residents have been stockpiling for months in anticipation.

State residents cashed in more than 1 billion empties in 2015, according to the Oregon Liquor Control Commission.  Oregon introduced its bottle bill in 1971.

--For those of you watching The Masters this weekend, there’s an interesting side story involving Phil Mickelson.  His buddy, infamous Las Vegas gambler William “Billy” Walters, was convicted Friday of insider trading in federal court in New York City.  A prosecutor had said Mickelson earned nearly $1 million after Walters told him to buy Dean Foods Co. stock in 2012, but Mickelson was never charged.  Instead, the SEC cited him in a lawsuit and he agreed to repay the $1 million.

But Walters was convicted of earning over $40 million illegally in the stock.

Phil is right in there at Augusta after two rounds, but I can’t imagine he was told of the verdict as he played Friday afternoon.  While he’d never admit if the decision has an impact on his play, it will be interesting to see how he does Sat. and Sun.

--An investigation by the New York Times first found a total of five women had received payouts totaling $13 million from either Bill O’Reilly or Fox News’ parent company, 21st Century Fox, in the wake of a sexual harassment scandal that began with the dismissal of former Fox chairman Roger Ailes.

Other women, some still working at Fox, came out with accusations against Ailes or O’Reilly, and then advertisers began to flee, some 35 as of Wednesday.

Ads on “The O’Reilly Factor” are the most expensive in cable news at an average of $14,000 per 30-second spot, according to Standard Media Index.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: There were other developments in this theater. ISIS killed 33 people in an execution-style attack in eastern Syria, the terror group’s largest mass killing so far this year.  The Syrian Observatory for Human Rights wasn’t able to determine if the victims, males age 18-25, were Syrian government forces, allied militia or rebel factions.

ISIS also reportedly killed at least 35 in the Iraqi city of Tikrit, also on Wednesday.  There, gunmen opened fire on police and civilians before they blew themselves up.

Iraqi officials said Wednesday that they had removed nearly 300 bodies from the site of an apparent airstrike in west Mosul, the largest civilian death toll since the battle against Islamic State began more than two years ago and among the deadliest incidents in decades of modern warfare.  The U.S.-led coalition is still investigating who was responsible, with Iraqi officials blaming Islamic State.

Previously, the Pentagon has acknowledged 220 civilian deaths from coalition airstrikes in Iraq and Syria since the U.S. campaign against Islamic State began.  Independent monitoring groups put the toll at about 2,700 in both countries.

Egypt: President Abdul Fattah al-Sisis visited the White House for the first time since he led the military’s overthrow of his predecessor in 2013.  President Trump said he was “very much behind” Sisi, whose deadly crackdown on dissent was criticized by the Obama administration.

Sisi led the 2013 overthrow of the country’s first freely elected president, Mohammed Morsi, after mass protests against his rule.

The following month, Sisi oversaw the violent dispersal of protests by supporters of Morsi and his Muslim Brotherhood, which left more than 1,000 people dead.

Barack Obama froze some U.S. military assistance to Egypt in response to the crackdown.

A senior Trump administration official who briefed reporters said human rights concerns would be raised at Monday’s meeting, but in a “private, more discreet way.”

Trump said as he sat beside Sisi in the Oval Office: “We agree on so many things.  I just want to let everybody know in case there was any doubt that we are very much behind President el-Sisi. He’s done a fantastic job in a very difficult situation.  We are very much behind Egypt and the people of Egypt.”

So in that one moment, there was a dramatic shift in U.S.-Egypt policy.

The problem is, aside from the human rights issues, Sisi is in a very weak position at home.

China/North Korea: Needless to say, the U.S. military strike on Syria overshadowed the first face-to-face meeting between President Xi Jinping and Donald Trump, though some observers felt it might take the heat off the Trump administration to act tougher in talks between the two, even as the leaders were to talk about North Korea and China’s growing military presence in the South China Sea, as well as trade.

The Syria action also shifted U.S. public attention away from China, which is not necessarily a bad thing for Beijing.

So Friday, after the completion of the summit, President Trump said he had made progress in talks with Xi and expected them to overcome many problems.  Trump set an entirely different tone from the strident, anti-China rhetoric of the campaign, while Chinese officials didn’t have to scramble over any breaches of protocol.

“We have made tremendous progress in our relationship with China,” Trump told reporters.  “We will be making additional progress.  The relationship developed by President Xi and myself I think is outstanding.  And I believe lots of very potentially bad problems will be going away,” Trump added.

Xi said, “We have engaged in deeper understanding, and have built a trust – a preliminary working relationship and friendship,” he said.

But details on the discussions that were held over North Korea and the South China Sea were initially lacking.  Bizarrely, there was no closing joint statement.  Then, after Xi had left, Trump’s aides insisted he had made good on his pledge to raise concerns about China’s trade practices and said there was some headway, with Xi agreeing to a 100-day plan for trade talks aimed at boosting U.S. exports and reducing China’s trade surplus with the U.S.

Separately, Secretary of State Tillerson said Xi had also agreed to increase cooperation in reining in North Korea’s missile and nuclear programs.  Tillerson said Trump raised concerns about China’s activities in the South China Sea as well.

Meanwhile, North Korea fired a missile into the Sea of Japan, days before the Trump-Xi summit. The missile, believed to a medium-range one, was in the air nine minutes, according to the Pentagon.  Sec. of State Tillerson said, “The United States has spoken enough about North Korea.  We have no further comment.”

Japan and South Korea called the move “provocative” and a blatant challenge to UN resolutions banning Pyongyang’s nuclear and missile activities.

Last weekend at a forum in London, Defense Secretary Jim Mattis said North Korea has “got to be stopped.”

Deputy White House national security adviser, KT McFarland, told the Financial Times, “There is a real possibility that North Korea will be able to hit the U.S. with a nuclear-armed missile by the end of the first Trump term.”

U.S. ambassador to the UN Nikki Haley said America would “no longer take excuses from China.”

Haley added: “They need to show us how concerned they are.  They need to put pressure on North Korea. The only country that can stop North Korea is China, and they know that.”

Russia: A St. Petersburg train was hit by a suicide bomber, killing 14 people and injuring 49.  The bomber was identified as a native of Kyrgyzstan who obtained Russian citizenship. 

Amid the recent anti-corruption protests across Russia, Prime Minister Dmitry Medvedev, the main target of the demonstrations, saw his approval rating fall 10 percent last month to 42 percent, according to a survey by independent pollster the Levada Center.  But President Putin’s approval rating remained steady at 82 percent.

Ukraine: The International Monetary Fund said its executive board had approved another $1 billion loan payment to Kiev, bringing total disbursements to about $8.38bn under the $17.5bn bailout program.  The IMF said Ukraine’s economy was showing signs of improvement, with lower inflation and a doubling of international reserves.

Australia: Cyclone Debbie flooded vast tracts “almost the size of Texas” and left at least six dead.  It then crossed the Tasman Sea and hit New Zealand, with historic flooding there.

The bill for crop loss in Australia will undoubtedly be in the hundreds of $millions.

Philippines: In a dramatic reversal of policy, President Rodrigo Duterte has ordered troops to live on up to 10 unoccupied islands and reefs in the South China Sea. 

Only six months after declaring his “separation” with the United States and “realignment” with China, Duterte said the Philippines needs to assert its jurisdiction over areas it claims, a move likely to provoke rival claimants, including China.

“Let us get what is ours now,” Duterte told reporters during a visit to a military camp.  “It looks like everybody else is making a grab for the islands there, so we better live on those that are vacant.”

Venezuela: Opposition lawmakers sought the dismissal of Supreme Court judges whom they accuse of propping up a dictatorship.  This is a newly-militant position for the opposition, which controls parliament.

Last weekend, President Nicolas Maduro backed down from a threat to strip the assembly of legislative powers, which the Supreme Court had ruled he could do, in an effort to reduce tensions.

But Friday, opposition leader and two-time presidential candidate, Henrique Capriles, said he had been banned from holding political office for 15 years, which is sure to further galvanize protesters gearing up for a massive demonstration on Saturday.  A protester died in Thursday’s marches against Maduro.

Argentina: A general strike paralyzed the nation the other day as protesters clashed with police during marches over government austerity measures as labor unions challenged President Mauricio Macri in the first major job action since he took office 16 months ago. 

Mexico: The other day I talked about the soaring murder rate here, related to the capture of El Chapo and fighting between the cartels for control.  This week I saw that in Tijuana last year, there were 871 homicides, making it the second-most violent city in Mexico, according to a University of San Diego report.

Meanwhile, another newspaper in Mexico is shutting down because the country has become too dangerous for journalists, according to the owner of the Norte publication in the border city of Juarez.  Five Mexican journalists were targeted by violence last month, including the killing of one of Norte’s reporters; a female journalist who covered the cartels and corruption stories.

Separately, the number of people arrested crossing the Mexican border into the U.S. has fallen to the lowest level in 17 years.  There were fewer than 17,000 arrests of undocumented migrants in March, the least since 2000, according to U.S. Customs and Border Protection.

Random Musings

Daniel Henninger / Wall Street Journal

“Asked during an interview with the Financial Times whether he regretted any of his tweets, President Trump said, ‘I don’t regret anything.’ He said Twitter is part of the reason he made it to the White House and on balance the tweeting is worth it: ‘You know if you issue hundreds of tweets, and every once in a while you have a clinker, that’s not so bad.’

“Mr. Trump’s deputy press secretary, Sarah Huckabee Sanders, complained on ‘Fox News Sunday’ that the media’s coverage doesn’t reflect the reality of the new presidency: ‘The media constantly wants to talk about something that doesn’t exist instead of something that does.’  She said, ‘We’ve spent the last couple of months doing major policy initiatives and rollouts in the forms of executive orders, rolling back regulations, creating an environment where businesses are confident in hiring again.’

“All of this is true, not least Mr. Trump’s belief that Twitter helped him into the Oval Office.  Back then, Mr. Trump’s tweets drew free-media attention to himself and his shoestring campaign.  The tweets destabilized his opponents, notably Hillary Clinton, who over-focused on him at the expense of her own message.  The tweets rallied the Trump base and held it together when he had virtually no ground game.  In the campaign, the tweets produced a positive outcome.

“In this presidency, though, Mr. Trump’s tweets are producing the opposite result. They have become presidential speed bumps.

“This time, the tweets are drawing attention to himself as a president in permanent tension with two major American institutions: the U.S. press and the intelligence community.  His furious, highly charged tweets about them produced a reaction.  Both institutions are now in active opposition to his presidency, especially the media.

“The ancient advice, ‘don’t pick fights with people who buy ink by the barrel,’ is still true....

“Tweeting ‘Sleepy Eyes Chuck Todd’ incentivizes every decision-maker at NBC to put anti-Trump reporting at the top of its hourly-news budget across the network. Where is the upside?

“Mr. Trump has many sympathizers in his fight with the media. But for every president back to Lyndon Johnson, this is like waging battle with the tides.  Repetitive negative publicity on this scale will suppress the Trump message and agenda....

“During the primaries, the Trump base emerged as a solid 30%.  It will never abandon him.  But as president, the arena of battle – on taxes, spending and infrastructure – has moved unavoidably to Washington, where the Trump base is a less potent factor.

“Mr. Trump is right. Twitter helped him win the presidency. But the net-negative effects of the president’s tweets are eroding his chances for success in Washington, where every victory is won at the margin.”

--We learned after I posted last time that the driver of a pickup truck that collided with a church minibus in rural Texas, killing 13 people, acknowledged he had been texting while driving, as a witness first said, the same witness who reported the vehicle earlier driving erratically for miles.

So the witness saw the crash and afterward, as he checked on both the bus and the truck, was able to speak with the driver of the truck, who told him, “I’m sorry, I’m sorry, I was texting.”

Texas has no statewide ban on texting while driving.

--Back to Steve Bannon, according to a Politico report, and other outlets, he has been feuding constantly with Jared Kushner over policy differences.  Politico reports that the clashes have gotten so bad, Rebekah Mercer, a Republican mega donor and Trump supporter, had to urge Bannon not to quit.

Then tonight, the Wall Street Journal is reporting that a shakeup in Trump’s staff could be imminent, with Reince Priebus and potentially Bannon in danger.  What’s clear is that Jared Kushner is gaining more influence by the hour.

--A story from the Los Angeles Times notes that across California, “Police recorded the lowest number of arrests in nearly 50 years, according to the California attorney general’s office, with about 1.1 million arrests in 2015 compared with 1.5 million in 2006, down 25% from 2013 to 2015.

Many believe the decline is due to officers having lost motivation in the face of increased scrutiny – from the public as well as their superiors.

Also, a November 2014 ballot measure, Prop 47, downgraded some drug and property felonies to misdemeanors.

--According to a study published in the medical journal The Lancet, smoking causes one in 10 deaths worldwide, half of them in just four countries – China, India, the U.S. and Russia.

The author of the study, “The Global Burden of Diseases,” Dr. Emmanuela Gakidou, noted “one in every four men in the world is a daily smoker.”  It’s one in 20 women.

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

God bless America.

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Gold $1256
Oil $52.29

Returns for the week 4/3-4/7

Dow Jones  -0.03% [20656]
S&P 500   -0.3%  [2355]
S&P MidCap   -0.8%
Russell 2000   -1.5%
Nasdaq   -0.6%  [5877]

Returns for the period 1/1/17-4/7/17

Dow Jones  +4.5%
S&P 500  +5.2%
S&P MidCap  +2.8%
Russell 2000  +0.6%
Nasdaq  +9.2%

Bulls 55.8
Bears  18.3  [Source: Investors Intelligence]

Have a good week.

Brian Trumbore