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Week in Review

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05/20/2017

For the week 5/`15-5/19

[Posted 12:00 AM ET, Saturday]

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Edition 945

Trump World          

If ever there was a week to follow my dictum ‘wait 24 hours,’ it was this past one, one that is likely to be remembered for a long time by those of us who care about the country and the world.  As discussed below, last weekend’s ballistic missile test by North Korea undoubtedly scared the hell out of many in the Pentagon because of the progress it showed Pyongyang has made, and then for about 120 straight hours, it has been non-stop Trump.

For me, waiting 24 hours to a large extent this week means ‘waiting for the evidence.’  What most upsets many of us for now, though, is the Trump agenda has been sidelined and there are very few legislative days left on the calendar before we turn the page and it becomes all about the 2018 mid-term elections and little else. 

I have decided I will write my full opinion on what has been transpiring in two weeks. I want to see how the overseas trip goes and to then see what happens upon Trump’s return.  I feel compelled to remind my audience, though, that the format for “Week in Review” has never changed.  I give a summary of world financial markets and geopolitics, plus I throw in commentary from both sides.  I’ve always been about building the historical record, and so I will continue to do so, come hell or high water. But of course there’s a slant.  I am, after all, the editor.

And so we start with last weekend, where following the firing of FBI Director James Comey the week before, the chatter Saturday and Sunday in Washington was about the move.  Virginia Senator Mark Warner, the ranking Democrat on the Senate Intelligence Committee, said he would “absolutely” subpoena recordings of conversations between President Trump and former director Comey if they exist.

Appearing on ABC’s This Week, Warner said: “Listen, I don’t have the foggiest whether there are tapes are not, but the fact that the president made allusions to that and then the White House would not confirm or deny, it is not anything we have seen in recent days.”

Last Friday, Trump had threatened Comey on Twitter, days after firing him.

“James Comey better hope that there are no ‘tapes’ of our conversations before he starts leaking to the press!” Trump tweeted.

Appearing on Fox News Sunday, Sen. Warner, addressing the overall investigation into Russia’s alleged interference in the 2016 election, said, “(Again) the president and this administration said that ‘there’s no there, there,’ (yet) continues through their actions to indicate that they are afraid of where this investigation may head.”

Warner said he felt reassured when Acting FBI Director Andrew McCabe said the FBI would pursue its investigation.

“The dots seem to be fairly obviously connected that there’s a lot more smoke here, but I’m trying to give the president the benefit of the doubt until we finish this investigation,” Warner said.

Editorial / Wall Street Journal...May 13-14

There still is no serious evidence of Trump-Russia collusion during the 2016 campaign.  The worst detail so far is Michael Flynn’s denial (he says he forgot) that he had met with the Russian ambassador. The various other names who’ve flashed as targets of media suspicion are small-timers (Carter Page) or Beltway bandits (Paul Manafort) who look more like mercenaries than conspirators.

“Perhaps such evidence will emerge.  If it does, Mr. Trump’s presidency isn’t likely to survive. If it doesn’t, he could emerge politically stronger for having his denials vindicated....

The Trump White House is a mess, but then we knew that.  The chaos and self-serving leaks after the Comey firing make the Bill Clinton White House look like a model of discipline and decorum. If Trump aides aren’t trashing each other, they’re trashing the boss, who doesn’t seem to mind humiliating them as he has spokesman Sean Spicer.  Then there was this week’s leak – dumped to reporters favored by the Stephen Bannon team – that Mr. Trump is unhappy with General McMaster, who apparently suffers from being too capable.

“The historical analogy isn’t Richard Nixon, whose advisers were effective in their abuses until they were finally discovered. This is more like Jimmy Carter – outsiders who arrived to drain the swamp and are swamped by incompetence.  The blundering over the Comey decision and aftermath raises serious doubts that this White House has the focus and discipline to manage tax reform.

The main source of dysfunction is the man at the top. The President is his own worst enemy – impulsive, thin-skinned, undisciplined, by now readers know the story.  Every time his supporters think he might finally be appreciating the weight of the job, or the gravity of a President’s words, he goes on a Twitter rant.

“Rather than focus on his agenda, he keeps the Russia pot boiling by railing against critics.  Health care – what’s that? He faults his communications team for mistakes, but they are usually based on incomplete information or on attempts to clean up the boss’s effusions.

“Mr. Trump has assembled many able advisers and officials who are trying to serve the country and steer the mercurial President from his own worst instincts.  If Mr. Trump won’t heed their counsel, he really  will turn into Jimmy Carter.”

Monday... The Washington Post reported that President Trump revealed highly classified information to the Russian foreign minister and ambassador in a White House meeting last week, “according to current and former U.S. officials, who said that Trump’s disclosures jeopardized a critical source of intelligence on the Islamic State.”

Greg Miller and Greg Jaffe: “The information Trump relayed had been provided by a U.S. partner through an intelligence-sharing arrangement considered so sensitive that details have been withheld from allies and tightly restricted even within the U.S. government, officials said.

“The partner had not given the United States permission to share the material with Russia, and officials said that Trump’s decision to do so risks cooperation from an ally that has access to the inner workings of the Islamic State.  After Trump’s meeting, senior White House officials took steps to contain the damage, placing calls to the CIA and National Security Agency.”

A U.S. official familiar with the matter told the Post, Trump “revealed more information to the Russian ambassador than we have shared with our own allies.”

The previously scheduled meeting with Foreign Minister Sergei Lavrov and Ambassador Sergey Kislyak was held in the Oval Office a day after the Comey firing.  To say the optics were poor is an understatement.  And to know that the only press allowed in to take pictures was Russian, no one from the U.S. press, made it even more so.

What we quickly learned, though, is that a president has the right to declassify intelligence on the spot, so it’s not like he was breaking the law.

Instead, it became clear the president was trying to impress his guests with both his knowledge and the intelligence-gathering capabilities of the United States, while attempting to draw Russia into a closer alliance on fighting terror and ISIS; the intel having to do with the laptop bomb threat on commercial aviation.

National Security Adviser H.R. McMaster was sent out to defend the discussion with the Russians.  McMaster said the president wasn’t aware where the information about ISIS threats to airliners originated or how it was gathered.

“The president wasn’t even aware where this information came from.  He wasn’t briefed on the source or method of the information either,” said McMaster, who was in the Oval Office with Lavrov and Kisylak.

McMaster slammed the Washington Post.

“The premise of that article is false that in any way the president had a conversation that was inappropriate or that resulted in any kind of lapse in national security.

“In the context of that discussion, what the president discussed with the foreign minister was wholly appropriate to that conversation and is consistent with the routine sharing of information between the president and any leaders with whom he’s engaged.”

McMaster said the president brought up the information during the course of the conversation.  The general then said the “real issue” was that “our national security has been put at risk by those violating confidentiality and those releasing information to the press.”

Trump took to Twitter:

“As President I wanted to share with Russia (at an openly scheduled W.H. meeting) which I have the absolute right to do, facts pertaining to terrorism and airline flight safety.  Humanitarian reasons, plus I want Russia to greatly step up their fight against ISIS & terrorism,” he wrote.

Then Trump said:

“I have been asking Director Comey & others, from the beginning of my administration, to find the LEAKERS in the intelligence community.”

Republican Senator Bob Corker, chairman of the Senate Foreign Relations Committee, reacted to the news that Trump had shared intelligence with the Russians.

“Obviously, they are in a downward spiral right now and have got to figure out a way to come to grips with all that’s happening. And the shame of it is, there’s a really good national security team in place.”

Senate Majority Leader Mitch McConnell: “I think we could do with a little less drama from the White House on a lot of things, so that we can focus on our agenda, which is deregulation, tax reform, repealing and replacing ObamaCare.”

Danny Yatom, the former director of Israel’s spy agency Mossad, told the Jerusalem Post that it would be a “grave violation” of intelligence sharing protocols if sensitive information was turned over because it “could lead to harm to the source.”  Yatom said this before it was formally disclosed that Israel was the source.  Yatom warned Russia could share the information with Syria and Iran.  [Specifically, the intelligence disclosed was about how ISIS was determining how to implant and mask explosives inside the battery of a laptop computer, with the charge still functioning enough to allow airport security officials to power up the device, the standard test to see if it’s safe.]

The Kremlin described as “complete nonsense” reports Trump had disclosed classified intelligence during the meeting.

Needless to say, Democrats are having a field day.  The number two Democrat, Dick Durbin of Illinois, said Trump was “dangerous” and “reckless.”

“This conduct by the president is not only dangerous, it’s reckless.  It is reckless for him to disclose to the Russian foreign minister and ambassador, sensitive, top secret information.”

Gerald Seib / Wall Street Journal

“Most people prefer to avoid controversy. Donald Trump seeks it out.

“Indeed, it sometimes seems that if a controversy isn’t roiling, he works to create one and then stoke it.  Sometimes this is to change the subject to one he prefers, sometimes to distract attention from the last controversy he wants to move beyond.

“It’s an approach mostly foreign to the worlds of politics and governance, which is exactly what his supporters like about it. Somehow it worked for Mr. Trump as a presidential candidate. We are watching a live experiment in whether it can work as president.  Chances are it will always be thus.”

Michael Morell / Washington Post

“First, we now know that the president is actually paying attention to the intelligence community. He was evidently able to recite to the Russians the Islamic State-related threat intelligence on which he had been briefed with a significant level of detail. So, gone should be the perception that the president is not listening to the intelligence community. And gone should be the idea that the intelligence community is withholding information from the president that he needs to do his job. Neither is true....

“Second, the president’s advisers have not been able to properly ‘manage’ the president. The Lavrov incident underscores that national security adviser H.R. McMaster and his staff are failing us in two ways. They are not succeeding in persuading Trump to work off of a set of carefully written and coordinated talking points when meeting with foreign officials.  And they are not always willing or able to redirect the conversation between the president and foreign officials when it is heading into inappropriate areas.”

Michael V. Hayden / Washington Post

“Governing is new turf for Trump. He is one of the least experienced presidents in the nation’s history.  There is no evidence of scholarship or even deep interest in the processes of U.S. government. He has little international knowledge beyond real estate and business.

“But even with such a thin portfolio, he seems incapable of humility in the face of such inexperience.  By all accounts, the president is impatient with process and study, preternaturally confident in his own knowledge and instincts, and indifferent to, and perhaps contemptuous of, the institutions of government designed to help him succeed.”

Editorial / Wall Street Journal

“The portrait of an inexperienced, impulsive chief who might spill secrets to an overseas foe is one to which Mr. Trump has too often contributed.  It was political mismanagement even to hold the Russian meeting, especially the day after he fired FBI Director James Comey amid the investigation of the Trump campaign’s alleged Russian connection.

“This eruption shows why a President’s credibility is so important. If people don’t believe Mr. Trump’s words or trust his judgment, they won’t give him the benefit of the doubt or be responsive if he asks for support.  Last week the White House spent two days attributing Mr. Comey’s firing to a Justice Department recommendation, only for Mr. Trump to insist in a TV interview that the pink slip came ‘regardless of recommendation’....

“Millions of Americans recognized Mr. Trump’s flaws but decided he was a risk worth taking. They assumed, or at least hoped, that he’d rise to the occasion and the demands of the job. If he cannot, he’ll betray their hopes as his Presidency sinks before his eyes.”

Tuesday... The New York Times published a story that President Trump sought to persuade then-Director Comey to back off the FBI investigation into fired national security adviser Michael Flynn. 

After a conversation Comey had with Trump in February, a day after Flynn was fired for what the White House then said were misleading accounts of his conversations with Russia’s U.S. ambassador, the FBI director wrote a memo documenting the Oval Office meeting.  Comey said the president asked him to abandon the investigation.

According to the memo, as cited by the Times, Trump told the FBI director, “I hope you can let this go.”

House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-Utah) said he was considering subpoenaing the memo, if it wasn’t made available.

The move was supported by Speaker Paul Ryan.

“We need to have all the facts, and it is appropriate for the House Oversight Committee to request this memo,” a spokeswoman for Ryan said in a statement.

Arizona Republican Sen. John McCain said Trump’s troubles have reached “Watergate size and scale.”

Editorial / New York Post

“The stunning allegation that President Trump in February asked then-FBI chief James Comey to shut down the investigation of his national-security adviser, Michael Flynn, guarantees fresh political nightmares for the administration.

“If the actual memo resembles what the New York Times and others reported Tuesday night (without having actually seen it), a major independent probe of Russian meddling in U.S. politics is a sure thing....

“The flap over whether Trump inappropriately disclosed secret material to top Russian officials already seems old. But that story, too, gained new life thanks to the president.

“Top officials including National Security Adviser H.R. McMaster denied the thrust of the claims on Monday, and again on Tuesday. But in between, Trump took to Twitter and seemed to confirm the stories by defending his ‘absolute right’ to ‘share with Russia’ information about terrorism....

“The president needs to get a handle on his words – on his public communications, online and on-air, and on even his private comments. He’s already sabotaging his own agenda, and possibly putting his very presidency at risk.”

John Podhoretz / New York Post

“Right now, the very best you can say about Donald Trump is that he stinks at this whole president thing – in large part because he keeps creating trouble for himself and entirely on his own.

“Yes, the media are against him. Yes, the Democrats want his scalp. But everyone inclined to indulge President Trump in his self-pity about how he’s being badly treated by others in Washington and badly served by his own staff is ignoring the basic facts of the political situation he is bungling at present like no one has bungled it before.

“He just won an election and his party controls both chambers of Congress. If he were any good at this president thing he would be able to convert both of these advantages into facts on the ground – into legislative and procedural successes that would stymie the media attacks and throw Democrats on the defensive.

“Instead, it’s his own party that’s on the defensive.  It’s his own party that is terrified of acting.  It’s his own party that cannot make sense of what he wants.  They can do many things for him and he can do many things for them and they don’t and he doesn’t because he’s too busy lighting fires on which he then pours gasoline....

“It’s only 117 days into a presidency that is supposed to last, at a minimum, 1,460.  But after the gobsmacking self-inflicted wounds of the past two days, it doesn’t seem  unreasonable for the first time to wonder whether he’s already served a majority of the days he’s likely to serve.”

Editorial / Wall Street Journal

“The more important issue is why Mr. Comey failed to inform senior Justice officials and resign immediately after the conversation (over Flynn).  If he really thought Mr. Trump was attempting to obstruct justice, the director knows he had a legal obligation to report it immediately.  He certainly had a moral duty to resign and go public with his reasons.

“Yet the Times reports that Mr. Comey merely wrote the notes to himself and informed a few others.  One explanation is that perhaps Mr. Comey didn’t view Mr. Trump’s comments as amounting to obstruction.

“Intent is crucial to proving obstruction, and without listening to the conversation it’s impossible to know the context and tenor of Mr. Trump’s ‘let it go’ comment.  Mr. Trump might be guilty of obstruction if he thought Mr. Flynn knew something damaging about Mr. Trump, but not if he was making a general remark to give the guy a break.

“Another possibility is that Mr. Comey viewed the notes as a form of political insurance that could be useful in a future controversy.  By not resigning but quietly spreading word among colleagues, Mr. Comey was laying down evidence that he could use to protect his job or retaliate if Mr. Trump did fire him.

“The leak of Mr. Comey’s notes suggests that he or his allies are now calling on that insurance.  Such behavior fits Mr. Comey’s habit over the years of putting his personal political standing above other priorities. And it echoes uncomfortably of the way J. Edgar Hoover used information he collected to protect himself against presidential accountability....

“Mr. Trump was foolish even to discuss the Russia probe with Mr. Comey. Perhaps this was due to Mr. Trump’s naivete rather than an attempt to block an investigation, but even a rookie should know to seek legal guidance before blundering into matters so fraught with political risk.”

Wednesday... Former FBI Director Robert Mueller III was appointed as special counsel to oversee the federal investigation into Russia’s alleged interference in the election. He’ll have wide latitude to explore potential collusion between the Trump campaign and the Kremlin.

Deputy Attorney General Rod Rosenstein (reminder, AG Jeff Sessions had earlier recused himself on the Russian investigation) said he was naming a special counsel due to the inquiry’s “unique circumstances.”  The public interest, he said, “requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of command.”

Rosenstein cautioned the appointment wasn’t the result of a “finding that crimes have been committed or that any prosecution is warranted.”  No determination has been made.

Late Wednesday night, President Trump issued a statement:

“There was no collusion between my campaign and any foreign entity. I look forward to this matter concluding quickly.”

Trump said nothing about the appointment of Mueller. There are no limits on Mueller’s mandate. 

Mueller was the sixth director of the FBI, a position he took one week before 9/11, and held for 12 years, making him the longest-serving director next to J. Edgar Hoover.

Senate Intelligence Committee Chairman Richard Burr (R-N.C.) was among those hailing the news of Mueller’s appointment, but adding his own committee’s investigation hasn’t changed.

Republican Sen. Marco Rubio (Fla.): “This effort should in no way be allowed to impede the ability of the Senate Intelligence Committee to conduct and conclude its investigation into the same subject.  It is my hope that these investigations will now move expeditiously.”

Rep. Adam Schiff (D-Calif.), the ranking Democrat on the House Intelligence Committee, said: “The appointment of a special counsel is not a substitute for a vigorous investigation in Congress and the House Intelligence Committee will take steps to make sure our investigations do not conflict and ensure the success of both efforts,” he said. “We will also want to make certain that the special counsel has all the resources it needs to undertake this important task.”

Rep. Justin Amash (R-Mich.) on Wednesday said reports that Trump pressed Comey to end an investigation would merit impeachment if they’re true.  When asked by The Hill he said, “Yes, but everybody gets a fair trial in this country.”  Asked by another reporter if he trusted Comey’s word or Trump’s, Amash said: “I think it’s pretty clear I have more confidence in Director Comey.”

Amash was one of two House Republicans to co-sponsor a Democratic bill to establish an independent commission to investigate Russia’s role in the election.  [North Carolina Republican Rep. Walter Jones being the other.]

Editorial / Wall Street Journal

“Democrats and their media allies finally got their man. After weeks of political pressure, Deputy Attorney General Rod Rosenstein blinked late Wednesday and announced that he has named a special counsel to investigate Russian attempts to influence the 2016 presidential election. These expeditions rarely end well for anyone, and Democrats are hoping this one will bedevil the Trump Administration for the next four years....

“What the country really needs is a full accounting of how the Russians tried to influence the election and whether any Americans assisted them. That is fundamentally a counterintelligence investigation, but Mr. Mueller will be under pressure to bring criminal indictments of some kind to justify his existence. He’ll also no doubt bring on young attorneys who will savor the opportunity to make their reputation on such a high-profile investigation.”

Daniel Henninger / Wall Street Journal

“After two weeks, one must ask: How many parallel universes can the U.S. political system endure?

“Let us enumerate the celestial bodies traveling along independent orbits just now: Donald Trump, Sean Spicer, the Beltway press chorus, the White House’s Borgia factions, 2018’s at-risk congressional Republicans, the Schumer Democrats, the mosquito clouds of social media, and the various people working in what little exists so far of the Trump government.

“One more parallel universe deserves mention: the Trump vote, which decided the 2016 election.  Oh, them.

“The Trump vote sits out in the country watching the Washington spectacle of all things Comey, all things Russian, rumors of White House firings, and the president’s tweetstorms.

“Polls suggest most Trump voters aren’t much moved by these events.  After surviving the 2016 election, the Trump voter remains fixed on achieving the Trump agenda – the economy, health care, taxes, education, America’s global standing, financial reform, immigration, infrastructure, trade.  They are willing to put with a lot, because they know that President Donald J. Trump is the only vessel they’ve got.

“Trump voters, however, should not underestimate the dangers of the current Washington circus.  It isn’t a sideshow. It could pull down him and them.”

Thursday... After a measured statement Wednesday night following the appointment of Robert Mueller, Trump woke up and let loose on Twitter, calling the investigations “the single greatest witch hunt of a politician in American history.”  And then he tweeted that there never was a special counsel appointed for Obama or Clinton despite “all of the illegal acts that took place” in the Clinton campaign and Obama Administration.

In a meeting with network anchors, Trump told them the appointment of a special counsel “hurts our country terribly” as it shows how divided the United States is.

“I believe it hurts our country terribly, because it shows we’re a divided, mixed-up, not-unified country.” 

At a joint news conference with Colombia’s President Juan Santos, Trump, when asked about Rosenstein’s decision to appoint a special counsel, said:

“I respect the move, but the entire thing has been a witch hunt, and there is no collusion between – certainly myself and my campaign, but I can only speak for myself and the Russians. Zero.  Believe me, there’s no collusion.”

Asked whether he urged Comey to drop the Flynn investigation, Trump quickly said, “No, no.” before ordering the reporter to move on to the “next question.”

Meanwhile, also Thursday, Deputy AG Rosenstein, in a closed-door briefing with the full Senate, reportedly told them he knew President Trump wanted to fire Comey before he wrote a letter criticizing the FBI director.

Sen. Claire McCaskill (D-Mo.) told reporters after: “He knew that Comey was going to be removed prior to him writing his memo.”

Sen. Dick Durbin said, “He knew the day before...On May 8...”

To me, when I first read these two statements from the senators, it seemed they were attempting to infer Rosenstein was coerced into writing a damning letter, but Rosenstein himself later made clear he stood by his letter.

Separately, Sen. Lindsey Graham (R-S.C.) said that with regards to the Mueller appointment, “The shock to the body is this is now considered a criminal investigation. And Congress’ ability to conduct an investigation of all things Russia is severely limited.  I think a lot of members wanted the special counsel to be appointed, but don’t understand you’re pretty well knocked out of the game.”  [Because potential witnesses might refuse to cooperate out of fear of self-incrimination.]

None of the committees now expect Flynn to willingly come forward, for example, and Thursday, Reuters reported that Trump’s campaign advisers, including Flynn, had contacted Russian officials or others with ties to the Kremlin at least 18 times in the final months of the 2016 campaign.  Six of these contacts, Reuters reports, were between Ambassador Kislyak and Flynn.

Friday... Late in the day, right after Trump took off for Saudi Arabia and the first leg of his nine-day adventure, two stories broke, one in the Washington Post, the other in the New York Times.

The Post reported that a senior adviser inside the White House was a “person of interest” in a probe of possible collusion with Russia during the 2016 election, while the Times reported that Trump boasted to Russian officials at the now infamous meeting in the Oval Office that the firing of James Comey relieved “great pressure” the president faced from the probe into Russian meddling.

“I just fired the head of the FBI,” Trump is alleged to have said.  “He was crazy, a real nut job.”  The Times cited a document summarizing the meeting and read to it by an unnamed U.S. official.  The White House then in a statement did not deny the existence of the document nor the veracity of the remarks.

What is particularly disturbing is that our president, meeting with two thuggish Russians, is disparaging our own FBI director?!  That’s beyond belief.  Cue Jeff Spicoli.

Meanwhile, James Comey agreed to testify in open session before the Senate Intelligence committee after Memorial Day.  Talk about must-see TV.

Robert Kagan / Washington Post

“There was a time, in the early days of the administration, when a decent, patriotic person could make a case for serving this president.  If all the competent people refused, the government would be run by incompetents.  Better to surround President Trump with ‘adults’ than to leave him to his own devices.  Optimists argued that Trump had no beliefs and could be molded like a piece of unformed clay.  Pessimists argued that even if he could not be changed, someone had to save us from his most dangerous errors.  And there was the matter of duty. Like it or not, Trump was the elected president, and when the president calls, you have a duty to serve.

“Those who went into the administration for all these reasons may want to start asking themselves how all this is working out.... People like their jobs, like the power and rarely resign on mere principle.

“This situation is different, however.  Many of those who joined the administration opposed Trump during the campaign, not only because they disagreed with his policies but also because they thought he was unfit for the office.  This was especially so for those involved with national security.  Whether they said it publicly or only among friends, they feared that because of his temperament and his ignorance of world affairs, and because his view of the United States’ purpose was diametrically opposed to theirs, Trump would make a poor if not disastrous president and  commander in chief. When they agreed to work for him, they did not pretend that their  view had changed.  They simply believed that the country would be better served with them in than with them out.

“One can argue that it was worth the experiment, but does there ever come a point when the experiment can be declared a failure?”

Charles Krauthammer / Washington Post

“The pleasant surprise of the First 100 Days is over.  The action was hectic, heated, often confused, but well within the bounds of normalcy.  Policy (e.g., health care) was being hashed out, a Supreme Court nominee confirmed, foreign policy challenges (e.g. North Korea) addressed.

“Donald Trump’s character – volatile, impulsive, often self-destructive – had not changed since the campaign. But it seemed as if the guardrails of our democracy – Congress, the courts, the states, the media, the Cabinet – were keeping things within bounds.  Then came the past 10 days. The country is now caught in the internal maelstrom that is the mind of Donald Trump.  We are in the realm of the id.  Chaos reigns.  No guardrails can hold....

“Trump’s behavior is deeply disturbing but hardly surprising. His mercurial nature is not the product of a post-inaugural adder sting at Mar-a-Lago.  It’s been there all along.  And the American electorate chose him nonetheless.  A decent respect for constitutional governance requires banishing even the thought of invoking the 25th Amendment.  [Ed. removing an incapacitated president.]

“What to do?  Strengthen the guardrails.  Redouble oversight of this errant president.  Follow the facts, especially the Comey memos. And let the chips fall where they may.

“But no tricks, constitutional or otherwise.”

Wall Street

As the flow of earnings reports from the first quarter is largely in, as of early in the week, 72% of S&P 500 companies had topped analysts’ estimates vs. an average of 66%, according to S&P Capital IQ.  Earnings were looking up 15%, 11% ex-volatile energy, with an estimate of 11% for the entire year.

But this is based in no small part on the Trump agenda of tax reform, repatriation in some form, continued deregulation and at least an outline of a massive infrastructure program getting through Congress and that’s where you have the uncertainty that was a large part of Wednesday’s little crashette on Wall Street with the crescendo of concerns over our president’s future, let alone any ‘agenda.’

There was little actual news on the economic front this week, with April housing starts falling more than expected, not good, while April industrial production was the best since Feb. 2014, which is very good.

We close out the week with the Atlanta Fed’s GDPNow barometer calling for second-quarter growth of 4.1%, back up from the prior week’s 3.6%.

But in terms of the Federal Reserve acting to hike interest rates again when it next meets June 13-14, the political uncertainty of the past week certainly has to give board members pause.

Separately, just minutes before Wall Street tanked on Wednesday, former Fed chief Ben Bernanke scolded a roomful of hedge fund moguls and bankers for ignoring the dangers Washington politics can have on their portfolios.

“It always puzzled me that markets are blasé about political risk until the very last moment,” he said at the SkyBridge Alternatives Conference, or SALT, in Las Vegas.

On the repeal and replacing of ObamaCare, it appears Medicaid is the key for Senate Republicans now working on rewriting the House bill.  Some are proposing faster and steeper cuts, while others want a more gradual tapering of funding that would be increasingly shifted to the states.

Europe and Asia

Some economic news for the eurozone.  The first quarter figure for GDP, as published by Eurostat, was up 0.5%, 1.7% year-on-year.  Fourth-quarter GDP was also up 0.5%.

Germany registered 0.6% (1.7% yoy); France 0.3 (0.8%); Italy 0.2% (0.8%); Spain 0.8% (3.0%). 

Greece was -0.1% (-0.5% yoy).

Eurostat also released the April inflation data for the EA19, 1.9% annualized, compared with 1.5% in March and 2.0% in February...and -0.2% ann. in April 2016.

Germany was 2.0%; France 1.4%; Italy 2.0%; Spain 2.6%.

Separately, producer prices in Germany climbed to their highest level in nearly six years, with the PPI up 3.4% annualized in April.

Inflation in the U.K. was at 2.7% in April, as measured by its CPI, the highest since March 2013, according to the Office of National Statistics.  Ex-food and energy the figure is 2.4%.  The Bank of England still sees the CPI peaking under 3% next year.

Retail sales in the U.K., ex-fuel, increased by 2% in April over March, solid, but future growth here is dependent on wage growth (and Brexit) which has been stagnating, up 2.1% in the three months to March from 2.2%; meaning, looking at the above, that wages are essentially only just keeping up with inflation (over three-month periods), and on the verge of falling short should April’s 2.7% CPI pace continue.

At least the overall unemployment rate in the U.K. dropped to its lowest since 1975, 4.6 percent, as noted by the Office for National Statistics.

Eurobits....

--In France, it’s now about new President Emmanuel Macron’s cabinet and attempts to piece together a coalition of voters from both the left and right for the June 11/18 parliamentary elections.  Macron appointed a conservative prime minister, Edouard Philippe, 46, who is the mayor of port city Le Havre. This infuriated many in the conservative Republican Party (the party of presidential candidate Francois Fillon, as well as Nicolas Sarkozy), as it makes it harder for it to recover from its humiliating election defeat to the far-right National Front and Macron’s one-year-old centrist party.

Macron also named Bruno Le Maire, another moderate Republican (Les Republicains), as his economy minister

By week’s end, the polls for the legislative elections had Macron’s Republic on the Move party at 27 percent in the first round, with the Republicans and the National Front both on 20% and the far-left France Unbowed at 14%.  The disgraced Socialists bring up the rear at 11%.  Projections then have Macron ending up with between 280 and 300 seats of the 535 mainland French seats in the lower house of parliament following the run-offs.  Macron needs 289 of 577, overall, including offshore/overseas seats such as from Corsica.

Meanwhile, Macron held his first meeting as president with German Chancellor Merkel and Merkel said the two had agreed on “the historical significance of the Franco-German relationship,” adding, “Europe can only prosper when France and Germany prosper.”

The problems in this relationship in the past few years have largely been economic, as France’s economy stagnated while Germany’s chugged along.  Merkel urged Macron’s predecessor, Francois Hollande, to speed up labor and business reforms, but now Macron has an agenda that would do just that.  This is a prerequisite, Merkel says, to agreeing to any large regional projects between the two.

--On the Brexit front, while formal negotiations won’t begin until after the June 8 British election, Chancellor Merkel told an event with labor union officials in Berlin on Wednesday that “if the British government says that free movement of people is no longer valid, that will have its price in relations with Britain.”

Merkel added that “this isn’t malicious” but if Britain, for example, says that only 100,000 or 200,000 EU citizens are allowed into the country, “we would have to think about what obstacle we create from the European side to compensate for that.”

But here’s an example, as put forward by Merkel, of how complex Brexit is likely to be.

“Currently, the 250,000 pets, cats and dogs that travel from Britain to the continent or the other way around each year are managed within an EU framework.  Now they’ll need hygiene certificates – things we don’t even remember.”

Her whole point is that trade unions play a big role in pushing for a level playing field between Britain and the bloc to minimize disruption to British employers and employees.  “The British auto industry lives on supplies from continental European countries,” she said.  “It is up to the British side, who are expressing the wish to have the fewest possible distortions.”  [Thomas Escritt / Reuters]

As for the latest poll data ahead of the vote, Prime Minister May’s Conservatives are at 47% in a Panelbase survey, with Labour at 33%, both little changed since the last poll.

--Chancellor Merkel was able to strut like a peacock this week because of a huge election win in the state of North Rhine-Westphalia, which is home to more than 20% of German voters overall.  Her Christian Democratic Union (CDU) scored its biggest win over the Social Democrats (SPD) in decades, as the SPD’s vote in the state hit an all-time low, the CDU taking 33% (7% higher than 2012), while the SPD garnered 31% (8% lower than five years ago) and its worst showing since 1947.  [The Liberal Democrats picked up 12.5%, the Greens 6% and the anti-immigrant AfD 7%.]

The significance is that this is the third straight loss in state elections for the SPD and its new chairman and candidate for chancellor, Martin Schulz, after an initial bump in nationwide polls last winter following his selection.

State voting is now over. On to September and the general election and suddenly, Merkel is looking like she will cruise to yet another term.

--Greece was hit hard by a general strike on Tuesday that severely impacted hospitals, transportation services and the like as members of the big trade unions protested new austerity measures that must be approved by parliament in order for the country to receive needed bailout funds to meet July debt payments.

Air traffic controllers stopped work for four hours, no newspapers were published, TV channels were badly hit, doctors and other hospital workers walked out, trains and buses provided only limited service, and the police joined in later.

The latest round of reforms would further cut pensions and end tax breaks.

--Out of nowhere, Austria has called a snap election with a collapse in the current government, which is leaving the door ajar for the far-right Freedom party ahead of what will now be an October 15 national vote, a year ahead of schedule.  Six months ago, it almost won the ceremonial Austrian presidency, but this is far more important and the Freedom party has been surging in the polls.

While the chances for picking up the chancellorship are slim, the odds the Freedom party could be a significant part of a new government are high.  Immigration is a big issue, tiny Austria having received 42,000 asylum requests last year, after 90,000 the previous one.

So just when Europe thought it had beaten back far-right, populist movements in the Netherlands and France, up pops Austria again.  [Best wiener schnitzel in the world is in Vienna... Figlmuller’s.   But bring cash, sports fans!]

Turning to Asia, Japan’s economy started off 2017 on the right foot, with GDP growing by an annualized 2.2% in the first quarter, according to a preliminary reading from the Cabinet Office. This is a full percentage point higher than the fourth quarter and is ahead of estimates, plus the fifth quarter of growth; a shot in the arm for Prime Minister Abe and the longest expansion in Japan since 2006. Stronger global demand, especially for tech-related items, is a big help.

Quarter-on-quarter GDP rose 0.5%, up from a 0.3% rise in the prior quarter.

Domestic demand rose 0.4% compared with Q4.  Importantly, private consumption also rose 0.4% after being flat in December.

Net exports rose 2.1% quarter on quarter (8.9% yoy), solid.

Japan’s producer prices rose for a fourth month in April at a 2.1% annualized clip, the quickest since November 2014.

All in all, good, though the Bank of Japan is not likely to back away from its highly stimulative monetary policy.

Street Bytes

--Stocks would have finished up on the week, save for Wednesday’s big drop, 371 points on the Dow Jones amid the Trump hysteria.  But, overall, the Dow ended down 0.45 to 20804, ditto the S&P 500.  Nasdaq declined -0.6% from its all-time highs.

--U.S. Treasury Yields

6-mo. 1.01%  2-yr. 1.27%  10-yr. 2.23%  30-yr. 2.90%

--Total debt held by American households reached a record in early 2017, exceeding its 2008 peak, but this isn’t necessarily a cause for alarm and the economy is larger than 8 ½ years ago.  And with tougher lending standards, less debt is delinquent.  Mortgages remain the largest form of household borrowing, though consumers have been taking on more automotive and student loan debt.

--U.S. crude inventories dropped last week, though less than expected, while imports registered a nearly million-barrel-a-day increase, according to data released on Wednesday by the Energy Information Administration.

Monday, Saudi Arabia and non-OPEC Russia agreed to extend production cuts for several months, which was the real reason behind a rally in crude prices.

OPEC meets in Vienna on May 25.

--The waves of cyberattacks last weekend appeared, for the time, to be drying up, as networks, companies and government agencies were among those hit by the attack that took advantage of security vulnerabilities in Microsoft software.

The ransomware asked for as little as $300 in bitcoin and by the time this first round was over less than $70,000, across the world, was collected.  But, critically, no one recovered their data as the hackers’ had promised.

The WannaCry attack hit Friday as I was in my 12-hour blind spot (both in traveling and trying to grab some free time at the Jersey Shore), but I would have activated my ’24-hour rule’ anyway.

What we have learned since is the hackers, a la the Sony attack, are most probably from North Korea.  Various security experts, from Symantec to Moscow-based Kaspersky, have identified similar codes used in both instances.

So that daffy little guy with the 6-inch platform heels (that are no doubt a cause of his ankle issues) is once again working his mischief, he and his band of 4’8”, malnourished Orcs, and the story continues down below.

But, for now, of course these attacks will only worsen and I know it scares the heck out of many of you, as it does moi.  I’ve only been writing for, oh, like 7-8 years, that when it comes to North Korea, always sleep with one eye open...or let me worry for you.  It’s free.                                                           

--The Trump administration on Thursday set the clock ticking toward a mid-August start of renegotiations of the North American Free Trade Agreement with Canada and Mexico, an attempt to win better terms for U.S. workers and manufacturers.  U.S. Trade Representative Robert Lighthizer said, “If renegotiations result in a fairer deal for American workers there is value in making the transition to a modernized NAFTA as seamless as possible.”  Lighthizer, in a letter to Congress, said NAFTA needs modernizing in the areas of digital trade, intellectual property rights, labor and environmental standards, food safety standards and more.

--Amazon marked its 20th anniversary as a publicly traded company on Monday and CEO Jeff Bezos had cause to celebrate, further.  At Monday’s closing price of $957.97, Amazon had gained 48,776 percent from May 15, 1997 – the day of its $18 a share IPO.  Pretty, pretty good.

$10,000 would be worth $4.9 million today.

Apple was up only 116 percent in its first 20 years, though it got creamed with the tech crash ahead of its anniversary, Dec. 12, 2000.

Google was up 1,770 percent in its first 13 years as a public company.

--Ford Motor Co. announced on Wednesday it plans to cut 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives as it looks to boost its share price, which has been at a 52-week low recently.  Ford said the cuts would amount to about 10% of 15,000 managers and other non-production workers and would reduce labor costs for that segment by 10 percent.

Ford has been an earnings machine, reporting a record $10.4 billion in pretax earnings in 2016, but auto sales are slowing and sentiment has changed, plus looming in the not too distant future is an industry dominated by autonomous vehicles and car sharing.

Meanwhile, while Donald Trump has been putting pressure on automakers to add jobs in the U.S., and Ford had announced it was adding 700 in Michigan, General Motors has laid off more than 4,000 U.S. jobs since November and is closing operations elsewhere in Europe and Asia, while you can be sure there will be no big ‘new’ plant announcements in the U.S. anytime soon until this current down cycle that the industry seems to be entering provides a clearer picture of what the future holds.

--Speaking of autonomous vehicles, Waymo, the self-driving car unit that operates under Google’s parent company, signed a deal with ride-sharing start-up Lyft. The venture calls for the companies to share autonomous vehicle technology to help bring them into the mainstream through product development and pilot projects. The deal was then confirmed by the two parties.

The deal is big for Uber, as the world’s biggest ride-hailing company deals with a number of legal issues, including a lawsuit brought by Waymo, which says Uber stole its trade secrets to develop such autonomous vehicle technology.

Lyft previously announced a joint venture with General Motors, while Waymo has a partnership with Fiat Chrysler.

--Home Depot reported another kick-ass quarter, with U.S. comp-store sales up a whopping 6%, 5.5% globally.  Good for them.

--Wal-Mart Stores reported stronger-than-expected quarterly sales Thursday, with same-store sales rising 1.4% - the 11th straight quarterly increase, which is darn impressive in today’s environment.  Foot traffic rose 1.5%.  Wal-Mart also announced a surge in its online sales, up 63%, including sales from Jet.com Inc. and other recent e-commerce operations.

The company has been focusing on reducing inventories to smooth store operations and they fell 7.3% in the quarter.

In all, Wal-Mart earned $3.04 billion, compared with $3.08bn a year ago, with revenue increasing 1.4% to $117.54 billion.

--An ambitious turnaround plan by retailer Target that focused on online sales and lower prices to better compete with Walmart and Amazon appears to be paying off.  The company reported same-store sales fell 1.3% in the three months to end of April, which was the fourth straight quarter of decline, but it was far better than the 3.6% drop analysts were forecasting.

Target then gave guidance that full year earnings could be above the midpoint range of its own forecasts.

Revenue slipped 1.1% to $16bn during the quarter, also better than expected, and net income obliterated forecasts.

In February, the company announced plans to spend $7bn remodeling existing stores, expanding its small-store format, and enhancing its e-commerce strategy.

--TJX Co. reported lighter-than-expected first-quarter sales, up 1%, though it was the first time the company hadn’t exceeded its own guidance since Q3 2014.

--Dick’s Sporting Goods Inc.’s same-store sales rose 2.4% for the quarter ended April 29, but this was below expectations and the shares fell sharply, as the company announced it planned to scale back new store openings amid the crisis in traditional retail.  The company warned of an ongoing “challenging retail environment.”

Dick’s is opening 43 stores this year, but now says it will reduce this number to 15 to 20 in 2018 and perhaps just 5 the following year.

Plummeting golf equipment sales have hurt big time in terms of traffic, though with all the sporting goods bankruptcies, most notably Sports Authority, you’d think Dick’s would be doing better.

--Sears’ problems continue.  Monday it announced one of its main suppliers is threatening to sue the retailer to get out of its contract.  Sears then accused One World, a subsidiary of Chinese conglomerate Techtronic Industries and the supplier for its Craftsman power tools brand, of “trying to take advantage of negative rumors about Sears to make themselves a better deal.”

Sears has accumulated losses of $10bn over the past six years, with more than $4.2bn in debt as of the end of January.

--Shares in Cisco Systems fell sharply after the tech giant projected a steeper-than-expected drop in sales and lower-than-forecast profits for the quarter, with Cisco forecasting a 4-6 percent year-over-year decline in revenue for its fiscal fourth quarter, greater than the 1 percent that analysts estimated.

Revenue was $11.9bn, a 1 percent year-on-year decline, while net income rose 7 percent compared with a year ago.

The company also announced an additional 1,100 workers would be laid off, on top of a previously announced 5,500 back in August.

CEO Chuck Robbins is trying to shift the business from hardware to software and services. The company has made gains in areas such as security, but faces weak demand in its core networking hardware business.

--John Simons / Wall Street Journal: “IBM is giving thousands of its remote workers in the U.S. a choice this week: Abandon your home workspaces and relocate to a regional office – or leave the company.

“The 105-year-old technology giant is quietly dismantling its popular decades-old remote work program to bring employees back into offices; a move it says will improve collaboration and accelerate the pace of work.”

This is what happens when you report 20 consecutive quarters of falling revenue, boys and girls.  What’s kind of funny is one of IBM’s prime focuses has been on marketing its services and software for what it calls “the anytime, anywhere workforce.”

--Deere & Co. on Friday reported fiscal second-quarter net income of $802.4 million, far surpassing Wall Street’s expectations and the shares soared 8% on the news.  The agricultural equipment manufacturer posted revenue of $8.29bn, which also topped the Street.

--Twitter co-founder Biz Stone announced he would be returning full time.

“My top focus will be to guide the company culture, that energy, that feeling,” Stone said in a blog post.  Stone added he wouldn’t be replacing anyone.

Twitter CEO Jack Dorsey had asked Stone to return.

--According to Institutional Investor’s Alpha magazine, the top 25 best-paid hedge fund managers earned a collective $11 billion in 2016.  Nearly half made single-digit returns for their investors, a crappy sum when measured against the S&P 500’s up 12%, including reinvested dividends.

James Simons, founder of Renaissance Technologies, was tops at $1.6 billion, while Ray Dalio of Bridgewater Associates took home $1.4 billion.

Frustrated investors took $70 billion out of the $3 trillion industry last year.

I totally agree with New York City comptroller Scott Stringer (Dem.), who said, “When a manager collects a fee without adding value, it’s just not right.”

David Tepper of Appaloosa Management, who used to set up shop most of the year about a one-minute drive from me, but whose base is now in Florida, made $700 million.

--Hedge fund manager Leon Cooperman settled his insider trading case with the Securities and Exchange Commission, paying $4.9 million in civil penalties and forfeited profits without admitting or denying any guilt (standard practice).  Most importantly, Cooperman, 74, will not be barred from the securities industry.

Cooperman, according to the above-referenced report from Institutional Investor, made $225 million last year.

--This was the week when the television networks pitched advertising executives and marketers. CBS declared victory for the 14th time in 15 years as the most-watched network in the U.S.

But CBS’ prime-time audience fell 12% this season, which is ending, and is 20% lower in the key 18-to-49 demographic. [Part of this was due to the yearly comparisons that included one-off events, such as CBS having the Super Bowl in 2016, and not having it this year.]

But “The Big Bang Theory,” the No. 1 comedy on all of TV, saw its audience decline 9% and that hurt CBS’ numbers.

TV ad sales fell this past quarter for the first time since 2010, while online rivals like Google and Facebook posted gains of 19% and 46%.

--NBC confirmed Megyn Kelly will be premiering her Sunday news magazine program in June, running opposite “60 Minutes.”  While I have pooh-poohed this idea, the advantage for Kelly is that “60 Minutes” will be in re-runs, though in the past they’ve rushed out an original story or two depending on the news cycle.  So Megyn has a shot at getting a toehold before the fall.

Kelly will also have her day-time show at 9:00 a.m.

--Christie’s had a great first night with its spring auction, $289.2 million for impressionists and modern art helped along by bidding from Chinese buyers.  A 1913 sculpture by Romanian Constantin Brancusi, “Sleeping Muse,” went for $57.3 million, surpassing its $35 million estimate. 

Separately, Sotheby’s sold a 1982 painting, “Untitled,” by Jean-Michel Basquiat for $110.5 million, to become the sixth most expensive work ever sold at auction.  Only 10 other works have broken the $100 million mark.

Said dealer Jeffrey Deitsch, “(Basquiat) is now in the same league as Francis Bacon and Pablo Picasso.”

The buyer is a Japanese tech billionaire.

--The restaurant business in New York City has been a disaster in terms of P&L, due largely to outrageous rents.  While I can’t remember having been to Upper West Side spot Isabella’s, which just closed, per Crain’s New York Business, it’s illustrative of the predicament faced by restaurateurs. 

Isabella’s was a popular brunch spot near the Museum of Natural History, but it had an expiring lease and the landlord chose not to renew, according to the owners in a letter to customers.

The bottom line is asking rents for retail space along Columbus Avenue were $412 per square foot last fall, 18% higher than in the previous year and 65% higher than five years ago, which is outrageous given the minimal inflation rate over that time, let alone low food costs.  [Hell, if you can’t find a 2 frozen meals for $5 special at your local supermarket these days, or a box of pasta for a $1, or good pasta sauce for $2, you aren’t looking!]

Isabella’s appeared on Seinfeld and Curb Your Enthusiasm.

--Speaking of closings and local business conditions, the owner of Mountain Creek, a popular ski resort and waterpark here in New Jersey (yes, those of you not in the know...we have legitimate ski areas), is seeking Chapter 11 protection.

Hardly a surprise, given that we’ve had about four miserable winters for skiing and snowboarding in the last five.

But in this case the company is pointing to “legacy debt” from the former owners.  Mountain Creek Management LLC plans on continuing operations while they restructure, but you have to be from around this area to understand this is like the 11th different owner in just the last 30 years.  My buddies and I used to go up there when it had a Playboy Club, by god, and that didn’t end well...the club that is, not my buddies and I, I hasten to add.

--Brad Grey, the former head of Paramount Pictures for more than a decade after a long career as a TV producer, died last Sunday of cancer at the age of 59.

Grey led the studio known for the “Transformers” and “Star Trek” movies for 12 years.  He was ousted from the Viacom-owned studio in February, following a series of box-office flops and big losses.

Grey grew up in the Bronx, the son of a New York garment industry salesman, and sold belt buckles made in his grandfather’s factory when he was in high school.  While in college he got his break as a gofer for concert promoter Harvey Weinstein, who would later go on to co-found Miramax Film Corp.

Before joining Paramount, Grey’s Brillstein-Grey Entertainment represented stars such as Brad Pitt and Adam Sandler and produced such TV shows as HBO’s “The Sopranos” and “Real Time With Bill Maher.”  [Ryan Faughnder / Los Angeles Times]

--In the here and now, last weekend, Warner Bros.’ “King Arthur: Legend of the Sword,” took in only $14.7 million, well below expectations, and with a $175 million price tag, one of the big busts of the past few years, unless it’s a big hit overseas, and last weekend it did take in $29 million elsewhere.  “Guardians of the Galaxy Vol. 2” remained atop the box office.

--L.A. Reid, the head of Sony Music Entertainment’s Epic Records, left the company amid accusations of harassment from a female assistant.

Reid is responsible for signing Bobby Brown, Boyz II Men, TLC, Mariah Carey, Kanye West, Rihanna and Jennifer Lopez.

--Editorial / Wall Street Journal

“If Ronald Reagan was rightly called the Great Communicator, Roger Ailes, who died Thursday at age 77, has to be considered the greatest creator of communicators in the history of politics or television.

“Political professionals talk about the importance of ‘getting your message out.’  Ailes knew the message mattered, but he also knew the message wasn’t worth much unless you knew how to deliver it.

“Ailes relished challenges, so it’s no surprise that his first political client was presidential candidate Richard Nixon, who told Ailes in 1967 that TV was a gimmick.  ‘If you think that,’ Ailes replied, ‘you’ll lose again.’  In 1968 Nixon defeated Hubert Humphrey.  Ailes would later advise Ronald Reagan, George H.W. Bush and after the trauma of 9/11, George W. Bush.

“Any understanding of Ailes’ success, though, must always return to the medium of television.  His TV career started in 1962 in Cleveland as a property assistant for ‘The Mike Douglas Show,’ a daytime talk show.  At age 27 he was executive producer for the likeable Douglas, and the show became a hit.

“Ailes’ biggest TV moment arrived when Rupert Murdoch, the owner of this newspaper, asked him to start a cable news channel in 1996. Fox News rose and eventually rolled over rival cable networks CNN and MSNBC.

“Ailes’ competitors and critics acknowledged his success with Fox but never could understand how this ‘conservative’ channel attracted and held so many viewers.  Asked how he accounted for this, Ailes told us it was pretty simple: NBC, CBS, ABC and his cable competitors aimed their programming at audiences on the East and West Coasts.  He programmed for the country in between....

“A relentless competitor, Ailes thought traditional television had tilted its news and U.S. politics by elevating a single point of view.  He saw a market for news and commentary that no one else offered, and he filled it.

“Ailes’ career ended at Fox amid allegations of sexual harassment, but it is hard to overstate the importance of his legacy in television and American politics. He rebalanced both in the U.S.  The competition in both will continue, but Roger Ailes redesigned the playing field.”

Former President George H.W. Bush tweeted: “He wasn’t perfect, but Roger Ailes was my friend and I loved him. Not sure I would have been President w/o his great talent, loyal help. RIP.”

Fox News host Sean Hannity, said in part in a statement: “Today America lost one of its great patriotic warriors. RA. For Decades RA has impacted American politics and media. He has dramatically and forever changed the political and the media landscape singlehandedly for the better. Neither will ever be the same again as he was a true American original.”

Others were far less charitable.

Ailes died from complications after suffering a fall at his home in the bathroom, where he struck his head.

I do have to add that among his many accomplishments, in 1993 he took a struggling CNBC and turned it into a financial success.

Foreign Affairs

Syria/Iraq/Turkey: Thursday, Turkey’s government called for the removal of the U.S. diplomat coordinating the international coalition fighting ISIS in Iraq and Syria, accusing Brett McGurk of giving support to the Syrian Kurdish militias that Washington and Ankara have been at odds over.  Again, Turkey considers the Kurdish People’s Protection Units (YPG) in Syria to be a front for the Kurdistan Workers’ Party (PKK) separatists that Turkey has been waging a decades-long war with inside Turkey.

Last year, during a visit to the Syrian town of Kobane that was under Kurdish control, McGurk received a plaque, which pissed off Turkey. At the time, President Erdogan told Washington it’s us or them, the “terrorists.”

But while Turkey is unhappy with McGurk, Ankara did say that talks earlier this week in Washington between President Trump and Erdogan had gone well, with the two pledging to improve ties, though Erdogan still warned against arming the Kurds.

Turkey wants to join the fight to retake Raqqa from ISIS, but only if the Kurds aren’t involved, while the U.S. is arming the YPG in the battle to do just that, telling Ankara that the weapons being given the YPG won’t be used later against Turkey.

As for the meeting between Trump and Erdogan, there was a major incident outside that got attention.

Editorial / Washington Post

“President Trump laid out the welcome mat this week for Turkish President Recep Tayyip Erdogan, and the strongman apparently felt so much at home he thought it okay for his thugs to beat up peaceful demonstrators.  That Mr. Erdogan has unfortunately been successful in stifling dissent in Turkey doesn’t give him license to come to this country and attack one of its most basic, and cherished, freedoms. It must be made clear that this behavior is unacceptable and will not be tolerated.

“A violent confrontation Tuesday evening outside the Turkish ambassador’s residence in Northwest Washington resulted in 11 people being injured.  Two people were arrested and charged with misdemeanor assault, and D.C. police said Wednesday the investigation is continuing....Particular scrutiny needs to be paid to the actions of Mr. Erdogan’s security guards, who, a state-owned Turkish news service confirmed, were involved in the fighting because – can you believe the gall? – they didn’t think police were doing enough to quiet the protest.... According to D.C. Police Chief Peter Newsham, the situation was especially ‘dicey’ because some of the Turkish guards were armed.”

Fethullah Gulen / Washington Post...Erdogan’s main rival, living in exile in Pennsylvania.

“As the presidents of the United States and Turkey meet at the White House on Tuesday, the leader of the country I have called home for almost two decades comes face to face with the leader of my homeland. The two countries have a lot at stake, including the fight against the Islamic State, the future of Syria and the refugee crisis.  But the Turkey that I once knew as a hope-inspiring country on its way to consolidating its democracy and a moderate form of secularism has become the dominion of a president who is doing everything he can to amass power and subjugate dissent.

“The West must help Turkey return to a democratic path....

“Since July 15, following a deplorable coup attempt, Turkish President Recep Tayyip Erdogan has systematically persecuted innocent people – arresting, detaining, firing and otherwise ruining the lives of more than 300,000 Turkish citizens, be they Kurds, Alevis, secularist, leftists, journalists, academics or participants of Hizmet, the peaceful humanitarian movement with which I am associated.

“As the coup attempt unfolded, I fiercely denounced it and denied any involvement. Furthermore, I said that anyone who participated in the putsch betrayed my ideals.  Nevertheless, and without evidence, Erdogan immediately accused me of orchestrating it from 5,000 miles away....

“In April, the president won a narrow referendum victory – amid allegations of serious fraud – to form an ‘executive presidency’ without checks and balances, enabling him to control all three branches of the government. To be sure, through purges and corruption, much of this power was already in his hands. I fear for the Turkish people as they enter this new stage of authoritarianism.”

In Iraq, Iraqi forces said they have recaptured nearly 90 percent of west Mosul from ISIS, with the militants being on the verge of “total defeat,” according to a military spokesman.  Assuming the battle is declared over in the next week or so, that would mean the operation took seven months from the start last October.  The death toll in the battle, including of civilians, is not known, but this will be an important victory for Iraq’s military as it no doubt will face other threats in the coming years.

In Syria, the government is essentially back to full control over Damascus after the suburbs had been ravaged in the six-year war, forcing tens of thousands to be displaced.  Rebels have now evacuated some of the last Damascus districts under their control...their dream of toppling a five-decade-old government shattered.  Whatever pockets of resistance still exist, the rebels are operating in shattered neighborhoods. 

The capital of Damascus itself, with its approximately 1.6 million inhabitants, has largely been insulated from the fighting.

But the United States said on Monday it has evidence President Bashar Assad had built a crematorium near the site of the Sednaya prison, according to the State Department. The crematorium would be used to dispose of bodies from the prison where “tens of thousands” have been detained during the war.  We have known, I have told you, since the war’s early days how Assad has been torturing and killing untold numbers of those in opposition and the truth, when we finally learn the details from defectors and the like, will be beyond horrifying.  It’s virtually all on Obama. I long proved that.

[Amnesty International recently said in a report that, based on the testimony of witnesses, somewhere between 5,000 and 13,000 had already been executed at Sednaya over five years.]

Separately, in a significant development, the United States launched an airstrike against Syrian forces that had been attacking U.S.-backed Syrian rebel forces, Defense Secretary Jim Mattis telling reporters at the Pentagon that the U.S. strike was defensive in nature, while later we learned the Syrian forces were being directed by Iran.  The Assad government condemned the action, while your editor cheered.

This is the first such strike by the U.S. specifically against Syrian forces, but this does not suggest a shift in policy.

Iran: Voters went to the polls today to elect a new president, the race between President Hassan Rouhani and hardline cleric Ebrahim Raisi, Raisi having called for a much tougher stance against the West.

Polls were kept open an extra six hours and I’m seeing on the wires as I go to post that Rouhani is winning handily. 

Separately, Tehran criticized the levelling of new sanctions on Iran’s missile program, saying it undermined a 2015 nuclear deal.

“Iran condemns the U.S. administration’s ill will in its effort to reduce the positive results of the country’s implementation of JCPOA (nuclear deal) commitments by adding individuals to the list of unilateral and illegal extraterritorial sanctions,” said foreign ministry spokesman Bahram Ghasemi.  [FT]

Reuel Marc Gerecht / Wall Street Journal

“In Washington there is a consensus that the re-election of Iranian President Hassan Rouhani is in the best interests of the U.S.  Most find the self-avowed pragmatic cleric, who championed the 2015 nuclear deal, a less menacing choice than his ‘hardline’ opponent Ebrahim Raisi, who is rumored to be the preferred candidate of Supreme Leader Ayatollah Ali Khamenei.

“But a victory for Mr. Rouhani, who appears destined to win unless Mr. Khamenei rigs the election in Mr. Raisi’s favor, would be the worst possible outcome. Better than anyone, Mr. Rouhani can align Iran’s factions on major foreign-policy questions.  Put another way, he is uniquely capable of fortifying the theocracy.

“Mr. Rouhani and the supreme leader go way back.  They worked together after the 1979 revolution to purge the Iranian army.  Mr. Rouhani is also a founding father of the feared Iranian ministry of intelligence. He took the supreme leader’s side in the brutal suppression of the pro-democracy Green Movement in 2009-10, which was probably the most dangerous time for the clerical regime since Saddam Hussein’s invasion in 1980.

“Despite the decades-old feud between him and Mr. Khamenei’s praetorians, the Revolutionary Guard Corps, Mr. Rouhani has tried to maintain amicable relations with senior officers, including Maj. Gen. Qasem Soleimani, the head of the expeditionary Qods Force and the overall commander of the foreign Shiite militias deployed to Syria and Iraq.  Mr. Rouhani is as ardent a supporter of Iran’s new Shiite imperialism as is Gen. Soleimani....

“It ought to be clear that Washington isn’t better off with a more powerful Islamic Republic, the ultimate objective of Mr. Rouhani. The Revolutionary Guards’ budget is going up 24% this year.  Although enormously appealing to Western businessmen and politicians, the moderation-through-trade argument that President Obama advanced during the nuclear talks isn’t historically sound....

“Washington would be far better off if a ‘hard-liner’ won the presidential contest. It would make it more difficult for Congress and the Trump administration to deceive themselves about Iran’s intentions. It would increase the distance between the Iranian people and their overlords, improving the chances that the Revolutionary Guards, who had difficulty shooting demonstrators in 2009, will splinter.

“Opposition to clerical dictatorship will erupt again – the sooner the better given the nuclear deal’s temporary restraints.  Mr. Rouhani’s promise is an illusion for those weary of the Middle East.  Like a mirage on the desert’s edge, this mullah beckons fools.”

I totally agree with Mr. Gerecht, but it doesn’t seem as if we’ll get the right outcome.

Israel: Multiple top former Israeli officials, breaking with the government’s current line, called President Trump’s leak of intelligence to Russia deeply troubling.

While U.S. Ambassador Ron Dermer and others played down the riff by emphasizing the strength of U.S.-Israeli intel sharing....

Elliot Cohen / Defense One

“Russia is antagonistic to the United States, although Trump has repeatedly indicated his desire to be chummy with them – after all, as he notoriously said during the presidential campaign, we are both killers, and so on the same moral plane. He apparently divulged the information to show off, which not only shows a lack of self-discipline: It shows, yet again, how easy this man is to play, particularly by veteran manipulators like his two experienced, talented, and thuggish guests.  The crisis is made worse by virtue of Trump having just fired the FBI director, apparently for having pushed that Russia investigation too far.

“Quite apart from making himself and the country a laughingstock around the world, the president has now practically begged Vladimir Putin to toy with him, tantalize him, tease him, flatter him, manipulate him.  He has shown the Russians (and others, who are watching just as closely) just how easy that is to do, and he has shown the rest of us that his vanity and impulsiveness have not been tempered by the highest responsibilities....

“(It) seems likely that the Russians captured all of the conversation – they were allowed to bring their electronics into the room, including the only video cameras, the American press having been excluded – they undoubtedly got all of it.

“But that is not the half of it. Tillerson casually said of Trump in an interview on Meet the Press on Sunday ‘I have to earn his confidence every day.’ One does not earn Donald Trump’s confidence by calmly conveying to him some unpleasant but essential truths. Rather, one earns his confidence by truckling to him, and by lying to everyone else.  ...

“One can be certain that (metaphorically speaking) at this very moment ice picks are sliding into unsuspecting kidneys in the White House.  No doubt the president is raging at the cowed subordinates who have to cover yet again for his folly and grandiosity; no doubt that some subordinates see this as an opportunity to settle scores, undermine rivals, and curry favor. It is probably a fascinating if odious spectacle....

“And all of us should begin contemplating the conditions under which – not now, maybe not even a year from now – the constitutional remedies for dealing with a president utterly incapable of fulfilling his duties with elementary probity and competence will have to be implemented.”

Yemen: A cholera outbreak had killed 209 people as of Wednesday, according to the UN’s children’s agency.  But the figure is expected to explode as 3,000 cases a day are being reported.

Cholera is a highly contagious bacterial infection spread through contaminated food or water. Hospitals are struggling to keep up, with half of the nation’s facilities having fallen victim to the devastating civil war that has killed more than 8,000, with 40,000 wounded.

The UN has been warning 2/3s of the population is on the brink of famine.

Libya: Fighting between rival forces in Benghazi killed at least 60 during this week.

But then I saw tonight that an attack on a southern air base killed as many as 141 people, with 103 being Libyan National Army troops.  Some civilians were executed.  I haven’t seen who carried it out.

North Korea: On Wednesday, South Korean President Moon Jae-in said there was a “high possibility” of conflict with North Korea, as it presses ahead with nuclear and missile programs it says it needs to counter U.S. aggression.

President Moon said hours earlier he wanted to reopen a dialogue with Pyongyang as he seeks a two-track policy, involving sanctions and diplomacy.

This was in response to Sunday’s highly-troubling ballistic missile test, again in total defiance of UN Security Council resolutions, which North Korea said was a test of its capability to carry a “large-size heavy nuclear warhead.”  It was also clearly a message to newly-elected Moon.

Moon said it’s clear the North’s missile program has advanced rapidly, and what makes Sunday’s test so disturbing is the missile was shot at a steep angle and reached an altitude of 1,242 miles (another report said 1,312), traveling about 490 miles and landing near Russia.  Had the altitude been straightened out, the missile would have been able to target, for example, the U.S. base on Guam.  It was the longest-range missile the North has ever tested.

China urged restraint from all parties on the “complex and sensitive” situation on the Korean peninsula.  Japanese Prime Minister Shinzo Abe told reporters the test was “a serious threat to Japan.”

What did I tell you last fall; watch Fourth of July and Guam.  Yes, these rockets are hardly accurate, and we still don’t know whether North Korea has the ability to make their nuclear weapons small enough to be mounted on a rocket of this kind, and it has never tested a long-range ICBM that could reach the U.S.

But I’ve been pounding the table, saying Pyongyang was making far more rapid progress than the “experts” in the field believed, and now we know this is indeed the case. 

China: Two Chinese Sukhoi Su-30 jets conducted what is being called an “unprofessional” intercept of a U.S. aircraft over the East China Sea, the U.S. military reported.  One of the Chinese jets came as close as 150-feet to the U.S. WC-135 plane and flew upside down above it, according to CNN.  The U.S. aircraft was a sniffer/reconnaissance plane, used to detect evidence of possible nuclear tests by North Korea.

And in the South China Sea, China has installed rocket launchers on a disputed reef to ward off Vietnamese military combat divers (yes, divers), according to a state-run newspaper.  It’s being described as an anti-frogman rocket launcher defense system. The Vietnamese have been installing large numbers of fishing nets in the Paracel Islands.  [We need to arm the fish to go after both sides.]

Meanwhile, Taiwan President Tsai Ing-wen is calling for more cooperation from China to help her rein in hardliners on the island that China considers its own, But Beijing is unlikely to make any major moves ahead of its five-yearly Communist Party Congress this fall.

Tsai, who has now been in office one year, is facing a surge in anti-China sentiment as Beijing pressures it to accept its “one China” policy.  The latest surveys have 70 percent of Taiwanese not accepting it.  Tsai knows that China’s biggest fear is that she is forced to call an independence referendum, which, as I’ve noted for years, would force China to respond militarily.

On another diplomatic front, Chinese President Xi Jinping said in a meeting with a special envoy from South Korea in Beijing that he’s willing to talk with South Korea in an attempt to return to a “normal track” in relations, following a rift over the deployment by Seoul of the U.S. missile-defense system, THAAD, which is guarding against the North Korean threat.

On a totally different issue, President Xi pledged $124 billion on Sunday for his new Silk Road initiative, using a summit on the topic to bolster China’s global leadership ambitions.

“We should build an open platform of cooperation and uphold and grow an open world economy,” Xi said at the opening of the two-day gathering in Beijing.

The Silk Road project, also called the Belt and Road initiative, is aimed at expanding links between Asia, Africa, Europe and beyond.

Since it all boils down to infrastructure – roads, railways, ports and such – everyone is scrambling to get their share of the eventual projects, but some, such as India, worry about “sovereignty and territorial integrity,” as their foreign minister put it.

Lastly, today, Philippine President Rodrigo Duterte said that President Xi had warned him there would be war if Manila tried to enforce an arbitration ruling and drill for oil in a disputed part of the South China Sea.  Openly saying this will no doubt tick off Beijing to no end.

Duterte described a recent conversation between the two.  “We intend to drill oil there, if it’s yours, well, that’s your view, but my view is, I can drill the oil, if there is some inside the bowels of the earth because it is ours.”  Duterte then said Xi’s response was, “We’re friends, we don’t want to quarrel with you, we want to maintain the presence of warm relationship, but if you force the issue, we’ll go to war.”

Brazil: The markets here have been cratering as President Michel Temer is under investigation in connection with the massive corruption scandal, with the country’s Supreme Court confirming what most suspected.  A leading Brazilian newspaper reported that prosecutors have recordings of Temer from March purportedly encouraging a corporate executive to keep making payments to silence a former Speaker of the House, who was convicted that month of corruption and money laundering.  So the calls for Temer’s impeachment are growing.  For his part, Temer said on Thursday that he wouldn’t step down.

“I did not buy the silence of anyone,” Temer said.  “I will not resign.”  Brazil’s Bovespa stock index lost 9 percent on the news, the steepest fall since the 2008 financial crisis.

The allegations come less than a year after Temer played a key role in the impeachment of his predecessor, former President Dilma Rousseff.

Random Musings

--One thing you aren’t going to see on Trump’s trip to Europe is a lot of hugging from European leaders.  They will be doing all they can to avoid being seen getting chummy with our damaged leader.

--A new Reuters/Ipsos poll released Friday has President Trump with a 38% approval rating, 56% disapproving.

--A Wall Street Journal/NBC News poll found that only 29 percent of Americans approve of Trump’s ousting of FBI Director Comey, with 38 percent disapproving, while 32 percent did not have an opinion of Comey’s removal.

Among independents, 21 percent approve of the change, while 36 percent disapprove.

In this survey, Trump’s approval rating dropped to 39 percent, while 54% disapprove.  35% of independents approve, 54% disapprove.

Meanwhile, the same WSJ/NBC survey also found that 23% approve of the GOP’s health-care legislation, while 48% thought it was a bad idea.  Among independents, 18% called the bill a good idea and 44% called it a bad one.

--Secretary of State Rex Tillerson responded to Sen. John McCain Sunday, after McCain, in an op-ed last week, called out Tillerson and warned it is “dangerous” to look at foreign policy as “simply transactional, referencing prior remarks of Tillerson’s, who said conditioning U.S. foreign policy too much on values forms barriers to advancing the country’s national interests.

“With those words, Secretary Tillerson sent a message to oppressed people everywhere, ‘Don’t look to the United States for hope,’” McCain wrote.

Sunday, on NBC’s Meet the Press, Tillerson sought to clarify.

“America’s values of freedom, of treatment of people, human dignity, freedom of expression throughout the world, those are our values. Those are enduring values. They are part of everything we do,” he said. 

“But I make a distinction between values and policy.  A policy has to be tailored to the individual situation. To the country. To its circumstances. To the broader issues that we are addressing in terms of advancing our national security interest, our national economic interest.”

--Michael Goodwin / New York Post...Goodwin being a long-time Trump supporter.

The following was written before this week’s events, but after the Comey firing....

“Some days, Trump gets the level of difficulty, telling Reuters about his first 100 days, ‘I thought it would be easier.’

“Other days, he gets everything backward, making it hard for supporters to defend him and easy for opponents to attack. This is not merely annoying.

“The exasperating pattern has been and remains the existential threat to Trump’s presidency, given his precarious public standing and his party’s narrow margin in Congress. He will not be able to deliver on his promises to revitalize the economy and rebuild the military unless he establishes wider support for his agenda and more trust in his judgment.

“The task applies to politicians and ordinary citizens alike.  Both need frequent reassurance he is up to the job....

“Then there’s Trump himself, who keeps adding fuel to the bonfire.  His comment to NBC that he had decided to fire Comey before Attorney General Jeff Sessions and his deputy, Rod Rosenstein, had recommended it contradicted the official explanation of the chronology.

“The press office and Vice President Mike Pence cited the Sessions-Rosenstein recommendation to explain the decision.  In fact, Trump’s letter to Comey cited it, too, saying, ‘I have accepted their recommendation and you are hereby terminated and removed from office, effective immediately.’

“Suddenly, that was no longer true, delivering a blow to the administration’s credibility.

“Then Friday, Trump upped the ante by warning darkly about ‘tapes’ in a tweet that cautioned Comey no to leak.  A president igniting speculation about secret Oval Office recordings is like a shipbuilder musing about the Titanic.  No, no, no....

“I recognize it’s still early days for the administration, and that Trump’s talent for disruption is a big part of his appeal.  I also recognize that his campaign often veered off-road and he still pulled off one of the great political upsets in American history.

“But a presidency, for all its power and grandeur, is fragile.  Its strength comes from the consent of the governed and the mandate to lead must be constantly earned and expanded.  Nothing is guaranteed.

“Trump may thrive in chaos, but his staff, the government and the public require more order and certainty. Because he inherited plenty of crises, there’s no need to create new ones.

“So here’s my plea, Mr. President: Make it easier for others to keep the faith. You’ll accomplish much more and many more Americans will be proud to stand with you.”

--White House chief of staff Reince Priebus issued a stern warning at a recent staff meeting: Quit trying to secretly slip stuff to President Trump. Aides have been slipping him stories outside the formal information stream that are often fake stories intended to press the aide’s policy agenda.  Negative press clips in particular often cause a volcanic reaction from the president, according to a Politico story.

--San Antonio Spurs coach Gregg Popovich, popping off before the week’s political events broke, without mentioning Donald Trump’s name.

Asked whether the state of the world distracts him:

“Absolutely. It’s got nothing to do with the Democrats losing the election.  It’s got to do with the way one individual conducts himself and that’s embarrassing.  It’s dangerous to our institutions and what we all stand for and what we expect the country to be, but for this individual he’s in a game show.  And everything that happens begins and ends with him, not with our people or our country.  Every time he talks about those things that’s just a ruse.  That’s just disingenuous, cynical and fake.”

--House Majority Leader Kevin McCarthy (Calif.) found himself in trouble over a comment caught on tape, a private conversation with GOP leaders on Capitol Hill last year, according to the Washington Post.

“There’s two people I think Putin pays: Rohrabacher and Trump,” McCarthy can be heard saying in the June 15, 2016 exchange.  “Swear to God,” he added, while his colleagues laughed.

House Speaker Paul Ryan, who was one of several lawmakers in attendance, is heard asking the comments be kept to themselves.

“No leaks,” Ryan told his lieutenants, according to the Post.  “This is how we know we’re a real family here.”

Rohrabacher, a Republican congressman from California, has been a noted defender of Putin and Russia.

McCarthy told reporters Wednesday night that it was a “bad attempt at a joke.”  “That’s all there is to it.  No one believes it to be true from any stretch of fact.”

This is much ado about nothing.  McCarthy’s comments came one day after the Washington Post reported that Russian hackers had infiltrated the computer network of the Democratic National Committee.

--The chairman of the House Oversight and Government Reform Committee, Utah Republican Jason Chaffetz, made it official. He was resigning from the House as of June 30.  The powerful job is apparently South Carolina Rep. Trey Gowdy’s if he wants it.  Step up to the plate, Trey.

--U.S. arrests of suspected illegal immigrants rose by nearly 40 percent in the first 100 days of the Trump presidency, following executive orders that broadened the scope of who could be targeted for immigration violations, according to data from the Immigration and Customs Enforcement agency.

--The only two states in the union to have gubernatorial races this year are New Jersey and Virginia.  In my state it seems Democrat Phil Murphy is a lock, though I have voiced my support for Republican Jack Ciatterelli in the primary.

But in Virginia, which has a primary June 13, the likely Republican nominee is Ed Gillespie, the former chairman of the Republican National Committee, who by all accounts has run a terrific campaign.  Very likeable guy, in my estimation, though we’ll see how his support of Trump to date impacts the race in the fall.  Trump has only a 36% approval rating in Virginia, as reported by the Washington Post.  More on the Democratic side in this race post primaries, current Democratic Gov. Terry McAuliffe being prohibited from seeking a second consecutive term.

--In a new Quinnipiac University poll of New York City voters, Mayor Bill de Blasio suddenly has his highest job approval since taking office, 60%, as he heads into the fall’s election.

De Blasio has zero competition from the Republicans and will roll, with polls showing he would win by a 3 to 1 margin.

Among black voters, 80% said they would vote for the mayor over his Republican rivals, while 73% of Hispanic voters would.  Among white voters, that figure was 48%.

--Hillary Clinton unveiled her new political action organization, Onward Together, which will fundraise for five prominent progressive groups.

“I believe more fiercely than ever that citizen engagement at every level is central to a strong and vibrant democracy,” she wrote in an email to supporters.

Just go away.

--Hillary’s former top aide, Huma Abedin, finally filed for divorce from her disgraced husband Anthony Weiner – the same day he pleaded guilty to sexting with a minor.  As Weiner is soon-to-be officially labeled a sex offender, there is little doubt Huma holds all the cards and will gain custody of their 5-year-old son.

Because he pleaded guilty, Weiner’s sentence will only be between 21 and 27 months in prison.  I doubt he will survive the experience.

--After a seven-year legal impasse, Swedish prosecutors dropped their rape investigation into WikiLeaks founder Julian Assange Friday.  Sweden based its decision on its inability to try Assange following his flight to the Ecuadorean embassy in London five years ago, with authorities saying all options “are now exhausted.”

Assange hasn’t wanted to face charges in Sweden because he didn’t want to risk being extradited to the United States.  His lawyer in Sweden said it’s a total victory for him.

But if Assange leaves the embassy, London’s Metropolitan Police have said it was “obliged” to execute an arrest warrant issued in 2012 after Assange failed to properly surrender to British authorities.  However, now the Met police could waive this.

--David P. passed on a piece from Collin Binkley of the Associated Press that I had missed.

“Black students at Harvard University are organizing a graduation ceremony of their own this year to recognize the achievements of black students and faculty members some say have been overlooked.

“More than 700 students and guests are registered to attend Harvard’s first Black Commencement, which will take place two days before the school’s traditional graduation events.  It isn’t meant to replace the existing ceremony, student organizers say, but rather to add something that was missing.

“ ‘We really wanted an opportunity to give voice to the voiceless at Harvard,’ said Michael Huggins, president of the Harvard Black Graduate Student Alliance.

Voiceless at Harvard? I hardly think so. But whatever floats your boat.

--I normally don’t comment in this column on stories such as the tragic death of a student at Penn State, who died after being forced to drink too much during a fraternity hazing ritual, only to be abandoned by his ‘brothers’ after being seen stumbling a number of times, and then taking a hard fall, clearly injuring himself, and yet it was nearly 12 hours before anyone called 9-1-1.

What gets me is the institutional blindness, insensitivity and stupidity exhibited by the Penn State hierarchy, in this case from President Eric J. Barron on down; this after you’d think the school had learned something from the Jerry Sandusky mess.

I mean the idiots at Penn State recently elected Jay Paterno to the Board of Trustees.  Even Sports Illustrated selected this as the week’s “Sign of the Apocalypse.”

--Nebraska Republican Sen. Ben Sasse has written a book, The Vanishing American Adult, in which he speaks of an American crisis of loneliness and disconnection, and how parents need to take back responsibility for their children’s upbringing from schools, and ensure the children travel widely, work hard, and “become truly literate.”

I’ve been following him.  He’ll be running for president.  And he’s likely to get my support.

Wouldn’t be a bad Veep either under President Pence.

---

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

God bless America.

---

Gold $1255
Oil $50.53

Returns for the week 5/15-5/19

Dow Jones  -0.4%  [20804]
S&P 500  -0.4%  [2381]
S&P MidCap  -0.4%
Russell 2000  -1.1%
Nasdaq  -0.6%  [6083]

Returns for the period 1/1/17-5/19/17

Dow Jones  +5.3%
S&P 500  +6.4%
S&P MidCap  +3.1%
Russell 2000  +0.7%
Nasdaq  +13.0%

Bulls 58.1
Bears 17.1 [Source: Investors Intelligence]

Have a great week.

Brian Trumbore



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Week in Review

05/20/2017

For the week 5/`15-5/19

[Posted 12:00 AM ET, Saturday]

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

Edition 945

Trump World          

If ever there was a week to follow my dictum ‘wait 24 hours,’ it was this past one, one that is likely to be remembered for a long time by those of us who care about the country and the world.  As discussed below, last weekend’s ballistic missile test by North Korea undoubtedly scared the hell out of many in the Pentagon because of the progress it showed Pyongyang has made, and then for about 120 straight hours, it has been non-stop Trump.

For me, waiting 24 hours to a large extent this week means ‘waiting for the evidence.’  What most upsets many of us for now, though, is the Trump agenda has been sidelined and there are very few legislative days left on the calendar before we turn the page and it becomes all about the 2018 mid-term elections and little else. 

I have decided I will write my full opinion on what has been transpiring in two weeks. I want to see how the overseas trip goes and to then see what happens upon Trump’s return.  I feel compelled to remind my audience, though, that the format for “Week in Review” has never changed.  I give a summary of world financial markets and geopolitics, plus I throw in commentary from both sides.  I’ve always been about building the historical record, and so I will continue to do so, come hell or high water. But of course there’s a slant.  I am, after all, the editor.

And so we start with last weekend, where following the firing of FBI Director James Comey the week before, the chatter Saturday and Sunday in Washington was about the move.  Virginia Senator Mark Warner, the ranking Democrat on the Senate Intelligence Committee, said he would “absolutely” subpoena recordings of conversations between President Trump and former director Comey if they exist.

Appearing on ABC’s This Week, Warner said: “Listen, I don’t have the foggiest whether there are tapes are not, but the fact that the president made allusions to that and then the White House would not confirm or deny, it is not anything we have seen in recent days.”

Last Friday, Trump had threatened Comey on Twitter, days after firing him.

“James Comey better hope that there are no ‘tapes’ of our conversations before he starts leaking to the press!” Trump tweeted.

Appearing on Fox News Sunday, Sen. Warner, addressing the overall investigation into Russia’s alleged interference in the 2016 election, said, “(Again) the president and this administration said that ‘there’s no there, there,’ (yet) continues through their actions to indicate that they are afraid of where this investigation may head.”

Warner said he felt reassured when Acting FBI Director Andrew McCabe said the FBI would pursue its investigation.

“The dots seem to be fairly obviously connected that there’s a lot more smoke here, but I’m trying to give the president the benefit of the doubt until we finish this investigation,” Warner said.

Editorial / Wall Street Journal...May 13-14

There still is no serious evidence of Trump-Russia collusion during the 2016 campaign.  The worst detail so far is Michael Flynn’s denial (he says he forgot) that he had met with the Russian ambassador. The various other names who’ve flashed as targets of media suspicion are small-timers (Carter Page) or Beltway bandits (Paul Manafort) who look more like mercenaries than conspirators.

“Perhaps such evidence will emerge.  If it does, Mr. Trump’s presidency isn’t likely to survive. If it doesn’t, he could emerge politically stronger for having his denials vindicated....

The Trump White House is a mess, but then we knew that.  The chaos and self-serving leaks after the Comey firing make the Bill Clinton White House look like a model of discipline and decorum. If Trump aides aren’t trashing each other, they’re trashing the boss, who doesn’t seem to mind humiliating them as he has spokesman Sean Spicer.  Then there was this week’s leak – dumped to reporters favored by the Stephen Bannon team – that Mr. Trump is unhappy with General McMaster, who apparently suffers from being too capable.

“The historical analogy isn’t Richard Nixon, whose advisers were effective in their abuses until they were finally discovered. This is more like Jimmy Carter – outsiders who arrived to drain the swamp and are swamped by incompetence.  The blundering over the Comey decision and aftermath raises serious doubts that this White House has the focus and discipline to manage tax reform.

The main source of dysfunction is the man at the top. The President is his own worst enemy – impulsive, thin-skinned, undisciplined, by now readers know the story.  Every time his supporters think he might finally be appreciating the weight of the job, or the gravity of a President’s words, he goes on a Twitter rant.

“Rather than focus on his agenda, he keeps the Russia pot boiling by railing against critics.  Health care – what’s that? He faults his communications team for mistakes, but they are usually based on incomplete information or on attempts to clean up the boss’s effusions.

“Mr. Trump has assembled many able advisers and officials who are trying to serve the country and steer the mercurial President from his own worst instincts.  If Mr. Trump won’t heed their counsel, he really  will turn into Jimmy Carter.”

Monday... The Washington Post reported that President Trump revealed highly classified information to the Russian foreign minister and ambassador in a White House meeting last week, “according to current and former U.S. officials, who said that Trump’s disclosures jeopardized a critical source of intelligence on the Islamic State.”

Greg Miller and Greg Jaffe: “The information Trump relayed had been provided by a U.S. partner through an intelligence-sharing arrangement considered so sensitive that details have been withheld from allies and tightly restricted even within the U.S. government, officials said.

“The partner had not given the United States permission to share the material with Russia, and officials said that Trump’s decision to do so risks cooperation from an ally that has access to the inner workings of the Islamic State.  After Trump’s meeting, senior White House officials took steps to contain the damage, placing calls to the CIA and National Security Agency.”

A U.S. official familiar with the matter told the Post, Trump “revealed more information to the Russian ambassador than we have shared with our own allies.”

The previously scheduled meeting with Foreign Minister Sergei Lavrov and Ambassador Sergey Kislyak was held in the Oval Office a day after the Comey firing.  To say the optics were poor is an understatement.  And to know that the only press allowed in to take pictures was Russian, no one from the U.S. press, made it even more so.

What we quickly learned, though, is that a president has the right to declassify intelligence on the spot, so it’s not like he was breaking the law.

Instead, it became clear the president was trying to impress his guests with both his knowledge and the intelligence-gathering capabilities of the United States, while attempting to draw Russia into a closer alliance on fighting terror and ISIS; the intel having to do with the laptop bomb threat on commercial aviation.

National Security Adviser H.R. McMaster was sent out to defend the discussion with the Russians.  McMaster said the president wasn’t aware where the information about ISIS threats to airliners originated or how it was gathered.

“The president wasn’t even aware where this information came from.  He wasn’t briefed on the source or method of the information either,” said McMaster, who was in the Oval Office with Lavrov and Kisylak.

McMaster slammed the Washington Post.

“The premise of that article is false that in any way the president had a conversation that was inappropriate or that resulted in any kind of lapse in national security.

“In the context of that discussion, what the president discussed with the foreign minister was wholly appropriate to that conversation and is consistent with the routine sharing of information between the president and any leaders with whom he’s engaged.”

McMaster said the president brought up the information during the course of the conversation.  The general then said the “real issue” was that “our national security has been put at risk by those violating confidentiality and those releasing information to the press.”

Trump took to Twitter:

“As President I wanted to share with Russia (at an openly scheduled W.H. meeting) which I have the absolute right to do, facts pertaining to terrorism and airline flight safety.  Humanitarian reasons, plus I want Russia to greatly step up their fight against ISIS & terrorism,” he wrote.

Then Trump said:

“I have been asking Director Comey & others, from the beginning of my administration, to find the LEAKERS in the intelligence community.”

Republican Senator Bob Corker, chairman of the Senate Foreign Relations Committee, reacted to the news that Trump had shared intelligence with the Russians.

“Obviously, they are in a downward spiral right now and have got to figure out a way to come to grips with all that’s happening. And the shame of it is, there’s a really good national security team in place.”

Senate Majority Leader Mitch McConnell: “I think we could do with a little less drama from the White House on a lot of things, so that we can focus on our agenda, which is deregulation, tax reform, repealing and replacing ObamaCare.”

Danny Yatom, the former director of Israel’s spy agency Mossad, told the Jerusalem Post that it would be a “grave violation” of intelligence sharing protocols if sensitive information was turned over because it “could lead to harm to the source.”  Yatom said this before it was formally disclosed that Israel was the source.  Yatom warned Russia could share the information with Syria and Iran.  [Specifically, the intelligence disclosed was about how ISIS was determining how to implant and mask explosives inside the battery of a laptop computer, with the charge still functioning enough to allow airport security officials to power up the device, the standard test to see if it’s safe.]

The Kremlin described as “complete nonsense” reports Trump had disclosed classified intelligence during the meeting.

Needless to say, Democrats are having a field day.  The number two Democrat, Dick Durbin of Illinois, said Trump was “dangerous” and “reckless.”

“This conduct by the president is not only dangerous, it’s reckless.  It is reckless for him to disclose to the Russian foreign minister and ambassador, sensitive, top secret information.”

Gerald Seib / Wall Street Journal

“Most people prefer to avoid controversy. Donald Trump seeks it out.

“Indeed, it sometimes seems that if a controversy isn’t roiling, he works to create one and then stoke it.  Sometimes this is to change the subject to one he prefers, sometimes to distract attention from the last controversy he wants to move beyond.

“It’s an approach mostly foreign to the worlds of politics and governance, which is exactly what his supporters like about it. Somehow it worked for Mr. Trump as a presidential candidate. We are watching a live experiment in whether it can work as president.  Chances are it will always be thus.”

Michael Morell / Washington Post

“First, we now know that the president is actually paying attention to the intelligence community. He was evidently able to recite to the Russians the Islamic State-related threat intelligence on which he had been briefed with a significant level of detail. So, gone should be the perception that the president is not listening to the intelligence community. And gone should be the idea that the intelligence community is withholding information from the president that he needs to do his job. Neither is true....

“Second, the president’s advisers have not been able to properly ‘manage’ the president. The Lavrov incident underscores that national security adviser H.R. McMaster and his staff are failing us in two ways. They are not succeeding in persuading Trump to work off of a set of carefully written and coordinated talking points when meeting with foreign officials.  And they are not always willing or able to redirect the conversation between the president and foreign officials when it is heading into inappropriate areas.”

Michael V. Hayden / Washington Post

“Governing is new turf for Trump. He is one of the least experienced presidents in the nation’s history.  There is no evidence of scholarship or even deep interest in the processes of U.S. government. He has little international knowledge beyond real estate and business.

“But even with such a thin portfolio, he seems incapable of humility in the face of such inexperience.  By all accounts, the president is impatient with process and study, preternaturally confident in his own knowledge and instincts, and indifferent to, and perhaps contemptuous of, the institutions of government designed to help him succeed.”

Editorial / Wall Street Journal

“The portrait of an inexperienced, impulsive chief who might spill secrets to an overseas foe is one to which Mr. Trump has too often contributed.  It was political mismanagement even to hold the Russian meeting, especially the day after he fired FBI Director James Comey amid the investigation of the Trump campaign’s alleged Russian connection.

“This eruption shows why a President’s credibility is so important. If people don’t believe Mr. Trump’s words or trust his judgment, they won’t give him the benefit of the doubt or be responsive if he asks for support.  Last week the White House spent two days attributing Mr. Comey’s firing to a Justice Department recommendation, only for Mr. Trump to insist in a TV interview that the pink slip came ‘regardless of recommendation’....

“Millions of Americans recognized Mr. Trump’s flaws but decided he was a risk worth taking. They assumed, or at least hoped, that he’d rise to the occasion and the demands of the job. If he cannot, he’ll betray their hopes as his Presidency sinks before his eyes.”

Tuesday... The New York Times published a story that President Trump sought to persuade then-Director Comey to back off the FBI investigation into fired national security adviser Michael Flynn. 

After a conversation Comey had with Trump in February, a day after Flynn was fired for what the White House then said were misleading accounts of his conversations with Russia’s U.S. ambassador, the FBI director wrote a memo documenting the Oval Office meeting.  Comey said the president asked him to abandon the investigation.

According to the memo, as cited by the Times, Trump told the FBI director, “I hope you can let this go.”

House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-Utah) said he was considering subpoenaing the memo, if it wasn’t made available.

The move was supported by Speaker Paul Ryan.

“We need to have all the facts, and it is appropriate for the House Oversight Committee to request this memo,” a spokeswoman for Ryan said in a statement.

Arizona Republican Sen. John McCain said Trump’s troubles have reached “Watergate size and scale.”

Editorial / New York Post

“The stunning allegation that President Trump in February asked then-FBI chief James Comey to shut down the investigation of his national-security adviser, Michael Flynn, guarantees fresh political nightmares for the administration.

“If the actual memo resembles what the New York Times and others reported Tuesday night (without having actually seen it), a major independent probe of Russian meddling in U.S. politics is a sure thing....

“The flap over whether Trump inappropriately disclosed secret material to top Russian officials already seems old. But that story, too, gained new life thanks to the president.

“Top officials including National Security Adviser H.R. McMaster denied the thrust of the claims on Monday, and again on Tuesday. But in between, Trump took to Twitter and seemed to confirm the stories by defending his ‘absolute right’ to ‘share with Russia’ information about terrorism....

“The president needs to get a handle on his words – on his public communications, online and on-air, and on even his private comments. He’s already sabotaging his own agenda, and possibly putting his very presidency at risk.”

John Podhoretz / New York Post

“Right now, the very best you can say about Donald Trump is that he stinks at this whole president thing – in large part because he keeps creating trouble for himself and entirely on his own.

“Yes, the media are against him. Yes, the Democrats want his scalp. But everyone inclined to indulge President Trump in his self-pity about how he’s being badly treated by others in Washington and badly served by his own staff is ignoring the basic facts of the political situation he is bungling at present like no one has bungled it before.

“He just won an election and his party controls both chambers of Congress. If he were any good at this president thing he would be able to convert both of these advantages into facts on the ground – into legislative and procedural successes that would stymie the media attacks and throw Democrats on the defensive.

“Instead, it’s his own party that’s on the defensive.  It’s his own party that is terrified of acting.  It’s his own party that cannot make sense of what he wants.  They can do many things for him and he can do many things for them and they don’t and he doesn’t because he’s too busy lighting fires on which he then pours gasoline....

“It’s only 117 days into a presidency that is supposed to last, at a minimum, 1,460.  But after the gobsmacking self-inflicted wounds of the past two days, it doesn’t seem  unreasonable for the first time to wonder whether he’s already served a majority of the days he’s likely to serve.”

Editorial / Wall Street Journal

“The more important issue is why Mr. Comey failed to inform senior Justice officials and resign immediately after the conversation (over Flynn).  If he really thought Mr. Trump was attempting to obstruct justice, the director knows he had a legal obligation to report it immediately.  He certainly had a moral duty to resign and go public with his reasons.

“Yet the Times reports that Mr. Comey merely wrote the notes to himself and informed a few others.  One explanation is that perhaps Mr. Comey didn’t view Mr. Trump’s comments as amounting to obstruction.

“Intent is crucial to proving obstruction, and without listening to the conversation it’s impossible to know the context and tenor of Mr. Trump’s ‘let it go’ comment.  Mr. Trump might be guilty of obstruction if he thought Mr. Flynn knew something damaging about Mr. Trump, but not if he was making a general remark to give the guy a break.

“Another possibility is that Mr. Comey viewed the notes as a form of political insurance that could be useful in a future controversy.  By not resigning but quietly spreading word among colleagues, Mr. Comey was laying down evidence that he could use to protect his job or retaliate if Mr. Trump did fire him.

“The leak of Mr. Comey’s notes suggests that he or his allies are now calling on that insurance.  Such behavior fits Mr. Comey’s habit over the years of putting his personal political standing above other priorities. And it echoes uncomfortably of the way J. Edgar Hoover used information he collected to protect himself against presidential accountability....

“Mr. Trump was foolish even to discuss the Russia probe with Mr. Comey. Perhaps this was due to Mr. Trump’s naivete rather than an attempt to block an investigation, but even a rookie should know to seek legal guidance before blundering into matters so fraught with political risk.”

Wednesday... Former FBI Director Robert Mueller III was appointed as special counsel to oversee the federal investigation into Russia’s alleged interference in the election. He’ll have wide latitude to explore potential collusion between the Trump campaign and the Kremlin.

Deputy Attorney General Rod Rosenstein (reminder, AG Jeff Sessions had earlier recused himself on the Russian investigation) said he was naming a special counsel due to the inquiry’s “unique circumstances.”  The public interest, he said, “requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of command.”

Rosenstein cautioned the appointment wasn’t the result of a “finding that crimes have been committed or that any prosecution is warranted.”  No determination has been made.

Late Wednesday night, President Trump issued a statement:

“There was no collusion between my campaign and any foreign entity. I look forward to this matter concluding quickly.”

Trump said nothing about the appointment of Mueller. There are no limits on Mueller’s mandate. 

Mueller was the sixth director of the FBI, a position he took one week before 9/11, and held for 12 years, making him the longest-serving director next to J. Edgar Hoover.

Senate Intelligence Committee Chairman Richard Burr (R-N.C.) was among those hailing the news of Mueller’s appointment, but adding his own committee’s investigation hasn’t changed.

Republican Sen. Marco Rubio (Fla.): “This effort should in no way be allowed to impede the ability of the Senate Intelligence Committee to conduct and conclude its investigation into the same subject.  It is my hope that these investigations will now move expeditiously.”

Rep. Adam Schiff (D-Calif.), the ranking Democrat on the House Intelligence Committee, said: “The appointment of a special counsel is not a substitute for a vigorous investigation in Congress and the House Intelligence Committee will take steps to make sure our investigations do not conflict and ensure the success of both efforts,” he said. “We will also want to make certain that the special counsel has all the resources it needs to undertake this important task.”

Rep. Justin Amash (R-Mich.) on Wednesday said reports that Trump pressed Comey to end an investigation would merit impeachment if they’re true.  When asked by The Hill he said, “Yes, but everybody gets a fair trial in this country.”  Asked by another reporter if he trusted Comey’s word or Trump’s, Amash said: “I think it’s pretty clear I have more confidence in Director Comey.”

Amash was one of two House Republicans to co-sponsor a Democratic bill to establish an independent commission to investigate Russia’s role in the election.  [North Carolina Republican Rep. Walter Jones being the other.]

Editorial / Wall Street Journal

“Democrats and their media allies finally got their man. After weeks of political pressure, Deputy Attorney General Rod Rosenstein blinked late Wednesday and announced that he has named a special counsel to investigate Russian attempts to influence the 2016 presidential election. These expeditions rarely end well for anyone, and Democrats are hoping this one will bedevil the Trump Administration for the next four years....

“What the country really needs is a full accounting of how the Russians tried to influence the election and whether any Americans assisted them. That is fundamentally a counterintelligence investigation, but Mr. Mueller will be under pressure to bring criminal indictments of some kind to justify his existence. He’ll also no doubt bring on young attorneys who will savor the opportunity to make their reputation on such a high-profile investigation.”

Daniel Henninger / Wall Street Journal

“After two weeks, one must ask: How many parallel universes can the U.S. political system endure?

“Let us enumerate the celestial bodies traveling along independent orbits just now: Donald Trump, Sean Spicer, the Beltway press chorus, the White House’s Borgia factions, 2018’s at-risk congressional Republicans, the Schumer Democrats, the mosquito clouds of social media, and the various people working in what little exists so far of the Trump government.

“One more parallel universe deserves mention: the Trump vote, which decided the 2016 election.  Oh, them.

“The Trump vote sits out in the country watching the Washington spectacle of all things Comey, all things Russian, rumors of White House firings, and the president’s tweetstorms.

“Polls suggest most Trump voters aren’t much moved by these events.  After surviving the 2016 election, the Trump voter remains fixed on achieving the Trump agenda – the economy, health care, taxes, education, America’s global standing, financial reform, immigration, infrastructure, trade.  They are willing to put with a lot, because they know that President Donald J. Trump is the only vessel they’ve got.

“Trump voters, however, should not underestimate the dangers of the current Washington circus.  It isn’t a sideshow. It could pull down him and them.”

Thursday... After a measured statement Wednesday night following the appointment of Robert Mueller, Trump woke up and let loose on Twitter, calling the investigations “the single greatest witch hunt of a politician in American history.”  And then he tweeted that there never was a special counsel appointed for Obama or Clinton despite “all of the illegal acts that took place” in the Clinton campaign and Obama Administration.

In a meeting with network anchors, Trump told them the appointment of a special counsel “hurts our country terribly” as it shows how divided the United States is.

“I believe it hurts our country terribly, because it shows we’re a divided, mixed-up, not-unified country.” 

At a joint news conference with Colombia’s President Juan Santos, Trump, when asked about Rosenstein’s decision to appoint a special counsel, said:

“I respect the move, but the entire thing has been a witch hunt, and there is no collusion between – certainly myself and my campaign, but I can only speak for myself and the Russians. Zero.  Believe me, there’s no collusion.”

Asked whether he urged Comey to drop the Flynn investigation, Trump quickly said, “No, no.” before ordering the reporter to move on to the “next question.”

Meanwhile, also Thursday, Deputy AG Rosenstein, in a closed-door briefing with the full Senate, reportedly told them he knew President Trump wanted to fire Comey before he wrote a letter criticizing the FBI director.

Sen. Claire McCaskill (D-Mo.) told reporters after: “He knew that Comey was going to be removed prior to him writing his memo.”

Sen. Dick Durbin said, “He knew the day before...On May 8...”

To me, when I first read these two statements from the senators, it seemed they were attempting to infer Rosenstein was coerced into writing a damning letter, but Rosenstein himself later made clear he stood by his letter.

Separately, Sen. Lindsey Graham (R-S.C.) said that with regards to the Mueller appointment, “The shock to the body is this is now considered a criminal investigation. And Congress’ ability to conduct an investigation of all things Russia is severely limited.  I think a lot of members wanted the special counsel to be appointed, but don’t understand you’re pretty well knocked out of the game.”  [Because potential witnesses might refuse to cooperate out of fear of self-incrimination.]

None of the committees now expect Flynn to willingly come forward, for example, and Thursday, Reuters reported that Trump’s campaign advisers, including Flynn, had contacted Russian officials or others with ties to the Kremlin at least 18 times in the final months of the 2016 campaign.  Six of these contacts, Reuters reports, were between Ambassador Kislyak and Flynn.

Friday... Late in the day, right after Trump took off for Saudi Arabia and the first leg of his nine-day adventure, two stories broke, one in the Washington Post, the other in the New York Times.

The Post reported that a senior adviser inside the White House was a “person of interest” in a probe of possible collusion with Russia during the 2016 election, while the Times reported that Trump boasted to Russian officials at the now infamous meeting in the Oval Office that the firing of James Comey relieved “great pressure” the president faced from the probe into Russian meddling.

“I just fired the head of the FBI,” Trump is alleged to have said.  “He was crazy, a real nut job.”  The Times cited a document summarizing the meeting and read to it by an unnamed U.S. official.  The White House then in a statement did not deny the existence of the document nor the veracity of the remarks.

What is particularly disturbing is that our president, meeting with two thuggish Russians, is disparaging our own FBI director?!  That’s beyond belief.  Cue Jeff Spicoli.

Meanwhile, James Comey agreed to testify in open session before the Senate Intelligence committee after Memorial Day.  Talk about must-see TV.

Robert Kagan / Washington Post

“There was a time, in the early days of the administration, when a decent, patriotic person could make a case for serving this president.  If all the competent people refused, the government would be run by incompetents.  Better to surround President Trump with ‘adults’ than to leave him to his own devices.  Optimists argued that Trump had no beliefs and could be molded like a piece of unformed clay.  Pessimists argued that even if he could not be changed, someone had to save us from his most dangerous errors.  And there was the matter of duty. Like it or not, Trump was the elected president, and when the president calls, you have a duty to serve.

“Those who went into the administration for all these reasons may want to start asking themselves how all this is working out.... People like their jobs, like the power and rarely resign on mere principle.

“This situation is different, however.  Many of those who joined the administration opposed Trump during the campaign, not only because they disagreed with his policies but also because they thought he was unfit for the office.  This was especially so for those involved with national security.  Whether they said it publicly or only among friends, they feared that because of his temperament and his ignorance of world affairs, and because his view of the United States’ purpose was diametrically opposed to theirs, Trump would make a poor if not disastrous president and  commander in chief. When they agreed to work for him, they did not pretend that their  view had changed.  They simply believed that the country would be better served with them in than with them out.

“One can argue that it was worth the experiment, but does there ever come a point when the experiment can be declared a failure?”

Charles Krauthammer / Washington Post

“The pleasant surprise of the First 100 Days is over.  The action was hectic, heated, often confused, but well within the bounds of normalcy.  Policy (e.g., health care) was being hashed out, a Supreme Court nominee confirmed, foreign policy challenges (e.g. North Korea) addressed.

“Donald Trump’s character – volatile, impulsive, often self-destructive – had not changed since the campaign. But it seemed as if the guardrails of our democracy – Congress, the courts, the states, the media, the Cabinet – were keeping things within bounds.  Then came the past 10 days. The country is now caught in the internal maelstrom that is the mind of Donald Trump.  We are in the realm of the id.  Chaos reigns.  No guardrails can hold....

“Trump’s behavior is deeply disturbing but hardly surprising. His mercurial nature is not the product of a post-inaugural adder sting at Mar-a-Lago.  It’s been there all along.  And the American electorate chose him nonetheless.  A decent respect for constitutional governance requires banishing even the thought of invoking the 25th Amendment.  [Ed. removing an incapacitated president.]

“What to do?  Strengthen the guardrails.  Redouble oversight of this errant president.  Follow the facts, especially the Comey memos. And let the chips fall where they may.

“But no tricks, constitutional or otherwise.”

Wall Street

As the flow of earnings reports from the first quarter is largely in, as of early in the week, 72% of S&P 500 companies had topped analysts’ estimates vs. an average of 66%, according to S&P Capital IQ.  Earnings were looking up 15%, 11% ex-volatile energy, with an estimate of 11% for the entire year.

But this is based in no small part on the Trump agenda of tax reform, repatriation in some form, continued deregulation and at least an outline of a massive infrastructure program getting through Congress and that’s where you have the uncertainty that was a large part of Wednesday’s little crashette on Wall Street with the crescendo of concerns over our president’s future, let alone any ‘agenda.’

There was little actual news on the economic front this week, with April housing starts falling more than expected, not good, while April industrial production was the best since Feb. 2014, which is very good.

We close out the week with the Atlanta Fed’s GDPNow barometer calling for second-quarter growth of 4.1%, back up from the prior week’s 3.6%.

But in terms of the Federal Reserve acting to hike interest rates again when it next meets June 13-14, the political uncertainty of the past week certainly has to give board members pause.

Separately, just minutes before Wall Street tanked on Wednesday, former Fed chief Ben Bernanke scolded a roomful of hedge fund moguls and bankers for ignoring the dangers Washington politics can have on their portfolios.

“It always puzzled me that markets are blasé about political risk until the very last moment,” he said at the SkyBridge Alternatives Conference, or SALT, in Las Vegas.

On the repeal and replacing of ObamaCare, it appears Medicaid is the key for Senate Republicans now working on rewriting the House bill.  Some are proposing faster and steeper cuts, while others want a more gradual tapering of funding that would be increasingly shifted to the states.

Europe and Asia

Some economic news for the eurozone.  The first quarter figure for GDP, as published by Eurostat, was up 0.5%, 1.7% year-on-year.  Fourth-quarter GDP was also up 0.5%.

Germany registered 0.6% (1.7% yoy); France 0.3 (0.8%); Italy 0.2% (0.8%); Spain 0.8% (3.0%). 

Greece was -0.1% (-0.5% yoy).

Eurostat also released the April inflation data for the EA19, 1.9% annualized, compared with 1.5% in March and 2.0% in February...and -0.2% ann. in April 2016.

Germany was 2.0%; France 1.4%; Italy 2.0%; Spain 2.6%.

Separately, producer prices in Germany climbed to their highest level in nearly six years, with the PPI up 3.4% annualized in April.

Inflation in the U.K. was at 2.7% in April, as measured by its CPI, the highest since March 2013, according to the Office of National Statistics.  Ex-food and energy the figure is 2.4%.  The Bank of England still sees the CPI peaking under 3% next year.

Retail sales in the U.K., ex-fuel, increased by 2% in April over March, solid, but future growth here is dependent on wage growth (and Brexit) which has been stagnating, up 2.1% in the three months to March from 2.2%; meaning, looking at the above, that wages are essentially only just keeping up with inflation (over three-month periods), and on the verge of falling short should April’s 2.7% CPI pace continue.

At least the overall unemployment rate in the U.K. dropped to its lowest since 1975, 4.6 percent, as noted by the Office for National Statistics.

Eurobits....

--In France, it’s now about new President Emmanuel Macron’s cabinet and attempts to piece together a coalition of voters from both the left and right for the June 11/18 parliamentary elections.  Macron appointed a conservative prime minister, Edouard Philippe, 46, who is the mayor of port city Le Havre. This infuriated many in the conservative Republican Party (the party of presidential candidate Francois Fillon, as well as Nicolas Sarkozy), as it makes it harder for it to recover from its humiliating election defeat to the far-right National Front and Macron’s one-year-old centrist party.

Macron also named Bruno Le Maire, another moderate Republican (Les Republicains), as his economy minister

By week’s end, the polls for the legislative elections had Macron’s Republic on the Move party at 27 percent in the first round, with the Republicans and the National Front both on 20% and the far-left France Unbowed at 14%.  The disgraced Socialists bring up the rear at 11%.  Projections then have Macron ending up with between 280 and 300 seats of the 535 mainland French seats in the lower house of parliament following the run-offs.  Macron needs 289 of 577, overall, including offshore/overseas seats such as from Corsica.

Meanwhile, Macron held his first meeting as president with German Chancellor Merkel and Merkel said the two had agreed on “the historical significance of the Franco-German relationship,” adding, “Europe can only prosper when France and Germany prosper.”

The problems in this relationship in the past few years have largely been economic, as France’s economy stagnated while Germany’s chugged along.  Merkel urged Macron’s predecessor, Francois Hollande, to speed up labor and business reforms, but now Macron has an agenda that would do just that.  This is a prerequisite, Merkel says, to agreeing to any large regional projects between the two.

--On the Brexit front, while formal negotiations won’t begin until after the June 8 British election, Chancellor Merkel told an event with labor union officials in Berlin on Wednesday that “if the British government says that free movement of people is no longer valid, that will have its price in relations with Britain.”

Merkel added that “this isn’t malicious” but if Britain, for example, says that only 100,000 or 200,000 EU citizens are allowed into the country, “we would have to think about what obstacle we create from the European side to compensate for that.”

But here’s an example, as put forward by Merkel, of how complex Brexit is likely to be.

“Currently, the 250,000 pets, cats and dogs that travel from Britain to the continent or the other way around each year are managed within an EU framework.  Now they’ll need hygiene certificates – things we don’t even remember.”

Her whole point is that trade unions play a big role in pushing for a level playing field between Britain and the bloc to minimize disruption to British employers and employees.  “The British auto industry lives on supplies from continental European countries,” she said.  “It is up to the British side, who are expressing the wish to have the fewest possible distortions.”  [Thomas Escritt / Reuters]

As for the latest poll data ahead of the vote, Prime Minister May’s Conservatives are at 47% in a Panelbase survey, with Labour at 33%, both little changed since the last poll.

--Chancellor Merkel was able to strut like a peacock this week because of a huge election win in the state of North Rhine-Westphalia, which is home to more than 20% of German voters overall.  Her Christian Democratic Union (CDU) scored its biggest win over the Social Democrats (SPD) in decades, as the SPD’s vote in the state hit an all-time low, the CDU taking 33% (7% higher than 2012), while the SPD garnered 31% (8% lower than five years ago) and its worst showing since 1947.  [The Liberal Democrats picked up 12.5%, the Greens 6% and the anti-immigrant AfD 7%.]

The significance is that this is the third straight loss in state elections for the SPD and its new chairman and candidate for chancellor, Martin Schulz, after an initial bump in nationwide polls last winter following his selection.

State voting is now over. On to September and the general election and suddenly, Merkel is looking like she will cruise to yet another term.

--Greece was hit hard by a general strike on Tuesday that severely impacted hospitals, transportation services and the like as members of the big trade unions protested new austerity measures that must be approved by parliament in order for the country to receive needed bailout funds to meet July debt payments.

Air traffic controllers stopped work for four hours, no newspapers were published, TV channels were badly hit, doctors and other hospital workers walked out, trains and buses provided only limited service, and the police joined in later.

The latest round of reforms would further cut pensions and end tax breaks.

--Out of nowhere, Austria has called a snap election with a collapse in the current government, which is leaving the door ajar for the far-right Freedom party ahead of what will now be an October 15 national vote, a year ahead of schedule.  Six months ago, it almost won the ceremonial Austrian presidency, but this is far more important and the Freedom party has been surging in the polls.

While the chances for picking up the chancellorship are slim, the odds the Freedom party could be a significant part of a new government are high.  Immigration is a big issue, tiny Austria having received 42,000 asylum requests last year, after 90,000 the previous one.

So just when Europe thought it had beaten back far-right, populist movements in the Netherlands and France, up pops Austria again.  [Best wiener schnitzel in the world is in Vienna... Figlmuller’s.   But bring cash, sports fans!]

Turning to Asia, Japan’s economy started off 2017 on the right foot, with GDP growing by an annualized 2.2% in the first quarter, according to a preliminary reading from the Cabinet Office. This is a full percentage point higher than the fourth quarter and is ahead of estimates, plus the fifth quarter of growth; a shot in the arm for Prime Minister Abe and the longest expansion in Japan since 2006. Stronger global demand, especially for tech-related items, is a big help.

Quarter-on-quarter GDP rose 0.5%, up from a 0.3% rise in the prior quarter.

Domestic demand rose 0.4% compared with Q4.  Importantly, private consumption also rose 0.4% after being flat in December.

Net exports rose 2.1% quarter on quarter (8.9% yoy), solid.

Japan’s producer prices rose for a fourth month in April at a 2.1% annualized clip, the quickest since November 2014.

All in all, good, though the Bank of Japan is not likely to back away from its highly stimulative monetary policy.

Street Bytes

--Stocks would have finished up on the week, save for Wednesday’s big drop, 371 points on the Dow Jones amid the Trump hysteria.  But, overall, the Dow ended down 0.45 to 20804, ditto the S&P 500.  Nasdaq declined -0.6% from its all-time highs.

--U.S. Treasury Yields

6-mo. 1.01%  2-yr. 1.27%  10-yr. 2.23%  30-yr. 2.90%

--Total debt held by American households reached a record in early 2017, exceeding its 2008 peak, but this isn’t necessarily a cause for alarm and the economy is larger than 8 ½ years ago.  And with tougher lending standards, less debt is delinquent.  Mortgages remain the largest form of household borrowing, though consumers have been taking on more automotive and student loan debt.

--U.S. crude inventories dropped last week, though less than expected, while imports registered a nearly million-barrel-a-day increase, according to data released on Wednesday by the Energy Information Administration.

Monday, Saudi Arabia and non-OPEC Russia agreed to extend production cuts for several months, which was the real reason behind a rally in crude prices.

OPEC meets in Vienna on May 25.

--The waves of cyberattacks last weekend appeared, for the time, to be drying up, as networks, companies and government agencies were among those hit by the attack that took advantage of security vulnerabilities in Microsoft software.

The ransomware asked for as little as $300 in bitcoin and by the time this first round was over less than $70,000, across the world, was collected.  But, critically, no one recovered their data as the hackers’ had promised.

The WannaCry attack hit Friday as I was in my 12-hour blind spot (both in traveling and trying to grab some free time at the Jersey Shore), but I would have activated my ’24-hour rule’ anyway.

What we have learned since is the hackers, a la the Sony attack, are most probably from North Korea.  Various security experts, from Symantec to Moscow-based Kaspersky, have identified similar codes used in both instances.

So that daffy little guy with the 6-inch platform heels (that are no doubt a cause of his ankle issues) is once again working his mischief, he and his band of 4’8”, malnourished Orcs, and the story continues down below.

But, for now, of course these attacks will only worsen and I know it scares the heck out of many of you, as it does moi.  I’ve only been writing for, oh, like 7-8 years, that when it comes to North Korea, always sleep with one eye open...or let me worry for you.  It’s free.                                                           

--The Trump administration on Thursday set the clock ticking toward a mid-August start of renegotiations of the North American Free Trade Agreement with Canada and Mexico, an attempt to win better terms for U.S. workers and manufacturers.  U.S. Trade Representative Robert Lighthizer said, “If renegotiations result in a fairer deal for American workers there is value in making the transition to a modernized NAFTA as seamless as possible.”  Lighthizer, in a letter to Congress, said NAFTA needs modernizing in the areas of digital trade, intellectual property rights, labor and environmental standards, food safety standards and more.

--Amazon marked its 20th anniversary as a publicly traded company on Monday and CEO Jeff Bezos had cause to celebrate, further.  At Monday’s closing price of $957.97, Amazon had gained 48,776 percent from May 15, 1997 – the day of its $18 a share IPO.  Pretty, pretty good.

$10,000 would be worth $4.9 million today.

Apple was up only 116 percent in its first 20 years, though it got creamed with the tech crash ahead of its anniversary, Dec. 12, 2000.

Google was up 1,770 percent in its first 13 years as a public company.

--Ford Motor Co. announced on Wednesday it plans to cut 1,400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives as it looks to boost its share price, which has been at a 52-week low recently.  Ford said the cuts would amount to about 10% of 15,000 managers and other non-production workers and would reduce labor costs for that segment by 10 percent.

Ford has been an earnings machine, reporting a record $10.4 billion in pretax earnings in 2016, but auto sales are slowing and sentiment has changed, plus looming in the not too distant future is an industry dominated by autonomous vehicles and car sharing.

Meanwhile, while Donald Trump has been putting pressure on automakers to add jobs in the U.S., and Ford had announced it was adding 700 in Michigan, General Motors has laid off more than 4,000 U.S. jobs since November and is closing operations elsewhere in Europe and Asia, while you can be sure there will be no big ‘new’ plant announcements in the U.S. anytime soon until this current down cycle that the industry seems to be entering provides a clearer picture of what the future holds.

--Speaking of autonomous vehicles, Waymo, the self-driving car unit that operates under Google’s parent company, signed a deal with ride-sharing start-up Lyft. The venture calls for the companies to share autonomous vehicle technology to help bring them into the mainstream through product development and pilot projects. The deal was then confirmed by the two parties.

The deal is big for Uber, as the world’s biggest ride-hailing company deals with a number of legal issues, including a lawsuit brought by Waymo, which says Uber stole its trade secrets to develop such autonomous vehicle technology.

Lyft previously announced a joint venture with General Motors, while Waymo has a partnership with Fiat Chrysler.

--Home Depot reported another kick-ass quarter, with U.S. comp-store sales up a whopping 6%, 5.5% globally.  Good for them.

--Wal-Mart Stores reported stronger-than-expected quarterly sales Thursday, with same-store sales rising 1.4% - the 11th straight quarterly increase, which is darn impressive in today’s environment.  Foot traffic rose 1.5%.  Wal-Mart also announced a surge in its online sales, up 63%, including sales from Jet.com Inc. and other recent e-commerce operations.

The company has been focusing on reducing inventories to smooth store operations and they fell 7.3% in the quarter.

In all, Wal-Mart earned $3.04 billion, compared with $3.08bn a year ago, with revenue increasing 1.4% to $117.54 billion.

--An ambitious turnaround plan by retailer Target that focused on online sales and lower prices to better compete with Walmart and Amazon appears to be paying off.  The company reported same-store sales fell 1.3% in the three months to end of April, which was the fourth straight quarter of decline, but it was far better than the 3.6% drop analysts were forecasting.

Target then gave guidance that full year earnings could be above the midpoint range of its own forecasts.

Revenue slipped 1.1% to $16bn during the quarter, also better than expected, and net income obliterated forecasts.

In February, the company announced plans to spend $7bn remodeling existing stores, expanding its small-store format, and enhancing its e-commerce strategy.

--TJX Co. reported lighter-than-expected first-quarter sales, up 1%, though it was the first time the company hadn’t exceeded its own guidance since Q3 2014.

--Dick’s Sporting Goods Inc.’s same-store sales rose 2.4% for the quarter ended April 29, but this was below expectations and the shares fell sharply, as the company announced it planned to scale back new store openings amid the crisis in traditional retail.  The company warned of an ongoing “challenging retail environment.”

Dick’s is opening 43 stores this year, but now says it will reduce this number to 15 to 20 in 2018 and perhaps just 5 the following year.

Plummeting golf equipment sales have hurt big time in terms of traffic, though with all the sporting goods bankruptcies, most notably Sports Authority, you’d think Dick’s would be doing better.

--Sears’ problems continue.  Monday it announced one of its main suppliers is threatening to sue the retailer to get out of its contract.  Sears then accused One World, a subsidiary of Chinese conglomerate Techtronic Industries and the supplier for its Craftsman power tools brand, of “trying to take advantage of negative rumors about Sears to make themselves a better deal.”

Sears has accumulated losses of $10bn over the past six years, with more than $4.2bn in debt as of the end of January.

--Shares in Cisco Systems fell sharply after the tech giant projected a steeper-than-expected drop in sales and lower-than-forecast profits for the quarter, with Cisco forecasting a 4-6 percent year-over-year decline in revenue for its fiscal fourth quarter, greater than the 1 percent that analysts estimated.

Revenue was $11.9bn, a 1 percent year-on-year decline, while net income rose 7 percent compared with a year ago.

The company also announced an additional 1,100 workers would be laid off, on top of a previously announced 5,500 back in August.

CEO Chuck Robbins is trying to shift the business from hardware to software and services. The company has made gains in areas such as security, but faces weak demand in its core networking hardware business.

--John Simons / Wall Street Journal: “IBM is giving thousands of its remote workers in the U.S. a choice this week: Abandon your home workspaces and relocate to a regional office – or leave the company.

“The 105-year-old technology giant is quietly dismantling its popular decades-old remote work program to bring employees back into offices; a move it says will improve collaboration and accelerate the pace of work.”

This is what happens when you report 20 consecutive quarters of falling revenue, boys and girls.  What’s kind of funny is one of IBM’s prime focuses has been on marketing its services and software for what it calls “the anytime, anywhere workforce.”

--Deere & Co. on Friday reported fiscal second-quarter net income of $802.4 million, far surpassing Wall Street’s expectations and the shares soared 8% on the news.  The agricultural equipment manufacturer posted revenue of $8.29bn, which also topped the Street.

--Twitter co-founder Biz Stone announced he would be returning full time.

“My top focus will be to guide the company culture, that energy, that feeling,” Stone said in a blog post.  Stone added he wouldn’t be replacing anyone.

Twitter CEO Jack Dorsey had asked Stone to return.

--According to Institutional Investor’s Alpha magazine, the top 25 best-paid hedge fund managers earned a collective $11 billion in 2016.  Nearly half made single-digit returns for their investors, a crappy sum when measured against the S&P 500’s up 12%, including reinvested dividends.

James Simons, founder of Renaissance Technologies, was tops at $1.6 billion, while Ray Dalio of Bridgewater Associates took home $1.4 billion.

Frustrated investors took $70 billion out of the $3 trillion industry last year.

I totally agree with New York City comptroller Scott Stringer (Dem.), who said, “When a manager collects a fee without adding value, it’s just not right.”

David Tepper of Appaloosa Management, who used to set up shop most of the year about a one-minute drive from me, but whose base is now in Florida, made $700 million.

--Hedge fund manager Leon Cooperman settled his insider trading case with the Securities and Exchange Commission, paying $4.9 million in civil penalties and forfeited profits without admitting or denying any guilt (standard practice).  Most importantly, Cooperman, 74, will not be barred from the securities industry.

Cooperman, according to the above-referenced report from Institutional Investor, made $225 million last year.

--This was the week when the television networks pitched advertising executives and marketers. CBS declared victory for the 14th time in 15 years as the most-watched network in the U.S.

But CBS’ prime-time audience fell 12% this season, which is ending, and is 20% lower in the key 18-to-49 demographic. [Part of this was due to the yearly comparisons that included one-off events, such as CBS having the Super Bowl in 2016, and not having it this year.]

But “The Big Bang Theory,” the No. 1 comedy on all of TV, saw its audience decline 9% and that hurt CBS’ numbers.

TV ad sales fell this past quarter for the first time since 2010, while online rivals like Google and Facebook posted gains of 19% and 46%.

--NBC confirmed Megyn Kelly will be premiering her Sunday news magazine program in June, running opposite “60 Minutes.”  While I have pooh-poohed this idea, the advantage for Kelly is that “60 Minutes” will be in re-runs, though in the past they’ve rushed out an original story or two depending on the news cycle.  So Megyn has a shot at getting a toehold before the fall.

Kelly will also have her day-time show at 9:00 a.m.

--Christie’s had a great first night with its spring auction, $289.2 million for impressionists and modern art helped along by bidding from Chinese buyers.  A 1913 sculpture by Romanian Constantin Brancusi, “Sleeping Muse,” went for $57.3 million, surpassing its $35 million estimate. 

Separately, Sotheby’s sold a 1982 painting, “Untitled,” by Jean-Michel Basquiat for $110.5 million, to become the sixth most expensive work ever sold at auction.  Only 10 other works have broken the $100 million mark.

Said dealer Jeffrey Deitsch, “(Basquiat) is now in the same league as Francis Bacon and Pablo Picasso.”

The buyer is a Japanese tech billionaire.

--The restaurant business in New York City has been a disaster in terms of P&L, due largely to outrageous rents.  While I can’t remember having been to Upper West Side spot Isabella’s, which just closed, per Crain’s New York Business, it’s illustrative of the predicament faced by restaurateurs. 

Isabella’s was a popular brunch spot near the Museum of Natural History, but it had an expiring lease and the landlord chose not to renew, according to the owners in a letter to customers.

The bottom line is asking rents for retail space along Columbus Avenue were $412 per square foot last fall, 18% higher than in the previous year and 65% higher than five years ago, which is outrageous given the minimal inflation rate over that time, let alone low food costs.  [Hell, if you can’t find a 2 frozen meals for $5 special at your local supermarket these days, or a box of pasta for a $1, or good pasta sauce for $2, you aren’t looking!]

Isabella’s appeared on Seinfeld and Curb Your Enthusiasm.

--Speaking of closings and local business conditions, the owner of Mountain Creek, a popular ski resort and waterpark here in New Jersey (yes, those of you not in the know...we have legitimate ski areas), is seeking Chapter 11 protection.

Hardly a surprise, given that we’ve had about four miserable winters for skiing and snowboarding in the last five.

But in this case the company is pointing to “legacy debt” from the former owners.  Mountain Creek Management LLC plans on continuing operations while they restructure, but you have to be from around this area to understand this is like the 11th different owner in just the last 30 years.  My buddies and I used to go up there when it had a Playboy Club, by god, and that didn’t end well...the club that is, not my buddies and I, I hasten to add.

--Brad Grey, the former head of Paramount Pictures for more than a decade after a long career as a TV producer, died last Sunday of cancer at the age of 59.

Grey led the studio known for the “Transformers” and “Star Trek” movies for 12 years.  He was ousted from the Viacom-owned studio in February, following a series of box-office flops and big losses.

Grey grew up in the Bronx, the son of a New York garment industry salesman, and sold belt buckles made in his grandfather’s factory when he was in high school.  While in college he got his break as a gofer for concert promoter Harvey Weinstein, who would later go on to co-found Miramax Film Corp.

Before joining Paramount, Grey’s Brillstein-Grey Entertainment represented stars such as Brad Pitt and Adam Sandler and produced such TV shows as HBO’s “The Sopranos” and “Real Time With Bill Maher.”  [Ryan Faughnder / Los Angeles Times]

--In the here and now, last weekend, Warner Bros.’ “King Arthur: Legend of the Sword,” took in only $14.7 million, well below expectations, and with a $175 million price tag, one of the big busts of the past few years, unless it’s a big hit overseas, and last weekend it did take in $29 million elsewhere.  “Guardians of the Galaxy Vol. 2” remained atop the box office.

--L.A. Reid, the head of Sony Music Entertainment’s Epic Records, left the company amid accusations of harassment from a female assistant.

Reid is responsible for signing Bobby Brown, Boyz II Men, TLC, Mariah Carey, Kanye West, Rihanna and Jennifer Lopez.

--Editorial / Wall Street Journal

“If Ronald Reagan was rightly called the Great Communicator, Roger Ailes, who died Thursday at age 77, has to be considered the greatest creator of communicators in the history of politics or television.

“Political professionals talk about the importance of ‘getting your message out.’  Ailes knew the message mattered, but he also knew the message wasn’t worth much unless you knew how to deliver it.

“Ailes relished challenges, so it’s no surprise that his first political client was presidential candidate Richard Nixon, who told Ailes in 1967 that TV was a gimmick.  ‘If you think that,’ Ailes replied, ‘you’ll lose again.’  In 1968 Nixon defeated Hubert Humphrey.  Ailes would later advise Ronald Reagan, George H.W. Bush and after the trauma of 9/11, George W. Bush.

“Any understanding of Ailes’ success, though, must always return to the medium of television.  His TV career started in 1962 in Cleveland as a property assistant for ‘The Mike Douglas Show,’ a daytime talk show.  At age 27 he was executive producer for the likeable Douglas, and the show became a hit.

“Ailes’ biggest TV moment arrived when Rupert Murdoch, the owner of this newspaper, asked him to start a cable news channel in 1996. Fox News rose and eventually rolled over rival cable networks CNN and MSNBC.

“Ailes’ competitors and critics acknowledged his success with Fox but never could understand how this ‘conservative’ channel attracted and held so many viewers.  Asked how he accounted for this, Ailes told us it was pretty simple: NBC, CBS, ABC and his cable competitors aimed their programming at audiences on the East and West Coasts.  He programmed for the country in between....

“A relentless competitor, Ailes thought traditional television had tilted its news and U.S. politics by elevating a single point of view.  He saw a market for news and commentary that no one else offered, and he filled it.

“Ailes’ career ended at Fox amid allegations of sexual harassment, but it is hard to overstate the importance of his legacy in television and American politics. He rebalanced both in the U.S.  The competition in both will continue, but Roger Ailes redesigned the playing field.”

Former President George H.W. Bush tweeted: “He wasn’t perfect, but Roger Ailes was my friend and I loved him. Not sure I would have been President w/o his great talent, loyal help. RIP.”

Fox News host Sean Hannity, said in part in a statement: “Today America lost one of its great patriotic warriors. RA. For Decades RA has impacted American politics and media. He has dramatically and forever changed the political and the media landscape singlehandedly for the better. Neither will ever be the same again as he was a true American original.”

Others were far less charitable.

Ailes died from complications after suffering a fall at his home in the bathroom, where he struck his head.

I do have to add that among his many accomplishments, in 1993 he took a struggling CNBC and turned it into a financial success.

Foreign Affairs

Syria/Iraq/Turkey: Thursday, Turkey’s government called for the removal of the U.S. diplomat coordinating the international coalition fighting ISIS in Iraq and Syria, accusing Brett McGurk of giving support to the Syrian Kurdish militias that Washington and Ankara have been at odds over.  Again, Turkey considers the Kurdish People’s Protection Units (YPG) in Syria to be a front for the Kurdistan Workers’ Party (PKK) separatists that Turkey has been waging a decades-long war with inside Turkey.

Last year, during a visit to the Syrian town of Kobane that was under Kurdish control, McGurk received a plaque, which pissed off Turkey. At the time, President Erdogan told Washington it’s us or them, the “terrorists.”

But while Turkey is unhappy with McGurk, Ankara did say that talks earlier this week in Washington between President Trump and Erdogan had gone well, with the two pledging to improve ties, though Erdogan still warned against arming the Kurds.

Turkey wants to join the fight to retake Raqqa from ISIS, but only if the Kurds aren’t involved, while the U.S. is arming the YPG in the battle to do just that, telling Ankara that the weapons being given the YPG won’t be used later against Turkey.

As for the meeting between Trump and Erdogan, there was a major incident outside that got attention.

Editorial / Washington Post

“President Trump laid out the welcome mat this week for Turkish President Recep Tayyip Erdogan, and the strongman apparently felt so much at home he thought it okay for his thugs to beat up peaceful demonstrators.  That Mr. Erdogan has unfortunately been successful in stifling dissent in Turkey doesn’t give him license to come to this country and attack one of its most basic, and cherished, freedoms. It must be made clear that this behavior is unacceptable and will not be tolerated.

“A violent confrontation Tuesday evening outside the Turkish ambassador’s residence in Northwest Washington resulted in 11 people being injured.  Two people were arrested and charged with misdemeanor assault, and D.C. police said Wednesday the investigation is continuing....Particular scrutiny needs to be paid to the actions of Mr. Erdogan’s security guards, who, a state-owned Turkish news service confirmed, were involved in the fighting because – can you believe the gall? – they didn’t think police were doing enough to quiet the protest.... According to D.C. Police Chief Peter Newsham, the situation was especially ‘dicey’ because some of the Turkish guards were armed.”

Fethullah Gulen / Washington Post...Erdogan’s main rival, living in exile in Pennsylvania.

“As the presidents of the United States and Turkey meet at the White House on Tuesday, the leader of the country I have called home for almost two decades comes face to face with the leader of my homeland. The two countries have a lot at stake, including the fight against the Islamic State, the future of Syria and the refugee crisis.  But the Turkey that I once knew as a hope-inspiring country on its way to consolidating its democracy and a moderate form of secularism has become the dominion of a president who is doing everything he can to amass power and subjugate dissent.

“The West must help Turkey return to a democratic path....

“Since July 15, following a deplorable coup attempt, Turkish President Recep Tayyip Erdogan has systematically persecuted innocent people – arresting, detaining, firing and otherwise ruining the lives of more than 300,000 Turkish citizens, be they Kurds, Alevis, secularist, leftists, journalists, academics or participants of Hizmet, the peaceful humanitarian movement with which I am associated.

“As the coup attempt unfolded, I fiercely denounced it and denied any involvement. Furthermore, I said that anyone who participated in the putsch betrayed my ideals.  Nevertheless, and without evidence, Erdogan immediately accused me of orchestrating it from 5,000 miles away....

“In April, the president won a narrow referendum victory – amid allegations of serious fraud – to form an ‘executive presidency’ without checks and balances, enabling him to control all three branches of the government. To be sure, through purges and corruption, much of this power was already in his hands. I fear for the Turkish people as they enter this new stage of authoritarianism.”

In Iraq, Iraqi forces said they have recaptured nearly 90 percent of west Mosul from ISIS, with the militants being on the verge of “total defeat,” according to a military spokesman.  Assuming the battle is declared over in the next week or so, that would mean the operation took seven months from the start last October.  The death toll in the battle, including of civilians, is not known, but this will be an important victory for Iraq’s military as it no doubt will face other threats in the coming years.

In Syria, the government is essentially back to full control over Damascus after the suburbs had been ravaged in the six-year war, forcing tens of thousands to be displaced.  Rebels have now evacuated some of the last Damascus districts under their control...their dream of toppling a five-decade-old government shattered.  Whatever pockets of resistance still exist, the rebels are operating in shattered neighborhoods. 

The capital of Damascus itself, with its approximately 1.6 million inhabitants, has largely been insulated from the fighting.

But the United States said on Monday it has evidence President Bashar Assad had built a crematorium near the site of the Sednaya prison, according to the State Department. The crematorium would be used to dispose of bodies from the prison where “tens of thousands” have been detained during the war.  We have known, I have told you, since the war’s early days how Assad has been torturing and killing untold numbers of those in opposition and the truth, when we finally learn the details from defectors and the like, will be beyond horrifying.  It’s virtually all on Obama. I long proved that.

[Amnesty International recently said in a report that, based on the testimony of witnesses, somewhere between 5,000 and 13,000 had already been executed at Sednaya over five years.]

Separately, in a significant development, the United States launched an airstrike against Syrian forces that had been attacking U.S.-backed Syrian rebel forces, Defense Secretary Jim Mattis telling reporters at the Pentagon that the U.S. strike was defensive in nature, while later we learned the Syrian forces were being directed by Iran.  The Assad government condemned the action, while your editor cheered.

This is the first such strike by the U.S. specifically against Syrian forces, but this does not suggest a shift in policy.

Iran: Voters went to the polls today to elect a new president, the race between President Hassan Rouhani and hardline cleric Ebrahim Raisi, Raisi having called for a much tougher stance against the West.

Polls were kept open an extra six hours and I’m seeing on the wires as I go to post that Rouhani is winning handily. 

Separately, Tehran criticized the levelling of new sanctions on Iran’s missile program, saying it undermined a 2015 nuclear deal.

“Iran condemns the U.S. administration’s ill will in its effort to reduce the positive results of the country’s implementation of JCPOA (nuclear deal) commitments by adding individuals to the list of unilateral and illegal extraterritorial sanctions,” said foreign ministry spokesman Bahram Ghasemi.  [FT]

Reuel Marc Gerecht / Wall Street Journal

“In Washington there is a consensus that the re-election of Iranian President Hassan Rouhani is in the best interests of the U.S.  Most find the self-avowed pragmatic cleric, who championed the 2015 nuclear deal, a less menacing choice than his ‘hardline’ opponent Ebrahim Raisi, who is rumored to be the preferred candidate of Supreme Leader Ayatollah Ali Khamenei.

“But a victory for Mr. Rouhani, who appears destined to win unless Mr. Khamenei rigs the election in Mr. Raisi’s favor, would be the worst possible outcome. Better than anyone, Mr. Rouhani can align Iran’s factions on major foreign-policy questions.  Put another way, he is uniquely capable of fortifying the theocracy.

“Mr. Rouhani and the supreme leader go way back.  They worked together after the 1979 revolution to purge the Iranian army.  Mr. Rouhani is also a founding father of the feared Iranian ministry of intelligence. He took the supreme leader’s side in the brutal suppression of the pro-democracy Green Movement in 2009-10, which was probably the most dangerous time for the clerical regime since Saddam Hussein’s invasion in 1980.

“Despite the decades-old feud between him and Mr. Khamenei’s praetorians, the Revolutionary Guard Corps, Mr. Rouhani has tried to maintain amicable relations with senior officers, including Maj. Gen. Qasem Soleimani, the head of the expeditionary Qods Force and the overall commander of the foreign Shiite militias deployed to Syria and Iraq.  Mr. Rouhani is as ardent a supporter of Iran’s new Shiite imperialism as is Gen. Soleimani....

“It ought to be clear that Washington isn’t better off with a more powerful Islamic Republic, the ultimate objective of Mr. Rouhani. The Revolutionary Guards’ budget is going up 24% this year.  Although enormously appealing to Western businessmen and politicians, the moderation-through-trade argument that President Obama advanced during the nuclear talks isn’t historically sound....

“Washington would be far better off if a ‘hard-liner’ won the presidential contest. It would make it more difficult for Congress and the Trump administration to deceive themselves about Iran’s intentions. It would increase the distance between the Iranian people and their overlords, improving the chances that the Revolutionary Guards, who had difficulty shooting demonstrators in 2009, will splinter.

“Opposition to clerical dictatorship will erupt again – the sooner the better given the nuclear deal’s temporary restraints.  Mr. Rouhani’s promise is an illusion for those weary of the Middle East.  Like a mirage on the desert’s edge, this mullah beckons fools.”

I totally agree with Mr. Gerecht, but it doesn’t seem as if we’ll get the right outcome.

Israel: Multiple top former Israeli officials, breaking with the government’s current line, called President Trump’s leak of intelligence to Russia deeply troubling.

While U.S. Ambassador Ron Dermer and others played down the riff by emphasizing the strength of U.S.-Israeli intel sharing....

Elliot Cohen / Defense One

“Russia is antagonistic to the United States, although Trump has repeatedly indicated his desire to be chummy with them – after all, as he notoriously said during the presidential campaign, we are both killers, and so on the same moral plane. He apparently divulged the information to show off, which not only shows a lack of self-discipline: It shows, yet again, how easy this man is to play, particularly by veteran manipulators like his two experienced, talented, and thuggish guests.  The crisis is made worse by virtue of Trump having just fired the FBI director, apparently for having pushed that Russia investigation too far.

“Quite apart from making himself and the country a laughingstock around the world, the president has now practically begged Vladimir Putin to toy with him, tantalize him, tease him, flatter him, manipulate him.  He has shown the Russians (and others, who are watching just as closely) just how easy that is to do, and he has shown the rest of us that his vanity and impulsiveness have not been tempered by the highest responsibilities....

“(It) seems likely that the Russians captured all of the conversation – they were allowed to bring their electronics into the room, including the only video cameras, the American press having been excluded – they undoubtedly got all of it.

“But that is not the half of it. Tillerson casually said of Trump in an interview on Meet the Press on Sunday ‘I have to earn his confidence every day.’ One does not earn Donald Trump’s confidence by calmly conveying to him some unpleasant but essential truths. Rather, one earns his confidence by truckling to him, and by lying to everyone else.  ...

“One can be certain that (metaphorically speaking) at this very moment ice picks are sliding into unsuspecting kidneys in the White House.  No doubt the president is raging at the cowed subordinates who have to cover yet again for his folly and grandiosity; no doubt that some subordinates see this as an opportunity to settle scores, undermine rivals, and curry favor. It is probably a fascinating if odious spectacle....

“And all of us should begin contemplating the conditions under which – not now, maybe not even a year from now – the constitutional remedies for dealing with a president utterly incapable of fulfilling his duties with elementary probity and competence will have to be implemented.”

Yemen: A cholera outbreak had killed 209 people as of Wednesday, according to the UN’s children’s agency.  But the figure is expected to explode as 3,000 cases a day are being reported.

Cholera is a highly contagious bacterial infection spread through contaminated food or water. Hospitals are struggling to keep up, with half of the nation’s facilities having fallen victim to the devastating civil war that has killed more than 8,000, with 40,000 wounded.

The UN has been warning 2/3s of the population is on the brink of famine.

Libya: Fighting between rival forces in Benghazi killed at least 60 during this week.

But then I saw tonight that an attack on a southern air base killed as many as 141 people, with 103 being Libyan National Army troops.  Some civilians were executed.  I haven’t seen who carried it out.

North Korea: On Wednesday, South Korean President Moon Jae-in said there was a “high possibility” of conflict with North Korea, as it presses ahead with nuclear and missile programs it says it needs to counter U.S. aggression.

President Moon said hours earlier he wanted to reopen a dialogue with Pyongyang as he seeks a two-track policy, involving sanctions and diplomacy.

This was in response to Sunday’s highly-troubling ballistic missile test, again in total defiance of UN Security Council resolutions, which North Korea said was a test of its capability to carry a “large-size heavy nuclear warhead.”  It was also clearly a message to newly-elected Moon.

Moon said it’s clear the North’s missile program has advanced rapidly, and what makes Sunday’s test so disturbing is the missile was shot at a steep angle and reached an altitude of 1,242 miles (another report said 1,312), traveling about 490 miles and landing near Russia.  Had the altitude been straightened out, the missile would have been able to target, for example, the U.S. base on Guam.  It was the longest-range missile the North has ever tested.

China urged restraint from all parties on the “complex and sensitive” situation on the Korean peninsula.  Japanese Prime Minister Shinzo Abe told reporters the test was “a serious threat to Japan.”

What did I tell you last fall; watch Fourth of July and Guam.  Yes, these rockets are hardly accurate, and we still don’t know whether North Korea has the ability to make their nuclear weapons small enough to be mounted on a rocket of this kind, and it has never tested a long-range ICBM that could reach the U.S.

But I’ve been pounding the table, saying Pyongyang was making far more rapid progress than the “experts” in the field believed, and now we know this is indeed the case. 

China: Two Chinese Sukhoi Su-30 jets conducted what is being called an “unprofessional” intercept of a U.S. aircraft over the East China Sea, the U.S. military reported.  One of the Chinese jets came as close as 150-feet to the U.S. WC-135 plane and flew upside down above it, according to CNN.  The U.S. aircraft was a sniffer/reconnaissance plane, used to detect evidence of possible nuclear tests by North Korea.

And in the South China Sea, China has installed rocket launchers on a disputed reef to ward off Vietnamese military combat divers (yes, divers), according to a state-run newspaper.  It’s being described as an anti-frogman rocket launcher defense system. The Vietnamese have been installing large numbers of fishing nets in the Paracel Islands.  [We need to arm the fish to go after both sides.]

Meanwhile, Taiwan President Tsai Ing-wen is calling for more cooperation from China to help her rein in hardliners on the island that China considers its own, But Beijing is unlikely to make any major moves ahead of its five-yearly Communist Party Congress this fall.

Tsai, who has now been in office one year, is facing a surge in anti-China sentiment as Beijing pressures it to accept its “one China” policy.  The latest surveys have 70 percent of Taiwanese not accepting it.  Tsai knows that China’s biggest fear is that she is forced to call an independence referendum, which, as I’ve noted for years, would force China to respond militarily.

On another diplomatic front, Chinese President Xi Jinping said in a meeting with a special envoy from South Korea in Beijing that he’s willing to talk with South Korea in an attempt to return to a “normal track” in relations, following a rift over the deployment by Seoul of the U.S. missile-defense system, THAAD, which is guarding against the North Korean threat.

On a totally different issue, President Xi pledged $124 billion on Sunday for his new Silk Road initiative, using a summit on the topic to bolster China’s global leadership ambitions.

“We should build an open platform of cooperation and uphold and grow an open world economy,” Xi said at the opening of the two-day gathering in Beijing.

The Silk Road project, also called the Belt and Road initiative, is aimed at expanding links between Asia, Africa, Europe and beyond.

Since it all boils down to infrastructure – roads, railways, ports and such – everyone is scrambling to get their share of the eventual projects, but some, such as India, worry about “sovereignty and territorial integrity,” as their foreign minister put it.

Lastly, today, Philippine President Rodrigo Duterte said that President Xi had warned him there would be war if Manila tried to enforce an arbitration ruling and drill for oil in a disputed part of the South China Sea.  Openly saying this will no doubt tick off Beijing to no end.

Duterte described a recent conversation between the two.  “We intend to drill oil there, if it’s yours, well, that’s your view, but my view is, I can drill the oil, if there is some inside the bowels of the earth because it is ours.”  Duterte then said Xi’s response was, “We’re friends, we don’t want to quarrel with you, we want to maintain the presence of warm relationship, but if you force the issue, we’ll go to war.”

Brazil: The markets here have been cratering as President Michel Temer is under investigation in connection with the massive corruption scandal, with the country’s Supreme Court confirming what most suspected.  A leading Brazilian newspaper reported that prosecutors have recordings of Temer from March purportedly encouraging a corporate executive to keep making payments to silence a former Speaker of the House, who was convicted that month of corruption and money laundering.  So the calls for Temer’s impeachment are growing.  For his part, Temer said on Thursday that he wouldn’t step down.

“I did not buy the silence of anyone,” Temer said.  “I will not resign.”  Brazil’s Bovespa stock index lost 9 percent on the news, the steepest fall since the 2008 financial crisis.

The allegations come less than a year after Temer played a key role in the impeachment of his predecessor, former President Dilma Rousseff.

Random Musings

--One thing you aren’t going to see on Trump’s trip to Europe is a lot of hugging from European leaders.  They will be doing all they can to avoid being seen getting chummy with our damaged leader.

--A new Reuters/Ipsos poll released Friday has President Trump with a 38% approval rating, 56% disapproving.

--A Wall Street Journal/NBC News poll found that only 29 percent of Americans approve of Trump’s ousting of FBI Director Comey, with 38 percent disapproving, while 32 percent did not have an opinion of Comey’s removal.

Among independents, 21 percent approve of the change, while 36 percent disapprove.

In this survey, Trump’s approval rating dropped to 39 percent, while 54% disapprove.  35% of independents approve, 54% disapprove.

Meanwhile, the same WSJ/NBC survey also found that 23% approve of the GOP’s health-care legislation, while 48% thought it was a bad idea.  Among independents, 18% called the bill a good idea and 44% called it a bad one.

--Secretary of State Rex Tillerson responded to Sen. John McCain Sunday, after McCain, in an op-ed last week, called out Tillerson and warned it is “dangerous” to look at foreign policy as “simply transactional, referencing prior remarks of Tillerson’s, who said conditioning U.S. foreign policy too much on values forms barriers to advancing the country’s national interests.

“With those words, Secretary Tillerson sent a message to oppressed people everywhere, ‘Don’t look to the United States for hope,’” McCain wrote.

Sunday, on NBC’s Meet the Press, Tillerson sought to clarify.

“America’s values of freedom, of treatment of people, human dignity, freedom of expression throughout the world, those are our values. Those are enduring values. They are part of everything we do,” he said. 

“But I make a distinction between values and policy.  A policy has to be tailored to the individual situation. To the country. To its circumstances. To the broader issues that we are addressing in terms of advancing our national security interest, our national economic interest.”

--Michael Goodwin / New York Post...Goodwin being a long-time Trump supporter.

The following was written before this week’s events, but after the Comey firing....

“Some days, Trump gets the level of difficulty, telling Reuters about his first 100 days, ‘I thought it would be easier.’

“Other days, he gets everything backward, making it hard for supporters to defend him and easy for opponents to attack. This is not merely annoying.

“The exasperating pattern has been and remains the existential threat to Trump’s presidency, given his precarious public standing and his party’s narrow margin in Congress. He will not be able to deliver on his promises to revitalize the economy and rebuild the military unless he establishes wider support for his agenda and more trust in his judgment.

“The task applies to politicians and ordinary citizens alike.  Both need frequent reassurance he is up to the job....

“Then there’s Trump himself, who keeps adding fuel to the bonfire.  His comment to NBC that he had decided to fire Comey before Attorney General Jeff Sessions and his deputy, Rod Rosenstein, had recommended it contradicted the official explanation of the chronology.

“The press office and Vice President Mike Pence cited the Sessions-Rosenstein recommendation to explain the decision.  In fact, Trump’s letter to Comey cited it, too, saying, ‘I have accepted their recommendation and you are hereby terminated and removed from office, effective immediately.’

“Suddenly, that was no longer true, delivering a blow to the administration’s credibility.

“Then Friday, Trump upped the ante by warning darkly about ‘tapes’ in a tweet that cautioned Comey no to leak.  A president igniting speculation about secret Oval Office recordings is like a shipbuilder musing about the Titanic.  No, no, no....

“I recognize it’s still early days for the administration, and that Trump’s talent for disruption is a big part of his appeal.  I also recognize that his campaign often veered off-road and he still pulled off one of the great political upsets in American history.

“But a presidency, for all its power and grandeur, is fragile.  Its strength comes from the consent of the governed and the mandate to lead must be constantly earned and expanded.  Nothing is guaranteed.

“Trump may thrive in chaos, but his staff, the government and the public require more order and certainty. Because he inherited plenty of crises, there’s no need to create new ones.

“So here’s my plea, Mr. President: Make it easier for others to keep the faith. You’ll accomplish much more and many more Americans will be proud to stand with you.”

--White House chief of staff Reince Priebus issued a stern warning at a recent staff meeting: Quit trying to secretly slip stuff to President Trump. Aides have been slipping him stories outside the formal information stream that are often fake stories intended to press the aide’s policy agenda.  Negative press clips in particular often cause a volcanic reaction from the president, according to a Politico story.

--San Antonio Spurs coach Gregg Popovich, popping off before the week’s political events broke, without mentioning Donald Trump’s name.

Asked whether the state of the world distracts him:

“Absolutely. It’s got nothing to do with the Democrats losing the election.  It’s got to do with the way one individual conducts himself and that’s embarrassing.  It’s dangerous to our institutions and what we all stand for and what we expect the country to be, but for this individual he’s in a game show.  And everything that happens begins and ends with him, not with our people or our country.  Every time he talks about those things that’s just a ruse.  That’s just disingenuous, cynical and fake.”

--House Majority Leader Kevin McCarthy (Calif.) found himself in trouble over a comment caught on tape, a private conversation with GOP leaders on Capitol Hill last year, according to the Washington Post.

“There’s two people I think Putin pays: Rohrabacher and Trump,” McCarthy can be heard saying in the June 15, 2016 exchange.  “Swear to God,” he added, while his colleagues laughed.

House Speaker Paul Ryan, who was one of several lawmakers in attendance, is heard asking the comments be kept to themselves.

“No leaks,” Ryan told his lieutenants, according to the Post.  “This is how we know we’re a real family here.”

Rohrabacher, a Republican congressman from California, has been a noted defender of Putin and Russia.

McCarthy told reporters Wednesday night that it was a “bad attempt at a joke.”  “That’s all there is to it.  No one believes it to be true from any stretch of fact.”

This is much ado about nothing.  McCarthy’s comments came one day after the Washington Post reported that Russian hackers had infiltrated the computer network of the Democratic National Committee.

--The chairman of the House Oversight and Government Reform Committee, Utah Republican Jason Chaffetz, made it official. He was resigning from the House as of June 30.  The powerful job is apparently South Carolina Rep. Trey Gowdy’s if he wants it.  Step up to the plate, Trey.

--U.S. arrests of suspected illegal immigrants rose by nearly 40 percent in the first 100 days of the Trump presidency, following executive orders that broadened the scope of who could be targeted for immigration violations, according to data from the Immigration and Customs Enforcement agency.

--The only two states in the union to have gubernatorial races this year are New Jersey and Virginia.  In my state it seems Democrat Phil Murphy is a lock, though I have voiced my support for Republican Jack Ciatterelli in the primary.

But in Virginia, which has a primary June 13, the likely Republican nominee is Ed Gillespie, the former chairman of the Republican National Committee, who by all accounts has run a terrific campaign.  Very likeable guy, in my estimation, though we’ll see how his support of Trump to date impacts the race in the fall.  Trump has only a 36% approval rating in Virginia, as reported by the Washington Post.  More on the Democratic side in this race post primaries, current Democratic Gov. Terry McAuliffe being prohibited from seeking a second consecutive term.

--In a new Quinnipiac University poll of New York City voters, Mayor Bill de Blasio suddenly has his highest job approval since taking office, 60%, as he heads into the fall’s election.

De Blasio has zero competition from the Republicans and will roll, with polls showing he would win by a 3 to 1 margin.

Among black voters, 80% said they would vote for the mayor over his Republican rivals, while 73% of Hispanic voters would.  Among white voters, that figure was 48%.

--Hillary Clinton unveiled her new political action organization, Onward Together, which will fundraise for five prominent progressive groups.

“I believe more fiercely than ever that citizen engagement at every level is central to a strong and vibrant democracy,” she wrote in an email to supporters.

Just go away.

--Hillary’s former top aide, Huma Abedin, finally filed for divorce from her disgraced husband Anthony Weiner – the same day he pleaded guilty to sexting with a minor.  As Weiner is soon-to-be officially labeled a sex offender, there is little doubt Huma holds all the cards and will gain custody of their 5-year-old son.

Because he pleaded guilty, Weiner’s sentence will only be between 21 and 27 months in prison.  I doubt he will survive the experience.

--After a seven-year legal impasse, Swedish prosecutors dropped their rape investigation into WikiLeaks founder Julian Assange Friday.  Sweden based its decision on its inability to try Assange following his flight to the Ecuadorean embassy in London five years ago, with authorities saying all options “are now exhausted.”

Assange hasn’t wanted to face charges in Sweden because he didn’t want to risk being extradited to the United States.  His lawyer in Sweden said it’s a total victory for him.

But if Assange leaves the embassy, London’s Metropolitan Police have said it was “obliged” to execute an arrest warrant issued in 2012 after Assange failed to properly surrender to British authorities.  However, now the Met police could waive this.

--David P. passed on a piece from Collin Binkley of the Associated Press that I had missed.

“Black students at Harvard University are organizing a graduation ceremony of their own this year to recognize the achievements of black students and faculty members some say have been overlooked.

“More than 700 students and guests are registered to attend Harvard’s first Black Commencement, which will take place two days before the school’s traditional graduation events.  It isn’t meant to replace the existing ceremony, student organizers say, but rather to add something that was missing.

“ ‘We really wanted an opportunity to give voice to the voiceless at Harvard,’ said Michael Huggins, president of the Harvard Black Graduate Student Alliance.

Voiceless at Harvard? I hardly think so. But whatever floats your boat.

--I normally don’t comment in this column on stories such as the tragic death of a student at Penn State, who died after being forced to drink too much during a fraternity hazing ritual, only to be abandoned by his ‘brothers’ after being seen stumbling a number of times, and then taking a hard fall, clearly injuring himself, and yet it was nearly 12 hours before anyone called 9-1-1.

What gets me is the institutional blindness, insensitivity and stupidity exhibited by the Penn State hierarchy, in this case from President Eric J. Barron on down; this after you’d think the school had learned something from the Jerry Sandusky mess.

I mean the idiots at Penn State recently elected Jay Paterno to the Board of Trustees.  Even Sports Illustrated selected this as the week’s “Sign of the Apocalypse.”

--Nebraska Republican Sen. Ben Sasse has written a book, The Vanishing American Adult, in which he speaks of an American crisis of loneliness and disconnection, and how parents need to take back responsibility for their children’s upbringing from schools, and ensure the children travel widely, work hard, and “become truly literate.”

I’ve been following him.  He’ll be running for president.  And he’s likely to get my support.

Wouldn’t be a bad Veep either under President Pence.

---

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

God bless America.

---

Gold $1255
Oil $50.53

Returns for the week 5/15-5/19

Dow Jones  -0.4%  [20804]
S&P 500  -0.4%  [2381]
S&P MidCap  -0.4%
Russell 2000  -1.1%
Nasdaq  -0.6%  [6083]

Returns for the period 1/1/17-5/19/17

Dow Jones  +5.3%
S&P 500  +6.4%
S&P MidCap  +3.1%
Russell 2000  +0.7%
Nasdaq  +13.0%

Bulls 58.1
Bears 17.1 [Source: Investors Intelligence]

Have a great week.

Brian Trumbore