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06/03/2017

For the week 5/29-6/2

[Posted 11:30 PM ET, Friday]

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Edition 947

Trump Comes Home...Europeans Fret....

[I have my take on withdrawing from the Paris Agreement down below.]

Last Sunday, during a campaign appearance in Munich, German Chancellor Angela Merkel said that a new chapter in U.S.-European relations had begun, and that Europe “really must take our fate into our own hands.”  Merkel, Europe’s de facto leader, told her followers that the days when Europe could rely on others was “over to a certain extent.  This is what I have experienced in the last few days,” alluding to her meetings with President Trump.  Clearly, relations between Europe and the White House were strained even more than they already were as a result of Trump’s trip.

Trump himself, though, had a different take upon his return on Saturday, tweeting out:

“Just returned from Europe.  Trip was a great success for America.  Hard work but big results!”

Yes, Trump’s Twitter habit was back and over the course of the next few days, we were treated to stuff like:

“So now it is reported that the Democrats, who have excoriated Carter Page about Russia, don’t want him to testify.  He blows away their...case against him & now wants to clear his name by showing ‘the false or misleading testimony by James Comey, John Brennan...’ Witch Hunt!”

And he called Germany’s trade policies “very bad” on Tuesday, as Merkel’s election rival, Martin Schulz, said Trump was a “destroyer of Western values,” adding that the president was undermining the peaceful cooperation of nations based on mutual respect and tolerance.  “One must stand in the way of such a man with his ideology of rearmament.”

[German Foreign Minister Sigmar Gabriel suggested the spat was just a rough patch.]

It’s important to note that Schulz has long been a Trump hater since day one of Trump’s campaign, but when Schulz initially popped in the polls upon his announcement he was running for chancellor against Merkel last January, Merkel began coopting his message and it’s worked.

Meanwhile, former FBI Director James Comey agreed to appear before the Senate Intelligence Committee at 10:00 a.m. on Thursday, June 8, at which time multiple reports said he plans to say President Trump pressured him to drop an investigation into former national security adviser Michael Flynn’s ties to Russia.

Comey has apparently discussed the parameters of his congressional testimony with Special Counsel Robert Mueller, who has taken over the criminal investigation.

Russian President Vladimir Putin suggested Thursday that “patriotically minded” private Russian hackers could have been involved in cyberattacks last year that meddled in the U.S. election.

Putin continued to deny any Kremlin involvement, but his comment clearly departed from his previous position: that Russia had played no role whatsoever in the hacking of the Democratic National Committee.

Friday, at an economic forum in St. Petersburg, Putin said that Trump had run a more effective campaign than Clinton and that U.S. intelligence agencies may have faked evidence of campaign hacking, adding there were no “Russian fingerprints.”

So next week, Russia is back front and center, after losing the stage somewhat at week’s end to the Paris Accord.

But first, pre-Paris withdrawal....

Opinion...all sides....

Ralph Peters / New York Post

“President Trump’s immediate Russia problem is that he insists he doesn’t have a Russia problem. He does.

“Whether the multiple investigations underway reveal indisputable evidence of subversive relationships or give the president a clean bill of political health, they must be pursued to the end. It’s essential to the integrity of our system of government.

“Given the allegations and the extraordinary, if largely circumstantial, evidence already accumulated, every American, whatever his or her political bent, should want answers.  Instead, we have Democrats prematurely demanding impeachment, while Republicans dismiss a paramount security threat as a witch hunt.

“Let the independent counsel, the FBI, Treasury and other relevant agencies do their jobs.

“What do we know that merits investigation?

“At least five Trump campaign advisers have had dubious ties to Russia.  Carter Page shared energy-industry information with Russian agents. Roger Stone, who’s known Trump since the 1980s, appears to have had advance knowledge of Russian mischief during the election.  Paul Manafort made a fortune working for Vladimir Putin’s now-vanquished puppet regime in Ukraine and had extensive Moscow ties.

“Retired Lt. Gen. Michael Flynn, once a fine soldier, disgraced his uniform by taking payment from the Putin regime (and by surreptitiously flacking for Turkey), then attempting to cover it up.  He lied to Vice President Mike Pence, obfuscated with investigators and deceived the Pentagon.

“Now Trump’s son-in-law Jared Kushner has been placed, along with Flynn, in a secretive meeting with Russia’s U.S. ambassador, Sergey Kislyak, reportedly for the purpose of establishing clandestine back-channel communications with Moscow (the line was never activated).  Whether the idea was first broached by Flynn and Kushner or by the Russians, this isn’t business as usual. Even Henry Kissinger, pursuing his opening with China, didn’t rely upon Chinese intelligence-service communications.

“Kushner also met with Sergey Gorkov, Russian spy-school grad and head of Vnesheconombank, a Russian international bank under U.S. sanctions that appears to serve as a slush fund for Putin.  Why?  This isn’t business as usual, either....

“The president fired FBI Director James Comey, who had been heading the investigation into Russian campaign activities.  Then Trump told the Russian ambassador and Foreign Minister Sergey Lavrov that getting rid of Comey took the pressure off of Russia-related matters.  That isn’t business as usual.

“Trump made it clear that, in the recent French presidential elections, he preferred pro-Putin candidate Marine Le Pen (who lost by a landslide).  Trump mirrors Putin’s line on the European Union and, to a worrisome degree, NATO.  And while the president is swift to criticize allies, he doesn’t criticize Putin.  That isn’t business as usual....

“It’s unfortunate that this vital national-security issue has been muddied by the shamelessly biased media (on both sides) and by hysterical partisan loyalties. This transcends politics.  It’s about the safety of the republic, the integrity of our national elections and possible hostile penetration of a presidential administration.

“No matter which side of the political divide we’re on, as Americans we should want to know the truth, the whole truth and nothing but the truth.”

Editorial / Wall Street Journal

“President Trump can’t seem to stop himself from popping off on trade, but can he at least do a little homework?  The German newspaper Der Spiegel reported this week that Mr. Trump called out German car makers in a meeting with EU leaders in Brussels.  ‘Look at the millions of cars that they sell in the U.S.  Terrible.  We’re going to stop that,’ ostensibly through tariffs.  The White House has not denied the report.

“Some basic facts: Last year BMW produced more than 400,000 cars at its $7 billion plant in...South Carolina.  About 70% of the cars were exported, which makes BMW the top automotive exporter in the U.S.  Last year a Mercedes plant in Alabama made 300,000 cars.  Foreign-based auto makers (including Toyota, Mitsubishi and others) produced 5.5 million cars in America last year and have invested $75 billion in U.S. operations.

“That translates to thousands of jobs, mostly in states with right-to-work laws, which tend to be run by Republicans and voted for Mr. Trump. The BMW plant in South Carolina employs 8,800 people, and Mercedes has invested more than $4.5 billion in Tuscaloosa County, Ala.  Of the top 10 states for employment by an international auto maker, Mr. Trump carried nine.

“Yet Mr. Trump is fixated on a $15.4 billion automobile trade deficit with Germany.  This is a meaningless statistic, not least because the inputs are produced along a global supply chain.  Mr. Trump has some dim sense that no one drives Chevys in Hamburg, but one reason is that Europe distorts its market with emissions rules and high fuel taxes.

“Mr. Trump is known to sound off and then ditch some of his worst ideas, and perhaps here he’ll do the same.   But he could do much more for U.S. manufacturing by passing tax reform and dropping out of the Paris climate accord than with ill-informed tirades on trade.”

H.R. McMaster and Gary D. Cohn / Wall Street Journal

“President Trump just returned from nine days in the Middle East and Europe that demonstrated his America First approach to ensuring security and prosperity for our nation.  America will not lead from behind. This administration will restore confidence in American leadership as we serve the American people.

“America First does not mean America alone. It is a commitment to protecting and advancing our vital interests while also fostering cooperation and strengthening relationships with our allies and partners.  A determination to stand up for our people and our way of life deepens our friends’ respect for America.

“The president is unequivocal in declaring that America’s primary interest is the safety and security of our citizens.  In discussions overseas, Mr. Trump encouraged others to join the U.S. in doing more to defeat the terrorist organizations that threaten peaceful nations around the world.  He challenged leaders of more than 50 Muslim-majority countries to stand together ‘against the murder of innocent Muslims, the oppression of women, the persecution of Jews, and the slaughter of Christians.’

“A strong stand against terrorism is consistent with values common across all the world’s great religions.  After the president’s historic remarks, leader after leader of Muslim-majority nations reaffirmed the president’s message and committed to confronting the terrorism and extremism that plague all civilized societies. To answer the call and address these grave concerns, Saudi Arabia launched a new Global Center for Combatting Extremist Ideology, and several Middle Eastern nations signed a memorandum of understanding to create the Terrorist Financing Targeting Center, with the mission of cutting off funds to terrorist organizations....

“While meeting with European Union leaders in Brussels, the president reiterated his concern about our trade deficits with many European nations. He also emphasized the importance of reciprocity in trade and commerce. Simply put, America will treat others as they treat us. At the Group of Seven in Taormina, Sicily, where President Trump further solidified his relationships with leaders of the world’s largest market economies, the members came together in the official communique to stand firm ‘against all unfair trade practices’ and to foster a truly level playing field.

“Strong alliances and economically thriving partners are a third vital American interest. As the president stated in Brussels, the North Atlantic Treaty Organization is rooted in ‘the courage of our people, the strength of our resolve, and the commitments that bind us together as one.’  While reconfirming America’s commitment to NATO and Article 5, the president challenged our allies to share equitably the responsibility for our mutual defense.  We came away with new outcomes for the first time in decades: More allies are stepping up to meet their defense commitments.  By asking for more buy-in, we have deepened our relationships. That is not surprising.  Alliances based on mutual respect and shared responsibility are strong.  And strong alliances bolster American power....

“We are asking a lot of our allies and partners. But in return America will once again be a true friend to our partners and the worst foe to our enemies. The president’s visit showed the power of both competing to advance interests and engaging to develop relationships and foster cooperation. We have a vital interest in taking the lead internationally to advance American military, political and economic strength.

“We engage with the world not to impose our way of life but to ‘secure the blessings of liberty for ourselves and our posterity.’....

“At every stop in our journey, we delivered a clear message to our friends and partners: Where our interests align, we are open to working together to solve problems and explore opportunities.  We let adversaries know that we will not only take their measure, deter conflict through strength, and defend our interests and values, but also look for areas of common interest that allow us to work together.  In short, those societies that share our interests will find no friend more steadfast than the United States. Those that choose to challenge our interests will encounter the firmest resolve.

“This historic trip represented a strategic shift for the United States. America First signals the restoration of American leadership and our government’s traditional role overseas – to use the diplomatic, economic and military resources of the U.S. to enhance American security, promote American prosperity, and extend American influence around the world.”

Counterpoint to the above...David Brooks / New York Times:

“This week, two of Donald Trump’s top advisers, H.R. McMaster and Gary Cohn, wrote the following passage in the Wall Street Journal: ‘The president embarked on his first foreign trip with a clear-eyed outlook that the world is not a ‘global community’ but an arena where nations, nongovernmental actors and businesses engage and compete for advantage.’

“That sentence is the epitome of the Trump project.  It asserts that selfishness is the sole driver of human affairs.  It grows out of a worldview that life is a competitive struggle for gain.  It implies that cooperative communities are hypocritical covers for the selfish jockeying underneath.

“The essay explains why the Trump people are suspicious of any cooperative global arrangement, like NATO and the various trade agreements. It helps explain why Trump pulled out of the Paris global-warming accord. This essay explains why Trump gravitates toward leaders like Vladimir Putin, the Saudi princes and various global strongmen: They share his core worldview that life is nakedly a selfish struggle for money and dominance.

“It explains why people in the Trump White House are so savage to one another. Far from being a band of brothers, their world is a vicious arena where staffers compete for advantage.

“In the essay, McMaster and Cohn make explicit the great act of moral decoupling woven through this presidency.  In this worldview, morality has nothing to do with anything.  Altruism, trust, cooperation and virtue are unaffordable luxuries in the struggle of all against all.  Everything is about self-interest.”

Charles Krauthammer / Washington Post

“So what if, in his speech last week to NATO, President Trump didn’t explicitly reaffirm the provision that an attack on one is an attack on all?

“What’s the big deal?  Didn’t he affirm a general commitment to NATO during his visit?  Hadn’t he earlier sent his vice president and secretaries of state and defense to pledge allegiance to Article 5? And anyway, who believes that the United States would really go to war with Russia – and risk nuclear annihilation – over Estonia?

“Ah, but that’s precisely the point. It is because deterrence is so delicate, so problematic, so literally unbelievable that it is not to be trifled with.  And why for an American president to gratuitously undermine what little credibility deterrence already has, by ostentatiously refusing to recommit to Article 5, is so shocking.

“Deterrence is inherently a barely believable bluff.  Even at the height of the Cold War, when highly resolute presidents, such as Eisenhower and Kennedy, threatened Russia with ‘massive retaliation’ (i.e., all-out nuclear war), would we really have sacrificed New York for Berlin?

“No one knew for sure. Not Eisenhower, not Kennedy, not Khrushchev, not anyone.  Yet that very uncertainty was enough to stay the hand of any aggressor and keep the peace of the world for 70 years, the longest period without war between the Great Powers in modern history.

“Deterrence does not depend on 100 percent certainty that the other guy will go to war if you cross a red line. Given the stakes, merely a chance of that happening can be enough.  For 70 years, it was enough.

“Leaders therefore do everything they can to bolster it.  Install tripwires, for example.  During the Cold War, we stationed troops in Germany to face the massive tank armies of Soviet Russia.  Today we have 28,000 troops in South Korea, 12,000 near the demilitarized zone.

“Why?  Not to repel invasion.  They couldn’t....They’re a deliberate message to the enemy that if you invade our ally, you will have to kill a lot of Americans first.  Which will galvanize us into full-scale war against you.

“Tripwires are risky, dangerous and cynical. Yet we resort to them because parchment promises are problematic and tripwires imply automaticity....

“Which is why presidents from Truman on have regularly and powerfully reaffirmed our deterrent pledge to NATO. Until Trump.

“His omission was all the more damaging because of his personal history.  This is a man chronically disdainful of NATO.  He campaigned on its obsolescence.  His inaugural address denounced American allies as cunning parasites living off American wealth and generosity....

“Moreover, Trump devoted much of his Brussels speech, the highlight of his first presidential trip to NATO, to berating the allies for not paying their fair share.  Nothing particularly wrong with that, or new....

“That’s an American perennial. But if you’re going to berate, at least reassure as well. Especially given rising Russian threats and aggression....An administration official had spread the word that he would use the speech to endorse Article 5....

“And yet Trump deliberately, defiantly refused to simply say it: America will always honor its commitment under Article 5.

“Trump’s refusal to utter those words does lower whatever probability Vladimir Putin might attach to America responding with any seriousness to Russian aggression against a NATO ally....

“It’s not that yesterday Europe could fully rely – and today it cannot rely at all. It’s simply that the American deterrent has been weakened. And deterrence weakened is an invitation to instability, miscalculation, provocation and worse.

“And for what?”

Kimberley A. Strassel / Wall Street Journal

“Here is what Americans this week were told counted as ‘news’: Jared Kushner’s past meetings.  Russians.  James Comey’s upcoming testimony.  Russians.  Hillary Clinton’s latest conspiracy theories.  Russians.  Bob Mueller’s as-yet-nonexistent investigation (into Russians).  Kathy Griffin, Mr. Met and, of course, ‘covfefe.’  Total words printed on these subjects?  At least a duodecillion.

“Here’s what actually happened this week, the ‘news’ that holds real consequences for real Americans:

“Interior Secretary Ryan Zinke signed an order to begin reopening Alaska’s National Petroleum Reserve to oil and gas exploration, reversing the Obama administration’s ideologically driven 2013 shutdown. The order even aims at opening the Arctic National Wildlife Refuge to production – a move that is decades overdue.  This could not only buck up the listless Alaskan economy but cement the U.S. as an oil and gas powerhouse.

“In related news, the Dakota Access Pipeline finally went live.

“The Fish and Wildlife Service took steps that may stop the Obama administration’s last-minute endangered-species listing for the Texas Hornshell, a freshwater mussel.  That listing, based on outdated science, threatens significant harm to the Texas economy and was done over the protest of state officials and local industry.

“Commerce Secretary Wilbur Ross surprisingly said that he was open to completing the Transatlantic Trade and Investment Partnership, or TTIP, a far-reaching trade agreement being negotiated with the European Union.

“Sen. John Thune, the upper chamber’s third-ranking Republican, said his caucus had moved beyond meetings and on to ‘drafting’ the base language of an ObamaCare replacement.  The No. 2 Republican, John Cornyn, vowed the Senate would ‘absolutely’ have a bill by ‘the end of July at the latest.’

“And on and on....

“Who is to blame for this real-news blackout?  The press, obviously. But the co-culprit: Donald Trump....

“The result is a surreal situation in which the near-hysterical press coverage of Trump the man (and potential Russian operative) is utterly divorced from the substantive actions his administration takes or the progress it makes.  Mr. Trump’s cabinet, which includes some of the best reformers in the conservative world, is methodically implementing a far-reaching deregulatory agenda.  Congress is moving ahead on key promises.

“Thus Mr. Trump’s culpability. The president knows better than most the ills of the media; he rails about them constantly. Yet he continues to be the indulger in chief. He daily provides new, explosive tweets that give reporters every excuse to keep up their obsessions about Russia, Mr. Comey, Hillary, Carter Page.

“Mr. Trump’s Twitter handle may be the most powerful communications tool on the planet. He has the awesome ability, unlike any president in history, to force the press to focus on his agenda by putting it out into the world every morning (or late night, as it may be). He could use that tool to set the daily discussion.  Instead, he’s using it to undermine his own administration.

“Mr. Trump also has at his disposal an array of famous surrogates who could spread his message. He has all the free media he could ever hope for, if only he used it in a strategic fashion.  He has activist groups to help push for his reforms, but they can’t compete amid the crazy headlines.

“Team Trump owes it to voters to get the real news out about its agenda and successes.  But that will require doing more than complaining about the press.  This White House needs to set and define the daily debate.  It’s that, or Russia headlines through 2018.”

Withdrawing from the Paris Agreement, the Budget and Repeal of ObamaCare....

I have been consistent in my opinion for years.  The Iran nuclear deal was a total sham, it should never have been signed, but once it was we were stuck with it.  All during the 2016 campaign, I blasted Donald Trump for spouting off that the U.S. could just withdraw from it.  No! I wrote.  There are five other parties to it, all of whom are already doing extensive business with Iran with the lifting of sanctions, and to say otherwise is flat-out dishonest.  Did anyone possibly believe the other five – Britain, France, Germany, Russia and China – would follow us?  Of course not. 

Regarding Iran, the best we can hope for is that the inspections regime built into the nuclear agreement works (it won’t), and that eventually there is regime change (not as likely with the reelection of President Rouhani).  Otherwise, Iran gets the bomb.

When it came to the Paris Agreement on combating climate change, I said that this deal was also a total sham because it required nothing of China and India for decades, if ever.  This single fact makes it a joke.  But we signed onto it.

Who was responsible for both agreements?  President Obama.  The same man who cared more about the 2012 election than cooperating with President Erdogan of Turkey on a no-fly zone for Syria that would have stopped the massive carnage to come in the then still-nascent Syrian civil war in its tracks, avoiding the deaths of another 480,000 plus, the refugee crisis that then engulfed Europe and Syria’s neighbors, the formation of ISIS, and Russian involvement in that theatre.

This is the man, Obama, we entrusted to make such decisions and today we are paying the price.

But the Iran and Paris deals are distinctly different.  The Paris accord, even though the U.S. signed it along with 194 other nations, allows each country to set its own targets – meaning the targets can be moved without formal negotiations.  Yes, Obama set aggressive targets that if followed to the ‘T’ would have cost jobs in certain sectors of the American economy, but the whole deal is nothing more than tissue paper.

That said, it was a global framework and, what the hell, a new president comes into office, like Trump, pulls away Obama’s energy-related regulations, one by one, and we can deal with the Paris accord on our own terms.  Plus there are no massive protestations from world leaders and their populations because we can say, ‘Hey, we’re still in the deal.  The proof is in the pudding.  Who is reducing greenhouse gas emissions faster than the United States?  No one.  Leave us alone.  Go talk to China.’

That’s not how Donald Trump and a segment of the White House viewed it, though.  For starters, Trump should have moved the battle to the Senate, and as former secretary of state James Baker said on the “Today Show” the other day, let the people decide if they want to be in it or leave it.  We’d still retain our flexibility to move as fast or slowly as we wanted to if the people said, yes, we should be in.

But now we’re out, and there will be major consequences.  We didn’t have to pull a Mr. Met and flip off our allies in such blatant fashion.  Campaign promises?  Trump has been breaking them every day.  So what?  For his supporters, he’s gotten a lot done and if the market place feels there’s still a place for coal, and the price makes sense from a cost-benefit standpoint, coal will retain a share of the energy market.

Meanwhile, Trump indicated he was open to another climate deal, saying he would “begin negotiations to re-enter either the Paris accord or a really entirely new transaction on terms that are fair to the United States.”

But there is zero reason for the other players to reopen a deal that took years to reach, especially as Trump would be calling for deeper cuts from other countries.

As for the process of actually leaving the Paris agreement, it won’t be complete until just weeks after the U.S. presidential election in 2020, meaning it will be a major campaign issue.  A new president could reverse Trump’s order, or Trump could do it himself in a second term.

The Paris accord remains in effect regardless of the U.S. position.  We could have remained part of it and basically said, ‘whatever,’ but we wouldn’t have pissed off allies who will be needed for a true crisis sooner than later.

More next time, including how Corporate America does have good reason to be concerned.  It’s not just world leaders we now have to deal with.  It’s a riled up populace.  For now, for the record....

Among Trump’s claims was the accord “would effectively decapitate our coal industry, which now supplies about one-third of our electric power.”

“I was elected to represent the citizens of Pittsburgh, not Paris.” [To which Pittsburgh Mayor Bill Peduto, a Democrats, tweeted, “as the Mayor of Pittsburgh, I can assure you that we will follow the guidelines of the Paris Agreement for our people, our economy & future.”]

Trump: “According to a study by NERA Consulting, meeting the Obama administration’s requirements in the Paris Accord would cost the U.S. economy nearly three trillion dollars over the next several decades.  By 2040, our economy would lose 6.5 million industrial sector jobs – including 3.1 million manufacturing sector jobs.”

[But this was a study from over a decade ago, paid for by two groups that have long opposed environmental regulation and receive money from those who profit from the continued burning of fossil fuels.]

Trump: “If all member nations met their obligations, the impact on the climate would be negligible,” curbing temperature rise by “less than .2 degrees Celsius in 2100.”

[Again, some would say the White House cherry-picked one stat from a slew of studies that others would call flawed.]

Trump: “We don’t want other leaders and other countries laughing at us anymore – and they won’t be.”

The Heritage Foundation, an influential conservative think tank, also wanted the Paris agreement to be viewed as a treaty and submitted to the Senate for approval. 

Elon Musk, the CEO of Tesla, tweeted that if Trump does leave the accord, he would have “no choice but to depart councils” on which he has advised the president in the past.  [Musk is part of Trump’s manufacturing jobs initiative.]

Corporations from Apple to ExxonMobil have endorsed the accord, saying it won’t harm the competitiveness of U.S. business.

Disney CEO Robert Iger resigned from his White House advisory council, joining Musk.

JPMorgan Chase & Co. CEO Jamie Dimon, another member of Trump’s business council, said he disagrees with the president’s plan to withdraw from the accord, but he won’t follow Musk’s and Iger’s decision to quit the council.

“I absolutely disagree with the administration on this issue, but we have a responsibility to engage our elected officials to work constructively and advocate for policies that improve people’s lives and protect our environment.”

Lloyd Blankfein, chairman of Goldman Sachs, tweeted that Trump’s decision was a “setback for the environment and for the U.S.’s leadership position in the world.”

General Electric’s CEO Jeff Immelt tweeted his disappointment with the decision.  “Climate change is real.  Industry must now lead and not depend on government.”

Senate Majority Leader Mitch McConnell supported Trump “for dealing yet another significant blow to the Obama administration’s assault on domestic energy production and jobs.”

Reaction to the withdrawal from the Paris Accord was swift from European leaders, with French President Emmanuel Macron, German Chancellor Merkel and Italian Premier Paolo Gentiloni issuing a joint statement Thursday that they take note “with regret” at the U.S. decision. The three leaders said they regard the accord as “a cornerstone in the cooperation between our countries, for effectively and timely tackling climate change.”

They added that the course charted by the accord is “irreversible and we firmly believe that the Paris Agreement cannot be renegotiated.”

Canadian Prime Minister Justin Trudeau was “deeply disappointed” by Trump’s decision.  U.K. Prime Minister Theresa May expressed her disappointment in a phone call with Trump, telling him the deal protects the “prosperity and security of future generations.”

Japan’s Finance Minister Taro Aso said: “I’m not just disappointed, but also feel anger.”

Friday, Vladimir Putin said he did not want to judge Trump for his decision, but thought Washington could have remained in the pact by amending the scale of existing U.S. undertakings.  [Russia signed the accord but has not ratified it yet.]

Opinion....

Editorial / New York Post

“In quitting the Paris Accord, President Trump on Thursday did nothing to shift the course of U.S. environmental policy – not even on carbon emissions. But he did put the world on notice that no president can unilaterally commit this nation to such far-reaching agreements.

“The Constitution is clear: No treaty is binding on the U.S. government unless ratified by the Senate. That tanked the Kyoto Protocol, a 1997 anti-warming treaty that the Senate rejected 95-0.  And it would’ve killed the Paris deal that President Obama signed in 2016 – except that his negotiators shaped an ‘agreement’ that wouldn’t go to the Senate.

“But one that still would’ve been used to rewrite U.S. law, if the courts went along.  (And a President Hillary Clinton’s judicial picks would have ensured that they did.)

“In fact, Trump had already abandoned the Paris goals by junking Obama’s Clean Power Plan.   Yet he’s not turning back the clock.  He’s just saying no to what Obama sought to impose – a rush to a low-carbon America at huge economic cost.

“Under Paris, as Trump noted, the United States would’ve had to close all its coal plants, even as China builds hundreds more – and coal still generates a third of U.S. electricity.

“Yet America will continue to cut its carbon emissions: They’re already down by a fifth since 2000, thanks to fracking and the gradual replacement of coal plants with natural-gas ones.  That’s better than Europe did as it implemented Kyoto by making electricity cost twice as much as it does here.

“Nor did Paris make sense. As Danish economist Bjorn Lomborg notes, it entails costs of over $1 trillion a year to shave 0.36 degrees Fahrenheit off global temperatures by 2100 – a tenth the reduction it said is necessary.

“The better response, Lomborg argues, is massive R&D in non-carbon power – so that humanity needn’t impoverish itself to ‘save the planet.’  As he pursues smart post-Paris policies, Trump ought to boost outlays for ‘green energy’ R&D.

“America has far cleaner air and water than it did 50 years ago, and more parkland.  It should continue those trends, and keep reducing its carbon emissions – democratically.

“What the nation won’t do, thanks to the president, is devastate its own economy against the public’s wishes in order to satisfy the global elite.  Count this as a major Trump promise kept.”

Editorial / Washington Post

“In announcing that he will pull the United States out of the Paris climate agreement, Mr. Trump dealt a blow to the effort to slow climate change – but not only that.  By joining Syria and Nicaragua as the only nonparticipants in the most consequential diplomatic effort of this century, he also dealt a blow to the U.S. leadership that has helped promote peace and prosperity for the past seven decades under Republican and Democratic presidents alike.  Under their guidance, the United States acted with selflessness and enlightened self-interest.  The traits reflected in Mr. Trump’s decision are self-defeating, selfishness, insecurity and myopia.

“A variety of factors contributed to the nation’s post-World War II economic boom, but prominent among them was energetic internationalism. The General Agreement on Tariffs and Trade (GATT), which obliged countries to meet regularly and discuss improving the atmosphere for global trade, was one of the spectacularly successful U.S.-backed institutions that helped gradually remove barriers to economic exchange and innovation.

“The Paris agreement had the promise to be the 21st century’s GATT, providing a framework in which countries would regularly convene and in which each nation would be expected to offer what more it could to advance an essential global goal that no country could achieve alone – not freer trade, in this case, but heading off climate change’s worst effects.  The agreement bore an American stamp.  It was fairer and more flexible than previous attempts to strike a global climate deal, with particular sensitivity to U.S. concerns that emissions limits not be imposed on any country.

“The agreement was the world’s best hope to ensure that big developing nations such as China and India did their share, addressing GOP concerns that these countries would refuse to sacrifice along with the United States.  It did not lock in exactly how the United States and other nations would help.  Rather, it created an international expectation of voluntary commitments from every nation, enforced by diplomatic pressure.  All of Mr. Trump’s arguments for withdrawing, in other words, are unfounded.  He could have adjusted, even minimized, the U.S. commitment without trashing the framework.

“The president said Thursday that the United States might rejoin the Paris agreement after a period of renegotiation.  But given the extent to which other nations already accommodated American demands, the prospect of a radically different treaty is fanciful. So what tangible benefit does this irrational decision bring to Americans?  None.  None at all.”

Editorial / Wall Street Journal

“President Trump announced the U.S. will withdraw from the Paris climate agreement on Thursday, to the horror of green elites world-wide.  If the decision shows he is more mindful of American economic interests than they are, the other virtue of pulling out is to expose the fraudulence of this Potemkin village.

“In a Rose Garden ceremony, Mr. Trump broke with the 2015 agreement, starting the formal four-year withdrawal process: ‘We’re getting out. And we will start to renegotiate and we’ll see if there’s a better deal.  If we can, great.  If we can’t, that’s fine.’

“This nonchalance inspired a predictable political meltdown, with the anti-carbon lobby invoking death, planetary disaster and a permanent historical stain. Billionaire Democratic donor Tom Steyer called it ‘a traitorous act of war against the American people,’ while Barack Obama accused his successor of joining ‘a small handful of nations that reject the future,’ whatever that means.  Get ready for another march on the White House.

“But amid the outrage, the aggrieved still haven’t gotten around to resolving the central Paris contradiction, which is that it promises to be Earth-saving but fails on its own terms.  It is a pledge of phony progress.

“The 195 signatory nations volunteered their own carbon emission-reduction pledges, known as ‘intended nationally determined contributions,’ or INDCs.  China and the other developing nations account for 63% of annual global CO2 emissions, and their share is rising. They submitted INDCs that pledged to peak the carbon status quo ‘around’ 2030, and maybe later, or never, since Paris included no enforcement mechanisms to prevent cheating.

“Meanwhile, the developed OECD nations – responsible for 55% of world CO2 as recently as 2000 – made unrealistic assurances that even they knew they could not achieve.  As central-planning prone as the Obama Administration was, it never identified a tax-and-regulation program that came close to meeting its own emissions pledge of 26% to 28% reductions from 2005 levels by 2025.

“Paris is thus an exercise in moral and social signaling that is likely to exert little if any influence on atmospheric CO2, much less on global temperatures....

“A more prosperous society a century or more from now is a more important goal than asking the world to accept a lower standard of living today in exchange for symbolic benefits.  Poorer nations in a world where 1.35 billion live without electricity will never accept such a trade in any case, while Mr. Trump is right to decline to lock in U.S. promises that make U.S. industries less competitive.

“The surest way to ‘reject the future’ is to burden the economy with new political controls today, because economic growth underwrites technological progress and human ingenuity.  These are the major drivers of energy transitions that allow people to generate more wealth with fewer resources....

“Superior efficiency helps explain why U.S. carbon emissions fell by 145 million tons in 2016 compared to 2015, more than any other country....Over the past five years U.S. emissions have fallen by 270 million tons, while China – the No. 1 CO2 emitter – added 1.1 billion tons.

“All of which make the claims that the U.S. is abdicating global leadership so overwrought.  Leadership is not defined as the U.S. endorsing whatever other world leaders have already decided they want to do, and the U.S. is providing a better model in any case.  Private economies that can innovate and provide cost-effective alternatives will always beat meaningless international agreements.  To the extent Paris damages economic growth, the irony is that it would leave the world less prepared for climate change.”

---

Trump tweet: “Hopefully Republican Senators, good people all, can quickly get together and pass a new (repeal & replace) HEALTHCARE bill. Add saved $’s.”

Congress is in session just about 30 legislative days between now and end of July, start of a five-week summer recess. 

This takes us up to the 200-day mark in Trump’s presidency and House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell have always said this is the key target, not Trump’s first 100 days.

Which means Congress, read Republicans, have a ton of work to do on the budget, the ObamaCare repeal and replacement, and tax reform, along with some other important items like extending the debt ceiling.

First and foremost is the budget. Without one for fiscal 2018, which begins October 1st, there is no tax reform.

What seems clear among those who follow such things is that Congress is well behind in the appropriations process in setting a budget framework than they normally are at this stage of the year, with the House not having approved a single appropriations bill. 

But they can’t move on a budget for 2018, and tax reform, until they repeal ObamaCare.  The ball is in the Senate’s court and leaders there insist they will have crafted an alternative to the House plan by end of June, but at the very latest end of July.

I’ll be writing extensively on this topic the next two months you can be sure.

Lastly, the latest Kaiser Health Tracking Poll on the House-passed healthcare bill shows 55% view it negatively, the same proportion who want the Senate to make major changes to the legislation or reject it.  Only 8 percent want the legislation.

49% of the public holds favorable views of ObamaCare, while 42% have negative ones.

Wall Street

All three major market indexes hit new closing highs on Thursday, and again, Friday. While the S&P 500 and Nasdaq have consistently been hitting new records, the Dow’s high Thursday was its first since March 1.

But after Friday’s jobs report, it’s really all about the Federal Reserve and their next move on interest rates June 13-14. All of the Fed governors who spoke this week made it sound like a June hike was in the cards, but to me, Friday’s jobs report somewhat muddled the picture with a less-than-expected gain in nonfarm payrolls of 138,000, while April and March were revised down a cumulative 66,000.

The jobless rate, though, is down to 4.3%, the lowest since May 2001!  Clearly, the Fed looks at the 4.3%, below its own long-term target for unemployment, and will see a labor market at or very near full employment.

Wages rose 0.2% in May, up 2.5% from a year earlier, which has essentially been the pace since late 2015.

U6, the key underemployment rate, also hit a cycle low, 8.4%, and has fallen sharply the past year, which is very good.  [It was 8.3% the two years before the recession.]

Earlier, a report from ADP on private payrolls had employers adding 253,000 jobs in May, above expectations.

Bottom line, we should assume the Fed is hiking in June, even though the average monthly payroll gain for the first five months of the year is 162,000, vs. the 187,000 month average for 2016.

Just a few other economic notes the Fed will look at.  Personal income and consumption for April each rose a solid 0.4%, while the May Chicago PMI on manufacturing came in at 55.2, lower than expected but still good) and the ISM manufacturing reading for the month was 54.9 vs. 55.0 in April).

Back to the Fed, I do just have to add some notes from a speech given by Fed governor, Lael Brainard, for the archives.  She said the Fed is now ready to shrug off at least a little bad data and the FOMC should raise its benchmark interest rate “soon,” despite evidence inflation remains below the Fed’s target level of 2% (using its preferred metric).

“On balance, when assessing economic activity and its likely evolution, it would be reasonable to conclude that further removal of accommodation will likely be appropriate soon.” 

Ms. Brainard added, though, that she might reconsider the efficacy of further increases if inflation doesn’t get stronger.

Europe and Asia

There was a ton of economic news on the eurozone front as Britain gears up for its snap election on June 8, and France readies for two rounds of parliamentary elections on June 11 and 18.

First, from Eurostats, a flash reading on eurozone inflation for May came in at 1.4% annualized, vs. 1.9% in April, 1.5% in March and 2.0% in February.

The unemployment rate in the EA19 fell to 9.3% in April from 9.4% in March, and 10.2% April 2016, the 9.3% being the lowest since March 2009 as the continent’s recovery continues apace.

Germany came in at 3.9% (the German government calculates it differently and showed 5.7%, both the lowest since reunification in 1990); Spain was 17.8% (but down from 20.4% a year earlier), France 9.5%, Italy 11.1%, Portugal 9.8% (down from 11.6% a year ago), Ireland 6.4%, and Greece 23.2% (February).  [The U.K. is at 4.4% according to the government’s latest data.]

The youth unemployment rate is still high in some nations.  Italy’s is 34.0%, Spain 39.3% (down from 47.1% Apr. 2016), and Greece 47.9% (Feb.).

Bottom line, major progress.

Markit reported manufacturing PMIs for the eurozone and the final reading for May was a strong 57.0 (50 being the dividing line between growth and contraction) vs. 56.7 in April, the highest level since 2011.

Germany led the way with a manufacturing PMI of 59.5, a 73-month high; France 53.8; Italy 55.1; Spain 55.4; Ireland 55.9; but Greece is still in recession at 49.6, though this is a 9-mo. high.  [The U.K. registered a strong 56.7 last month.]

Chris Williamson, Chief Business Economist at IHS Markit:

“The eurozone upturn is developing deeper roots as factories enjoy a spring growth spurt. Demand for goods is growing at the steepest rate for six years, encouraging manufacturers to step up production and take on extra staff at a rate not previously seen in the two-decade history of the PMI survey.

“The fact that the upturn is being accompanied by such strong jobs growth sends a signal that increasing numbers of companies are moving away from a focus on cost cutting towards investing in expansion, underscoring the elevated levels of business optimism seen across the region. The record hiring adds to the sense that the upturn is looking more and more robust as each month goes by....

“The marked easing of input cost inflation during May will meanwhile be welcome news to policymakers eager to see signs that the recent uplift in consumer price inflation will prove short-lived.”

As for the European Central Bank and its ongoing massive stimulus program, which Chris Williamson is alluding to in his last paragraph, president Mario Draghi said this week that the eurozone still needs “an extraordinary amount of monetary support.”

But Draghi told European lawmakers that many of the eurozone’s major problems “are now behind us,” with the economy growing 16 consecutive quarters, though at the same time underlying inflation was subdued and he wants to see stronger numbers on that front before changing the ECB’s loose monetary policy.

The ECB’s policy board meets on June 8 and we’ll be looking for signs that it may begin scaling back its QE efforts.

Eurobits....

--We still don’t have a final resolution of Greece’s looming massive debt repayments for July in terms of support from its creditors for a debt-relief program.  European officials now have a June 15 deadline to reach a deal at the next meeting of Eurogroup finance ministers. 

--Portugal’s GDP rose 1% in the first quarter (2.8% year-over-year) and is off to its best year, potentially, since 2000.

--France’s final Q1 GDP, as reported by Insee, was 0.4%, but still up just 0.9% yoy.

--One thing to watch is the action in bank stocks in Italy and Spain.  Spanish lender Banco Popular saw its shares crater this week to at least a 28-year low, following reports senior EU officials are warning it could be wound down if Spain’s sixth largest bank can’t complete a merger.

Meanwhile, the Bank of Italy’s governor, Ignazio Visco, said Italy’s troubled banks may suffer an additional $11 billion in losses from the sale of their bad loans at current market prices.

Italy has a financial crisis-related legacy of roughly $400 billion...billion...in bad loans on the banks’ balance sheets, which is preventing the same institutions from issuing loans to small and many large businesses, that in turn impedes the recovery.

--Ireland’s ruling governing party, Fine Gael, elected Leo Varadkar as its new leader on Friday, choosing the gay, 38-year-old son of an Indian immigrant to succeed Enda Kenny as prime minister in a striking generational and social change.  Varadkar is expected to be voted in as prime minister when it next convenes on June 13. 

I know Ireland well, but I have not followed this guy and I’m kind of startled on a number of fronts.

British election: Virtually all of the polls have continued to show the Conservatives’ (Tories) lead over the Labour Party in Thursday’s election is shrinking.  Tuesday, an ICM poll for the Guardian had the Conservatives still at 45-33, but a Survey Monkey poll for the Sun the next day had the Conservatives leading by just six.  A Survation poll for ITV also had it at six points, with this same one at 18 two weeks ago.

YouGov for the Times by week’s end had it just three points, 42-39, and a different look at YouGov’s database had the Conservatives winning just 317 seats, less than the 326 needed for a majority in parliament.  They currently have 330, and the whole point of Prime Minister Theresa May’s call for a snap vote was to increase her slim majority to have more support for the looming Brexit negotiations, which will start in earnest following the elections.

May has been heavily criticized for running a poor campaign, saying in her main pitch to voters, “You can only deliver Brexit if you believe in Brexit,” but she had backed the “remain” campaign in the run-up to last year’s referendum on EU membership.  She says today she is the only party leader able to make a success of Brexit despite giving few details of how she will handle negotiations.

Earlier, May got a lot of heat among voters for going back on her intended portrayal of being a compassionate conservative when she proposed to make older Britons shoulder more of the costs of long-term home care, an item she was forced to pull after it was derided as a “dementia tax.”

May is certainly a far better leader for Brexit than her opponent, Labour leader Jeremy Corbyn, but the prime minister has hardly been decisive.

French Elections: A Harris/LCP poll on Thursday had French President Emmanuel Macron’s new party winning 31% of the vote in the first round, June 11, with the conservative Republicans and far-right National Front both at 18%.  Under this scenario, Macron’s party should then pick up a majority of the seats after the June 18 runoffs.

German Elections (Sept.): A poll of voters shows Chancellor Merkel’s conservative bloc’s lead widening, with an Emnid Sunday poll for Bild newspaper showing her Christian Democrats at 38%, while the SPD of Martin Schulz had slipped to 25%.  The pro-business Free Democrats and the Greens were both at 8%.

Turning to Asia, some data out of China, with the National Bureau of Statistics reporting that the manufacturing PMI for May was 51.2, unchanged from April, with the services reading at 54.5 vs. 54.0.

But the Caixin private manufacturing PMI, as put out by Markit, was only 49.6, contraction, vs. 50.3 in April, the first decline in 11 months.

In Japan, the manufacturing PMI for May was 53.1 vs. 52.7 in April, the ninth consecutive month over 50.  Industrial production in April was up 4% over March, but this is a highly volatile figure.

Unemployment in Japan in April was unchanged at 2.8%, the lowest level since June 1994, according to the Statistics Bureau.

Household spending, though, fell 1.4% year-on-year in April (but this is owing to big reductions in education spending, and on transport and communication).

Retails sale in April, on the other hand, were up 3.2% year-on-year.

Separately, Taiwan’s manufacturing PMI for May was 53.1 vs. 54.4 the prior month, the slowest pace since October, while South Korea’s PMI was 49.2 vs. 49.4.

Street Bytes

--For the week, the Dow Jones added 0.6% to 21206, the S&P 500 1.0% to 2439, and Nasdaq 1.5% to 6305, again, all record levels.

--U.S. Treasury Yields

6-mo. 1.04%  2-yr. 1.29%  10-yr. 2.16%  30-yr. 2.81%

The yield on the 10-year is back down to levels not seen since right after the election in November.  Frankly, this makes zero sense with the Fed preparing to hike anew. 

[The 10-yr. closed last year at 2.44%.  It was 2.27% on 12/31/15, and 2.17% on 12/31/14, for you stats junkies out there.]

--Oil prices continued to decline, to $47.74 on WTI, despite the agreement by OPEC and Russia to extend their production cut agreement to tackle the supply glut.  The problem is the U.S. keeps building its supply levels through the ongoing shale revolution, so this is offsetting the cuts. The market is also unhappy that when OPEC and non-member Russia extended the cut agreement, the cuts weren’t deeper.

--Coal stocks fell this week, with some of the larger operators urging President Trump to stay in the Paris deal in order to protect the coal industry’s interests overseas, including continued financing for foreign coal-burning power plant projects.

--U.S. auto sales continue to slow, with Kelley Blue Book expecting that for all of 2017, sales of cars and light trucks will be at a 17 million level vs. 2016’s record 17.55m.

In May, sedan sales were down about 20%, continuing the shift from sedans to SUVs.

The Chevy Bolt, General Motors’ much-anticipated electric sedan, is off to a slow start since being introduced in December, with most of the sales on the West Coast.

Ford sold a total of 241,000 vehicles last month, 4,000 more than GM, but this was because Ford registered some major fleet sales.  Nonetheless, it was the first time Ford outsold GM since March 2016.  Before that, it hadn’t happened since March 2011.

Ford’s sales were up 2.2% for May, GM’s down 1.3%, and Fiat Chrysler’s down 0.9%.

Also, Toyota’s U.S. sales fell 0.5%, while rising 0.9% for Honda, 3% for Nissan, and 12% for Subaru.  The VW brand rose 4.3%.

--A report out of Credit Suisse concludes that e-commerce will continue to pull shoppers away from bricks-and-mortar retailers, leading to between 20% and 25% of the nation’s shopping malls closing in the next five years.

The finding is far from surprising, but Credit Suisse expects apparel sales to represent 35% of all e-commerce by 2030, up from 17% today, and that certainly puts traditional mall anchors, such as Macy’s and J.C. Penney, in further danger.

But, the flip side is there are malls that are remaking themselves into entertainment destinations, filling retail space with more restaurants and service providers.

So let’s wait a few years before officially declaring the death of the mall.  [As long as you have a desirable location.]

--Canada’s economy grew at an annualized rate of 3.7% in the first quarter, making it the best-performing economy among Group of Seven countries in early 2017.

--Brazil’s GDP grew by 1.0% in the first quarter from the preceding one, according to the statistics agency IBGE, in line with expectations, with the figure signaling the end of the country’s worst recession on record.  Year-over-year the economy has shrunk 0.4%, following a 2.5% drop in the previous quarter.

--India’s economy slowed sharply in the first three months of 2017, with growth at 6.1% year-on-year in the first quarter, down from 7% in the fourth quarter and 7.4% in the third.

[India’s May manufacturing PMI was 51.6, down from 52.5 the prior month.]

--Russia reported a manufacturing PMI for May of 52.4 vs. 50.8 in April, as the recovery continues here.  [Markit]

--Illinois is close to having its bond rating downgraded to junk by S&P Global Ratings, the lowest grade that it’s given to a U.S. state on record, as a long-running political stalemate over a budget shows no signs of ending, with Republicans and Democrats battling over pensions and other entitlement liabilities that have exploded since the financial crisis.  S&P on Thursday dropped the state’s general-obligation bonds one level to BBB- minus, the lowest possible investment-grade rating.

--Uber said its head of finance is leaving after the ride-hailing company reported further huge losses despite increasing revenue.  The company told the Wall Street Journal that first-quarter revenue was $3.4 billion, up 18% from the fourth quarter, but the loss, excluding employee stock compensation and other items, was $708 million, narrower than the $991 million reported three months earlier.

Uber has raised some $15 billion in equity and debt financing and it said it has $7.2 billion remaining.

The company doesn’t have to give out any numbers as it is privately held, but it announced a few months ago it wanted to go public eventually. An Uber spokesman told the Journal’s Greg Bensinger, “The narrowing of our losses in the first quarter puts us on a good trajectory towards profitability.”

The head of finance (Uber has been without a CFO since 2015), Gautam Gupta, is leaving to join another startup in San Francisco.

Earlier in the week, Uber said it had fired Anthony Levandowski, a star engineer the company hired to lead its self-driving auto venture, though he was accused of stealing trade secrets after he quit Google to start his own company, Otto, which Uber then acquired for $700 million last year.  He has been the subject of a big lawsuit, with Google having spent hundreds of millions on its autonomous car technology, an effort now led by Google subsidiary, Waymo.

--The director general of the International Air Transport Association warned that banning carry-on laptops on international flights might create a fire risk from lithium batteries stored in the cargo hold.

“If you put all the electronic devices in the belly, it raises a clear safety concern,” said Alexandre de Juniac of the IATA.

U.S. and European Union officials continue to discuss possibly banning laptops from cabins of all inbound flights to the U.S. from Europe.

The administration says the risk is not in laptop batteries, but more with bulk carriage of lithium devices that aren’t installed in equipment and thus less well-shielded from damage.

On Thursday, the IATA said airline travel bookings from the Middle East and North Africa to the U.S. and Europe slowed to the lowest level in five years in April, and March data indicated that Middle Easter carriers’ traffic to the U.S. declined 2.8% year-over-year, the first annual decline in at least seven years.

--Electronics retailer RadioShack has closed more than 1,000 stores since Memorial Day weekend, with just 72 dealer-owned stores remaining after a giant liquidation sale.

It was just last March that parent General Wireless Operations filed for bankruptcy protection and proposed closing only about 200 RadioShack stores, which is when I lost my favorite one in Madison, NJ.

While the company left the door open to close more, no one thought it would essentially be the entire chain.

In its heyday, RadioShack had 7,300 stores.

--Steven A. Cohen, the billionaire trader whose former firm pleaded guilty to criminal insider trading charges less than four years ago, is seeking to mass a giant pool of funds for his return to hedge funds, $20 billion, as soon as next year.

Cohen’s SAC Capital Advisors LP pleaded guilty in 2013 and paid $1.8 billion in penalties.

The SEC sought to have him barred for life, but a civil settlement with regulators instead restricted him from serving as the supervisor of a registered fund until 2018.

Cohen has been overseeing his $11 billion family fortune at Point72 Asset Management LP, and most or all of the $11 billion would become part of Cohen’s new operation, as reported by the Journal.

--CBS suddenly announced Wednesday that Scott Pelley is leaving the “CBS Evening News” to take on full-time duties at “60 Minutes,” but the network, in totally haphazard fashion, did so before announcing his replacement had been selected.  CBS then named veteran correspondent Anthony Mason as an interim anchor, taking over in July.

Granted, Pelley’s ratings haven’t been good, so from that standpoint the move wasn’t unexpected, it’s just that it didn’t exactly look classy.  And I guess he is still hanging out for a while.

But it’s true the three evening news networks have continued to see a deterioration in their audience, down 6% in the May sweeps year-to-year.  [Pelley was down 9%.]

It’s important to note, however, that the Big Three still have a huge audience in percentage terms compared to the cable networks at that time, and thus they maintain their heavy influence, especially in times of crisis or major events.

But, when it comes to influence, the morning shows bring in twice the ad revenues as the evening news, ergo, network execs are far more focused on the morning product.  [Stephen Battaglio / Los Angeles Times]

Foreign Affairs

Afghanistan: In one of the worst attacks of the Afghan war, a suicide bomber detonated a huge amount of explosives inside a tanker truck close to the heavily protected diplomatic quarter in Kabul during the morning rush hour, killing at least 90 people and wounding some 400.

The Taliban immediately denied being involved, though ISIS hasn’t claimed responsibility and despite their denials, the Taliban have been known to conduct indiscriminate attacks before, and the targeting of the Green Zone fits their modus operandi to focus on foreign occupiers.

President Ashraf Ghani, in condemning the attack, said he would order the execution of 11 militants on death row in revenge, with the Taliban immediately warning the government against harming any of their prisoners.

Ghani’s fragile government has been under increasing pressure over its failure to protect its citizens, and this was before this week’s carnage. Friday, there were anti-government protests in the streets of Kabul with at least four demonstrators killed.

Eleven U.S. citizens working as contractors were injured in the bombing.  None of the injuries were life-threatening, according to a State Department spokesman.

Editorial / Wall Street Journal

“No doubt the truck bomb that killed at least 90 people and wounded more than 400  in the diplomatic quarter in Kabul on Wednesday has already achieved part of its purpose: to cause Americans to think twice about continuing to help Afghanistan.  After 16 years it’s a reasonable question.

“Yet the situation is not as dire as the headlines seem. After a visit to Afghanistan in April in which he said 2017 would be another tough year for Afghan forces, Defense Secretary James Mattis noted at a meeting in Denmark that Islamic State ‘has lost about two thirds of its strength’ in Afghanistan. The Afghans are undertaking the bulk of their own defense and taking horrific casualties to fight against the Taliban, al Qaeda and Islamic State.

“The U.S. has roughly 8,400 troops in Afghanistan, but in February the commander on the ground, Army Gen. John Nicholson, told the Senate that he nonetheless has ‘a shortfall of a few thousand’ troops.  President Trump is now weighing how many more to send, and we hope he fulfills Gen. Nicholson’s request.

“Barack Obama’s main goal in Afghanistan was getting out, but even he came around to seeing that U.S. withdrawal might let the Taliban win.  A terrorist triumph in Afghanistan would provide a new safe haven for jihadists in the region, without bases for the U.S. forces on the ground to counter it.  At the very least a decision on U.S. troops should be made mindful of the large strategic stakes, not as an overreaction to a single truck bomb.”

I totally disagree with the Journal in their characterization that the situation isn’t dire.

Iraq/Syria/ISIS: Two car bomb attacks in the heart of Baghdad by ISIS killed at least 26 people, in an ongoing series of attacks that, frankly, are hard to keep up with.  IS said it is targeting “gatherings” of Shia Muslims.

Meanwhile, Iraqi forces continue to press forward with a broad offensive targeting the remaining ISIS-held areas in west Mosul, calling on civilians to leave, which is easier said than done when you are being held hostage.  Hundreds of civilians have been killed thus far.

In Syria, a wave of airstrikes in the eastern section killed at least 35 civilians, according to the Syrian Observatory for Human Rights, which said the airstrikes were conducted by the U.S.-led coalition.  The final offensive on ISIS’ de facto capital in Syria, Raqqa, has yet to begin.

Saudi Arabia, Iran et al: Benny Avni / New York Post:

“President Trump’s Mideast trip produced a bevy of encouraging promises. And his speech was a rousing success, laying out what was at stake in fighting terror, both from Iran and jihadis like ISIS and al Qaeda. But now comes the hard part: getting Arab nations to live up to those promises.  Especially Qatar.

“Trump’s formula is simple: Good versus evil. Are you with or against us?

“It matters little that none of the Arab nations are true democracies.  His speech was intended to gather a posse of willing partners to fight Mideast extremists and anti-US. firebrands.  (The fact that being a democracy came second was made clear when, on Tuesday, Acting Assistant Secretary of State Stuart Jones was stumped for half a minute when asked at a press briefing to distinguish between ‘democracy’ in Iran and Saudi Arabia.)

“As National Security Adviser H.R. McMaster and National Economic Council Director Gary Cohn wrote in the Wall Street Journal Tuesday, ‘A strong stand against terrorism is consistent with values common across all the world’s great religions.’

“And a strong coalition is emerging to make that stand, they insist. ‘Leader after leader’ has ‘committed to confronting the terrorism and extremism that plague all civilized societies.’

Well, maybe.

“Start with the Saudis. Trump and Riyadh signed a deal worth $110 billion to strengthen the Saudis’ defensive capabilities (while creating American jobs), and $270 billion in other investments.  The Saudis, in return, established the Terrorist Financing Targeting Center, designed to stem jihadi funding.

“That’s a big deal in a country where wealthy princes have for decades financed various extremists around the world – and where some still do.

“The Saudi king, and especially his son, Muhammad bin Salman – who’s the country’s real mover and shaker – seem to understand that jihadists really threaten their hold on power.

“But can the 31-year-old Muhammad fend off some powerful old guard traditionalists who still want to play ball with the Islamists?  That remains to be seen.”

Benny Avni went on to say that Egypt and Jordan should remain good, or “reasonably good” allies, but there’s Qatar, an ally that nonetheless lets Hamas leaders reside in Doha, while financing al-Nusra, the Syrian branch of al Qaeda.  Plus Qatar has made some statements that appear Iran friendly.

So it’s complicated.

Avni:

“Marshaling Arab support has always been difficult. Now, opposition to Iran’s expansionism has become an organizing theme that can unify the region against all extremists. Trump needs to issue a simple command for Qatar and anyone else trying to have it both ways: Choose.”

Israel: President Trump renewed a six-month waiver that will keep the U.S. embassy in Israel in Tel Aviv, instead of Jerusalem, which had been a campaign promise of Trump’s.

Every president has signed the waiver ever since Congress passed the Jerusalem Embassy Act in 1995 and Trump faced a June 1 deadline to renew the waiver or let it expire.

The U.S. does not recognize Jerusalem as the capital of Israel (as Israelis do) and presidents in both parties have said its final status should be part of any peace talks with the Palestinians.  For Trump to move today and announce the U.S. would move its embassy to Jerusalem would thus have imperiled any future negotiations between Israel and the Palestinians, which was a focus of Trump’s recent trip to the region.

But some of Trump’s leading donors, such as casino-magnet Sheldon Adelson, have pushed him to fulfill his promise.

North Korea: The Pentagon announced a high-profile test of America’s missile defense program was successful in shooting down a mock warhead over the Pacific, in simulation of an intercontinental-range missile like North Korea is developing.

The test was the first of its kind in nearly three years, the military launching an interceptor rocket from Vandenberg Air Force Base in California that slammed into the warhead that was launched from a test range on a Pacific atoll.

This was Tuesday.  The day before the U.S. and South Korea had a joint exercise in which U.S. B-1B bombers flew near the Military Demarcation Line that divides North and South Korea.

This came just hours after Pyongyang test-launched a short-range missile, its third launch in less than three weeks (12th of the year), with the North claiming it was the most precise test to date.

Russia said on Thursday it is preparing retaliatory measures in response to U.S. sanctions on some Russian companies and citizens over alleged connections to North Korea.  The U.S. announced it has blacklisted nine companies and government institutions, including two Russian firms, and three people for their support of North Korea’s weapons program.

South Korea: President Moon Jae-in’s top security aide left for Washington on Thursday as the new leader tries to reassure his country’s main ally he will not scrap the deal to host the missile defense system, THAAD, that so angered China.

But Moon has made conflicting statements, having ordered an investigation this week into why his office had not been informed about the deployment of four more launchers for the system.  During his presidential campaign, the liberal Moon had promised to review the THAAD agreement and said it was “very shocking” his office had not been told of the latest deployment as he prepares for a summit in Washington this month.

The decision to deploy the system was made under former President Park Geun-hye, who was impeached in a corruption scandal.

U.S. Defense Secretary Jim Mattis said on CBS’ “Face the Nation” on Sunday that war with North Korea would “probably be the worst kind of fighting in most people’s lifetimes.”

“The bottom line is it would be a catastrophic war if this turns into combat and we’re not able to resolve this situation through diplomatic means.”

China: The third-highest ranking official has told Hongkongers not to confront the central government over its promised “high degree of autonomy,” and called on the city to enact controversial national security laws, in Beijing’s sternest statement on Hong Kong in recent years.

In a speech on the mainland’s policy towards Hong Kong Saturday, Zhang Dejiang unveiled a number of areas where the government would ‘go into further details’ to consolidate its power over the chief executive.

Speaking at the Great Hall of the People on the upcoming 20th anniversary of Hong Kong’s handover from Britain to China, Zhang said the chief executive’s role in the city was the “core,” emphasizing judges and officials need to “take the lead to learn the Basic Law.”

Under the Basic Law, Hong Kong’s mini-constitution, China enjoys “comprehensive” sovereignty over the city, Zhang said.  Understand, the man heads the National People’s Congress and the Communist Party’s working group on Hong Kong.

Zhang is saying Beijing should have “more detailed” power to deal with Hong Kong, and a direct hand in assessing any legislation reported by Legco (the legislative council), and in the appointment of the chief executive and all principal officials.

Among the other items Zhang emphasized is the whole cabinet should be made up of patriots.  Ergo, no dissent will be tolerated.

This is scary, though not unexpected, stuff. Zhang said calls for self-determination or Hong Kong independence were attempts to end-run China’s sovereignty.

Hongkongers should understand with the speech that any protests could be brutally suppressed, and then should this happen, it will be interesting to see what world reaction would be, including from Washington.

Separately, China has adopted a controversial law that mandates strict data surveillance and storage for firms working in the country, according to Xinhua news agency.

The law was originally passed in November by the country’s parliament and bans online service providers from collecting and selling users’ personal information, and gives users the right to have their information deleted, in cases of abuse.

Xinhua said, “Those who violate the provisions and infringe on personal information will face hefty fines.”

Overseas business groups have been urging Chinese regulators to delay implementation of the law, saying the rules would severely hurt activities.

Well, like I’ve been saying for years, if you’re a U.S. multinational counting on China being a large source of future business, in many cases you’ll be sadly mistaken.

Russia: President Putin traveled to France for his first meeting with new President Macron, Macron using the opening of an exhibition marking the tricentenary of Peter the Great’s trip to Versailles as an excuse for the two to get together there.  Macron described the talks as “extremely frank and direct.”

Relations between France and Russia have been under severe strain since the 2014 annexation of Crimea and then the Kremlin’s intervention in Syria to prop up Bashar al-Assad.

Tensions increased during the French election campaign, with Macron accusing the Kremlin of hacking into his party’s website and spreading false stories in an attempt to get voters to vote for Putin’s favored candidate, Marine Le Pen.  Putin of course denies such claims.

Regarding Syria, Macron said that if Russia were to use chemical weapons there, that would be a “red line” for France.

Meanwhile, during a visit to Australia, Republican Sen. John McCain (Ariz.) said Russia is a bigger security threat than Islamic State, citing Russia’s willingness to interfere in elections.

McCain, in Australia to discuss Asia-Pacific security issues, said: “I think ISIS can do terrible things and I worry a lot about what is happening with the Muslim faith. But it’s the Russians who tried to destroy the very fundamental of democracy, and that is to change the outcome of an American election.” 

Philippines: Foreign fighters are among the militants who besieged a southern Philippines city, Marawi, intensifying fears that ISIS is gaining a foothold in Southeast Asia.  Bodies found in Marawi, 830 miles south of Manila and on the island of Mindanao, include Malaysians, Indonesians, Saudis, and even a Chechen.

Overall, there are about a dozen different Islamist groups operating in the southern area and Australia and other nations in the region are so worried about the threat of homegrown ISIS militants returning from the battlefields of Iraq and Syria that a summit has been convened for August specifically to deal with the threat.

Philippine President Rodrigo Duterte last week imposed martial law on Mindanao, granting security forces sweeping powers, while warning of the threat of “contamination” by IS.

Separately, early Friday in Manila, a shooting erupted at a popular casino resort/hotel complex, Resorts World, sending terrified guests and workers fleeing, with initial reports talking of a potential terrorist attack by ISIS, which, given the situation in Mindanao, kind of made sense.

But I was following the news wires as the story unfolded and there was zero talk of casualties, with police saying almost immediately they had the situation under control.

There was heavy smoke and “gunshots” were heard.

So then we learned a lone gunman sparked the panic, a man looking to rob the casino (taking $2 million in chips), not a terror attack.  For a few hours, that seemed to be it, until authorities, in clearing the building, found 36 bodies, victims of suffocation after the robber set fire to casino tables.  He didn’t fire at any patrons, rather he was firing at TV screens. The unidentified man then apparently killed himself nearby.

It was yet another classic case of ‘wait 24 hours,’ yet there was President Trump in the Rose Garden, who in announcing the withdrawal from the Paris Accord, opened by saying:

“I would like to begin by addressing the terrorist attack in Manila. We’re closely monitoring the situation, and I will continue to give updates if anything happens during this period of time.  But it is really very sad as to what’s going on throughout the world with terror.”

Except in this case it wasn’t terror, at least as of the last report.

Venezuela: Gunmen manning a street barricade in Caracas shot dead a Venezuelan judge who appeared to be in the wrong place at the wrong time. The anti-government unrest has killed at least 61 as of Thursday.  It was probably a robbery attempt, as the people are desperate for food.

Random Musings

--Press secretary Sean Spicer returned on Tuesday after a two-week absence.  The appearance came just hours after Mike Dubke resigned as White House communications director, in what all expect to be just the first of many moves in Trump’s communications office, with Spicer not expected to last much longer.  [Spicer’s performance Tuesday was clearly intended to kiss his boss’ butt, rather than deal with the questions being asked.  It was quite pathetic.  Ditto subsequent performances.]

--The Trump administration is asking the Supreme Court to reinstate its ban on travelers from six  mostly Muslim countries.  This whole process has been a bad joke and it’s all on the administration. 

--I watched Hillary Clinton’s comments Wednesday during a Q&A session at a conference in Rancho Palos Verdes, California, as she blasted the Democratic National Committee.

“I mean, it was bankrupt.  It was on the verge of insolvency. Its data was mediocre to poor, nonexistent, wrong,” she recalled. “I had to inject money into it.”

By contrast, she said, then-GOP candidate Donald Trump inherited a well-funded and extensively tested data operation that laid the foundation for his ultimately successful campaign to effectively weaponize data and internet content against Clinton.

“So Trump becomes the nominee and he is basically handed this tried and true, effective foundation,” she said.

Clinton also suggested that Russian efforts to meddle in the election could only be “guided by Americans” and other political operatives and strategists.

“The Russians in my opinion, and based on the intel and counterintel people I’ve talked to, could not have known how best to weaponize that information unless they had been guided.  Guided by Americans and guided by people who had polling and data information.”  [The Hill]

Good lord.  Hillary’s excuses tour continues.

Editorial / New York Post

“Call it the most epic ‘defeat lap’ ever: Hillary Clinton can’t stop showing the world why she lost.

“At a conference in California on Wednesday, she insisted her e-mail mess was ‘the biggest nothing-burger ever’ and explained that she gave those toadying Goldman Sachs speeches because, well, ‘They paid me.’

“She also added to the list of other people responsible for her loss, insisting she inherited a mess at the Democratic National Committee – ‘Its data was mediocre to poor, nonexistent, wrong.’

“Oops: Andrew Therriault, the DNC chief of Data Science in 2014-16, revealed an even more damning Team Hillary fail in a tweet (later deleted) slamming her for ‘bashing DNC data,’ when the DNC models never had Michigan, Wisconsin or Pennsylvania ‘looking even close to safe.  Her team thought they knew better.’

“Sanctimonious, avaricious and just plain wrong on the facts: That’s the Hillary Clinton America chose not to elect.”

--Kathy Griffin was booted by CNN from its New Year’s Eve coverage after her disturbing photoshoot holding up a faux severed and bloody head of President Trump.  She has co-hosted the network’s “New Year’s Eve Live” broadcast with Anderson Cooper since 2007.

Once the image of Griffin went viral, it was just a matter of time before she was sacked, as people on both the left and right were outraged.

Anderson Cooper tweeted: “For the record, I am appalled by the photo shoot Kathy Griffin took part in. It is clearly disgusting and completely inappropriate.”

Griffin later apologized in a Twitter video, saying: “I went way too far.  I made a mistake and I was wrong.”

President Trump tweeted: “Kathy Griffin should be ashamed of herself. My children, especially my 11 year old son, Barron, are having a hard time with this. Sick!”

First lady Melania Trump in a statement: “As a mother, a wife, and a human being, that photo is very disturbing.”

“When you consider some of the atrocities happening in the world today, a photo opportunity like this is simply wrong and makes you wonder about the mental health of the person who did it,” the statement continued.

--Editorial / Washington Post

“Taliessin Myrddin Namkai Meche, 23, and Rick Best, 53, were killed when they – along with a third man, who was injured – intervened as two young women were being terrorized with anti-Muslim insults by a rider on a commuter train in Portland, Ore.  They probably saved the women’s lives.  They are heroes. Their willingness to help others – to stand up against bigotry and hate – hopefully will serve as an inspiration in these increasingly tense and troubled times.

“ ‘Without them, we probably would be dead right now,’ said 16-year-old Destinee Mangum, who, almost in wonderment, added ‘they didn’t even know me.’  Ms. Mangum, who said she is not Muslim, and a friend who was wearing a hijab were on the train late Friday afternoon when a man, later identified by authorities as Jeremy Joseph Christian, entered the car and started screaming slurs at them.  Mr. Namkai Meche, a recent college graduate, and Mr. Best, an Army veteran and father of four, were fatally stabbed and Micah David-Cole Fletcher, 21, had his throat slashed as they tried to deescalate the situation.

“Mr. Christian...has a criminal record, including a conviction in 2002 for robbery and kidnapping, and authorities said he has a history of white supremacist views. Did he just snap?  Had he been spoiling for a fight? Did the rising tensions in Portland between groups with opposing extremist views factor into this attack in any way?  That hateful speech can lead to hateful actions should give pause to those who have been quick to divide and demonize.

“President Trump’s unequivocal condemnation...was welcome and needed. Also encouraging was the public response: hundreds of people turning out for vigils and interfaith services and contributions pouring into GoFundMe campaigns for the three men as well as the young women.

“Sadly, some may learn the wrong lessons from Portland’s tragic events, using them as a reason not to say or do something when someone needs help.  ‘Why be a hero?’ goes that reasoning.  People always should be careful about placing themselves in personal danger – and, if possible, summon help from authorities who may be better-equipped.  In the end, though, the answer may lie with the insight offered by one speaker at a vigil honoring Mr. Namkai Meche and Mr. Best: ‘They didn’t have capes. They were just human beings that we all have the capacity to be.’”

Meanwhile, Portland’s mayor, Ted Wheeler, took the totally wrong approach in the aftermath of the killings, saying controversial rallies planned for this month should be canceled, to which the Washington Post editorialized:

“(Mayor Wheeler’s) concern for the raw feelings of his community is understandable, but he is completely off-base in trying to block the planned rallies and dangerously wrong in his reading of the U.S. Constitution.

“Mr. Wheeler unsuccessfully appealed to federal officials to revoke a permit granted to a group to hold a pro-Trump, free-speech rally Sunday at a downtown federal government plaza.  His request that a permit not be granted for a June 10 anti-Muslim rally was made moot when organizers opted Wednesday to cancel the rally and encourage participants to attend a similar event in Seattle instead.  The mayor characterized the rallies as ‘alt-right’ and said ‘hate speech is not protected by the First Amendment.’

“Actually, as was pointed out by legal scholars and free-speech advocates, Mr. Wheeler is wrong about how constitutional protections of free speech have been interpreted by the courts. Speech, no matter how vile or distasteful, is protected in the United States.  It can be banned only if it meets the legal threshold of threat or harassment.”

--Gen. Manuel Noriega died this week.  He was 83.  Panamanian President Juan Carlos Varela announced the death on Twitter, saying that the passing of the former strongman toppled in a 1989 U.S. invasion closes a chapter in the country’s history.

--George F. Will / Washington Post...as part of an op-ed on Nebraska Republican Sen. Ben Sasse and his book “The Vanishing American Adult: Our Coming-of-Age Crisis and How to Rebuild a Culture of Self-Reliance.”

“Childhood obesity has increased 500 percent in five decades.  For ‘the most medicated generation of youth in history,’ sales of ADHD drugs have increased 8 percent a year since 2010.  Research shows that teenage texters exhibit addictive, sleep-depriving behaviors akin to those of habit-denying addictive gamblers.  Teenagers clutching their devices ‘are spending nearly two-thirds of their waking hours with their eyes tied down and bodies stationary.’ Five million Americans, many of them low-skilled young men, play 45 hours of video games per week.

“In the long-running rivalry between the realist and romantic views of human nature, Sasse is firmly with the former.  This aligns him against those who believe that schooling should ‘be a substitute for parents’ as life’s ‘defining formative institution.’  In the progressive view of education with which the philosopher John Dewey imbued the United States’ primary and secondary schools, parents ‘with their supposedly petty interests in their children as individuals’ are deemed retrograde influences, hindering schools’ mission of making malleable young people outfitted with the proper ‘social consciousness.’  Schools should embrace the need of ‘controlling’ students and ‘the influences by which they are controlled.’  Parents must be marginalized lest they interfere with education understood, as Sasse witheringly says, as ‘not primarily about helping individuals, but rather about molding the collective.’

“When the United States was founded, Sasse the historian reminds us, ‘nobody commuted to work.  People worked where they lived.’  Before the ‘generational segregation’ of modern life, children saw adults working and were expected to pitch in. The replacement of ‘the gritty parenting of early America’ by ‘a more nurturing approach’ coincided with the rise of mass schooling.  In 1870, fewer than 2 percent of Americans had high school diplomas. An average of one new high school a day was built between 1890 and 1920, and by 1950, more than 75 percent of Americans were high school graduates.

“Sasse, 45, a former university president, regrets neither nurturing nor mass education.  He does regret the failure to supplement these softening experiences with rigors sought out for their toughening effects....

“The United States, Sasse says, needs to teach its children what life used to teach everyone, and what F. Scott Fitzgerald told his daughter: ‘Nothing any good isn’t hard.’ What will be hard is the future of Americans who do not cultivate a toughness that goes against the grain of today’s America.”

[And that, friends, is the last time I glorify Sen. Sasse.  Yes, it should be clear from the last few weeks that I hope this man runs for higher office someday.]

--NASA announced that it will launch its most ambitious mission ever to the sun, flying ten times closer to its atmosphere than any previous mission, within 4 million miles of the surface and withstanding temperatures of up to 2,500 Fahrenheit, which if our own surface hit that level, the ice caps would probably melt....very quickly.

The launch is planned for some time next summer and will be the first time a satellite flew directly into the sun’s atmosphere, which I didn’t realize is hotter than the surface of the sun itself. 

After eight weeks, the satellite will encounter Venus and then eight weeks after that, it will reach the sun, traveling at 430,000 miles an hour.  Then it will make orbits around the sun for basically as long as it can, though the whole mission is planned for seven years.  Very cool, err, hot.  Hope the satellite is using SPF 30.  [Shibani Mahtani / Wall Street Journal]

[The mission is being called the Parker Solar Probe, after work done by Eugene Parker at the University of Chicago in 1968, when he wrote the defining paper on solar winds and the solar magnetic system.]

--Lastly, Thursday night I did my annual duty as part of a charity organization I’m affiliated with in New Providence, handing out scholarships to high school seniors at their awards ceremony.  Afterwards, I was trading notes with former high school classmate and fireballing lefty, though he’s really from the ‘right’, Bobby C., on various topics and I commented how this year our Lions club granted the awards to the most diverse group of students we’ve ever selected, as the makeup of the community, like most everywhere else in America the past few decades, has changed pretty drastically.

So I thought Bobby C. put it well: “People don’t appreciate that we are the most diverse and tolerant country on the planet.  Try finding that in Japan, China, France, Germany, Saudi Arabia, etc.”

It’s so true.  Yeah, we have our issues, and we’re going through a rough patch in a number of respects these days, but for the most part it’s still America the Beautiful; still that shining city on a hill.

---

Gold $1281
Oil $47.74

Returns for the week 5/29-6/2

Dow Jones  +0.6%  [21206]
S&P 500  +1.0% [2439]
S&P MidCap  +1.4%
Russell 2000  +1.7%
Nasdaq  +1.5%  [6305]

Returns for the period 1/1/17-6/2/17

Dow Jones  +7.3%
S&P 500  +8.9%
S&P MidCap  +5.5%
Russell 2000  +3.6%
Nasdaq  +17.1%

Bulls  50.0
Bears  19.2 [Source: Investors Intelligence]

Dr. Bortrum posted a new column.

Have a great week.

Brian Trumbore

 



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Week in Review

06/03/2017

For the week 5/29-6/2

[Posted 11:30 PM ET, Friday]

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

Edition 947

Trump Comes Home...Europeans Fret....

[I have my take on withdrawing from the Paris Agreement down below.]

Last Sunday, during a campaign appearance in Munich, German Chancellor Angela Merkel said that a new chapter in U.S.-European relations had begun, and that Europe “really must take our fate into our own hands.”  Merkel, Europe’s de facto leader, told her followers that the days when Europe could rely on others was “over to a certain extent.  This is what I have experienced in the last few days,” alluding to her meetings with President Trump.  Clearly, relations between Europe and the White House were strained even more than they already were as a result of Trump’s trip.

Trump himself, though, had a different take upon his return on Saturday, tweeting out:

“Just returned from Europe.  Trip was a great success for America.  Hard work but big results!”

Yes, Trump’s Twitter habit was back and over the course of the next few days, we were treated to stuff like:

“So now it is reported that the Democrats, who have excoriated Carter Page about Russia, don’t want him to testify.  He blows away their...case against him & now wants to clear his name by showing ‘the false or misleading testimony by James Comey, John Brennan...’ Witch Hunt!”

And he called Germany’s trade policies “very bad” on Tuesday, as Merkel’s election rival, Martin Schulz, said Trump was a “destroyer of Western values,” adding that the president was undermining the peaceful cooperation of nations based on mutual respect and tolerance.  “One must stand in the way of such a man with his ideology of rearmament.”

[German Foreign Minister Sigmar Gabriel suggested the spat was just a rough patch.]

It’s important to note that Schulz has long been a Trump hater since day one of Trump’s campaign, but when Schulz initially popped in the polls upon his announcement he was running for chancellor against Merkel last January, Merkel began coopting his message and it’s worked.

Meanwhile, former FBI Director James Comey agreed to appear before the Senate Intelligence Committee at 10:00 a.m. on Thursday, June 8, at which time multiple reports said he plans to say President Trump pressured him to drop an investigation into former national security adviser Michael Flynn’s ties to Russia.

Comey has apparently discussed the parameters of his congressional testimony with Special Counsel Robert Mueller, who has taken over the criminal investigation.

Russian President Vladimir Putin suggested Thursday that “patriotically minded” private Russian hackers could have been involved in cyberattacks last year that meddled in the U.S. election.

Putin continued to deny any Kremlin involvement, but his comment clearly departed from his previous position: that Russia had played no role whatsoever in the hacking of the Democratic National Committee.

Friday, at an economic forum in St. Petersburg, Putin said that Trump had run a more effective campaign than Clinton and that U.S. intelligence agencies may have faked evidence of campaign hacking, adding there were no “Russian fingerprints.”

So next week, Russia is back front and center, after losing the stage somewhat at week’s end to the Paris Accord.

But first, pre-Paris withdrawal....

Opinion...all sides....

Ralph Peters / New York Post

“President Trump’s immediate Russia problem is that he insists he doesn’t have a Russia problem. He does.

“Whether the multiple investigations underway reveal indisputable evidence of subversive relationships or give the president a clean bill of political health, they must be pursued to the end. It’s essential to the integrity of our system of government.

“Given the allegations and the extraordinary, if largely circumstantial, evidence already accumulated, every American, whatever his or her political bent, should want answers.  Instead, we have Democrats prematurely demanding impeachment, while Republicans dismiss a paramount security threat as a witch hunt.

“Let the independent counsel, the FBI, Treasury and other relevant agencies do their jobs.

“What do we know that merits investigation?

“At least five Trump campaign advisers have had dubious ties to Russia.  Carter Page shared energy-industry information with Russian agents. Roger Stone, who’s known Trump since the 1980s, appears to have had advance knowledge of Russian mischief during the election.  Paul Manafort made a fortune working for Vladimir Putin’s now-vanquished puppet regime in Ukraine and had extensive Moscow ties.

“Retired Lt. Gen. Michael Flynn, once a fine soldier, disgraced his uniform by taking payment from the Putin regime (and by surreptitiously flacking for Turkey), then attempting to cover it up.  He lied to Vice President Mike Pence, obfuscated with investigators and deceived the Pentagon.

“Now Trump’s son-in-law Jared Kushner has been placed, along with Flynn, in a secretive meeting with Russia’s U.S. ambassador, Sergey Kislyak, reportedly for the purpose of establishing clandestine back-channel communications with Moscow (the line was never activated).  Whether the idea was first broached by Flynn and Kushner or by the Russians, this isn’t business as usual. Even Henry Kissinger, pursuing his opening with China, didn’t rely upon Chinese intelligence-service communications.

“Kushner also met with Sergey Gorkov, Russian spy-school grad and head of Vnesheconombank, a Russian international bank under U.S. sanctions that appears to serve as a slush fund for Putin.  Why?  This isn’t business as usual, either....

“The president fired FBI Director James Comey, who had been heading the investigation into Russian campaign activities.  Then Trump told the Russian ambassador and Foreign Minister Sergey Lavrov that getting rid of Comey took the pressure off of Russia-related matters.  That isn’t business as usual.

“Trump made it clear that, in the recent French presidential elections, he preferred pro-Putin candidate Marine Le Pen (who lost by a landslide).  Trump mirrors Putin’s line on the European Union and, to a worrisome degree, NATO.  And while the president is swift to criticize allies, he doesn’t criticize Putin.  That isn’t business as usual....

“It’s unfortunate that this vital national-security issue has been muddied by the shamelessly biased media (on both sides) and by hysterical partisan loyalties. This transcends politics.  It’s about the safety of the republic, the integrity of our national elections and possible hostile penetration of a presidential administration.

“No matter which side of the political divide we’re on, as Americans we should want to know the truth, the whole truth and nothing but the truth.”

Editorial / Wall Street Journal

“President Trump can’t seem to stop himself from popping off on trade, but can he at least do a little homework?  The German newspaper Der Spiegel reported this week that Mr. Trump called out German car makers in a meeting with EU leaders in Brussels.  ‘Look at the millions of cars that they sell in the U.S.  Terrible.  We’re going to stop that,’ ostensibly through tariffs.  The White House has not denied the report.

“Some basic facts: Last year BMW produced more than 400,000 cars at its $7 billion plant in...South Carolina.  About 70% of the cars were exported, which makes BMW the top automotive exporter in the U.S.  Last year a Mercedes plant in Alabama made 300,000 cars.  Foreign-based auto makers (including Toyota, Mitsubishi and others) produced 5.5 million cars in America last year and have invested $75 billion in U.S. operations.

“That translates to thousands of jobs, mostly in states with right-to-work laws, which tend to be run by Republicans and voted for Mr. Trump. The BMW plant in South Carolina employs 8,800 people, and Mercedes has invested more than $4.5 billion in Tuscaloosa County, Ala.  Of the top 10 states for employment by an international auto maker, Mr. Trump carried nine.

“Yet Mr. Trump is fixated on a $15.4 billion automobile trade deficit with Germany.  This is a meaningless statistic, not least because the inputs are produced along a global supply chain.  Mr. Trump has some dim sense that no one drives Chevys in Hamburg, but one reason is that Europe distorts its market with emissions rules and high fuel taxes.

“Mr. Trump is known to sound off and then ditch some of his worst ideas, and perhaps here he’ll do the same.   But he could do much more for U.S. manufacturing by passing tax reform and dropping out of the Paris climate accord than with ill-informed tirades on trade.”

H.R. McMaster and Gary D. Cohn / Wall Street Journal

“President Trump just returned from nine days in the Middle East and Europe that demonstrated his America First approach to ensuring security and prosperity for our nation.  America will not lead from behind. This administration will restore confidence in American leadership as we serve the American people.

“America First does not mean America alone. It is a commitment to protecting and advancing our vital interests while also fostering cooperation and strengthening relationships with our allies and partners.  A determination to stand up for our people and our way of life deepens our friends’ respect for America.

“The president is unequivocal in declaring that America’s primary interest is the safety and security of our citizens.  In discussions overseas, Mr. Trump encouraged others to join the U.S. in doing more to defeat the terrorist organizations that threaten peaceful nations around the world.  He challenged leaders of more than 50 Muslim-majority countries to stand together ‘against the murder of innocent Muslims, the oppression of women, the persecution of Jews, and the slaughter of Christians.’

“A strong stand against terrorism is consistent with values common across all the world’s great religions.  After the president’s historic remarks, leader after leader of Muslim-majority nations reaffirmed the president’s message and committed to confronting the terrorism and extremism that plague all civilized societies. To answer the call and address these grave concerns, Saudi Arabia launched a new Global Center for Combatting Extremist Ideology, and several Middle Eastern nations signed a memorandum of understanding to create the Terrorist Financing Targeting Center, with the mission of cutting off funds to terrorist organizations....

“While meeting with European Union leaders in Brussels, the president reiterated his concern about our trade deficits with many European nations. He also emphasized the importance of reciprocity in trade and commerce. Simply put, America will treat others as they treat us. At the Group of Seven in Taormina, Sicily, where President Trump further solidified his relationships with leaders of the world’s largest market economies, the members came together in the official communique to stand firm ‘against all unfair trade practices’ and to foster a truly level playing field.

“Strong alliances and economically thriving partners are a third vital American interest. As the president stated in Brussels, the North Atlantic Treaty Organization is rooted in ‘the courage of our people, the strength of our resolve, and the commitments that bind us together as one.’  While reconfirming America’s commitment to NATO and Article 5, the president challenged our allies to share equitably the responsibility for our mutual defense.  We came away with new outcomes for the first time in decades: More allies are stepping up to meet their defense commitments.  By asking for more buy-in, we have deepened our relationships. That is not surprising.  Alliances based on mutual respect and shared responsibility are strong.  And strong alliances bolster American power....

“We are asking a lot of our allies and partners. But in return America will once again be a true friend to our partners and the worst foe to our enemies. The president’s visit showed the power of both competing to advance interests and engaging to develop relationships and foster cooperation. We have a vital interest in taking the lead internationally to advance American military, political and economic strength.

“We engage with the world not to impose our way of life but to ‘secure the blessings of liberty for ourselves and our posterity.’....

“At every stop in our journey, we delivered a clear message to our friends and partners: Where our interests align, we are open to working together to solve problems and explore opportunities.  We let adversaries know that we will not only take their measure, deter conflict through strength, and defend our interests and values, but also look for areas of common interest that allow us to work together.  In short, those societies that share our interests will find no friend more steadfast than the United States. Those that choose to challenge our interests will encounter the firmest resolve.

“This historic trip represented a strategic shift for the United States. America First signals the restoration of American leadership and our government’s traditional role overseas – to use the diplomatic, economic and military resources of the U.S. to enhance American security, promote American prosperity, and extend American influence around the world.”

Counterpoint to the above...David Brooks / New York Times:

“This week, two of Donald Trump’s top advisers, H.R. McMaster and Gary Cohn, wrote the following passage in the Wall Street Journal: ‘The president embarked on his first foreign trip with a clear-eyed outlook that the world is not a ‘global community’ but an arena where nations, nongovernmental actors and businesses engage and compete for advantage.’

“That sentence is the epitome of the Trump project.  It asserts that selfishness is the sole driver of human affairs.  It grows out of a worldview that life is a competitive struggle for gain.  It implies that cooperative communities are hypocritical covers for the selfish jockeying underneath.

“The essay explains why the Trump people are suspicious of any cooperative global arrangement, like NATO and the various trade agreements. It helps explain why Trump pulled out of the Paris global-warming accord. This essay explains why Trump gravitates toward leaders like Vladimir Putin, the Saudi princes and various global strongmen: They share his core worldview that life is nakedly a selfish struggle for money and dominance.

“It explains why people in the Trump White House are so savage to one another. Far from being a band of brothers, their world is a vicious arena where staffers compete for advantage.

“In the essay, McMaster and Cohn make explicit the great act of moral decoupling woven through this presidency.  In this worldview, morality has nothing to do with anything.  Altruism, trust, cooperation and virtue are unaffordable luxuries in the struggle of all against all.  Everything is about self-interest.”

Charles Krauthammer / Washington Post

“So what if, in his speech last week to NATO, President Trump didn’t explicitly reaffirm the provision that an attack on one is an attack on all?

“What’s the big deal?  Didn’t he affirm a general commitment to NATO during his visit?  Hadn’t he earlier sent his vice president and secretaries of state and defense to pledge allegiance to Article 5? And anyway, who believes that the United States would really go to war with Russia – and risk nuclear annihilation – over Estonia?

“Ah, but that’s precisely the point. It is because deterrence is so delicate, so problematic, so literally unbelievable that it is not to be trifled with.  And why for an American president to gratuitously undermine what little credibility deterrence already has, by ostentatiously refusing to recommit to Article 5, is so shocking.

“Deterrence is inherently a barely believable bluff.  Even at the height of the Cold War, when highly resolute presidents, such as Eisenhower and Kennedy, threatened Russia with ‘massive retaliation’ (i.e., all-out nuclear war), would we really have sacrificed New York for Berlin?

“No one knew for sure. Not Eisenhower, not Kennedy, not Khrushchev, not anyone.  Yet that very uncertainty was enough to stay the hand of any aggressor and keep the peace of the world for 70 years, the longest period without war between the Great Powers in modern history.

“Deterrence does not depend on 100 percent certainty that the other guy will go to war if you cross a red line. Given the stakes, merely a chance of that happening can be enough.  For 70 years, it was enough.

“Leaders therefore do everything they can to bolster it.  Install tripwires, for example.  During the Cold War, we stationed troops in Germany to face the massive tank armies of Soviet Russia.  Today we have 28,000 troops in South Korea, 12,000 near the demilitarized zone.

“Why?  Not to repel invasion.  They couldn’t....They’re a deliberate message to the enemy that if you invade our ally, you will have to kill a lot of Americans first.  Which will galvanize us into full-scale war against you.

“Tripwires are risky, dangerous and cynical. Yet we resort to them because parchment promises are problematic and tripwires imply automaticity....

“Which is why presidents from Truman on have regularly and powerfully reaffirmed our deterrent pledge to NATO. Until Trump.

“His omission was all the more damaging because of his personal history.  This is a man chronically disdainful of NATO.  He campaigned on its obsolescence.  His inaugural address denounced American allies as cunning parasites living off American wealth and generosity....

“Moreover, Trump devoted much of his Brussels speech, the highlight of his first presidential trip to NATO, to berating the allies for not paying their fair share.  Nothing particularly wrong with that, or new....

“That’s an American perennial. But if you’re going to berate, at least reassure as well. Especially given rising Russian threats and aggression....An administration official had spread the word that he would use the speech to endorse Article 5....

“And yet Trump deliberately, defiantly refused to simply say it: America will always honor its commitment under Article 5.

“Trump’s refusal to utter those words does lower whatever probability Vladimir Putin might attach to America responding with any seriousness to Russian aggression against a NATO ally....

“It’s not that yesterday Europe could fully rely – and today it cannot rely at all. It’s simply that the American deterrent has been weakened. And deterrence weakened is an invitation to instability, miscalculation, provocation and worse.

“And for what?”

Kimberley A. Strassel / Wall Street Journal

“Here is what Americans this week were told counted as ‘news’: Jared Kushner’s past meetings.  Russians.  James Comey’s upcoming testimony.  Russians.  Hillary Clinton’s latest conspiracy theories.  Russians.  Bob Mueller’s as-yet-nonexistent investigation (into Russians).  Kathy Griffin, Mr. Met and, of course, ‘covfefe.’  Total words printed on these subjects?  At least a duodecillion.

“Here’s what actually happened this week, the ‘news’ that holds real consequences for real Americans:

“Interior Secretary Ryan Zinke signed an order to begin reopening Alaska’s National Petroleum Reserve to oil and gas exploration, reversing the Obama administration’s ideologically driven 2013 shutdown. The order even aims at opening the Arctic National Wildlife Refuge to production – a move that is decades overdue.  This could not only buck up the listless Alaskan economy but cement the U.S. as an oil and gas powerhouse.

“In related news, the Dakota Access Pipeline finally went live.

“The Fish and Wildlife Service took steps that may stop the Obama administration’s last-minute endangered-species listing for the Texas Hornshell, a freshwater mussel.  That listing, based on outdated science, threatens significant harm to the Texas economy and was done over the protest of state officials and local industry.

“Commerce Secretary Wilbur Ross surprisingly said that he was open to completing the Transatlantic Trade and Investment Partnership, or TTIP, a far-reaching trade agreement being negotiated with the European Union.

“Sen. John Thune, the upper chamber’s third-ranking Republican, said his caucus had moved beyond meetings and on to ‘drafting’ the base language of an ObamaCare replacement.  The No. 2 Republican, John Cornyn, vowed the Senate would ‘absolutely’ have a bill by ‘the end of July at the latest.’

“And on and on....

“Who is to blame for this real-news blackout?  The press, obviously. But the co-culprit: Donald Trump....

“The result is a surreal situation in which the near-hysterical press coverage of Trump the man (and potential Russian operative) is utterly divorced from the substantive actions his administration takes or the progress it makes.  Mr. Trump’s cabinet, which includes some of the best reformers in the conservative world, is methodically implementing a far-reaching deregulatory agenda.  Congress is moving ahead on key promises.

“Thus Mr. Trump’s culpability. The president knows better than most the ills of the media; he rails about them constantly. Yet he continues to be the indulger in chief. He daily provides new, explosive tweets that give reporters every excuse to keep up their obsessions about Russia, Mr. Comey, Hillary, Carter Page.

“Mr. Trump’s Twitter handle may be the most powerful communications tool on the planet. He has the awesome ability, unlike any president in history, to force the press to focus on his agenda by putting it out into the world every morning (or late night, as it may be). He could use that tool to set the daily discussion.  Instead, he’s using it to undermine his own administration.

“Mr. Trump also has at his disposal an array of famous surrogates who could spread his message. He has all the free media he could ever hope for, if only he used it in a strategic fashion.  He has activist groups to help push for his reforms, but they can’t compete amid the crazy headlines.

“Team Trump owes it to voters to get the real news out about its agenda and successes.  But that will require doing more than complaining about the press.  This White House needs to set and define the daily debate.  It’s that, or Russia headlines through 2018.”

Withdrawing from the Paris Agreement, the Budget and Repeal of ObamaCare....

I have been consistent in my opinion for years.  The Iran nuclear deal was a total sham, it should never have been signed, but once it was we were stuck with it.  All during the 2016 campaign, I blasted Donald Trump for spouting off that the U.S. could just withdraw from it.  No! I wrote.  There are five other parties to it, all of whom are already doing extensive business with Iran with the lifting of sanctions, and to say otherwise is flat-out dishonest.  Did anyone possibly believe the other five – Britain, France, Germany, Russia and China – would follow us?  Of course not. 

Regarding Iran, the best we can hope for is that the inspections regime built into the nuclear agreement works (it won’t), and that eventually there is regime change (not as likely with the reelection of President Rouhani).  Otherwise, Iran gets the bomb.

When it came to the Paris Agreement on combating climate change, I said that this deal was also a total sham because it required nothing of China and India for decades, if ever.  This single fact makes it a joke.  But we signed onto it.

Who was responsible for both agreements?  President Obama.  The same man who cared more about the 2012 election than cooperating with President Erdogan of Turkey on a no-fly zone for Syria that would have stopped the massive carnage to come in the then still-nascent Syrian civil war in its tracks, avoiding the deaths of another 480,000 plus, the refugee crisis that then engulfed Europe and Syria’s neighbors, the formation of ISIS, and Russian involvement in that theatre.

This is the man, Obama, we entrusted to make such decisions and today we are paying the price.

But the Iran and Paris deals are distinctly different.  The Paris accord, even though the U.S. signed it along with 194 other nations, allows each country to set its own targets – meaning the targets can be moved without formal negotiations.  Yes, Obama set aggressive targets that if followed to the ‘T’ would have cost jobs in certain sectors of the American economy, but the whole deal is nothing more than tissue paper.

That said, it was a global framework and, what the hell, a new president comes into office, like Trump, pulls away Obama’s energy-related regulations, one by one, and we can deal with the Paris accord on our own terms.  Plus there are no massive protestations from world leaders and their populations because we can say, ‘Hey, we’re still in the deal.  The proof is in the pudding.  Who is reducing greenhouse gas emissions faster than the United States?  No one.  Leave us alone.  Go talk to China.’

That’s not how Donald Trump and a segment of the White House viewed it, though.  For starters, Trump should have moved the battle to the Senate, and as former secretary of state James Baker said on the “Today Show” the other day, let the people decide if they want to be in it or leave it.  We’d still retain our flexibility to move as fast or slowly as we wanted to if the people said, yes, we should be in.

But now we’re out, and there will be major consequences.  We didn’t have to pull a Mr. Met and flip off our allies in such blatant fashion.  Campaign promises?  Trump has been breaking them every day.  So what?  For his supporters, he’s gotten a lot done and if the market place feels there’s still a place for coal, and the price makes sense from a cost-benefit standpoint, coal will retain a share of the energy market.

Meanwhile, Trump indicated he was open to another climate deal, saying he would “begin negotiations to re-enter either the Paris accord or a really entirely new transaction on terms that are fair to the United States.”

But there is zero reason for the other players to reopen a deal that took years to reach, especially as Trump would be calling for deeper cuts from other countries.

As for the process of actually leaving the Paris agreement, it won’t be complete until just weeks after the U.S. presidential election in 2020, meaning it will be a major campaign issue.  A new president could reverse Trump’s order, or Trump could do it himself in a second term.

The Paris accord remains in effect regardless of the U.S. position.  We could have remained part of it and basically said, ‘whatever,’ but we wouldn’t have pissed off allies who will be needed for a true crisis sooner than later.

More next time, including how Corporate America does have good reason to be concerned.  It’s not just world leaders we now have to deal with.  It’s a riled up populace.  For now, for the record....

Among Trump’s claims was the accord “would effectively decapitate our coal industry, which now supplies about one-third of our electric power.”

“I was elected to represent the citizens of Pittsburgh, not Paris.” [To which Pittsburgh Mayor Bill Peduto, a Democrats, tweeted, “as the Mayor of Pittsburgh, I can assure you that we will follow the guidelines of the Paris Agreement for our people, our economy & future.”]

Trump: “According to a study by NERA Consulting, meeting the Obama administration’s requirements in the Paris Accord would cost the U.S. economy nearly three trillion dollars over the next several decades.  By 2040, our economy would lose 6.5 million industrial sector jobs – including 3.1 million manufacturing sector jobs.”

[But this was a study from over a decade ago, paid for by two groups that have long opposed environmental regulation and receive money from those who profit from the continued burning of fossil fuels.]

Trump: “If all member nations met their obligations, the impact on the climate would be negligible,” curbing temperature rise by “less than .2 degrees Celsius in 2100.”

[Again, some would say the White House cherry-picked one stat from a slew of studies that others would call flawed.]

Trump: “We don’t want other leaders and other countries laughing at us anymore – and they won’t be.”

The Heritage Foundation, an influential conservative think tank, also wanted the Paris agreement to be viewed as a treaty and submitted to the Senate for approval. 

Elon Musk, the CEO of Tesla, tweeted that if Trump does leave the accord, he would have “no choice but to depart councils” on which he has advised the president in the past.  [Musk is part of Trump’s manufacturing jobs initiative.]

Corporations from Apple to ExxonMobil have endorsed the accord, saying it won’t harm the competitiveness of U.S. business.

Disney CEO Robert Iger resigned from his White House advisory council, joining Musk.

JPMorgan Chase & Co. CEO Jamie Dimon, another member of Trump’s business council, said he disagrees with the president’s plan to withdraw from the accord, but he won’t follow Musk’s and Iger’s decision to quit the council.

“I absolutely disagree with the administration on this issue, but we have a responsibility to engage our elected officials to work constructively and advocate for policies that improve people’s lives and protect our environment.”

Lloyd Blankfein, chairman of Goldman Sachs, tweeted that Trump’s decision was a “setback for the environment and for the U.S.’s leadership position in the world.”

General Electric’s CEO Jeff Immelt tweeted his disappointment with the decision.  “Climate change is real.  Industry must now lead and not depend on government.”

Senate Majority Leader Mitch McConnell supported Trump “for dealing yet another significant blow to the Obama administration’s assault on domestic energy production and jobs.”

Reaction to the withdrawal from the Paris Accord was swift from European leaders, with French President Emmanuel Macron, German Chancellor Merkel and Italian Premier Paolo Gentiloni issuing a joint statement Thursday that they take note “with regret” at the U.S. decision. The three leaders said they regard the accord as “a cornerstone in the cooperation between our countries, for effectively and timely tackling climate change.”

They added that the course charted by the accord is “irreversible and we firmly believe that the Paris Agreement cannot be renegotiated.”

Canadian Prime Minister Justin Trudeau was “deeply disappointed” by Trump’s decision.  U.K. Prime Minister Theresa May expressed her disappointment in a phone call with Trump, telling him the deal protects the “prosperity and security of future generations.”

Japan’s Finance Minister Taro Aso said: “I’m not just disappointed, but also feel anger.”

Friday, Vladimir Putin said he did not want to judge Trump for his decision, but thought Washington could have remained in the pact by amending the scale of existing U.S. undertakings.  [Russia signed the accord but has not ratified it yet.]

Opinion....

Editorial / New York Post

“In quitting the Paris Accord, President Trump on Thursday did nothing to shift the course of U.S. environmental policy – not even on carbon emissions. But he did put the world on notice that no president can unilaterally commit this nation to such far-reaching agreements.

“The Constitution is clear: No treaty is binding on the U.S. government unless ratified by the Senate. That tanked the Kyoto Protocol, a 1997 anti-warming treaty that the Senate rejected 95-0.  And it would’ve killed the Paris deal that President Obama signed in 2016 – except that his negotiators shaped an ‘agreement’ that wouldn’t go to the Senate.

“But one that still would’ve been used to rewrite U.S. law, if the courts went along.  (And a President Hillary Clinton’s judicial picks would have ensured that they did.)

“In fact, Trump had already abandoned the Paris goals by junking Obama’s Clean Power Plan.   Yet he’s not turning back the clock.  He’s just saying no to what Obama sought to impose – a rush to a low-carbon America at huge economic cost.

“Under Paris, as Trump noted, the United States would’ve had to close all its coal plants, even as China builds hundreds more – and coal still generates a third of U.S. electricity.

“Yet America will continue to cut its carbon emissions: They’re already down by a fifth since 2000, thanks to fracking and the gradual replacement of coal plants with natural-gas ones.  That’s better than Europe did as it implemented Kyoto by making electricity cost twice as much as it does here.

“Nor did Paris make sense. As Danish economist Bjorn Lomborg notes, it entails costs of over $1 trillion a year to shave 0.36 degrees Fahrenheit off global temperatures by 2100 – a tenth the reduction it said is necessary.

“The better response, Lomborg argues, is massive R&D in non-carbon power – so that humanity needn’t impoverish itself to ‘save the planet.’  As he pursues smart post-Paris policies, Trump ought to boost outlays for ‘green energy’ R&D.

“America has far cleaner air and water than it did 50 years ago, and more parkland.  It should continue those trends, and keep reducing its carbon emissions – democratically.

“What the nation won’t do, thanks to the president, is devastate its own economy against the public’s wishes in order to satisfy the global elite.  Count this as a major Trump promise kept.”

Editorial / Washington Post

“In announcing that he will pull the United States out of the Paris climate agreement, Mr. Trump dealt a blow to the effort to slow climate change – but not only that.  By joining Syria and Nicaragua as the only nonparticipants in the most consequential diplomatic effort of this century, he also dealt a blow to the U.S. leadership that has helped promote peace and prosperity for the past seven decades under Republican and Democratic presidents alike.  Under their guidance, the United States acted with selflessness and enlightened self-interest.  The traits reflected in Mr. Trump’s decision are self-defeating, selfishness, insecurity and myopia.

“A variety of factors contributed to the nation’s post-World War II economic boom, but prominent among them was energetic internationalism. The General Agreement on Tariffs and Trade (GATT), which obliged countries to meet regularly and discuss improving the atmosphere for global trade, was one of the spectacularly successful U.S.-backed institutions that helped gradually remove barriers to economic exchange and innovation.

“The Paris agreement had the promise to be the 21st century’s GATT, providing a framework in which countries would regularly convene and in which each nation would be expected to offer what more it could to advance an essential global goal that no country could achieve alone – not freer trade, in this case, but heading off climate change’s worst effects.  The agreement bore an American stamp.  It was fairer and more flexible than previous attempts to strike a global climate deal, with particular sensitivity to U.S. concerns that emissions limits not be imposed on any country.

“The agreement was the world’s best hope to ensure that big developing nations such as China and India did their share, addressing GOP concerns that these countries would refuse to sacrifice along with the United States.  It did not lock in exactly how the United States and other nations would help.  Rather, it created an international expectation of voluntary commitments from every nation, enforced by diplomatic pressure.  All of Mr. Trump’s arguments for withdrawing, in other words, are unfounded.  He could have adjusted, even minimized, the U.S. commitment without trashing the framework.

“The president said Thursday that the United States might rejoin the Paris agreement after a period of renegotiation.  But given the extent to which other nations already accommodated American demands, the prospect of a radically different treaty is fanciful. So what tangible benefit does this irrational decision bring to Americans?  None.  None at all.”

Editorial / Wall Street Journal

“President Trump announced the U.S. will withdraw from the Paris climate agreement on Thursday, to the horror of green elites world-wide.  If the decision shows he is more mindful of American economic interests than they are, the other virtue of pulling out is to expose the fraudulence of this Potemkin village.

“In a Rose Garden ceremony, Mr. Trump broke with the 2015 agreement, starting the formal four-year withdrawal process: ‘We’re getting out. And we will start to renegotiate and we’ll see if there’s a better deal.  If we can, great.  If we can’t, that’s fine.’

“This nonchalance inspired a predictable political meltdown, with the anti-carbon lobby invoking death, planetary disaster and a permanent historical stain. Billionaire Democratic donor Tom Steyer called it ‘a traitorous act of war against the American people,’ while Barack Obama accused his successor of joining ‘a small handful of nations that reject the future,’ whatever that means.  Get ready for another march on the White House.

“But amid the outrage, the aggrieved still haven’t gotten around to resolving the central Paris contradiction, which is that it promises to be Earth-saving but fails on its own terms.  It is a pledge of phony progress.

“The 195 signatory nations volunteered their own carbon emission-reduction pledges, known as ‘intended nationally determined contributions,’ or INDCs.  China and the other developing nations account for 63% of annual global CO2 emissions, and their share is rising. They submitted INDCs that pledged to peak the carbon status quo ‘around’ 2030, and maybe later, or never, since Paris included no enforcement mechanisms to prevent cheating.

“Meanwhile, the developed OECD nations – responsible for 55% of world CO2 as recently as 2000 – made unrealistic assurances that even they knew they could not achieve.  As central-planning prone as the Obama Administration was, it never identified a tax-and-regulation program that came close to meeting its own emissions pledge of 26% to 28% reductions from 2005 levels by 2025.

“Paris is thus an exercise in moral and social signaling that is likely to exert little if any influence on atmospheric CO2, much less on global temperatures....

“A more prosperous society a century or more from now is a more important goal than asking the world to accept a lower standard of living today in exchange for symbolic benefits.  Poorer nations in a world where 1.35 billion live without electricity will never accept such a trade in any case, while Mr. Trump is right to decline to lock in U.S. promises that make U.S. industries less competitive.

“The surest way to ‘reject the future’ is to burden the economy with new political controls today, because economic growth underwrites technological progress and human ingenuity.  These are the major drivers of energy transitions that allow people to generate more wealth with fewer resources....

“Superior efficiency helps explain why U.S. carbon emissions fell by 145 million tons in 2016 compared to 2015, more than any other country....Over the past five years U.S. emissions have fallen by 270 million tons, while China – the No. 1 CO2 emitter – added 1.1 billion tons.

“All of which make the claims that the U.S. is abdicating global leadership so overwrought.  Leadership is not defined as the U.S. endorsing whatever other world leaders have already decided they want to do, and the U.S. is providing a better model in any case.  Private economies that can innovate and provide cost-effective alternatives will always beat meaningless international agreements.  To the extent Paris damages economic growth, the irony is that it would leave the world less prepared for climate change.”

---

Trump tweet: “Hopefully Republican Senators, good people all, can quickly get together and pass a new (repeal & replace) HEALTHCARE bill. Add saved $’s.”

Congress is in session just about 30 legislative days between now and end of July, start of a five-week summer recess. 

This takes us up to the 200-day mark in Trump’s presidency and House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell have always said this is the key target, not Trump’s first 100 days.

Which means Congress, read Republicans, have a ton of work to do on the budget, the ObamaCare repeal and replacement, and tax reform, along with some other important items like extending the debt ceiling.

First and foremost is the budget. Without one for fiscal 2018, which begins October 1st, there is no tax reform.

What seems clear among those who follow such things is that Congress is well behind in the appropriations process in setting a budget framework than they normally are at this stage of the year, with the House not having approved a single appropriations bill. 

But they can’t move on a budget for 2018, and tax reform, until they repeal ObamaCare.  The ball is in the Senate’s court and leaders there insist they will have crafted an alternative to the House plan by end of June, but at the very latest end of July.

I’ll be writing extensively on this topic the next two months you can be sure.

Lastly, the latest Kaiser Health Tracking Poll on the House-passed healthcare bill shows 55% view it negatively, the same proportion who want the Senate to make major changes to the legislation or reject it.  Only 8 percent want the legislation.

49% of the public holds favorable views of ObamaCare, while 42% have negative ones.

Wall Street

All three major market indexes hit new closing highs on Thursday, and again, Friday. While the S&P 500 and Nasdaq have consistently been hitting new records, the Dow’s high Thursday was its first since March 1.

But after Friday’s jobs report, it’s really all about the Federal Reserve and their next move on interest rates June 13-14. All of the Fed governors who spoke this week made it sound like a June hike was in the cards, but to me, Friday’s jobs report somewhat muddled the picture with a less-than-expected gain in nonfarm payrolls of 138,000, while April and March were revised down a cumulative 66,000.

The jobless rate, though, is down to 4.3%, the lowest since May 2001!  Clearly, the Fed looks at the 4.3%, below its own long-term target for unemployment, and will see a labor market at or very near full employment.

Wages rose 0.2% in May, up 2.5% from a year earlier, which has essentially been the pace since late 2015.

U6, the key underemployment rate, also hit a cycle low, 8.4%, and has fallen sharply the past year, which is very good.  [It was 8.3% the two years before the recession.]

Earlier, a report from ADP on private payrolls had employers adding 253,000 jobs in May, above expectations.

Bottom line, we should assume the Fed is hiking in June, even though the average monthly payroll gain for the first five months of the year is 162,000, vs. the 187,000 month average for 2016.

Just a few other economic notes the Fed will look at.  Personal income and consumption for April each rose a solid 0.4%, while the May Chicago PMI on manufacturing came in at 55.2, lower than expected but still good) and the ISM manufacturing reading for the month was 54.9 vs. 55.0 in April).

Back to the Fed, I do just have to add some notes from a speech given by Fed governor, Lael Brainard, for the archives.  She said the Fed is now ready to shrug off at least a little bad data and the FOMC should raise its benchmark interest rate “soon,” despite evidence inflation remains below the Fed’s target level of 2% (using its preferred metric).

“On balance, when assessing economic activity and its likely evolution, it would be reasonable to conclude that further removal of accommodation will likely be appropriate soon.” 

Ms. Brainard added, though, that she might reconsider the efficacy of further increases if inflation doesn’t get stronger.

Europe and Asia

There was a ton of economic news on the eurozone front as Britain gears up for its snap election on June 8, and France readies for two rounds of parliamentary elections on June 11 and 18.

First, from Eurostats, a flash reading on eurozone inflation for May came in at 1.4% annualized, vs. 1.9% in April, 1.5% in March and 2.0% in February.

The unemployment rate in the EA19 fell to 9.3% in April from 9.4% in March, and 10.2% April 2016, the 9.3% being the lowest since March 2009 as the continent’s recovery continues apace.

Germany came in at 3.9% (the German government calculates it differently and showed 5.7%, both the lowest since reunification in 1990); Spain was 17.8% (but down from 20.4% a year earlier), France 9.5%, Italy 11.1%, Portugal 9.8% (down from 11.6% a year ago), Ireland 6.4%, and Greece 23.2% (February).  [The U.K. is at 4.4% according to the government’s latest data.]

The youth unemployment rate is still high in some nations.  Italy’s is 34.0%, Spain 39.3% (down from 47.1% Apr. 2016), and Greece 47.9% (Feb.).

Bottom line, major progress.

Markit reported manufacturing PMIs for the eurozone and the final reading for May was a strong 57.0 (50 being the dividing line between growth and contraction) vs. 56.7 in April, the highest level since 2011.

Germany led the way with a manufacturing PMI of 59.5, a 73-month high; France 53.8; Italy 55.1; Spain 55.4; Ireland 55.9; but Greece is still in recession at 49.6, though this is a 9-mo. high.  [The U.K. registered a strong 56.7 last month.]

Chris Williamson, Chief Business Economist at IHS Markit:

“The eurozone upturn is developing deeper roots as factories enjoy a spring growth spurt. Demand for goods is growing at the steepest rate for six years, encouraging manufacturers to step up production and take on extra staff at a rate not previously seen in the two-decade history of the PMI survey.

“The fact that the upturn is being accompanied by such strong jobs growth sends a signal that increasing numbers of companies are moving away from a focus on cost cutting towards investing in expansion, underscoring the elevated levels of business optimism seen across the region. The record hiring adds to the sense that the upturn is looking more and more robust as each month goes by....

“The marked easing of input cost inflation during May will meanwhile be welcome news to policymakers eager to see signs that the recent uplift in consumer price inflation will prove short-lived.”

As for the European Central Bank and its ongoing massive stimulus program, which Chris Williamson is alluding to in his last paragraph, president Mario Draghi said this week that the eurozone still needs “an extraordinary amount of monetary support.”

But Draghi told European lawmakers that many of the eurozone’s major problems “are now behind us,” with the economy growing 16 consecutive quarters, though at the same time underlying inflation was subdued and he wants to see stronger numbers on that front before changing the ECB’s loose monetary policy.

The ECB’s policy board meets on June 8 and we’ll be looking for signs that it may begin scaling back its QE efforts.

Eurobits....

--We still don’t have a final resolution of Greece’s looming massive debt repayments for July in terms of support from its creditors for a debt-relief program.  European officials now have a June 15 deadline to reach a deal at the next meeting of Eurogroup finance ministers. 

--Portugal’s GDP rose 1% in the first quarter (2.8% year-over-year) and is off to its best year, potentially, since 2000.

--France’s final Q1 GDP, as reported by Insee, was 0.4%, but still up just 0.9% yoy.

--One thing to watch is the action in bank stocks in Italy and Spain.  Spanish lender Banco Popular saw its shares crater this week to at least a 28-year low, following reports senior EU officials are warning it could be wound down if Spain’s sixth largest bank can’t complete a merger.

Meanwhile, the Bank of Italy’s governor, Ignazio Visco, said Italy’s troubled banks may suffer an additional $11 billion in losses from the sale of their bad loans at current market prices.

Italy has a financial crisis-related legacy of roughly $400 billion...billion...in bad loans on the banks’ balance sheets, which is preventing the same institutions from issuing loans to small and many large businesses, that in turn impedes the recovery.

--Ireland’s ruling governing party, Fine Gael, elected Leo Varadkar as its new leader on Friday, choosing the gay, 38-year-old son of an Indian immigrant to succeed Enda Kenny as prime minister in a striking generational and social change.  Varadkar is expected to be voted in as prime minister when it next convenes on June 13. 

I know Ireland well, but I have not followed this guy and I’m kind of startled on a number of fronts.

British election: Virtually all of the polls have continued to show the Conservatives’ (Tories) lead over the Labour Party in Thursday’s election is shrinking.  Tuesday, an ICM poll for the Guardian had the Conservatives still at 45-33, but a Survey Monkey poll for the Sun the next day had the Conservatives leading by just six.  A Survation poll for ITV also had it at six points, with this same one at 18 two weeks ago.

YouGov for the Times by week’s end had it just three points, 42-39, and a different look at YouGov’s database had the Conservatives winning just 317 seats, less than the 326 needed for a majority in parliament.  They currently have 330, and the whole point of Prime Minister Theresa May’s call for a snap vote was to increase her slim majority to have more support for the looming Brexit negotiations, which will start in earnest following the elections.

May has been heavily criticized for running a poor campaign, saying in her main pitch to voters, “You can only deliver Brexit if you believe in Brexit,” but she had backed the “remain” campaign in the run-up to last year’s referendum on EU membership.  She says today she is the only party leader able to make a success of Brexit despite giving few details of how she will handle negotiations.

Earlier, May got a lot of heat among voters for going back on her intended portrayal of being a compassionate conservative when she proposed to make older Britons shoulder more of the costs of long-term home care, an item she was forced to pull after it was derided as a “dementia tax.”

May is certainly a far better leader for Brexit than her opponent, Labour leader Jeremy Corbyn, but the prime minister has hardly been decisive.

French Elections: A Harris/LCP poll on Thursday had French President Emmanuel Macron’s new party winning 31% of the vote in the first round, June 11, with the conservative Republicans and far-right National Front both at 18%.  Under this scenario, Macron’s party should then pick up a majority of the seats after the June 18 runoffs.

German Elections (Sept.): A poll of voters shows Chancellor Merkel’s conservative bloc’s lead widening, with an Emnid Sunday poll for Bild newspaper showing her Christian Democrats at 38%, while the SPD of Martin Schulz had slipped to 25%.  The pro-business Free Democrats and the Greens were both at 8%.

Turning to Asia, some data out of China, with the National Bureau of Statistics reporting that the manufacturing PMI for May was 51.2, unchanged from April, with the services reading at 54.5 vs. 54.0.

But the Caixin private manufacturing PMI, as put out by Markit, was only 49.6, contraction, vs. 50.3 in April, the first decline in 11 months.

In Japan, the manufacturing PMI for May was 53.1 vs. 52.7 in April, the ninth consecutive month over 50.  Industrial production in April was up 4% over March, but this is a highly volatile figure.

Unemployment in Japan in April was unchanged at 2.8%, the lowest level since June 1994, according to the Statistics Bureau.

Household spending, though, fell 1.4% year-on-year in April (but this is owing to big reductions in education spending, and on transport and communication).

Retails sale in April, on the other hand, were up 3.2% year-on-year.

Separately, Taiwan’s manufacturing PMI for May was 53.1 vs. 54.4 the prior month, the slowest pace since October, while South Korea’s PMI was 49.2 vs. 49.4.

Street Bytes

--For the week, the Dow Jones added 0.6% to 21206, the S&P 500 1.0% to 2439, and Nasdaq 1.5% to 6305, again, all record levels.

--U.S. Treasury Yields

6-mo. 1.04%  2-yr. 1.29%  10-yr. 2.16%  30-yr. 2.81%

The yield on the 10-year is back down to levels not seen since right after the election in November.  Frankly, this makes zero sense with the Fed preparing to hike anew. 

[The 10-yr. closed last year at 2.44%.  It was 2.27% on 12/31/15, and 2.17% on 12/31/14, for you stats junkies out there.]

--Oil prices continued to decline, to $47.74 on WTI, despite the agreement by OPEC and Russia to extend their production cut agreement to tackle the supply glut.  The problem is the U.S. keeps building its supply levels through the ongoing shale revolution, so this is offsetting the cuts. The market is also unhappy that when OPEC and non-member Russia extended the cut agreement, the cuts weren’t deeper.

--Coal stocks fell this week, with some of the larger operators urging President Trump to stay in the Paris deal in order to protect the coal industry’s interests overseas, including continued financing for foreign coal-burning power plant projects.

--U.S. auto sales continue to slow, with Kelley Blue Book expecting that for all of 2017, sales of cars and light trucks will be at a 17 million level vs. 2016’s record 17.55m.

In May, sedan sales were down about 20%, continuing the shift from sedans to SUVs.

The Chevy Bolt, General Motors’ much-anticipated electric sedan, is off to a slow start since being introduced in December, with most of the sales on the West Coast.

Ford sold a total of 241,000 vehicles last month, 4,000 more than GM, but this was because Ford registered some major fleet sales.  Nonetheless, it was the first time Ford outsold GM since March 2016.  Before that, it hadn’t happened since March 2011.

Ford’s sales were up 2.2% for May, GM’s down 1.3%, and Fiat Chrysler’s down 0.9%.

Also, Toyota’s U.S. sales fell 0.5%, while rising 0.9% for Honda, 3% for Nissan, and 12% for Subaru.  The VW brand rose 4.3%.

--A report out of Credit Suisse concludes that e-commerce will continue to pull shoppers away from bricks-and-mortar retailers, leading to between 20% and 25% of the nation’s shopping malls closing in the next five years.

The finding is far from surprising, but Credit Suisse expects apparel sales to represent 35% of all e-commerce by 2030, up from 17% today, and that certainly puts traditional mall anchors, such as Macy’s and J.C. Penney, in further danger.

But, the flip side is there are malls that are remaking themselves into entertainment destinations, filling retail space with more restaurants and service providers.

So let’s wait a few years before officially declaring the death of the mall.  [As long as you have a desirable location.]

--Canada’s economy grew at an annualized rate of 3.7% in the first quarter, making it the best-performing economy among Group of Seven countries in early 2017.

--Brazil’s GDP grew by 1.0% in the first quarter from the preceding one, according to the statistics agency IBGE, in line with expectations, with the figure signaling the end of the country’s worst recession on record.  Year-over-year the economy has shrunk 0.4%, following a 2.5% drop in the previous quarter.

--India’s economy slowed sharply in the first three months of 2017, with growth at 6.1% year-on-year in the first quarter, down from 7% in the fourth quarter and 7.4% in the third.

[India’s May manufacturing PMI was 51.6, down from 52.5 the prior month.]

--Russia reported a manufacturing PMI for May of 52.4 vs. 50.8 in April, as the recovery continues here.  [Markit]

--Illinois is close to having its bond rating downgraded to junk by S&P Global Ratings, the lowest grade that it’s given to a U.S. state on record, as a long-running political stalemate over a budget shows no signs of ending, with Republicans and Democrats battling over pensions and other entitlement liabilities that have exploded since the financial crisis.  S&P on Thursday dropped the state’s general-obligation bonds one level to BBB- minus, the lowest possible investment-grade rating.

--Uber said its head of finance is leaving after the ride-hailing company reported further huge losses despite increasing revenue.  The company told the Wall Street Journal that first-quarter revenue was $3.4 billion, up 18% from the fourth quarter, but the loss, excluding employee stock compensation and other items, was $708 million, narrower than the $991 million reported three months earlier.

Uber has raised some $15 billion in equity and debt financing and it said it has $7.2 billion remaining.

The company doesn’t have to give out any numbers as it is privately held, but it announced a few months ago it wanted to go public eventually. An Uber spokesman told the Journal’s Greg Bensinger, “The narrowing of our losses in the first quarter puts us on a good trajectory towards profitability.”

The head of finance (Uber has been without a CFO since 2015), Gautam Gupta, is leaving to join another startup in San Francisco.

Earlier in the week, Uber said it had fired Anthony Levandowski, a star engineer the company hired to lead its self-driving auto venture, though he was accused of stealing trade secrets after he quit Google to start his own company, Otto, which Uber then acquired for $700 million last year.  He has been the subject of a big lawsuit, with Google having spent hundreds of millions on its autonomous car technology, an effort now led by Google subsidiary, Waymo.

--The director general of the International Air Transport Association warned that banning carry-on laptops on international flights might create a fire risk from lithium batteries stored in the cargo hold.

“If you put all the electronic devices in the belly, it raises a clear safety concern,” said Alexandre de Juniac of the IATA.

U.S. and European Union officials continue to discuss possibly banning laptops from cabins of all inbound flights to the U.S. from Europe.

The administration says the risk is not in laptop batteries, but more with bulk carriage of lithium devices that aren’t installed in equipment and thus less well-shielded from damage.

On Thursday, the IATA said airline travel bookings from the Middle East and North Africa to the U.S. and Europe slowed to the lowest level in five years in April, and March data indicated that Middle Easter carriers’ traffic to the U.S. declined 2.8% year-over-year, the first annual decline in at least seven years.

--Electronics retailer RadioShack has closed more than 1,000 stores since Memorial Day weekend, with just 72 dealer-owned stores remaining after a giant liquidation sale.

It was just last March that parent General Wireless Operations filed for bankruptcy protection and proposed closing only about 200 RadioShack stores, which is when I lost my favorite one in Madison, NJ.

While the company left the door open to close more, no one thought it would essentially be the entire chain.

In its heyday, RadioShack had 7,300 stores.

--Steven A. Cohen, the billionaire trader whose former firm pleaded guilty to criminal insider trading charges less than four years ago, is seeking to mass a giant pool of funds for his return to hedge funds, $20 billion, as soon as next year.

Cohen’s SAC Capital Advisors LP pleaded guilty in 2013 and paid $1.8 billion in penalties.

The SEC sought to have him barred for life, but a civil settlement with regulators instead restricted him from serving as the supervisor of a registered fund until 2018.

Cohen has been overseeing his $11 billion family fortune at Point72 Asset Management LP, and most or all of the $11 billion would become part of Cohen’s new operation, as reported by the Journal.

--CBS suddenly announced Wednesday that Scott Pelley is leaving the “CBS Evening News” to take on full-time duties at “60 Minutes,” but the network, in totally haphazard fashion, did so before announcing his replacement had been selected.  CBS then named veteran correspondent Anthony Mason as an interim anchor, taking over in July.

Granted, Pelley’s ratings haven’t been good, so from that standpoint the move wasn’t unexpected, it’s just that it didn’t exactly look classy.  And I guess he is still hanging out for a while.

But it’s true the three evening news networks have continued to see a deterioration in their audience, down 6% in the May sweeps year-to-year.  [Pelley was down 9%.]

It’s important to note, however, that the Big Three still have a huge audience in percentage terms compared to the cable networks at that time, and thus they maintain their heavy influence, especially in times of crisis or major events.

But, when it comes to influence, the morning shows bring in twice the ad revenues as the evening news, ergo, network execs are far more focused on the morning product.  [Stephen Battaglio / Los Angeles Times]

Foreign Affairs

Afghanistan: In one of the worst attacks of the Afghan war, a suicide bomber detonated a huge amount of explosives inside a tanker truck close to the heavily protected diplomatic quarter in Kabul during the morning rush hour, killing at least 90 people and wounding some 400.

The Taliban immediately denied being involved, though ISIS hasn’t claimed responsibility and despite their denials, the Taliban have been known to conduct indiscriminate attacks before, and the targeting of the Green Zone fits their modus operandi to focus on foreign occupiers.

President Ashraf Ghani, in condemning the attack, said he would order the execution of 11 militants on death row in revenge, with the Taliban immediately warning the government against harming any of their prisoners.

Ghani’s fragile government has been under increasing pressure over its failure to protect its citizens, and this was before this week’s carnage. Friday, there were anti-government protests in the streets of Kabul with at least four demonstrators killed.

Eleven U.S. citizens working as contractors were injured in the bombing.  None of the injuries were life-threatening, according to a State Department spokesman.

Editorial / Wall Street Journal

“No doubt the truck bomb that killed at least 90 people and wounded more than 400  in the diplomatic quarter in Kabul on Wednesday has already achieved part of its purpose: to cause Americans to think twice about continuing to help Afghanistan.  After 16 years it’s a reasonable question.

“Yet the situation is not as dire as the headlines seem. After a visit to Afghanistan in April in which he said 2017 would be another tough year for Afghan forces, Defense Secretary James Mattis noted at a meeting in Denmark that Islamic State ‘has lost about two thirds of its strength’ in Afghanistan. The Afghans are undertaking the bulk of their own defense and taking horrific casualties to fight against the Taliban, al Qaeda and Islamic State.

“The U.S. has roughly 8,400 troops in Afghanistan, but in February the commander on the ground, Army Gen. John Nicholson, told the Senate that he nonetheless has ‘a shortfall of a few thousand’ troops.  President Trump is now weighing how many more to send, and we hope he fulfills Gen. Nicholson’s request.

“Barack Obama’s main goal in Afghanistan was getting out, but even he came around to seeing that U.S. withdrawal might let the Taliban win.  A terrorist triumph in Afghanistan would provide a new safe haven for jihadists in the region, without bases for the U.S. forces on the ground to counter it.  At the very least a decision on U.S. troops should be made mindful of the large strategic stakes, not as an overreaction to a single truck bomb.”

I totally disagree with the Journal in their characterization that the situation isn’t dire.

Iraq/Syria/ISIS: Two car bomb attacks in the heart of Baghdad by ISIS killed at least 26 people, in an ongoing series of attacks that, frankly, are hard to keep up with.  IS said it is targeting “gatherings” of Shia Muslims.

Meanwhile, Iraqi forces continue to press forward with a broad offensive targeting the remaining ISIS-held areas in west Mosul, calling on civilians to leave, which is easier said than done when you are being held hostage.  Hundreds of civilians have been killed thus far.

In Syria, a wave of airstrikes in the eastern section killed at least 35 civilians, according to the Syrian Observatory for Human Rights, which said the airstrikes were conducted by the U.S.-led coalition.  The final offensive on ISIS’ de facto capital in Syria, Raqqa, has yet to begin.

Saudi Arabia, Iran et al: Benny Avni / New York Post:

“President Trump’s Mideast trip produced a bevy of encouraging promises. And his speech was a rousing success, laying out what was at stake in fighting terror, both from Iran and jihadis like ISIS and al Qaeda. But now comes the hard part: getting Arab nations to live up to those promises.  Especially Qatar.

“Trump’s formula is simple: Good versus evil. Are you with or against us?

“It matters little that none of the Arab nations are true democracies.  His speech was intended to gather a posse of willing partners to fight Mideast extremists and anti-US. firebrands.  (The fact that being a democracy came second was made clear when, on Tuesday, Acting Assistant Secretary of State Stuart Jones was stumped for half a minute when asked at a press briefing to distinguish between ‘democracy’ in Iran and Saudi Arabia.)

“As National Security Adviser H.R. McMaster and National Economic Council Director Gary Cohn wrote in the Wall Street Journal Tuesday, ‘A strong stand against terrorism is consistent with values common across all the world’s great religions.’

“And a strong coalition is emerging to make that stand, they insist. ‘Leader after leader’ has ‘committed to confronting the terrorism and extremism that plague all civilized societies.’

Well, maybe.

“Start with the Saudis. Trump and Riyadh signed a deal worth $110 billion to strengthen the Saudis’ defensive capabilities (while creating American jobs), and $270 billion in other investments.  The Saudis, in return, established the Terrorist Financing Targeting Center, designed to stem jihadi funding.

“That’s a big deal in a country where wealthy princes have for decades financed various extremists around the world – and where some still do.

“The Saudi king, and especially his son, Muhammad bin Salman – who’s the country’s real mover and shaker – seem to understand that jihadists really threaten their hold on power.

“But can the 31-year-old Muhammad fend off some powerful old guard traditionalists who still want to play ball with the Islamists?  That remains to be seen.”

Benny Avni went on to say that Egypt and Jordan should remain good, or “reasonably good” allies, but there’s Qatar, an ally that nonetheless lets Hamas leaders reside in Doha, while financing al-Nusra, the Syrian branch of al Qaeda.  Plus Qatar has made some statements that appear Iran friendly.

So it’s complicated.

Avni:

“Marshaling Arab support has always been difficult. Now, opposition to Iran’s expansionism has become an organizing theme that can unify the region against all extremists. Trump needs to issue a simple command for Qatar and anyone else trying to have it both ways: Choose.”

Israel: President Trump renewed a six-month waiver that will keep the U.S. embassy in Israel in Tel Aviv, instead of Jerusalem, which had been a campaign promise of Trump’s.

Every president has signed the waiver ever since Congress passed the Jerusalem Embassy Act in 1995 and Trump faced a June 1 deadline to renew the waiver or let it expire.

The U.S. does not recognize Jerusalem as the capital of Israel (as Israelis do) and presidents in both parties have said its final status should be part of any peace talks with the Palestinians.  For Trump to move today and announce the U.S. would move its embassy to Jerusalem would thus have imperiled any future negotiations between Israel and the Palestinians, which was a focus of Trump’s recent trip to the region.

But some of Trump’s leading donors, such as casino-magnet Sheldon Adelson, have pushed him to fulfill his promise.

North Korea: The Pentagon announced a high-profile test of America’s missile defense program was successful in shooting down a mock warhead over the Pacific, in simulation of an intercontinental-range missile like North Korea is developing.

The test was the first of its kind in nearly three years, the military launching an interceptor rocket from Vandenberg Air Force Base in California that slammed into the warhead that was launched from a test range on a Pacific atoll.

This was Tuesday.  The day before the U.S. and South Korea had a joint exercise in which U.S. B-1B bombers flew near the Military Demarcation Line that divides North and South Korea.

This came just hours after Pyongyang test-launched a short-range missile, its third launch in less than three weeks (12th of the year), with the North claiming it was the most precise test to date.

Russia said on Thursday it is preparing retaliatory measures in response to U.S. sanctions on some Russian companies and citizens over alleged connections to North Korea.  The U.S. announced it has blacklisted nine companies and government institutions, including two Russian firms, and three people for their support of North Korea’s weapons program.

South Korea: President Moon Jae-in’s top security aide left for Washington on Thursday as the new leader tries to reassure his country’s main ally he will not scrap the deal to host the missile defense system, THAAD, that so angered China.

But Moon has made conflicting statements, having ordered an investigation this week into why his office had not been informed about the deployment of four more launchers for the system.  During his presidential campaign, the liberal Moon had promised to review the THAAD agreement and said it was “very shocking” his office had not been told of the latest deployment as he prepares for a summit in Washington this month.

The decision to deploy the system was made under former President Park Geun-hye, who was impeached in a corruption scandal.

U.S. Defense Secretary Jim Mattis said on CBS’ “Face the Nation” on Sunday that war with North Korea would “probably be the worst kind of fighting in most people’s lifetimes.”

“The bottom line is it would be a catastrophic war if this turns into combat and we’re not able to resolve this situation through diplomatic means.”

China: The third-highest ranking official has told Hongkongers not to confront the central government over its promised “high degree of autonomy,” and called on the city to enact controversial national security laws, in Beijing’s sternest statement on Hong Kong in recent years.

In a speech on the mainland’s policy towards Hong Kong Saturday, Zhang Dejiang unveiled a number of areas where the government would ‘go into further details’ to consolidate its power over the chief executive.

Speaking at the Great Hall of the People on the upcoming 20th anniversary of Hong Kong’s handover from Britain to China, Zhang said the chief executive’s role in the city was the “core,” emphasizing judges and officials need to “take the lead to learn the Basic Law.”

Under the Basic Law, Hong Kong’s mini-constitution, China enjoys “comprehensive” sovereignty over the city, Zhang said.  Understand, the man heads the National People’s Congress and the Communist Party’s working group on Hong Kong.

Zhang is saying Beijing should have “more detailed” power to deal with Hong Kong, and a direct hand in assessing any legislation reported by Legco (the legislative council), and in the appointment of the chief executive and all principal officials.

Among the other items Zhang emphasized is the whole cabinet should be made up of patriots.  Ergo, no dissent will be tolerated.

This is scary, though not unexpected, stuff. Zhang said calls for self-determination or Hong Kong independence were attempts to end-run China’s sovereignty.

Hongkongers should understand with the speech that any protests could be brutally suppressed, and then should this happen, it will be interesting to see what world reaction would be, including from Washington.

Separately, China has adopted a controversial law that mandates strict data surveillance and storage for firms working in the country, according to Xinhua news agency.

The law was originally passed in November by the country’s parliament and bans online service providers from collecting and selling users’ personal information, and gives users the right to have their information deleted, in cases of abuse.

Xinhua said, “Those who violate the provisions and infringe on personal information will face hefty fines.”

Overseas business groups have been urging Chinese regulators to delay implementation of the law, saying the rules would severely hurt activities.

Well, like I’ve been saying for years, if you’re a U.S. multinational counting on China being a large source of future business, in many cases you’ll be sadly mistaken.

Russia: President Putin traveled to France for his first meeting with new President Macron, Macron using the opening of an exhibition marking the tricentenary of Peter the Great’s trip to Versailles as an excuse for the two to get together there.  Macron described the talks as “extremely frank and direct.”

Relations between France and Russia have been under severe strain since the 2014 annexation of Crimea and then the Kremlin’s intervention in Syria to prop up Bashar al-Assad.

Tensions increased during the French election campaign, with Macron accusing the Kremlin of hacking into his party’s website and spreading false stories in an attempt to get voters to vote for Putin’s favored candidate, Marine Le Pen.  Putin of course denies such claims.

Regarding Syria, Macron said that if Russia were to use chemical weapons there, that would be a “red line” for France.

Meanwhile, during a visit to Australia, Republican Sen. John McCain (Ariz.) said Russia is a bigger security threat than Islamic State, citing Russia’s willingness to interfere in elections.

McCain, in Australia to discuss Asia-Pacific security issues, said: “I think ISIS can do terrible things and I worry a lot about what is happening with the Muslim faith. But it’s the Russians who tried to destroy the very fundamental of democracy, and that is to change the outcome of an American election.” 

Philippines: Foreign fighters are among the militants who besieged a southern Philippines city, Marawi, intensifying fears that ISIS is gaining a foothold in Southeast Asia.  Bodies found in Marawi, 830 miles south of Manila and on the island of Mindanao, include Malaysians, Indonesians, Saudis, and even a Chechen.

Overall, there are about a dozen different Islamist groups operating in the southern area and Australia and other nations in the region are so worried about the threat of homegrown ISIS militants returning from the battlefields of Iraq and Syria that a summit has been convened for August specifically to deal with the threat.

Philippine President Rodrigo Duterte last week imposed martial law on Mindanao, granting security forces sweeping powers, while warning of the threat of “contamination” by IS.

Separately, early Friday in Manila, a shooting erupted at a popular casino resort/hotel complex, Resorts World, sending terrified guests and workers fleeing, with initial reports talking of a potential terrorist attack by ISIS, which, given the situation in Mindanao, kind of made sense.

But I was following the news wires as the story unfolded and there was zero talk of casualties, with police saying almost immediately they had the situation under control.

There was heavy smoke and “gunshots” were heard.

So then we learned a lone gunman sparked the panic, a man looking to rob the casino (taking $2 million in chips), not a terror attack.  For a few hours, that seemed to be it, until authorities, in clearing the building, found 36 bodies, victims of suffocation after the robber set fire to casino tables.  He didn’t fire at any patrons, rather he was firing at TV screens. The unidentified man then apparently killed himself nearby.

It was yet another classic case of ‘wait 24 hours,’ yet there was President Trump in the Rose Garden, who in announcing the withdrawal from the Paris Accord, opened by saying:

“I would like to begin by addressing the terrorist attack in Manila. We’re closely monitoring the situation, and I will continue to give updates if anything happens during this period of time.  But it is really very sad as to what’s going on throughout the world with terror.”

Except in this case it wasn’t terror, at least as of the last report.

Venezuela: Gunmen manning a street barricade in Caracas shot dead a Venezuelan judge who appeared to be in the wrong place at the wrong time. The anti-government unrest has killed at least 61 as of Thursday.  It was probably a robbery attempt, as the people are desperate for food.

Random Musings

--Press secretary Sean Spicer returned on Tuesday after a two-week absence.  The appearance came just hours after Mike Dubke resigned as White House communications director, in what all expect to be just the first of many moves in Trump’s communications office, with Spicer not expected to last much longer.  [Spicer’s performance Tuesday was clearly intended to kiss his boss’ butt, rather than deal with the questions being asked.  It was quite pathetic.  Ditto subsequent performances.]

--The Trump administration is asking the Supreme Court to reinstate its ban on travelers from six  mostly Muslim countries.  This whole process has been a bad joke and it’s all on the administration. 

--I watched Hillary Clinton’s comments Wednesday during a Q&A session at a conference in Rancho Palos Verdes, California, as she blasted the Democratic National Committee.

“I mean, it was bankrupt.  It was on the verge of insolvency. Its data was mediocre to poor, nonexistent, wrong,” she recalled. “I had to inject money into it.”

By contrast, she said, then-GOP candidate Donald Trump inherited a well-funded and extensively tested data operation that laid the foundation for his ultimately successful campaign to effectively weaponize data and internet content against Clinton.

“So Trump becomes the nominee and he is basically handed this tried and true, effective foundation,” she said.

Clinton also suggested that Russian efforts to meddle in the election could only be “guided by Americans” and other political operatives and strategists.

“The Russians in my opinion, and based on the intel and counterintel people I’ve talked to, could not have known how best to weaponize that information unless they had been guided.  Guided by Americans and guided by people who had polling and data information.”  [The Hill]

Good lord.  Hillary’s excuses tour continues.

Editorial / New York Post

“Call it the most epic ‘defeat lap’ ever: Hillary Clinton can’t stop showing the world why she lost.

“At a conference in California on Wednesday, she insisted her e-mail mess was ‘the biggest nothing-burger ever’ and explained that she gave those toadying Goldman Sachs speeches because, well, ‘They paid me.’

“She also added to the list of other people responsible for her loss, insisting she inherited a mess at the Democratic National Committee – ‘Its data was mediocre to poor, nonexistent, wrong.’

“Oops: Andrew Therriault, the DNC chief of Data Science in 2014-16, revealed an even more damning Team Hillary fail in a tweet (later deleted) slamming her for ‘bashing DNC data,’ when the DNC models never had Michigan, Wisconsin or Pennsylvania ‘looking even close to safe.  Her team thought they knew better.’

“Sanctimonious, avaricious and just plain wrong on the facts: That’s the Hillary Clinton America chose not to elect.”

--Kathy Griffin was booted by CNN from its New Year’s Eve coverage after her disturbing photoshoot holding up a faux severed and bloody head of President Trump.  She has co-hosted the network’s “New Year’s Eve Live” broadcast with Anderson Cooper since 2007.

Once the image of Griffin went viral, it was just a matter of time before she was sacked, as people on both the left and right were outraged.

Anderson Cooper tweeted: “For the record, I am appalled by the photo shoot Kathy Griffin took part in. It is clearly disgusting and completely inappropriate.”

Griffin later apologized in a Twitter video, saying: “I went way too far.  I made a mistake and I was wrong.”

President Trump tweeted: “Kathy Griffin should be ashamed of herself. My children, especially my 11 year old son, Barron, are having a hard time with this. Sick!”

First lady Melania Trump in a statement: “As a mother, a wife, and a human being, that photo is very disturbing.”

“When you consider some of the atrocities happening in the world today, a photo opportunity like this is simply wrong and makes you wonder about the mental health of the person who did it,” the statement continued.

--Editorial / Washington Post

“Taliessin Myrddin Namkai Meche, 23, and Rick Best, 53, were killed when they – along with a third man, who was injured – intervened as two young women were being terrorized with anti-Muslim insults by a rider on a commuter train in Portland, Ore.  They probably saved the women’s lives.  They are heroes. Their willingness to help others – to stand up against bigotry and hate – hopefully will serve as an inspiration in these increasingly tense and troubled times.

“ ‘Without them, we probably would be dead right now,’ said 16-year-old Destinee Mangum, who, almost in wonderment, added ‘they didn’t even know me.’  Ms. Mangum, who said she is not Muslim, and a friend who was wearing a hijab were on the train late Friday afternoon when a man, later identified by authorities as Jeremy Joseph Christian, entered the car and started screaming slurs at them.  Mr. Namkai Meche, a recent college graduate, and Mr. Best, an Army veteran and father of four, were fatally stabbed and Micah David-Cole Fletcher, 21, had his throat slashed as they tried to deescalate the situation.

“Mr. Christian...has a criminal record, including a conviction in 2002 for robbery and kidnapping, and authorities said he has a history of white supremacist views. Did he just snap?  Had he been spoiling for a fight? Did the rising tensions in Portland between groups with opposing extremist views factor into this attack in any way?  That hateful speech can lead to hateful actions should give pause to those who have been quick to divide and demonize.

“President Trump’s unequivocal condemnation...was welcome and needed. Also encouraging was the public response: hundreds of people turning out for vigils and interfaith services and contributions pouring into GoFundMe campaigns for the three men as well as the young women.

“Sadly, some may learn the wrong lessons from Portland’s tragic events, using them as a reason not to say or do something when someone needs help.  ‘Why be a hero?’ goes that reasoning.  People always should be careful about placing themselves in personal danger – and, if possible, summon help from authorities who may be better-equipped.  In the end, though, the answer may lie with the insight offered by one speaker at a vigil honoring Mr. Namkai Meche and Mr. Best: ‘They didn’t have capes. They were just human beings that we all have the capacity to be.’”

Meanwhile, Portland’s mayor, Ted Wheeler, took the totally wrong approach in the aftermath of the killings, saying controversial rallies planned for this month should be canceled, to which the Washington Post editorialized:

“(Mayor Wheeler’s) concern for the raw feelings of his community is understandable, but he is completely off-base in trying to block the planned rallies and dangerously wrong in his reading of the U.S. Constitution.

“Mr. Wheeler unsuccessfully appealed to federal officials to revoke a permit granted to a group to hold a pro-Trump, free-speech rally Sunday at a downtown federal government plaza.  His request that a permit not be granted for a June 10 anti-Muslim rally was made moot when organizers opted Wednesday to cancel the rally and encourage participants to attend a similar event in Seattle instead.  The mayor characterized the rallies as ‘alt-right’ and said ‘hate speech is not protected by the First Amendment.’

“Actually, as was pointed out by legal scholars and free-speech advocates, Mr. Wheeler is wrong about how constitutional protections of free speech have been interpreted by the courts. Speech, no matter how vile or distasteful, is protected in the United States.  It can be banned only if it meets the legal threshold of threat or harassment.”

--Gen. Manuel Noriega died this week.  He was 83.  Panamanian President Juan Carlos Varela announced the death on Twitter, saying that the passing of the former strongman toppled in a 1989 U.S. invasion closes a chapter in the country’s history.

--George F. Will / Washington Post...as part of an op-ed on Nebraska Republican Sen. Ben Sasse and his book “The Vanishing American Adult: Our Coming-of-Age Crisis and How to Rebuild a Culture of Self-Reliance.”

“Childhood obesity has increased 500 percent in five decades.  For ‘the most medicated generation of youth in history,’ sales of ADHD drugs have increased 8 percent a year since 2010.  Research shows that teenage texters exhibit addictive, sleep-depriving behaviors akin to those of habit-denying addictive gamblers.  Teenagers clutching their devices ‘are spending nearly two-thirds of their waking hours with their eyes tied down and bodies stationary.’ Five million Americans, many of them low-skilled young men, play 45 hours of video games per week.

“In the long-running rivalry between the realist and romantic views of human nature, Sasse is firmly with the former.  This aligns him against those who believe that schooling should ‘be a substitute for parents’ as life’s ‘defining formative institution.’  In the progressive view of education with which the philosopher John Dewey imbued the United States’ primary and secondary schools, parents ‘with their supposedly petty interests in their children as individuals’ are deemed retrograde influences, hindering schools’ mission of making malleable young people outfitted with the proper ‘social consciousness.’  Schools should embrace the need of ‘controlling’ students and ‘the influences by which they are controlled.’  Parents must be marginalized lest they interfere with education understood, as Sasse witheringly says, as ‘not primarily about helping individuals, but rather about molding the collective.’

“When the United States was founded, Sasse the historian reminds us, ‘nobody commuted to work.  People worked where they lived.’  Before the ‘generational segregation’ of modern life, children saw adults working and were expected to pitch in. The replacement of ‘the gritty parenting of early America’ by ‘a more nurturing approach’ coincided with the rise of mass schooling.  In 1870, fewer than 2 percent of Americans had high school diplomas. An average of one new high school a day was built between 1890 and 1920, and by 1950, more than 75 percent of Americans were high school graduates.

“Sasse, 45, a former university president, regrets neither nurturing nor mass education.  He does regret the failure to supplement these softening experiences with rigors sought out for their toughening effects....

“The United States, Sasse says, needs to teach its children what life used to teach everyone, and what F. Scott Fitzgerald told his daughter: ‘Nothing any good isn’t hard.’ What will be hard is the future of Americans who do not cultivate a toughness that goes against the grain of today’s America.”

[And that, friends, is the last time I glorify Sen. Sasse.  Yes, it should be clear from the last few weeks that I hope this man runs for higher office someday.]

--NASA announced that it will launch its most ambitious mission ever to the sun, flying ten times closer to its atmosphere than any previous mission, within 4 million miles of the surface and withstanding temperatures of up to 2,500 Fahrenheit, which if our own surface hit that level, the ice caps would probably melt....very quickly.

The launch is planned for some time next summer and will be the first time a satellite flew directly into the sun’s atmosphere, which I didn’t realize is hotter than the surface of the sun itself. 

After eight weeks, the satellite will encounter Venus and then eight weeks after that, it will reach the sun, traveling at 430,000 miles an hour.  Then it will make orbits around the sun for basically as long as it can, though the whole mission is planned for seven years.  Very cool, err, hot.  Hope the satellite is using SPF 30.  [Shibani Mahtani / Wall Street Journal]

[The mission is being called the Parker Solar Probe, after work done by Eugene Parker at the University of Chicago in 1968, when he wrote the defining paper on solar winds and the solar magnetic system.]

--Lastly, Thursday night I did my annual duty as part of a charity organization I’m affiliated with in New Providence, handing out scholarships to high school seniors at their awards ceremony.  Afterwards, I was trading notes with former high school classmate and fireballing lefty, though he’s really from the ‘right’, Bobby C., on various topics and I commented how this year our Lions club granted the awards to the most diverse group of students we’ve ever selected, as the makeup of the community, like most everywhere else in America the past few decades, has changed pretty drastically.

So I thought Bobby C. put it well: “People don’t appreciate that we are the most diverse and tolerant country on the planet.  Try finding that in Japan, China, France, Germany, Saudi Arabia, etc.”

It’s so true.  Yeah, we have our issues, and we’re going through a rough patch in a number of respects these days, but for the most part it’s still America the Beautiful; still that shining city on a hill.

---

Gold $1281
Oil $47.74

Returns for the week 5/29-6/2

Dow Jones  +0.6%  [21206]
S&P 500  +1.0% [2439]
S&P MidCap  +1.4%
Russell 2000  +1.7%
Nasdaq  +1.5%  [6305]

Returns for the period 1/1/17-6/2/17

Dow Jones  +7.3%
S&P 500  +8.9%
S&P MidCap  +5.5%
Russell 2000  +3.6%
Nasdaq  +17.1%

Bulls  50.0
Bears  19.2 [Source: Investors Intelligence]

Dr. Bortrum posted a new column.

Have a great week.

Brian Trumbore