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11/11/2017

For the week 11/6-11/10

[Posted 11:00 PM ET]

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Edition 970

To me events in the Middle East this week far overshadow President Trump’s trip to the Far East and his talks with the leaders of Japan, South Korea and China.  Frankly, it was startling how things developed last Saturday.

Lebanese Prime Minister Saad Hariri, in a shocking announcement from Saudi Arabia, said he was resigning, citing an assassination plot.  Just hours later, Saudi Crown Prince Mohammed bin Salman, 32, had scores of big businessmen and senior officials arrested on his orders, including the commander of the national guard, the economy minister and Saudi Arabia’s leading international financier, Prince Alwaleed bin Talal, the billionaire investor (and nephew of King Salman) familiar to so many Americans, and major investor in Citigroup, Twitter, News Corp. and Apple, among others. Forbes estimates his wealth at $17 billion.

Saad Hariri, in a televised address from Riyadh, fired a vicious tirade against Iran and Hizbullah for what he said was their meddling in Arab affairs and said “Iran’s arms in the region will be cut off....

“The evil that Iran spreads in the region will backfire on it,” accusing Tehran of spreading chaos, strife and destruction.

Lebanon is divided between the Sunni camp loyal to Saudi Arabia, and Saad Hariri, and the Shiite one loyal to Iran and Hizbullah.*  Needless to say, tensions were immediately ratcheted up ten-fold in the region.

*In Lebanon, the prime minister must be Sunni, the president a Maronite Catholic, and the speaker of parliament a Shiite.  The president, Michel Aoun, is a Hizbullah ally. He is refusing to accept Saad Hariri’s resignation until he returns to Lebanon and explains his action.

Saad, as you know, is the son of Rafik Hariri, whose casket and those of his bodyguards I saw personally in Beirut in 2005 when I went there following Rafik’s horrific assassination, he being prime minister at the time, done in by Hizbullah (though it has long denied any involvement).

Sunday, Hizbullah leader Sheikh Nasrallah said: “The resignation was a Saudi decision dictated to Prime Minister (Hariri) and was forced on him.”

The moves the kingdom made (including I now believe the forced resignation of Hariri) were, yes, aimed at consolidating the power of an emerging ruler who is poised to succeed his 82-year-old father, King Salman.

There were reports the Saudi government was aiming to confiscate assets of as much as $800 billion in the ‘corruption’ crackdown. The country’s central bank, the Saudi Arabian Monetary Authority, said late Tuesday it has frozen the bank accounts of “persons of interest” and said the move is “in response to the Attorney General’s request pending the legal cases against them.”

King Salman said in comments on state TV: “Laws will be applied firmly on everyone who touched public money and didn’t protect it or embezzled it, or abused their power and influence. This will be applied on those big and small, and we will fear no one.”

Prince Mohammed is popular with young Saudis, and one who desperately wants to diversify the economy.  He also controls almost all the levers of government, from the Defense Ministry to the central bank and the oil giant Aramco, which bankrolls the country.

Saudi Arabia on Monday accused Lebanon of declaring war against the monarchy following attacks by Hizbullah from Yemen.

Earlier, a spokesman for Iran’s Supreme Leader Ayatollah Khamenei said, “Hariri’s resignation was done with planning by Donald Trump, the president of America, and Mohammed bin Salman...The hands of treachery and aggression must be cut off.”

Israeli Prime Minister Benjamin Netanyahu said, “(Hariri’s) words are a wake-up call to the international community to take action against Iranian aggression.”

But there was also a mysterious helicopter crash in the kingdom’s south that killed Prince Mansour bin Muqrin and at least seven others.  Prince Mansour was the son of Prince Muqrin bin Abdulaziz, a former intelligence service director and one-time crown prince, removed as crown prince in April 2015 by his half-brother King Salman in favor of Prince Mohammed bin Nayef, a counterterrorism czar and interior minister.

King Salman then ousted Mohammed bin Nayef in favor of his son, the now-Crown Prince Mohammed bin Salman (hereafter MBS), first in line to the throne.  [More on the crash below.]

There were rumors immediately that the Saudis were trying to force an Israeli-Lebanese (Hizbullah) war.  [Yes, I’m spelling Hizbullah my way, the way both the Jerusalem Post and the Daily Star of Lebanon used to write it.  Forgive me if I intersperse others’ use of the now commonly preferred Hezbollah.]

So I wrote a friend from Beirut, the esteemed author and editor, Michael Young, whose book “The Ghosts of Martys Square,” the definitive history of Lebanon that is a must read, I had autographed by Michael in Beirut when I was there in 2010.  We shared a few adult beverages at a pleasant café and I pulled out his book this week to re-read the inscription he wrote that day, April 22....

“In memory of an afternoon in Beirut, after the period of the martyrs...but can we be sure?”

Today, Michael believes the Saudis “are escalating their pressure on Lebanon and engaging in a form of collective punishment that will virtually ensure that Hezbollah’s influence is reinforced rather than weakened.  It’s foolish, reckless, but it’s also part of the new militant mood that MBS is bringing to the kingdom that leaves no room for grays.”

Thursday, Saudi Arabia warned its citizens: “Due to the circumstances in the Lebanese Republic, the kingdom asks its citizens who are visiting or residing” in the country to leave it as soon as possible, according to the kingdom’s official news agency (SPA).

Tonight, Saudi Arabia announced one of its citizens had been kidnapped in Lebanon.

I have much more below on this critical story.

Trump World...Asian Adventure...

I told you months ago, when we first learned of President Trump’s trip to Asia, including China, exactly what would happen.  I never deviated and I had this for you last week.

“I’ve told you for a while now that (Trump) will screw up royally in China. And I also know that Trump will be totally naïve to the fact that President Xi Jinping will ignore every single word Trump says.  I’ve been warning of Xi for a long time now. He feels it’s his stage.”

Xi did indeed ignore every word Trump said, as you’ll see below.  Trump was blown away by the pomp and pageantry, as Xi knew he would be, and then the Chinese president played him like a fiddle.  Trump was indeed hopelessly naïve.

But our president didn’t “screw up royally” in the sense there were no actual press conferences, no questions from reporters, in China.  Xi made sure this was the case, though past American presidents demanded of the Chinese leaders in similar circumstances that questions be allowed.  That there were none helped Trump.

So here’s how the trip has gone until now....

Monday, in Japan at a joint press conference with Prime Minister Shinzo Abe, Trump offered the two were in agreement on North Korea.

“The era of strategic patience is over,” Trump said.  He defended his aggressive posture toward Pyongyang.

“Some people said that my rhetoric is very strong, but look what’s happened with very weak rhetoric over the last 25 years.  Look where we are now.”

Prime Minister Abe vowed: “We are together 100 percent... Now is the time not for dialogue, but for applying a maximum level of pressure on North Korea,” in also urging China to do more to hobble the North’s ambitions.

On the issue of the trade deficit between the United States and Japan, the leaders downplayed their differences, though Trump said the two countries are working to resolve the situation.

The next day, in his speech to the South Korean Assembly, President Trump called on China to stop all trade with North Korea or have the regime’s growing nuclear threat on its “conscience” ahead of crunch talks.  Trump urged China to “sever all ties,” saying Beijing should feel no “obligation” to help its neighbor.

Trump described North Korea as a “hell that no person deserves” and issued a warning directly to the regime: “Do not underestimate us and do not try us.”

“We call on every nation, including China and Russia, to fully implement UN Security Council resolutions, downgrade diplomatic relations with the regime and sever all ties of trade and technology. It is our responsibility and our duty to confront this danger together, because the longer we wait, the greater the danger grows and the fewer the options become.

“And to those nations that choose to ignore this threat – or worse still, to enable it – the weight of this crisis is on your conscience.”

Trump issued a direct warning to Kim Jong-un: “The weapons you are acquiring are not making you safer. They are putting your regime in grave danger.  Every step you take down this dark path increases the peril you face.  North Korea is not the paradise your grandfather envisioned. It is a hell that no person deserves.”

There was a report in the South China Morning Post that North Korean officials are looking for clarity about the U.S. government’s willingness to engage in formal dialogue and under what terms, according to Ralph Cossa, president of Pacific Forum CSIS and former special assistant to the head of U.S. Pacific Command.  A conference of lower-level North Korean officials together with analysts and advisers from the U.S. is to take place in Washington in December; what would be called “track II” dialogue.  “Track I” would be talks between senior government officials.

Separately, some $250 billion in commercial deals were signed between Chinese and U.S. companies during Trump’s visit, but no word on how many may have already been in place and when others will be implemented.

Wednesday, in a joint press conference (without questions), Trump congratulated Xi on his enhanced political status after last month’s Communist Party Congress.

“Your people are also very proud of you,” adding Xi’s elevation opened the opportunity for further improving Sino-U.S. relations.

In their talks, the two leaders discussed reining in North Korea, narrowing the trade deficit between the two countries, containing tensions between China and the U.S., stepping up military ties and ensuring security in the region, and more exchanges between young people.

Xi said the relationship between China and the U.S. was at a “new historic starting point,” but added that efforts should be taken to properly manage the differences between the two nations.  Xi said he had told Trump that the Pacific Ocean was big enough to accommodate both China and the United States.

Trump said: “In the coming months and years, I look forward to building an even stronger relationship between our countries, China and the United States of America, and even closer friendships and relationships between the people of our countries.”

Addressing a group of business leaders, Trump said: “I don’t blame China (for the trade deficit) – after all, who can blame a country for taking advantage of another country for the benefit of its citizens... I give China great credit.”  Trump said it was previous U.S. administrations that were to blame for “a very unfair and one-sided” trade relationship with China.

Thursday, Trump called on Xi to redouble Chinese pressure on the North.  “We have it in our power to liberate the world” from the North Korean “menace.” Trump then saluted Xi for leading a country that had left the United States “so far behind” and saying he could not blame the Chinese for taking advantage of Americans.

In joint statements made before reporters who, again, could not ask questions, Trump said of Xi: “You’re a very special man.”

Congratulating Xi on his consolidation of power, Trump said, “Perhaps now more than ever we have an opportunity to strengthen our relationship.”

Xi, though, in his statement, made no mention of the one-year anniversary of Trump’s own triumph. Nor did he talk in personal terms of his relationship with Trump.  Instead he just uttered formulaic bulls--- about China and the United States peacefully coexisting if they respected each other’s different political systems.

Friday, at the Asia-Pacific Economic Cooperation forum in Danang, Vietnam, President Xi offered a robust defense of globalization in a speech to business leaders, calling on countries to keep their economies open for shared prosperity.

“The concept of globalization should pay more attention to openness and tolerance, while the direction should focus on balance.”  Xi said, China will “continue to build an open economy and work hard to achieve mutual benefits.  Opening up will bring progress and those who close down will inevitably lag behind.”

Xi pledged: “In the next fifteen years, China wants to set up a new platform for the cooperation of all parties in entering the Chinese market.”

I wanted to throw up.  But unless President Trump stands up for the same values, Xi will win the day in terms of the others in the region.

[China did announce new rules on Friday, curiously after Trump had left the country, that allows American and other securities firms to own 51 percent stakes in joint ventures, which is a market-opening move, but I wouldn’t be going crazy over this yet.  I know this country too well. Zero details on timing, for example, were released.  And why didn’t Xi tell Trump about it when he was there?]

Back to APEC, what did Trump say to the same audience?  He gave his freakin’ stump speech questioning past U.S. trade practices, vowing not to “let the United States be taken advantage of anymore.”  He also warned against North Korea’s “nuclear blackmail.”

“I am always going to put American first in the same way I expect all of you in this room to put your countries first.”

Trump pledged to crack down on closed markets, predatory practices, currency manipulation, intellectual property theft, and other alleged misdeeds.

He talked of promoting a “free and open Indo-Pacific” region based on concepts like “the rule of law, private enterprise, and trade reciprocity.”

But of course one of the first things Trump did as president was pull the United States from the Trans-Pacific Partnership, a trade deal involving a dozen Pacific Rim nations. The remaining 11 are now talking about forming their own trade bloc, without the U.S.

In his speech to APEC, though, Trump said the United States would no longer engage in big, multi-lateral trade agreement like TPP, saying they undercut national sovereignty.  Instead, he said, the U.S. would focus on bilateral, one-on-one trade agreements with individual countries.

But other nations wonder if Trump is committed to any kind of trade relationship.

Separately, on Friday we learned that the formal meeting between Trump and Russian President Vladimir Putin had fallen through, though they shook hands at the summit’s group photo.  The Russians were mystified.

Editorial / Wall Street Journal

“China rolled out the best of Middle Kingdom hospitality for Donald Trump this week, while the U.S. President returned the flattery by gushing about his ‘chemistry’ with President Xi Jinping and calling him ‘a very special man.’ The question is what will come of this bonhomie, especially from China on North Korea.

“China knows how to entertain a democratic leader with flattery and symbolism, and Mr. Xi even arranged a tea in the Forbidden City for the U.S. President, the first foreign leader to be given that privilege.  Mr. Trump more than even most U.S. Presidents puts stock in appearances of respect, and the Chinese know it.

“Mr. Trump’s praise for Mr. Xi can be seen as a similar calculation. He knows Mr. Xi wants China to be seen as an equal to America on the world stage, and Mr. Trump is trying to convince Mr. Xi to cooperate in stopping North Korea’s nuclear program. As a ‘deal-maker,’ Mr. Trump also prizes his ability to size up a negotiating partner.

“Not to disdain chemistry, but it isn’t clear the two sides made any diplomatic breakthroughs. Secretary of State Rex Tillerson stressed the positive in his post-meeting presser, saying ‘there is no disagreement on North Korea.’  He repeated Chinese assurances that ‘they will not accept a North Korea with nuclear weapons,’ adding ‘there’s no space between both of our objectives.’

“Yet as a senior U.S. official told the Journal on the presidential plane, Beijing still hasn’t cut all financial links with North Korea that are banned under United Nations sanctions. And U.N. sanctions only cap sales of oil to the Kim Jong Un regime; they don’t cut off the rest of China’s economic lifeline to its ally. Clearly disagreements between the U.S. and China persist.

“Mr. Trump sent a much clearer message to Beijing, and the East Asia region, with his fine and forceful speech Wednesday to South Korea’s National Assembly. Mr. Trump hasn’t spoken often of values or morality in his foreign-policy speeches, but in Seoul he spoke in blunt moral terms about the ‘prison state of North Korea’ with more detail than any previous President....

“Framing the North Korea challenge in moral terms signals a new U.S. resolve. Mr. Trump is also right that the appeasement of past Presidents made the problem worse, and he says he won’t repeat that mistake.  Whether this strategy succeeds depends on how credible is his implicit threat to punish Pyongyang’s backers if they don’t sever ties.  If his praise for Mr. Xi is interpreted as supplication and weakness, Beijing may string the U.S. along with false assurances of cooperation as it has for decades.”

Editorial / The Economist

“On security, Mr. Trump has avoided some terrible mistakes.  He has not started a needless row with China over Taiwan’s ambiguous status, as he once threatened to do. Congress and the election-hacking scandal prevented him from pursuing a grand bargain with Vladimir Putin that might have left Russia’s neighbors at the Kremlin’s mercy. And he has apparently coaxed China to exert a little more pressure on North Korea to stop expanding its nuclear arsenal.

“However, he has made some serious errors, too, such as undermining the deal with Iran that curbs its ability to make nuclear bombs.  And his instincts are atrocious. He imagines he has nothing to learn from history.  He warms to strongmen, such as Mr. Putin and Xi Jinping. His love of generals is matched by a disdain for diplomats – he has gutted the State Department, losing busloads of experienced ambassadors. His tweeting is no joke: he undermines and contradicts his officials without warning, and makes reckless threats against Kim Jong Un, whose paranoia needs no stoking.  Furthermore, Mr. Trump has yet to be tested by a crisis.  Level-headed generals may advise him, but he is the commander-in-chief, with a temperament that alarms friend and foe alike.

“On trade, he remains wedded to a zero-sum view of the world, in which exporters ‘win’ and importers ‘lose.’  (Are the buyers of Ivanka Trump-branded clothes and handbags, which are made in Asia, losers?)  Mr. Trump has made clear that he favors bilateral deals over multilateral ones, because that way a big country like America can bully small ones into making concessions.  The trouble with this approach is twofold. First, it is deeply unappealing to small countries, which by the way also have protectionist lobbies to overcome.  Second, it would reproduce the insanely complicated mishmash of rules that the multilateral trade system was created to simplify and trim.  The Trump team probably will not make a big push to disrupt global trade until tax reform has passed through Congress. But when and if that happens, all bets are off – NAFTA is still in grave peril.

“Perhaps the greatest damage that Mr. Trump has done is to American soft power. He openly scorns the notion that America should stand up for universal values such as democracy and human rights. Not only does he admire dictators; he explicitly praises thuggishness, such as the mass murder of criminal suspects in the Philippines.  He does so not out of diplomatic tact, but apparently out of conviction.  This is new. Previous American presidents supported despots for reasons of cold-war realpolitik.  (‘He’s a bastard, but he’s our bastard,’ as Harry Truman is reputed to have said of an anti-communist tyrant in Nicaragua.)  Mr. Trump’s attitude seems more like: ‘He’s a bastard.  Great!’

“This repels America’s liberal allies, in Europe, East Asia and beyond. It emboldens autocrats to behave worse, as in Saudi Arabia this week, where the crown prince’s dramatic political purges met with Mr. Trump’s blessing.  It makes it easier for China to declare American-style democracy passe, and more tempting for other countries to copy China’s autocratic model.

“The idea that things will return to normal after a single Trump term is too sanguine.  The world is moving on. Asians are building new trade ties, often centered on China.  Europeans are working out how to defend themselves if they cannot rely on Uncle Sam.  And American politics are turning inward: both Republicans and Democrats are more protectionist now than they were before Mr. Trump’s electoral triumph.

“For all its flaws, America has long been the greatest force for good in the world, upholding the liberal order and offering an example of how democracy works.  All that is imperiled by a president who believes that strong nations look out only for themselves.  By putting ‘America First,’ he makes it weaker, and the world worse off.”

Trump tweet: “My meetings with President Xi Jinping were very productive on both trade and the subject of North Korea. He is a highly respected and powerful representative of his people.”

And: “I don’t blame China, I blame the incompetence of past Admins for allowing China to take advantage of the U.S. on trade leading up to a point where the U.S. is losing $100s of billions.  How can you blame China for taking advantage of people that had no clue?  I would’ve done the same.”

And: “In the coming months and years ahead I look forward to building an even STRONGER relationship between the United States and China.”

As The Economist was saying....

Tax Reform

Editorial / Wall Street Journal...sums up where we stand today well....

“Congress is now at the stage of tax reform where the details are messy and the political claims are confusing.  The trick is to keep your eye on the big picture, and by that measure reform momentum is building.  House Ways and Means passed its reform Thursday, and Senate Republicans released reform details that improve on the House bill in important ways.

“The biggest news is that the House and Senate plans cut the top corporate tax rate to 20% from today’s 35%, that is the highest in the developed world and has punished the U.S. economy. The rate cut would be permanent. Both chambers would also convert the U.S. into a territorial system, which taxes income where it’s earned. These are the crown jewels of this reform that should increase investment in the U.S. and increase wages for workers.

“One asterisk in the Senate version is that the 20% rate would not begin until 2019 to ‘save’ money under the Senate’s bizarre budget rules. But 100% expensing for businesses would be immediate, and expensing is more valuable against a higher tax rate. Economists we trust say this should mitigate any harm from a one-year delay. We’d prefer the immediate cut in the House bill, but a one-year delay is better than a temporary rate cut that would complicate business decisions in the future.

“The Senate bill is a notable improvement on the House in its treatment of ‘pass-through’ businesses. These mostly smaller businesses now declare income on personal tax returns, and the House divorces the two with a top rate of 25% on businesses with a complicated formula for what income gets what rate.  The Senate instead expands a deduction to allow a 17.4% discount against a top rate of 38.5% (down from 39.6%).  The little guys thus do at least as well as corporations, which are taxed twice, on both income and dividends....

“The Senate bill’s individual reform is both better and worse than the House version. It’s better in that it cuts the top marginal rate at least a little, to 38.5% from 39.6% on income of more than $500,000 for single filers. It also removes the House bill’s noxious ‘bubble rate’ of 45.6% for certain high earners.

“The Senate also keeps seven tax rates, rather than the House’s four, but the real simplification in tax reform comes less from fewer brackets and more from how you define income.  In that sense the Senate bill is also simpler than current law because it eliminates many deductions and credits.

“The big victory here is total repeal of the state and local deduction, which is a subsidy for high-tax progressive states. The House carves out an exception for property taxes to win the votes of Republicans from California and New York, and a compromise will be negotiated in conference.  But note the GOP consensus that the state and local deduction is on death row. This is the price Chuck Schumer’s Democrats will pay for rejecting any reform....

“The biggest disappointment is that the Senate won’t repeal the death tax. This is a loss for economic growth and tax fairness, and it won’t deflect Democratic charges about tax cuts for the rich. A doubled exclusion to more than $10 million of estate value is nice, but the wealthy will still duck the tax by moving their assets into trusts or foundations – or sell businesses prematurely. All of this diverts resources from the productive economy, to the benefit of accountants and lawyers.

“These details matter, but the larger story is that the Senate – the cemetery for the Republican healthcare bill – is joining the House with a pro-growth reform that has a real chance to pass.  There are still ways the GOP could trip up: The party must bow to the Senate’s Byrd Rule that bans deficits outside the 10-year budget window, and Republicans can avoid that by repealing ObamaCare’s individual mandate and save more than $300 billion.

“Still, this week’s momentum suggests that the GOP is aware that its political future depends on sticking the landing on a tax reform that can lift the economy and unleash broader prosperity.”

But we still have a long ways to go to ensure passage. The state and local deduction (SALT) is a huge item in terms of gaining key support from California, New York, New Jersey and Illinois Republicans.

The two versions will eventually go to conference, but passage by Christmas as the president wants is highly iffy.  I haven’t even begun to talk about the issue of the deficit.  Next time.

Trumpets....

Tuesday’s election was a mini-disaster for the Republicans.  While defeat was long expected in the New Jersey gubernatorial race, one of just two major races in the country this week, we had been told the Virginia contest for governor had become too close to call and the Republican ended up losing by nine points.

I have details on the races in “Random Musings,” but what’s worrisome for Republicans is how the state races shaped up in Virginia, and to a lesser extent in New Jersey.  It does not bode well for 2018.

Sen. John McCain (R-Az.) said, “Unless we get our act together, we’re going to lose heavily” in the midterms.

Rep. Tom Cole (R-Okla.), a former chairman of the National Republican Congressional Committee, said, “The best way to get run over by this train is to stand still.”

In the Senate, though, Republicans are only defending eight seats in 2018, compared to 25 for Democrats.

In the House, Democrats would need to gain 24 seats to win back the majority.  23 GOP lawmakers are in districts carried by Hillary Clinton.

My congressman, Leonard Lance (R-N.J.), said after Tuesday, “She won by 3,800 votes.  I won by 38,000 votes.  I like that extra zero.”  [If the state and local tax deduction is eliminated, he’ll need more than that extra zero, even if he votes against, as he has said he would.]

House Minority Leader Nancy Pelosi said Wednesday that “the door is certainly open for us” in 2018.

And then you have the string of Republicans who have announced their retirements. On Tuesday alone, Reps. Frank LoBiondo (R-N.J.) and Ted Poe (R-Texas) both said they won’t run for reelection next year.  The Cook Political Report immediately took LoBiondo’s announcement and moved his seat from “solid Republican” to a “toss up.”  [The Hill]

Thursday, House Judiciary Chairman Bob Goodlatte (R-Va.) became yet another to announce he would not seek another term.

All told, 29 Republicans will not seek reelection to their House seats, compared to only 11 Democrats.  [Some of these on both sides are running for the Senate or governor.]

With Trump’s dismal approval rating, the stampede for the exits could continue, possibly a slew of announcements after the Christmas/New Year’s holiday.  “I had time to discuss it with my family....” is a line we may hear some.

Majority Whip Steve Scalise (R-La.) told The Hill the other day: “The sad thing is they start smiling more and more after they make the announcement.”

But what is now crucial for the GOP is a win on tax reform, especially after failing to repeal ObamaCare.

Of course the elephant in the room is the Trump factor.  All I can tell you is my own experience.  I am tied to a charity organization in neighboring New Providence where virtually the entire town council, including the mayor, borough administrator and others are in the club and all I’ve been hearing from them was there was  a definite Trump factor this fall....as in many voters were tiring of him.  I keep harping on the Independent vote, and the numbers show Trump losing support within this critical group, but when your overall approval rating is generally stuck at 40% or below (save for Rasmussen), you can’t tell me Trump hasn’t lost some of those who voted for him 11/8/16.  It’s just a fact.

Rep. Scott Taylor (R-Va.) said Republicans in tough races shouldn’t try to act like people they’re not, referring to Ed Gillespie’s run in his state, and that Tuesday’s GOP losses were a “referendum” on Trump.

“If they agree with the president, agree with him. If they disagree with him, say it. Do not be afraid to say you disagree with the president if you do. Do not be afraid to say you agree with the president if you do,” Taylor said.

Wall Street

There was zero economic news on the week of note, and I cover the rest in “Street Bytes,” but the week did mark the one-year anniversary since Donald Trump was elected president, Nov. 8, 2016, so I thought we’d take a look at the returns in that one-year period, seeing as he loves to tweet about them so much.  [And this week he said on Air Force One: “The reason our stock market is so successful is because of me.  I’ve always been great with money, I’ve always been great with jobs, that’s what I do.”]

Dow Jones +28.5%
S&P 500 +21.3%
Nasdaq +30.7%

Tokyo Nikkei +33.4%
London FTSE +10.0%...Brexit-related issues main reason for underperformance
Frankfurt DAX +27.7%
Paris CAC 40 +22.2%

If you look at just the standard benchmark, the S&P 500, Germany, France and Japan have outperformed it.

So, yes, as I’ve been writing, while the president can take some credit, the terrific returns are not just on the expectations of tax cuts, and Trump’s moves to deregulate key sectors of the economy, which has helped with business confidence, but it’s also about synchronized global growth, with the 25 most-developed countries in the world all growing at once.  In the case of the Dow Jones, that of course helps the large U.S. multinationals with their earnings, and in the case of the S&P and Nasdaq, it is a fact that just five stocks – Amazon, Apple, Alphabet (Google), Facebook and Microsoft – represented 48% of the gain in the S&P 500...and a significant percentage of Nasdaq’s gains.

Europe and Asia

There was some economic news in the eurozone (EA19), with IHS Markit releasing the service sector data for the month of October, 55.0 for the EA19 vs. 55.8 in September (50 being the dividing line between growth and contraction).

Germany came in at 54.7; France 57.3; Spain 54.6 (a dip from 56.7, and a sign of the economic uncertainty created by the Catalonia crisis); Italy 52.1 (one-year low).

Eurozone retail sales for September (as released by Eurostat) rose a strong 0.7% over August, and were up 3.7% year-over-year, the fastest pace since July 2015.

Germany is up 4.6% yoy; France 4.6%; Spain 2.5%; Italy 2.5%.

In the U.K., car registrations (sales) fell 12.2% in October, year-over-year, according to the Society of Motor Manufacturers and Traders, while retail sales fell the most in 7 months in October, down 1%, according to the National Statistics Office.

Turning to Asia, the only economic news of note was Japan’s services PMI for October, 53.4, a 26-month high.  It also needs to be noted that the Nikkei stock average closed at 22937 on Tuesday, the highest level since 1992 (though its all-time closing high was 38915, Dec. 29, 1989). The Nikkei ended the week at 22681, up a ninth consecutive week.

Brexit: Talks resumed this week in Brussels, and the European Union threw Britain a curve ball as the future of the Irish border suddenly erupted to be a major distraction, with the EU making new demands on Britain, calling for Northern Ireland to maintain the rules of the customs union and single market after Brexit. The EU added there must be no hard border on the island, meaning regulations have to be the same on either side of the frontier.

The border issue has always been one of the three divorce items that needed to be settled before the EU would initiate full trade talks, but it was seen to be the easiest to settle so it took a back seat to the other two issues; the divorce bill and citizens’ rights.

The thing is, allowing Northern Ireland to stay in the customs union would mean putting a border between Northern Ireland and mainland Britain, which is unthinkable for the U.K., especially when the ruling Conservatives under Prime Minister Theresa May are only in power due to the support of the pro-U.K. Democratic Unionist Party from Northern Ireland.

So Ireland, recognizing it will be just one voice of 27 once talks move onto to a broad trade agreement with the entire union, is playing hardball while it has maximum power.

Ireland insists the U.K. remaining in the customs union would be the easiest way to avoid a new border, but Mrs. May says Britain can’t strike trade deals around the world otherwise.

Meanwhile, the prime minister’s shaky coalition has been beset by turmoil in her cabinet, as she had to replace a second minister this week, this time Priti Patel, international development secretary, who was forced to resign after revelations she held secret talks with the Israeli government behind May’s back.  Patel was replaced by Brexit supporter Penny Mordaunt (important because Patel was a Brexit supporter as May has been forced to balance her cabinet between pro-Brexit and those who campaigned to ‘stay’ in the Union).

Earlier, defense minister and loyal ally, Michael Fallon, was forced to resign over a sexual-harassment scandal, which has other ministers facing internal investigations.

May has been facing down one attempt after another to oust her following her disastrous decision to call an election last June that resulted in the Conservatives losing their majority in the House of Commons.

Now, back to Brussels and the talks, Britain is still faced with an end of year deadline for showing the EU that significant progress has been made on the three divorce issues before the EU will commence trade talks. Without progress in just a few weeks, Britain’s business community has promised it will begin to initiate its emergency exit plans, protecting its interests in the European Union.

Brussels has apparently given London two to three weeks to make its position on the divorce bill clear, while Germany has asked negotiators not to give the U.K. the impression that the discussions are making progress. [An advisory board in Germany has told Chancellor Angela Merkel that she should encourage Prime Minister May to reverse course and stay in the EU.]

On the issue of the exit bill, the figure now being talked about is $70 billion. The U.K. has agreed to pay only a third of that thus far, while hinting it could go higher.

The Financial Times reports that the EU has begun work on two versions of draft summit conclusions for the gathering of European leaders in December – one for the possibility of a breakthrough and another for continuing stalemate.  The EU is also preparing for the possibility the May government will collapse.

Finally, an ORB International poll of Britons finds that 66% disapprove of the government’s handling of the negotiations, while only 27% were confident Mrs. May could get the right deal.

Catalonia: Sacked Catalan leader Carles Puigdemont and four associates turned themselves into Belgian police on Sunday, following Spain’s issuing of an arrest warrant for rebellion and sedition.

Puigdemont and the others had fled to Brussels, where they are fighting Spanish arrest and extradition orders. At week’s end, some in the Belgian government aren’t real happy with Prime Minister Charles Michel for not taking tougher action against Puigdemont, with others complaining his presence in the country is inflaming Flemish separatist sentiments in Belgium.

The five were granted conditional release and are scheduled to appear at court within 15 days.  Puigdemont can’t leave Belgium without a judge’s consent.  He has said he would not return to Spain unless he receives guarantees of a fair trial.  He has also said he is prepared to run in the December 21 election from outside Catalonia and that has Spain’s OK, as long as he hasn’t been convicted.

Eight members of the dismissed Catalan cabinet and two activists were jailed as a Spanish court studies possible charges of rebellion and sedition against them.

Pro-independence protesters blocked roads and stopped trains as part of a general strike to protest against the jailing of the ousted Catalan government officials and secessionist activists on Thursday.  It was a mess in the likes of Barcelona, for example, and the trains were hit hard, but the strike was not backed by Spain’s two main unions and was not having any effect on industry or the tourism sector.  

For the December vote, a pro-independence coalition would need 68 seats for a majority in the 135-seat parliament and according to a survey published in La Vanguardia newspaper, the various pro-independence parties would take between 66 and 69 seats today.

But the pro-independence movement is not necessarily united. What seems clear, however, is that the movement is helped by the jailing of the Catalan politicians.  Ergo, Madrid may opt to release them depending on later polls.  [Just my thought.]

Germany: Chancellor Merkel still hasn’t formed a new coalition, and now one of the parties being considered, the Greens, have polled at their highest level of the year in a survey published Sunday, overtaking the other would-be partner, the pro-business Free Democrats, who have demanded the Finance Minister position. The Greens, in the Bild poll, are at 11% and the FDP at 10%.  Mostly, the impact would be on issues such as abandoning coal as a source of energy in Germany, a main position of the Greens.

Merkel’s Christian Democrats and their Bavarian CSU sister party were unchanged at 31%, while the Social Democrats slipped to 21%.

If out of nowhere negotiations on the coalition fail, new elections could be called, which could see more gains for the far-right Alternative for Germany (AfD), which in the Bild survey polled at 12% (left-wing Die Linke at 10%).

Street Bytes

--The Dow Jones and S&P 500 posted their first weekly losses since early September, breaking an eight-week winning streak amid concerns the House and Senate may not be able to reconcile their tax reform packages.  The Dow fell 0.5%, while the S&P and Nasdaq dropped 0.2%.

All three hit new highs on Wednesday before the doubts crept in.

--U.S. Treasury Yields

6-mo. 1.29%  2-yr. 1.61%  10-yr. 2.33%  30-yr. 2.81%

Over the one-year period since Trump was elected, the yield on the 10-year rose from 1.78% to 2.34% (that’s thru Wednesday); the yield on the 10-year German Bund from 0.13% to 0.32%.  [It closed at 0.41% Friday with a late-week bond rout in Europe.]

Federal Reserve Bank of New York President William Dudley announced his plans to retire in the middle of next year, ahead of when his 10-year term would have ended in January 2019, which leaves President Trump with a ton of openings.  Jerome Powell is replacing Janet Yellen at chair, leaving Powell’s position as vice chair open (Yellen not expected to exercise her prerogative by staying on as a governor), and now with Dudley’s announcement, that leaves Trump with four open slots, at a most important time for the board.

--U.S. crude oil inventories unexpectedly rose last week, according to the Energy Information Administration, when a decline had been forecast.

But in its latest production report, OPEC said its members complied to the tune of 104 percent in October on its production target.  At the same time, despite this week’s U.S. report on inventories, U.S. shale output growth is slowing; still largely rising but at a much slower pace, if at all in some fields.

So with the rise in oil prices to two-year highs ($56.90 on Friday), some analysts believe the supply-demand picture is finally coming into balance, and if you get any kind of geopolitical crisis (as we have potentially today with the Saudi-Lebanon-Iran situation), oil is poised to rise even higher.

--AT&T’s proposed $85-billion purchase of Time Warner Inc. hit a major speed bump, as the U.S. Department of Justice is ‘reported to be’ pressuring the companies to sell Time Warner’s news channel, CNN, to gain approval for the deal.

Needless to say, this ‘request’ threatens to scuttle a massive media deal and could lead to a rather big court battle if the Justice Department sues AT&T to block the purchase.

Time Warner’s Turner Broadcasting unit is not just CNN, but also the Cartoon Network, TBS, TNT and Turner Classic Movies.  [TBS and TNT containing many sports offerings as well as their normal fare.]  Justice is saying AT&T’s only other option would be to sell its satellite television unit, DirecTV.

But everyone agrees, it’s political, and all about CNN, President Trump being a critic of the deal before he became president, and constantly calling CNN “fake news.” Analysts who cover such deals are rather shocked.

AT&T is going to fight, with chairman and CEO Randall Stephenson saying on Wednesday when the news leaked of the Justice Department’s demand, “I have never offered to sell CNN and have no intention of doing so.”  [Stephenson may not have totally told the truth with this statement.]

For its part the DoJ said in a statement, “the department does not comment on any pending investigation.”

Herbert Hovenkamp, an antitrust expert at the Univ. of Pennsylvania Wharton School of Business, where President Trump received very good grades, told the Los Angeles Times that while placing conditions on a merger is not uncommon, “it makes no sense at all to try to shut down a media merger because of news coverage.” The government would have to persuade a federal judge that the proposed tie-up would harm competition and consumers.

This whole thing is outrageous, and obviously all Trump, though CEO Stephenson diplomatically said on Thursday he had no reason to believe examination of the deal was influenced by the president.

This is headed to court for what will be a lengthy fight. Stephenson saying at the DealBook conference in New York, “We are prepared to litigate now.”

--Meanwhile, T-Mobile said Saturday that while the company believed a merger with Sprint could have been beneficial for consumers, it has decided to go it alone.

In a statement, flamboyant T-Mobile CEO John Legere said: “We have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record.”

The collapse in talks was a blow to Sprint Chairman Masayoshi Son, who has been seeking to merge with T-Mobile on different occasions.  It just seems the two sides couldn’t reach an agreement on how much the deal should be worth.

Sprint isn’t going to make it, in my humble opinion.  I’ve been with them for ages.  They suck.  But I don’t need their services that often.  For regular users, there is zero reason to stick with them after neglecting its infrastructure.

--Walt Disney Co. reported net income of $1.75 billion, down 1% from a year earlier, with revenue declining 3%, short of analysts’ expectations.

The story is still largely about the media networks unit – led by ESPN – with the segment reporting a drop in operating income of 12% from a year earlier, much of which was due to lower advertising revenue at the sports network and higher programming costs, such as for carrying the NFL and Major League Baseball.  ESPN is reportedly laying off about 100 employees after Thanksgiving, on top of 100 in April, though it still currently has about 8,000 employees worldwide.

ESPN has long been the profit engine for Disney, but it has been under rising threat from both cord cutting and the costs for sports rights. In 2010, ESPN was available in nearly 100 million homes in the U.S., but according to Nielsen, this figure is now about 87 million.  It also hasn’t helped that the network has had issues with some of its on-air personalities and programming.

Nonetheless, Disney CEO Robert Iger said, “We’ve never lost our bullishness about ESPN. The brand is strong...There are always opportunities to improve... But we like where ESPN is these days.”

Meanwhile, Disney is launching two Netflix-like streaming  services – one for sports and another for films and television shows; both meant to appeal to younger audiences who have been turning away from traditional media.

Disney did not address whether it has an interest in acquiring 21st Century Fox’s movie and television production studios, as rumored.

--Staying in the media space, Time Inc.’s revenue fell 9% in its latest quarter with sales of print ads and magazine subscriptions continuing to shrink, while digital ad sales edged up only slightly.

The Sports Illustrated and People publisher continues to restructure and slash costs, including reducing the printing schedule and eliminating some magazines.

Magazine-related revenues fell 14% from a year ago, though this represents 64% of the company’s total sales. Digital products accounted for 24%.

--And News Corp. reported a 5% increase in revenue for the quarter, with net income of $68 million, compared with a net loss of $15 million a year ago.

The publisher of the Wall Street Journal, New York Post and other major papers in the U.K. and Australia – reported revenue of $2.06 billion for the fiscal first quarter.

The news and information-services business reported a 2% increase in revenue to $1.24 billion.

The Wall Street Journal had 1.318 million digital subscribers at the end of September, up 48,000 from the end of June. But advertising revenue at Dow Jones, publishers of the Journal, fell 10% in the quarter.

At News UK, which publishes the Times of London, Sunday Times and the Sun, ad revenue fell 9% and circulation revenue 5%.

Revenue in News Corp’s book-publishing segment rose 3% to $401 million, driven in no small part by strong sales of J.D. Vance’s “Hillbilly Elegy.”

--Deutsche Bank CEO John Cryan has signaled that Germany’s biggest lender is far from finished in cutting the size of its workforce, now 97,000 strong.  In an interview with the Financial Times, Cryan cited artificial intelligence as replacing many of the bank’s back office roles.

“We employ 97,000 people...most big peers have more like half that number,” before saying “machine learning” and “mechanization” will allow the firm to make greater efficiencies.

Deutsche Bank previously announced in 2015 it was cutting 9,000 jobs, but to date only 4,000 have been lost.

--Shares in Kohl’s fell sharply, the retailer missing earnings expectations, that were also shy of last year’s, while total revenue of $4.33 billion was flat with the same period in 2016.  Same-store sales rose a scant 0.1%, but this was the first increase in seven quarters.

--Rival Macy’s reported sales slid 6.1% in the quarter to $5.3 billion, largely because of weather-related issues, but income more than doubled to $36 million in the quarter ended Oct. 28, better-than-expected.  Same-store sales were down 3.6 percent.

--And Nordstrom’s reported lower same-store sales, down 0.9 percent, worse than the Street expected, while total revenue rose to $3.63 billion (net of all the shoplifting at their store at The Mall at Short Hills...actually, I’m not sure exactly how shoplifting is accounted for by the beancounters).

--J.C. Penney shares surged Friday after it reported a 1.7% rise in comp sales, better than expected, and the company beat on revenue.  But we’re talking about a stock now at $3.17.

--Sears Holdings reached a deal that will allow it to sell up to 140 additional properties amid mounting losses and declining sales. Sears would use the proceeds from selling or financing deals to fund a pension plan that still supports about 100,000 beneficiaries.

Sears warned this week that it would post a third-quarter net loss of $525 million to $595 million (actually better than a year ago), with same-store sales down a sickening 15.3%, including a 17% drop at Sears locations and 13% for Kmart stores.

--As noted in a piece by Bloomberg News, while U.S. retailers announced more than 3,000 store openings in the first three quarters of this year, chains also said 6,800 would close, and this comes with sky-high consumer confidence, historically low unemployment and a growing economy.

Ergo...not a good sign for the future of retail, and as Bloomberg’s report notes, it’s not just Amazon.com, or Millennials’ changing spending habits.  It’s the fact many of these chains, see Sears, are saddled with massive debt loads – often through leveraged buyouts led by private equity firms.  And the suburbs are overstored (and I’d add, overbanked).

--Officials at NBCUniversal and CBS Corp. said they haven’t seen any hesitation on the part of their advertisers in terms of the networks’ NFL coverage.

CBS Corp. CEO and chairman Leslie Moonves said of the anthem controversy and lower ratings, “I don’t think it’s affecting advertising or their desire one iota.”

NBC Sports said “all but a handful of units” have been sold for the Super Bowl, with some 30-second spots going for “north of $5 million.”  EVP of ad sales, Dan Lovinger, told a conference that that the Super Bowl will bring in $350 million from in-game advertising, in addition to pregame  and postgame ad revenue.

One thing you’ve seen the networks do, in response to advertisers like Papa Johns, is simply not show the anthem, which until the Colin Kaepernick protest was always used for commercials, unless it was a special game, like the Super Bowl or some playoff contests.  [I did watch Thursday night’s opening, NBC showing the anthem because of the Michael Bennett angle...he stood for it.]

--Sales growth at Adidas AG slowed faster than the Street had forecast, sending the shares to a steep decline.  Revenue advanced 8.7 percent, less than the 20 percent recorded in the second quarter.

But operating profit rose by more than a third to $923 million, beating expectations, with sales of footwear up 14 percent.  Revenue in North America increased 19 percent to $1.28 billion, an all-time high.

Adidas reiterated its forecast for the full year.

--Qualcomm Inc. received a buyout offer from Broadcom Ltd. of $70 a share, as I noted last time when the announcement came late, which would value the deal at $105bn, the largest in the semiconductor industry, but then after Monday there was little talk about the move, which is a hostile bid by Broadcom.

It’s now up to Qualcomm’s board to decide if they could receive a higher valuation after the introduction of 5G wireless that would aid its chips.

Broadcom’s Hock Tan recently held a news conference with President Trump to announce that Broadcom, currently based in Singapore, where you have to drink a lot of beer to beat the humidity (but I love the place...coincidence?), planned to move its headquarters to the U.S.

Qualcomm has been in a vicious fight with Apple over patent royalties, and it’s been facing anti-monopoly accusations from regulators in the U.S., South Korea and Taiwan.

--Snap, parent of the disappearing messaging app Snapchat, released third-quarter results Tuesday that were, to say the least, disappointing, the company showing slower user growth, sales that missed expectations and a bigger-than-expected loss, $443.2 million, the shares dropping sharply in response.

While the loss-per-share, adjusted for stock option expense and non-recurring costs, was in line with expectations, revenue of $207.9 million was far short.

24 hours later, Snap said it had received a new vote of confidence from backer Tencent Holdings, the Chinese internet giant, which increased its stake in the messaging app to over 12 percent.  [Snap’s IPO price back in March was $17, and it hit $29.44 intraday the second day of trading.  Today it closed at $12.67.]

--Monster Beverage shares fell sharply after the energy drink maker posted quarterly earnings that fell short of the Street’s forecasts.  Net income rose to $218.7m from $191.6m in the year-ago quarter. Earnings grew smartly, too, but just not as good as expected.

Net sales rose 15.4 percent to $909.5m, sales outside the U.S. jumping more than 36 percent.

Of course followers of NASCAR, such as moi, know the chief asset at the company is the Monster Energy Girls.  Here’s hoping this sponsorship continues for many years to come. 

--Panera Bread is reuniting with its fellow bakery-café chain Au Bon Pain, for an undisclosed amount.  Au Bon Pain has 304 units worldwide, most with smaller storefronts than the 2,050 sit-down restaurants Panera operates.

The two had once been under the same roof, until co-founder Ron Shaich acquired a chain of bakery restaurants that became Panera, and then spun off Au bon Pain.

It is all so confusing!  [I’m surprised how few Au Bon Pains there are...I feel like I’ve seen all 304.]

Earlier this year, after 26 years as a public company, Panera was purchased for $7.5 billion by JAB Holding Co., a family-held European outfit that owns brands such as Keurig Green Mountain and Peet’s Coffee, and paid $1.35 billion for Krispy Kreme Doughnuts.

--Wendy’s shares fell after the company reported results for the third quarter that fell short of analysts’ expectations, while also guiding lower.

Revenue was $308 million, down from $364 million in the same quarter last year, with North America same-restaurant sales up 2.0%.

Now if you read that last line and you’re thinking what the heck? it’s because the results in the quarter were hurt by hurricanes in Florida and Texas that temporarily closed many of its restaurants.

Hurting more longer term is competition from McDonald’s and other chains that are cutting prices on some menu items and offering delivery at an increasing number of locations.  Wendy’s did say it would be expanding its own delivery service.  [I used to love this chain...haven’t been in ages even though there is one nearby.]

--I don’t recall ever eating at a Red Robin Gourmet Burgers joint, but the company’s stock collapsed by about 20% at one point the other day after it reported earnings results that fell short of expectations.  Revenue also missed forecasts.

--Meal-kit delivery company Blue Apron saw its shares plunge more than 20% this week after it talked of rising costs at its new fulfillment center in Linden, New Jersey; executives explaining they are investing on improving operations and delivery infrastructure amid rising competition from the likes of Amazon and other niche players like Plated.

But here’s the real deal.  The stock is at $3.20 after coming to market at $10 just this past June.  This is beyond pathetic.  It’s clear this outfit should not have gone public in the first place.

--I’m a big fan of CVS, namely because I know where everything is in my local New Providence, N.J., location, and the chain and pharmacy benefits manager reported revenues of $46.18bn for the third quarter, up 3.5% from the prior year.  Pharmacy services revenues were up 8.1%, largely because of my new $5.50 a month blood pressure medication (which actually went down to $4.57 this month...at which point I stayed mum at checkout...but which may also force the company to guide lower later for the current quarter).

--Speaking of healthcare, a record number of Americans signed up for ObamaCare in the first few days of open enrollment, despite reports to the contrary that this would be the case (cuts in the budget for outreach and such).

More than 200,000 signed up Nov. 1, double last year’s total. And one million browsed the site, 33% more than 2016.

--AP Moller-Maersk fell as much as 7 percent after the world’s largest container shipping line’s performance was hit by the impact of a large cyberattack and higher fuel costs.

The Danish conglomerate said it couldn’t give a forecast on its profit this year, though it expects to make one, albeit lower than it guided previously.

Maersk said the so-called NotPetya cyberattack cost it $250m-$300m in lost business in July and August.

--SeaWorld lowered its full-year outlook yet again as the theme park operator reported further drops in attendance and quarterly profits.

The company reported a 10% decline in revenue to $437.7m during the third quarter, with attendance falling 8.8%, to 7.6m, during what is typically SeaWorld’s biggest quarter of the year.  Both figures missed the Street’s expectations.

Hurricane Irma hurt in Florida, which caused closures in Orlando and Tampa, while Hurricane Harvey caused lesser disruptions in Texas.

--You think you have it tough?  Try being a miner in South Africa.  The 2017 death toll in the country’s mines has already surpassed the 2016 figure, ending nine straight years of declines in the world’s deepest mines.

South Africa’s Chamber of Mines said in a statement: ‘Fatal accidents last week raised the number of fatalities in 2017 to 76, above the 73 reported in 2016.”

I forgot how deep these mines can be.  Some of the Harmony Gold, Gold Fields and AngloGold Ashanti mines are 4km ( 2 ½ miles) below ground.  That’s kind of unfathomable.  Try and imagine standing a straightened out quarter-mile track ten times, next time you’re at the track working out.

--Late word Friday has Hasbro making an approach for rival Mattel, Mattel shares soaring 24% in the after-market.

--While we still haven’t seen the final tax cut/reform package, with a House-Senate conference on same to come, charity groups are concerned, bigly, because the current proposal to double the “standard” deduction instead of itemizing charitable donations would lead to less giving, and probably by a large margin.  The Joint Committee on Taxation, for example, predicts that next year, 40.7m taxpayers would deduct charitable contributions from their tax bills, but if the House bill became law that number would fall to just 9.4m.  Wow.  [Financial Times]

--In a blistering piece in Forbes, the magazine said it was removing Commerce Secretary Wilbur Ross from its Forbes 400 list of America’s richest, last year the magazine pegging his wealth at $2.9 billion.  But now, after examining his financial disclosure files following his nomination to Trump’s cabinet, Forbes estimates the net worth at $700 million.

For you and I this is no big deal, but Forbes takes pride in how they compile their lists, that then whip around the world and feed egos (or infuriate) the likes of Donald Trump:

“It seems clear that Ross lied to us, the latest in an apparent sequence of fibs, exaggerations, omissions, fabrications and whoppers that have been going on with Forbes since 2004,” Dan Alexander wrote.

When confronted about the $2 billion+ discrepancy, Forbes says that Ross told the magazine he had created trusts for his family worth “more than $2 billion” that weren’t included in the filings, according to the article.

But after “one month of digging,” Forbes said it is now confident that “that money never existed.”

I believe Forbes.  One former colleague of Ross, David Wax, who served as No. 3 in his firm, told the publication, “Wilbur doesn’t have an issue with bending the truth.”  Like his boss.

--Kevin Spacey has been removed from a Ridley Scott film, “All the Money in the World,” with his role being totally reshot with Christopher Plummer in his place, just weeks before a scheduled Dec. 22 release.  It was supposed to have its world premiere next week at the closing night of AFI Fest.

The film tells the saga of the 1973 kidnapping of J. Paul Getty’s grandson, John Paul Getty III, and the behind-the-scenes efforts for his return.  [Sounds like a cool pic.]

--Thursday, famous comic Louis C.K. was the subject of sexual misconduct allegations from five women and a film he was about to launch was pulled.  HBO then pulled him from a scheduled comedy benefit next week.

This should have surprised no one.  You just have to listen to five minutes of his act to know the stories from the women are likely true.

And then Friday, he apologized, saying the allegations were indeed accurate.

Foreign Affairs

Saudi Arabia / Lebanon / Iran:  [More on the crisis]

Amos Harel / Haaretz

“Late last week, in under twenty four hours, the Saudi royal house set off a string of shocks within the kingdom and across the Middle East, making a set of moves that escalated the battle with Iran over regional hegemony.

“The complete Saudi plan, if it exists, has not been revealed yet. However, the series of developments has raised the level of nervousness in its neighbors’ capitals, provoking much guesswork regarding the Saudis’ next moves.

“First came the announcement that Lebanon’s Prime Minister Saad Hariri was resigning. At first it was explained as deriving from his concerns about an Iranian-inspired Hezbollah plot to assassinate him. As the days passed, the resignation seemed more like a Saudi dictate, stemming from Saudi Arabia’s displeasure at the way Hariri was compelled to cooperate with Hezbollah in Lebanon’s government.

“A few hours after the initial announcement, the Saudis announced a wave of arrests of princes and wealthy businessmen, on suspicion of corruption.  As the princes were being detained under five-star hotel conditions at the Ritz Carlton in Riyadh, a strange aerial accident took place in the southern part of the kingdom. The next day it emerged that a prince had tried to escape Saudi Arabia by air, using a helicopter which was shot down by the Saudi air force. The nine passengers and crew on board were killed. In the meantime, Yemen’s Houthi rebels, backed by Iran, fired a missile at Riyadh’s airport.  American missiles successfully intercepted the missile. In retaliation, Saudi Arabia imposed a land and naval blockade on Yemen.  [Ed: The U.N. says the blockade could result in the deaths of millions...millions...in Yemen from starvation and lack of medical supplies as aid is cut off. It’s already an incredibly fragile situation in the country, prior to the blockade.]

“These weren’t the only developments related to Saudi Arabia this week. U.S. President Donald Trump tweeted words of support for steps taken by King Salman and by the kingdom’s strongman, Crown Prince Mohammad bin Salman. Trump’s son-in-law Jared Kushner visited Saudi Arabia and Israel several days before the wave of purges took place. In Israel, the Foreign Ministry disseminated a position paper among foreign embassies following Hariri’s resignation, TV Channel 10 reported. This was totally congruent with the official Saudi version of events, which put the blame for the crisis in Lebanon squarely at Iran’s feet.  Mahmoud Abbas, head of the Palestinian Authority, embarked on an urgent visit to Egypt and Saudi Arabia. Brussels received a surprising request that a senior Saudi delegation come on a visit next week to discuss methods of combating terror.  The Saudis were responding to an invitation which had been issued by the Europeans ten months earlier.

“Is there one line connecting these dots, as well as one linking it to the crisis deliberately-generated by Saudi Arabia, the United Arab Emirates and Egypt with regard to fractious Qatar last summer? Is there a  link between these issues and the reconciliation between the Palestinian Authority and Hamas, which began to be implemented in Gaza last week, led by Cairo?  The conventional wisdom among intelligence officials and academic scholars is that these are steps designed to consolidate the influence of Mohammad bin Salman, ahead of the future transfer of power from his 82-year-old father into his hands.”

Here’s what seems to be clear.  Saudi Arabia, read Mohammad bin Salman (MBS), is seeking a new regional order.  I agree with those saying this week that the Saudis are also pushing Israel into a war with Lebanon (Hizbullah), which of course could lead to war with Iran.  Saudi Arabia wants Israel to do its dirty work, goes this theory.

Hariri’s resignation forces the fractured government in Lebanon, including Hizbullah, to deal with the country’s economic crisis, caused in no small part by the flood of refugees from Syria, that Lebanon has humanely accepted.

The Kushner angle is interesting.  Is the White House preparing a new peace deal for Israel and the Palestinians that would have Saudi backing?

Israel has been stepping up its operations in Syria against weapons depots and factories that help fuel Hizbullah in Lebanon.  I’ve written of how Syria, read Iran, wants to be able to launch another front against Israel from the Golan Heights, which through Hizbullah, the Syrian army and other forces it is trying to infiltrate.

It’s all incredibly dangerous.

Thursday, French President Emmanuel Macron paid an emergency visit to the kingdom to meet with MBS, France having an historic interest in Lebanon.  Prior to his meeting with the crown prince, Macron said: “My wish is that all Lebanese political officials live freely in Lebanon...which means having a very demanding stance on those who could threaten any leader,” he said.

David Ignatius / Washington Post

“Saudi Arabia appears to be committing the original sin of modern Middle East politics – fighting its regional wars in Lebanon and driving that fragile country once again toward civil strife.

“Saudi Crown Prince Mohammed bin Salman’s target in Lebanon is Hezbollah, the nation’s dominant political force, which is backed by the Saudis’ nemesis, Iran. Unwilling to risk a direct shot at Tehran, the crown prince is instead attacking Iran’s clients in Beirut.

“The proxy battle has escalated over the past week. First, the Saudis pressured Lebanese Prime Minister Saad Hariri to resign last Saturday; hours later, MBS, as the 32-year-old crown prince is known, launched sweeping arrests of rival princes and business leaders in Riyadh, creating an uproar across the region. On Thursday, the Saudi government told its citizens to leave Lebanon and advised against future travel there.

“For a Sunni Arab world that fears and loathes Iran, the moves by MBS will probably be popular.  He’s emerging as the strongest (if also the most impulsive) Sunni leader in decades, exercising a kind of raw power at home and in the region that hasn’t been seen since Iraq’s Saddam Hussein....

“Lebanese sources told me Thursday in telephone interviews [Ed. Ignatius no doubt talked to the aforementioned Michael Young...Ignatius’ column often in Mr. Young’s Daily Star] that the Saudis want to force Hezbollah to leave the cabinet and parliament.  That’s understandable for Riyadh, but not realistic.

“Saudi Arabia’s real leverage is that about 500,000 Lebanese work in the Gulf, sending home roughly $3 billion annually, a tide of remittances that keeps Lebanon’s financial and property markets afloat. If those Lebanese were expelled, a dramatic downward spiral would begin....

“When the Syrian civil war began in 2011, many analysts predicted that a frail Lebanon would tumble back into chaos.  But it hasn’t happened – yet – because Hezbollah worked quietly with Saad Hariri and other Lebanese leaders to keep a lid on unrest.

“Can such quiet cooperation continue?  Not if the Saudis sabotage the country’s economy in what they describe as an effort to punish Hezbollah.

“For the United States, Lebanon poses what’s becoming a recurring challenge – how to encourage MBS’s push to modernize the kingdom without letting him drive Saudi Arabia and the region off a cliff.

“Call it the MBS conundrum: The headstrong crown prince jumped into what U.S. officials thought was an unwise war in Yemen; it’s still raging, despite U.S. attempts to find a settlement.  MBS escalated a feud with meddlesome neighbor Qatar; Secretary of State Rex Tillerson has tried unsuccessfully to mediate. This week in Lebanon, the United States was again attempting damage control, as Ambassador Elizabeth Richard pledged $42 million for the Lebanese army and expressed support for ‘a stable, secure, democratic, and prosperous Lebanon.’

“The rivalry between Iran and Saudi Arabia has been ripping the fabric of the Middle East since the Iranian revolution of 1979, spawning terrorist movements and proxy wars among Shiite and Sunni allies of the two nations. This sectarian bloodletting seemed unstoppable when a strong, arrogant Iran faced a weak, confused Saudi Arabia.

“MBS may hope to become the powerful Sunni leader who could eventually balance the region – and open the way for a grand bargain that would bring stability. That’s a desirable outcome. But in the short term, the challenge for Washington is to prevent this would-be strongman from blowing up himself and his neighbors.”

Anne Applebaum / Washington Post

“There are countries in which you are accused of an act of corruption and then you are arrested. And then there are countries in which someone decides to arrest you and only then are you called corrupt.

“Saudi Arabia belongs to that second category. Last week, the Saudi crown prince, Mohammed bin Salman, used the excuse of ‘corruption’ to arrest several dozen people, including close members of his family, and to lock them up in the posh confines of the Ritz-Carlton Riyadh.

“Nobody took the charges at face value.  ‘Corruption’ – theft from the state – is not easily defined in Saudi Arabia, a place where the ruling family is the state, and vice versa.

“Instead, those who know the country have argued that these arrests are part of a major political transition, an assault on the country’s sclerotic, traditional power structure....Talk of social modernization, for example – one of the world’s most misogynistic societies will soon allow women to drive – as well as of the diversification of an economy almost entirely dependent on oil.

“But if those are the goals, these arrests also represent another setback for U.S. leadership in the era of President Trump, and a major blow to the prestige of a very different model of modernization and political transition....

“Instead of following a Western model of modernization and reform, the crown prince has taken the path of China and Russia, where ‘political transition’ means that power is retained by a tiny, very wealthy elite. In Russia in 2003, Vladimir Putin arrested, for ‘corruption,’ Mikhail Khodorkovsky, then one of the wealthiest and most powerful men in Russia. Khodorkovsky was unluckier than the Saudi princes – he wound up in a Siberian labor camp, not the Ritz-Carlton – but his arrest served the same purpose: It frightened Russia’s other rich men into submission, and it established the Kremlin, not the oligarchs, as the ultimate source of power.

“In China, Trump’s new friend, President Xi Jinping, has used charges of ‘corruption’ in a strikingly similar manner. As in Russia and Saudi Arabia, almost everyone in the nepotistic Chinese ruling class has extraordinary access to money, jobs and even state assets. The decision to call anyone ‘corrupt’ is just as political in Beijing as it is in Riyadh. Since taking power, Xi has, like Putin, used that tool to eliminate political rivals, to scare his colleagues and to establish himself as the unchallengeable ruler. And by using the language of ‘anti-corruption,’ he, like Putin, seeks public approval in a society that is well aware that the system is skewed against them.

“It’s not hard to guess why the Saudi crown prince has chosen to follow the Russian and Chinese road map...In part, it is thanks to the failure of the Arab Spring, a disaster that has tragically tainted ‘Western models’ in a part of the world that will know peace only if citizens of different ethnicities can find ways to share power.

“But Trump is also part of the story.  By his own example – through his disdain for courts and for the media, through his scorn for ethical norms – Trump has cast doubt on the Western model. He may even have encouraged the Saudi prince more directly. Jared Kushner, Trump’s son-in-law, a living embodiment of American nepotism, visited Riyadh for long talks...in the days before the arrests.  The image of two princelings, scheming late into the night, makes a textbook illustration of the decline of American prestige and American values, even in a country that is closely allied to the United States.”

Thomas L. Friedman / New York Times

“(Here) is what I don’t know for sure: Where does his impulse for rapid reform stop and his autocratic impulse to seize all power begin?  After MBS arrested a slew of Saudi princes, media owners and billionaire businessmen on ‘corruption’ charges, President Trump tweeted his applause, saying, ‘Some of those they are harshly treating have been ‘milking’ their country for years!’

“I could only laugh reading that tweet. Hearing that Saudi princes were arrested for ‘corruption’ is like reading that Donald Trump fired seven cabinet secretaries ‘for lying.’  You know it has to be something else. Trump obviously missed the story last year that MBS impulsively bought a yacht while on vacation in the south of France – it just caught his fancy in the harbor – from its Russia owner for $550 million. Did that money come out of his piggy bank? Savings from his Riyadh lemonade stand? From his Saudi government 401(k)?

“I raise this point because when you’re making as many radical changes at once, and making as many enemies at once, as MBS is, your robes need to be very clean.  People have to believe that you mean what you say and that you have no hidden agendas, because change is going to be painful. Look at what MBS is doing all at once:

“To speed up decision-making, he is reshaping the Saudi state – from a broad family coalition where power is shared and alternated among seven major families and decisions taken by consensus – to a state governed by a single family line. This is no longer ‘Saudi Arabia.’ It is becoming ‘Salman Arabia.’  In the latest series of arrests, MBS basically eliminated the ‘young old guard’ – the key sons and his natural rivals from the other main Saudi royal lines. He also arrested the owners of the three main quasi-independent private television networks, MBC, ART and Rotana....

“In 1979, in the wake of the takeover of Islam’s most holy site in Mecca by an ultra-fundamentalist Saudi preacher who claimed that the al-Saud family was not Islamic enough, the Saudi ruling family – to shore up its religious legitimacy – made a sharp religious turn at home and began exporting its puritanical Wahhabi Sunni Islam abroad, building mosques and schools from London to Indonesia.

“It has been a disaster for the Arab/Muslim world, spawning offshoots like Al Qaeda and ISIS and retarding Arab education and women’s advancement.

“MBS has vowed to give birth to a more moderate Saudi Islam, starting by curbing his religious police and permitting women to drive.  This is hugely important.  He is daring people to judge his government not on piety but on performance, not on Quran but on KPIs – key performance indicators on unemployment, economic growth, housing and health care.

“But he is replacing Wahhabism as a source of solidarity with a more secular Saudi nationalism, one that has a strong anti-Iran/Persian/Shiite tenor.  And that is taking him to some dangerous places.... It’s overreach, and there seems to be no one around to tell him that....

“I worry that those urging MBS to be more aggressive in confronting Iran (whose malign regional influence does need counterbalancing) – like the U.A.E., Trump, Jared Kushner and Bibi Netanyahu – will push MBS into a war abroad and at home at the same time, and we could see Saudi Arabia and the whole region spin out of control at the same time.  As I said, I’m worried.”

Iraq / Syria: A Hizbullah-run media unit said Friday that ISIS leader Abu Bakr al-Baghdadi was reported to have been in the Syrian town of Albukamal during the Syrian army and its allies’ operation to clear it, though Hizbullah did not say what had happened to Baghdadi.  The U.S.-led coalition said today it had no “releaseable information” on Baghdadi’s whereabouts.

The Syrian army declared victory over Islamic State on Thursday, saying its capture of the extremists’ last town marked the collapse of their three-year rule in the region.

But there are still clashes taking place near Albukamal, which is near the border with Iraq, where ISIS still has some fighters. [Iraq’s military contributed in the fight by seizing the town of al-Qaim, across from Albukamal, thus giving the two armies control of a strategic crossing between the two countries.  [Apparently some Iraqi troops fought with the Syrians in Albukamal.]

While this is the end for ISIS in Syria in terms of formal territory, the group will still keep up its media apparatus and operate from desert areas.  [An ISIS car bomb, for example, killed dozens at a refugee gathering in Syria last Saturday, an area controlled by the U.S.-backed SDF.]

In Washington, Turkey’s Prime Minister Binali Yildirim said the United States should withdraw its weapons and support for the Kurds and Arab forces that just routed ISIS in Syria, calling them a post-war threat to the region and Israel.

Yildirim, who had talks with Vice President Pence, said Ankara does not want any Syrian Democratic Forces, let alone Kurdish YPG militiamen remaining in control of parts of Syria through post-war stabilization; Turkey considering the YPG a terrorist threat akin to the separatist Kurdistan Workers Party, or PKK.

China: The National People’s Congress Standing Committee, the top legislature, endorsed an amendment to the criminal code to make abuse of the national anthem or flag punishable by up to three years in prison.  Significantly, this is now part of Hong Kong’s mini-constitution, the Basic Law.  I guarantee this will be a major flashpoint in Hong Kong, such as at football matches.  I’d be taking a knee myself.

North Korea: The Pentagon told U.S. lawmakers this week in a letter requested by some members of the House that the only way to locate and secure all of North Korea’s nuclear weapons sites “with complete certainty” is through an invasion with U.S. ground forces, and in the event of conflict, the Pentagon added the North could use chemical and biological weapons.

The letter also notes the possibility of “opposition from China or Russia.”

Zimbabwe: President Robert Mugabe dismissed Emmerson Mnangagwa as his deputy, a day after first lady Grace Mugabe accused him of plotting a coup and said she’s prepared to succeed her 93-year-old husband as leader of the country.

Mnangagwa had been considered a leading candidate to succeed Mugabe.

Meanwhile, Martha O’Donovan, the 25-year-old New York University graduate who was arrested for attacking Mugabe in a tweet, calling him a “sick and selfish man,” denied she ever sent the tweet from the account of @matigary, which joined Twitter in February 2016.  Zimbabwe authorities say they believe O’Donovan is the author, and while O’Donovan denies it was her, @matigary continued to tweet since she was jailed!

O’Donovan was charged with subversion and attempting to overthrow the government, a charge that carries a sentence of up to 20 years in prison.

I’ve been so busy with other news that I haven’t had a chance to fully get an update, but last I saw, the State Department declined any comment other than to say it was aware of her situation.

Random Musings

--Presidential tracking polls....

Gallup:  37% job approval for President Trump, 58% disapproval
Rasmussen: 44% approval, 555 disapproval

--In a CNN poll conducted by SSRS, President Trump’s overall approval rating stood at 36%, the worst of his presidency (37% in October).

[In terms of personal favorability, Trump has dipped to 38%, which is the same as Vice President Mike Pence...interesting.]

59% say they think Trump himself knew last year of those associated with his campaign who may have had contact with suspected Russian operatives, while only 35% think the then-GOP nominee did not know about those contacts.

In terms of the role of tech companies in protecting us from foreign countries influencing future elections, 59% do not have confidence the likes of Google, Facebook and Twitter are doing enough to prevent such meddling.

Only 40% think President Trump is doing a good job keeping candidate Trump’s promises, down from 48% in April.

On the question of Trump being able to unite the country, 30% say they think the President will unite the country rather than divide it, down 13 points since last November, and 38% say he cares about “people like you,” also down significantly from a year ago.

Last year, 81% of Republicans thought Trump would unite the country, 91% that he cared about people like them. Now, those figures are 65% and 83%, respectively.

Almost two-thirds (64%) overall say Trump’s statements and actions since taking office have made them less confident in his ability to serve as president.

In a bit of good news for Trump, 45% approve of his handling of the economy, 46% disapprove, and terrorism, 44% approve and 48% disapprove.

And 68% describe the economy as in good shape, up from 57% just before Trump’s inauguration and the highest share to do so since spring 2001.

34% call Trump honest and trustworthy, 64% say he’s not.

All told, just a third think the President deserves re-election in 2020, 63% say he doesn’t deserve it.  64% say they aren’t proud to have Trump as President.

Back to presidential approval numbers, in Gallup’s all-time numbers, President Harry Truman hit 22% in 1952, while Richard Nixon was at 24% just before he resigned.

According to a new poll from ABC News and the Washington Post, Trump has a 37% approval rating and 59% disapproval.

In this survey, 66% of Americans say Trump “lacks the personality and temperament it takes to serve effectively as president.”  65% said Trump is not honest and trustworthy.

35% say he has accomplished a great deal or a good amount while in office.  65% say he has accomplished “not much” or “little or nothing,” up from 56% last spring (which was too early for a poll of this kind...now it’s a fair question).

--Virginia Democrat Ralph Northam routed Republican Ed Gillespie to become the next governor of Virginia, 54-45, when we were led to believe that prior to the vote it was suddenly too-close to call.  Gillespie, in the final few weeks, heavily adopted the Trump agenda, but the state that went for Hillary Clinton by five points in 2016 turned out in a strong party effort.

It was also a big win for DNC chairman Tom Perez, who I truly loathe, as he has been under siege, but he personally barnstormed the state the days leading up to the election in support of down ticket candidates that no doubt helped Northam’s tally.  [Kind of like myself.  I went to the polls to vote for my Republican state senator and assemblymen, and really as an afterthought voted for the Republican for governor, even though she was an awful candidate.]

Gillespie is a good guy. I liked him when he was chairman of the Republican National Committee and adviser to President George W. Bush.  Yeah, he’s establishment.  He just wasn’t the candidate for these times, and his dive into the culture wars didn’t pan out.

President Trump, ever classy, tweeted shortly after Gillespie’s defeat:

“Ed Gillespie worked hard but did not embrace me or what I stand for.  Don’t forget, Republicans won 4 out of 4 House seats, and with the economy doing record numbers, we will continue to win, even bigger than before!”

Trump, and Steve Bannon, threw Gillespie under the bus.

Editorial / Wall Street Journal

“Republicans can take little comfort that Hillary Clinton defeated Mr. Trump by five points in 2016.  Mr. Gillespie lost by nine and he badly underperformed in Northern Virginia, home to federal employees and white, college-educated suburbanites who dislike Mr. Trump’s polarizing politics by insult.  In his 2014 near-miss Senate race, Mr. Gillespie won pivotal Loudoun County by 456 votes.  On Tuesday he lost it by 23,432.”

--New York City voters re-elected Bill Blasio in a landslide, as expected, de Blasio with 66.5% to Republican State Assemblywoman Nicole Malliotakis’ 28%.  [New York is six-to-one registered Democrats, but you’ve seen it elect qualified Republicans in the past...just an incredibly weak field of elephants of late.  De Blasio won with 73% in 2013.]

So now de Blasio will use his platform to increase his national visibility, no doubt the guy having presidential ambitions, touting his progressivism.  He is also going to be pressing Albany for new taxes on the wealthy to fund his liberal agenda and fix subways.  But he’s been unable to do so in the past because he is despised by Republicans and New York Democratic Gov. Andrew Cuomo, the latter with his own national ambitions and wanting to portray a more moderate face, at least in public.  [A day after the election, Cuomo had yet to call de Blasio to congratulate him, which I find fascinating.  Cuomo doesn’t want de Blasio stealing his thunder, like on ambitious infrastructure programs, including the New York City subways.  Cuomo will be running for re-election himself in 2018, a big margin of victory needed to help propel him to 2020.]

--Entering Tuesday, in my state of New Jersey, Democrats had a 24-16 majority in the Senate and a 52-28 majority in the Assembly, and they lost at least one in each with that day’s election.  Plus Democrat Phil Murphy rolled Republican Lt. Gov. Kim Guadagno, 56-42, in the race to replace Chris Christie.

My hometown of Summit now has a Democratic-majority in the City Council for the first time, ever!  And the margins in the three races decided on Tuesday weren’t even close.  I can guarantee you that a sizable portion of the vote was a backlash against Trump in some fashion, because it’s not as if the Republicans running the place have done anything necessarily bad.

By the way, how important was Bridgegate?  Four years ago, Christie won reelection by 22 points. Today he has a 14-15 percent approval rating.

--Republican Sen. Rand Paul (Ky.) is recovering from six broken ribs and resultant lung issues, following an alleged attack (“blindside”) by Paul’s next-door neighbor, Rene Boucher, who was charged with assault.  The dispute was reportedly over the condition of Paul’s lawn and where grass clippings and twigs should be placed, though others, including Sen. Paul himself, dispute this.  Some neighbors say it was more about bad blood that has been simmering between the two for years, though they haven’t reportedly spoken to each other in years.

Regardless, the injuries are serious, and if you believe the version thus far, that Paul was on his riding tractor, cutting the lawn, when he was blindsided, I hope Boucher, also a doctor, gets prison time.

--Senate Republican leadership is calling for Alabama GOP candidate Roy Moore to step down as the party’s nominee in the special election taking place in December to replace the now-Attorney General Jeff Sessions, if the allegations in a report in the Washington Post on Thursday that he had a relationship of some sort with a 14-year-old when he was 32 are true.  Other women, according to the Post, have similar stories.

Now from what I know, I do not like Judge Moore (twice booted off the state Supreme Court), but I would be an amazing hypocrite not to follow my own “wait 24 hours” adage, especially in a case like this.

Friday, though, President Trump echoed Senate Majority Leader Mitch McConnell, saying if the allegations are true, he must step aside.

And then Moore gave what I consider to be a weak defense of himself on Sean Hannity’s radio show today.

But watching Hannity tonight as he replayed the radio interview, it was almost comical, despite the gravity of the situation.

The thing is Hannity did an outstanding job in grilling Moore, so good that the likes of Geraldo and Greg Jarrett said after, the guy’s guilty.

The funny thing was that you could see it then hit Hannity, ‘Omigod...I’ve killed Judge Moore’s candidacy and this is my base!’  So there was Hannity, feverishly trying to backpedal, hoping against hope that Moore is indeed innocent.

--In a book by Mark K. Updegrove titled “The Last Republicans,” former Presidents George H.W. Bush and George W. Bush expressed their displeasure with President Trump.  The younger Bush expressed concern he would be “the last Republican president.”

The elder Bush says in the book: “I don’t like him. I don’t know much about him, but I know he’s a blowhard. And I’m not too excited about him being a leader.”

George W. Bush said Trump “doesn’t know what it means to be president.”

Both admitted to not having voted for Trump.

So of course the White House fired back, attacking their legacies in a statement, that read in part: “If one presidential candidate can disassemble a political party, it speaks volumes about how strong a legacy its past two presidents really had.”

The White House also called the Iraq war, “one of the greatest foreign policy mistakes in American history.”

--The Donna Brazile story didn’t make the cut this week due to time constraints.  I’m also bored by it.

--So President Trump was all set to make a dramatic, secret appearance at the DMZ on Wednesday after all, after we were told the White House opted not to do so because it didn’t want to ratchet up tension further, but then he was fogged out.  You just know he was going nuts. He wanted to be able to post pictures and tweet about it so badly.

To be fair, South Korean President Moon was prepared to appear with Trump, and he was there, waiting for him, having traveled much of the way by car, an option not open to Trump for security reasons.

--One of the great regrets of the nearly 19 years doing this column and this site is I just don’t have time to read books, after being a voracious consumer of historical texts until then.  One of my favorite books was Ulysses S. Grant’s memoir, which a recent op-ed by George Will in the Washington Post described as “the greatest military memoir in the English language, and the finest book published by any U.S. president.”

Will was writing about Ron Chernow’s new biography of Grant, “which no reader will wish were shorter than its 1,074 pages,” Mr. Chernow having written greatly honored biographies of George Washington and Alexander Hamilton.

One thing that’s important for schoolchildren to learn about General, then President Grant, says Chernow, was “(he) showed a deep reservoir of courage in directing the fight against the Ku Klux Klan and crushing the largest wave of domestic terrorism in American history.” Will writes: “He ranks behind only Abraham Lincoln and Lyndon B. Johnson as a presidential advancer of African American aspirations.”

Most of us grow up learning about Grant’s corrupt presidency (which wasn’t on him, but those around him who abused his trust), drinking, and the huge death tolls in the battles he fought.

George Will:

“Chernow is clear-eyed in examining and evenhanded in assessing Grant’s defects.  He had an episodic drinking problem but was not a problem drinker: He was rarely incapacitated, and never during military exigencies or when with Julia, his wife.  Far from being an unimaginative military plodder profligate with soldiers’ lives, he was by far the war’s greatest soldier, tactically and strategically, and the percentage of casualties in his armies was, Chernow says, ‘often lower than those of many Confederate generals.’”

Lastly, from Mr. Will: “Chernow leans against today’s leveling winds of mindless egalitarianism – the belief that because greatness is rare, celebrating it is undemocratic. And against the populist tear-them-down rage to disparage....

“Chernow’s ‘Grant’ is a gift to a nation much in need of measured judgments about its past.”

--I’ve been harping on the issue of distracted driving, and then last week, in my noting of the passing of Native American activist Dennis Banks, I talked of my experience in the Pine Ridge Indian Reservation in South Dakota a number of years ago.  So the day after I posted I’m reading the Rapid City Journal and a court case there had just come down.

As reported by Tiffany Tan:

“A woman sitting in a wheelchair, one of her lower legs missing, said Friday that she had been waiting more than two years for an apology.

“ ‘I thought, this girl will come forward and say ‘I’m so sorry,’’ Colene Bald Eagle said in federal court.

“The awaited words came an hour later, when 27-year-old Sophia Janis apologized for checking Facebook on her iPhone while driving and causing a collision that killed one woman, injured another and led to Bald Eagle’s amputation.

“Janis, then an Oglala Sioux Tribe corrections officer, was driving a Department of Corrections vehicle on the Pine Ridge Indian Reservation when the accident occurred July 30, 2015....

“Driving while checking her phone, which Janis described as ‘bad judgment,’ will cost the Wounded Knee woman three years of freedom.  She pleaded guilty in April to involuntary manslaughter and was sentenced Friday to 37 months in prison and three years of supervised release.”

Yes, as they say, ‘It can wait, people.’

--I’ve been meaning to get down for the record what President Trump told Maria Bartiromo of the Fox Business Network in an interview a few weeks ago on tweeting and just haven’t had the time.

BARTIROMO: Do you ever feel like sometimes, some of your unscripted Tweets, unscripted comments get in the way of the larger message? I have spoken with a lot of supporters of yours and while they love the policies; they say we, you know we feel like we are always defending something he said, that he really didn’t mean, to say that way. Do you think that is getting in the way of your agenda and the overall message?

TRUMP: It is such an interesting question, because I have friends that say, oh, don’t use social media. See I don’t call it Tweets, Tweeting is like a typewriter – when I put it out, you put it immediately on your show. I mean the other day, put something out, two seconds later I am watching your show, it’s up –

BARITROMO: You’re right. We’re watching your Twitter feed.

TRUMP: OK, and then, you know they are well crafted. I was always a good student, I am like a person that does well with that, does well with that kind of thing. And I doubt I would be here if it weren’t for social media, to be honest with you. Because there is a fake media out there, I get treated very unfairly by the media.

And I have a tremendous platform.  I think I have 125 million people between Twitter and Instagram and all of them and Facebook.  I have a tremendous platform....

So when somebody says something about me, I am able to go bing, bing, bing and I take care of it. The other way, I would never be able to get the word out.  I had a big rally, we were in Texas for something and I then I went back unfortunately for the hurricanes.

But one woman was standing, I had thousands and thousands of people, but the woman was saying ‘keep tweeting, it matters.’....

BARTIROMO: It’s not just the Tweets, Tweeting is good. I mean having that direct relationship. It’s just tweeting on other subjects other than the message that you really want to focus on.

TRUMP: You have to keep people interested also. You know, you have to keep people interested.  But, social media, without social media, I am not sure that we would be here talking.

[We’ll assess how effective it was in 2018 and 2020, and how things go with the likes of North Korea and Iran.]

--One thing Trump did in Japan...he set off a Twitter firestorm over his choice of a hamburger at a meal with Prime Minister Abe, with Yutaka Yanagisawa, owner of Munch’s Burger Shack in the Minato Ward in Tokyo, selected to serve the president.

Sora News 24 reported that customers have been flooding his two burger shack locations to buy the Trump burger – made with Colby Jack Cheese and 100 percent American Angus beef, cost $10.54. 

Trump asked for his well-done, as I would have.

--Finally, we thank Stephen Willeford, the brave local plumber who no doubt saved lives by grabbing his rifle and firing at killer Devin Kelley in Sutherland Springs, Texas last Sunday.  As a Wall Street Journal editorial put it:

“No one wants crowds of vigilantes looking for someone to shoot, but we’re sure glad Stephen Willeford had a rifle and knew how to use it.  Like the passengers aboard Flight 93 on 9/11, or the Yanks who foiled a terror attack on a train in Belgium in 2015, he didn’t wait for orders to protect his fellow human beings.”

But the fact the Air Force failed to report Devin Kelley’s “bad conduct” discharge in 2014 after being court-martialed on a domestic violence charge to the FBI’s National Criminal Information Center database is outrageous.  It would not have been impossible for Kelley to then purchase a firearm, but it would have been harder for him to do so legally.

This is the same military that just concluded investigations on Naval mishaps in the Pacific that claimed scores of our nation’s best...pure negligence and incompetence.

Start doing your job, Pentagon.  Your nation demands it.  And your soldiers, sailors and airmen also deserve better.

---

Pray for the men and women of our armed forces...and all the fallen.  God bless the Veterans.  We thank you.

And we pray for the victims and their families of the Sutherland massacre.

God bless America.

---

Gold $1275
Oil $56.90

Returns for the week 11/6-11/10

Dow Jones  -0.5%  [23422]
S&P 500  -0.2%  [2582]
S&P MidCap  -0.6%
Russell 2000  -1.3%
Nasdaq  -0.2%  [6750]

Returns for the period 1/1/17-11/10/17

Dow Jones  +18.5%
S&P 500  +15.3%
S&P MidCap  +9.9%
Russell 2000  +8.7%
Nasdaq  +25.4%

Bulls 64.4
Bears 14.4  [Source: Investors Intelligence...again, biggest spread, 50 points, since early 1987...though the Crash that year didn’t occur until October.]

Brian Trumbore



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Week in Review

11/11/2017

For the week 11/6-11/10

[Posted 11:00 PM ET]

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

Edition 970

To me events in the Middle East this week far overshadow President Trump’s trip to the Far East and his talks with the leaders of Japan, South Korea and China.  Frankly, it was startling how things developed last Saturday.

Lebanese Prime Minister Saad Hariri, in a shocking announcement from Saudi Arabia, said he was resigning, citing an assassination plot.  Just hours later, Saudi Crown Prince Mohammed bin Salman, 32, had scores of big businessmen and senior officials arrested on his orders, including the commander of the national guard, the economy minister and Saudi Arabia’s leading international financier, Prince Alwaleed bin Talal, the billionaire investor (and nephew of King Salman) familiar to so many Americans, and major investor in Citigroup, Twitter, News Corp. and Apple, among others. Forbes estimates his wealth at $17 billion.

Saad Hariri, in a televised address from Riyadh, fired a vicious tirade against Iran and Hizbullah for what he said was their meddling in Arab affairs and said “Iran’s arms in the region will be cut off....

“The evil that Iran spreads in the region will backfire on it,” accusing Tehran of spreading chaos, strife and destruction.

Lebanon is divided between the Sunni camp loyal to Saudi Arabia, and Saad Hariri, and the Shiite one loyal to Iran and Hizbullah.*  Needless to say, tensions were immediately ratcheted up ten-fold in the region.

*In Lebanon, the prime minister must be Sunni, the president a Maronite Catholic, and the speaker of parliament a Shiite.  The president, Michel Aoun, is a Hizbullah ally. He is refusing to accept Saad Hariri’s resignation until he returns to Lebanon and explains his action.

Saad, as you know, is the son of Rafik Hariri, whose casket and those of his bodyguards I saw personally in Beirut in 2005 when I went there following Rafik’s horrific assassination, he being prime minister at the time, done in by Hizbullah (though it has long denied any involvement).

Sunday, Hizbullah leader Sheikh Nasrallah said: “The resignation was a Saudi decision dictated to Prime Minister (Hariri) and was forced on him.”

The moves the kingdom made (including I now believe the forced resignation of Hariri) were, yes, aimed at consolidating the power of an emerging ruler who is poised to succeed his 82-year-old father, King Salman.

There were reports the Saudi government was aiming to confiscate assets of as much as $800 billion in the ‘corruption’ crackdown. The country’s central bank, the Saudi Arabian Monetary Authority, said late Tuesday it has frozen the bank accounts of “persons of interest” and said the move is “in response to the Attorney General’s request pending the legal cases against them.”

King Salman said in comments on state TV: “Laws will be applied firmly on everyone who touched public money and didn’t protect it or embezzled it, or abused their power and influence. This will be applied on those big and small, and we will fear no one.”

Prince Mohammed is popular with young Saudis, and one who desperately wants to diversify the economy.  He also controls almost all the levers of government, from the Defense Ministry to the central bank and the oil giant Aramco, which bankrolls the country.

Saudi Arabia on Monday accused Lebanon of declaring war against the monarchy following attacks by Hizbullah from Yemen.

Earlier, a spokesman for Iran’s Supreme Leader Ayatollah Khamenei said, “Hariri’s resignation was done with planning by Donald Trump, the president of America, and Mohammed bin Salman...The hands of treachery and aggression must be cut off.”

Israeli Prime Minister Benjamin Netanyahu said, “(Hariri’s) words are a wake-up call to the international community to take action against Iranian aggression.”

But there was also a mysterious helicopter crash in the kingdom’s south that killed Prince Mansour bin Muqrin and at least seven others.  Prince Mansour was the son of Prince Muqrin bin Abdulaziz, a former intelligence service director and one-time crown prince, removed as crown prince in April 2015 by his half-brother King Salman in favor of Prince Mohammed bin Nayef, a counterterrorism czar and interior minister.

King Salman then ousted Mohammed bin Nayef in favor of his son, the now-Crown Prince Mohammed bin Salman (hereafter MBS), first in line to the throne.  [More on the crash below.]

There were rumors immediately that the Saudis were trying to force an Israeli-Lebanese (Hizbullah) war.  [Yes, I’m spelling Hizbullah my way, the way both the Jerusalem Post and the Daily Star of Lebanon used to write it.  Forgive me if I intersperse others’ use of the now commonly preferred Hezbollah.]

So I wrote a friend from Beirut, the esteemed author and editor, Michael Young, whose book “The Ghosts of Martys Square,” the definitive history of Lebanon that is a must read, I had autographed by Michael in Beirut when I was there in 2010.  We shared a few adult beverages at a pleasant café and I pulled out his book this week to re-read the inscription he wrote that day, April 22....

“In memory of an afternoon in Beirut, after the period of the martyrs...but can we be sure?”

Today, Michael believes the Saudis “are escalating their pressure on Lebanon and engaging in a form of collective punishment that will virtually ensure that Hezbollah’s influence is reinforced rather than weakened.  It’s foolish, reckless, but it’s also part of the new militant mood that MBS is bringing to the kingdom that leaves no room for grays.”

Thursday, Saudi Arabia warned its citizens: “Due to the circumstances in the Lebanese Republic, the kingdom asks its citizens who are visiting or residing” in the country to leave it as soon as possible, according to the kingdom’s official news agency (SPA).

Tonight, Saudi Arabia announced one of its citizens had been kidnapped in Lebanon.

I have much more below on this critical story.

Trump World...Asian Adventure...

I told you months ago, when we first learned of President Trump’s trip to Asia, including China, exactly what would happen.  I never deviated and I had this for you last week.

“I’ve told you for a while now that (Trump) will screw up royally in China. And I also know that Trump will be totally naïve to the fact that President Xi Jinping will ignore every single word Trump says.  I’ve been warning of Xi for a long time now. He feels it’s his stage.”

Xi did indeed ignore every word Trump said, as you’ll see below.  Trump was blown away by the pomp and pageantry, as Xi knew he would be, and then the Chinese president played him like a fiddle.  Trump was indeed hopelessly naïve.

But our president didn’t “screw up royally” in the sense there were no actual press conferences, no questions from reporters, in China.  Xi made sure this was the case, though past American presidents demanded of the Chinese leaders in similar circumstances that questions be allowed.  That there were none helped Trump.

So here’s how the trip has gone until now....

Monday, in Japan at a joint press conference with Prime Minister Shinzo Abe, Trump offered the two were in agreement on North Korea.

“The era of strategic patience is over,” Trump said.  He defended his aggressive posture toward Pyongyang.

“Some people said that my rhetoric is very strong, but look what’s happened with very weak rhetoric over the last 25 years.  Look where we are now.”

Prime Minister Abe vowed: “We are together 100 percent... Now is the time not for dialogue, but for applying a maximum level of pressure on North Korea,” in also urging China to do more to hobble the North’s ambitions.

On the issue of the trade deficit between the United States and Japan, the leaders downplayed their differences, though Trump said the two countries are working to resolve the situation.

The next day, in his speech to the South Korean Assembly, President Trump called on China to stop all trade with North Korea or have the regime’s growing nuclear threat on its “conscience” ahead of crunch talks.  Trump urged China to “sever all ties,” saying Beijing should feel no “obligation” to help its neighbor.

Trump described North Korea as a “hell that no person deserves” and issued a warning directly to the regime: “Do not underestimate us and do not try us.”

“We call on every nation, including China and Russia, to fully implement UN Security Council resolutions, downgrade diplomatic relations with the regime and sever all ties of trade and technology. It is our responsibility and our duty to confront this danger together, because the longer we wait, the greater the danger grows and the fewer the options become.

“And to those nations that choose to ignore this threat – or worse still, to enable it – the weight of this crisis is on your conscience.”

Trump issued a direct warning to Kim Jong-un: “The weapons you are acquiring are not making you safer. They are putting your regime in grave danger.  Every step you take down this dark path increases the peril you face.  North Korea is not the paradise your grandfather envisioned. It is a hell that no person deserves.”

There was a report in the South China Morning Post that North Korean officials are looking for clarity about the U.S. government’s willingness to engage in formal dialogue and under what terms, according to Ralph Cossa, president of Pacific Forum CSIS and former special assistant to the head of U.S. Pacific Command.  A conference of lower-level North Korean officials together with analysts and advisers from the U.S. is to take place in Washington in December; what would be called “track II” dialogue.  “Track I” would be talks between senior government officials.

Separately, some $250 billion in commercial deals were signed between Chinese and U.S. companies during Trump’s visit, but no word on how many may have already been in place and when others will be implemented.

Wednesday, in a joint press conference (without questions), Trump congratulated Xi on his enhanced political status after last month’s Communist Party Congress.

“Your people are also very proud of you,” adding Xi’s elevation opened the opportunity for further improving Sino-U.S. relations.

In their talks, the two leaders discussed reining in North Korea, narrowing the trade deficit between the two countries, containing tensions between China and the U.S., stepping up military ties and ensuring security in the region, and more exchanges between young people.

Xi said the relationship between China and the U.S. was at a “new historic starting point,” but added that efforts should be taken to properly manage the differences between the two nations.  Xi said he had told Trump that the Pacific Ocean was big enough to accommodate both China and the United States.

Trump said: “In the coming months and years, I look forward to building an even stronger relationship between our countries, China and the United States of America, and even closer friendships and relationships between the people of our countries.”

Addressing a group of business leaders, Trump said: “I don’t blame China (for the trade deficit) – after all, who can blame a country for taking advantage of another country for the benefit of its citizens... I give China great credit.”  Trump said it was previous U.S. administrations that were to blame for “a very unfair and one-sided” trade relationship with China.

Thursday, Trump called on Xi to redouble Chinese pressure on the North.  “We have it in our power to liberate the world” from the North Korean “menace.” Trump then saluted Xi for leading a country that had left the United States “so far behind” and saying he could not blame the Chinese for taking advantage of Americans.

In joint statements made before reporters who, again, could not ask questions, Trump said of Xi: “You’re a very special man.”

Congratulating Xi on his consolidation of power, Trump said, “Perhaps now more than ever we have an opportunity to strengthen our relationship.”

Xi, though, in his statement, made no mention of the one-year anniversary of Trump’s own triumph. Nor did he talk in personal terms of his relationship with Trump.  Instead he just uttered formulaic bulls--- about China and the United States peacefully coexisting if they respected each other’s different political systems.

Friday, at the Asia-Pacific Economic Cooperation forum in Danang, Vietnam, President Xi offered a robust defense of globalization in a speech to business leaders, calling on countries to keep their economies open for shared prosperity.

“The concept of globalization should pay more attention to openness and tolerance, while the direction should focus on balance.”  Xi said, China will “continue to build an open economy and work hard to achieve mutual benefits.  Opening up will bring progress and those who close down will inevitably lag behind.”

Xi pledged: “In the next fifteen years, China wants to set up a new platform for the cooperation of all parties in entering the Chinese market.”

I wanted to throw up.  But unless President Trump stands up for the same values, Xi will win the day in terms of the others in the region.

[China did announce new rules on Friday, curiously after Trump had left the country, that allows American and other securities firms to own 51 percent stakes in joint ventures, which is a market-opening move, but I wouldn’t be going crazy over this yet.  I know this country too well. Zero details on timing, for example, were released.  And why didn’t Xi tell Trump about it when he was there?]

Back to APEC, what did Trump say to the same audience?  He gave his freakin’ stump speech questioning past U.S. trade practices, vowing not to “let the United States be taken advantage of anymore.”  He also warned against North Korea’s “nuclear blackmail.”

“I am always going to put American first in the same way I expect all of you in this room to put your countries first.”

Trump pledged to crack down on closed markets, predatory practices, currency manipulation, intellectual property theft, and other alleged misdeeds.

He talked of promoting a “free and open Indo-Pacific” region based on concepts like “the rule of law, private enterprise, and trade reciprocity.”

But of course one of the first things Trump did as president was pull the United States from the Trans-Pacific Partnership, a trade deal involving a dozen Pacific Rim nations. The remaining 11 are now talking about forming their own trade bloc, without the U.S.

In his speech to APEC, though, Trump said the United States would no longer engage in big, multi-lateral trade agreement like TPP, saying they undercut national sovereignty.  Instead, he said, the U.S. would focus on bilateral, one-on-one trade agreements with individual countries.

But other nations wonder if Trump is committed to any kind of trade relationship.

Separately, on Friday we learned that the formal meeting between Trump and Russian President Vladimir Putin had fallen through, though they shook hands at the summit’s group photo.  The Russians were mystified.

Editorial / Wall Street Journal

“China rolled out the best of Middle Kingdom hospitality for Donald Trump this week, while the U.S. President returned the flattery by gushing about his ‘chemistry’ with President Xi Jinping and calling him ‘a very special man.’ The question is what will come of this bonhomie, especially from China on North Korea.

“China knows how to entertain a democratic leader with flattery and symbolism, and Mr. Xi even arranged a tea in the Forbidden City for the U.S. President, the first foreign leader to be given that privilege.  Mr. Trump more than even most U.S. Presidents puts stock in appearances of respect, and the Chinese know it.

“Mr. Trump’s praise for Mr. Xi can be seen as a similar calculation. He knows Mr. Xi wants China to be seen as an equal to America on the world stage, and Mr. Trump is trying to convince Mr. Xi to cooperate in stopping North Korea’s nuclear program. As a ‘deal-maker,’ Mr. Trump also prizes his ability to size up a negotiating partner.

“Not to disdain chemistry, but it isn’t clear the two sides made any diplomatic breakthroughs. Secretary of State Rex Tillerson stressed the positive in his post-meeting presser, saying ‘there is no disagreement on North Korea.’  He repeated Chinese assurances that ‘they will not accept a North Korea with nuclear weapons,’ adding ‘there’s no space between both of our objectives.’

“Yet as a senior U.S. official told the Journal on the presidential plane, Beijing still hasn’t cut all financial links with North Korea that are banned under United Nations sanctions. And U.N. sanctions only cap sales of oil to the Kim Jong Un regime; they don’t cut off the rest of China’s economic lifeline to its ally. Clearly disagreements between the U.S. and China persist.

“Mr. Trump sent a much clearer message to Beijing, and the East Asia region, with his fine and forceful speech Wednesday to South Korea’s National Assembly. Mr. Trump hasn’t spoken often of values or morality in his foreign-policy speeches, but in Seoul he spoke in blunt moral terms about the ‘prison state of North Korea’ with more detail than any previous President....

“Framing the North Korea challenge in moral terms signals a new U.S. resolve. Mr. Trump is also right that the appeasement of past Presidents made the problem worse, and he says he won’t repeat that mistake.  Whether this strategy succeeds depends on how credible is his implicit threat to punish Pyongyang’s backers if they don’t sever ties.  If his praise for Mr. Xi is interpreted as supplication and weakness, Beijing may string the U.S. along with false assurances of cooperation as it has for decades.”

Editorial / The Economist

“On security, Mr. Trump has avoided some terrible mistakes.  He has not started a needless row with China over Taiwan’s ambiguous status, as he once threatened to do. Congress and the election-hacking scandal prevented him from pursuing a grand bargain with Vladimir Putin that might have left Russia’s neighbors at the Kremlin’s mercy. And he has apparently coaxed China to exert a little more pressure on North Korea to stop expanding its nuclear arsenal.

“However, he has made some serious errors, too, such as undermining the deal with Iran that curbs its ability to make nuclear bombs.  And his instincts are atrocious. He imagines he has nothing to learn from history.  He warms to strongmen, such as Mr. Putin and Xi Jinping. His love of generals is matched by a disdain for diplomats – he has gutted the State Department, losing busloads of experienced ambassadors. His tweeting is no joke: he undermines and contradicts his officials without warning, and makes reckless threats against Kim Jong Un, whose paranoia needs no stoking.  Furthermore, Mr. Trump has yet to be tested by a crisis.  Level-headed generals may advise him, but he is the commander-in-chief, with a temperament that alarms friend and foe alike.

“On trade, he remains wedded to a zero-sum view of the world, in which exporters ‘win’ and importers ‘lose.’  (Are the buyers of Ivanka Trump-branded clothes and handbags, which are made in Asia, losers?)  Mr. Trump has made clear that he favors bilateral deals over multilateral ones, because that way a big country like America can bully small ones into making concessions.  The trouble with this approach is twofold. First, it is deeply unappealing to small countries, which by the way also have protectionist lobbies to overcome.  Second, it would reproduce the insanely complicated mishmash of rules that the multilateral trade system was created to simplify and trim.  The Trump team probably will not make a big push to disrupt global trade until tax reform has passed through Congress. But when and if that happens, all bets are off – NAFTA is still in grave peril.

“Perhaps the greatest damage that Mr. Trump has done is to American soft power. He openly scorns the notion that America should stand up for universal values such as democracy and human rights. Not only does he admire dictators; he explicitly praises thuggishness, such as the mass murder of criminal suspects in the Philippines.  He does so not out of diplomatic tact, but apparently out of conviction.  This is new. Previous American presidents supported despots for reasons of cold-war realpolitik.  (‘He’s a bastard, but he’s our bastard,’ as Harry Truman is reputed to have said of an anti-communist tyrant in Nicaragua.)  Mr. Trump’s attitude seems more like: ‘He’s a bastard.  Great!’

“This repels America’s liberal allies, in Europe, East Asia and beyond. It emboldens autocrats to behave worse, as in Saudi Arabia this week, where the crown prince’s dramatic political purges met with Mr. Trump’s blessing.  It makes it easier for China to declare American-style democracy passe, and more tempting for other countries to copy China’s autocratic model.

“The idea that things will return to normal after a single Trump term is too sanguine.  The world is moving on. Asians are building new trade ties, often centered on China.  Europeans are working out how to defend themselves if they cannot rely on Uncle Sam.  And American politics are turning inward: both Republicans and Democrats are more protectionist now than they were before Mr. Trump’s electoral triumph.

“For all its flaws, America has long been the greatest force for good in the world, upholding the liberal order and offering an example of how democracy works.  All that is imperiled by a president who believes that strong nations look out only for themselves.  By putting ‘America First,’ he makes it weaker, and the world worse off.”

Trump tweet: “My meetings with President Xi Jinping were very productive on both trade and the subject of North Korea. He is a highly respected and powerful representative of his people.”

And: “I don’t blame China, I blame the incompetence of past Admins for allowing China to take advantage of the U.S. on trade leading up to a point where the U.S. is losing $100s of billions.  How can you blame China for taking advantage of people that had no clue?  I would’ve done the same.”

And: “In the coming months and years ahead I look forward to building an even STRONGER relationship between the United States and China.”

As The Economist was saying....

Tax Reform

Editorial / Wall Street Journal...sums up where we stand today well....

“Congress is now at the stage of tax reform where the details are messy and the political claims are confusing.  The trick is to keep your eye on the big picture, and by that measure reform momentum is building.  House Ways and Means passed its reform Thursday, and Senate Republicans released reform details that improve on the House bill in important ways.

“The biggest news is that the House and Senate plans cut the top corporate tax rate to 20% from today’s 35%, that is the highest in the developed world and has punished the U.S. economy. The rate cut would be permanent. Both chambers would also convert the U.S. into a territorial system, which taxes income where it’s earned. These are the crown jewels of this reform that should increase investment in the U.S. and increase wages for workers.

“One asterisk in the Senate version is that the 20% rate would not begin until 2019 to ‘save’ money under the Senate’s bizarre budget rules. But 100% expensing for businesses would be immediate, and expensing is more valuable against a higher tax rate. Economists we trust say this should mitigate any harm from a one-year delay. We’d prefer the immediate cut in the House bill, but a one-year delay is better than a temporary rate cut that would complicate business decisions in the future.

“The Senate bill is a notable improvement on the House in its treatment of ‘pass-through’ businesses. These mostly smaller businesses now declare income on personal tax returns, and the House divorces the two with a top rate of 25% on businesses with a complicated formula for what income gets what rate.  The Senate instead expands a deduction to allow a 17.4% discount against a top rate of 38.5% (down from 39.6%).  The little guys thus do at least as well as corporations, which are taxed twice, on both income and dividends....

“The Senate bill’s individual reform is both better and worse than the House version. It’s better in that it cuts the top marginal rate at least a little, to 38.5% from 39.6% on income of more than $500,000 for single filers. It also removes the House bill’s noxious ‘bubble rate’ of 45.6% for certain high earners.

“The Senate also keeps seven tax rates, rather than the House’s four, but the real simplification in tax reform comes less from fewer brackets and more from how you define income.  In that sense the Senate bill is also simpler than current law because it eliminates many deductions and credits.

“The big victory here is total repeal of the state and local deduction, which is a subsidy for high-tax progressive states. The House carves out an exception for property taxes to win the votes of Republicans from California and New York, and a compromise will be negotiated in conference.  But note the GOP consensus that the state and local deduction is on death row. This is the price Chuck Schumer’s Democrats will pay for rejecting any reform....

“The biggest disappointment is that the Senate won’t repeal the death tax. This is a loss for economic growth and tax fairness, and it won’t deflect Democratic charges about tax cuts for the rich. A doubled exclusion to more than $10 million of estate value is nice, but the wealthy will still duck the tax by moving their assets into trusts or foundations – or sell businesses prematurely. All of this diverts resources from the productive economy, to the benefit of accountants and lawyers.

“These details matter, but the larger story is that the Senate – the cemetery for the Republican healthcare bill – is joining the House with a pro-growth reform that has a real chance to pass.  There are still ways the GOP could trip up: The party must bow to the Senate’s Byrd Rule that bans deficits outside the 10-year budget window, and Republicans can avoid that by repealing ObamaCare’s individual mandate and save more than $300 billion.

“Still, this week’s momentum suggests that the GOP is aware that its political future depends on sticking the landing on a tax reform that can lift the economy and unleash broader prosperity.”

But we still have a long ways to go to ensure passage. The state and local deduction (SALT) is a huge item in terms of gaining key support from California, New York, New Jersey and Illinois Republicans.

The two versions will eventually go to conference, but passage by Christmas as the president wants is highly iffy.  I haven’t even begun to talk about the issue of the deficit.  Next time.

Trumpets....

Tuesday’s election was a mini-disaster for the Republicans.  While defeat was long expected in the New Jersey gubernatorial race, one of just two major races in the country this week, we had been told the Virginia contest for governor had become too close to call and the Republican ended up losing by nine points.

I have details on the races in “Random Musings,” but what’s worrisome for Republicans is how the state races shaped up in Virginia, and to a lesser extent in New Jersey.  It does not bode well for 2018.

Sen. John McCain (R-Az.) said, “Unless we get our act together, we’re going to lose heavily” in the midterms.

Rep. Tom Cole (R-Okla.), a former chairman of the National Republican Congressional Committee, said, “The best way to get run over by this train is to stand still.”

In the Senate, though, Republicans are only defending eight seats in 2018, compared to 25 for Democrats.

In the House, Democrats would need to gain 24 seats to win back the majority.  23 GOP lawmakers are in districts carried by Hillary Clinton.

My congressman, Leonard Lance (R-N.J.), said after Tuesday, “She won by 3,800 votes.  I won by 38,000 votes.  I like that extra zero.”  [If the state and local tax deduction is eliminated, he’ll need more than that extra zero, even if he votes against, as he has said he would.]

House Minority Leader Nancy Pelosi said Wednesday that “the door is certainly open for us” in 2018.

And then you have the string of Republicans who have announced their retirements. On Tuesday alone, Reps. Frank LoBiondo (R-N.J.) and Ted Poe (R-Texas) both said they won’t run for reelection next year.  The Cook Political Report immediately took LoBiondo’s announcement and moved his seat from “solid Republican” to a “toss up.”  [The Hill]

Thursday, House Judiciary Chairman Bob Goodlatte (R-Va.) became yet another to announce he would not seek another term.

All told, 29 Republicans will not seek reelection to their House seats, compared to only 11 Democrats.  [Some of these on both sides are running for the Senate or governor.]

With Trump’s dismal approval rating, the stampede for the exits could continue, possibly a slew of announcements after the Christmas/New Year’s holiday.  “I had time to discuss it with my family....” is a line we may hear some.

Majority Whip Steve Scalise (R-La.) told The Hill the other day: “The sad thing is they start smiling more and more after they make the announcement.”

But what is now crucial for the GOP is a win on tax reform, especially after failing to repeal ObamaCare.

Of course the elephant in the room is the Trump factor.  All I can tell you is my own experience.  I am tied to a charity organization in neighboring New Providence where virtually the entire town council, including the mayor, borough administrator and others are in the club and all I’ve been hearing from them was there was  a definite Trump factor this fall....as in many voters were tiring of him.  I keep harping on the Independent vote, and the numbers show Trump losing support within this critical group, but when your overall approval rating is generally stuck at 40% or below (save for Rasmussen), you can’t tell me Trump hasn’t lost some of those who voted for him 11/8/16.  It’s just a fact.

Rep. Scott Taylor (R-Va.) said Republicans in tough races shouldn’t try to act like people they’re not, referring to Ed Gillespie’s run in his state, and that Tuesday’s GOP losses were a “referendum” on Trump.

“If they agree with the president, agree with him. If they disagree with him, say it. Do not be afraid to say you disagree with the president if you do. Do not be afraid to say you agree with the president if you do,” Taylor said.

Wall Street

There was zero economic news on the week of note, and I cover the rest in “Street Bytes,” but the week did mark the one-year anniversary since Donald Trump was elected president, Nov. 8, 2016, so I thought we’d take a look at the returns in that one-year period, seeing as he loves to tweet about them so much.  [And this week he said on Air Force One: “The reason our stock market is so successful is because of me.  I’ve always been great with money, I’ve always been great with jobs, that’s what I do.”]

Dow Jones +28.5%
S&P 500 +21.3%
Nasdaq +30.7%

Tokyo Nikkei +33.4%
London FTSE +10.0%...Brexit-related issues main reason for underperformance
Frankfurt DAX +27.7%
Paris CAC 40 +22.2%

If you look at just the standard benchmark, the S&P 500, Germany, France and Japan have outperformed it.

So, yes, as I’ve been writing, while the president can take some credit, the terrific returns are not just on the expectations of tax cuts, and Trump’s moves to deregulate key sectors of the economy, which has helped with business confidence, but it’s also about synchronized global growth, with the 25 most-developed countries in the world all growing at once.  In the case of the Dow Jones, that of course helps the large U.S. multinationals with their earnings, and in the case of the S&P and Nasdaq, it is a fact that just five stocks – Amazon, Apple, Alphabet (Google), Facebook and Microsoft – represented 48% of the gain in the S&P 500...and a significant percentage of Nasdaq’s gains.

Europe and Asia

There was some economic news in the eurozone (EA19), with IHS Markit releasing the service sector data for the month of October, 55.0 for the EA19 vs. 55.8 in September (50 being the dividing line between growth and contraction).

Germany came in at 54.7; France 57.3; Spain 54.6 (a dip from 56.7, and a sign of the economic uncertainty created by the Catalonia crisis); Italy 52.1 (one-year low).

Eurozone retail sales for September (as released by Eurostat) rose a strong 0.7% over August, and were up 3.7% year-over-year, the fastest pace since July 2015.

Germany is up 4.6% yoy; France 4.6%; Spain 2.5%; Italy 2.5%.

In the U.K., car registrations (sales) fell 12.2% in October, year-over-year, according to the Society of Motor Manufacturers and Traders, while retail sales fell the most in 7 months in October, down 1%, according to the National Statistics Office.

Turning to Asia, the only economic news of note was Japan’s services PMI for October, 53.4, a 26-month high.  It also needs to be noted that the Nikkei stock average closed at 22937 on Tuesday, the highest level since 1992 (though its all-time closing high was 38915, Dec. 29, 1989). The Nikkei ended the week at 22681, up a ninth consecutive week.

Brexit: Talks resumed this week in Brussels, and the European Union threw Britain a curve ball as the future of the Irish border suddenly erupted to be a major distraction, with the EU making new demands on Britain, calling for Northern Ireland to maintain the rules of the customs union and single market after Brexit. The EU added there must be no hard border on the island, meaning regulations have to be the same on either side of the frontier.

The border issue has always been one of the three divorce items that needed to be settled before the EU would initiate full trade talks, but it was seen to be the easiest to settle so it took a back seat to the other two issues; the divorce bill and citizens’ rights.

The thing is, allowing Northern Ireland to stay in the customs union would mean putting a border between Northern Ireland and mainland Britain, which is unthinkable for the U.K., especially when the ruling Conservatives under Prime Minister Theresa May are only in power due to the support of the pro-U.K. Democratic Unionist Party from Northern Ireland.

So Ireland, recognizing it will be just one voice of 27 once talks move onto to a broad trade agreement with the entire union, is playing hardball while it has maximum power.

Ireland insists the U.K. remaining in the customs union would be the easiest way to avoid a new border, but Mrs. May says Britain can’t strike trade deals around the world otherwise.

Meanwhile, the prime minister’s shaky coalition has been beset by turmoil in her cabinet, as she had to replace a second minister this week, this time Priti Patel, international development secretary, who was forced to resign after revelations she held secret talks with the Israeli government behind May’s back.  Patel was replaced by Brexit supporter Penny Mordaunt (important because Patel was a Brexit supporter as May has been forced to balance her cabinet between pro-Brexit and those who campaigned to ‘stay’ in the Union).

Earlier, defense minister and loyal ally, Michael Fallon, was forced to resign over a sexual-harassment scandal, which has other ministers facing internal investigations.

May has been facing down one attempt after another to oust her following her disastrous decision to call an election last June that resulted in the Conservatives losing their majority in the House of Commons.

Now, back to Brussels and the talks, Britain is still faced with an end of year deadline for showing the EU that significant progress has been made on the three divorce issues before the EU will commence trade talks. Without progress in just a few weeks, Britain’s business community has promised it will begin to initiate its emergency exit plans, protecting its interests in the European Union.

Brussels has apparently given London two to three weeks to make its position on the divorce bill clear, while Germany has asked negotiators not to give the U.K. the impression that the discussions are making progress. [An advisory board in Germany has told Chancellor Angela Merkel that she should encourage Prime Minister May to reverse course and stay in the EU.]

On the issue of the exit bill, the figure now being talked about is $70 billion. The U.K. has agreed to pay only a third of that thus far, while hinting it could go higher.

The Financial Times reports that the EU has begun work on two versions of draft summit conclusions for the gathering of European leaders in December – one for the possibility of a breakthrough and another for continuing stalemate.  The EU is also preparing for the possibility the May government will collapse.

Finally, an ORB International poll of Britons finds that 66% disapprove of the government’s handling of the negotiations, while only 27% were confident Mrs. May could get the right deal.

Catalonia: Sacked Catalan leader Carles Puigdemont and four associates turned themselves into Belgian police on Sunday, following Spain’s issuing of an arrest warrant for rebellion and sedition.

Puigdemont and the others had fled to Brussels, where they are fighting Spanish arrest and extradition orders. At week’s end, some in the Belgian government aren’t real happy with Prime Minister Charles Michel for not taking tougher action against Puigdemont, with others complaining his presence in the country is inflaming Flemish separatist sentiments in Belgium.

The five were granted conditional release and are scheduled to appear at court within 15 days.  Puigdemont can’t leave Belgium without a judge’s consent.  He has said he would not return to Spain unless he receives guarantees of a fair trial.  He has also said he is prepared to run in the December 21 election from outside Catalonia and that has Spain’s OK, as long as he hasn’t been convicted.

Eight members of the dismissed Catalan cabinet and two activists were jailed as a Spanish court studies possible charges of rebellion and sedition against them.

Pro-independence protesters blocked roads and stopped trains as part of a general strike to protest against the jailing of the ousted Catalan government officials and secessionist activists on Thursday.  It was a mess in the likes of Barcelona, for example, and the trains were hit hard, but the strike was not backed by Spain’s two main unions and was not having any effect on industry or the tourism sector.  

For the December vote, a pro-independence coalition would need 68 seats for a majority in the 135-seat parliament and according to a survey published in La Vanguardia newspaper, the various pro-independence parties would take between 66 and 69 seats today.

But the pro-independence movement is not necessarily united. What seems clear, however, is that the movement is helped by the jailing of the Catalan politicians.  Ergo, Madrid may opt to release them depending on later polls.  [Just my thought.]

Germany: Chancellor Merkel still hasn’t formed a new coalition, and now one of the parties being considered, the Greens, have polled at their highest level of the year in a survey published Sunday, overtaking the other would-be partner, the pro-business Free Democrats, who have demanded the Finance Minister position. The Greens, in the Bild poll, are at 11% and the FDP at 10%.  Mostly, the impact would be on issues such as abandoning coal as a source of energy in Germany, a main position of the Greens.

Merkel’s Christian Democrats and their Bavarian CSU sister party were unchanged at 31%, while the Social Democrats slipped to 21%.

If out of nowhere negotiations on the coalition fail, new elections could be called, which could see more gains for the far-right Alternative for Germany (AfD), which in the Bild survey polled at 12% (left-wing Die Linke at 10%).

Street Bytes

--The Dow Jones and S&P 500 posted their first weekly losses since early September, breaking an eight-week winning streak amid concerns the House and Senate may not be able to reconcile their tax reform packages.  The Dow fell 0.5%, while the S&P and Nasdaq dropped 0.2%.

All three hit new highs on Wednesday before the doubts crept in.

--U.S. Treasury Yields

6-mo. 1.29%  2-yr. 1.61%  10-yr. 2.33%  30-yr. 2.81%

Over the one-year period since Trump was elected, the yield on the 10-year rose from 1.78% to 2.34% (that’s thru Wednesday); the yield on the 10-year German Bund from 0.13% to 0.32%.  [It closed at 0.41% Friday with a late-week bond rout in Europe.]

Federal Reserve Bank of New York President William Dudley announced his plans to retire in the middle of next year, ahead of when his 10-year term would have ended in January 2019, which leaves President Trump with a ton of openings.  Jerome Powell is replacing Janet Yellen at chair, leaving Powell’s position as vice chair open (Yellen not expected to exercise her prerogative by staying on as a governor), and now with Dudley’s announcement, that leaves Trump with four open slots, at a most important time for the board.

--U.S. crude oil inventories unexpectedly rose last week, according to the Energy Information Administration, when a decline had been forecast.

But in its latest production report, OPEC said its members complied to the tune of 104 percent in October on its production target.  At the same time, despite this week’s U.S. report on inventories, U.S. shale output growth is slowing; still largely rising but at a much slower pace, if at all in some fields.

So with the rise in oil prices to two-year highs ($56.90 on Friday), some analysts believe the supply-demand picture is finally coming into balance, and if you get any kind of geopolitical crisis (as we have potentially today with the Saudi-Lebanon-Iran situation), oil is poised to rise even higher.

--AT&T’s proposed $85-billion purchase of Time Warner Inc. hit a major speed bump, as the U.S. Department of Justice is ‘reported to be’ pressuring the companies to sell Time Warner’s news channel, CNN, to gain approval for the deal.

Needless to say, this ‘request’ threatens to scuttle a massive media deal and could lead to a rather big court battle if the Justice Department sues AT&T to block the purchase.

Time Warner’s Turner Broadcasting unit is not just CNN, but also the Cartoon Network, TBS, TNT and Turner Classic Movies.  [TBS and TNT containing many sports offerings as well as their normal fare.]  Justice is saying AT&T’s only other option would be to sell its satellite television unit, DirecTV.

But everyone agrees, it’s political, and all about CNN, President Trump being a critic of the deal before he became president, and constantly calling CNN “fake news.” Analysts who cover such deals are rather shocked.

AT&T is going to fight, with chairman and CEO Randall Stephenson saying on Wednesday when the news leaked of the Justice Department’s demand, “I have never offered to sell CNN and have no intention of doing so.”  [Stephenson may not have totally told the truth with this statement.]

For its part the DoJ said in a statement, “the department does not comment on any pending investigation.”

Herbert Hovenkamp, an antitrust expert at the Univ. of Pennsylvania Wharton School of Business, where President Trump received very good grades, told the Los Angeles Times that while placing conditions on a merger is not uncommon, “it makes no sense at all to try to shut down a media merger because of news coverage.” The government would have to persuade a federal judge that the proposed tie-up would harm competition and consumers.

This whole thing is outrageous, and obviously all Trump, though CEO Stephenson diplomatically said on Thursday he had no reason to believe examination of the deal was influenced by the president.

This is headed to court for what will be a lengthy fight. Stephenson saying at the DealBook conference in New York, “We are prepared to litigate now.”

--Meanwhile, T-Mobile said Saturday that while the company believed a merger with Sprint could have been beneficial for consumers, it has decided to go it alone.

In a statement, flamboyant T-Mobile CEO John Legere said: “We have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record.”

The collapse in talks was a blow to Sprint Chairman Masayoshi Son, who has been seeking to merge with T-Mobile on different occasions.  It just seems the two sides couldn’t reach an agreement on how much the deal should be worth.

Sprint isn’t going to make it, in my humble opinion.  I’ve been with them for ages.  They suck.  But I don’t need their services that often.  For regular users, there is zero reason to stick with them after neglecting its infrastructure.

--Walt Disney Co. reported net income of $1.75 billion, down 1% from a year earlier, with revenue declining 3%, short of analysts’ expectations.

The story is still largely about the media networks unit – led by ESPN – with the segment reporting a drop in operating income of 12% from a year earlier, much of which was due to lower advertising revenue at the sports network and higher programming costs, such as for carrying the NFL and Major League Baseball.  ESPN is reportedly laying off about 100 employees after Thanksgiving, on top of 100 in April, though it still currently has about 8,000 employees worldwide.

ESPN has long been the profit engine for Disney, but it has been under rising threat from both cord cutting and the costs for sports rights. In 2010, ESPN was available in nearly 100 million homes in the U.S., but according to Nielsen, this figure is now about 87 million.  It also hasn’t helped that the network has had issues with some of its on-air personalities and programming.

Nonetheless, Disney CEO Robert Iger said, “We’ve never lost our bullishness about ESPN. The brand is strong...There are always opportunities to improve... But we like where ESPN is these days.”

Meanwhile, Disney is launching two Netflix-like streaming  services – one for sports and another for films and television shows; both meant to appeal to younger audiences who have been turning away from traditional media.

Disney did not address whether it has an interest in acquiring 21st Century Fox’s movie and television production studios, as rumored.

--Staying in the media space, Time Inc.’s revenue fell 9% in its latest quarter with sales of print ads and magazine subscriptions continuing to shrink, while digital ad sales edged up only slightly.

The Sports Illustrated and People publisher continues to restructure and slash costs, including reducing the printing schedule and eliminating some magazines.

Magazine-related revenues fell 14% from a year ago, though this represents 64% of the company’s total sales. Digital products accounted for 24%.

--And News Corp. reported a 5% increase in revenue for the quarter, with net income of $68 million, compared with a net loss of $15 million a year ago.

The publisher of the Wall Street Journal, New York Post and other major papers in the U.K. and Australia – reported revenue of $2.06 billion for the fiscal first quarter.

The news and information-services business reported a 2% increase in revenue to $1.24 billion.

The Wall Street Journal had 1.318 million digital subscribers at the end of September, up 48,000 from the end of June. But advertising revenue at Dow Jones, publishers of the Journal, fell 10% in the quarter.

At News UK, which publishes the Times of London, Sunday Times and the Sun, ad revenue fell 9% and circulation revenue 5%.

Revenue in News Corp’s book-publishing segment rose 3% to $401 million, driven in no small part by strong sales of J.D. Vance’s “Hillbilly Elegy.”

--Deutsche Bank CEO John Cryan has signaled that Germany’s biggest lender is far from finished in cutting the size of its workforce, now 97,000 strong.  In an interview with the Financial Times, Cryan cited artificial intelligence as replacing many of the bank’s back office roles.

“We employ 97,000 people...most big peers have more like half that number,” before saying “machine learning” and “mechanization” will allow the firm to make greater efficiencies.

Deutsche Bank previously announced in 2015 it was cutting 9,000 jobs, but to date only 4,000 have been lost.

--Shares in Kohl’s fell sharply, the retailer missing earnings expectations, that were also shy of last year’s, while total revenue of $4.33 billion was flat with the same period in 2016.  Same-store sales rose a scant 0.1%, but this was the first increase in seven quarters.

--Rival Macy’s reported sales slid 6.1% in the quarter to $5.3 billion, largely because of weather-related issues, but income more than doubled to $36 million in the quarter ended Oct. 28, better-than-expected.  Same-store sales were down 3.6 percent.

--And Nordstrom’s reported lower same-store sales, down 0.9 percent, worse than the Street expected, while total revenue rose to $3.63 billion (net of all the shoplifting at their store at The Mall at Short Hills...actually, I’m not sure exactly how shoplifting is accounted for by the beancounters).

--J.C. Penney shares surged Friday after it reported a 1.7% rise in comp sales, better than expected, and the company beat on revenue.  But we’re talking about a stock now at $3.17.

--Sears Holdings reached a deal that will allow it to sell up to 140 additional properties amid mounting losses and declining sales. Sears would use the proceeds from selling or financing deals to fund a pension plan that still supports about 100,000 beneficiaries.

Sears warned this week that it would post a third-quarter net loss of $525 million to $595 million (actually better than a year ago), with same-store sales down a sickening 15.3%, including a 17% drop at Sears locations and 13% for Kmart stores.

--As noted in a piece by Bloomberg News, while U.S. retailers announced more than 3,000 store openings in the first three quarters of this year, chains also said 6,800 would close, and this comes with sky-high consumer confidence, historically low unemployment and a growing economy.

Ergo...not a good sign for the future of retail, and as Bloomberg’s report notes, it’s not just Amazon.com, or Millennials’ changing spending habits.  It’s the fact many of these chains, see Sears, are saddled with massive debt loads – often through leveraged buyouts led by private equity firms.  And the suburbs are overstored (and I’d add, overbanked).

--Officials at NBCUniversal and CBS Corp. said they haven’t seen any hesitation on the part of their advertisers in terms of the networks’ NFL coverage.

CBS Corp. CEO and chairman Leslie Moonves said of the anthem controversy and lower ratings, “I don’t think it’s affecting advertising or their desire one iota.”

NBC Sports said “all but a handful of units” have been sold for the Super Bowl, with some 30-second spots going for “north of $5 million.”  EVP of ad sales, Dan Lovinger, told a conference that that the Super Bowl will bring in $350 million from in-game advertising, in addition to pregame  and postgame ad revenue.

One thing you’ve seen the networks do, in response to advertisers like Papa Johns, is simply not show the anthem, which until the Colin Kaepernick protest was always used for commercials, unless it was a special game, like the Super Bowl or some playoff contests.  [I did watch Thursday night’s opening, NBC showing the anthem because of the Michael Bennett angle...he stood for it.]

--Sales growth at Adidas AG slowed faster than the Street had forecast, sending the shares to a steep decline.  Revenue advanced 8.7 percent, less than the 20 percent recorded in the second quarter.

But operating profit rose by more than a third to $923 million, beating expectations, with sales of footwear up 14 percent.  Revenue in North America increased 19 percent to $1.28 billion, an all-time high.

Adidas reiterated its forecast for the full year.

--Qualcomm Inc. received a buyout offer from Broadcom Ltd. of $70 a share, as I noted last time when the announcement came late, which would value the deal at $105bn, the largest in the semiconductor industry, but then after Monday there was little talk about the move, which is a hostile bid by Broadcom.

It’s now up to Qualcomm’s board to decide if they could receive a higher valuation after the introduction of 5G wireless that would aid its chips.

Broadcom’s Hock Tan recently held a news conference with President Trump to announce that Broadcom, currently based in Singapore, where you have to drink a lot of beer to beat the humidity (but I love the place...coincidence?), planned to move its headquarters to the U.S.

Qualcomm has been in a vicious fight with Apple over patent royalties, and it’s been facing anti-monopoly accusations from regulators in the U.S., South Korea and Taiwan.

--Snap, parent of the disappearing messaging app Snapchat, released third-quarter results Tuesday that were, to say the least, disappointing, the company showing slower user growth, sales that missed expectations and a bigger-than-expected loss, $443.2 million, the shares dropping sharply in response.

While the loss-per-share, adjusted for stock option expense and non-recurring costs, was in line with expectations, revenue of $207.9 million was far short.

24 hours later, Snap said it had received a new vote of confidence from backer Tencent Holdings, the Chinese internet giant, which increased its stake in the messaging app to over 12 percent.  [Snap’s IPO price back in March was $17, and it hit $29.44 intraday the second day of trading.  Today it closed at $12.67.]

--Monster Beverage shares fell sharply after the energy drink maker posted quarterly earnings that fell short of the Street’s forecasts.  Net income rose to $218.7m from $191.6m in the year-ago quarter. Earnings grew smartly, too, but just not as good as expected.

Net sales rose 15.4 percent to $909.5m, sales outside the U.S. jumping more than 36 percent.

Of course followers of NASCAR, such as moi, know the chief asset at the company is the Monster Energy Girls.  Here’s hoping this sponsorship continues for many years to come. 

--Panera Bread is reuniting with its fellow bakery-café chain Au Bon Pain, for an undisclosed amount.  Au Bon Pain has 304 units worldwide, most with smaller storefronts than the 2,050 sit-down restaurants Panera operates.

The two had once been under the same roof, until co-founder Ron Shaich acquired a chain of bakery restaurants that became Panera, and then spun off Au bon Pain.

It is all so confusing!  [I’m surprised how few Au Bon Pains there are...I feel like I’ve seen all 304.]

Earlier this year, after 26 years as a public company, Panera was purchased for $7.5 billion by JAB Holding Co., a family-held European outfit that owns brands such as Keurig Green Mountain and Peet’s Coffee, and paid $1.35 billion for Krispy Kreme Doughnuts.

--Wendy’s shares fell after the company reported results for the third quarter that fell short of analysts’ expectations, while also guiding lower.

Revenue was $308 million, down from $364 million in the same quarter last year, with North America same-restaurant sales up 2.0%.

Now if you read that last line and you’re thinking what the heck? it’s because the results in the quarter were hurt by hurricanes in Florida and Texas that temporarily closed many of its restaurants.

Hurting more longer term is competition from McDonald’s and other chains that are cutting prices on some menu items and offering delivery at an increasing number of locations.  Wendy’s did say it would be expanding its own delivery service.  [I used to love this chain...haven’t been in ages even though there is one nearby.]

--I don’t recall ever eating at a Red Robin Gourmet Burgers joint, but the company’s stock collapsed by about 20% at one point the other day after it reported earnings results that fell short of expectations.  Revenue also missed forecasts.

--Meal-kit delivery company Blue Apron saw its shares plunge more than 20% this week after it talked of rising costs at its new fulfillment center in Linden, New Jersey; executives explaining they are investing on improving operations and delivery infrastructure amid rising competition from the likes of Amazon and other niche players like Plated.

But here’s the real deal.  The stock is at $3.20 after coming to market at $10 just this past June.  This is beyond pathetic.  It’s clear this outfit should not have gone public in the first place.

--I’m a big fan of CVS, namely because I know where everything is in my local New Providence, N.J., location, and the chain and pharmacy benefits manager reported revenues of $46.18bn for the third quarter, up 3.5% from the prior year.  Pharmacy services revenues were up 8.1%, largely because of my new $5.50 a month blood pressure medication (which actually went down to $4.57 this month...at which point I stayed mum at checkout...but which may also force the company to guide lower later for the current quarter).

--Speaking of healthcare, a record number of Americans signed up for ObamaCare in the first few days of open enrollment, despite reports to the contrary that this would be the case (cuts in the budget for outreach and such).

More than 200,000 signed up Nov. 1, double last year’s total. And one million browsed the site, 33% more than 2016.

--AP Moller-Maersk fell as much as 7 percent after the world’s largest container shipping line’s performance was hit by the impact of a large cyberattack and higher fuel costs.

The Danish conglomerate said it couldn’t give a forecast on its profit this year, though it expects to make one, albeit lower than it guided previously.

Maersk said the so-called NotPetya cyberattack cost it $250m-$300m in lost business in July and August.

--SeaWorld lowered its full-year outlook yet again as the theme park operator reported further drops in attendance and quarterly profits.

The company reported a 10% decline in revenue to $437.7m during the third quarter, with attendance falling 8.8%, to 7.6m, during what is typically SeaWorld’s biggest quarter of the year.  Both figures missed the Street’s expectations.

Hurricane Irma hurt in Florida, which caused closures in Orlando and Tampa, while Hurricane Harvey caused lesser disruptions in Texas.

--You think you have it tough?  Try being a miner in South Africa.  The 2017 death toll in the country’s mines has already surpassed the 2016 figure, ending nine straight years of declines in the world’s deepest mines.

South Africa’s Chamber of Mines said in a statement: ‘Fatal accidents last week raised the number of fatalities in 2017 to 76, above the 73 reported in 2016.”

I forgot how deep these mines can be.  Some of the Harmony Gold, Gold Fields and AngloGold Ashanti mines are 4km ( 2 ½ miles) below ground.  That’s kind of unfathomable.  Try and imagine standing a straightened out quarter-mile track ten times, next time you’re at the track working out.

--Late word Friday has Hasbro making an approach for rival Mattel, Mattel shares soaring 24% in the after-market.

--While we still haven’t seen the final tax cut/reform package, with a House-Senate conference on same to come, charity groups are concerned, bigly, because the current proposal to double the “standard” deduction instead of itemizing charitable donations would lead to less giving, and probably by a large margin.  The Joint Committee on Taxation, for example, predicts that next year, 40.7m taxpayers would deduct charitable contributions from their tax bills, but if the House bill became law that number would fall to just 9.4m.  Wow.  [Financial Times]

--In a blistering piece in Forbes, the magazine said it was removing Commerce Secretary Wilbur Ross from its Forbes 400 list of America’s richest, last year the magazine pegging his wealth at $2.9 billion.  But now, after examining his financial disclosure files following his nomination to Trump’s cabinet, Forbes estimates the net worth at $700 million.

For you and I this is no big deal, but Forbes takes pride in how they compile their lists, that then whip around the world and feed egos (or infuriate) the likes of Donald Trump:

“It seems clear that Ross lied to us, the latest in an apparent sequence of fibs, exaggerations, omissions, fabrications and whoppers that have been going on with Forbes since 2004,” Dan Alexander wrote.

When confronted about the $2 billion+ discrepancy, Forbes says that Ross told the magazine he had created trusts for his family worth “more than $2 billion” that weren’t included in the filings, according to the article.

But after “one month of digging,” Forbes said it is now confident that “that money never existed.”

I believe Forbes.  One former colleague of Ross, David Wax, who served as No. 3 in his firm, told the publication, “Wilbur doesn’t have an issue with bending the truth.”  Like his boss.

--Kevin Spacey has been removed from a Ridley Scott film, “All the Money in the World,” with his role being totally reshot with Christopher Plummer in his place, just weeks before a scheduled Dec. 22 release.  It was supposed to have its world premiere next week at the closing night of AFI Fest.

The film tells the saga of the 1973 kidnapping of J. Paul Getty’s grandson, John Paul Getty III, and the behind-the-scenes efforts for his return.  [Sounds like a cool pic.]

--Thursday, famous comic Louis C.K. was the subject of sexual misconduct allegations from five women and a film he was about to launch was pulled.  HBO then pulled him from a scheduled comedy benefit next week.

This should have surprised no one.  You just have to listen to five minutes of his act to know the stories from the women are likely true.

And then Friday, he apologized, saying the allegations were indeed accurate.

Foreign Affairs

Saudi Arabia / Lebanon / Iran:  [More on the crisis]

Amos Harel / Haaretz

“Late last week, in under twenty four hours, the Saudi royal house set off a string of shocks within the kingdom and across the Middle East, making a set of moves that escalated the battle with Iran over regional hegemony.

“The complete Saudi plan, if it exists, has not been revealed yet. However, the series of developments has raised the level of nervousness in its neighbors’ capitals, provoking much guesswork regarding the Saudis’ next moves.

“First came the announcement that Lebanon’s Prime Minister Saad Hariri was resigning. At first it was explained as deriving from his concerns about an Iranian-inspired Hezbollah plot to assassinate him. As the days passed, the resignation seemed more like a Saudi dictate, stemming from Saudi Arabia’s displeasure at the way Hariri was compelled to cooperate with Hezbollah in Lebanon’s government.

“A few hours after the initial announcement, the Saudis announced a wave of arrests of princes and wealthy businessmen, on suspicion of corruption.  As the princes were being detained under five-star hotel conditions at the Ritz Carlton in Riyadh, a strange aerial accident took place in the southern part of the kingdom. The next day it emerged that a prince had tried to escape Saudi Arabia by air, using a helicopter which was shot down by the Saudi air force. The nine passengers and crew on board were killed. In the meantime, Yemen’s Houthi rebels, backed by Iran, fired a missile at Riyadh’s airport.  American missiles successfully intercepted the missile. In retaliation, Saudi Arabia imposed a land and naval blockade on Yemen.  [Ed: The U.N. says the blockade could result in the deaths of millions...millions...in Yemen from starvation and lack of medical supplies as aid is cut off. It’s already an incredibly fragile situation in the country, prior to the blockade.]

“These weren’t the only developments related to Saudi Arabia this week. U.S. President Donald Trump tweeted words of support for steps taken by King Salman and by the kingdom’s strongman, Crown Prince Mohammad bin Salman. Trump’s son-in-law Jared Kushner visited Saudi Arabia and Israel several days before the wave of purges took place. In Israel, the Foreign Ministry disseminated a position paper among foreign embassies following Hariri’s resignation, TV Channel 10 reported. This was totally congruent with the official Saudi version of events, which put the blame for the crisis in Lebanon squarely at Iran’s feet.  Mahmoud Abbas, head of the Palestinian Authority, embarked on an urgent visit to Egypt and Saudi Arabia. Brussels received a surprising request that a senior Saudi delegation come on a visit next week to discuss methods of combating terror.  The Saudis were responding to an invitation which had been issued by the Europeans ten months earlier.

“Is there one line connecting these dots, as well as one linking it to the crisis deliberately-generated by Saudi Arabia, the United Arab Emirates and Egypt with regard to fractious Qatar last summer? Is there a  link between these issues and the reconciliation between the Palestinian Authority and Hamas, which began to be implemented in Gaza last week, led by Cairo?  The conventional wisdom among intelligence officials and academic scholars is that these are steps designed to consolidate the influence of Mohammad bin Salman, ahead of the future transfer of power from his 82-year-old father into his hands.”

Here’s what seems to be clear.  Saudi Arabia, read Mohammad bin Salman (MBS), is seeking a new regional order.  I agree with those saying this week that the Saudis are also pushing Israel into a war with Lebanon (Hizbullah), which of course could lead to war with Iran.  Saudi Arabia wants Israel to do its dirty work, goes this theory.

Hariri’s resignation forces the fractured government in Lebanon, including Hizbullah, to deal with the country’s economic crisis, caused in no small part by the flood of refugees from Syria, that Lebanon has humanely accepted.

The Kushner angle is interesting.  Is the White House preparing a new peace deal for Israel and the Palestinians that would have Saudi backing?

Israel has been stepping up its operations in Syria against weapons depots and factories that help fuel Hizbullah in Lebanon.  I’ve written of how Syria, read Iran, wants to be able to launch another front against Israel from the Golan Heights, which through Hizbullah, the Syrian army and other forces it is trying to infiltrate.

It’s all incredibly dangerous.

Thursday, French President Emmanuel Macron paid an emergency visit to the kingdom to meet with MBS, France having an historic interest in Lebanon.  Prior to his meeting with the crown prince, Macron said: “My wish is that all Lebanese political officials live freely in Lebanon...which means having a very demanding stance on those who could threaten any leader,” he said.

David Ignatius / Washington Post

“Saudi Arabia appears to be committing the original sin of modern Middle East politics – fighting its regional wars in Lebanon and driving that fragile country once again toward civil strife.

“Saudi Crown Prince Mohammed bin Salman’s target in Lebanon is Hezbollah, the nation’s dominant political force, which is backed by the Saudis’ nemesis, Iran. Unwilling to risk a direct shot at Tehran, the crown prince is instead attacking Iran’s clients in Beirut.

“The proxy battle has escalated over the past week. First, the Saudis pressured Lebanese Prime Minister Saad Hariri to resign last Saturday; hours later, MBS, as the 32-year-old crown prince is known, launched sweeping arrests of rival princes and business leaders in Riyadh, creating an uproar across the region. On Thursday, the Saudi government told its citizens to leave Lebanon and advised against future travel there.

“For a Sunni Arab world that fears and loathes Iran, the moves by MBS will probably be popular.  He’s emerging as the strongest (if also the most impulsive) Sunni leader in decades, exercising a kind of raw power at home and in the region that hasn’t been seen since Iraq’s Saddam Hussein....

“Lebanese sources told me Thursday in telephone interviews [Ed. Ignatius no doubt talked to the aforementioned Michael Young...Ignatius’ column often in Mr. Young’s Daily Star] that the Saudis want to force Hezbollah to leave the cabinet and parliament.  That’s understandable for Riyadh, but not realistic.

“Saudi Arabia’s real leverage is that about 500,000 Lebanese work in the Gulf, sending home roughly $3 billion annually, a tide of remittances that keeps Lebanon’s financial and property markets afloat. If those Lebanese were expelled, a dramatic downward spiral would begin....

“When the Syrian civil war began in 2011, many analysts predicted that a frail Lebanon would tumble back into chaos.  But it hasn’t happened – yet – because Hezbollah worked quietly with Saad Hariri and other Lebanese leaders to keep a lid on unrest.

“Can such quiet cooperation continue?  Not if the Saudis sabotage the country’s economy in what they describe as an effort to punish Hezbollah.

“For the United States, Lebanon poses what’s becoming a recurring challenge – how to encourage MBS’s push to modernize the kingdom without letting him drive Saudi Arabia and the region off a cliff.

“Call it the MBS conundrum: The headstrong crown prince jumped into what U.S. officials thought was an unwise war in Yemen; it’s still raging, despite U.S. attempts to find a settlement.  MBS escalated a feud with meddlesome neighbor Qatar; Secretary of State Rex Tillerson has tried unsuccessfully to mediate. This week in Lebanon, the United States was again attempting damage control, as Ambassador Elizabeth Richard pledged $42 million for the Lebanese army and expressed support for ‘a stable, secure, democratic, and prosperous Lebanon.’

“The rivalry between Iran and Saudi Arabia has been ripping the fabric of the Middle East since the Iranian revolution of 1979, spawning terrorist movements and proxy wars among Shiite and Sunni allies of the two nations. This sectarian bloodletting seemed unstoppable when a strong, arrogant Iran faced a weak, confused Saudi Arabia.

“MBS may hope to become the powerful Sunni leader who could eventually balance the region – and open the way for a grand bargain that would bring stability. That’s a desirable outcome. But in the short term, the challenge for Washington is to prevent this would-be strongman from blowing up himself and his neighbors.”

Anne Applebaum / Washington Post

“There are countries in which you are accused of an act of corruption and then you are arrested. And then there are countries in which someone decides to arrest you and only then are you called corrupt.

“Saudi Arabia belongs to that second category. Last week, the Saudi crown prince, Mohammed bin Salman, used the excuse of ‘corruption’ to arrest several dozen people, including close members of his family, and to lock them up in the posh confines of the Ritz-Carlton Riyadh.

“Nobody took the charges at face value.  ‘Corruption’ – theft from the state – is not easily defined in Saudi Arabia, a place where the ruling family is the state, and vice versa.

“Instead, those who know the country have argued that these arrests are part of a major political transition, an assault on the country’s sclerotic, traditional power structure....Talk of social modernization, for example – one of the world’s most misogynistic societies will soon allow women to drive – as well as of the diversification of an economy almost entirely dependent on oil.

“But if those are the goals, these arrests also represent another setback for U.S. leadership in the era of President Trump, and a major blow to the prestige of a very different model of modernization and political transition....

“Instead of following a Western model of modernization and reform, the crown prince has taken the path of China and Russia, where ‘political transition’ means that power is retained by a tiny, very wealthy elite. In Russia in 2003, Vladimir Putin arrested, for ‘corruption,’ Mikhail Khodorkovsky, then one of the wealthiest and most powerful men in Russia. Khodorkovsky was unluckier than the Saudi princes – he wound up in a Siberian labor camp, not the Ritz-Carlton – but his arrest served the same purpose: It frightened Russia’s other rich men into submission, and it established the Kremlin, not the oligarchs, as the ultimate source of power.

“In China, Trump’s new friend, President Xi Jinping, has used charges of ‘corruption’ in a strikingly similar manner. As in Russia and Saudi Arabia, almost everyone in the nepotistic Chinese ruling class has extraordinary access to money, jobs and even state assets. The decision to call anyone ‘corrupt’ is just as political in Beijing as it is in Riyadh. Since taking power, Xi has, like Putin, used that tool to eliminate political rivals, to scare his colleagues and to establish himself as the unchallengeable ruler. And by using the language of ‘anti-corruption,’ he, like Putin, seeks public approval in a society that is well aware that the system is skewed against them.

“It’s not hard to guess why the Saudi crown prince has chosen to follow the Russian and Chinese road map...In part, it is thanks to the failure of the Arab Spring, a disaster that has tragically tainted ‘Western models’ in a part of the world that will know peace only if citizens of different ethnicities can find ways to share power.

“But Trump is also part of the story.  By his own example – through his disdain for courts and for the media, through his scorn for ethical norms – Trump has cast doubt on the Western model. He may even have encouraged the Saudi prince more directly. Jared Kushner, Trump’s son-in-law, a living embodiment of American nepotism, visited Riyadh for long talks...in the days before the arrests.  The image of two princelings, scheming late into the night, makes a textbook illustration of the decline of American prestige and American values, even in a country that is closely allied to the United States.”

Thomas L. Friedman / New York Times

“(Here) is what I don’t know for sure: Where does his impulse for rapid reform stop and his autocratic impulse to seize all power begin?  After MBS arrested a slew of Saudi princes, media owners and billionaire businessmen on ‘corruption’ charges, President Trump tweeted his applause, saying, ‘Some of those they are harshly treating have been ‘milking’ their country for years!’

“I could only laugh reading that tweet. Hearing that Saudi princes were arrested for ‘corruption’ is like reading that Donald Trump fired seven cabinet secretaries ‘for lying.’  You know it has to be something else. Trump obviously missed the story last year that MBS impulsively bought a yacht while on vacation in the south of France – it just caught his fancy in the harbor – from its Russia owner for $550 million. Did that money come out of his piggy bank? Savings from his Riyadh lemonade stand? From his Saudi government 401(k)?

“I raise this point because when you’re making as many radical changes at once, and making as many enemies at once, as MBS is, your robes need to be very clean.  People have to believe that you mean what you say and that you have no hidden agendas, because change is going to be painful. Look at what MBS is doing all at once:

“To speed up decision-making, he is reshaping the Saudi state – from a broad family coalition where power is shared and alternated among seven major families and decisions taken by consensus – to a state governed by a single family line. This is no longer ‘Saudi Arabia.’ It is becoming ‘Salman Arabia.’  In the latest series of arrests, MBS basically eliminated the ‘young old guard’ – the key sons and his natural rivals from the other main Saudi royal lines. He also arrested the owners of the three main quasi-independent private television networks, MBC, ART and Rotana....

“In 1979, in the wake of the takeover of Islam’s most holy site in Mecca by an ultra-fundamentalist Saudi preacher who claimed that the al-Saud family was not Islamic enough, the Saudi ruling family – to shore up its religious legitimacy – made a sharp religious turn at home and began exporting its puritanical Wahhabi Sunni Islam abroad, building mosques and schools from London to Indonesia.

“It has been a disaster for the Arab/Muslim world, spawning offshoots like Al Qaeda and ISIS and retarding Arab education and women’s advancement.

“MBS has vowed to give birth to a more moderate Saudi Islam, starting by curbing his religious police and permitting women to drive.  This is hugely important.  He is daring people to judge his government not on piety but on performance, not on Quran but on KPIs – key performance indicators on unemployment, economic growth, housing and health care.

“But he is replacing Wahhabism as a source of solidarity with a more secular Saudi nationalism, one that has a strong anti-Iran/Persian/Shiite tenor.  And that is taking him to some dangerous places.... It’s overreach, and there seems to be no one around to tell him that....

“I worry that those urging MBS to be more aggressive in confronting Iran (whose malign regional influence does need counterbalancing) – like the U.A.E., Trump, Jared Kushner and Bibi Netanyahu – will push MBS into a war abroad and at home at the same time, and we could see Saudi Arabia and the whole region spin out of control at the same time.  As I said, I’m worried.”

Iraq / Syria: A Hizbullah-run media unit said Friday that ISIS leader Abu Bakr al-Baghdadi was reported to have been in the Syrian town of Albukamal during the Syrian army and its allies’ operation to clear it, though Hizbullah did not say what had happened to Baghdadi.  The U.S.-led coalition said today it had no “releaseable information” on Baghdadi’s whereabouts.

The Syrian army declared victory over Islamic State on Thursday, saying its capture of the extremists’ last town marked the collapse of their three-year rule in the region.

But there are still clashes taking place near Albukamal, which is near the border with Iraq, where ISIS still has some fighters. [Iraq’s military contributed in the fight by seizing the town of al-Qaim, across from Albukamal, thus giving the two armies control of a strategic crossing between the two countries.  [Apparently some Iraqi troops fought with the Syrians in Albukamal.]

While this is the end for ISIS in Syria in terms of formal territory, the group will still keep up its media apparatus and operate from desert areas.  [An ISIS car bomb, for example, killed dozens at a refugee gathering in Syria last Saturday, an area controlled by the U.S.-backed SDF.]

In Washington, Turkey’s Prime Minister Binali Yildirim said the United States should withdraw its weapons and support for the Kurds and Arab forces that just routed ISIS in Syria, calling them a post-war threat to the region and Israel.

Yildirim, who had talks with Vice President Pence, said Ankara does not want any Syrian Democratic Forces, let alone Kurdish YPG militiamen remaining in control of parts of Syria through post-war stabilization; Turkey considering the YPG a terrorist threat akin to the separatist Kurdistan Workers Party, or PKK.

China: The National People’s Congress Standing Committee, the top legislature, endorsed an amendment to the criminal code to make abuse of the national anthem or flag punishable by up to three years in prison.  Significantly, this is now part of Hong Kong’s mini-constitution, the Basic Law.  I guarantee this will be a major flashpoint in Hong Kong, such as at football matches.  I’d be taking a knee myself.

North Korea: The Pentagon told U.S. lawmakers this week in a letter requested by some members of the House that the only way to locate and secure all of North Korea’s nuclear weapons sites “with complete certainty” is through an invasion with U.S. ground forces, and in the event of conflict, the Pentagon added the North could use chemical and biological weapons.

The letter also notes the possibility of “opposition from China or Russia.”

Zimbabwe: President Robert Mugabe dismissed Emmerson Mnangagwa as his deputy, a day after first lady Grace Mugabe accused him of plotting a coup and said she’s prepared to succeed her 93-year-old husband as leader of the country.

Mnangagwa had been considered a leading candidate to succeed Mugabe.

Meanwhile, Martha O’Donovan, the 25-year-old New York University graduate who was arrested for attacking Mugabe in a tweet, calling him a “sick and selfish man,” denied she ever sent the tweet from the account of @matigary, which joined Twitter in February 2016.  Zimbabwe authorities say they believe O’Donovan is the author, and while O’Donovan denies it was her, @matigary continued to tweet since she was jailed!

O’Donovan was charged with subversion and attempting to overthrow the government, a charge that carries a sentence of up to 20 years in prison.

I’ve been so busy with other news that I haven’t had a chance to fully get an update, but last I saw, the State Department declined any comment other than to say it was aware of her situation.

Random Musings

--Presidential tracking polls....

Gallup:  37% job approval for President Trump, 58% disapproval
Rasmussen: 44% approval, 555 disapproval

--In a CNN poll conducted by SSRS, President Trump’s overall approval rating stood at 36%, the worst of his presidency (37% in October).

[In terms of personal favorability, Trump has dipped to 38%, which is the same as Vice President Mike Pence...interesting.]

59% say they think Trump himself knew last year of those associated with his campaign who may have had contact with suspected Russian operatives, while only 35% think the then-GOP nominee did not know about those contacts.

In terms of the role of tech companies in protecting us from foreign countries influencing future elections, 59% do not have confidence the likes of Google, Facebook and Twitter are doing enough to prevent such meddling.

Only 40% think President Trump is doing a good job keeping candidate Trump’s promises, down from 48% in April.

On the question of Trump being able to unite the country, 30% say they think the President will unite the country rather than divide it, down 13 points since last November, and 38% say he cares about “people like you,” also down significantly from a year ago.

Last year, 81% of Republicans thought Trump would unite the country, 91% that he cared about people like them. Now, those figures are 65% and 83%, respectively.

Almost two-thirds (64%) overall say Trump’s statements and actions since taking office have made them less confident in his ability to serve as president.

In a bit of good news for Trump, 45% approve of his handling of the economy, 46% disapprove, and terrorism, 44% approve and 48% disapprove.

And 68% describe the economy as in good shape, up from 57% just before Trump’s inauguration and the highest share to do so since spring 2001.

34% call Trump honest and trustworthy, 64% say he’s not.

All told, just a third think the President deserves re-election in 2020, 63% say he doesn’t deserve it.  64% say they aren’t proud to have Trump as President.

Back to presidential approval numbers, in Gallup’s all-time numbers, President Harry Truman hit 22% in 1952, while Richard Nixon was at 24% just before he resigned.

According to a new poll from ABC News and the Washington Post, Trump has a 37% approval rating and 59% disapproval.

In this survey, 66% of Americans say Trump “lacks the personality and temperament it takes to serve effectively as president.”  65% said Trump is not honest and trustworthy.

35% say he has accomplished a great deal or a good amount while in office.  65% say he has accomplished “not much” or “little or nothing,” up from 56% last spring (which was too early for a poll of this kind...now it’s a fair question).

--Virginia Democrat Ralph Northam routed Republican Ed Gillespie to become the next governor of Virginia, 54-45, when we were led to believe that prior to the vote it was suddenly too-close to call.  Gillespie, in the final few weeks, heavily adopted the Trump agenda, but the state that went for Hillary Clinton by five points in 2016 turned out in a strong party effort.

It was also a big win for DNC chairman Tom Perez, who I truly loathe, as he has been under siege, but he personally barnstormed the state the days leading up to the election in support of down ticket candidates that no doubt helped Northam’s tally.  [Kind of like myself.  I went to the polls to vote for my Republican state senator and assemblymen, and really as an afterthought voted for the Republican for governor, even though she was an awful candidate.]

Gillespie is a good guy. I liked him when he was chairman of the Republican National Committee and adviser to President George W. Bush.  Yeah, he’s establishment.  He just wasn’t the candidate for these times, and his dive into the culture wars didn’t pan out.

President Trump, ever classy, tweeted shortly after Gillespie’s defeat:

“Ed Gillespie worked hard but did not embrace me or what I stand for.  Don’t forget, Republicans won 4 out of 4 House seats, and with the economy doing record numbers, we will continue to win, even bigger than before!”

Trump, and Steve Bannon, threw Gillespie under the bus.

Editorial / Wall Street Journal

“Republicans can take little comfort that Hillary Clinton defeated Mr. Trump by five points in 2016.  Mr. Gillespie lost by nine and he badly underperformed in Northern Virginia, home to federal employees and white, college-educated suburbanites who dislike Mr. Trump’s polarizing politics by insult.  In his 2014 near-miss Senate race, Mr. Gillespie won pivotal Loudoun County by 456 votes.  On Tuesday he lost it by 23,432.”

--New York City voters re-elected Bill Blasio in a landslide, as expected, de Blasio with 66.5% to Republican State Assemblywoman Nicole Malliotakis’ 28%.  [New York is six-to-one registered Democrats, but you’ve seen it elect qualified Republicans in the past...just an incredibly weak field of elephants of late.  De Blasio won with 73% in 2013.]

So now de Blasio will use his platform to increase his national visibility, no doubt the guy having presidential ambitions, touting his progressivism.  He is also going to be pressing Albany for new taxes on the wealthy to fund his liberal agenda and fix subways.  But he’s been unable to do so in the past because he is despised by Republicans and New York Democratic Gov. Andrew Cuomo, the latter with his own national ambitions and wanting to portray a more moderate face, at least in public.  [A day after the election, Cuomo had yet to call de Blasio to congratulate him, which I find fascinating.  Cuomo doesn’t want de Blasio stealing his thunder, like on ambitious infrastructure programs, including the New York City subways.  Cuomo will be running for re-election himself in 2018, a big margin of victory needed to help propel him to 2020.]

--Entering Tuesday, in my state of New Jersey, Democrats had a 24-16 majority in the Senate and a 52-28 majority in the Assembly, and they lost at least one in each with that day’s election.  Plus Democrat Phil Murphy rolled Republican Lt. Gov. Kim Guadagno, 56-42, in the race to replace Chris Christie.

My hometown of Summit now has a Democratic-majority in the City Council for the first time, ever!  And the margins in the three races decided on Tuesday weren’t even close.  I can guarantee you that a sizable portion of the vote was a backlash against Trump in some fashion, because it’s not as if the Republicans running the place have done anything necessarily bad.

By the way, how important was Bridgegate?  Four years ago, Christie won reelection by 22 points. Today he has a 14-15 percent approval rating.

--Republican Sen. Rand Paul (Ky.) is recovering from six broken ribs and resultant lung issues, following an alleged attack (“blindside”) by Paul’s next-door neighbor, Rene Boucher, who was charged with assault.  The dispute was reportedly over the condition of Paul’s lawn and where grass clippings and twigs should be placed, though others, including Sen. Paul himself, dispute this.  Some neighbors say it was more about bad blood that has been simmering between the two for years, though they haven’t reportedly spoken to each other in years.

Regardless, the injuries are serious, and if you believe the version thus far, that Paul was on his riding tractor, cutting the lawn, when he was blindsided, I hope Boucher, also a doctor, gets prison time.

--Senate Republican leadership is calling for Alabama GOP candidate Roy Moore to step down as the party’s nominee in the special election taking place in December to replace the now-Attorney General Jeff Sessions, if the allegations in a report in the Washington Post on Thursday that he had a relationship of some sort with a 14-year-old when he was 32 are true.  Other women, according to the Post, have similar stories.

Now from what I know, I do not like Judge Moore (twice booted off the state Supreme Court), but I would be an amazing hypocrite not to follow my own “wait 24 hours” adage, especially in a case like this.

Friday, though, President Trump echoed Senate Majority Leader Mitch McConnell, saying if the allegations are true, he must step aside.

And then Moore gave what I consider to be a weak defense of himself on Sean Hannity’s radio show today.

But watching Hannity tonight as he replayed the radio interview, it was almost comical, despite the gravity of the situation.

The thing is Hannity did an outstanding job in grilling Moore, so good that the likes of Geraldo and Greg Jarrett said after, the guy’s guilty.

The funny thing was that you could see it then hit Hannity, ‘Omigod...I’ve killed Judge Moore’s candidacy and this is my base!’  So there was Hannity, feverishly trying to backpedal, hoping against hope that Moore is indeed innocent.

--In a book by Mark K. Updegrove titled “The Last Republicans,” former Presidents George H.W. Bush and George W. Bush expressed their displeasure with President Trump.  The younger Bush expressed concern he would be “the last Republican president.”

The elder Bush says in the book: “I don’t like him. I don’t know much about him, but I know he’s a blowhard. And I’m not too excited about him being a leader.”

George W. Bush said Trump “doesn’t know what it means to be president.”

Both admitted to not having voted for Trump.

So of course the White House fired back, attacking their legacies in a statement, that read in part: “If one presidential candidate can disassemble a political party, it speaks volumes about how strong a legacy its past two presidents really had.”

The White House also called the Iraq war, “one of the greatest foreign policy mistakes in American history.”

--The Donna Brazile story didn’t make the cut this week due to time constraints.  I’m also bored by it.

--So President Trump was all set to make a dramatic, secret appearance at the DMZ on Wednesday after all, after we were told the White House opted not to do so because it didn’t want to ratchet up tension further, but then he was fogged out.  You just know he was going nuts. He wanted to be able to post pictures and tweet about it so badly.

To be fair, South Korean President Moon was prepared to appear with Trump, and he was there, waiting for him, having traveled much of the way by car, an option not open to Trump for security reasons.

--One of the great regrets of the nearly 19 years doing this column and this site is I just don’t have time to read books, after being a voracious consumer of historical texts until then.  One of my favorite books was Ulysses S. Grant’s memoir, which a recent op-ed by George Will in the Washington Post described as “the greatest military memoir in the English language, and the finest book published by any U.S. president.”

Will was writing about Ron Chernow’s new biography of Grant, “which no reader will wish were shorter than its 1,074 pages,” Mr. Chernow having written greatly honored biographies of George Washington and Alexander Hamilton.

One thing that’s important for schoolchildren to learn about General, then President Grant, says Chernow, was “(he) showed a deep reservoir of courage in directing the fight against the Ku Klux Klan and crushing the largest wave of domestic terrorism in American history.” Will writes: “He ranks behind only Abraham Lincoln and Lyndon B. Johnson as a presidential advancer of African American aspirations.”

Most of us grow up learning about Grant’s corrupt presidency (which wasn’t on him, but those around him who abused his trust), drinking, and the huge death tolls in the battles he fought.

George Will:

“Chernow is clear-eyed in examining and evenhanded in assessing Grant’s defects.  He had an episodic drinking problem but was not a problem drinker: He was rarely incapacitated, and never during military exigencies or when with Julia, his wife.  Far from being an unimaginative military plodder profligate with soldiers’ lives, he was by far the war’s greatest soldier, tactically and strategically, and the percentage of casualties in his armies was, Chernow says, ‘often lower than those of many Confederate generals.’”

Lastly, from Mr. Will: “Chernow leans against today’s leveling winds of mindless egalitarianism – the belief that because greatness is rare, celebrating it is undemocratic. And against the populist tear-them-down rage to disparage....

“Chernow’s ‘Grant’ is a gift to a nation much in need of measured judgments about its past.”

--I’ve been harping on the issue of distracted driving, and then last week, in my noting of the passing of Native American activist Dennis Banks, I talked of my experience in the Pine Ridge Indian Reservation in South Dakota a number of years ago.  So the day after I posted I’m reading the Rapid City Journal and a court case there had just come down.

As reported by Tiffany Tan:

“A woman sitting in a wheelchair, one of her lower legs missing, said Friday that she had been waiting more than two years for an apology.

“ ‘I thought, this girl will come forward and say ‘I’m so sorry,’’ Colene Bald Eagle said in federal court.

“The awaited words came an hour later, when 27-year-old Sophia Janis apologized for checking Facebook on her iPhone while driving and causing a collision that killed one woman, injured another and led to Bald Eagle’s amputation.

“Janis, then an Oglala Sioux Tribe corrections officer, was driving a Department of Corrections vehicle on the Pine Ridge Indian Reservation when the accident occurred July 30, 2015....

“Driving while checking her phone, which Janis described as ‘bad judgment,’ will cost the Wounded Knee woman three years of freedom.  She pleaded guilty in April to involuntary manslaughter and was sentenced Friday to 37 months in prison and three years of supervised release.”

Yes, as they say, ‘It can wait, people.’

--I’ve been meaning to get down for the record what President Trump told Maria Bartiromo of the Fox Business Network in an interview a few weeks ago on tweeting and just haven’t had the time.

BARTIROMO: Do you ever feel like sometimes, some of your unscripted Tweets, unscripted comments get in the way of the larger message? I have spoken with a lot of supporters of yours and while they love the policies; they say we, you know we feel like we are always defending something he said, that he really didn’t mean, to say that way. Do you think that is getting in the way of your agenda and the overall message?

TRUMP: It is such an interesting question, because I have friends that say, oh, don’t use social media. See I don’t call it Tweets, Tweeting is like a typewriter – when I put it out, you put it immediately on your show. I mean the other day, put something out, two seconds later I am watching your show, it’s up –

BARITROMO: You’re right. We’re watching your Twitter feed.

TRUMP: OK, and then, you know they are well crafted. I was always a good student, I am like a person that does well with that, does well with that kind of thing. And I doubt I would be here if it weren’t for social media, to be honest with you. Because there is a fake media out there, I get treated very unfairly by the media.

And I have a tremendous platform.  I think I have 125 million people between Twitter and Instagram and all of them and Facebook.  I have a tremendous platform....

So when somebody says something about me, I am able to go bing, bing, bing and I take care of it. The other way, I would never be able to get the word out.  I had a big rally, we were in Texas for something and I then I went back unfortunately for the hurricanes.

But one woman was standing, I had thousands and thousands of people, but the woman was saying ‘keep tweeting, it matters.’....

BARTIROMO: It’s not just the Tweets, Tweeting is good. I mean having that direct relationship. It’s just tweeting on other subjects other than the message that you really want to focus on.

TRUMP: You have to keep people interested also. You know, you have to keep people interested.  But, social media, without social media, I am not sure that we would be here talking.

[We’ll assess how effective it was in 2018 and 2020, and how things go with the likes of North Korea and Iran.]

--One thing Trump did in Japan...he set off a Twitter firestorm over his choice of a hamburger at a meal with Prime Minister Abe, with Yutaka Yanagisawa, owner of Munch’s Burger Shack in the Minato Ward in Tokyo, selected to serve the president.

Sora News 24 reported that customers have been flooding his two burger shack locations to buy the Trump burger – made with Colby Jack Cheese and 100 percent American Angus beef, cost $10.54. 

Trump asked for his well-done, as I would have.

--Finally, we thank Stephen Willeford, the brave local plumber who no doubt saved lives by grabbing his rifle and firing at killer Devin Kelley in Sutherland Springs, Texas last Sunday.  As a Wall Street Journal editorial put it:

“No one wants crowds of vigilantes looking for someone to shoot, but we’re sure glad Stephen Willeford had a rifle and knew how to use it.  Like the passengers aboard Flight 93 on 9/11, or the Yanks who foiled a terror attack on a train in Belgium in 2015, he didn’t wait for orders to protect his fellow human beings.”

But the fact the Air Force failed to report Devin Kelley’s “bad conduct” discharge in 2014 after being court-martialed on a domestic violence charge to the FBI’s National Criminal Information Center database is outrageous.  It would not have been impossible for Kelley to then purchase a firearm, but it would have been harder for him to do so legally.

This is the same military that just concluded investigations on Naval mishaps in the Pacific that claimed scores of our nation’s best...pure negligence and incompetence.

Start doing your job, Pentagon.  Your nation demands it.  And your soldiers, sailors and airmen also deserve better.

---

Pray for the men and women of our armed forces...and all the fallen.  God bless the Veterans.  We thank you.

And we pray for the victims and their families of the Sutherland massacre.

God bless America.

---

Gold $1275
Oil $56.90

Returns for the week 11/6-11/10

Dow Jones  -0.5%  [23422]
S&P 500  -0.2%  [2582]
S&P MidCap  -0.6%
Russell 2000  -1.3%
Nasdaq  -0.2%  [6750]

Returns for the period 1/1/17-11/10/17

Dow Jones  +18.5%
S&P 500  +15.3%
S&P MidCap  +9.9%
Russell 2000  +8.7%
Nasdaq  +25.4%

Bulls 64.4
Bears 14.4  [Source: Investors Intelligence...again, biggest spread, 50 points, since early 1987...though the Crash that year didn’t occur until October.]

Brian Trumbore