Stocks and News
Home | Week in Review Process | Terms of Use | About UsContact Us
   Articles Go Fund Me All-Species List Hot Spots Go Fund Me
Week in Review   |  Bar Chat    |  Hot Spots    |   Dr. Bortrum    |   Wall St. History
Week-in-Review
  Search Our Archives: 
 

 

Week in Review

https://www.gofundme.com/s3h2w8

AddThis Feed Button

   

07/14/2018

For the week 7/9-7/13

[Posted 11:30 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 1,005

I thought President Donald Trump’s performance this week was disgraceful, “atrocious,” as former Republican Congressman Charlie Dent of Pennsylvania described it this afternoon on CNN, though no doubt, many of Trump’s supporters, not concerned with the facts, such as his tirades on NATO members’ defense spending (which is not the same as keeping their NATO contributions up to date), will love that the president remains the great disruptor, hell-bent on toppling the West’s institutions.

And I suppose many of his supporters are not concerned in the least about Monday’s one-on-one, no one else in the room but interpreters, ‘summit’ with Vladimir Putin, aka, Vlad the Impaler.

The prospects for what could take place Monday, which we’ll eventually find out through Putin’s “read”, not Trump’s, are deeply troubling.

Especially after Friday’s noon bombshell that 12 Russian intelligence officers were charged with hacking the Democratic National Committee and the Clinton presidential campaign; the indictments part of the special counsel’s investigation into Russia’s interference in the 2016 presidential campaign.

Russia, and Putin, continue to deny they had any role in the hacks that preceded the election.

Deputy Attorney General Rod Rosenstein discussed the charges during a news conference at the Justice Department, at the same time President Trump was meeting with Queen Elizabeth, which was rich.

Rosenstein said: “Free and fair elections are hard fought and contentious, and there will always be adversaries who work to exacerbate domestic differences and try to confuse, divide and conquer us.

“So long as we are united in our commitment to the shared values enshrined in the Constitution, they will not succeed.”

The 29-page indictment is the most detailed accusation by the American government to date of the Kremlin’s involvement, and as I go to post the big question is how President Trump will handle it Monday.

Of course we’ll get a clue through Twitter before then, as Trump relaxes at his golf course in Scotland before bopping over to Helsinki.

I mean, imagine, President Trump had been made aware of the looming indictments by Rosenstein before he flew to Brussels for the NATO summit, and then the U.K., yet there was the president, today, in his press conference with Prime Minister May, again calling out the ‘fake news’ media and the ‘witch hunt.’

Trump is scheduled to hold a joint presser with Putin after their meeting and we’ll see if that comes off as planned.  The president needs to watch it. He is skating on incredibly thin ice.

Donald Trump continues to advance Vladimir Putin’s own foreign policy goals, which is sickening for me to even write.  Trump is playing with fire.

On to another week in....

Trump World...NATO...Kavanaugh

NATO and Helsinki

Trump started off the NATO summit on a defiant note, saying at a breakfast with Jens Stoltenberg, the NATO secretary general: “Many countries are not paying what they should, and, frankly, many countries owe us a tremendous amount of money from many years back. They’re delinquent, as far as I’m concerned, because the United States has had to pay for them.”

Then he singled out Germany for particularly sharp criticism, saying the country was “totally controlled by Russia” because of its dependence on imported natural gas. The United States spends heavily to defend Germany from Russia, he said, and “Germany goes out and pays billions and billions of dollars a year to Russia.”

Trump criticized Berlin for giving approval for Gazprom, the Russian energy titan, to construct the Nord Stream 2 pipeline through its waters, a $10 billion project.

“Germany is a captive of Russia,” Trump said. “I think it’s something that NATO has to look at.”

German Chancellor Angela Merkel, who grew up in East Germany, offered a reminder that she learned firsthand what it means to be a “captive” nation. Modern Germany, she said, is not one.

“I have experienced myself how a part of Germany was controlled by the Soviet Union,” she told reporters after learning of Trump’s comments.  Now “united in freedom,” she said, Germans “can make our own policies and make our own decisions.”

But as the Wall Street Journal opined:

“Mr. Trump’s suspicion of, if not hostility to, allies...could backfire. One rear-guard attempt to disrupt the pipeline would have the European Union extend its energy-market regulations to pipelines such as Nord Stream 2 when only one end touches EU soil.

“Supporters hope this regulatory burden would force Moscow to at least bear financial losses as a cost of its gas policy. Yet this anti-Nord Stream effort faces an uphill fight in Brussels, and Mr. Trump’s lobbying carries less weight than it would if Europeans weren’t now predisposed to distrust him on his overall commitment to NATO and trade.

“Bluntness is underrated as a diplomatic tool, and Berlin deserves its Trumpian embarrassment over its pipeline follies. The main regret over his comments is that he undermines their diplomatic impact with his many other, less helpful, fulminations on European affairs.”

Throughout the week, Trump kept tweeting:

“Billions of additional dollars are being spent by NATO countries since my visit last year, at my request, but it isn’t nearly enough. U.S. spends too much. Europe’s borders are BAD!  Pipeline dollars to Russia are not acceptable!”

“Presidents have been trying unsuccessfully for years to get Germany and other rich NATO Nations to pay more toward their protection from Russia.  They pay only a fraction of their cost. The U.S. pays tens of Billions of Dollars too much to subsidize Europe, and loses Big on Trade!”

“On top of it all, Germany just started paying Russia, the country they want protection from, Billions of Dollars for their Energy needs coming out of a new pipeline from Russia. Not acceptable!  All NATO Nations must meet their 2% commitment, and that must ultimately go to 4%!”

“What good is NATO if Germany is paying Russia billions of dollars for gas and energy?  Why are their (sic) only 5 out of 29 countries that have met their commitment? The U.S. is paying for Europe’s protection, then loses billions on Trade. Must pay 2% of GDP IMMEDIATELY, not by 2025.”

At a news conference on Thursday, Trump insisted NATO had agreed to increase their spending on defense, in fairness to the United States.

“They’re going to up it at levels that they’ve never thought of before.”

But other leaders denied that they’d made any significantly new pledges beyond what they’d agreed to in 2014, under some pressure from President Obama.  “No increase in spending,” Italy’s new prime minister, Giuseppe Conte, said of his country’s military budget.

French President Emmanuel Macron, in his own closing news conference, said NATO members generally had made no new commitments. He also said that Trump “never at any moment, either in public or in private, threatened to withdraw from NATO.”

The diplomatic confusion Trump caused among NATO allies left them more uncertain than before of the United States’ commitment and apprehensive about his get-together with Putin. At the close of the summit, Trump cast himself as the savior, yet he had created the crisis in the first place.

“Yesterday, I let them know I was extremely unhappy with what was happening. And now we’re very happy. We have a very powerful, very strong NATO – much stronger than it was two days ago,” Trump said at the closing news conference.

“After 2%, we’ll start talking about going higher,” he said.

A day after tweeting “What good is NATO?” Trump spoke in his most glowing terms ever about the alliance.  “I believe in NATO,” the president said.  “I think NATO is very important – probably the greatest ever done.”

Trump continued to falsely describe how NATO is financed, saying the U.S. pays for 90% of it.  He conflated each member-nation’s military spending with their much smaller contributions to the alliance’s administration, on which all members are current, according to NATO.

Again, the 2% Trump keeps referring to is the pledge to increase to that level by 2024, while NATO keeps its annual commitments to fund the NATO budget.  These are two totally different items.

That said, NATO admits on its website: “There is an overreliance by the alliance as a whole on the United States for the provision of essential capabilities, including, for instance, in regard to intelligence, surveillance and reconnaissance; air-to-air refueling; ballistic missile defense; and airborne electronic warfare.”

Earlier this week in a series of tweets, ailing Sen. John McCain (R-Ariz.), the chairman of the Senate Armed Services Committee, criticized Trump’s NATO “performance” and his softness toward Putin.

The president’s “misstatements and bluster,” McCain wrote, “are the words of one man.  Americans and their Congress still believe in the transatlantic alliance.”

So it was then on to the U.K. for talks with Prime Minister May, and in an interview with The Sun newspaper, Trump said May had mishandled Brexit negotiations, while calling her rival, Boris Johnson, who had just resigned as foreign minister over the prime minister’s handling of the Brexit talks, a “great prime minister.”

“I actually told Theresa May how to do it, but she didn’t listen to me” Trump said in the interview, in speaking of how May mishandled Brexit, adding her plan for it “is a much different deal than the one the people voted on.”

Trump also added she’d probably ended chances for a new trade deal with the U.S.  Her plan, he said, “will definitely affect trade with the United States, unfortunately in a negative way.”

The interview broke as the president was having dinner with Mrs. May Thursday night.  He added the impact of immigration on Europe “changed the fabric” of the continent.

“I think you are losing your culture.  Look around.  You go through certain areas that didn’t exist 10 or 15 years ago....I think what has happened to Europe is a shame. Allowing the immigration to take place in Europe is a shame.”

And Trump continued: “I think it changed the fabric of Europe and, unless you act very quickly, it’s never going to be what it was and I don’t mean that in a positive way.  So I think allowing millions and millions of people to come into Europe is very, very sad.”

The comments – an extraordinary intervention by a U.S. president in an allied country’s politics – came after the NATO summit dominated by Trump’s demands on spending.

Jens Stoltenberg, General Secretary of NATO / Wall Street Journal

“NATO was created in 1949 to ensure that none of us will ever have to live through another world war. The result of the alliance has been an unprecedented period of peace and security for the citizens of North America and Europe.

“The U.S. has had close allies and friends of NATO that no other world power can match. Together, the alliance’s 29 countries represent half the world’s economic and military might.

“But for all NATO has achieved, we cannot be complacent. Facing the most complex and dangerous security environment in a generation, we must invest more in our collective defense.  In an unpredictable world, we must do what is necessary to keep our nations safe....

“NATO’s credibility as an alliance – in each other’s eyes, and in those of our potential adversaries – relies on sharing the defense burden fairly. Ahead of our summit on July 11-12 in Brussels, I have been carrying that message with me every time I meet with allied leaders.

“Increased spending is only one part of the equation, however. Allies are also directing that money where it will matter. When NATO leaders signed on to the 2% guideline, they also pledged to put at least 20% of their defense budgets toward major new equipment, such as fighter planes, tanks and warships.   Accordingly, NATO countries have added $18 billion in spending on equipment since 2014.

“From the Balkans to the North Atlantic, from the Black Sea to the Baltic, American and European soldiers, sailors and airmen are working together through NATO to keep our nations safe. They do so because we have common interest, history and values, and because the ties that bind us run deep.

“That’s why NATO allies invoked Article 5, our mutual-defense clause, after 9/11 – the first and only time we have done so. It’s why hundreds of thousands of European and Canadian troops have served shoulder-to-shoulder with American soldiers in Afghanistan.  More than 1,000 of them have made the ultimate sacrifice.

“It’s no secret that there are differences among NATO countries on serious issues such as trade, climate change and the Iran nuclear deal.  But we have always managed to overcome our differences before. Two world wars and a Cold War have taught a simple yet powerful lesson: United, we are stronger and safer.”

Patrick Tucker / Defense News

“At Poland’s northeast border there’s only a narrow strip of inland border connecting it to NATO members Lithuania, Latvia and Estonia. It’s called the Suwalki Corridor and it has long been an object of concern for Western military leaders.

“To the west sits a unique spot of Russian territory, the exclave of Kaliningrad, a key military port on the Baltic Sea.  To the east is Belarus, a key Russian military ally.  On the eve of this week’s NATO summit, the former commanding general of U.S. Army Europe is issuing a new warning: cutting off that corridor could be how Russian President Vladimir Putin cuts off the Baltic states from the rest of NATO, possibly without firing a shot.

“ ‘Situated between Belarus and the Russian exclave of Kaliningrad, it serves as the only land link between NATO and its three Baltic members, Estonia, Latvia, and Lithuania,’ says a new report co-authored by retired Lt. Gen. Ben Hodges, scheduled for release on Monday by the Center for European Analysis, or CEPA....

“ ‘If Russian forces ever established control over this Corridor, or even threatened the free movement of NATO forces and material through it, they could cut the Baltic States off from the rest of the Alliance and potentially obstruct allied reinforcements advancing by land through Poland.’

“The significance of the corridor to NATO, and the unpredictability of Russian action, has Hodges worried. The idea of Russia actively invading Europe may seem far-fetched.  And it is, as we conceive of it.

“ ‘I don’t think that Russia intends to invade Europe as though its 1991. They don’t have the capacity to do that anymore. Especially with the 29 forces of NATO, it completely dwarfs them,’ said Hodges, who retired this year.

“But if you accept Putin’s goal is to destabilize the NATO alliance and convince some members or unaligned countries to join Russia’s sphere of influence, then it becomes easier to imagine Putin engineering some sort of crisis to make the alliance look impotent or irrelevant to its members’ security, and that’s what has Hodges worried.

“The Kremlin wants ‘a seat at the high table and they do that by undermining the alliance,’ Hodges said. “The way that they do that is show that the alliance cannot protect one of its members, show that we are too slow, that we can’t deter that sort of attack.  If you accept that premise, that they might do a limited attack to demonstrate that NATO cannot protect its members, that would create a problem.’....

“ ‘If they ever tried anything, they would do it asymmetrically so that they could achieve whatever they wanted to achieve before the alliance caught on,’ said Hodges.”

Which is exactly what happened in Crimea.  Remember the ‘little green men’?

Robert Kagan / Washington Post

“Human beings often choose self-delusion over painful reality, and so in the days and weeks to come, we will hear reassurances that the NATO alliance is in good shape. After all, there have been spats in the past – over the Suez crisis in 1956, Vietnam in the 1960s and ‘70s, missile deployment in the Reagan years and, of course, Iraq.

“American presidents have been complaining about shortfalls in European defense spending for decades.  President Trump is not wrong to criticize Germany’s pipeline deal with Russia. As for this week’s fractious summit, we are urged to focus on the substance, not the rhetoric. U.S. forces in Europe have been beefed up in recent years, and new plans are in place to resist Russian aggression. On the ground, the alliance still functions.

“All true, but unfortunately beside the point. Small troop deployments and incremental defense increases don’t mean much when the foundations of the alliance are crumbling – as they are and have been for some time. And pointing to previous differences ignores how much political and international circumstances have changed over the past decade.  Europe faces new problems, as well as the return of some of the old problems that led to catastrophe in the past; and Americans have a very different attitude toward the world than they did during the Cold War. This is not just another family quarrel.

“The transatlantic community was in trouble even before Trump took office.  The peaceful, democratic Europe we had come to take for granted in recent decades has been rocked to the core by populist nationalist movements responding to the massive flow of refugees from the Middle East and Africa. For the first time since World War II, a right-wing party holds a substantial share of seats in the German Bundestag. Authoritarianism has replaced democracy, or threatens to, in such major European states as Hungary and Poland, and democratic practices and liberal values are under attack in the Czech Republic and Slovakia. France remains one election away from a right-wing nationalist leadership, and Italy has already taken a big step in that direction. Meanwhile, Britain, which played such a key role in Europe during and after the Cold War, has taken itself out of the picture and has become, globally, a pale shadow of its former self.  The possibility that Europe could return to its dark past is greater today than at any time during the Cold War....

“Any student of history knows that it is moments like this summit that set in motion chains of events that are difficult to stop.  The democratic alliance that has been the bedrock of the American-led liberal world order is unraveling. At some point, and probably sooner than we expect, the global peace that that alliance and that order undergirded will unravel, too. Despite our human desire to hope for the best, things will not be okay. The world crisis is upon us.”

The Supreme Court: The confirmation battle is on, with President Trump’s nomination of Brett Kavanaugh, a federal judge with a 12-year record on an appeals court to pore over.  Senate Minority Leader Chuck Schumer (D-N.Y.) drew a straight line from the 1990s to the present in floor remarks Tuesday.

“His judicial philosophy appears to spring from his history.  Judge Kavanaugh was embedded in the partisan fights of the past few decades: the notorious Starr report, the Florida recount, President Bush’s secrecy and privilege claims once in office, and ideological judicial nomination fights throughout the Bush Era,” Mr. Schumer said.

A White House aide told the Wall Street Journal, “A lot of that stuff is pretty stale now. If we’re fighting about whether there were weapons of mass destruction in Iraq in 2003, I think we’re going to win.”

Opinion...all sides....

Editorial / Wall Street Journal

“Brett Kavanaugh’s nomination now heads to the Senate, and the most important fact to understand is that the debate in the world’s greatest nondeliberative body is not about the future of the Supreme Court. That’s a sideshow.  The real debate is about the future of the Senate – specifically, which political party will control that now narrowly divided chamber in 2019.

“Minority Leader Chuck Schumer has already said he will ‘oppose Judge Kavanaugh’s nomination with everything I have.’  Nice to know he’s given it such careful thought. But Mr. Schumer knows defeating the judge is a  long shot, especially after Maine Senator Susan Collins made encouraging comments Tuesday about Judge Kavanaugh’s lower-court opinion on ObamaCare and his statement in 2006 that Roe v. Wade is a binding precedent.

“In any case, what Mr. Schumer cares about more than defeating Donald Trump’s nominee is to be the next Majority Leader. Toward that end he wants to help his 10 incumbent Senators running in November to navigate between a political base that demands opposition to all things Trump and broader state electorates that might come to think that Judge Kavanaugh is an excellent nominee.

“The best way to do that is to postpone a confirmation vote beyond Nov. 6.  That way Joe Donnelly in Indiana, Heidi Heitkamp in North Dakota and Joe Manchin in West Virginia wouldn’t have to take a politically difficult vote before Election Day.

“They and other Democrats like Claire McCaskill in Missouri risk infuriating Democratic activists if they vote for a nominee who will be described day after day on MSNBC and CNN as a threat to every right they have.  On the other hand, the Senators might motivate Trump voters to turn out against them if they oppose Judge Kavanaugh.  So Mr. Schumer’s main priority is delay, and delay some more.

“Keep this in mind as you begin to hear Democratic charges that the confirmation process is moving too fast, that it’s a railroad job, or a cover-up.  You will also soon hear demands for documents, millions of documents, from Mr. Kavanaugh’s tenure as staff secretary in the George W. Bush White House and on the staff of independent counsel Ken Starr in the 1990s.

“Democrats aren’t looking for anything in particular, though if they find something negative they’ll use it. The main purpose will be to find an excuse to raise more questions, to seek still more documents, and to interview more witnesses – all with a goal of pushing Senate hearings into the autumn and delaying a vote into the lame duck session of Congress or even next year.”

Editorial / USA TODAY

“Trump’s prime-time selection of Judge Brett Kavanaugh, 53, is likely to please the Republican base.  Kavanaugh has been a reliable conservative in his approximately 300 opinions issued on the District of Columbia Circuit Court of Appeals (often considered the second most powerful court in the land) and, if confirmed by the GOP-controlled Senate, he could shift the high court dramatically to the right for years to come....

“Conveniently for Trump, and perhaps serendipitously for Kavanaugh, his views on presidential inquiries have migrated since then. In 2009 he wrote that presidents should be free from civil and criminal investigations.

“Like all recent nominees, Kavanaugh is a highly accomplished appellate judge with a keen intellect. He deserves the thoughtful consideration of the Senate, though the confirmation process is sure to turn ugly given the high stakes and lingering Democratic resentment over Republicans’ refusal to even consider the eminently qualified Merrick Garland, nominated in 2016 by President Barack Obama....

“Much of the attention during his confirmation hearings will no doubt focus on the issue of abortion. While ruling only rarely on the topic, a dissent Kavanaugh issued in a case involving an undocumented teenager has delighted those opposed to abortion.  In that opinion, he asserted that ‘the government has permissible interests in favoring fetal life, protecting the best interests of a minor, and refraining from facilitating abortion.’

“Democrats will warn that a court with so many conservatives would overturn Roe v. Wade. But a more likely prospect, given the degree to which a ruling would upend precedent, is a de facto repeal by allowing ever increasing restrictions on abortions.

“Amid the glow in the White House East Room, Kavanaugh provided a preview of his confirmation hearing, vowing to be independent and ‘keep an open mind in every case.’

“His reception from Democratic senators and interest groups will be considerably less friendly.”

Editorial / New York Post

“Judge Kavanaugh is widely seen as one of the top legal minds of his generation – so much so that now-Justice Elena Kagan recruited him to teach at Harvard Law, where students across the spectrum rave about him. Though firmly committed to interpreting the Constitution as written, he’s no ideologue – which is why Sen. Ted Cruz and other hard-rightists had been urging Trump to pick someone else.

“But now Democrats will proceed with their preset strategy for fighting any Trump picks – charging that confirmation guarantees the end of Roe v. Wade and ObamaCare.

“Which is nonsense: Chief Justice John Roberts, who’s set to be the new swing vote on the court, has already joined the four liberal justices to save ObamaCare once, and all indications are that he’s unwilling to reverse Roe or any other precedent more than four decades old.  (For that matter, the only justice who clearly favors junking Roe is Clarence Thomas.).

“No, what has Democrats despairing is the prospect of a Supreme Court that won’t create new progressive ‘rights’ that even liberal majorities in Congress don’t dare pass as legislation....

“Above all, Senate Minority Leader Chuck Schumer will try to play out the clock, pushing to delay any confirmation vote until after Election Day, when his odds of defeating the nominee might improve.

“It’s up to Majority Leader Mitch McConnell and the White House to make sure Democrats’ hysterical games don’t derail a first-rate nominee.”

Editorial / Washington Post

“Mr. Kavanaugh meets the basic qualifications for high court service. A Yale Law School graduate who clerked for Mr. Kennedy, he has served for 12 years on the powerful U.S. Court of Appeals for the District of Columbia Circuit.  The country certainly could have expected worse from President Trump. Yet Mr. Kavanaugh came from a list of potential nominees preapproved by conservative activist groups. Their goal is to tilt the court as far right as possible as quickly sa possible.

“Mr. Trump’s first nominee, Neil M. Gorsuch, was, in his confirmation hearings, the least forthcoming Supreme Court nominee in recent memory. Mr. Kavanaugh must do better. Fortunately, he comes with a huge record....

“Most importantly, senators must extract an ironclad commitment that Mr. Kavanaugh will act as a check on the president.  That’s a role he has not seemed comfortable playing in cases involving enemy combatants, or in a law review article suggesting that the president should not be subject to civil or criminal court proceedings while in office. There is always a danger that justices will be seen as loyal to the presidents and parties that installed them; that danger is particularly pronounced now, as Mr. Trump ignores traditional boundaries on presidential action and the Republican Party mostly enables his autocratic instincts.

“Just as Democrats should not have ruled out Mr. Trump’s pick before it was announced, Republicans should not duck their responsibility to bring a critical eye to the coming confirmation process.”

Editorial / New York Times

“During the 2016 campaign, Mr. Trump publicized a list of possible Supreme Court nominees preapproved by the Federalist Society and the Heritage Foundation, another conservative group. It was scrubbed of any squishes along the lines of David Souter, Anthony Kennedy or even Chief Justice Roberts, all of whom have been deemed insufficiently committed to the cause for failing to vote in lock step with the radical right’s agenda.  (Judge Kavanaugh was left off the original list but was added later.)

“The Federalist Society claims to value the so-called strict construction of the Constitution, but this supposedly neutral mode of constitutional interpretation lines up suspiciously well with Republican policy preferences – say, gutting laws that protect voting rights, or opening the floodgates to unlimited political spending, or undermining women’s reproductive freedom, or destroying public-sector labor unions’ ability to stand up for the interests of workers.

“In short, Senate Democrats need to use the confirmation process to explain to Americans how their Constitution is about to be hijacked by a small group of conservative radicals well-funded by ideological and corporate interests, and what that means in terms of the rights they will lose and the laws that will be invalidated over the next several decades.

“We’re witnessing right now a global movement against the idea of liberal democracy and, in places like Hungary and Poland, its grounding in an independent judiciary.  Mr. Trump and Senate Republicans appear happy to ride this wave to unlimited power. They will almost certainly win this latest battle, but it’s a victory that will come at great cost to the nation, and to the court’s remaining legitimacy.

“Americans who care about the court’s future and its role in the American system of government need to turn to the political process to restore the protections the new majority will take away, and to create an environment where radical judges can’t be nominated or confirmed. As those tireless conservative activists would be the first to tell you, winning the future depends on deliberate, long-term organizing in the present, even when – especially when – things appear most bleak.”

Trumpets....

--Former Republican Senate Majority Leader Bill Frist / Washington Post

“Nobody knows what the special counsel’s investigation will conclude. I, for one, do not think the president colluded with Russian President Vladimir Putin to win the 2016 election. But I do believe Putin purposely tried to undermine our democratic process.

“It isn’t easy to tell a president of your own party that he is wrong. But the assault on Mueller’s investigation does not help the president or his party. When Trump talks about firing the special counsel or his power to pardon himself, he makes it seem as though as he has something to hide.  The president must remember that only Mueller’s exoneration can lift the cloud hanging over the White House.

“The special counsel’s investigation is not about Trump. It is about our national security.  Every American should be rooting for Mueller’s success in determining precisely how Russia interfered in our fundamental democratic process. I had no illusions about the Soviet Union during the Cold War, and I have none about Putin now. Mueller’s most recent court filings indicate that Putin is seeking to meddle in this year’s elections.  Secretary of State Mike Pompeo, Director of National Intelligence Danial Coats and FBI Director Christopher A. Wray – all Trump appointees confirmed by the Republican-led Senate – have also warned of foreign interference. We should heed these warnings and empower Mueller to see his important work through to its conclusion.

“I have worried over the years about runaway legal authority, and I’ve battled against activist judges. I don’t worry about Robert Mueller. He is a lifelong Republican with a career of distinguished service running the Criminal Division of the Justice Department for President Ronald Reagan and serving as President George W. Bush’s FBI director, twice unanimously confirmed by the Senate. And his investigation is getting results: By any objective standard, he has moved swiftly, obtaining 23 indictments and five guilty pleas in just more than a year.*

“Congress must never abandon its role as an equal branch of government.  In this moment, that means protecting Mueller’s investigation. We’re at our best as senators and Republicans when we defend our institutions. But more than that, it’s our best face as Americans.

“People around the world admire not just the material well-being of the United States but our values, too.  The rule of law is something many die trying to secure for their countries. We can’t afford to squander it at home.”

*Frist authored the piece almost a week before the latest Russian investigation indictments.

--Devlin Barrett and Karoun Demirjian / Washington Post

“Republicans fought bitterly Thursday with FBI agent Peter Strzok, at a congressional hearing that frequently devolved into shouting matches about political bias between supporters of President Trump and defenders of the agency investigating him.

“The mutual contempt felt between Republicans on one side and Democrats and the star witness on the other was palpable from the very first question put to Strzok, whose conduct as the lead agent on FBI probes of Hillary Clinton and the Trump campaign has been sharply criticized by internal Justice Department investigators.

“The day-long hearing, which featured far more heated accusations than new information, was a naked display of the animus and agitation in Washington that surrounds the ongoing investigation into whether any Trump associates conspired with Russia to interfere with the 2016 election.

“Republicans accused Strzok and the FBI of pursuing politically motivated probes aimed at harming President Trump. Democrats called the entire hearing part of a GOP attempt to protect the president by tainting the work of special counsel Robert S. Mueller III.”

I watched it. It was a travesty, capped off by Rep. Louis Gohmert (R-Tex.) raising the issue of Strzok’s extramarital affair with ex-FBI lawyer Lisa Page.

“I can’t help but wonder, when I see you looking there with a little smirk, how many times did you look so innocent into your wife’s eyes and lie to her about Lisa Page?” Gohmert asked.

Even Fox News’ Laura Ingraham was unhappy with the congressman’s performance, Ingraham correctly wondering if the hearings harmed Republicans.

Strzok battled with House Oversight Committee chairman Rep. Trey Gowdy (R-S.C.).  At one point, Strzok conceded that he “detested” Trump, and he accused Gowdy of twisting his words, saying: “I don’t appreciate what was originally said being changed.”

Gowdy shot back: “I don’t give a damn what you appreciate, Agent Strzok. I don’t appreciate an FBI agent with an unprecedented level of animus working on two major investigations in 2016.”

Strzok insisted that his superiors and colleagues “would not tolerate any improper behavior in me any more than I would tolerate it in them.  That is who we are as the FBI, and the suggestion that I, in some dark chamber somewhere in the FBI, would somehow cast aside  all of these procedures, all of these safeguards, and somehow be able to do this is astounding to me,” he said.

But there was a reason why Strzok was demoted to Human Resources and may yet face criminal prosecution.  Among other things, he has trouble with the truth.

--President Trump in his aforementioned Sun interview, also called out London Mayor Sadiq Khan.

“I think he has done a very bad job on terrorism. I think he has done a bad job on crime, if you look, all of the horrible things going on there, with all of the crime that is being brought in.”

Mayor Khan said it was preposterous for Trump to blame a rise in violent crime in the city on immigration.

--I’ve said since day one of this column, that anytime there is a beautiful day and I’m outdoors enjoying it (as was the case with this area’s past spectacular weekend), I thank Richard Nixon. I mean it.  What he did on the environment was no doubt politically expedient, but the fact is he did it.

So I got a kick out of the following.

Linda Stasi / New York Daily News

“Scott Pruitt is no Richard Nixon.

“No, I’m not saying the vile nature-destroying, recently-resigned EPA chief Pruitt wsa better for the environment than Richard Nixon – I’m saying exactly the opposite.

“Sit down, brothers and sisters.

“It was – get this – Nixon who created the Environmental Protection Agency in 1970, which Pruitt headed and did his best to turn into an endangered species.

“Yeah, that Richard Nixon – the one who was so corrupt he nearly destroyed our democracy and who had so many ethics violations he could have served as a role model for Pruitt’s career.

“But yes, it was also that Richard Nixon who in creating the EPA, said, ‘Restoring nature to its natural state is a cause beyond party and beyond factions.’ Thing is, that same Richard Nixon was the greatest environmental president since Teddy Roosevelt.  In short, what Roosevelt did for our national parks, Nixon did for our environment.

“And for all the bad he did, at least that Nixon’s environmental policies were good. Until Scott Pruitt, who, as attorney general for Oklahoma filed 14 – count ‘em 14 – lawsuits against the EPA, the agency he would one day head.

“And yeah, it was that same Scott Pruitt who, in his short-lived reign as EPA king, did commit such unspeakable acts such as undoing the ban on chlorpyrifos – the pesticide that damages the brain and nervous system of fetuses and young children.

“It was that same Scott Pruitt who rolled back something like 45 environmental rules, including 25 at EPA alone; decisions that will affect not just our land, our air, water and environment, but our whole planet, our lives and our children’s lives, for the foreseeable future.

“And yea, it was that Scott Pruitt who advised President Trump to pull out of the Paris climate accords, revoked the rules against dumping coal waste into local streams and fired scientists at the EPA and replaced them with industry lobbyists.

“So in retrospect, since we don’t have that Scott Pruitt to kick around anymore, we should stop criticizing his 14 shameless unethical personal acts such as the Chick-fil-A scandal and how he alone gave new meaning to the phrase ‘take to the mattresses’ by trying to buy a mattress on the cheap from the Trump International Hotel – because really, who doesn’t want a used mattress upon which countless strangers have done the nasty? – and start concentrating on the harm he’s done to the rest of us.

“This I say, even though Pruitt himself reminded the President in his bizarre, nearly-evangelical EPA resignation letter, it was in the end, God’s providence that ‘brought [him] into [Trump’s] service.’

“It’s just that – and who am I to question God? – it’s hard to believe that God’s providence included dumping coal debris into local waters, putting fossil-fuel lobbyists into the EPA, and repealing the Clean Water Act leaving about 117 million Americans at risk of industrial and agricultural pollution.

“Given all of this, Richard Nixon, he must be turning in his grave.”

Wall Street...Trade

The only economic news of import this week was on the inflation front, with June producer prices up 0.3%, 3.4% year-over-year, while ex-food and energy, the PPI was up 0.3%, 2.8% yoy.

The next day, Thursday, we had consumer prices and the CPI was up 0.1%, but up 2.9% year-over-year, the fastest pace since Feb. 2012, while the core figures were 0.2%, 2.3%.

So the CPI at 2.9% fully offsets the average hourly wage growth for a second consecutive month, ‘real’ wages flat for the American worker.

Federal Reserve Chairman Jerome Powell gives his semiannual congressional update on the economy next week and in a radio interview yesterday he said a strong economy should allow the central bank to keep raising interest rates gradually, and it was premature to judge how recent trade policy actions could impact the Fed’s thinking.

“I sleep pretty well on the economy right now,” Powell said.  But with the trade uncertainty and the potential influence on Fed policy, he said, “It’s very hard to sit here today and say which way that’s going.”

If the Trump administration is successful over time in lowering trade tariffs, “then that’ll be a good thing for our economy,” Powell said on the Marketplace radio program.  “If it works out other ways, so that we wind up having high tariffs on a lot of products...and that they become sustained for a long period of time, then yes, that could be a negative for our economy.”

In Powell’s worst-case scenario, “You can imagine situations which would be very challenging, where inflation is going up and the economy is weakening,” he said.

This week the Trump administration announced a third round of tariffs on $200 billion on Chinese products, which no doubt would provoke new retaliation from Beijing.  These would take effect end of August, if they go through, and would impact products ranging from clothing to televisions to refrigerators; essentially anything in your home. 

So China has seven weeks to make a deal or dig in and try to outlast Trump.  President Xi Jinping, under pressure politically to look tough, has vowed to respond blow-for-blow. And one step could be consumer boycotts, as I’ve warned for years.

There have been no high-level talks between the two sides since an early June visit by U.S. Commerce Secretary Wilbur Ross that achieved zippo.

Currently, the administration has imposed tariffs on imported steel and aluminum from the EU, Canada and Mexico, which has led to them levying their own tariffs on U.S. exports.

Republican Rep. Kevin Brady, chairman of the House Ways and Means Committee, warned of “a long, multi-year trade war between the two largest economies in the world that engulfs more and more of the globe.”

“Despite the serious economic consequences of ever-increasing tariffs, today there are no serious trade discussions occurring between the U.S. and China, no plans for trade negotiations anytime soon, and seemingly little action toward a solution,” the Texas congressman said.  Senate Finance Committee Chairman Orrin Hatch (R-Utah), called the new levies “reckless” and not “targeted.”

It was back in March that Trump suggested “trade wars are good and easy to win.”

Among other things, the U.S. is asking China to roll back its “Made-in-China 2025” program, a signature Xi initiative to dominate several strategic industries, including semiconductors and aerospace, the technology for which they’ve been stealing for years and years.

Meanwhile, the Treasury Department said on Thursday that government receipts fell 7% in June compared with the same month a year earlier, owing to a sharp 33% drop in gross corporate taxes. Individual withheld and payroll taxes were down 5%, while non-withheld individual taxes rose by 7%.

But thanks to a 9% drop in government outlays, the budget deficit narrowed to $74.86 billion in June, compared with $90.23 billion in June 2017.

More broadly, for the first nine months of the fiscal year, the budget gap totaled $607.1 billion, up 16% over a year earlier.

As for Wall Street and the stock market, it continued to ignore trade tensions.

Europe and Asia

No economic news of note for the eurozone, though the European Commission lowered its growth forecasts for the EA19, blaming growing trade tensions and rising energy prices.  Brussels is now projecting euro area growth of 2.1% this year, compared with a forecast of 2.3% in May. The EC lowered Germany’s growth forecast from 2.3% to 1.9%. France was lowered from 2% to 1.7%.  Growth for the eurozone was 2.4% in 2017.

But the European Central Bank, which is set to call time on its bond buying spree later this year, is convinced the region’s economy is strong enough to take the slow withdrawal of quantitative easing and its crisis era support, according to its June minutes.

The ECB is lowering its purchase program from 30bn euro to 15bn in September, and then zero after December.

“While the incoming data had been somewhat weaker than previously expected, the fundamentals remained in place for the medium-term growth outlook to remain solid and broad-based,” the account said.

There was also “increased confidence that price and wage pressures would strengthen further over time,” raising the likelihood that the bank would keep inflation pressures broadly in line with its goal of just under 2% in the years ahead.

Brexit: As alluded to above, President Trump’s comments to The Sun newspaper on Brexit did Theresa May no favors.  They came the same day the government released its white paper on the plan for exiting the bloc, which would keep Britain tied to the European Union on goods and agricultural products.

The prime minister is trying to minimize the economic impact of Brexit with ‘Brexit Lite,” or soft Brexit, but Trump (parroting Steve Bannon...who is in his ear again) has sided with pro-Brexit critics who argue that, by keeping many of the European Union’s economic rules, it would inevitably reduce the scope for a separate trade deal with the United States.

Three government ministers, including Brexit Secretary David Davis, and Foreign Minister Boris Johnson, resigned over the new proposal to leave the EU.

Johnson, at the start of 2016, was the most popular politician in Britain, as he led the campaign to leave the EU, but he and his fellow Brexiteers led an incredibly dishonest campaign on the perceived benefits of leaving the union, like greatly increased benefits for the National Health Service.  After all, Britain would no longer be paying dues to the EU for which it didn’t receive corresponding benefits, so the argument went, and thus the “savings” could go back to the people.

So in the two years since the June 2016 referendum that shocked the world, nobody, from Johnson to the prime minister, and the opposition Labour Party, has come up with a plan that would please both the public and parliament, let alone the European Union, which doesn’t want to do Britain any favors.

Jenni Russell, a British journalist and broadcaster, had the following take in a New York Times op-ed:

“All of Mr. Johnson’s weaknesses have been exposed: his lazy reluctance to do detail, his preference for bluster over thinking, his contempt for business. The campaign was meant to secure his future; instead, in damaging the country, he fears he has wrecked his own future, too.  As one of his allies told me last month: ‘He knows that the verdict of history is about to come down on him – and bury him.’

“Mr. Johnson seems to believe that this is his last chance to become prime minister: After his resignation this week, he hopes to be reborn as a rebel who will lead the party. But more likely is that he will once again create political chaos without delivering what he wants.

“Two years ago, the side effect of Mr. Johnson’s ambitious maneuvering was to split the country and risk the prosperity and security of all Britons for decades.  Now, just as a fragile basis for negotiation emerges, his selfish drive for vindication, attention and admiration threatens that, too.

“It is petrifying that the deliberate deceptions and wild ego of one man can so mislead a nation.  (Americans know all about that.)  One insider told me that Mrs. May was prepared for Mr. Johnson’s defection, and will outflank him, persuading wavering Conservatives that the time for fantasy has passed.

“But Britain is teetering on the edge, on the verge of making catastrophic, irreversibly damaging mistakes.  The danger is that Johnson might tip the balance in the wrong direction once again.”

JPMorgan Chase CEO Jamie Dimon said the U.K. economy could suffer such a significant downturn after Brexit it could have “an impact on global growth.”

Dimon has previously warned that JPMorgan’s 16,000-strong U.K. workforce could be reduced by 4,000 after Britain exits the EU.

Eurobits...

--French President Emmanuel Macron has been attempting to get some major financial players to expand their operations in Paris ahead of Brexit, and his charm offensive bore some fruit this week when BlackRock and Citigroup joined other Wall Street firms in doing just that.

BlackRock chose Paris over London for its new base to provide alternative investment services across Europe and Asia.  Macron at one point in the courtship met with BlackRock CEO Larry Fink at the Elysee Palace.

And Macron persuaded Citi to expand in the country

“The effect of Macron has lightened up the country – before his election it was pretty bleak,” said Luigi de Vecchi, chairman of corporate and investment banking in continental Europe at Citi, who is moving from Milan to Paris.  “As you talk to French CEOs, they are all pumped up with tons of cash and aggressive plans.”  [Financial Times]

London will, however, remain BlackRock’s main European office.

Bank of America, JPMorgan Chase, Morgan Stanley and HSBC have previously made announcements on their expansion plans in Paris, ranging from a handful of employees to up to 1,000, in the case of HSBC.

--The population of the European Union is nearly 513 million as of January 1, 2018, up a million from 2017.  Germany is the most populous at 82.9 million, followed by France (67.2m), the U.K. (66.2m), and Italy (60.5m).

Since Croatia is in the World Cup final, Sunday, against France, I have to note its population is 4.105 million.

One note from China...its monthly trade surplus with the U.S. hit a record high of nearly $29bn in June as exports to America remained strong.  But analysts expect to see the impact of the new tariffs in July’s figures, though they won’t plunge since the first round only targeted $34bn worth of goods, which is small compared to China’s total trade.

In the first six months of the year, China’s exports to the U.S. rose 13.6% from a year earlier, while imports from the U.S. increased by 11.8%.  The trade surplus over the same period was $133.76 billion, up from $117.51bn last year.

Street Bytes

--Stocks rose a second week, with the Dow Jones gaining 2.3% to 25019, back in the black for the year, while the S&P 500 added 1.5% to close above 2800 (2801) for the first time since Feb. 1.  Nasdaq was up 1.8% to a fresh closing high of 7825.

With the Street ignoring trade issues, for now, it’s all about earnings season, with the flood beginning next week. 

--U.S. Treasury Yields

6-mo. 2.15%  2-yr. 2.58%  10-yr. 2.83%  30-yr. 2.93%

The spread between the 2- and 10-year continues to narrow, with the yield on the 2-year at its highest level since 2008.

--Crude oil had its worst day in a year on Wednesday despite a larger-than-expected weekly drop in inventories after Libya, whose production had been largely offline due to armed conflicts in and around its ports, said export activities were resuming, thus easing fears, for now, of a global supply shortage.

Oil fell 5% to $70.38 a barrel on West Texas Intermediate (WTI). Brent crude the global benchmark, dropped 7% to $73.49, its worst day since February 2016.  [WTI closed the week at $70.58, Brent $74.92]

There were also reports Saudi production is rising to near levels not seen since the country embarked on production cuts.

Thursday, the International Energy Agency warned that spare oil production capacity risks being “stretched to the limit” as supply disruptions and U.S. sanctions against Iran tighten the market.

For the moment, the IEA says the key risk was supply capacity, with moves by producers to raise output cutting into the thin buffer of reserve production.

“Rising production currently underpins oil prices and seems likely to continue doing so.  We see no sign of higher production from elsewhere that might ease fears of market tightness,” it said.

The IEA said it saw only 2.1m barrels a day of quickly available spare capacity in three OPEC members – Saudi Arabia, Kuwait and UAE.

The IEA is focused on the U.S. sanctions on Iran, which are expected to hit hard, while Venezuelan capacity spirals lower, according to the agency.

--The Justice Department said on Thursday it would appeal a federal judge’s approval of AT&T’s merger with Time Warner, extending the government’s legal challenge of the $85.4 billion deal.

A federal judge signed off on the deal a month ago, saying the DOJ did not sufficiently prove that the merger would harm competition and consumers.

AT&T and Time Warner executives have said they were confident they would win an appeal of the merger because of the judge’s sweeping rejection of the government’s case.

And speaking of the judge’s ruling, AT&T’s General Counsel David McAtee said: “The court’s decision could hardly have been more thorough, fact-based, and well-reasoned. While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances.  We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”

This is absurd.  I hope the judge throws the DOJ’s attorneys out on their ears.  “And never come back!”

--JPMorgan Chase kicked off the Wall Street earnings with strong second-quarter results, reporting revenue of $27.7billion and earnings per share of $2.29, up 6% and 26% from a year ago, respectively. Both figures beat consensus, but not by enough to satisfy traders.

Chairman and CEO Jamie Dimon said: “We see good economic growth, particularly in the U.S., where consumer and business sentiment is high...Capital markets were open and active, leading to strong fee and markets revenue performance.”

Markets revenue was up 16%, while fixed income markets trading revenue climbed 12%. Equities trading revenue jumped 24%.

--Citigroup reported its second-quarter profit rose 16%, boosted by growing loans and flat expenses.  CFO John Gerspach said in a call with analysts that trade disputes have dampened the overall market, but haven’t affected the bank.

Revenue rose 2% from a year ago to $18.47 billion, slightly below expectations. Earnings beat at $1.63 per share.

But shares in Citi and JPMorgan struggled on Friday after their reports amid concerns the Fed’s interest rate hikes will squeeze profit margins, the shares already struggling with the flattening yield curve.

And there are signs higher borrowing costs are hurting demand for some loans.  Fees at Wells Fargo from mortgage banking fell a third from a year ago to $770 million.

--Speaking of Wells, its profits dropped 11% in the second quarter, as it struggles to restore its reputation as a reliable financial performer almost two years after a scandal over fake accounts erupted at the bank.  Revenues also declined 3% to $21.6bn.

--A jury in St. Louis found Thursday that Johnson & Johnson should pay $4.69 billion in damages to 22 women and their families who blamed ovarian-cancer cases on asbestos in the company’s iconic baby powder, the biggest single verdict in such cases so far.

The jury awarded $550 million and later added $4.14 billion in punitive damages against the company for allegedly failing to warn that its talcum powder raised the risk of ovarian cancer.

Needless to say J&J plans to appeal what it says was the product of a “fundamentally unfair process.”

J&J shouldn’t have to worry about the punitive damages, which no way stand, with the trial judge able to reverse them.  But the $550 million?  The company has been fighting more than 9,000 talcum-powder lawsuits with mixed results.

The plaintiffs’ lawyers argued during the six-week trial that asbestos fibers mixed with the talc used to make Johnson’s Baby Powder entered the bodies of women who used the product every day for decades for feminine hygiene.  Six of the plaintiffs had died.

The FDA says asbestos has not been an ingredient since the 1970s.

By the way, I didn’t know that Mark Lanier was the lead counsel for the women and their families, a name that should be familiar to some of you as he has been the lead on many high-profile cases of this sort.  Imagine his ‘take.’

--Twitter announced it would begin removing tens of millions of suspicious accounts from users’ followers on Thursday, as Twitter takes aim at a pervasive form of social media fraud.  It is expected that the company’s move will result in about a 6 percent drop in follower count.

The New York Times points out, “Officials at Twitter acknowledged that easy access to fake followers, and the company’s slowness in responding to the problem, had devalued the influence accumulated by legitimate users, sowing suspicion around those who quickly attained a broad following.”

The market for fakes was hurting Twitter with advertisers, which are relying on social media “influencers.”  Last month, Unilever, which spends billions on advertising, announced it would no longer pay influencers who purchased followers.

The Washington Post last weekend reported that Twitter suspended more than 70 million accounts in May and June, and the pace has continued this month.

So with all the above, the shares in Twitter fell over fears of a decline in the number of monthly users in the second quarter.  Previously, Twitter has also estimated that fewer than 5 percent of the active users are fake or involved in spam, and that fewer than 8.5 percent use automation tools that characterize the accounts as bots.  Many legitimate accounts are bots, such as to report weather or seismic activity.

Monday, Twitter’s CFO, Ned Segal, attempted to rebut the Post report claiming user growth was at risk because Segal said that most deleted accounts had not been previously included in its reported metrics, either because they had not been active for more than a month or been identified as problematic when opened.

Early on, it was reported President Trump lost about 400,000 of his 53.4 million followers, while Barack Obama lost 2 million.

And you had the likes of Katy Perry lose 3 million of her 110 million, and Kim Kardashian, 1.7 million of her 60.2 million.  Even Twitter CEO Jack Dorsey lsot 200,000 of his 4 million followers.  [I lost 25.]

This will be a huge issue on Twitter’s earnings call, July 27.

--Ford Motor Co. said sales in China plunged 26% in the first half of 2018 compared with the same period last year, with little relief in sight given worsening trade tensions.

China’s auto market overall grew 5.6%, according to the China Association of Automobile Manufacturers, with sales reaching 14.1 million vehicles for the first six months.

Ford sold just 400,000, the company’s worst showing for the first half since 2012. General Motors, however, reported sales in China rose 4% to 1.84 million.

[The one vehicle Ford was having success with, the Lincoln premium brand, is exported from the U.S. and now subject to a 40% tariff imposed by China last week in retaliation for new U.S. tariff measures.]

The concern now is for a backlash such as those suffered by Japanese and Korea when Chinese consumers turned against them due to various conflicts between Beijing and Tokyo, and Beijing and Seoul.  Thus far, there hasn’t been a backlash against U.S. products in China, but this seems inevitable if the trade tensions worsen.

Ford and GM build most of their cars for the Chinese market through joint ventures with domestic partners, thus avoiding tariffs. GM doesn’t export cars to China to the extent Ford does, so its sales are more directly tied to the overall Chinese market.

Electric-vehicle sales in China grew 112% to 412,000, boosted by government subsidies and other policies.

--Which brings us to Tesla, which on Tuesday said it would build a wholly owned auto plant in the Shanghai, the company’s first factory outside the United States. The move would double the size of the car-maker’s global manufacturing.

The deal was announced at the same time that Tesla announced price hikes in China on U.S.-made vehicles it sells there to offset the cost of tariffs imposed by the Chinese government.  [Ford, by the way, is picking up its costs, for now.]

Separately, Shanghai will accelerate efforts to cancel restrictions on foreign investment in the auto manufacturing sector, a government official said, a day after the Tesla announcement.

Earlier this year, China said it would scrap foreign ownership caps for companies making fully electric or plug-in hybrid vehicles in 2018 and all automotive ventures by 2022.  Heretofore, China has capped foreign ownership in the sector at 50 percent.

But with all the hoopla over the Tesla announcement, there was no comment from Shanghai officials on the size of the project or when construction of a plant with the capacity to produce 500,000 Tesla battery electric cars a year would start.  Plus the cost of such a plant would be well over $1 billion, according to industry officials, like multiples of $1 billion.

As Russ Mitchell of the Los Angeles Times reported, it was back in 2015 that Elon Musk told the Chinese news media Tesla would begin producing cars in China “within three years.”  Three years later, no plant has been built.

So the Shanghai announcement is highly suspect. Tesla claimed Tuesday that production could begin in about two years, after it obtained “all the necessary approvals and permits” to proceed. There was also zero talk of money. And analysts note that while Musk earlier said Tesla doesn’t need to sell more stock or take on more debt this year, the Shanghai plans are impossible without massive new capital investment.

--Pfizer Inc. said it would defer some recent drug-price increases, reversing course after criticism from President Trump.  Pfizer backtracked after CEO Ian Read had what the company described as extensive talks with the president Tuesday about the July 1 price increases.

Pfizer said the prices would be rolled back to pre-July 1 levels and remain in effect until the president had a chance to put his plans to curb high drug prices in place or the end of the year, whichever is earlier.

Health and Human Services Secretary Alex Azar said in a statement that the president “has made it clear that Americans are paying too much for prescription drugs and that the price increases must stop.”

--Shares in PepsiCo had their best day in nearly a decade after the company appeared to be arresting the decline of its core, domestic beverages business.    Pepsi reported revenue that was in line, with earnings above expectations for the quarter ending June 16, with the snack business continuing to perform well, up 4% in terms of the Frito-Lay North American segment, while North American Beverages declined 1%, which was better than previous quarters.

But overall, some wondered if the shares deserved the price spike, given that growth, or slower declines, is not that exciting.  We’ll see how some of its new sugar-free beverage lines do down the road.

--Starbucks, which doles out more than 1 billion straws a year, says it will phase out single-use plastic straws from its stores by 2020, replacing them with recyclable “strawless lids,” as well as straws made from biodegradable materials.

So the no-plastic-straws movement that has gained momentum in recent years picked up a rather large retailer to commit to eliminating the straws that are used in more than half of its beverage sales, cold drinks.

I am totally on board with this movement. 

Starbucks CEO Kevin Johnson said in a statement: “This is a significant milestone to achieve our global aspiration of sustainable coffee, served to our customers in more sustainable ways.”

--Papa John’s founder John Schnatter resigned as the company’s chairman on Wednesday night after fallout over his use of the n-word during a conference call.

Forbes reported earlier in the day that Schnatter used it on a call in May.  The call was specifically designed as a role-playing exercise to prevent future public-relations disasters.

“Colonel Sanders called blacks n-----s,” Schnatter said, before complaining that Sanders never faced public backlash.

Schnatter had already stepped down as CEO in January after he caused controversy by criticizing the NFL over their national anthem policy.  In November, citing the status of Papa John’s as a major advertiser during NFL games and corporate partner of the league, Schnatter linked his company’s earning to the NFL’s sagging TV ratings. Schnatter, a major contributor to the Trump campaign, said the NFL should have nipped the protests in the bud a year and a half earlier, claiming, “The ratings are going backwards because of the controversy, and so the controversy is polarizing the customer, polarizing the country.”

The company had to issue an apology, and later arranged for the agency to help “manage Schnatter’s comeback,” according to Forbes.  Then it blew up in their face.

Schnatter said in a statement Wednesday, “News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true. Regardless of the context, I apologize. Simply stated, racism has no place in our society.”

Major League Baseball suspended its partnership with the company Wednesday.  Today, the University of Louisville said it will change the name of Papa John’s Cardinals Stadium, its 65,000-seat football facility. 

--Kentucky’s distillery industry employs some 17,500, vs. 4,000 a decade ago, according to the Distilled Spirits Council.  Eric Gregory, head of the Kentucky Distillers Association, said recently imposed tariffs on bourbon by the EU, Mexico and Canada, will hit the industry hard, just as it is undergoing a renaissance, partly driven by more women drinking bourbon, in addition to growing demand across Europe.  [FT]

--Soybeans have been trading at a near decade low of about $8.40-$8.50 a bushel on trade concerns with China.  According to the American Soybean Association, farmers break even at $9.50, with demand and a bumper crop last year sending the price to $10.50. 

But with the tariffs now in place, China will be scaling back purchases of U.S. soybeans, after scooping up more than half of U.S. soy exports in recent years, and the Department of Agriculture on Thursday projected stocks of soybeans for the 2018-19 crop year at a would-be record of 580 million bushels, around 50% higher than its previous estimate and more than analysts expected.  Soybean exports next year will fall by 11%, the agency said.  The price touched $8.26 a bushel on the Chicago Board of Trade.

--Personal-computer shipments in the second quarter had the strongest showing in six years, driven by stronger demand from business customers, according to preliminary data from research firms Gartner and International Data Corp. The two account for the market slightly differently.

Overall, Gartner said world-wide PC shipments totaled 62.1 million units in the second quarter, up 1.4% from a year earlier.

In the U.S., PC shipments totaled 14.5 million units, up 1.7%, year-over-year, which Gartner said marked a return to growth after six consecutive quarters of declines.

IDC said world-wide shipments reached 62.3 million units, up 2.7% from a year earlier.

--Delta Air Lines Inc. said it will boost fares and add fewer flights than planned, as carriers contend with a surge in fuel prices that is looming over flush times for the industry.

Delta posted second-quarter earnings than topped forecasts, with record revenue of $11.8 billion, which offset a $578 million jump in its fuel bill, up 33% from a year earlier. The airline said its fuel bill for all of 2018 would be $2 billion higher than 2017.

CEO Ed Bastian said, “With higher fuel prices you’re going to expect to see ticket prices go up as well.”

Delta posted a profit of $1.03 billion for the quarter, compared with $1.19 billion, a year earlier.

--The American Customer Satisfaction Index’s Restaurant Report found Chick-fil-A was the favorite, again, in the “Limited-Service Restaurants” category for 2018, with Panera Bread second.

McDonald’s was last among 18, measured on food accuracy, waitstaff behavior, food quality, beverage quality, restaurant cleanliness and layout, among other items.

Among “Full-Service Restaurants,” Texas Roadhouse was No. 1, Denny’s last.

Gee, I like McDonald’s and Denny’s...not that I’ve been to the latter recently.

--Facebook CEO Mark Zuckerberg surpassed Warren Buffett to become the world’s third-richest person, trailing Amazon’s Jeff Bezos and Microsoft founder Bill Gates.

Zuckerberg is worth $81.6 billion, as of a few days ago, which sucks given all we know now.

--Television ratings have been down for the World Cup, largely due to no U.S. team in the competition, but also because of the fact the games have been broadcast at 10:00 a.m. and 2:00 p.m. ET; not exactly ideal.  21st Century Fox is thus expected to lose money on the tournament, with Fox having spent $900 million on soccer rights through the 2026 World Cup.

But Fox told the Wall Street Journal that ad revenue for the WC is on pace to beat the 2014 figure.  Yes, viewership is off about 30% over 2014 (which was in a favorable time zone, Brazil), but we’re still talking 2.6 million on average through the quarterfinals.  And, actually, the quarterfinal matches on Fox scored higher ratings than the corresponding games in the 2014 tournament.

Telemundo, which has the Spanish-language rights, is also going to lose money, but the network said its ratings are new highs.

Separately, I think Fox has done an outstanding job with its coverage.

Foreign Affairs

Russia: As he left the White House on Tuesday, on his way to meetings with foreign leaders in Europe, President Trump made an assertion. The member nations of NATO have “not treated us fairly” because “we pay far too much and they pay far too little,” he said. As for Britain, where he headed on Thursday, “that’s a situation that’s been going on for a long time” and, following the resignations of senior British officials on Monday, the country is “in somewhat turmoil.”

And then Trump goes, “And I have Putin,” referring to Monday’s summit.  “Frankly, Putin may be the easiest of them all. Who would think? Who would think?”

Trump then said of Putin, “He’s a competitor. He’s been very nice to me the times I’ve met him. I’ve been nice to him. He’s a competitor.... Somebody was saying, is he an enemy?  He’s not my enemy.  Is he a friend? No, I don’t know him well enough. But the couple of times I’ve gotten to meet him, we get along very well.”

Philip Bump / Washington Post: “There are two things about that statement that are, for lack of a better word, staggering.

“The first is that Trump frames the interaction with Putin almost exclusively in personal terms.  Putin is a competitor to him.  He is not Trump’s personal enemy and, who knows!  Maybe he and Putin can eventually be personal friends. One of the first things that mediocre middle managers say their first day on the job is that they aren’t there to be employees’ friends; it’s all about the job.  Trump’s telling Putin, in short, that Russia’s relationship with the United States depends almost entirely on Putin being friends with Trump. For a Russian leader with few scruples and little to lose, that kicks open a very big door of opportunity.

“The second thing about Trump’s statement is how his framing of the relationship as personal undercuts his own case.

“Why isn’t Putin a friend or an enemy? Because Trump [doesn’t] know him well enough. Well, the United States knows Putin quite well, and both historians and intelligence analysts can describe in great detail the relationship between our two countries and Putin’s efforts to undercut American geopolitical standing. America knows Putin well, but Trump actively chooses to set that knowledge aside. Putin looks the way Trump thinks a leader should look, and Trump clearly admires that.  That Putin’s approach to leadership is broadly antithetical to how American leadership is expected to behave is an important but ignored complication.”

David Ignatius / Washington Post

“As the Helsinki summit approaches, President Trump appears to be on the verge of acquiescing to parts of the belligerent strategy and behavior that Moscow has been pursuing for decades.

“The summit will be a culmination of Trump’s often-proclaimed eagerness for better relations with Russian President Vladimir Putin.  ‘He’s not my enemy. And hopefully someday maybe he’ll be a friend,’ Trump said Thursday during a news conference in Brussels. Critics ask: At what cost, and for what reason?

“Trump obviously relishes this latest installment in the reality-television series that is his presidency. The danger is that the summit will implicitly condone Putin’s brutal tactics in Ukraine, Syria, the European Union and the United States – and foster further discord within the NATO alliance, a Russian goal for nearly 70 years. Trump should consider the possibility that ‘Helsinki’ could someday become a symbolic name for appeasement, like Munich in 1938 or Yalta in 1945.

“Russia’s new diplomatic ascendancy is a Kremlin dream fulfilled. When I was in Moscow last summer, Sergey Karaganov, the head of Russia’s Council on Foreign and Defense Policy, bluntly proclaimed Russia’s hope to dissolve the ‘liberal international order’ symbolized by NATO and the other institutions that long sustained American power.  ‘That order we did not like, and we are doing away with it,’ he said.

“ ‘Putin is about to get absolution,’ fears Tom Donilon, who was a national security adviser for President Barack Obama. In Trump’s enthusiasm for reconciliation with Russia, he seems unaware that he may be seen as ratifying a long string of malign Russian goals and actions, including:

“Uncoupling the United States from its allies in Europe.  Trump’s recent sideswipes at a ‘captive’ Germany and an ‘unfair’ NATO deepened European worries that, in a showdown with Russia, the United States wouldn’t risk nuclear war to defend its allies....

“Sowing political division in America and Europe, thereby undermining democracies....

“Dominating the political future of Syria and gaining new leverage across the Middle East.  With Trump’s acquiescence, Russia’s successful military intervention to rescue Syrian President Bashar al-Assad has made the Kremlin the new indispensable power in the region – simultaneously maintaining close relations with Israel, Iran, Turkey, Saudi Arabia, the United Arab Emirates and Jordan.    One little-noted sign of Russia’s new influence is its partnership with Saudi Arabia in shaping global oil production and prices...

“Annexing Crimea and destabilizing Ukraine...

“Hacking into U.S. nuclear power plants and other energy facilities in what was described as a ‘multistage intrusion campaign’ in a March 15 report by the FBI and the Department of Homeland Security....

“Poisoning an ex-Russian spy living in Britain, using a deadly nerve agent called Novichok...

“Improving relations with Russia is a worthy goal – so long as it doesn’t undermine security or reward bad behavior. Putin is a bully who is emboldened by his every success. You could say he and Trump were made for each other.”

Separately, Defense News reported this week that Russia has been making improvements to the aforementioned Baltic Sea exclave of Kaliningrad, as satellite photos show.  The changes involve a bunker facility often used to house artillery.  In June, a separate analysis of satellite photos by the Federation of American Scientists showed Russia was upgrading nuclear-weapons bunkers there.

I wrote years ago about the potential for nukes in Kaliningrad, and in 2016, the Russians deployed the SS-26 Iskander, a nuclear-capable missile with a range of more than 400 kilometers, to Kaliningrad.

Finally, on a totally different topic, President Putin said on Friday that his country’s hosting of the World Cup had helped debunk stereotypes about it.

And it’s true that security concerns, such as my own, have not been borne out, ditto hooligan violence and racism on any broad scale.

Putin said in an interview, “People have seen that Russia is a hospitable country, a friendly one for those who come here.”

Personally, Russia has the least friendly bartenders I’ve ever encountered. And at the end of the day....

North Korea: On July 12, President Trump revealed a totally worthless letter that Kim Jong Un sent him, dated July 6, which reads in part:

“I deeply appreciate the energetic and extraordinary efforts made by Your Excellency Mr. President for the improvement of relations between the two countries and the faithful implementation of the joint statement.

“I firmly believe that the strong will, sincere efforts and unique approach of myself and Your Excellency Mr. President aimed at opening up a new future between the DPRK and the U.S. will surely come to fruition.”

Trump tweeted that this letter helped show “Great progress is being made!”

But the letter was before Secretary of State Mike Pompeo’s failed mission to Pyongyang last week, which included being blown off by Kim himself.

And then Thursday, North Korean officials did not show up for a meeting with Americans at the inter-Korean border, at Panmunjom, to discuss the return of remains of United States soldiers killed in the Korean War, officials said.

At the summit with President Trump, Kim committed to repatriating American soldiers’ remains.  Secretary Pompeo said last week that working-level talks would be held Thursday...and then they weren’t.  The North Koreans were a no show.

President Trump has been lying continuously that the remains of some 200 to 250 American servicemen had “already (been) sent back, or are in the process of being sent back,” but there has been no repatriation.

Experts also believe the process is likely to take years. Remains would be brought to South Korea and then transferred to Hawaii, where painstaking forensic work would be carried out to identify them.

Meanwhile, Pompeo claimed his discussions last week in Pyongyang had been productive, though North Korea accused him of making a “unilateral and gangster-like demand for denuclearization,” while satellite photos have shown that North Korea has been expanding a key missile manufacturing plant and upgrading its nuclear infrastructure at Yongbyon.

Pompeo said over the weekend in Tokyo that Kim remained committed to a “broad definition of denuclearization” that would proceed “in parallel” with North Korea’s demands, including a “peace regime” that formally ends the 1950-53 Korean War and provides the North with security guarantees.

Benny Avni / New York Post

“Confused by North Korea’s sudden hard line? Look to China for answers.

“Last week Pyongyang reverted to taunts, calling Mike Pompeo’s trip there ‘regrettable,’ saying America has a ‘gangster-like mindset’ and denying the secretary of state a meeting with Dear Leader, who apparently was obliged to inspect a potato farm instead.

“Why?  As Sen. Lindsey Graham told ‘Fox News Sunday,’ I see China’s hands all over this,’ adding, ‘There’s no doubt in my mind that it’s the Chinese pulling the North Koreans back.’

“President Trump tweeted Monday his ‘confidence’ that ‘Kim Jong Un will honor the contract we signed, even more importantly, our handshake.’  (No contract, of course, was signed at the end of last month’s Singapore handshaking session.)

“Then, Trump added: ‘China, on the other hand, may be exerting negative pressure on a deal because of our posture on Chinese Trade-Hope Not!’

“Graham and Trump are right – and it’s about more than trade.

“Over the weekend two U.S. Navy destroyers sailed the Taiwan Straits. A Navy official called the exercise ‘routine’ but a Beijing mouthpiece, the Global Times, opined it was a ‘psychological game.’:  America, according to the paper, is sending ‘political signals.’

“Psychological games? Signals? That’s President Xi Jinping’s bailiwick, and he’s unhappy with America these days. He’s used to world leaders asking  ‘how high’ when he asks them to jump. Trump doesn’t.

“Airlines around the world have by now largely changed their websites and ticketing apps so all flights to Taiwan are labeled ‘Taipei, China.’  Beijing demanded the change as part of a renewed campaign pressuring countries to quash any hint of Taiwanese national aspirations.

“Beijing sees the democratic island nation as one of its provinces. Anyone trying to treat Taiwan differently is threatened with cutting off access to China’s lucrative markets. However, U.S. airlines, under pressure from Washington and almost alone in the world, still list Taiwan as a destination.

“So Xi can’t be happy.

“Meanwhile, Trump has also been threatening to, as he sees it, level the trade playing field. Washington imposed a 25 percent tax on $34 billion worth of Chinese imports on Friday. To illustrate his point, he went after the World Trade Organization’s definition of China as a ‘developing’ nation.  ‘Does anybody think this is fair?’ he tweeted.

“It isn’t.  In fact, China is acting globally more like a nasty feudal lord than an ambitious serf striving for equality. And not only in Taiwan, or the rest of China’s ever-expanding backyard.

“Beijing is working hard to export state capitalism. Even in Europe some wonder these days whether China offers a better governing model than our messy and chaotic democracies.

“When it encounters obstacles to its aspirations of dominance, China uses all levers of power to get its way – and that’s likely how, over the weekend, a Beijing client state, North Korea, delighted Pompeo’s critics by doing a 180 on its polite-host act and stopped pretending it’s committed to true denuclearization.

“The usual suspects, including some in the Trump administration, will now push the president to appease Xi: If you avoid confrontation, negotiate your proposed tariffs away and forgo big military maneuvers in Beijing’s backyard, maybe North Korea will come back to the table ready to deal.

“That would be a big mistake. Under Xi, China has shown remarkable hostility to goodwill gestures. When it smells weakness, it responds by upping the pressure.

“In fact, Trump may have been a bit too conciliatory toward China, treating Xi as a possible partner and hoping he’d help to denuclearize North Korea for us.

“Instead, Beijing is now back to its old ways. Once again, Chinese banks and companies are brazenly violating UN Security Council sanctions. China had supported imposing those sanctions when Washington threatened to blacklist Chinese companies dealing with Pyongyang.  It ceased to cooperate when these sanctions were waived to advance North Korean diplomacy.

“North Korea is one of those pesky problems that need addressing. Trump has, rightly or not, gone all-in trying to negotiate it away. But North Korea is merely a tail, while China is the menacing wolf wagging it.

“And he’s at the door.”

China: This is classic China. From BBC News:

“Cut-price Chinese home insulation is being blamed for a massive rise in emissions of a gas, highly damaging to the Earth’s protective ozone layer.

“The Environmental Investigations Agency (EIA) found widespread use of CFC-11 in China, even though the chemical was fully banned back in 2010.

“Scientists have been extremely puzzled by the mysterious rise in emissions. But this report suggests the key source is China’s home construction industry.  Just two months ago, researchers published a study showing that the expected decline in the use of CFC-11 after it was completely banned eight years ago had slowed to a crawl.

“There were suspicions among researchers that new supplies were being made somewhere in East Asia.

“Rumors were rife as to the source. There was a concern among some experts that the chemical was being used to secretly enrich uranium for use in nuclear weapons.

“The reality it seems is more about insulation than proliferation....

“Researchers from the EIA, a green campaign group, contacted foam manufacturing factories in 10 different provinces across China. From their detailed discussions with executives in 18 companies, the investigators concluded that the chemical is used in the majority of the polyurethane insulation the firms produce.

“One seller of CFC-11 estimated that 70% of China’s domestic sales used the illegal gas.  The reason is quite simple – CFC-11 is better quality and much cheaper than the alternatives.

“The authorities have banned CFC-11 but enforcement of the regulation is poor.”

Iran / Syria: Prime Minister Benjamin Netanyahu met with Russian President Putin in Moscow on Wednesday for a sixth time in nine months, as Israel demands all Iranian forces leave Syria – a demand Russian Foreign Minister Sergey Lavrov has already deemed completely unrealistic.

Russia has told Israel on several occasions that it can’t make Iran leave Syria completely; the most it can do is try to get Iranian forces and their affiliated militias, including Hezbollah, to move a significant distance away from the Syrian-Israeli border in the Golan Heights.  But Russia isn’t even keeping its promise to secure a partial withdrawal of Iranian forces.

Various reports say Iran and Hezbollah were involved in the Syrian army’s conquest of the Daraa district (in the southwest) over the past few days.  Plus the Syrian army, which now controls most of the border between Syria and Jordan, including the key Naseeb border crossing (vital to Jordan and commerce), has entered rebel-controlled areas in violation of an agreement it reached just last week.

According to the New Yorker magazine this week, Saudi Arabia, the UAE and Israel have suggested to President Trump that America offer to cancel the sanctions it imposed on Russia four years ago, following the annexation of Crimea and the invasion of western Ukraine, in exchange for Russian action to remove Iranian forces from Syria. [Zvi Bar’el / Haaretz]

But Iran has made it clear it is staying in Syria.  And this week Syrian state TV accused Israel of striking Syria’s T4 Airbase near Homs just hours after a senior Iranian official said Iran would maintain its military presence in the country.    The number of casualties was unknown.

Supreme Leader Ayatollah Ali Khamenei said the time when Iran’s enemies could “hit and run” was over.

On the issue of Iran and U.S. sanctions that are to go into effect Nov. 4 against countries buying Iranian oil, ministers from Britain, China, France, Germany and Russia met their Iranian counterpart in Vienna last weekend for the first time since President Trump left the nuclear accord  in May, but the talks did not go well, as all the sides agreed to reconvene the joint commission at a future date in an attempt to save the deal.

But it is up to Iran whether they want to stay in or not. August is the deadline for implementing any economic package to compensate Iran for the U.S. sanctions, which begin going into effect more broadly then.

Turkey: The Erdogan government dismissed thousands of state employees under an emergency decree for alleged links to terrorism groups.

Over 18,000 people, including nearly 9,000 police officers, 6,000 members of the military and hundreds of teachers and academics were sacked. Their passports will be cancelled. 

Turkey has been under a state of emergency for nearly two years, after a coup attempt in July 2016, with the government blaming a U.S.-based cleric, Fethullah Gulen, in exile in eastern Pennsylvania, for orchestrating the coup, with Turkey sacking or arresting people suspected of links to him. Gulen denies the allegations, but more than 130,000 people in all have been dismissed since ’16.

Kenya: The people are outraged that 20 MPs traveled to watch the World Cup in Russia at the taxpayers’ expense, catching four games, including the final, in a two-week trip estimated to be costing hundreds of thousands of dollars. The MPs caught the attention of Kenyans when they posted selfies in a stadium.

Sports Minister Rashid Echesa told the BBC he had authorized only six MPs to travel, to help understand how to organize such big events.

Kenya never qualified for a World Cup final and is currently ranked 112 out of 206 nations by the world governing body, Fifa.

It has submitted a bid to host the 2023 World Athletics Championships.

Random Musings

--Presidential tracking polls....

Gallup: 41% approval for President Trump, 56% disapproval (Jul. 8)
Rasmussen: 46% approval, 53% disapproval (Jul. 13)

--Murders have increased in New York City so far this year, though overall crime continues to fall to historic lows, the NYPD said Thursday, with 147 murders between Jan. 1 and June 30, an increase of 85 from the same period in 2017.  In 2017 there were 136 murders through June and 292 for the entire year – the lowest per-capita murder rate since the 1950s.

Rapes were up a large 33% the first half of the year, with police attributing the rise to victims feeling more comfortable reporting the cases.

But overall crime, from murder and rape to robbery, felony assault, and grand larceny, hit a new low, down 2%.

The murder rate peaked in 1990 at 2,200 during the crack epidemic.

--President Trump’s chauffeur of more than 25 years is suing him for unpaid overtime, describing him in court documents as showing “an utterly callous display of unwarranted privilege and entitlement.”

Noel Cintron, 59, is suing the Trump Organization in court in Manhattan for 3,300 hours of overtime that he says he worked in the past six years, totaling around $178,000.

Cintron was Trump’s driver until the Secret Service took over in 2016.

He also accuses Trump of raising his salary only twice in 15 years – and clawing the second raise back by stopping his health insurance that the Trump Organization was paying for.  In 2006, he got a raise from $62,700 to $68,000, and in 2020 he was given his second raise, to $75,000 – but on the condition he surrendered his health benefits, which Cintron alleges saved the company nearly $18,000 per year.

--The Wall Street Journal’s Valerie Bauerlein reported that “Nearly half of Miss America’s board has quit or have been forced to resign in the wake of the organization’s decision to eliminate the swimsuit competition from the contest, and 22 state pageant leaders are seeking to oust Chairwoman Gretchen Carlson over concerns about the pageant’s new direction.”

I’d oust her....this was easily one of the stupidest moves of any kind this year (including the New York Mets’ hiring of Mickey Callaway as manager).

Ms. Carlson, a former Miss America and leader of the #MeToo movement, said that in dropping the evening-gown and swimsuit competitions and replacing them with an extended onstage interview, it was important to make women’s voices heard during a “cultural revolution in our country.”

So here’s what it comes down to for the Miss America Organization.  It needs the television revenue, having lost $575,000 in 2016 – the latest available figures – on revenue of $9.8 million.

A key to the debate is the opinion of the close-knit group of former Miss Americas.  As Ms. Bauerlein of the Journal notes, “29 of whom released a Saturday statement supporting Ms. Carlson and her team. But dozens of others didn’t sign on, said Ericka Dunlap, Miss America 2004.  ‘This much dissension clearly means that we need to make some major changes or we will not have Miss America,’ she said.”

Adios, girls.

--The feel-good story of the year concluded successfully with the rescue of 12 members of a Thai youth soccer team (ages 11-16) and their coach from a large cave complex in northern Thailand, an ordeal stretching more than two weeks, and wrapping up far sooner, with three rounds of rescues concluding months before we were first told could be the case once the group was discovered.

For 10 days, the Wild Boars soccer squad survived deep underground, their food and drinking water diminished, before British divers found them on July 2.

But as a New York Times story by Hannah Beech noted, it was Adul Sam-on, 14, who played a key role.  “Proficient in English, Thai, Burmese, Mandarin and Wa, Adul politely communicated to the British divers his squad’s greatest needs: food and clarity on just how long they had stayed alive.”

For Thailand, this was a rare cause for cheer as the country has endured four years of military rule following an army coup in 2014.  The nation has been divided, largely rural vs. urban.  And three of the trapped soccer players, as well as their coach, Ekkapol Chantawong, are stateless ethnic minorities.

As Ms. Beech put it: “Their presence undercuts a Thai sense of nationhood that is girded by a triumvirate of institutions: the military, the monarchy and the Buddhist monastery.”

And now Thailand’s military has been handed an opportunity to burnish its image.  It was wonderful throughout this ordeal.  Thai Navy SEAL divers became the face of the operation, and the nation will always remember the retired Thai SEAL diver, Saman Gunnan, 38, who died during the effort to bring air tanks into the cave ahead of the rescue.

It’s an interesting dynamic, since it’s the military that has been delaying elections and a restoration of democracy.

The monarchy also benefited from the outpouring of support for the 13 members of the trapped team.

Initially, the boys’ coach was thought to be criminally liable for the seemingly reckless adventure, but now he’s a hero...and he deserves the accolades for keeping them together all that time...and safe.  Ekkapol had training as a Buddhist monk and he taught the boys how to meditate so they could pass the time without stress.

We were witnesses to the very best of humanity this week.  It was a needed shot in the arm for all of us and we wish Thailand the best as a nation going forward...and full health and normalcy for the team.

---

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

God bless America.

---

Gold $1241
Oil $70.58

Returns for the week 7/9-7/13

Dow Jones  +2.3%  [25019]
S&P 500  +1.5%  [2801]
S&P MidCap  +0.3%
Russell 2000  -0.4%
Nasdaq  +1.8%  [7825]

Returns for the period 1/1/18-7/13/18

Dow Jones  +1.2%
S&P 500  +4.8%
S&P MidCap  +5.0%
Russell 2000  +9.9%
Nasdaq  +13.4%

Bulls  52.4
Bears  18.5 [Prior week, 47.1 / 18.6]

Have a great week.

Brian Trumbore

 



AddThis Feed Button

-07/14/2018-      
Web Epoch NJ Web Design  |  (c) Copyright 2016 StocksandNews.com, LLC.

Week in Review

07/14/2018

For the week 7/9-7/13

[Posted 11:30 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 1,005

I thought President Donald Trump’s performance this week was disgraceful, “atrocious,” as former Republican Congressman Charlie Dent of Pennsylvania described it this afternoon on CNN, though no doubt, many of Trump’s supporters, not concerned with the facts, such as his tirades on NATO members’ defense spending (which is not the same as keeping their NATO contributions up to date), will love that the president remains the great disruptor, hell-bent on toppling the West’s institutions.

And I suppose many of his supporters are not concerned in the least about Monday’s one-on-one, no one else in the room but interpreters, ‘summit’ with Vladimir Putin, aka, Vlad the Impaler.

The prospects for what could take place Monday, which we’ll eventually find out through Putin’s “read”, not Trump’s, are deeply troubling.

Especially after Friday’s noon bombshell that 12 Russian intelligence officers were charged with hacking the Democratic National Committee and the Clinton presidential campaign; the indictments part of the special counsel’s investigation into Russia’s interference in the 2016 presidential campaign.

Russia, and Putin, continue to deny they had any role in the hacks that preceded the election.

Deputy Attorney General Rod Rosenstein discussed the charges during a news conference at the Justice Department, at the same time President Trump was meeting with Queen Elizabeth, which was rich.

Rosenstein said: “Free and fair elections are hard fought and contentious, and there will always be adversaries who work to exacerbate domestic differences and try to confuse, divide and conquer us.

“So long as we are united in our commitment to the shared values enshrined in the Constitution, they will not succeed.”

The 29-page indictment is the most detailed accusation by the American government to date of the Kremlin’s involvement, and as I go to post the big question is how President Trump will handle it Monday.

Of course we’ll get a clue through Twitter before then, as Trump relaxes at his golf course in Scotland before bopping over to Helsinki.

I mean, imagine, President Trump had been made aware of the looming indictments by Rosenstein before he flew to Brussels for the NATO summit, and then the U.K., yet there was the president, today, in his press conference with Prime Minister May, again calling out the ‘fake news’ media and the ‘witch hunt.’

Trump is scheduled to hold a joint presser with Putin after their meeting and we’ll see if that comes off as planned.  The president needs to watch it. He is skating on incredibly thin ice.

Donald Trump continues to advance Vladimir Putin’s own foreign policy goals, which is sickening for me to even write.  Trump is playing with fire.

On to another week in....

Trump World...NATO...Kavanaugh

NATO and Helsinki

Trump started off the NATO summit on a defiant note, saying at a breakfast with Jens Stoltenberg, the NATO secretary general: “Many countries are not paying what they should, and, frankly, many countries owe us a tremendous amount of money from many years back. They’re delinquent, as far as I’m concerned, because the United States has had to pay for them.”

Then he singled out Germany for particularly sharp criticism, saying the country was “totally controlled by Russia” because of its dependence on imported natural gas. The United States spends heavily to defend Germany from Russia, he said, and “Germany goes out and pays billions and billions of dollars a year to Russia.”

Trump criticized Berlin for giving approval for Gazprom, the Russian energy titan, to construct the Nord Stream 2 pipeline through its waters, a $10 billion project.

“Germany is a captive of Russia,” Trump said. “I think it’s something that NATO has to look at.”

German Chancellor Angela Merkel, who grew up in East Germany, offered a reminder that she learned firsthand what it means to be a “captive” nation. Modern Germany, she said, is not one.

“I have experienced myself how a part of Germany was controlled by the Soviet Union,” she told reporters after learning of Trump’s comments.  Now “united in freedom,” she said, Germans “can make our own policies and make our own decisions.”

But as the Wall Street Journal opined:

“Mr. Trump’s suspicion of, if not hostility to, allies...could backfire. One rear-guard attempt to disrupt the pipeline would have the European Union extend its energy-market regulations to pipelines such as Nord Stream 2 when only one end touches EU soil.

“Supporters hope this regulatory burden would force Moscow to at least bear financial losses as a cost of its gas policy. Yet this anti-Nord Stream effort faces an uphill fight in Brussels, and Mr. Trump’s lobbying carries less weight than it would if Europeans weren’t now predisposed to distrust him on his overall commitment to NATO and trade.

“Bluntness is underrated as a diplomatic tool, and Berlin deserves its Trumpian embarrassment over its pipeline follies. The main regret over his comments is that he undermines their diplomatic impact with his many other, less helpful, fulminations on European affairs.”

Throughout the week, Trump kept tweeting:

“Billions of additional dollars are being spent by NATO countries since my visit last year, at my request, but it isn’t nearly enough. U.S. spends too much. Europe’s borders are BAD!  Pipeline dollars to Russia are not acceptable!”

“Presidents have been trying unsuccessfully for years to get Germany and other rich NATO Nations to pay more toward their protection from Russia.  They pay only a fraction of their cost. The U.S. pays tens of Billions of Dollars too much to subsidize Europe, and loses Big on Trade!”

“On top of it all, Germany just started paying Russia, the country they want protection from, Billions of Dollars for their Energy needs coming out of a new pipeline from Russia. Not acceptable!  All NATO Nations must meet their 2% commitment, and that must ultimately go to 4%!”

“What good is NATO if Germany is paying Russia billions of dollars for gas and energy?  Why are their (sic) only 5 out of 29 countries that have met their commitment? The U.S. is paying for Europe’s protection, then loses billions on Trade. Must pay 2% of GDP IMMEDIATELY, not by 2025.”

At a news conference on Thursday, Trump insisted NATO had agreed to increase their spending on defense, in fairness to the United States.

“They’re going to up it at levels that they’ve never thought of before.”

But other leaders denied that they’d made any significantly new pledges beyond what they’d agreed to in 2014, under some pressure from President Obama.  “No increase in spending,” Italy’s new prime minister, Giuseppe Conte, said of his country’s military budget.

French President Emmanuel Macron, in his own closing news conference, said NATO members generally had made no new commitments. He also said that Trump “never at any moment, either in public or in private, threatened to withdraw from NATO.”

The diplomatic confusion Trump caused among NATO allies left them more uncertain than before of the United States’ commitment and apprehensive about his get-together with Putin. At the close of the summit, Trump cast himself as the savior, yet he had created the crisis in the first place.

“Yesterday, I let them know I was extremely unhappy with what was happening. And now we’re very happy. We have a very powerful, very strong NATO – much stronger than it was two days ago,” Trump said at the closing news conference.

“After 2%, we’ll start talking about going higher,” he said.

A day after tweeting “What good is NATO?” Trump spoke in his most glowing terms ever about the alliance.  “I believe in NATO,” the president said.  “I think NATO is very important – probably the greatest ever done.”

Trump continued to falsely describe how NATO is financed, saying the U.S. pays for 90% of it.  He conflated each member-nation’s military spending with their much smaller contributions to the alliance’s administration, on which all members are current, according to NATO.

Again, the 2% Trump keeps referring to is the pledge to increase to that level by 2024, while NATO keeps its annual commitments to fund the NATO budget.  These are two totally different items.

That said, NATO admits on its website: “There is an overreliance by the alliance as a whole on the United States for the provision of essential capabilities, including, for instance, in regard to intelligence, surveillance and reconnaissance; air-to-air refueling; ballistic missile defense; and airborne electronic warfare.”

Earlier this week in a series of tweets, ailing Sen. John McCain (R-Ariz.), the chairman of the Senate Armed Services Committee, criticized Trump’s NATO “performance” and his softness toward Putin.

The president’s “misstatements and bluster,” McCain wrote, “are the words of one man.  Americans and their Congress still believe in the transatlantic alliance.”

So it was then on to the U.K. for talks with Prime Minister May, and in an interview with The Sun newspaper, Trump said May had mishandled Brexit negotiations, while calling her rival, Boris Johnson, who had just resigned as foreign minister over the prime minister’s handling of the Brexit talks, a “great prime minister.”

“I actually told Theresa May how to do it, but she didn’t listen to me” Trump said in the interview, in speaking of how May mishandled Brexit, adding her plan for it “is a much different deal than the one the people voted on.”

Trump also added she’d probably ended chances for a new trade deal with the U.S.  Her plan, he said, “will definitely affect trade with the United States, unfortunately in a negative way.”

The interview broke as the president was having dinner with Mrs. May Thursday night.  He added the impact of immigration on Europe “changed the fabric” of the continent.

“I think you are losing your culture.  Look around.  You go through certain areas that didn’t exist 10 or 15 years ago....I think what has happened to Europe is a shame. Allowing the immigration to take place in Europe is a shame.”

And Trump continued: “I think it changed the fabric of Europe and, unless you act very quickly, it’s never going to be what it was and I don’t mean that in a positive way.  So I think allowing millions and millions of people to come into Europe is very, very sad.”

The comments – an extraordinary intervention by a U.S. president in an allied country’s politics – came after the NATO summit dominated by Trump’s demands on spending.

Jens Stoltenberg, General Secretary of NATO / Wall Street Journal

“NATO was created in 1949 to ensure that none of us will ever have to live through another world war. The result of the alliance has been an unprecedented period of peace and security for the citizens of North America and Europe.

“The U.S. has had close allies and friends of NATO that no other world power can match. Together, the alliance’s 29 countries represent half the world’s economic and military might.

“But for all NATO has achieved, we cannot be complacent. Facing the most complex and dangerous security environment in a generation, we must invest more in our collective defense.  In an unpredictable world, we must do what is necessary to keep our nations safe....

“NATO’s credibility as an alliance – in each other’s eyes, and in those of our potential adversaries – relies on sharing the defense burden fairly. Ahead of our summit on July 11-12 in Brussels, I have been carrying that message with me every time I meet with allied leaders.

“Increased spending is only one part of the equation, however. Allies are also directing that money where it will matter. When NATO leaders signed on to the 2% guideline, they also pledged to put at least 20% of their defense budgets toward major new equipment, such as fighter planes, tanks and warships.   Accordingly, NATO countries have added $18 billion in spending on equipment since 2014.

“From the Balkans to the North Atlantic, from the Black Sea to the Baltic, American and European soldiers, sailors and airmen are working together through NATO to keep our nations safe. They do so because we have common interest, history and values, and because the ties that bind us run deep.

“That’s why NATO allies invoked Article 5, our mutual-defense clause, after 9/11 – the first and only time we have done so. It’s why hundreds of thousands of European and Canadian troops have served shoulder-to-shoulder with American soldiers in Afghanistan.  More than 1,000 of them have made the ultimate sacrifice.

“It’s no secret that there are differences among NATO countries on serious issues such as trade, climate change and the Iran nuclear deal.  But we have always managed to overcome our differences before. Two world wars and a Cold War have taught a simple yet powerful lesson: United, we are stronger and safer.”

Patrick Tucker / Defense News

“At Poland’s northeast border there’s only a narrow strip of inland border connecting it to NATO members Lithuania, Latvia and Estonia. It’s called the Suwalki Corridor and it has long been an object of concern for Western military leaders.

“To the west sits a unique spot of Russian territory, the exclave of Kaliningrad, a key military port on the Baltic Sea.  To the east is Belarus, a key Russian military ally.  On the eve of this week’s NATO summit, the former commanding general of U.S. Army Europe is issuing a new warning: cutting off that corridor could be how Russian President Vladimir Putin cuts off the Baltic states from the rest of NATO, possibly without firing a shot.

“ ‘Situated between Belarus and the Russian exclave of Kaliningrad, it serves as the only land link between NATO and its three Baltic members, Estonia, Latvia, and Lithuania,’ says a new report co-authored by retired Lt. Gen. Ben Hodges, scheduled for release on Monday by the Center for European Analysis, or CEPA....

“ ‘If Russian forces ever established control over this Corridor, or even threatened the free movement of NATO forces and material through it, they could cut the Baltic States off from the rest of the Alliance and potentially obstruct allied reinforcements advancing by land through Poland.’

“The significance of the corridor to NATO, and the unpredictability of Russian action, has Hodges worried. The idea of Russia actively invading Europe may seem far-fetched.  And it is, as we conceive of it.

“ ‘I don’t think that Russia intends to invade Europe as though its 1991. They don’t have the capacity to do that anymore. Especially with the 29 forces of NATO, it completely dwarfs them,’ said Hodges, who retired this year.

“But if you accept Putin’s goal is to destabilize the NATO alliance and convince some members or unaligned countries to join Russia’s sphere of influence, then it becomes easier to imagine Putin engineering some sort of crisis to make the alliance look impotent or irrelevant to its members’ security, and that’s what has Hodges worried.

“The Kremlin wants ‘a seat at the high table and they do that by undermining the alliance,’ Hodges said. “The way that they do that is show that the alliance cannot protect one of its members, show that we are too slow, that we can’t deter that sort of attack.  If you accept that premise, that they might do a limited attack to demonstrate that NATO cannot protect its members, that would create a problem.’....

“ ‘If they ever tried anything, they would do it asymmetrically so that they could achieve whatever they wanted to achieve before the alliance caught on,’ said Hodges.”

Which is exactly what happened in Crimea.  Remember the ‘little green men’?

Robert Kagan / Washington Post

“Human beings often choose self-delusion over painful reality, and so in the days and weeks to come, we will hear reassurances that the NATO alliance is in good shape. After all, there have been spats in the past – over the Suez crisis in 1956, Vietnam in the 1960s and ‘70s, missile deployment in the Reagan years and, of course, Iraq.

“American presidents have been complaining about shortfalls in European defense spending for decades.  President Trump is not wrong to criticize Germany’s pipeline deal with Russia. As for this week’s fractious summit, we are urged to focus on the substance, not the rhetoric. U.S. forces in Europe have been beefed up in recent years, and new plans are in place to resist Russian aggression. On the ground, the alliance still functions.

“All true, but unfortunately beside the point. Small troop deployments and incremental defense increases don’t mean much when the foundations of the alliance are crumbling – as they are and have been for some time. And pointing to previous differences ignores how much political and international circumstances have changed over the past decade.  Europe faces new problems, as well as the return of some of the old problems that led to catastrophe in the past; and Americans have a very different attitude toward the world than they did during the Cold War. This is not just another family quarrel.

“The transatlantic community was in trouble even before Trump took office.  The peaceful, democratic Europe we had come to take for granted in recent decades has been rocked to the core by populist nationalist movements responding to the massive flow of refugees from the Middle East and Africa. For the first time since World War II, a right-wing party holds a substantial share of seats in the German Bundestag. Authoritarianism has replaced democracy, or threatens to, in such major European states as Hungary and Poland, and democratic practices and liberal values are under attack in the Czech Republic and Slovakia. France remains one election away from a right-wing nationalist leadership, and Italy has already taken a big step in that direction. Meanwhile, Britain, which played such a key role in Europe during and after the Cold War, has taken itself out of the picture and has become, globally, a pale shadow of its former self.  The possibility that Europe could return to its dark past is greater today than at any time during the Cold War....

“Any student of history knows that it is moments like this summit that set in motion chains of events that are difficult to stop.  The democratic alliance that has been the bedrock of the American-led liberal world order is unraveling. At some point, and probably sooner than we expect, the global peace that that alliance and that order undergirded will unravel, too. Despite our human desire to hope for the best, things will not be okay. The world crisis is upon us.”

The Supreme Court: The confirmation battle is on, with President Trump’s nomination of Brett Kavanaugh, a federal judge with a 12-year record on an appeals court to pore over.  Senate Minority Leader Chuck Schumer (D-N.Y.) drew a straight line from the 1990s to the present in floor remarks Tuesday.

“His judicial philosophy appears to spring from his history.  Judge Kavanaugh was embedded in the partisan fights of the past few decades: the notorious Starr report, the Florida recount, President Bush’s secrecy and privilege claims once in office, and ideological judicial nomination fights throughout the Bush Era,” Mr. Schumer said.

A White House aide told the Wall Street Journal, “A lot of that stuff is pretty stale now. If we’re fighting about whether there were weapons of mass destruction in Iraq in 2003, I think we’re going to win.”

Opinion...all sides....

Editorial / Wall Street Journal

“Brett Kavanaugh’s nomination now heads to the Senate, and the most important fact to understand is that the debate in the world’s greatest nondeliberative body is not about the future of the Supreme Court. That’s a sideshow.  The real debate is about the future of the Senate – specifically, which political party will control that now narrowly divided chamber in 2019.

“Minority Leader Chuck Schumer has already said he will ‘oppose Judge Kavanaugh’s nomination with everything I have.’  Nice to know he’s given it such careful thought. But Mr. Schumer knows defeating the judge is a  long shot, especially after Maine Senator Susan Collins made encouraging comments Tuesday about Judge Kavanaugh’s lower-court opinion on ObamaCare and his statement in 2006 that Roe v. Wade is a binding precedent.

“In any case, what Mr. Schumer cares about more than defeating Donald Trump’s nominee is to be the next Majority Leader. Toward that end he wants to help his 10 incumbent Senators running in November to navigate between a political base that demands opposition to all things Trump and broader state electorates that might come to think that Judge Kavanaugh is an excellent nominee.

“The best way to do that is to postpone a confirmation vote beyond Nov. 6.  That way Joe Donnelly in Indiana, Heidi Heitkamp in North Dakota and Joe Manchin in West Virginia wouldn’t have to take a politically difficult vote before Election Day.

“They and other Democrats like Claire McCaskill in Missouri risk infuriating Democratic activists if they vote for a nominee who will be described day after day on MSNBC and CNN as a threat to every right they have.  On the other hand, the Senators might motivate Trump voters to turn out against them if they oppose Judge Kavanaugh.  So Mr. Schumer’s main priority is delay, and delay some more.

“Keep this in mind as you begin to hear Democratic charges that the confirmation process is moving too fast, that it’s a railroad job, or a cover-up.  You will also soon hear demands for documents, millions of documents, from Mr. Kavanaugh’s tenure as staff secretary in the George W. Bush White House and on the staff of independent counsel Ken Starr in the 1990s.

“Democrats aren’t looking for anything in particular, though if they find something negative they’ll use it. The main purpose will be to find an excuse to raise more questions, to seek still more documents, and to interview more witnesses – all with a goal of pushing Senate hearings into the autumn and delaying a vote into the lame duck session of Congress or even next year.”

Editorial / USA TODAY

“Trump’s prime-time selection of Judge Brett Kavanaugh, 53, is likely to please the Republican base.  Kavanaugh has been a reliable conservative in his approximately 300 opinions issued on the District of Columbia Circuit Court of Appeals (often considered the second most powerful court in the land) and, if confirmed by the GOP-controlled Senate, he could shift the high court dramatically to the right for years to come....

“Conveniently for Trump, and perhaps serendipitously for Kavanaugh, his views on presidential inquiries have migrated since then. In 2009 he wrote that presidents should be free from civil and criminal investigations.

“Like all recent nominees, Kavanaugh is a highly accomplished appellate judge with a keen intellect. He deserves the thoughtful consideration of the Senate, though the confirmation process is sure to turn ugly given the high stakes and lingering Democratic resentment over Republicans’ refusal to even consider the eminently qualified Merrick Garland, nominated in 2016 by President Barack Obama....

“Much of the attention during his confirmation hearings will no doubt focus on the issue of abortion. While ruling only rarely on the topic, a dissent Kavanaugh issued in a case involving an undocumented teenager has delighted those opposed to abortion.  In that opinion, he asserted that ‘the government has permissible interests in favoring fetal life, protecting the best interests of a minor, and refraining from facilitating abortion.’

“Democrats will warn that a court with so many conservatives would overturn Roe v. Wade. But a more likely prospect, given the degree to which a ruling would upend precedent, is a de facto repeal by allowing ever increasing restrictions on abortions.

“Amid the glow in the White House East Room, Kavanaugh provided a preview of his confirmation hearing, vowing to be independent and ‘keep an open mind in every case.’

“His reception from Democratic senators and interest groups will be considerably less friendly.”

Editorial / New York Post

“Judge Kavanaugh is widely seen as one of the top legal minds of his generation – so much so that now-Justice Elena Kagan recruited him to teach at Harvard Law, where students across the spectrum rave about him. Though firmly committed to interpreting the Constitution as written, he’s no ideologue – which is why Sen. Ted Cruz and other hard-rightists had been urging Trump to pick someone else.

“But now Democrats will proceed with their preset strategy for fighting any Trump picks – charging that confirmation guarantees the end of Roe v. Wade and ObamaCare.

“Which is nonsense: Chief Justice John Roberts, who’s set to be the new swing vote on the court, has already joined the four liberal justices to save ObamaCare once, and all indications are that he’s unwilling to reverse Roe or any other precedent more than four decades old.  (For that matter, the only justice who clearly favors junking Roe is Clarence Thomas.).

“No, what has Democrats despairing is the prospect of a Supreme Court that won’t create new progressive ‘rights’ that even liberal majorities in Congress don’t dare pass as legislation....

“Above all, Senate Minority Leader Chuck Schumer will try to play out the clock, pushing to delay any confirmation vote until after Election Day, when his odds of defeating the nominee might improve.

“It’s up to Majority Leader Mitch McConnell and the White House to make sure Democrats’ hysterical games don’t derail a first-rate nominee.”

Editorial / Washington Post

“Mr. Kavanaugh meets the basic qualifications for high court service. A Yale Law School graduate who clerked for Mr. Kennedy, he has served for 12 years on the powerful U.S. Court of Appeals for the District of Columbia Circuit.  The country certainly could have expected worse from President Trump. Yet Mr. Kavanaugh came from a list of potential nominees preapproved by conservative activist groups. Their goal is to tilt the court as far right as possible as quickly sa possible.

“Mr. Trump’s first nominee, Neil M. Gorsuch, was, in his confirmation hearings, the least forthcoming Supreme Court nominee in recent memory. Mr. Kavanaugh must do better. Fortunately, he comes with a huge record....

“Most importantly, senators must extract an ironclad commitment that Mr. Kavanaugh will act as a check on the president.  That’s a role he has not seemed comfortable playing in cases involving enemy combatants, or in a law review article suggesting that the president should not be subject to civil or criminal court proceedings while in office. There is always a danger that justices will be seen as loyal to the presidents and parties that installed them; that danger is particularly pronounced now, as Mr. Trump ignores traditional boundaries on presidential action and the Republican Party mostly enables his autocratic instincts.

“Just as Democrats should not have ruled out Mr. Trump’s pick before it was announced, Republicans should not duck their responsibility to bring a critical eye to the coming confirmation process.”

Editorial / New York Times

“During the 2016 campaign, Mr. Trump publicized a list of possible Supreme Court nominees preapproved by the Federalist Society and the Heritage Foundation, another conservative group. It was scrubbed of any squishes along the lines of David Souter, Anthony Kennedy or even Chief Justice Roberts, all of whom have been deemed insufficiently committed to the cause for failing to vote in lock step with the radical right’s agenda.  (Judge Kavanaugh was left off the original list but was added later.)

“The Federalist Society claims to value the so-called strict construction of the Constitution, but this supposedly neutral mode of constitutional interpretation lines up suspiciously well with Republican policy preferences – say, gutting laws that protect voting rights, or opening the floodgates to unlimited political spending, or undermining women’s reproductive freedom, or destroying public-sector labor unions’ ability to stand up for the interests of workers.

“In short, Senate Democrats need to use the confirmation process to explain to Americans how their Constitution is about to be hijacked by a small group of conservative radicals well-funded by ideological and corporate interests, and what that means in terms of the rights they will lose and the laws that will be invalidated over the next several decades.

“We’re witnessing right now a global movement against the idea of liberal democracy and, in places like Hungary and Poland, its grounding in an independent judiciary.  Mr. Trump and Senate Republicans appear happy to ride this wave to unlimited power. They will almost certainly win this latest battle, but it’s a victory that will come at great cost to the nation, and to the court’s remaining legitimacy.

“Americans who care about the court’s future and its role in the American system of government need to turn to the political process to restore the protections the new majority will take away, and to create an environment where radical judges can’t be nominated or confirmed. As those tireless conservative activists would be the first to tell you, winning the future depends on deliberate, long-term organizing in the present, even when – especially when – things appear most bleak.”

Trumpets....

--Former Republican Senate Majority Leader Bill Frist / Washington Post

“Nobody knows what the special counsel’s investigation will conclude. I, for one, do not think the president colluded with Russian President Vladimir Putin to win the 2016 election. But I do believe Putin purposely tried to undermine our democratic process.

“It isn’t easy to tell a president of your own party that he is wrong. But the assault on Mueller’s investigation does not help the president or his party. When Trump talks about firing the special counsel or his power to pardon himself, he makes it seem as though as he has something to hide.  The president must remember that only Mueller’s exoneration can lift the cloud hanging over the White House.

“The special counsel’s investigation is not about Trump. It is about our national security.  Every American should be rooting for Mueller’s success in determining precisely how Russia interfered in our fundamental democratic process. I had no illusions about the Soviet Union during the Cold War, and I have none about Putin now. Mueller’s most recent court filings indicate that Putin is seeking to meddle in this year’s elections.  Secretary of State Mike Pompeo, Director of National Intelligence Danial Coats and FBI Director Christopher A. Wray – all Trump appointees confirmed by the Republican-led Senate – have also warned of foreign interference. We should heed these warnings and empower Mueller to see his important work through to its conclusion.

“I have worried over the years about runaway legal authority, and I’ve battled against activist judges. I don’t worry about Robert Mueller. He is a lifelong Republican with a career of distinguished service running the Criminal Division of the Justice Department for President Ronald Reagan and serving as President George W. Bush’s FBI director, twice unanimously confirmed by the Senate. And his investigation is getting results: By any objective standard, he has moved swiftly, obtaining 23 indictments and five guilty pleas in just more than a year.*

“Congress must never abandon its role as an equal branch of government.  In this moment, that means protecting Mueller’s investigation. We’re at our best as senators and Republicans when we defend our institutions. But more than that, it’s our best face as Americans.

“People around the world admire not just the material well-being of the United States but our values, too.  The rule of law is something many die trying to secure for their countries. We can’t afford to squander it at home.”

*Frist authored the piece almost a week before the latest Russian investigation indictments.

--Devlin Barrett and Karoun Demirjian / Washington Post

“Republicans fought bitterly Thursday with FBI agent Peter Strzok, at a congressional hearing that frequently devolved into shouting matches about political bias between supporters of President Trump and defenders of the agency investigating him.

“The mutual contempt felt between Republicans on one side and Democrats and the star witness on the other was palpable from the very first question put to Strzok, whose conduct as the lead agent on FBI probes of Hillary Clinton and the Trump campaign has been sharply criticized by internal Justice Department investigators.

“The day-long hearing, which featured far more heated accusations than new information, was a naked display of the animus and agitation in Washington that surrounds the ongoing investigation into whether any Trump associates conspired with Russia to interfere with the 2016 election.

“Republicans accused Strzok and the FBI of pursuing politically motivated probes aimed at harming President Trump. Democrats called the entire hearing part of a GOP attempt to protect the president by tainting the work of special counsel Robert S. Mueller III.”

I watched it. It was a travesty, capped off by Rep. Louis Gohmert (R-Tex.) raising the issue of Strzok’s extramarital affair with ex-FBI lawyer Lisa Page.

“I can’t help but wonder, when I see you looking there with a little smirk, how many times did you look so innocent into your wife’s eyes and lie to her about Lisa Page?” Gohmert asked.

Even Fox News’ Laura Ingraham was unhappy with the congressman’s performance, Ingraham correctly wondering if the hearings harmed Republicans.

Strzok battled with House Oversight Committee chairman Rep. Trey Gowdy (R-S.C.).  At one point, Strzok conceded that he “detested” Trump, and he accused Gowdy of twisting his words, saying: “I don’t appreciate what was originally said being changed.”

Gowdy shot back: “I don’t give a damn what you appreciate, Agent Strzok. I don’t appreciate an FBI agent with an unprecedented level of animus working on two major investigations in 2016.”

Strzok insisted that his superiors and colleagues “would not tolerate any improper behavior in me any more than I would tolerate it in them.  That is who we are as the FBI, and the suggestion that I, in some dark chamber somewhere in the FBI, would somehow cast aside  all of these procedures, all of these safeguards, and somehow be able to do this is astounding to me,” he said.

But there was a reason why Strzok was demoted to Human Resources and may yet face criminal prosecution.  Among other things, he has trouble with the truth.

--President Trump in his aforementioned Sun interview, also called out London Mayor Sadiq Khan.

“I think he has done a very bad job on terrorism. I think he has done a bad job on crime, if you look, all of the horrible things going on there, with all of the crime that is being brought in.”

Mayor Khan said it was preposterous for Trump to blame a rise in violent crime in the city on immigration.

--I’ve said since day one of this column, that anytime there is a beautiful day and I’m outdoors enjoying it (as was the case with this area’s past spectacular weekend), I thank Richard Nixon. I mean it.  What he did on the environment was no doubt politically expedient, but the fact is he did it.

So I got a kick out of the following.

Linda Stasi / New York Daily News

“Scott Pruitt is no Richard Nixon.

“No, I’m not saying the vile nature-destroying, recently-resigned EPA chief Pruitt wsa better for the environment than Richard Nixon – I’m saying exactly the opposite.

“Sit down, brothers and sisters.

“It was – get this – Nixon who created the Environmental Protection Agency in 1970, which Pruitt headed and did his best to turn into an endangered species.

“Yeah, that Richard Nixon – the one who was so corrupt he nearly destroyed our democracy and who had so many ethics violations he could have served as a role model for Pruitt’s career.

“But yes, it was also that Richard Nixon who in creating the EPA, said, ‘Restoring nature to its natural state is a cause beyond party and beyond factions.’ Thing is, that same Richard Nixon was the greatest environmental president since Teddy Roosevelt.  In short, what Roosevelt did for our national parks, Nixon did for our environment.

“And for all the bad he did, at least that Nixon’s environmental policies were good. Until Scott Pruitt, who, as attorney general for Oklahoma filed 14 – count ‘em 14 – lawsuits against the EPA, the agency he would one day head.

“And yeah, it was that same Scott Pruitt who, in his short-lived reign as EPA king, did commit such unspeakable acts such as undoing the ban on chlorpyrifos – the pesticide that damages the brain and nervous system of fetuses and young children.

“It was that same Scott Pruitt who rolled back something like 45 environmental rules, including 25 at EPA alone; decisions that will affect not just our land, our air, water and environment, but our whole planet, our lives and our children’s lives, for the foreseeable future.

“And yea, it was that Scott Pruitt who advised President Trump to pull out of the Paris climate accords, revoked the rules against dumping coal waste into local streams and fired scientists at the EPA and replaced them with industry lobbyists.

“So in retrospect, since we don’t have that Scott Pruitt to kick around anymore, we should stop criticizing his 14 shameless unethical personal acts such as the Chick-fil-A scandal and how he alone gave new meaning to the phrase ‘take to the mattresses’ by trying to buy a mattress on the cheap from the Trump International Hotel – because really, who doesn’t want a used mattress upon which countless strangers have done the nasty? – and start concentrating on the harm he’s done to the rest of us.

“This I say, even though Pruitt himself reminded the President in his bizarre, nearly-evangelical EPA resignation letter, it was in the end, God’s providence that ‘brought [him] into [Trump’s] service.’

“It’s just that – and who am I to question God? – it’s hard to believe that God’s providence included dumping coal debris into local waters, putting fossil-fuel lobbyists into the EPA, and repealing the Clean Water Act leaving about 117 million Americans at risk of industrial and agricultural pollution.

“Given all of this, Richard Nixon, he must be turning in his grave.”

Wall Street...Trade

The only economic news of import this week was on the inflation front, with June producer prices up 0.3%, 3.4% year-over-year, while ex-food and energy, the PPI was up 0.3%, 2.8% yoy.

The next day, Thursday, we had consumer prices and the CPI was up 0.1%, but up 2.9% year-over-year, the fastest pace since Feb. 2012, while the core figures were 0.2%, 2.3%.

So the CPI at 2.9% fully offsets the average hourly wage growth for a second consecutive month, ‘real’ wages flat for the American worker.

Federal Reserve Chairman Jerome Powell gives his semiannual congressional update on the economy next week and in a radio interview yesterday he said a strong economy should allow the central bank to keep raising interest rates gradually, and it was premature to judge how recent trade policy actions could impact the Fed’s thinking.

“I sleep pretty well on the economy right now,” Powell said.  But with the trade uncertainty and the potential influence on Fed policy, he said, “It’s very hard to sit here today and say which way that’s going.”

If the Trump administration is successful over time in lowering trade tariffs, “then that’ll be a good thing for our economy,” Powell said on the Marketplace radio program.  “If it works out other ways, so that we wind up having high tariffs on a lot of products...and that they become sustained for a long period of time, then yes, that could be a negative for our economy.”

In Powell’s worst-case scenario, “You can imagine situations which would be very challenging, where inflation is going up and the economy is weakening,” he said.

This week the Trump administration announced a third round of tariffs on $200 billion on Chinese products, which no doubt would provoke new retaliation from Beijing.  These would take effect end of August, if they go through, and would impact products ranging from clothing to televisions to refrigerators; essentially anything in your home. 

So China has seven weeks to make a deal or dig in and try to outlast Trump.  President Xi Jinping, under pressure politically to look tough, has vowed to respond blow-for-blow. And one step could be consumer boycotts, as I’ve warned for years.

There have been no high-level talks between the two sides since an early June visit by U.S. Commerce Secretary Wilbur Ross that achieved zippo.

Currently, the administration has imposed tariffs on imported steel and aluminum from the EU, Canada and Mexico, which has led to them levying their own tariffs on U.S. exports.

Republican Rep. Kevin Brady, chairman of the House Ways and Means Committee, warned of “a long, multi-year trade war between the two largest economies in the world that engulfs more and more of the globe.”

“Despite the serious economic consequences of ever-increasing tariffs, today there are no serious trade discussions occurring between the U.S. and China, no plans for trade negotiations anytime soon, and seemingly little action toward a solution,” the Texas congressman said.  Senate Finance Committee Chairman Orrin Hatch (R-Utah), called the new levies “reckless” and not “targeted.”

It was back in March that Trump suggested “trade wars are good and easy to win.”

Among other things, the U.S. is asking China to roll back its “Made-in-China 2025” program, a signature Xi initiative to dominate several strategic industries, including semiconductors and aerospace, the technology for which they’ve been stealing for years and years.

Meanwhile, the Treasury Department said on Thursday that government receipts fell 7% in June compared with the same month a year earlier, owing to a sharp 33% drop in gross corporate taxes. Individual withheld and payroll taxes were down 5%, while non-withheld individual taxes rose by 7%.

But thanks to a 9% drop in government outlays, the budget deficit narrowed to $74.86 billion in June, compared with $90.23 billion in June 2017.

More broadly, for the first nine months of the fiscal year, the budget gap totaled $607.1 billion, up 16% over a year earlier.

As for Wall Street and the stock market, it continued to ignore trade tensions.

Europe and Asia

No economic news of note for the eurozone, though the European Commission lowered its growth forecasts for the EA19, blaming growing trade tensions and rising energy prices.  Brussels is now projecting euro area growth of 2.1% this year, compared with a forecast of 2.3% in May. The EC lowered Germany’s growth forecast from 2.3% to 1.9%. France was lowered from 2% to 1.7%.  Growth for the eurozone was 2.4% in 2017.

But the European Central Bank, which is set to call time on its bond buying spree later this year, is convinced the region’s economy is strong enough to take the slow withdrawal of quantitative easing and its crisis era support, according to its June minutes.

The ECB is lowering its purchase program from 30bn euro to 15bn in September, and then zero after December.

“While the incoming data had been somewhat weaker than previously expected, the fundamentals remained in place for the medium-term growth outlook to remain solid and broad-based,” the account said.

There was also “increased confidence that price and wage pressures would strengthen further over time,” raising the likelihood that the bank would keep inflation pressures broadly in line with its goal of just under 2% in the years ahead.

Brexit: As alluded to above, President Trump’s comments to The Sun newspaper on Brexit did Theresa May no favors.  They came the same day the government released its white paper on the plan for exiting the bloc, which would keep Britain tied to the European Union on goods and agricultural products.

The prime minister is trying to minimize the economic impact of Brexit with ‘Brexit Lite,” or soft Brexit, but Trump (parroting Steve Bannon...who is in his ear again) has sided with pro-Brexit critics who argue that, by keeping many of the European Union’s economic rules, it would inevitably reduce the scope for a separate trade deal with the United States.

Three government ministers, including Brexit Secretary David Davis, and Foreign Minister Boris Johnson, resigned over the new proposal to leave the EU.

Johnson, at the start of 2016, was the most popular politician in Britain, as he led the campaign to leave the EU, but he and his fellow Brexiteers led an incredibly dishonest campaign on the perceived benefits of leaving the union, like greatly increased benefits for the National Health Service.  After all, Britain would no longer be paying dues to the EU for which it didn’t receive corresponding benefits, so the argument went, and thus the “savings” could go back to the people.

So in the two years since the June 2016 referendum that shocked the world, nobody, from Johnson to the prime minister, and the opposition Labour Party, has come up with a plan that would please both the public and parliament, let alone the European Union, which doesn’t want to do Britain any favors.

Jenni Russell, a British journalist and broadcaster, had the following take in a New York Times op-ed:

“All of Mr. Johnson’s weaknesses have been exposed: his lazy reluctance to do detail, his preference for bluster over thinking, his contempt for business. The campaign was meant to secure his future; instead, in damaging the country, he fears he has wrecked his own future, too.  As one of his allies told me last month: ‘He knows that the verdict of history is about to come down on him – and bury him.’

“Mr. Johnson seems to believe that this is his last chance to become prime minister: After his resignation this week, he hopes to be reborn as a rebel who will lead the party. But more likely is that he will once again create political chaos without delivering what he wants.

“Two years ago, the side effect of Mr. Johnson’s ambitious maneuvering was to split the country and risk the prosperity and security of all Britons for decades.  Now, just as a fragile basis for negotiation emerges, his selfish drive for vindication, attention and admiration threatens that, too.

“It is petrifying that the deliberate deceptions and wild ego of one man can so mislead a nation.  (Americans know all about that.)  One insider told me that Mrs. May was prepared for Mr. Johnson’s defection, and will outflank him, persuading wavering Conservatives that the time for fantasy has passed.

“But Britain is teetering on the edge, on the verge of making catastrophic, irreversibly damaging mistakes.  The danger is that Johnson might tip the balance in the wrong direction once again.”

JPMorgan Chase CEO Jamie Dimon said the U.K. economy could suffer such a significant downturn after Brexit it could have “an impact on global growth.”

Dimon has previously warned that JPMorgan’s 16,000-strong U.K. workforce could be reduced by 4,000 after Britain exits the EU.

Eurobits...

--French President Emmanuel Macron has been attempting to get some major financial players to expand their operations in Paris ahead of Brexit, and his charm offensive bore some fruit this week when BlackRock and Citigroup joined other Wall Street firms in doing just that.

BlackRock chose Paris over London for its new base to provide alternative investment services across Europe and Asia.  Macron at one point in the courtship met with BlackRock CEO Larry Fink at the Elysee Palace.

And Macron persuaded Citi to expand in the country

“The effect of Macron has lightened up the country – before his election it was pretty bleak,” said Luigi de Vecchi, chairman of corporate and investment banking in continental Europe at Citi, who is moving from Milan to Paris.  “As you talk to French CEOs, they are all pumped up with tons of cash and aggressive plans.”  [Financial Times]

London will, however, remain BlackRock’s main European office.

Bank of America, JPMorgan Chase, Morgan Stanley and HSBC have previously made announcements on their expansion plans in Paris, ranging from a handful of employees to up to 1,000, in the case of HSBC.

--The population of the European Union is nearly 513 million as of January 1, 2018, up a million from 2017.  Germany is the most populous at 82.9 million, followed by France (67.2m), the U.K. (66.2m), and Italy (60.5m).

Since Croatia is in the World Cup final, Sunday, against France, I have to note its population is 4.105 million.

One note from China...its monthly trade surplus with the U.S. hit a record high of nearly $29bn in June as exports to America remained strong.  But analysts expect to see the impact of the new tariffs in July’s figures, though they won’t plunge since the first round only targeted $34bn worth of goods, which is small compared to China’s total trade.

In the first six months of the year, China’s exports to the U.S. rose 13.6% from a year earlier, while imports from the U.S. increased by 11.8%.  The trade surplus over the same period was $133.76 billion, up from $117.51bn last year.

Street Bytes

--Stocks rose a second week, with the Dow Jones gaining 2.3% to 25019, back in the black for the year, while the S&P 500 added 1.5% to close above 2800 (2801) for the first time since Feb. 1.  Nasdaq was up 1.8% to a fresh closing high of 7825.

With the Street ignoring trade issues, for now, it’s all about earnings season, with the flood beginning next week. 

--U.S. Treasury Yields

6-mo. 2.15%  2-yr. 2.58%  10-yr. 2.83%  30-yr. 2.93%

The spread between the 2- and 10-year continues to narrow, with the yield on the 2-year at its highest level since 2008.

--Crude oil had its worst day in a year on Wednesday despite a larger-than-expected weekly drop in inventories after Libya, whose production had been largely offline due to armed conflicts in and around its ports, said export activities were resuming, thus easing fears, for now, of a global supply shortage.

Oil fell 5% to $70.38 a barrel on West Texas Intermediate (WTI). Brent crude the global benchmark, dropped 7% to $73.49, its worst day since February 2016.  [WTI closed the week at $70.58, Brent $74.92]

There were also reports Saudi production is rising to near levels not seen since the country embarked on production cuts.

Thursday, the International Energy Agency warned that spare oil production capacity risks being “stretched to the limit” as supply disruptions and U.S. sanctions against Iran tighten the market.

For the moment, the IEA says the key risk was supply capacity, with moves by producers to raise output cutting into the thin buffer of reserve production.

“Rising production currently underpins oil prices and seems likely to continue doing so.  We see no sign of higher production from elsewhere that might ease fears of market tightness,” it said.

The IEA said it saw only 2.1m barrels a day of quickly available spare capacity in three OPEC members – Saudi Arabia, Kuwait and UAE.

The IEA is focused on the U.S. sanctions on Iran, which are expected to hit hard, while Venezuelan capacity spirals lower, according to the agency.

--The Justice Department said on Thursday it would appeal a federal judge’s approval of AT&T’s merger with Time Warner, extending the government’s legal challenge of the $85.4 billion deal.

A federal judge signed off on the deal a month ago, saying the DOJ did not sufficiently prove that the merger would harm competition and consumers.

AT&T and Time Warner executives have said they were confident they would win an appeal of the merger because of the judge’s sweeping rejection of the government’s case.

And speaking of the judge’s ruling, AT&T’s General Counsel David McAtee said: “The court’s decision could hardly have been more thorough, fact-based, and well-reasoned. While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances.  We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”

This is absurd.  I hope the judge throws the DOJ’s attorneys out on their ears.  “And never come back!”

--JPMorgan Chase kicked off the Wall Street earnings with strong second-quarter results, reporting revenue of $27.7billion and earnings per share of $2.29, up 6% and 26% from a year ago, respectively. Both figures beat consensus, but not by enough to satisfy traders.

Chairman and CEO Jamie Dimon said: “We see good economic growth, particularly in the U.S., where consumer and business sentiment is high...Capital markets were open and active, leading to strong fee and markets revenue performance.”

Markets revenue was up 16%, while fixed income markets trading revenue climbed 12%. Equities trading revenue jumped 24%.

--Citigroup reported its second-quarter profit rose 16%, boosted by growing loans and flat expenses.  CFO John Gerspach said in a call with analysts that trade disputes have dampened the overall market, but haven’t affected the bank.

Revenue rose 2% from a year ago to $18.47 billion, slightly below expectations. Earnings beat at $1.63 per share.

But shares in Citi and JPMorgan struggled on Friday after their reports amid concerns the Fed’s interest rate hikes will squeeze profit margins, the shares already struggling with the flattening yield curve.

And there are signs higher borrowing costs are hurting demand for some loans.  Fees at Wells Fargo from mortgage banking fell a third from a year ago to $770 million.

--Speaking of Wells, its profits dropped 11% in the second quarter, as it struggles to restore its reputation as a reliable financial performer almost two years after a scandal over fake accounts erupted at the bank.  Revenues also declined 3% to $21.6bn.

--A jury in St. Louis found Thursday that Johnson & Johnson should pay $4.69 billion in damages to 22 women and their families who blamed ovarian-cancer cases on asbestos in the company’s iconic baby powder, the biggest single verdict in such cases so far.

The jury awarded $550 million and later added $4.14 billion in punitive damages against the company for allegedly failing to warn that its talcum powder raised the risk of ovarian cancer.

Needless to say J&J plans to appeal what it says was the product of a “fundamentally unfair process.”

J&J shouldn’t have to worry about the punitive damages, which no way stand, with the trial judge able to reverse them.  But the $550 million?  The company has been fighting more than 9,000 talcum-powder lawsuits with mixed results.

The plaintiffs’ lawyers argued during the six-week trial that asbestos fibers mixed with the talc used to make Johnson’s Baby Powder entered the bodies of women who used the product every day for decades for feminine hygiene.  Six of the plaintiffs had died.

The FDA says asbestos has not been an ingredient since the 1970s.

By the way, I didn’t know that Mark Lanier was the lead counsel for the women and their families, a name that should be familiar to some of you as he has been the lead on many high-profile cases of this sort.  Imagine his ‘take.’

--Twitter announced it would begin removing tens of millions of suspicious accounts from users’ followers on Thursday, as Twitter takes aim at a pervasive form of social media fraud.  It is expected that the company’s move will result in about a 6 percent drop in follower count.

The New York Times points out, “Officials at Twitter acknowledged that easy access to fake followers, and the company’s slowness in responding to the problem, had devalued the influence accumulated by legitimate users, sowing suspicion around those who quickly attained a broad following.”

The market for fakes was hurting Twitter with advertisers, which are relying on social media “influencers.”  Last month, Unilever, which spends billions on advertising, announced it would no longer pay influencers who purchased followers.

The Washington Post last weekend reported that Twitter suspended more than 70 million accounts in May and June, and the pace has continued this month.

So with all the above, the shares in Twitter fell over fears of a decline in the number of monthly users in the second quarter.  Previously, Twitter has also estimated that fewer than 5 percent of the active users are fake or involved in spam, and that fewer than 8.5 percent use automation tools that characterize the accounts as bots.  Many legitimate accounts are bots, such as to report weather or seismic activity.

Monday, Twitter’s CFO, Ned Segal, attempted to rebut the Post report claiming user growth was at risk because Segal said that most deleted accounts had not been previously included in its reported metrics, either because they had not been active for more than a month or been identified as problematic when opened.

Early on, it was reported President Trump lost about 400,000 of his 53.4 million followers, while Barack Obama lost 2 million.

And you had the likes of Katy Perry lose 3 million of her 110 million, and Kim Kardashian, 1.7 million of her 60.2 million.  Even Twitter CEO Jack Dorsey lsot 200,000 of his 4 million followers.  [I lost 25.]

This will be a huge issue on Twitter’s earnings call, July 27.

--Ford Motor Co. said sales in China plunged 26% in the first half of 2018 compared with the same period last year, with little relief in sight given worsening trade tensions.

China’s auto market overall grew 5.6%, according to the China Association of Automobile Manufacturers, with sales reaching 14.1 million vehicles for the first six months.

Ford sold just 400,000, the company’s worst showing for the first half since 2012. General Motors, however, reported sales in China rose 4% to 1.84 million.

[The one vehicle Ford was having success with, the Lincoln premium brand, is exported from the U.S. and now subject to a 40% tariff imposed by China last week in retaliation for new U.S. tariff measures.]

The concern now is for a backlash such as those suffered by Japanese and Korea when Chinese consumers turned against them due to various conflicts between Beijing and Tokyo, and Beijing and Seoul.  Thus far, there hasn’t been a backlash against U.S. products in China, but this seems inevitable if the trade tensions worsen.

Ford and GM build most of their cars for the Chinese market through joint ventures with domestic partners, thus avoiding tariffs. GM doesn’t export cars to China to the extent Ford does, so its sales are more directly tied to the overall Chinese market.

Electric-vehicle sales in China grew 112% to 412,000, boosted by government subsidies and other policies.

--Which brings us to Tesla, which on Tuesday said it would build a wholly owned auto plant in the Shanghai, the company’s first factory outside the United States. The move would double the size of the car-maker’s global manufacturing.

The deal was announced at the same time that Tesla announced price hikes in China on U.S.-made vehicles it sells there to offset the cost of tariffs imposed by the Chinese government.  [Ford, by the way, is picking up its costs, for now.]

Separately, Shanghai will accelerate efforts to cancel restrictions on foreign investment in the auto manufacturing sector, a government official said, a day after the Tesla announcement.

Earlier this year, China said it would scrap foreign ownership caps for companies making fully electric or plug-in hybrid vehicles in 2018 and all automotive ventures by 2022.  Heretofore, China has capped foreign ownership in the sector at 50 percent.

But with all the hoopla over the Tesla announcement, there was no comment from Shanghai officials on the size of the project or when construction of a plant with the capacity to produce 500,000 Tesla battery electric cars a year would start.  Plus the cost of such a plant would be well over $1 billion, according to industry officials, like multiples of $1 billion.

As Russ Mitchell of the Los Angeles Times reported, it was back in 2015 that Elon Musk told the Chinese news media Tesla would begin producing cars in China “within three years.”  Three years later, no plant has been built.

So the Shanghai announcement is highly suspect. Tesla claimed Tuesday that production could begin in about two years, after it obtained “all the necessary approvals and permits” to proceed. There was also zero talk of money. And analysts note that while Musk earlier said Tesla doesn’t need to sell more stock or take on more debt this year, the Shanghai plans are impossible without massive new capital investment.

--Pfizer Inc. said it would defer some recent drug-price increases, reversing course after criticism from President Trump.  Pfizer backtracked after CEO Ian Read had what the company described as extensive talks with the president Tuesday about the July 1 price increases.

Pfizer said the prices would be rolled back to pre-July 1 levels and remain in effect until the president had a chance to put his plans to curb high drug prices in place or the end of the year, whichever is earlier.

Health and Human Services Secretary Alex Azar said in a statement that the president “has made it clear that Americans are paying too much for prescription drugs and that the price increases must stop.”

--Shares in PepsiCo had their best day in nearly a decade after the company appeared to be arresting the decline of its core, domestic beverages business.    Pepsi reported revenue that was in line, with earnings above expectations for the quarter ending June 16, with the snack business continuing to perform well, up 4% in terms of the Frito-Lay North American segment, while North American Beverages declined 1%, which was better than previous quarters.

But overall, some wondered if the shares deserved the price spike, given that growth, or slower declines, is not that exciting.  We’ll see how some of its new sugar-free beverage lines do down the road.

--Starbucks, which doles out more than 1 billion straws a year, says it will phase out single-use plastic straws from its stores by 2020, replacing them with recyclable “strawless lids,” as well as straws made from biodegradable materials.

So the no-plastic-straws movement that has gained momentum in recent years picked up a rather large retailer to commit to eliminating the straws that are used in more than half of its beverage sales, cold drinks.

I am totally on board with this movement. 

Starbucks CEO Kevin Johnson said in a statement: “This is a significant milestone to achieve our global aspiration of sustainable coffee, served to our customers in more sustainable ways.”

--Papa John’s founder John Schnatter resigned as the company’s chairman on Wednesday night after fallout over his use of the n-word during a conference call.

Forbes reported earlier in the day that Schnatter used it on a call in May.  The call was specifically designed as a role-playing exercise to prevent future public-relations disasters.

“Colonel Sanders called blacks n-----s,” Schnatter said, before complaining that Sanders never faced public backlash.

Schnatter had already stepped down as CEO in January after he caused controversy by criticizing the NFL over their national anthem policy.  In November, citing the status of Papa John’s as a major advertiser during NFL games and corporate partner of the league, Schnatter linked his company’s earning to the NFL’s sagging TV ratings. Schnatter, a major contributor to the Trump campaign, said the NFL should have nipped the protests in the bud a year and a half earlier, claiming, “The ratings are going backwards because of the controversy, and so the controversy is polarizing the customer, polarizing the country.”

The company had to issue an apology, and later arranged for the agency to help “manage Schnatter’s comeback,” according to Forbes.  Then it blew up in their face.

Schnatter said in a statement Wednesday, “News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true. Regardless of the context, I apologize. Simply stated, racism has no place in our society.”

Major League Baseball suspended its partnership with the company Wednesday.  Today, the University of Louisville said it will change the name of Papa John’s Cardinals Stadium, its 65,000-seat football facility. 

--Kentucky’s distillery industry employs some 17,500, vs. 4,000 a decade ago, according to the Distilled Spirits Council.  Eric Gregory, head of the Kentucky Distillers Association, said recently imposed tariffs on bourbon by the EU, Mexico and Canada, will hit the industry hard, just as it is undergoing a renaissance, partly driven by more women drinking bourbon, in addition to growing demand across Europe.  [FT]

--Soybeans have been trading at a near decade low of about $8.40-$8.50 a bushel on trade concerns with China.  According to the American Soybean Association, farmers break even at $9.50, with demand and a bumper crop last year sending the price to $10.50. 

But with the tariffs now in place, China will be scaling back purchases of U.S. soybeans, after scooping up more than half of U.S. soy exports in recent years, and the Department of Agriculture on Thursday projected stocks of soybeans for the 2018-19 crop year at a would-be record of 580 million bushels, around 50% higher than its previous estimate and more than analysts expected.  Soybean exports next year will fall by 11%, the agency said.  The price touched $8.26 a bushel on the Chicago Board of Trade.

--Personal-computer shipments in the second quarter had the strongest showing in six years, driven by stronger demand from business customers, according to preliminary data from research firms Gartner and International Data Corp. The two account for the market slightly differently.

Overall, Gartner said world-wide PC shipments totaled 62.1 million units in the second quarter, up 1.4% from a year earlier.

In the U.S., PC shipments totaled 14.5 million units, up 1.7%, year-over-year, which Gartner said marked a return to growth after six consecutive quarters of declines.

IDC said world-wide shipments reached 62.3 million units, up 2.7% from a year earlier.

--Delta Air Lines Inc. said it will boost fares and add fewer flights than planned, as carriers contend with a surge in fuel prices that is looming over flush times for the industry.

Delta posted second-quarter earnings than topped forecasts, with record revenue of $11.8 billion, which offset a $578 million jump in its fuel bill, up 33% from a year earlier. The airline said its fuel bill for all of 2018 would be $2 billion higher than 2017.

CEO Ed Bastian said, “With higher fuel prices you’re going to expect to see ticket prices go up as well.”

Delta posted a profit of $1.03 billion for the quarter, compared with $1.19 billion, a year earlier.

--The American Customer Satisfaction Index’s Restaurant Report found Chick-fil-A was the favorite, again, in the “Limited-Service Restaurants” category for 2018, with Panera Bread second.

McDonald’s was last among 18, measured on food accuracy, waitstaff behavior, food quality, beverage quality, restaurant cleanliness and layout, among other items.

Among “Full-Service Restaurants,” Texas Roadhouse was No. 1, Denny’s last.

Gee, I like McDonald’s and Denny’s...not that I’ve been to the latter recently.

--Facebook CEO Mark Zuckerberg surpassed Warren Buffett to become the world’s third-richest person, trailing Amazon’s Jeff Bezos and Microsoft founder Bill Gates.

Zuckerberg is worth $81.6 billion, as of a few days ago, which sucks given all we know now.

--Television ratings have been down for the World Cup, largely due to no U.S. team in the competition, but also because of the fact the games have been broadcast at 10:00 a.m. and 2:00 p.m. ET; not exactly ideal.  21st Century Fox is thus expected to lose money on the tournament, with Fox having spent $900 million on soccer rights through the 2026 World Cup.

But Fox told the Wall Street Journal that ad revenue for the WC is on pace to beat the 2014 figure.  Yes, viewership is off about 30% over 2014 (which was in a favorable time zone, Brazil), but we’re still talking 2.6 million on average through the quarterfinals.  And, actually, the quarterfinal matches on Fox scored higher ratings than the corresponding games in the 2014 tournament.

Telemundo, which has the Spanish-language rights, is also going to lose money, but the network said its ratings are new highs.

Separately, I think Fox has done an outstanding job with its coverage.

Foreign Affairs

Russia: As he left the White House on Tuesday, on his way to meetings with foreign leaders in Europe, President Trump made an assertion. The member nations of NATO have “not treated us fairly” because “we pay far too much and they pay far too little,” he said. As for Britain, where he headed on Thursday, “that’s a situation that’s been going on for a long time” and, following the resignations of senior British officials on Monday, the country is “in somewhat turmoil.”

And then Trump goes, “And I have Putin,” referring to Monday’s summit.  “Frankly, Putin may be the easiest of them all. Who would think? Who would think?”

Trump then said of Putin, “He’s a competitor. He’s been very nice to me the times I’ve met him. I’ve been nice to him. He’s a competitor.... Somebody was saying, is he an enemy?  He’s not my enemy.  Is he a friend? No, I don’t know him well enough. But the couple of times I’ve gotten to meet him, we get along very well.”

Philip Bump / Washington Post: “There are two things about that statement that are, for lack of a better word, staggering.

“The first is that Trump frames the interaction with Putin almost exclusively in personal terms.  Putin is a competitor to him.  He is not Trump’s personal enemy and, who knows!  Maybe he and Putin can eventually be personal friends. One of the first things that mediocre middle managers say their first day on the job is that they aren’t there to be employees’ friends; it’s all about the job.  Trump’s telling Putin, in short, that Russia’s relationship with the United States depends almost entirely on Putin being friends with Trump. For a Russian leader with few scruples and little to lose, that kicks open a very big door of opportunity.

“The second thing about Trump’s statement is how his framing of the relationship as personal undercuts his own case.

“Why isn’t Putin a friend or an enemy? Because Trump [doesn’t] know him well enough. Well, the United States knows Putin quite well, and both historians and intelligence analysts can describe in great detail the relationship between our two countries and Putin’s efforts to undercut American geopolitical standing. America knows Putin well, but Trump actively chooses to set that knowledge aside. Putin looks the way Trump thinks a leader should look, and Trump clearly admires that.  That Putin’s approach to leadership is broadly antithetical to how American leadership is expected to behave is an important but ignored complication.”

David Ignatius / Washington Post

“As the Helsinki summit approaches, President Trump appears to be on the verge of acquiescing to parts of the belligerent strategy and behavior that Moscow has been pursuing for decades.

“The summit will be a culmination of Trump’s often-proclaimed eagerness for better relations with Russian President Vladimir Putin.  ‘He’s not my enemy. And hopefully someday maybe he’ll be a friend,’ Trump said Thursday during a news conference in Brussels. Critics ask: At what cost, and for what reason?

“Trump obviously relishes this latest installment in the reality-television series that is his presidency. The danger is that the summit will implicitly condone Putin’s brutal tactics in Ukraine, Syria, the European Union and the United States – and foster further discord within the NATO alliance, a Russian goal for nearly 70 years. Trump should consider the possibility that ‘Helsinki’ could someday become a symbolic name for appeasement, like Munich in 1938 or Yalta in 1945.

“Russia’s new diplomatic ascendancy is a Kremlin dream fulfilled. When I was in Moscow last summer, Sergey Karaganov, the head of Russia’s Council on Foreign and Defense Policy, bluntly proclaimed Russia’s hope to dissolve the ‘liberal international order’ symbolized by NATO and the other institutions that long sustained American power.  ‘That order we did not like, and we are doing away with it,’ he said.

“ ‘Putin is about to get absolution,’ fears Tom Donilon, who was a national security adviser for President Barack Obama. In Trump’s enthusiasm for reconciliation with Russia, he seems unaware that he may be seen as ratifying a long string of malign Russian goals and actions, including:

“Uncoupling the United States from its allies in Europe.  Trump’s recent sideswipes at a ‘captive’ Germany and an ‘unfair’ NATO deepened European worries that, in a showdown with Russia, the United States wouldn’t risk nuclear war to defend its allies....

“Sowing political division in America and Europe, thereby undermining democracies....

“Dominating the political future of Syria and gaining new leverage across the Middle East.  With Trump’s acquiescence, Russia’s successful military intervention to rescue Syrian President Bashar al-Assad has made the Kremlin the new indispensable power in the region – simultaneously maintaining close relations with Israel, Iran, Turkey, Saudi Arabia, the United Arab Emirates and Jordan.    One little-noted sign of Russia’s new influence is its partnership with Saudi Arabia in shaping global oil production and prices...

“Annexing Crimea and destabilizing Ukraine...

“Hacking into U.S. nuclear power plants and other energy facilities in what was described as a ‘multistage intrusion campaign’ in a March 15 report by the FBI and the Department of Homeland Security....

“Poisoning an ex-Russian spy living in Britain, using a deadly nerve agent called Novichok...

“Improving relations with Russia is a worthy goal – so long as it doesn’t undermine security or reward bad behavior. Putin is a bully who is emboldened by his every success. You could say he and Trump were made for each other.”

Separately, Defense News reported this week that Russia has been making improvements to the aforementioned Baltic Sea exclave of Kaliningrad, as satellite photos show.  The changes involve a bunker facility often used to house artillery.  In June, a separate analysis of satellite photos by the Federation of American Scientists showed Russia was upgrading nuclear-weapons bunkers there.

I wrote years ago about the potential for nukes in Kaliningrad, and in 2016, the Russians deployed the SS-26 Iskander, a nuclear-capable missile with a range of more than 400 kilometers, to Kaliningrad.

Finally, on a totally different topic, President Putin said on Friday that his country’s hosting of the World Cup had helped debunk stereotypes about it.

And it’s true that security concerns, such as my own, have not been borne out, ditto hooligan violence and racism on any broad scale.

Putin said in an interview, “People have seen that Russia is a hospitable country, a friendly one for those who come here.”

Personally, Russia has the least friendly bartenders I’ve ever encountered. And at the end of the day....

North Korea: On July 12, President Trump revealed a totally worthless letter that Kim Jong Un sent him, dated July 6, which reads in part:

“I deeply appreciate the energetic and extraordinary efforts made by Your Excellency Mr. President for the improvement of relations between the two countries and the faithful implementation of the joint statement.

“I firmly believe that the strong will, sincere efforts and unique approach of myself and Your Excellency Mr. President aimed at opening up a new future between the DPRK and the U.S. will surely come to fruition.”

Trump tweeted that this letter helped show “Great progress is being made!”

But the letter was before Secretary of State Mike Pompeo’s failed mission to Pyongyang last week, which included being blown off by Kim himself.

And then Thursday, North Korean officials did not show up for a meeting with Americans at the inter-Korean border, at Panmunjom, to discuss the return of remains of United States soldiers killed in the Korean War, officials said.

At the summit with President Trump, Kim committed to repatriating American soldiers’ remains.  Secretary Pompeo said last week that working-level talks would be held Thursday...and then they weren’t.  The North Koreans were a no show.

President Trump has been lying continuously that the remains of some 200 to 250 American servicemen had “already (been) sent back, or are in the process of being sent back,” but there has been no repatriation.

Experts also believe the process is likely to take years. Remains would be brought to South Korea and then transferred to Hawaii, where painstaking forensic work would be carried out to identify them.

Meanwhile, Pompeo claimed his discussions last week in Pyongyang had been productive, though North Korea accused him of making a “unilateral and gangster-like demand for denuclearization,” while satellite photos have shown that North Korea has been expanding a key missile manufacturing plant and upgrading its nuclear infrastructure at Yongbyon.

Pompeo said over the weekend in Tokyo that Kim remained committed to a “broad definition of denuclearization” that would proceed “in parallel” with North Korea’s demands, including a “peace regime” that formally ends the 1950-53 Korean War and provides the North with security guarantees.

Benny Avni / New York Post

“Confused by North Korea’s sudden hard line? Look to China for answers.

“Last week Pyongyang reverted to taunts, calling Mike Pompeo’s trip there ‘regrettable,’ saying America has a ‘gangster-like mindset’ and denying the secretary of state a meeting with Dear Leader, who apparently was obliged to inspect a potato farm instead.

“Why?  As Sen. Lindsey Graham told ‘Fox News Sunday,’ I see China’s hands all over this,’ adding, ‘There’s no doubt in my mind that it’s the Chinese pulling the North Koreans back.’

“President Trump tweeted Monday his ‘confidence’ that ‘Kim Jong Un will honor the contract we signed, even more importantly, our handshake.’  (No contract, of course, was signed at the end of last month’s Singapore handshaking session.)

“Then, Trump added: ‘China, on the other hand, may be exerting negative pressure on a deal because of our posture on Chinese Trade-Hope Not!’

“Graham and Trump are right – and it’s about more than trade.

“Over the weekend two U.S. Navy destroyers sailed the Taiwan Straits. A Navy official called the exercise ‘routine’ but a Beijing mouthpiece, the Global Times, opined it was a ‘psychological game.’:  America, according to the paper, is sending ‘political signals.’

“Psychological games? Signals? That’s President Xi Jinping’s bailiwick, and he’s unhappy with America these days. He’s used to world leaders asking  ‘how high’ when he asks them to jump. Trump doesn’t.

“Airlines around the world have by now largely changed their websites and ticketing apps so all flights to Taiwan are labeled ‘Taipei, China.’  Beijing demanded the change as part of a renewed campaign pressuring countries to quash any hint of Taiwanese national aspirations.

“Beijing sees the democratic island nation as one of its provinces. Anyone trying to treat Taiwan differently is threatened with cutting off access to China’s lucrative markets. However, U.S. airlines, under pressure from Washington and almost alone in the world, still list Taiwan as a destination.

“So Xi can’t be happy.

“Meanwhile, Trump has also been threatening to, as he sees it, level the trade playing field. Washington imposed a 25 percent tax on $34 billion worth of Chinese imports on Friday. To illustrate his point, he went after the World Trade Organization’s definition of China as a ‘developing’ nation.  ‘Does anybody think this is fair?’ he tweeted.

“It isn’t.  In fact, China is acting globally more like a nasty feudal lord than an ambitious serf striving for equality. And not only in Taiwan, or the rest of China’s ever-expanding backyard.

“Beijing is working hard to export state capitalism. Even in Europe some wonder these days whether China offers a better governing model than our messy and chaotic democracies.

“When it encounters obstacles to its aspirations of dominance, China uses all levers of power to get its way – and that’s likely how, over the weekend, a Beijing client state, North Korea, delighted Pompeo’s critics by doing a 180 on its polite-host act and stopped pretending it’s committed to true denuclearization.

“The usual suspects, including some in the Trump administration, will now push the president to appease Xi: If you avoid confrontation, negotiate your proposed tariffs away and forgo big military maneuvers in Beijing’s backyard, maybe North Korea will come back to the table ready to deal.

“That would be a big mistake. Under Xi, China has shown remarkable hostility to goodwill gestures. When it smells weakness, it responds by upping the pressure.

“In fact, Trump may have been a bit too conciliatory toward China, treating Xi as a possible partner and hoping he’d help to denuclearize North Korea for us.

“Instead, Beijing is now back to its old ways. Once again, Chinese banks and companies are brazenly violating UN Security Council sanctions. China had supported imposing those sanctions when Washington threatened to blacklist Chinese companies dealing with Pyongyang.  It ceased to cooperate when these sanctions were waived to advance North Korean diplomacy.

“North Korea is one of those pesky problems that need addressing. Trump has, rightly or not, gone all-in trying to negotiate it away. But North Korea is merely a tail, while China is the menacing wolf wagging it.

“And he’s at the door.”

China: This is classic China. From BBC News:

“Cut-price Chinese home insulation is being blamed for a massive rise in emissions of a gas, highly damaging to the Earth’s protective ozone layer.

“The Environmental Investigations Agency (EIA) found widespread use of CFC-11 in China, even though the chemical was fully banned back in 2010.

“Scientists have been extremely puzzled by the mysterious rise in emissions. But this report suggests the key source is China’s home construction industry.  Just two months ago, researchers published a study showing that the expected decline in the use of CFC-11 after it was completely banned eight years ago had slowed to a crawl.

“There were suspicions among researchers that new supplies were being made somewhere in East Asia.

“Rumors were rife as to the source. There was a concern among some experts that the chemical was being used to secretly enrich uranium for use in nuclear weapons.

“The reality it seems is more about insulation than proliferation....

“Researchers from the EIA, a green campaign group, contacted foam manufacturing factories in 10 different provinces across China. From their detailed discussions with executives in 18 companies, the investigators concluded that the chemical is used in the majority of the polyurethane insulation the firms produce.

“One seller of CFC-11 estimated that 70% of China’s domestic sales used the illegal gas.  The reason is quite simple – CFC-11 is better quality and much cheaper than the alternatives.

“The authorities have banned CFC-11 but enforcement of the regulation is poor.”

Iran / Syria: Prime Minister Benjamin Netanyahu met with Russian President Putin in Moscow on Wednesday for a sixth time in nine months, as Israel demands all Iranian forces leave Syria – a demand Russian Foreign Minister Sergey Lavrov has already deemed completely unrealistic.

Russia has told Israel on several occasions that it can’t make Iran leave Syria completely; the most it can do is try to get Iranian forces and their affiliated militias, including Hezbollah, to move a significant distance away from the Syrian-Israeli border in the Golan Heights.  But Russia isn’t even keeping its promise to secure a partial withdrawal of Iranian forces.

Various reports say Iran and Hezbollah were involved in the Syrian army’s conquest of the Daraa district (in the southwest) over the past few days.  Plus the Syrian army, which now controls most of the border between Syria and Jordan, including the key Naseeb border crossing (vital to Jordan and commerce), has entered rebel-controlled areas in violation of an agreement it reached just last week.

According to the New Yorker magazine this week, Saudi Arabia, the UAE and Israel have suggested to President Trump that America offer to cancel the sanctions it imposed on Russia four years ago, following the annexation of Crimea and the invasion of western Ukraine, in exchange for Russian action to remove Iranian forces from Syria. [Zvi Bar’el / Haaretz]

But Iran has made it clear it is staying in Syria.  And this week Syrian state TV accused Israel of striking Syria’s T4 Airbase near Homs just hours after a senior Iranian official said Iran would maintain its military presence in the country.    The number of casualties was unknown.

Supreme Leader Ayatollah Ali Khamenei said the time when Iran’s enemies could “hit and run” was over.

On the issue of Iran and U.S. sanctions that are to go into effect Nov. 4 against countries buying Iranian oil, ministers from Britain, China, France, Germany and Russia met their Iranian counterpart in Vienna last weekend for the first time since President Trump left the nuclear accord  in May, but the talks did not go well, as all the sides agreed to reconvene the joint commission at a future date in an attempt to save the deal.

But it is up to Iran whether they want to stay in or not. August is the deadline for implementing any economic package to compensate Iran for the U.S. sanctions, which begin going into effect more broadly then.

Turkey: The Erdogan government dismissed thousands of state employees under an emergency decree for alleged links to terrorism groups.

Over 18,000 people, including nearly 9,000 police officers, 6,000 members of the military and hundreds of teachers and academics were sacked. Their passports will be cancelled. 

Turkey has been under a state of emergency for nearly two years, after a coup attempt in July 2016, with the government blaming a U.S.-based cleric, Fethullah Gulen, in exile in eastern Pennsylvania, for orchestrating the coup, with Turkey sacking or arresting people suspected of links to him. Gulen denies the allegations, but more than 130,000 people in all have been dismissed since ’16.

Kenya: The people are outraged that 20 MPs traveled to watch the World Cup in Russia at the taxpayers’ expense, catching four games, including the final, in a two-week trip estimated to be costing hundreds of thousands of dollars. The MPs caught the attention of Kenyans when they posted selfies in a stadium.

Sports Minister Rashid Echesa told the BBC he had authorized only six MPs to travel, to help understand how to organize such big events.

Kenya never qualified for a World Cup final and is currently ranked 112 out of 206 nations by the world governing body, Fifa.

It has submitted a bid to host the 2023 World Athletics Championships.

Random Musings

--Presidential tracking polls....

Gallup: 41% approval for President Trump, 56% disapproval (Jul. 8)
Rasmussen: 46% approval, 53% disapproval (Jul. 13)

--Murders have increased in New York City so far this year, though overall crime continues to fall to historic lows, the NYPD said Thursday, with 147 murders between Jan. 1 and June 30, an increase of 85 from the same period in 2017.  In 2017 there were 136 murders through June and 292 for the entire year – the lowest per-capita murder rate since the 1950s.

Rapes were up a large 33% the first half of the year, with police attributing the rise to victims feeling more comfortable reporting the cases.

But overall crime, from murder and rape to robbery, felony assault, and grand larceny, hit a new low, down 2%.

The murder rate peaked in 1990 at 2,200 during the crack epidemic.

--President Trump’s chauffeur of more than 25 years is suing him for unpaid overtime, describing him in court documents as showing “an utterly callous display of unwarranted privilege and entitlement.”

Noel Cintron, 59, is suing the Trump Organization in court in Manhattan for 3,300 hours of overtime that he says he worked in the past six years, totaling around $178,000.

Cintron was Trump’s driver until the Secret Service took over in 2016.

He also accuses Trump of raising his salary only twice in 15 years – and clawing the second raise back by stopping his health insurance that the Trump Organization was paying for.  In 2006, he got a raise from $62,700 to $68,000, and in 2020 he was given his second raise, to $75,000 – but on the condition he surrendered his health benefits, which Cintron alleges saved the company nearly $18,000 per year.

--The Wall Street Journal’s Valerie Bauerlein reported that “Nearly half of Miss America’s board has quit or have been forced to resign in the wake of the organization’s decision to eliminate the swimsuit competition from the contest, and 22 state pageant leaders are seeking to oust Chairwoman Gretchen Carlson over concerns about the pageant’s new direction.”

I’d oust her....this was easily one of the stupidest moves of any kind this year (including the New York Mets’ hiring of Mickey Callaway as manager).

Ms. Carlson, a former Miss America and leader of the #MeToo movement, said that in dropping the evening-gown and swimsuit competitions and replacing them with an extended onstage interview, it was important to make women’s voices heard during a “cultural revolution in our country.”

So here’s what it comes down to for the Miss America Organization.  It needs the television revenue, having lost $575,000 in 2016 – the latest available figures – on revenue of $9.8 million.

A key to the debate is the opinion of the close-knit group of former Miss Americas.  As Ms. Bauerlein of the Journal notes, “29 of whom released a Saturday statement supporting Ms. Carlson and her team. But dozens of others didn’t sign on, said Ericka Dunlap, Miss America 2004.  ‘This much dissension clearly means that we need to make some major changes or we will not have Miss America,’ she said.”

Adios, girls.

--The feel-good story of the year concluded successfully with the rescue of 12 members of a Thai youth soccer team (ages 11-16) and their coach from a large cave complex in northern Thailand, an ordeal stretching more than two weeks, and wrapping up far sooner, with three rounds of rescues concluding months before we were first told could be the case once the group was discovered.

For 10 days, the Wild Boars soccer squad survived deep underground, their food and drinking water diminished, before British divers found them on July 2.

But as a New York Times story by Hannah Beech noted, it was Adul Sam-on, 14, who played a key role.  “Proficient in English, Thai, Burmese, Mandarin and Wa, Adul politely communicated to the British divers his squad’s greatest needs: food and clarity on just how long they had stayed alive.”

For Thailand, this was a rare cause for cheer as the country has endured four years of military rule following an army coup in 2014.  The nation has been divided, largely rural vs. urban.  And three of the trapped soccer players, as well as their coach, Ekkapol Chantawong, are stateless ethnic minorities.

As Ms. Beech put it: “Their presence undercuts a Thai sense of nationhood that is girded by a triumvirate of institutions: the military, the monarchy and the Buddhist monastery.”

And now Thailand’s military has been handed an opportunity to burnish its image.  It was wonderful throughout this ordeal.  Thai Navy SEAL divers became the face of the operation, and the nation will always remember the retired Thai SEAL diver, Saman Gunnan, 38, who died during the effort to bring air tanks into the cave ahead of the rescue.

It’s an interesting dynamic, since it’s the military that has been delaying elections and a restoration of democracy.

The monarchy also benefited from the outpouring of support for the 13 members of the trapped team.

Initially, the boys’ coach was thought to be criminally liable for the seemingly reckless adventure, but now he’s a hero...and he deserves the accolades for keeping them together all that time...and safe.  Ekkapol had training as a Buddhist monk and he taught the boys how to meditate so they could pass the time without stress.

We were witnesses to the very best of humanity this week.  It was a needed shot in the arm for all of us and we wish Thailand the best as a nation going forward...and full health and normalcy for the team.

---

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

God bless America.

---

Gold $1241
Oil $70.58

Returns for the week 7/9-7/13

Dow Jones  +2.3%  [25019]
S&P 500  +1.5%  [2801]
S&P MidCap  +0.3%
Russell 2000  -0.4%
Nasdaq  +1.8%  [7825]

Returns for the period 1/1/18-7/13/18

Dow Jones  +1.2%
S&P 500  +4.8%
S&P MidCap  +5.0%
Russell 2000  +9.9%
Nasdaq  +13.4%

Bulls  52.4
Bears  18.5 [Prior week, 47.1 / 18.6]

Have a great week.

Brian Trumbore