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07/21/2018

For the week 7/16-7/20

[Posted 11:45 PM ET...Friday]

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Edition 1,006

Trump World...Helsinki

Following Donald Trump’s inauguration on Friday, Jan. 20, 2017, I opened that night with some of the following:

“What a week.  It started with president-elect Trump saying in an interview with German and British media that he was open to lifting sanctions on Russia, NATO was ‘obsolete’ and he wouldn’t commit to the ‘One China’ policy.  Our European allies were terrified, the Kremlin was smiling, and China was torqued off. Days later he took the oath of office....

“Trump wasn’t the least bit magnanimous [in his Inaugural Address, which I quoted extensively], nor did he give our allies any cause for optimism. He ripped them.  There was also no talk of freedom and liberty.

“But Trump’s supporters loved it....

“For now, though, it’s ‘wait 24 hours,’ even though this is the total antithesis of our president’s behavior.  You know where I stand.  I’m reasonably optimistic on the domestic front, but I’m scared to death when it comes to U.S. foreign policy and the immediate threats we face.  I like the president’s foreign policy team, but in the end he makes the call, and the first one is likely to be, ‘What to do with Kim?’”

I’ve been doing this since Feb. 1999 (Nov. 1997 if you count the reviews from my days at PIMCO).  If nothing else I’ve been consistent.  And having covered the George W. Bush and Barack Obama presidencies in their entirety, long-time readers know I rate those two as among the five worst in U.S. history.

Long-time readers also know that I believe the year 2012 will be looked on as the critical year of the entire century, when the books close on it (I’m guessing I die in 2029 in a kiln explosion, a la Fawn Leibowitz...if I’m not hit by an SUV crossing the street beforehand...so maybe someone else will pick up the column after).

Not much has changed since Jan. 20, 2017.  I haven’t changed my tone one iota.  With President Trump, my concerns are still almost totally related to foreign policy.  And you can see from the above that our leader hasn’t changed his tone much when it comes to Russia, Europe and NATO, the latter two still largely viewed as enemies, in his eyes, for some nutso reason.

I also know that Donald Trump loves to say, as he did at a recent campaign rally in Montana, noted in this space at the time, that when it came to his then-upcoming summit with Vladimir Putin: “I have been preparing for this stuff my whole life.”

And so with such great preparation came one of the great disasters in U.S. diplomatic history.  Yet afterwards, we had this.

Trump tweet: “The Summit with Russia was a great success, except with the real enemy of the people, the Fake News Media. I look forward to our second meeting so that we can start implementing some of the many things discussed, including stopping terrorism, security for Israel, nuclear....”

For this week, I guess I have to be included in the ‘Fake News’ crowd.  Donald Trump doesn’t like, nay, despises anyone who criticizes him.  Thus I’m ‘Fake News’ with the rest of them for believing Helsinki wasn’t a “great success.”

Last week, I wrote some of the following that, frankly, was rather prescient.  It was late Friday night, after the NATO summit disaster, and an equal one in the U.K., but three days before Helsinki.

July 13:

“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....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...are deeply troubling....

“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.”

---

And the fire is spreading tonight.  In Monday’s press conference, aside from Trump’s defense of Putin, discussed extensively below as only I do such things, a reporter also asked Putin: “Did you want President Trump to win the election? Did you direct any of your officials to help him do that?”

Putin quickly responded: “Yes, I wanted him to win, because he spoke about normalizing Russian-American relations,” a statement that both destroyed Trump’s narrative of the past 1 ½ years, but also was an admission, in part, that Putin, and Russia, meddled.

In the aftermath of Monday, the week had so many twists and turns, seemingly hourly, Trump dropping endless grenades, and then having a staffer fall on them to cover for him, that this column ends up being the longest ever.

But now we know that President Trump, despite the cascade of criticism and vitriol, is doubling down, inviting Vladimir to Washington this autumn, even before anyone has a freakin’ clue what the two discussed in their closed door, two-hour+ meeting. 

And to make matters worse, if they possibly can be, you have Putin telling an audience of Russian ambassadors on Thursday: “We see that there are forces in the United States that can easily sacrifice Russian-U.S. relations for the sake of their own ambitions.  Let’s see how the events develop, especially considering that certain forces are trying to disavow the results of the meeting in Helsinki.”

Then there was the revelation this afternoon that Trump’s longtime lawyer, Michael Cohen, secretly recorded a conversation with Trump two months before the presidential election in which they discussed payments to a former Playboy model, Karen McDougal, who has claimed she had a year-long affair with Trump in 2006, shortly after Melania gave birth to Barron.

I’m the ‘wait 24 hours’ guy.  We’ll see how this one develops.

More importantly, for now, just what the hell did President Trump agree to give President Putin?  What agreements did Trump reach with Russia, that the Russians are already talking cryptically about, such as on arms control?  Did Trump agree to take no action if Putin gins up a crisis in Montenegro?  We know there are plans on the shelf for the Baltics.

---

We move on.

In an interview with “CBS Evening News” anchor Jeff Glor on Wednesday, discussed further below, Trump made the following statement the media didn’t focus on, but to me it sums up the week, and this president, perfectly.  I provide a few paragraphs prior to the highlighted statement of his for context.

GLOR: Who gives you the best advice? When you come back and you read all these stories, you said, you know, what the fuss is all about. Who do you talk to?

TRUMP: Well, I will tell you, I don’t know what the fuss is all about. I think we did extremely well.  And I think the press makes up the, look, it’s fake news. And people understand. I think the press largely makes up a lot of the fuss about a lot of things. And I’m not talking about everything.

TRUMP: It’s crazy. You do something that’s positive, and they try and make it as negative as possible. Not all. And I have to say this, some of the most honorable people I know, some great people, are reporters, journalists, et cetera. But the level of dishonesty in your profession is extremely high.

GLOR: But the press covered the substance, the wording of that press conference accurately.

TRUMP: I don’t care what they covered. They don’t, they didn’t cover my meeting. The important thing, frankly, was the meeting that lasted for two and a half hours, or almost two and a half hours. And in that meeting, we discussed many, many things that were very, very positive for both countries.

I was driving home from a little shindig when I heard the above...amazing.  The press didn’t cover it, Mr. President, because no one knows what the hell happened!!!

And there was Director of National Intelligence Coats on Thursday afternoon, at the Aspen Security Forum, telling moderator Andrea Mitchell that he does not know what happened in the meeting.  Later in the interview, Mitchell told Coats of the information that hit while the two were sitting there...that Putin had been invited to visit the White House in the fall and Coats said he didn’t know of that either!

[Coats reiterated Thursday, again, that “Russians are the ones trying to undermine our basic values...our elections.”]

Back to the interview...

GLOR: What tangibly emerged from that conversation? What do you feel you achieved?

TRUMP: I think we achieved a lot.  Things emerged...that were very important. Nuclear proliferation between Russia and the United States,  that’s 90 percent of the nuclear weapons.  Protection of Israel. He feels good about that, I feel good about that, very good about that. That was a big factor. We talked about North Korea.  He said he will help.  He agrees with what I’m doing.  He thinks I’m doing a great job with respect to North Korea.  He said he would help. I think he will. Let’s see what happens.

---

Meanwhile, Tuesday, Trump said he misspoke when he suggested otherwise in Monday’s press conference.

“I will begin by stating that I have full faith and support for America’s great intelligence agencies, I always have,” Trump said before a meeting with members of Congress at the White House.  “And I have felt very strongly that, while Russia’s actions had no impact at all on the outcome of the election, let me be totally clear in saying that, and I have said this many times, I accept our intelligence community’s conclusion that Russia’s meddling in the 2016 election took place. It could be other people, also. There are lots of people out there.  7.2 billion, to be exact, I’d add.

Trump then said he needed to correct a statement made during the press conference with Putin.

“The sentence should have been: ‘I don’t see any reason why it wouldn’t be Russia.’ Sort of a double negative.  So you can put that in, and I think that probably clarifies things pretty good by itself,” reading from a printed script marked with the words, “There was No Collusion.”

Wednesday, in the interview with Jeff Glor, Trump again expressed confidence in U.S. intelligence agencies and their assessment of Russian interference, but declined to say whether he believes Vladimir Putin was lying when he denied Russia was behind the meddling effort. 

Trump said he believes it’s “true” Russia meddled in the 2016 election and said he directly warned Putin against interfering in U.S. elections during their one-on-one meeting.

Asked what he said to Putin, Trump responded, “Very strong on the fact that we can’t have meddling, we can’t have any of that...I let him know that we can’t have this, we’re not going to have it, and that’s the way it’s going to be.”

As for Director of National Intelligence Dan Coats, Trump told Jeff Glor, “Well, I accept.  I mean, he’s an expert.  This is what he does. He’s been doing a very good job.  I have tremendous faith in Dan Coats, and if he says that, I would accept that. I will tell you though, it better not be. It better not be.”

Trump said he also accepts Coats’ assessment that the threat from Russia is ongoing. But he declined to say whether his faith in the intelligence community leads him to the conclusion that Putin’s denials are untrue.  “So if you believe U.S. intelligence agencies, is Putin lying to you?” Glor asked.

“I don’t want to get into whether or not he’s lying,” Trump said. “I can only say that I do have confidence in our intelligence agencies as currently constituted.  I think that Dan Coats is excellent.  I think that [CIA Director] Gina [Haspel] is excellent. I think we have excellent people in the agencies, and when they tell me something, it means a lot.”

[The same day, Wednesday, FBI Director Christopher A. Wray, told the Aspen Security Forum: “The intelligence community’s assessment has not changed. My view has not changed, which is that Russia attempted to interfere with the last election and continues to engage in malign influence operations to this day.” The Russian efforts are “aimed at sowing discord and divisiveness in this country,” he continued.  “We haven’t yet seen an effort to target specific election infrastructure this time.  We could be just a moment away from the next level...It’s a threat we need to take extremely seriously and respond to with fierce determination and focus.”]

Earlier Wednesday, Trump sparked confusion about where he stands on whether Russia is an existing threat, given Coats’ assessment that the threat to America’s digital infrastructure is current.  White House press secretary Sarah Sanders told reporters that Mr. Trump’s response to a reporter’s question had been misconstrued.  When he said ‘no,’ she said, he was not answering the reporter’s question about whether he thought Russia is still targeting the U.S.

Those in the room who observed the pool reporter’s question believe the president was answering her.

And there was another issue.  Trump said he would discuss a Russian proposal to question American citizens, including former U.S. Ambassador Michael McFaul, whom the Kremlin accuses of committing crimes in Russia.

By the time this last one played out on Thursday, the White House had backed off the idea, as the Senate was voting 98-0 on a motion that prohibits the transfer to Russia of a figure such as McFaul.

Among the comments made by members of Congress....

House Speaker Paul Ryan (R-Wis.): “There is no question that Russia interfered in our election and continues attempts to undermine democracy here and round the world. That is not just the finding of the American intelligence community but also the House Committee on Intelligence. The president must appreciate that Russia is not our ally.  There is no moral equivalence between the United States and Russia, which remains hostile to our most basic values and ideals.  The United States must be focused on holding Russia accountable and putting an end to its vile attacks on democracy.”

Sen. John McCain (R-Ariz.): “(It was) one of the most disgraceful performances by an American president in memory.  The damage inflicted by President Trump’s naivete, egotism, false equivalence, and sympathy for autocrats is difficult to calculate. But it is clear that the summit in Helsinki was a tragic mistake.”

Sen. Bob Corker (R-Tenn.): “I’ll take a back seat to no one in the United States Senate on challenging what happened at NATO, what happened in Helsinki.  I take a back seat to no one on pressing this administration for some of the worst things that I’ve seen happen in public as it relates to our country.”

Sen. Ben Sasse (R-Neb.) blasted Trump’s statement blaming both sides in the U.S.-Russia relationship as “bizarre and flat-out wrong.”

“America wants a good relationship with the Russian people but Vladimir Putin and his thugs are responsible for Soviet-style aggression.”

Sen. Jeff Flake (R-Ariz.): “I never thought I would see the day when our American President would stand on the stage with the Russian President and place blame on the United States for Russian aggression. This is shameful.”

Mitt Romney: “President Trump’s decision to side with Putin over American intelligence agencies is disgraceful and detrimental to our democratic principles.   Russia remains our number one geopolitical adversary; claiming a moral equivalence between the United States and Russia not only defies reason and history, it undermines our national integrity and impairs our global credibility.”

Former House Speaker Newt Gingrich: “President Trump must clarify his statements in Helsinki on our intelligence system and Putin. It is the most serious mistake of his presidency and must be corrected – immediately.”

For the record, the European press blistered Trump’s performance with headlines like “Best ally of Putin” ... “Trump makes it easy for Putin” ... “Trump 0, Putin 1” ... Helsinki marked an “American surrender” ... Britain’s Guardian newspaper, in its lead headline, rolled out the T-word – “treasonous.”

But in Russia, Putin’s performance was of course hailed as a national triumph.  The state newspaper Rossiyskaya Gazeta trumpeted: “The West’s attempts to isolate Russia failed.”

And it’s true that Europe’s far right issued its own plaudits, such as from Italy’s hardline Interior Minister Matteo Salvini, who praised Russia for having a government “that acts in the interests of its people” and lamented that such behavior was “rare in Europe.”

But an op-ed in Le Monde called the Trump-Putin meeting a “dangerous liaison” for the entire world.

“Trump is praising Putin while at the same time he is constantly attacking without any reason America’s closest allies,” columnist Martin Klingst wrote in Germany’s Die Zeit online.

I have to add, again, that neither Putin nor Trump drink...just sayin’. 

In a post-summit CBS News poll published Thursday, less than a third of Americans approve of how President Trump handled Helsinki, 32 percent, but 68 percent of Republicans think he did a good job.  Overall, 55 percent were unhappy.  [Among Independents, 53 percent were not happy with how Trump handled things, 29 percent approved.]

A Reuters poll, also taken after Monday’s summit, had similar numbers.  55 percent of registered voters disapproved of Trump’s dealings with Russia, while 37 percent approved, but 71 percent of GOP voters supported Trump’s handling of Russia.

Opinion....not all of it unfavorable to Mr. Trump...

Editorial / New York Daily News

“Before the entire world Monday, the self-styled tough-guy, America-First President revealed himself to be Russian President Vladimir Putin’s poodle.

“Putin flatly denied what every U.S. intelligence agency has concluded, what new indictments by Special Counsel Robert Mueller now underline: That agents of the GRU, the intelligence agency Putin used to work for and still leads, spearheaded 2016 presidential election interference.

“The Russian president counters the mountain of evidence with an empty and robotic assertion: ‘the Russian State has not interfered and will never interfere in internal American affairs.’

“Associated Press reporter – and Daily News alum – Jonathan Lemire gave Trump a binary choice: ‘who do you believe?’

“At first, the man it pains us to say is our President refused to answer the question. He attacked Democrats for losing the election and dissembled, weaving together bits of conspiracy theories. Then he got down to brass tacks: He believes Putin.

“ ‘Coats said they think it’s Russia,’ Trump said, referring to his director of national intelligence.  ‘Putin says it’s not Russia.  I don’t see any reason why it would be’ Russia. That sound you hear is the head of the U.S. executive branch stabbing his intelligence agencies in the back in order to side, against all evidence, alongside the leader of a country that meddled in an American election and wants to do it again.

“Trump, in fact, blessed Putin as ‘extremely strong and powerful’ in his denial – words he would never assign to the reams of proof compiled by the top four American intelligence agencies – and talked up the Russian president’s ‘incredible offer’ to have his own agents review what U.S. officials have found.

“He derides reports with which he disagrees as ‘fake news,’ then buys the Russian narrative hook, line, sinker, pole and boat.

“Ignorant about decades of Moscow meddling, from the Korean and Vietnam Wars, to Cuba and Eastern Europe, Trump says relations have ‘NEVER been worse.’  Worse than the ignorance is the finger-pointing: He blames ‘many years of U.S. foolishness and stupidity and now, the Rigged Witch Hunt.’

“Nothing about Russia’s annexation of Crimea. Or its complicity in the shooting down of a civilian airliner.  Or its meddling in the 2016 elections.

“ ‘We’re all to blame,’ said the American President Monday, the foreign-policy equivalent of his ‘both sides’ drivel after a white supremacist rally in Charlottesville. It would be high comedy if it were not a national tragedy.  And a national emergency.”

Editorial / New York Post

“President Trump sought to boost U.S.-Russian ties when he met with Vladimir Putin in Helsinki on Monday. But his failure to publicly hold the Russian accountable for his aggressive behavior – on numerous fronts – will only embolden him and fuel more tension down the road.

“Most troubling was when Trump effectively endorsed Putin’s denial that Russia interfered in the 2016 election, contradicting not only Republican-controlled congressional committees, but even Trump’s own national security adviser and director of national intelligence. Putin ‘said it’s not Russia,’ declared Trump, adding: ‘I don’t see any reason why it would be.’  Huh?

“The president was right to meet with Putin in a bid to promote dialogue and establish a personal relationship with his Russian counterpart. But that also means holding Putin accountable, not just for election meddling but his outright aggression and complicity in Bashar al-Assad’s war against the Syrian people, among other things.

“Given an opportunity on the world stage, Trump backed away.  Little wonder that his performance has drawn howls of outrage from normally supportive officials.

“ ‘The president must appreciate that Russia is not our ally,’ said House Speaker Paul Ryan.  ‘There is no question that Russia interfered in our election.’

“Added Sen. Marco Rubio: ‘Foreign policy must be based on reality, not hyperbole or wishful thinking.’

“The harshest criticism came from Sen. John McCain, who charged that ‘no prior president has ever abased himself more abjectly before a tyrant.’

“President Trump had a real opportunity to forge a new relationship with Russia by projecting strength and commanding respect. He failed to do so – and it likely will come back to haunt him.”

Editorial / Wall Street Journal

“Donald Trump left for Europe a week ago with his reputation enhanced by a strong Supreme Court nomination. He returned Monday with that reputation diminished after a tumultuous week of indulging what amounts to the Trump First Doctrine.

“Mr. Trump marched through Europe with more swagger than strategy. His diplomacy is personal, rooted in instinct and impulse, and he treats other leaders above all on how much they praise Donald J. Trump.  He says what pops into his head to shock but then disavows it if there’s a backlash. He criticizes institutions and policies to grab headlines but then claims victory no matter  the outcome.

“The world hasn’t seen a U.S. President like this in modern times, and as ever in Trump World everyone else will have to adapt. Let’s navigate between the critics who predict the end of world order and the cheerleaders who see only genius, and try to offer a realistic assessment of the fallout from a troubling week.

NATO: The result here seems better than many feared. Mr. Trump bullied the allies with rhetoric and insulted Germany by claiming it is ‘totally controlled’ by Russia. But his charges about inadequate military spending and Russia’s gas pipeline had the advantage of being true, as most leaders acknowledged.

“The 23-page communique that Mr. Trump endorsed is a solid document that improves NATO’s capabilities to deter and resist a threat from Russia. Mr. Trump’s last-minute demand that countries raise military spending to 4% of GDP was weird, but he is right that more countries are likely to meet the 2% target.

“One risk is that Mr. Trump’s constant criticism of NATO will undermine public support for it in the U.S. – and, more dangerously, undermine the alliance’s deterrence against Russia. If Vladimir Putin concludes Mr. Trump isn’t willing to protect the Baltic states, he may pull another Crimea.

The Brits: Mr. Trump turned a friendly visit into a fiasco by criticizing Prime Minister Theresa May’s Brexit strategy in an interview with the Sun newspaper. He backtracked a day later, calling his own comments on tape ‘fake news,’ and Mrs. May was gracious.  But Mr. Trump should encourage a U.S.-British post-Brexit trade deal both in the U.S. interest and to help Britain negotiate the most favorable Brexit terms from the European Union.  Other leaders will conclude from his rude treatment of Mrs. May that working with Mr. Trump is more perilous than fighting him.

The EU: In contrast to NATO, Mr. Trump does seem to want to undermine the European compact. He called it a ‘foe’ on trade, which will make negotiating a better trade deal even less likely.  He seems determined to impose a 20% or higher tariff on European autos to strike at Germany, which would also hit France and others. The U.S. isn’t part of the EU, but American Presidents have found it useful as an ally to leverage sanctions against, say, Russia or Iran.  Mr. Trump is stoking European resentments that will bite back sooner or later when he wants Europe’s help.

Russia: Details from the private Trump-Putin talks in Helsinki will spill out in coming days, but Monday’s joint press conference was a personal and national embarrassment. On stage with the dictator whose election meddling has done so much harm to his Presidency, Mr. Trump couldn’t even bring himself to say he believed his own intelligence advisers like Dan Coats over the Russian strongman.

“ ‘I have – I have confidence in both parties,’ Mr. Trump said.  ‘So I have great confidence in my intelligence people, but I will tell you that President Putin was extremely strong and powerful in his denial today.’  Denials from liars usually are strong and powerful.

“The charitable explanation for this kowtow to the Kremlin is that Mr. Trump can’t get past his fury that critics claim his election was tainted by Russian interference. And so he couldn’t resist, in front of the world, going off on a solipsistic ramble about ‘Hillary Clinton’s emails’ and Democratic ‘servers.’  He can’t seem to figure out that the more he indulges his ego in this fashion, and the more he seems to indulge Mr. Putin, the more ammunition he gives to his opponents.

“For a rare moment in his Presidency, Mr. Trump also projected weakness. He was the one on stage beseeching Mr. Putin for a better relationship, while the Russian played it cool and matter of fact.  Mr. Trump touted their personal rapport, saying the bilateral ‘relationship has never been worse that it is now.  However, that changed as of about four hours ago.  I really believe that.’  In four hours?

“Mr. Putin focused on his agenda of consolidating Russian strategic gains in Syria, Ukraine and arms control, and suggesting that the American might help. Mr. Trump even seemed to soften his stance against Russia’s Nord Stream 2 gas pipeline to Germany.

“By going soft on Mr. Putin, Mr. Trump will paradoxically find it even harder to make deals with the Russian. Republicans and Democrats will unite in Congress, as they should, to limit his diplomatic running room. Mr. Trump may decide to court Mr. Putin anyway, like Barack Obama did Iran’s mullahs, but political isolation concerning a foreign adversary is a weak and dangerous place to be.”

Walter Russell Mead / Wall Street Journal

“Among the president’s remarkable assumptions about Vladimir Putin’s Russia: that it can be induced to cooperate with the U.S. on a wide range of security issues, including Syria and Iran; and that it can replace Germany as America’s principal Eurasian partner – or, if not, the U.S. can use the threat of a Russian alliance to extract better terms from Germany and the European Union.  The president is confident that he possesses the bargaining ability and diplomatic talent to manage the complex negotiations involved.

“Why does Mr. Trump seem so determined to defy his advisers and play a Russia card that costs him dearly in Washington and nourishes the suspicions of the investigators probing his Russia connections?  His fiercest critics are sure they know the answer: Vladimir Putin has ‘compromised’ the president, leaving him no choice but to appease the Russian dictator.

“Special counsel Robert Mueller will be in a better position to assess that question than the journalists who speculate about it wildly.  Meanwhile, after Mr. Trump’s meeting with Mr. Putin in Helsinki, it’s worth remembering that his Russia policy is less of an outlier than some of his critics assume. Both George W. Bush and Barack Obama also naively overestimated their ability to charm Mr. Putin.

“Mr. Obama’s policy in particular bore similarities to Mr. Trump’s.  Both men held Washington’s foreign-policy establishment (‘the blob’ or ‘the deep state’) in contempt.  Both came to the job with a belief that their unique life stories and personal qualities would enable them to transform global politics in a historic way.  Both were willing to accept a Russian presence in Syria and to overlook Russian complicity in Bashar Assad’s atrocities.  Long after the 2009 ‘reset’ failed, Mr. Obama was willing to flout domestic public opinion to make concessions to Russia. As he whispered to Russia’s then-President Dmitry Medvedev in 2012: ‘This is my last election I have more flexibility,’ on issues like missile defense.

“While the press celebrated rather than pilloried him for it [Ed. not true], Mr. Obama also made overtures to a U.S. adversary (Iran) over the heads of longtime allies (Israel and the Gulf states).  Mr. Trump’s Russia overtures over Germany’s head are just as ill-considered.

“What differentiates Mr. Trump from Mr. Obama most sharply is his approach to Europe.  Mr. Obama saw Europe as a rich and generally well-intentioned part of the world that punches well below its weight in world affairs. Mr. Trump’s view has been profoundly influenced by hard-core Brexiteers like Nigel Farage and anti-Islamist campaigners who see in the EU a mix of fecklessness in defending Western values and ruthlessness in promoting its own bureaucratic power.

“Similarly, both Mr. Trump and the Brexiteers see the EU as a screen for German domination of the Continent. And Mr. Trump’s concern that ‘excessive’ levels of migrants from Islamic countries threaten the social cohesion of Western societies tallies with the views of politicians in countries across Europe who resent German power and fear the imposition of post-Christian, post-nationalist values through the EU.

“From this perspective, Mr. Putin looks less like a malign force bent on dismantling the cathedral of liberty and more like an unsavory but potentially useful partner. After all, the one indisputable success of the EU is forming a bloc that can collectively resist American pressure on trade. Mr. Trump sees the trade balance as a fundamental inequity in the trans-Atlantic relationship. From this mercantilist perspective, cooperating with Mr. Putin’s anti-EU agenda is appealing to the president.

“A fresh start with Russia appears to be as much of an idee fixe for Mr. Trump as outreach to Iran was for his predecessor.  Mr. Obama never fully appreciated that the U.S. political system limits the ability of presidents to bring about diplomatic revolutions in the teeth of congressional resistance.  It remains to be seen whether and how quickly Mr. Trump will grasp this important truth.”

Editorial / Washington Post

“The enduring image of the U.S.-Russian summit in Helsinki on Monday will be that of President Trump standing next to Vladimir Putin and suggesting he found Mr. Putin’s ‘powerful’ denial at least as persuasive as the U.S. intelligence community’s unanimous finding that Russia intervened in the 2016 election.  Coupled with another groundless attack on the FBI and an apparent endorsement of a patently disingenuous offer by Mr. Putin to collaborate with the investigation of special counsel Robert S. Mueller III, Mr. Trump appeared to align himself with the Kremlin against American law enforcement before the Russian ruler and a global audience.

“Mr. Trump had said  he would raise the issue of Russia’s interference in the election with Mr. Putin, but the result was a series of statements that could have been scripted by Moscow.... He referred to various discredited conspiracy theories about the hack while lambasting the FBI.  When offered an open-ended opportunity to cite any behavior by Russia that had contributed to poor relations, the president sidestepped, saying, ‘I hold both countries responsible.’  As Mr. Trump apparently sees it, Russia’s invasions of Ukraine and Georgia, war crimes in Syria, poison attack in Britain and the shooting down of a Malaysian civilian airliner over Ukraine are morally equivalent to the policies pursued by previous U.S. administrations.

“It’s not yet known what Mr. Trump and Mr. Putin discussed in their private meeting, or whether they reached any tangible agreements. Both leaders suggested there had been accord on securing Israel’s border with Syria and on providing humanitarian aid to Syrian refugees, though they offered no details. Even if he obtained nothing concrete from Mr. Trump, Mr. Putin scored a symbolic triumph by appearing to stand as an equal with the U.S. president in a relationship with ‘special responsibility for maintaining international security,’ as he put it.

“While Mr. Trump’s insistence on granting Mr. Putin that status was misguided, it paled beside his betrayal of the FBI and his own senior intelligence officials.  Incredibly, Mr. Trump appeared to endorse a cynical suggestion by Mr. Putin that Mr. Mueller’s investigators be granted interviews with a dozen Russian intelligence officers indicted in the DNC hack in exchange for Russian access to associates of William Browder, a financier whose exposure of high-level corruption and human rights crimes in Moscow led to the adoption by Congress of the Magnitsky Act, which imposed sanctions on those responsible....

“In Helsinki, Mr. Trump again insisted ‘there was no collusion’ with Russia.  Yet in refusing to acknowledge the plain facts about Russia’s behavior, while trashing his own country’s justice system, Mr. Trump in fact was openly colluding with the criminal leader of a hostile power.”

William D. Hartung / Defense News

“President Trump’s dismissal of Russian interference in the 2016 election – choosing to believe Vladimir Putin over U.S. intelligence and law enforcement agencies has rightly sparked outrage and astonishment. But we shouldn’t let Trump’s disgraceful performance in Russia overshadow the other key issues raised by his recent trip.

“In particular, Trump’s tantrum over the need for NATO allies to spend more on defense deserves greater scrutiny. Whether the goal is 2 percent of GDP – the alliance’s long-stated goal – or 4 percent, a fantastic figure Trump floated as well – the real question is whether NATO or the United States need to spend more on traditionally military assets to ensure their security. Contrary to Trump’s assertions, the answer is no.

“According to the Stockholm International Peace Research Institute, the 29 members of the NATO alliance spent a cumulative $900 billion on defense last year, while Russia spent $66 billion. Even allowing for the fact that much of the U.S. share of that total is spent on global security challenges, NATO far outspends Russia. The top four European spenders – France, Germany, the United Kingdom, and Italy – together spend more than two-and-one-half times what Russia does.  If security is just about who spends the most money, NATO is already far ahead of Moscow. The real question is what NATO countries spend their money on.

“The Russian challenge does not require a buildup of costly military assets like tanks, aircraft, or ships. Russian tanks will not be rolling into East and Central Europe, and NATO aircraft will not be engaging in aerial dogfights with Russian planes. The biggest Russian threats to the United States and Europe are potential cyberattacks, political interference through the systematic deployment of funds and propaganda, and, possibly, the kind of hybrid warfare Moscow waged in Ukraine. None of these threats can be effectively addressed by accumulating more traditional military power.

“For Europe, the best route to greater security will involve addressing the most pressing internal problems, from combatting the rise of right-wing, and in some cases neo-fascist parties; finding an equitable solution to its refugee crisis; and reforming its political and economic system to give hope to those left behind by European integration.  These changes will make it harder for right-wing parties to get political traction, and will make European citizens less vulnerable to Russian propaganda efforts.

“As for military spending, the challenge remains what it has been for some time: crafting a coherent Europe-wide force, or at least a grouping of national forces that can act in an integrated fashion in a crisis.  This will involve the ability to deploy well-trained troops to crisis points rapidly.  It will also require, to the extent politically possible, an effort to reduce redundancy in procurement that wastes a significant portion of the continent’s current military investments.

“The one threat that President Trump can and should address is the continuing nuclear challenge posed by the possession of massive overkill by Washington and Russia. Progress on arms control is complicated in the short-term by Trump’s loss of credibility in the United States and globally due to his erratic behavior and uncritical embrace of Vladimir Putin. But at a minimum, Trump should agree to extend the New START nuclear arms agreement, which benefits U.S. security by limiting U.S. and Russian nuclear deployments to 1,550 weapons each, and, as or more importantly, gives the U.S. the ability to inspect and monitor nuclear developments in Russia.”

Editorial / Washington Post

“It is still not publicly known what President Trump and Russian President Vladimir Putin discussed on Monday during their two hours of one-on-one conversation in Helsinki. But the White House confirmed Wednesday that they did talk about an issue Mr. Putin later raised at their joint news conference in a way that was inappropriate as well as disturbing. Addressing the indictment of 12 Russian military officers on charges of hacking Democrats’ computers and using the stolen data to influence the 2016 election, Mr. Putin suggested the investigative team of special counsel Robert S. Mueller III could be invited to witness their questioning by Russian authorities – provided that similar access was given to Americans ‘who have something to do with illegal actions on the territory of Russia.’ ‘I think that’s an incredible offer,’ volunteered Mr. Trump.

“As it turned out, Mr. Putin was trying to equate the Mueller investigation with a sinister Russian campaign against Bill Browder, an American-born financier who has become a Putin nemesis. After his lawyer, Sergei Magnitsky, was jailed and killed for exposing a massive fraud involving senior Russian officials, Mr. Browder persuaded Congress to pass the 2012 Magnitsky Act, which has led to sanctions against numerous officials in the Putin clique. In an attempt to get the sanctions lifted, the Putin government has tried to portray Mr. Browder as a criminal, repeatedly and unsuccessfully seeking his arrest by Interpol....

“That Mr. Trump would endorse this cynical and preposterous proposal might be chalked up to ignorance or confusion – except that Mr. Trump knows all about Mr. Putin’s false claims against Mr. Browder. The same charges were the subject of the June 9, 2016, Trump Tower meeting between Russian lawyer Natalia Veselnitskaya and three senior Trump campaign officials, including Donald Trump Jr.  The younger Trump agreed to the meeting, which is reportedly a focus of Mr. Mueller’s investigation, after being promised damaging information on Ms. Clinton.  The president later dictated a misleading statement, saying the meeting was about adoptions; Mr. Putin had halted U.S. adoptions of Russian children following the passage of the Magnitsky Act.  Mr. Putin’s airing of the same allegations about Mr. Browder and Ms. Clinton in Helsinki only bolsters the case that Ms. Veselnitskaya was acting on the Kremlin’s behalf when she visited Trump Tower.  In turn, Mr. Trump’s rush to embrace Mr. Putin’s disingenuous proposal to question eminent Americans about those claims is in keeping with his alignment with Mr. Putin against Mr. Mueller and the U.S. justice system.  It shows he did not misspeak at that news conference: he was, in fact, championing Mr. Putin’s agenda.”

Thomas L. Friedman / New York Times

“If your puppy makes a mess on your carpet and you shout ‘Bad dog,’ there is a good chance that that puppy’s ears will droop, his head will bow and he may even whimper. In other words, even a puppy acts ashamed when caught misbehaving. That is not true of Donald Trump. Day in and day out, he proves to us that he has no shame. We’ve never had a president with no shame – and it’s become a huge source of power for him and trouble for us.

“And what makes Trump even more powerful and problematic is that this president with no shame is combined with a party with no spine and a major network with no integrity – save for a few real journalists at Fox News like the outstanding Chris Wallace.

“When a president with no shame is backed by a party with no spine and a network with no integrity, you have two big problems.

“First, there is no one inside his party or base who is going to sustainably stop Trump from being himself and doing whatever he bloody pleases. The Republican Party has completely lost its way. Don’t be fooled by the last-second tut-tutting of G.O.P. senators about Trump’s kowtowing to Vladimir Putin in Helsinki and spurning of our intelligence agencies.

“Until and unless the G.O.P.-led Congress passes legislation that protects special counsel Robert Mueller from being fired by Trump or enacts into law specific, deeper sanctions on Russia if it is ever again caught trying to tilt our elections – or secures Trump’s tax returns or the transcript of his two hours and 10 minutes of private conversation with Putin – it’s all just talk to cover the G.O.P’s behind.

“Let the Republicans in Congress do something hard and concrete that shows they love our country more than they fear Trump’s base and I will believe their words.

“I can’t put it better than Michael Gerson, the former George W. Bush speechwriter, did in the Washington Post Monday: ‘Much of the G.O.P. is playing down Russian aggression. And it is actively undermining the investigation of that aggression. Trump’s political tools have become Putin’s useful idiots. The party of national strength has become the obstacle to the effective protection of the country.’

“The G.O.P. has lost its way because it has been selling itself for years to whoever could keep it in power, and that is now Trump and his base.  And Trump’s base actually hates the people who hate Trump – i.e., liberals who they think look down on members of the base – more than it cares about Trump.  This is about culture, not politics, and culture doesn’t change with the news cycle. And neither do business models – and Fox News’ business model is to feed, and feed off of, that culture war by allowing many of its commentators to be Trump’s parrots and bullhorns.

“The fact that Trump’s party and his network always look for ways to excuse him has been hugely liberating for Trump.  He can actually deny he said things that were recorded – like his trashing of the British prime minister. He can take one side of any issue (like trashing key NATO allies to satisfy his base) and, when he gets blowback, take the other side (claim to love the Atlantic alliance). And he can declare that he really meant to ask why ‘wouldn’t’ Russia be the one hacking us instead of why ‘would’ it, as he did say.    If you believe that last one, I have a bridge near the Kremlin I’d love to sell you.

“ ‘Hey, give him a break,’ say Trump’s supporters, ‘there is a method to his madness.’  And that is true. What they don’t admit, though, is that there is tremendous madness to Trump’s method.  And the, there is just his sheer madness – ideas he holds that are ignorant gut impulses that bear no relation to science, math or history.

“For instance, Trump is right: We do need to confront China on its trade restrictions, forced technology transfers and nonreciprocal trade arrangements. But then, look at the madness to his methods.  How would you try to influence China on trade if you were thinking strategically?

“For starters, you’d sign the Trans-Pacific Partnership, creating a free-trade alliance around American values, standards and interests, with 11 other Pacific economies, creating a trade agreement covering 40 percent of global G.D.P. Then you’d forgo ridiculous steel and aluminum tariffs on our European Union allies and sign them all up instead to join us in our efforts to curb China’s trade abuses, which the E.U. suffers from just as much as we do....

“And then there is the sheer madness.  Threatening the U.K. that if it doesn’t do a full Brexit it will not get preferential trade treatment from Trump, calling the bloc a ‘foe’ on trade, and sneering at the number of refugees it has admitted.

“Where do you start? The E.U. is the United States of Europe – the other great center in the world of free markets, free people, liberty and democracy. It has kept the peace in Europe after a century of strife there – that dragged us into two world wars – and its economic growth as a trading partner has made both America and the E.U. steadily richer and more stable. It is sheer madness to believe that it is in U.S. interests to see the European Union fracture!

“Ask any senior U.S. military officer and you’ll be told that our greatest strategic competitive advantages is that we have a network of allies, like the E.U., and the Russians and Chinese do not.  They only have customers and vassals.  Why would we give that up for closer ties to Putin?

“Also, speaking of sheer madness, so much of the immigration that has swamped Europe of late has come from migrants from Syria and sub-Saharan Africa. Both migrations are the product of political turmoil fed by climate change, the collapse of small-scale agriculture and rapid population growth in the Middle East and Africa.  (Ditto Central America.) And what is Trump’s policy? Trash all global efforts to mitigate climate change, ban all U.S. government support for family planning overseas – and get out of Syria, rather than use our leverage there to try to stabilize its refugee flow.

“The only way to change this situation is not by hoping that the president develops some shame or that this version of the G.O.P. develops some spine.  It is by Democrats winning the House, the Senate or both in the midterm elections.

“Only by dealing an electoral defeat to this version of the G.O.P. in the midterms will we possibly get a healthy conservative party again (which we need) and curb Trump’s power.

“Everything else is just words – and words without power change nothing.”

Holman W. Jenkins, Jr. / Wall Street Journal

“Robert Mueller did his reputation for nonpartisanship no service by launching his indictment of Russia’s military hackers on the eve of what 99% of the media now say was a disastrous performance by President Trump in his summit with Vladimir Putin.

“This is the same Mr. Mueller who, as FBI chief, sat for five years on the indictment of a Russian uranium executive when it would have been embarrassing to Mr. Obama’s own Russian rapprochement – and doubly embarrassing to his secretary of state, Hillary Clinton, because of the connection to the Clinton Foundation to the Russian uranium business in question.

“Mr. Mueller’s timing on Friday was unnecessary. His indictment is only for show.  The Russian culprits will never be seen in a U.S. court.

“It raises a question I did not expect to be raised: Should we now see Mr. Mueller as part of the retinue that includes former Obama CIA chief John Brennan, former Director of National Intelligence James Clapper and (ambiguously) former FBI chief James Comey?  These men don’t like Mr. Trump or his Russia rapprochement; Mr. Brennan openly calls him a traitor.

“One hesitates to draw the comparison, but Truman and Eisenhower were assailed as agents of the Soviet Union by Joseph McCarthy. Reagan was accused (by George Will) of selling out to Gorbachev.  Critics of FDR’s foreign policy were actually proved right in the historical archives: The British were seeking to assure his re-election in 1940. Politics never did stop at the water’s edge.  It can’t.  All presidents use foreign policy the way they do domestic policy: to create, expand or protect their domestic political capital. That’s how our system works.

“And their opponents will always have recourse to the accusation that a president is a dupe or worse of foreign interests.

“Mr. Trump’s performance in Helsinki left a great deal to be desired, but he delivered the policy he has promised since the 2016 campaign. It is identical to the policy of his two most recent predecessors.

“Mr. Trump has a history of financial relations with Russians.  He has a history of statements saying that American leaders were ‘weak’ and relations with Russia would improve if the U.S. had a ‘strong’ leader.

“He has sought to expand America’s military power; he has sought to expand its energy power. One senses his walloping of Germany over the Nord Stream pipeline is less aimed at weakening Russia than at expanding U.S. gas sales but it would still weaken Russia....

“The best you can say about all this, there’s a consistency here. Mr. Trump may not know Palmerston, who said countries don’t have permanent friends, only permanent interests, but I wouldn’t put it past him to have seen the quote in a Charles Krauthammer column.

“Of course, you can never disprove sinister influences, an impossibility on which certain fellow journalists will be hanging their reputations for years to come. But a reliable assumption that covers all cases is that presidents act in their own interest.  Meanwhile, we have a democratic process, not to mention an extensive permanent bureaucracy with its own ideas, to help sort it out....

“Mr. Trump isn’t the answer to Mr. Putin’s dreams. The answer to his dreams is the U.S. tearing itself apart over tendentious, partisan claims of ‘treason,’ which ought to have some cheerleaders of this meme thinking twice.

“You would also think that Americans by now would have no trouble understanding that small, jealous men can rise to positions of authority.

“When looking at Mr. Trump or his enemies – such as Messrs. Brennan, Clapper and Comey, or Rep. Adam Schiff – do you honestly see Jesus in any of them? I don’t.  Nor would I expect to. Nor, thank God, do I believe it’s necessary in order for the United States to survive and prosper.”

Editorial / Wall Street Journal...later in the week...

“President Trump rarely admits mistakes, so it was good on Tuesday to see him reverse his claim of Monday that Russia may not have interfered in the 2016 U.S. election.  The problem is that he still doesn’t seem to understand the nature of the adversary known as Vladimir Putin whom he wants to make his friend.

“ ‘I have full faith in our intelligence agencies,’ Mr. Trump said Tuesday at the White House. He added that he unintentionally erred Monday when he said, ‘I don’t see any reason why it would be Russia’ that had done the cyber-hacking. He said he meant to say, ‘I don’t see any reason why it wouldn’t be Russia.’

“We wonder who thought of that one, but never mind. At least Mr. Trump has at last publicly sided with his own advisers over the former KGB agent in the Kremlin.  He also said ‘we are doing everything in our power to prevent Russian interference’ in the 2018 election, which his intelligence advisers have also warned him about.

“Less encouraging is Mr. Trump’s continued enthusiasm for working with Mr. Putin on issues like Syria and arms control.  On nuclear weapons in particular, Mr. Trump is a neophyte compared with the Russian who wants to rewrite the historical record to lure the President into further reducing the U.S. arsenal.

“Nuclear weapons are ‘the greatest threat of our world today,’ Mr. Trump told reporters Tuesday. Russia is ‘a great nuclear power, we’re a great nuclear power. We have to do something about nuclear, and so that was a matter that we discussed actually in great detail, and President Putin agrees with me.’

“Uh oh.  In an interview with Fox News host Chris Wallace Monday, Mr. Putin lamented America’s ‘unilateral withdrawal’ from the 1972 Anti-Ballistic Missile Treaty (ABM) during the George W. Bush administration.  ‘We didn’t want the United States to withdraw from the ABM treaty, but they did despite our request not to do it,’ Mr. Putin said.

“What Mr. Putin didn’t explain is that the ABM Treaty, which limited deployments of missile defenses, was a bilateral pact that the U.S. adhered to and the Soviets repeatedly violated, notably by building a large, phased-array radar at Krasnoyarsk. When the Soviet Union collapsed in 1991, the ABM Treaty was effectively voided, yet Republican and Democratic Presidents kept the treaty in place.

“George W. Bush finally withdrew from ABM in 2002, explaining that the Cold War had ended, Russia was no longer an enemy, and the treaty hindered the U.S. ‘ability to develop ways to protect our people from future terrorist or rogue state missile attacks.’ The Bush Administration understood that the treaty left the U.S. defenseless against a missile from the likes of Iran and North Korea....

“Yet on Monday Mr. Putin said Russia’s development of new offensive weaponry like the Sarmat intercontinental ballistic missile was ‘born as a response to the unilateral withdrawal of the United States from the ABM Treaty.’

“In his news conference with Mr. Trump, Mr. Putin also excused Russian violations of the 1987 intermediate-range Nuclear Forces Treaty, which bars ground-launched ballistic and cruise missiles with ranges of 500 to 5,500 kilometers.  Mr. Putin  blamed ‘implemental issues.’  He didn’t say that the Pentagon believes a new medium-range nuclear cruise missile that Russia has deployed in Europe violates the INF treaty. And Mr. Trump didn’t call him on it.

“Mr. Putin wants to draw Mr. Trump into an arms-control negotiation that would revive the ABM limits while expanding Barack Obama’s New Start reductions in U.S. missiles.  Mr. Trump is so confident of his personal deal-making skills, and so untutored in nuclear arms, that we hope the negotiations never begin.

“This is where Congress needs to containment strategy – for Mr. Putin and for Mr. Trump’s desire to cut deals with him.  Members of both parties can make clear that no new arms deal is possible until Mr. Putin stops cheating on current treaties; that no limit on missile defenses is tolerable; and that any new deal must be submitted to the Senate as a treaty requiring a two-thirds vote for ratification.”

Jonah Goldberg / New York Post

“Last week, I wrote that the best way to think about a Trump Doctrine is as nothing more than Trumpism on the international stage.  By Trumpism, I do not mean a coherent ideological program, but a psychological phenomenon, or simply the manifestation of his character.

“Monday, we literally saw President Trump on an international stage, in Helsinki, and he seemed hell-bent on proving me right.

“During a joint news appearance with Russian President Vladimir Putin, Trump demonstrated that, when put to the test, he cannot see any issue through a prism other than his grievances and ego.

“In a performance that should elicit some resignations from his administration, the president sided with Russia over America’s national-security community, including Dan Coats, the Trump-appointed director of national intelligence.

“Days ago, Coats issued a blistering warning that not only had Russia meddled in our election – undisputed by almost everyone save the president himself – but that it is preparing to do so again.

“But when asked about Russian interference in Helsinki, Trump replied, ‘All I can do is ask the question. My people came to me, Dan Coats came to me and some others. They said they think it’s Russia.  I have President Putin.  He just said it’s not Russia. I will say this. I don’t see any reason why it would be Russia...I have confidence in both parties.’  (He attempted, halfheartedly and unconvincingly, to walk this back Tuesday.)

“When asked about frosty relations between the two countries, Trump said, ‘I hold both countries responsible... I think we’re all to blame... I do feel that we have both made some mistakes.’

“Amid these and other appalling statements, Trump made it clear that he can only understand the investigation into Russian interference as an attempt to rob him of credit for his electoral victory, and thus to delegitimize his presidency.

“For most people with a grasp of the facts – supporters and critics alike – the question of Russian interference and the question of Russian collusion with the Trump campaign are separate.

“Russia did interfere in the election, full stop. Whether there was collusion is still an open question, even if many Trump supporters have made up their minds about it. Whether Russian interference, or collusion, got Trump over the finish line is ultimately unknowable, though I think it’s very unlikely.

“But for Trump these distinctions are meaningless. Even when his own Department of Justice indicts 12 Russian intelligence agents, the salient issue for Trump in Helsinki is that ‘they admit these are not people involved in the campaign.’  All you need to know is: We ran a brilliant campaign, and that’s why I’m president.

“The great parlor game in Washington (and beyond) is to theorize why Trump is so incapable of speaking ill of Putin and so determined to make apologies for Russia....

“One theory is that the Russians have ‘kompromat’ – that is, embarrassing or incriminating intelligence on Trump. Another is that he is a willing asset of the Russians – ‘Agent Orange’ – with whom he colluded to win the presidency.

“These theories can’t be wholly dismissed, even if some overheated versions get way ahead of the available facts. But their real shortcoming is that they are less plausible than the Aesopian explanation.  This is who Trump is.

“Even if Russia hadn’t meddled in the election at all, Trump would still admire Putin because Trump admires men like Putin – which is why he’s praised numerous other dictators and strongmen.”

Daniel Henninger / Wall Street Journal

“The controversy overflowing the banks of the press conference between Donald Trump and Vladimir Putin is a moment to step back and assess the nonstop maelstrom called the Trump presidency.

“Mr. Trump’s famous modus operandi is the art of the deal. Keep everyone guessing and off balance. Decision first, details later. Drive events, stay on offense, force everyone to react. In this, Mr. Trump has succeeded.

“No one – from the individuals who work daily in the White House to friends and enemies in foreign capitals – knows what he may do next.  A high-ranking official from an Asian ally who visited the Journal’s offices recently was asked if his government has a clear idea of what Mr. Trump wants them to do on trade.  ‘No,’ he said, ‘we do not.’

“The whole world is back on its heels, which is where, according to theory, the art-of-the-deal master wants them.

“There is another pop culture phrase nearly everyone knows: ‘Show me the money!’ It means there comes a time when the man offering deals has to stop talking and start producing results.

“Mr. Trump has three major foreign-policy initiatives going: North Korea, trade and Russia. So far, none have produced a deal or anything close.  Instead, we get Mr. Trump’s repeated, Jerry Maguire-like assurances that something big is in the works.

“Mr. Trump said shortly after his sit-down with Kim Jong Un, ‘The North Korean nuclear threat is over.’  Then this Tuesday, Mr. Trump said there is ‘no time limit’ on the negotiations. That deal sits at square one, the same tough starting point other presidents faced.  Meanwhile, Mr. Kim’s scientists will spend every day improving his missiles’ survival and accuracy.

“On trade, we don’t have a deal of any sort equal to the massive roll of the dice taken by pulling out of the Trans-Pacific Partnership, upending the North American Free Trade Agreement, and imposing tariffs on all the U.S.’s major trading partners.

“The only deals getting done are among our trading partners, with the U.S. excluded.  Japan this week signed a huge free-trade deal with the European Union.  Europe is finishing similar trade deals with Canada and Mexico.

“When U.S. allies, from Tokyo to London, become actively confused and doubtful about their lead partner’s commitments, they start looking for alternative arrangements of convenience. Two weeks ago, Japanese Prime Minister Shinzo Abe announced he will go to China  and hopes for a reciprocal visit to Tokyo by Chinese President-for-life Xi Jinping. Germany last week signed significant trade deals during a meeting in Berlin between Angela Merkel and Chinese Prime Minister Li Keqiang. Slowly, the U.S. is being isolated.

“On Tuesday at the White House, addressing the Putin controversy, Mr. Trump said his meeting with the Russian ‘was really strong.’  He added, ‘They were willing to do things that frankly I didn’t think they would be willing to do.’  Like what?  Given the barrage of criticism this week, if anything resembling real progress had been accomplished in Helsinki, the White House would have made it public by now.

“The only voice addressing the substance of the Putin meeting remains that of Mr. Trump, who in a tweet Wednesday promised.  ‘Big results will come!’  Mr. Putin got the results he wanted on Monday in Finland. The man with the Cheshire cat smile will be moving on now.

“Mr. Trump’s supporters say he deserves more time to negotiate wins on these big foreign-policy bets.  It’s not going to get better.

“Boarding his plane for the meetings in Europe, Mr. Trump said, ‘Frankly, Putin may be the easiest of them all.’ That confident insouciance can be endearing, but we are seeing the limits to Mr. Trump’s art of the deal.  Past some point of complexity, such as the global supply chain or North Korea’s nuclear program, decision first and strategy later (‘We’ll see what happens’) degrades into deadlock. Or what may be worse, happy talk, which in time erodes credibility.

“When Mr. Trump entered office amid a generalized panic among political elites, the first thing some of us noticed was that he was filling his government with first-rate people.  To revive the economy, they included economic advisers Gary Cohn and Kevin Hassett, EPA Administrator Scott Pruitt and OMB Director Mick Mulvaney. On taxes, Paul Ryan and Kevin Brady provided a detailed template. The economy raced to full employment.  The stock market boomed.

“On the Supreme Court, the most astute minds in the conservative legal movement gave Mr. Trump a list of stellar options. He picked Neil Gorsuch and Brett Kavanaugh. More wins.

“Mr. Trump has said that in Mike Pompeo, Jim Mattis and John Bolton he has the foreign-policy team he always wanted. He also said he wanted to do one-on-ones with Messrs. Xi, Kim and Putin. He has done that.  The moment has arrived to start listening less to America’s adversaries and more to his own good people.  That, in his first year, was the art of the win.”

George Will / Washington Post

“Like the purloined letter in Edgar Allan Poe’s short story with that title, collusion with Russia is hiding in plain sight. We shall learn from special counsel Robert S. Mueller III’s investigation whether in 2016 there was collusion with Russia by members of the Trump campaign. The world, however, saw in Helsinki something more grave – ongoing collusion between Trump, now in power, and Russia. The collusion is in what Trump says (refusing to back the United States’ intelligence agencies) and in what evidently went unsaid (such as: You ought to stop disrupting Ukraine, downing civilian airliners, attempting to assassinate people abroad using poisons, and so on, and on).

“Americans elected a president who – this is a safe surmise – knew that he had more to fear from making his tax returns public than from keeping them secret.  The most innocent inference is that for decades he has depended on an American weakness, susceptibility to the tacky charisma of wealth, which would evaporate when his tax returns revealed that he has always lied about his wealth, too.  A more ominous explanation might be that his redundantly demonstrated incompetence as a businessman tumbled him into unsavory financial dependencies on Russians. A still more sinister explanation might be that the Russians have something else, something worse, to keep him compliant.

“The explanation is in doubt; what needs to be explained – his compliance – is not. Granted, Trump has a weak man’s banal fascination with strong men whose disdain for him is evidently unimaginable to him.   And, yes, he only perfunctorily pretends to have priorities beyond personal aggrandizement.  But just as astronomers inferred, from anomalies in the orbits of the planet Uranus, the existence of Neptune before actually seeing it, Mueller might infer, and then find, still-hidden sources of the behavior of this sad, embarrassing wreck of a man.”

Wall Street...Trade

Wall Street continues to slough off trade tensions and geopolitics, focusing instead on growth and second-quarter earnings, with the major market averages finishing fractionally mixed.

We did have another strong retail sales report for June, up 0.5%, with May revised upward to 1.3%.  June industrial production was also up a solid 0.6%, in line with expectations.

But June housing starts fell 12.3%, the biggest drop since the election.

Put it all together, though, and the Atlanta Fed’s GDPNow barometer is at 4.5% for the second quarter.  The first estimate on Q2 GDP from the Commerce Department comes out next Friday, July 27, and this is a biggie; Republicans able to tout it into the mid-term elections.  President Trump certainly will be.

In his semi-annual testimony to Congress on the health of the U.S. economy, Federal Reserve Chair Jay Powell argued against protectionism, saying it could hurt growth and adding that he does not view the European Union as a “foe,” in contrast to President Trump’s remarks.

Powell said in testimony to the Senate Banking Committee, “really there’s no precedent for this kind of broad trade discussions in my adult life.”

While Powell said he preferred to “stay in his lane” in discussing policy, on the question of trade, countries that have “remained open to trade, and have not erected barriers, including tariffs, have grown faster, had higher incomes, higher productivity, and countries that have gone in a more protectionist direction have done worse.”

On the impact of tariffs on agriculture, Powell said: “I hardly need to tell you what tariffs will do for agriculture. We lead the world in productivity and we’re great exporters and we would be hard hit with these tariffs...I think it would be tough on rural communities and I think we would feel that at the national level too.”

Otherwise, Powell was very sanguine on the economy and inflation.

But President Trump made waves in commenting on the Federal Reserve and its interest rate stance.  Presidents don’t traditionally comment on the Fed’s monetary policy, but Trump told CNBC that he is “not thrilled” about the recent rate hikes (two so far this year, two more planned).

“I don’t like all of this work that we’re putting into the economy and then I see rates going up.”

Every time the economy strengthens “they want to raise rates again,” he said.  Trump did say, however, he wouldn’t interfere with the Fed.  “I’m letting them do what they feel is best.”

But if the president publicly tells a Fed chair to stop raising rates, the Fed has to keep going because it must show it’s maintaining its independence, so Trump is shooting himself in the foot...again.

[Both of the Fed’s rate hikes this year have been approved unanimously, by the way.]

Trump also tweeted after the CNBC interview: “China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars (sic) gets stronger and stronger with each passing day – taking away our big competitive edge. As usual, not a level playing field...

“...The United States should not be penalized because we are doing so well.  Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?”

[It needs to be noted the president couldn’t give a damn about the deficit.]

On the trade front, today, President Trump said he was ready to intensify his trade war with China by slapping tariffs on all $500bn of imports from the country.

“I’m ready to go to 500,” he said in the CNBC interview.

Trump’s comments come before the most recent round of U.S. tariffs has had time to take effect.

Last week, Washington listed $200bn worth of additional Chinese products it intends to place tariffs on as soon as September; a list including more than 6,000 items, including food products, minerals and consumer goods, all subject to a 10% tariff.  The public comment period lasting until the end of August.

The U.S. and China have already imposed tit-for-tat tariffs of $34bn on each other’s goods, but there has been no high-level contacts between the two in weeks.

“We’re down a tremendous amount,” said Trump, reiterating his view that China’s trade surplus with the U.S. amounts to unfair trading practices.

For his part, Chinese President Xi Jinping is trying to play cool and smart to win the trade war against the U.S. by fixing domestic economic weak links, and offering a friendly face to other trading partners and American firms.

Beijing is trying to manage the dispute’s economic impact on growth without sidelining their strategic pursuits such as debt reduction, analysts are saying.

One area Xi will focus on is the friction with the U.S. has exposed China’s lack of home-grown “core technologies” to help it to control its own fate.  The earlier decision on the part of Washington to ban key component sales to ZTE nearly killed the Chinese telecom equipment maker, exposing the Achilles’ heel of the world’s second-largest economy.  [The ban has been lifted.]

Meanwhile, the president continues to threaten to impose sweeping tariffs on imported automobiles, which would impact a broad array of industries.  The Commerce Department has been holding hearings as it probes whether imports of passenger vehicles imperil U.S. national security.  The administration has received extremely limited support for the idea that foreign cars undermine America’s ability to defend itself.

Commerce Secretary Wilbur Ross opened the hearing seeking to dispel the notion the administration has already made up its mind.  The department has received nearly 2,300 written submissions from industry groups, unions, foreign governments and individuals commenting on the investigation.

“It’s clearly too early now to say if this investigation will ultimately result in a Section 232 recommendation on national security grounds, as we did earlier with steel and aluminum,” Ross said. “But President Trump does understand how indispensable the U.S. automobile industry is.”

A U.S. assault on foreign cars would further strain relations with allies such as Germany and Canada as Trump questions pillars of the Western order such as the Group of 7 and NATO.

President Trump is scheduled to meet European Commission President Jean-Claude Juncker next week in Washington as Europe pushes for a global deal to cut auto tariffs.

The EU is preparing a new list of American goods to hit with protective measures if Juncker’s mission fails.

Republican candidates in November are pleading with Trump to avoid duties on cars, but this may not deter the president, as he continues to call the EU a “foe” on trade.

Such as this tweet this week: “The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the U.S., but not for long!”

And as for America’s farmers, Trump tweeted: “Farmers have been on a downward trend for 15 years.  The price of soybeans has fallen 50% since 5 years before the Election. A big reason is bad (terrible) Trade Deals with other countries. They put on massive Tariffs and Barriers. Canada charges 275% on Dairy. Farmers will WIN!”

They ain’t today, Mr. President.           

Finally, the European Union and Japan signed one of the world’s biggest free trade deals this week, covering nearly a third of the world’s GDP and 600 million people.

One of the biggest EU exports to Japan is dairy goods, while cars are one of Japan’s biggest exports.

The move contrasts sharply with actions by the Trump administration.

EU Commission head Juncker said: “[The] impact of today’s agreement goes far beyond our shores. Together we are making, by signing this agreement, a statement about the future of free and fair trade.

“We are showing that we are stronger and better off when we work together. And we are leading by example, showing that trade is about more than tariffs and barriers. It is about values, principles and finding win-win solutions for all those concerned.”

Editorial / Wall Street Journal

“President Trump called the European Union a trading ‘foe’ last week, and on Tuesday European leaders replied by signing an economic partnership with Japan that will eliminate almost all tariffs on bilateral goods.  The negotiations had dragged on for years, but Mr. Trump’s protectionism pushed both sides to reach a deal that shows how trade liberalization will increasingly bypass the U.S.

“We wrote about the potential for the Japan-EU deal to put American food exports at a disadvantage when it was finalized in December. The removal of Japanese quotas and duties on European farm products will hurt American hog farmers, who currently enjoy a strong market position in Japan. EU processed-food exports are expected to grow by as much as 180%.

“The biggest impact will be in manufacturing industries dear to Mr. Trump’s heart.  In addition to removing tariffs, the deal will harmonize standards and remove nontariff barriers. As the U.S. raises duties on imported raw materials and components, its attractiveness as a manufacturing base will fall and supply chains will cut out American suppliers.

“The EU projects that its exports to Japan of chemicals will increase 22% and mechanical engineering products 16%, according to Deutsche Welle. European companies will gain better access to government contracts, something the U.S. has long sought.  Meanwhile, as European tariffs on Japanese cars decline to zero from 10%, American automakers will face stiffer competition on the continent.

“Japanese Prime Minister Shinzo Abe is resisting U.S. pressure to negotiate a bilateral deal that would offer benefits similar to those in the Trans-Pacific Partnership (TPP). The remaining 11 countries defied predictions that TPP would collapse after Mr. Trump pulled the U.S. out in 2017, and they signed a renegotiated version in March.  Part of Mr. Abe’s calculation is that the lost trade will prove so painful for the U.S. that it will choose to rejoin, whether under Mr. Trump or his successor.

“China is also seeking closer economic relations with Japan and the EU to mitigate the effects of its escalating trade war with the U.S.  Beijing recently de-emphasized tariff retaliation against the U.S. and began to offer preferential treatment to multinationals from other countries. Instead of forcing Beijing to open up its markets to American companies, the Trump tariffs will help their competitors.

“Mr. Trump picked fights with America’s largest economic partners because he assumes that, like him, they would focus on bilateral flows of finished goods and treat trade as a zero-sum game.  That is proving wrong. As the EU-Japan deal and renegotiated TPP show, they see a route to prosperity by liberalizing trade among themselves.  The rest of the world will benefit from freer trade while American companies and consumers lose.”

Europe and Asia

Just a few economic notes for the eurozone.

June inflation for the EA19 came in at 2% vs. 1.3% annualized a year ago, as published by Eurostat.  But ex-food and energy, the rate was only 1.2%.

Eurostat also reported that the ratio of government debt to GDP was 86.8% in the first quarter for the eurozone, up a tick from the prior period, and down from 89.2% in Q1 2017.

Germany is at 62.9%, but Italy is 133.4% and Greece 180.4%.

Eurobits...

Brexit: Boris Johnson launched a veiled attack on Eurosceptic colleagues who have remained loyal to Prime Minister May, as he insisted it was “not too late to save Brexit.”

The former foreign secretary, who quit in protest at his government’s plan to leave the EU, said it was “absolute nonsense” to suggest a “botched treaty” can be improved after Brexit.

Michael Gove, a leading Brexiter, apparently has told colleagues that their best strategy is to see the deal pass the March 2019 deadline and flesh out the details of the trade relationship later.

But Johnson argues: “We will not get another chance to get it right.”

“And it is absolute nonsense to imagine, as I fear some of my colleagues do, that we can somehow afford to make a botched treaty now, and then break and reset the bone later on.”

When he quit, Johnson said May’s plan would leave Britain with “the status of colony.” Speaking in the Commons chamber on Wednesday, he added: “We are volunteering for economic vassalage.”

Johnson said a “fog of self-doubt” had descended on the government that Mrs. May’s plan would leave Britain in a state of “miserable permanent limbo.”

“We have time in these negotiations, we have changed tack once and we can change again. The problem is not that we failed to make the case for a free-trade agreement of the kind spelt out at Lancaster House, we haven’t even tried.  We must try now because we will not get another to get it right.”

One minister told the Financial Times: “I don’t agree with him but at least he sounded serious and had brushed his hair: It’s a shame we didn’t have a bit more of that when he was foreign secretary.” [Laura Hughes and George Parker / FT]

Earlier in the week, Prime Minister May bowed to pressure from Brexit supporters in her Conservative Party, accepting their changes to a customs bill that underpins Britain’s departure from the European Union, though the actual changes were more technical than fundamental.

But in hardening the language to emphasize that the future collection of duties and taxes by Britain and the EU is on a reciprocal basis, Brexit supporters may have made May’s plan less sellable to the bloc.

May’s ‘white paper’ on Brexit, issued the prior week, is still but a starting point for a second phase of talks with the EU, which must intensify mightily in August, ahead of an October deadline.

Meanwhile, last weekend, Mrs. May revealed that Donald Trump told  her she should sue the EU rather than negotiate.  Last Friday at a joint press conference, Trump said he had given her a suggestion but she had found it too “brutal.”

Asked by the BBC what Trump said, she replied: “He told me I should sue the EU – not go into negotiations.”

--The European Union’s executive branch is taking Hungary to court over the government’s treatment of asylum seekers, escalating a battle over how to balance the continent’s legal guarantees for refugees with popular demand for tighter borders.

The European Commission, after threatening legal action against Hungary for three years over its strict anti-migrant laws, said it would ask the EU’s highest courts to consider the government in violation of several EU treaties requiring protection for foreigners seeking asylum on the continent.

It will likely be up to the European Court of Justice to rule on a fundamental debate roiling Europe these days, with broad implications.

Hungarian voters have strongly endorsed the nationalist politics of Prime Minister Viktor Orban, whose sole issue has been keeping out refugees since 2015, amid the great migration that year.  The opposition Jobbik party is even tougher on migrants.

Poland and Slovakia back Orban’s hardline stance.

“We are, of course, ready for the debates that this procedure is going to bring,” said Hungary’s Foreign Minister Peter Szijjarto.

Later this year, Orban hopes to pass a constitutional amendment that would block the EU from enforcing refugee settlement rules here.

Turning to Asia... China reported second-quarter GDP came in at 6.7%, vs. 6.8% in Q1, according to the National Bureau of Statistics, as the amazing consistency of the numbers continues (cough cough). The government’s goal is 6.5% for 2018.

First-half fixed assets investment did hit a record low, growing just 7.3% vs. 21.1% in the first half of 2017, amid weakening investment in infrastructure. 

For June, industrial production rose 6%, while retail sales for June rose 9.4% from 10.4% in the entire first half.

In Japan, core consumer prices rose 0.8 percent in June from a year earlier, according to government data.  The core CPI, which includes energy but excludes fresh food prices, was in line with expectations.  Stripping away food and energy, the rise was just 0.2 percent from a year ago.  The Bank of Japan is still striving for much higher inflation, 2%, so there is no reason today to contemplate changing its zero interest rate policy

Street Bytes

--The Dow Jones added 0.2% to 25058, the S&P 500 just a mere fraction of a point, 0.02%, and Nasdaq declined 0.1%, though the tech-heavy index earlier hit a new closing high.

--U.S. Treasury Yields

6-mo. 2.13%  2-yr. 2.59%  10-yr. 2.89%  30-yr. 3.03%

Five straight weeks the yield on the 10-year has closed below 2.90%, when we all assumed that 3.00%+ was going to be the new norm with the Fed raising rates.

--The U.S. Energy Information Administration said in its weekly supply report that crude-oil stockpiles jumped by 5.8 million barrels, when a decline was expected from the previous week.  The report also showed U.S. production jumped to a record 11 million barrels a day.

Oil fell to $67 following Wednesday’s report, a one-month low, but rebounded to finish the week at $70.31.

Separately, the International Energy Agency said global demand growth in the second half of the year would slow to 1.3 million barrels a day from 1.5 million in the first half.

Lastly, it is expected that China will be snapping up much of the Iranian oil that other nations won’t buy because of the threat of U.S. sanctions, especially with growing trade tensions between Beijing and Washington.

China buying the extra oil could dull the economic impact of those sanctions.  China and Iran have been in negotiations on the extra oil, with an Iranian official saying, “We don’t have any problem selling our oil” to China.

Monday, U.S. Treasury Secretary Steven Mnuchin said the United States’ aim was to squeeze Iranian oil exports “to zero.”

Mnuchin said that Washington wanted to avoid disrupting markets and would in some cases consider waivers, but that it had been made clear to allies that it expects them to enforce sanctions against Iran.

--As alluded to above, Google was hit with a record $5.1 billion fine by European Union antitrust officials on Wednesday for abusing its power in the smartphone market, in the region’s latest move to rein in the clout of American tech companies.  Just last year, the EU levied a $2.8bn fine on Google last year for unfairly favoring its own services in internet search results.

EU officials said Google used its Android operating system to strike deals with handset manufacturers such as HTC, Huawei and Samsung.  The agreements required Google’s services, such as the search bar and Chrome browser, to be favored over its rivals’ offerings.

Margrethe Vestager, Europe’s antitrust chief, said: “Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under E.U. antitrust rules.

--Microsoft’s shares hit an all-time high on the heels of an optimistic growth forecast, thanks to surging demand for its cloud services.  The number of new customer contracts worth more than $10m for the company’s Azure cloud platform doubled in the latest quarter, according to CFO Amy Hood. 

The Street had been expecting the rate of growth in Azure revenues to moderate, but the business continued its recent streak to rise 89 percent, with overall company sales growth of 17 percent to $30bn – making for Microsoft’s strongest revenue quarter for years.  Earnings also exceeded expectations and the shares rose 2%.

The big investment in data centers around the world lifted spending on property and equipment by 74 percent to $4bn in the latest period, and Microsoft said capital spending would rise further in the current quarter, before starting to moderate.

But investors brushed off the higher spending levels to focus on revenue from the commercial cloud – the key indicator of Microsoft’s cloud business – which rose 53 percent to $6.9bn.

Microsoft’s performance was also helped by a robust market for PCs, its traditional business.  Last week I noted how PC shipments rose in the second quarter for the first time in six years, at a time when smartphone sales have declined.

--Amazon boasted that Prime Day was its best ever, though, per usual, Amazon gave few details in a press release.  Wednesday, the company hit the $900 billion market cap figure for the first time, with only Apple ahead of it at $935bn, though AMZN finished the week at $880bn.

But how sparse were Amazon’s Prime Day details? Try this: Whole Foods customers “saved millions of dollars,” and the “best selling deal [there] was organic strawberries.”

Amazon reported that its members bought more than 100 million items during the 36-hour shop-a-thon, which ended early Wednesday morning.  But no comparisons with the prior year.

The  company’s website quickly ran into some snags at the beginning of Prime Day and it wasn’t possible to place orders for a few hours.

--Morgan Stanley reported second-quarter earnings that rose 39% from a year ago, completing a superb big bank earnings season with few signs global trade tensions are impacting the financial sector.

MS reported a profit of $2.4 billion on $10.6bn in revenue, beating the Street on both handily.

The last time Morgan Stanley reported two consecutive quarters of $10 billion-plus revenue was 2007.

Steady economic growth, lower taxes, an uptick in demand for loans, and renewed volatility in the price of some securities have helped the Big Six banks this year.

Jonathan Pruzan of MS said, “Corporations feel good, consumers feel good. The pockets of volatility seem to be isolated and not rolling over into the broader market.

“If that changes, and it starts to put people in defensive mode, we’ll have a different second half.”

--The day before Morgan Stanley reported, Goldman Sachs announced its best first half in nine years, revenue and earnings in the quarter that were well ahead of expectations, with net profit up 40% from a year earlier to $2.57 billion. 

Fixed-income currency and commodity trading revenue jumped 45%, though it’s off a low base from the first half of  2017.  Equity trading revenue, though, was basically flat.  Investment banking revenue soared 88%.

The results ensure CEO Lloyd Blankfein leaves on a high note, Goldman confirming this week that David Solomon, currently president and chief operating officer, will succeed him.

Blankfein, 63, steps down Sept. 30 after 12 years at the helm, though he’ll remain as chairman until the end of the year and then will transition to a “senior chairman” role, available as needed.

Under his tenure, Blankfein steered Goldman through the financial crisis, with the bank having to shell out about $5 billion in fines for its role in selling bad home loans – far less than rivals JPMorgan and Bank of America.

But it was also under his leadership that Goldman got labeled the “vampire squid” – in part for deals designed to sour for unwitting investors.

Some, such as bank analyst Dick Bove, have said Blankfein was responsible for a “lost decade.”

As for Solomon, expect him to shake things up, including pruning Goldman’s management committee, while pushing new ideas and acquisitions.

“Everything’s on the table,” Solomon has been telling top executives.

--Bank of America Corp. reported a 33% increase in second-quarter profit, $6.784 billion, with earnings per share handily beating Wall Street’s forecast. Revenue fell slightly, however, due to a one-time gain related to the sale of a business a year earlier.  Without that gain, revenue would have risen 3%.

Rising interest rates have provided a major lift, with lenders like BofA pocketing the difference between what they pay on deposits and the rate they collect on loans.  Thus far, the banks are reaping the benefits from the Fed’s rate hikes because customers aren’t broadly demanding more interest on their deposits, but eventually, the banks are going to have to pay more interest to keep depositors around, crimping the financial benefit of future rate increases.  Ergo, eventually the flattening yield curve will catch up to the banks.

Separately, the recent tax-law changes provided a major lift. The bank paid $1.71 billion in income tax in the quarter, down from $3.015 billion in the second quarter last year, before the legislation was passed.

--BlackRock, the world’s biggest investment group, saw its assets dip for the first time since late 2015, from $6.32 trillion to $6.3tn at the end of June, owing to a surging U.S. currency eroding the dollar value of its growing overseas business.

But analysts focused more on the sharp slowdown in BlackRock’s overall inflows this year, which fell to $20bn in the quarter – down from more than $100bn in the same period last year.  The shares fell a bit in response.

BlackRock, by far the world’s biggest manager of exchange-traded funds, saw inflows fall sharply to a two-year low in the second quarter, though CEO Larry Fink told the Financial Times: “We’re seeing huge churn,” but, “we believe the longer-term trend is still intact,” with Q2 just being a blip in the seismic investor shift towards cheaper passive products such as ETFs.

--Shares in Netflix tumbled about 6% (though they were initially down 14% in after-hours trading) as the company reported weak subscriber growth in the second quarter, after regularly beating its own subscriber forecast.  The company also issued a tepid forecast on third-quarter growth.

CEO Reed Hastings, in a letter to shareholders, called it a “strong but not stellar Q2.”

“As a reminder, the quarterly guidance we provide is our actual internal forecast at the time we report and we strive for accuracy, meaning in some quarters we will be high and other quarters low relative to our guidance.  This Q2, we over-forecasted global net additions which amounted to 5.2m vs. a forecast of 6.2m and flat compared to Q2 a year ago.”

Revenue in the three months ended June rose to $3.9 billion, with earnings per share of 88 cents.

During the quarter, the company added 670,000 domestic streaming subscribers, and 4.47 million international subs.

For the current quarter, the company is projecting revenue of $3.988 billion, below the consensus for $4.126bn.

Overall, Netflix has 130 million total members globally, while the company plans on rolling out 700 original shows and movies on the service this year, including 80 for non-English-speaking markets.  Last week it scored 112 Emmy Awards nominations, more than any other television network and breaking a streak that HBO held on to for 17 years.

But this also means its ad spending is ballooning, to the tune of $1 billion for the first half of 2018, up from $546 million in the prior-year period.

--IBM said it generated more than half of its quarterly revenue from newer services such as cloud and artificial intelligence, the first time it has generated that large a percentage from the initiatives as it continues to shift away from equipment sales and other legacy businesses.

IBM reported a third consecutive quarter of revenue growth from a year earlier, after nearly a six-year stretch of shrinking quarterly sales under CEO Ginny Rometty.

Revenue in the second quarter rose 3.7% to $20 billion, slightly ahead of expectations, while profit rose 3.1% to $2.4 billion.  The company maintained its forecast for adjusted earnings for the year.

--Johnson & Johnson’s results topped forecasts for the quarter in both profit and revenue.

Revenues in the pharmaceutical division were 19.9% ahead of the prior year thanks to higher sales of its drugs for immune disorders and cancer.

Sales of Stelara, a drug for psoriasis and arthritis, grew by 36% to hit $1.34bn during the quarter, comfortably beating consensus.

Revenues for a prostate cancer drug, Zytiga, also soared, 63% to $909m, the two drugs helping offset the impact of falling sales of Remicade, the company’s top-selling arthritis medicine.

--Comcast Corp. dropped its bid for 21st Century Fox’s entertainment assets amid mounting odds, clearing the way for Walt Disney Co. to acquire the pieces of Rupert Murdoch’s media empire for $71.3bn.  So a major victory for Disney CEO Robert Iger.

But Comcast said it was still pursuing European pay-television giant Sky PLC, which Iger sees as a “crown jewel” in the deal for Fox. Comcast has the higher offer for the operator, in which Fox already owns a 39% stake.

Comcast views Sky as a mini-version of Comcast-NBCUniversal that could give them a boost in the global streaming race.

Fox has been trying since 2016 to buy the rest of Sky, while Disney has indicated in regulatory filings that it is in charge of whether Fox continues pursuing Sky.

--General Electric reported so-so second-quarter earnings, while revenue rose 3% to $30.1 billion, above forecasts. 

GE said adjusted EPS for the year would be $1.00-$1.07, above estimates, but the stock fell on the news to $13.12, near the 52-week low of $12.60.

--Oilfield services giant Schlumberger reported that due to rising oil prices, revenue from North America rose 43 percent as the number of active oil rigs in the U.S. stood at 863, up from 765 a year earlier, according to Baker Hughes’ weekly report (week ending July 13).

But revenue from Schlumberger’s international business fell 1.4 percent. Total revenue was up 11.3 percent to $8.30 billion, with second-quarter net income of $430 million, after reporting a loss in the same period a year earlier.

--Boeing secured a $3.9 billion deal to build the new jets that will fly as Air Force One, ending a tortuous 18-month negotiation with President Trump, who had threatened to cancel the sale over the costs of replacing the aging 747 jumbo jets.  The Air Force oversees the program.

The president has been weighing in on the color scheme as well, saying this week he prefers the planes be red, white and blue, rather than the traditional baby blue first selected by Jackie Kennedy.

--I’ve mentioned that Ryanair was facing a bunch of labor issues this summer and next week, up to 100,000 passengers face disruption as the budget airline grounds 600 European flights due to cabin crew strikes. That’s 12 percent of its flights across the continent.

--David Neeleman, the founder of JetBlue and a major investor in the Portuguese airline TAP and Brazilian carrier Azul, says he is leading a group of investors to create a new airline in the United States.

“After years of U.S. airline consolidation, the conditions are improving for a new generation of U.S. airlines to emerge, focused on passengers, service and satisfaction,” he said in a statement.

The investors group made a commitment with European aircraft manufacturer Airbus to buy 60 A220-300 jets, with deliveries to begin in 2021.

The last new airline to launch in the U.S. with regularly scheduled commercial flights was Virgin America in 2007.

--Texas Instruments Inc. CEO Brian Crutcher resigned after spending less than two months in the role, exiting over what the company said were code-of-conduct violations.

TI said on Tuesday, “the violations are related to personal behavior that is not consistent with our ethics and core values, but not related to company strategy, operations or financial reporting.”

Just last June 21, Intel CEO Brian Krzanich was forced to resign after violating company policy by having a relationship with an employee.

--Tesla founder Elon Musk apologized to British caver Vern Unsworth for comments he made about him following the rescue of a dozen Thai schoolboys and their coach from a cave in northern Thailand.

Sunday, Musk launched a vicious Twitter attack against Unsworth, who was part of the recue team, calling him a “pedo” after the frogman criticized Musk for his failed bid to aid the situation.

Musk had sent a mini-submarine to the site to help with the rescue, but Unsworth said, “It just had absolutely no chance of working.  He had no conception of what the cave passage was like.  The submarine I believe was about 5 feet, 6 inches long, rigid, so it wouldn’t have gone round corners or round any obstacles,” Unsworth said.

“It wouldn’t have made the first 50 meters into the cave from the dive start point. It was just a PR stunt.”

Musk then tweeted of Unsworth: “Never saw this British expat guy who lives in Thailand (sus) at any point when we were in the caves.

“Only people in sight were the Thai navy/army guys, who were great. Thai navy seals escorted us in – total opposite of wanting us to leave.”

Musk goes on with some detail, belittling the dangers, and then he says, “Sorry pedo guy, you really did ask for it.”

“His actions against me do not justify my actions against him, and for that I apologize to Mr. Unsworth and to the companies I represent as leader,” Musk then said in a tweet. “The fault is mine and mine alone.”

Many are rightfully questioning Elon’s ability to steer his various companies effectively. 

--Papa John’s founder John Schnatter is not going quietly into the night after he was forced to resign following the revelation he used the N-word in an internal conference call with a marketing firm in May.

Now Schnatter is accusing that firm – Los Angeles-based Laundry Service – of trying to extort $6 million to keep quiet about the call.

Schnatter told a Louisville, Ky., CBS affiliate, “We held firm and they ran to Forbes, which printed it.”

Foreign Affairs

Russia: The arrest of Maria Butina, a Russian accused of being a covert agent, this week is significant.  She is being held without bail, after it is alleged she pursued a brazen effort to infiltrate conservative circles and influence powerful Republicans while she secretly was in contact with Russian intelligence operatives, a senior Russian official and a billionaire oligarch close to the Kremlin whom she called her “funder,” federal prosecutors said on Wednesday.

At Federal District Court in Washington, D.C., prosecutors said Butina was the point person in a calculated, long-term campaign intended to steer high-level politicians toward Moscow’s objectives.

Prosecutors said in a memo that she “should be considered on a par with other covert Russian agents.”

The FBI has been surveilling Butina for the past year.  There is no doubt a lot more to come on this story.

The story hits at the same time that Vladimir Putin can’t be thrilled with the indictment of 12 GRU intelligence officials in connection with the Mueller probe, and then today, a story hit in the BBC that Russia’s Federal Security Service (FSB) has raided a space research facility after a suspected leak of hypersonic missile secrets to Western spies.

The state space agency Roskosmos said its security staff were cooperating with FSB officers on a criminal case.

Russia’s Kommersant daily says about 10 staff at a Roskosmos facility, TsNIIMash, are under suspicion.  On Thursday Russia released video of new hypersonic missile systems.

“It was established that the leak came from an employee,” a source told Kommersant.

Separately, police in the U.K. believe they have identified the suspected perpetrators of the Novichok attack on a Russian ex-spy and his daughter, Sergei and Yulia Skripal, in Salisbury in March.

Several Russians were involved in the attempted murder.  Earlier this month, Dawn Sturgess, 44, died after being poisoned by the same nerve agent, in Amesbury. Her partner was also poisoned June 30 and remains seriously ill.

Lastly, with the conclusion of the World Cup tournament in Russia, which went off without a hitch, some 700,000 foreign fans packed the streets of the 11 host cities, Moscow seeing a 60 percent increase in foreign tourists, bringing the overall number of visitors to the Russian capital during the event to 3 million, according to the head of Moscow’s sport and tourism department.

Among the beneficiaries were Russia’s electronics retailer, with sales of TV sets and smartphones surging 20 percent in May-June compared with a year ago.  Many Russians stayed home to watch the matches on television rather than take a holiday.  According to a Russian research center, 23 percent of Russians said they had no summer travel plans this year vs. 7 percent in 2016.

New car sales growth slowed, with analysts blaming the World Cup as the factor that distracted buyers.           

North Korea: The nation’s economy contracted at the sharpest rate in two decades in 2017, according to an estimate by South Korea’s central bank on Friday, in a clear sign international sanctions imposed on Pyongyang have hit hard.

GDP contracted by 3.5 percent from the prior year, the worst since a 6.5 percent drop in 1997 when the North was hit by a devastating famine, the Bank of Korea said.

Industrial production, which accounts for about a third of the nation’s total output, dropped by 8.5 percent as factory production collapsed on restrictions of flows of oil and other energy resources into the country.

External trade volume fell significantly with the exports ban on coal, steel, fisheries and textile products, according to the BOK.

But that was 2017. What about now, with the sanctions still in place?  Kim Jong Un in April vowed to switch the country’s strategic focus from the development of its nuclear arsenal to emulating China’s “socialist economic construction.”

So there is intense pressure, you would think, on Kim to negotiate with the U.S. to get Washington to remove the sanctions.

As for China, North Korea’s biggest trading partner, it enforced sanctions strictly in the second half of 2017, suspending coal purchases that greatly reduced the North’s main export revenue source, while suspending fuel sales to the reclusive state.

China’s total trade with the North dropped 59 percent in the first half of 2018 from a year earlier, according to China’s customs data, while the BOK uses figures compiled by the government and spy agencies to make its economic estimates.  North Korea doesn’t publish economic data.

But the UN North Korea Sanctions Committee report accused both China and South Korea of being reluctant to enforce a ban on coal exports from the North, citing five shipments that arrived in China last August.

The Chinese Foreign Affairs Ministry said on Friday that China had obeyed the UN Security Council Resolution.  But Beijing recently promised to restore its economic ties with Pyongyang, with President Xi telling Kim during the latter’s third visit this year to China last month that China would support North Korea’s efforts to develop the economy.

On Thursday, Russia and China delayed a United States push for a Security Council committee to ban refined petroleum exports to North Korea.

So with all the above, it was interesting to see Kim Jong Un this week launch a barrage of criticism at officials over delays in completing economic projects.  Normally, the political leaders praise officials during factory visits.

But this time state media said Kim was “speechless” a power plant was only 70% complete and “appalled” by hot-spring bathtubs “dirtier than fish tanks.”

Kim’s latest inspection tour took him to four sites in a province bordering China.

Separately, last weekend U.S. and North Korean military officials met on the inter-Korean border to discuss the return of remains of U.S. soldiers killed in the Korean War, this after U.S. officials were blown off the Thursday before when a meeting had been scheduled. The meeting then ended up taking place Sunday at Panmunjom. There was no news from either side afterwards.

One more...the costs of the canceled military exercises between the U.S. and South Korea, a concession by President Trump to Kim Jong Un in Singapore, was estimated to cost $14 million, according to the Pentagon.  The figure is kind of funny, seeing as how President Trump talked of the “incredible savings” from canceling it, yet the military parade planned for November in Washington is now estimated to cost $12 million.

Syria / Iran: The Syrian regime accused Israel of striking a Syrian army base near Aleppo late Sunday night, the official Syrian news agency SANA reported.

“The Zionist enemy returned in its desperate attempts to support defeated terror organizations in Deraa and in Quneitra and it attacked, using missiles, one of our military outposts north of the Nayrab Airport.  Damage was caused to property only,” SANA said, quoting a military source.

But the Syrian Observatory for Human Rights said on Monday that nine Syrian soldiers were killed in the attack.

Syrian government forces backed by Russian air power have been retaking large swathes of territory on the Syrian Golan Heights from rebel groups along the Israeli border.  Iranian forces and affiliated Shiite militias are also said to be playing a minor role in the offensive.

Israel is concerned that the Assad regime will allow Iran and its proxy militia Hezbollah to entrench themselves near Israel’s Golan Heights, with Defense Minister Avigdor Liberman saying earlier that Israel has “identified elements” belonging to Iran and Hezbollah in the Golan.

“This effort to establish a terrorist infrastructure under the auspices of the regime, as far as we are concerned, is unacceptable and we will act with force against any terrorist infrastructure that we see and identify here in the region,” Liberman warned.

“We are not prepared to accept an Iranian presence in Syria anywhere.  As you have heard more than once, we will act against any Iranian consolidation in Syria,” the defense minister said.

At the Helsinki summit, we were told Presidents Trump and Putin agreed to work together on solving the Syrian crisis – but there were zero details, while saying the focus was on guaranteeing Israel’s security.

But as noted above, Russia has been supporting Assad’s push to retake the border area with both Israel and Jordan in the southwest, routing the remaining pockets of opposition.  Israel, though, has been ramping up its airstrikes against Iranian military targets and the pro-Iranian militia presence there.

Prime Minister Netanyahu has said he told Putin that Israel has no problem with Assad’s forces as long as they don’t attempt to penetrate the demilitarized zone.

Meanwhile, Putin hasn’t said anything about Israeli airstrikes on Iranian forces, but Trump hasn’t said anything on the future of U.S. troops in Syria, mostly deployed in the Kurdish-controlled areas of eastern Syria that have been liberated from ISIS – and that contain a large share of Syria’s oil and gas reserves.  Trump has repeatedly said he wants all U.S. forces gone from Syria, so did Trump and Putin discuss this as part of their one-on-one?  Was an agreement made?  We don’t know.

At the same time, there is little prospect for a significant Iran pullout.

Trump did say, “Cooperation between our countries has the potential to save hundreds of thousands of lives.”  [In the current Syrian-Russian-Iranian offensive in the southwest, over 250 civilians have been killed, with hundreds of thousands displaced.]

But Robert Ford, who served as U.S. ambassador to Syria until the war began, told the Wall Street Journal, “I don’t know what the Americans can cooperate with the Russians on in Syria. I am at a loss.  The Russian track record in Syria is known to everyone. They have repeatedly failed to live up to commitments made to the American administration.”

Sen. Lindsey Graham (R-S.C.) said: “It is imperative that Congress hold hearings on the extent and scope of any cooperation with Russia in Syria regarding Iran’s presence.”

Curiously, in his remarks in Helsinki, Trump didn’t criticize Assad.

Israel: Israel passed a contentious basic law on Thursday that anchors itself as the nation-state of the Jewish people, promotes the development of Jewish communities and downgrades the status of Arabic from an official language to one with a “special status.”

So the law enshrines the Jewish people’s exclusive right to self-determination in Israel, a move that was hailed by supporters as “historic” and denounced by detractors as discriminatory, racist and a blow to democracy.

While the law is largely symbolic, opponents say it harms the delicate balance between the country’s Jewish majority and its Arab minority, which makes up about 21 percent of the population.

But the law is a flagship measure for the most right-wing – religious governing coalition in Israeli history.

Prime Minister Benjamin Netanyahu said after the vote: “This is a defining moment in the annals of Zionism and the annals of the state of Israel. We have determined in law the founding principle of our existence.  Israel is the nation state of the Jewish people, and respects the rights of all of its citizens.”

But the law further divides Israel, the measure passing by a vote of just 62-55 with two abstentions.  One member of the 120-seat Parliament absent.  Moments after the vote, Arab members of the Parliament ripped up copies of the bill while crying out “Apartheid!” [Isabel Kershner / New York Times]

Afghanistan: The number of civilians killed in the long-running war in Afghanistan reached a record high in the first six months of this year, the UN says.

Some 1,692 fatalities were recorded, with militant attacks and suicide bombs said to be the leading causes of death.  The figures are the highest since the UN started keeping records in 2009.

The Taliban now “threaten 70% of Afghanistan,” according to experts, with the major gains coming since NATO formally ended the combat mission, handing it over to Afghan forces whom it had trained back in 2014.

Nicaragua: More than 300 people have died during months of anti-government protests, highlighted by an attack on a church where dozens of protesters had sought shelter after more violence erupted in the country.  At least two students were killed at the church, 11 people nationwide last weekend.  Among the dead was a 10-year-old girl, according to the Nicaraguan Human Rights Association.

The students, who had been taking part in protests on a day of a national strike, came under attack from paramilitaries and became trapped in the church on Friday evening.

Protesters have been demanding the resignation of President Daniel Ortega, who was elected 11 years ago after leading a revolutionary government in the 1980s.  He has faced widespread public anger after calling for unpopular social security changes three months ago and then violently suppressing peaceful demonstrations.

Since then, tens of thousands of Nicaraguans have engaged in a broad-based uprising against the government, marching in the streets and building barricades to thwart the masked paramilitary forces.

Random Musings

--Presidential tracking polls...

Gallup: 43% approval of President Trump’s job performance, 52% disapproval (July 15)*
Rasmussen: 44% approval, 55% disapproval (July 20)

*So with the Gallup tracking poll, which as you know is now weekly, not rolling three days, being for results ending Sunday, before the Helsinki summit, it’s going to be interesting tracking this number the next few weeks in particular.  Will there be the slightest move in the base?  Doubtful.

In the survey, Trump had the approval of 90% of Republicans, 38% of Independents.

--Former President Barack Obama delivered a speech in South Africa at an event marking the 100th anniversary of Nelson Mandela’s birth.  Without mentioning President Trump, Obama offered a stinging rebuke of “strongman politics”, warning about growing nationalism, xenophobia and bigotry in the U.S. and around the world, while offering a defense of the liberal international order and democracy.

The speech was a day after the Helsinki summit.

“Look around,” said Obama.  “Strongman politics are ascendant suddenly, whereby elections and some pretense of democracy are maintained, the form of it, but those in power seek to undermine every institution or norm that gives democracy meaning.”

Obama opened his nearly 90-minute speech with a nod to current events, saying that times were “strange and uncertain” and that “each day’s news cycle is bringing more head-spinning and disturbing headlines.”  He said that leaders embracing the “politics of fear, resentment and retrenchment” were undermining the international order established after World War II.

“That kind of politics is now on the move,” Obama said. “It’s on a move at a pace that would have seemed unimaginable just a few years ago. I’m not being alarmist; I’m simply stating the facts.”

The former president added: “We see the utter loss of shame among political leaders, where they’re caught in a lie and they just double down and lie some more.  Look, let me say: Politicians have always lied, but it used to be that if you caught them lying, they’d be like, ‘Ah, man.’”  [Matthew Haag / New York Times]

--Former Sen. Joe Lieberman / Wall Street Journal

“Alexander Ocasio-Cortex’s surprise primary victory over Rep. Joe Crowley seems likely to hurt Congress, America and the Democratic Party. It doesn’t have to.

“Because the policies Ms. Ocasio-Cortez advocates are so far from the mainstream, her election in November would make it harder for Congress to stop fighting and start fixing problems. Thanks to a small percentage of primary votes, all of the people of New York’s 14th Congressional District stand to lose a very effective representative in Washington.

“Fortunately, Joe Crowley and the voters in his district can prevent this damage.  On Election Day, his name will be on the ballot as the endorsed candidate of the Working Families Party. But for Mr. Crowley to have a chance at getting re-elected, he will have to decide if he wants to remain an active candidate. I hope he does.

“Ms. Ocasio-Cortez is a proud member of the Democratic Socialists of America, whose platform, like hers, is more Socialist than Democratic. Her dreams of new federal spending would bankrupt the country or require very large tax increases, including on the working class.  Her approach foresees government ownership of many private companies, which would decimate the economy and put millions out of work.

“Ms. Ocasio-Cortez didn’t speak much about foreign policy during the primary, but when she did, it was from the DSA policy book – meaning support for socialist governments, even if they are dictatorial and corrupt (Venezuela), opposition to American leadership in the world, even to alleviate humanitarian disasters (Syria), and reflexive criticism of one of America’s great democratic allies (Israel).

“She has received the most attention for calling to ‘Abolish ICE,’ Immigration and Customs Enforcement. This makes no sense unless you no longer want any rules on immigration or customs to be enforced.  I have not heard anyone say that.  Nonetheless, at least three credible candidates for the Democratic presidential nomination rushed to endorse Ms. Ocasio-Cortez’s position.

“Republicans are calling Ms. Ocasio-Cortez the ‘new face’ of the Democratic Party. That’s why Nancy Pelosi has tried to put distance between Ms. Ocasio-Cortez and House Democrats.  ‘They made a choice in one district,’ Mrs. Pelosi said.  ‘It is not to be viewed as something that stands for anything else.’ She knows that if Democrats are to regain a majority, it will be by winning swing districts with sensible, mainstream candidates. Ms. Ocasio-Cortez is making that task harder across America.

“Joe Crowley’s re-election would be evidence that Democrats are capable of governing again. His voting record shows that Mr. Crowley is a progressive. I know him as a bridge builder and problem solver, which is exactly what Congress needs more of in both parties.

“Mr. Crowley faces a difficult choice.  I know because I faced the same one in 2006 after losing in a Democratic primary. I ran as an independent because I wanted all the voters to decide whether I deserved to continue to serve them in the Senate.  It was a risk, but I concluded it was worth it to know that I had taken my fight for the kind of government I believed in as far as I possibly could.

“For the sake of Congress and our country, I hope Joe Crowley will give all the voters of his district the opportunity to re-elect him in November – and I hope they find his name on their ballots.”

--Directly related to the above, as the Wall Street Journal reported, Delaware Democratic Senator Chris Coons has launched a one-man campaign imploring his party to face the facts, “to exchange ‘pie-in-the-sky’ promises such as abolishing (ICE) for pragmatic policies.  Without naming names, the subject of his ire was clear: Democratic colleagues aiming to win favor from the party’s liberal base as they test out 2020 presidential bids.

“Some members of our party, I fear, are instead taking the easy road, and proposing ideas that might sound great in a tweet, like free college, and free health care,” Sen. Coons said in a speech to New Democracy, a centrist Democratic group.

“If the next two years is just a race to offer increasingly unrealistic proposals, to rally just those who are already with us, our strongest supporters, it’ll be difficult for us to make a credible case we should be allowed to govern again,” he warned.

--David Nakamura of the Washington Post had a piece on a topic near and dear to my heart...how U.S. presidents treat foreign trips.  As in Donald Trump is the first in memory to totally eschew meeting with locals, in any setting.  He clearly has zero desire to, and as presidential historian Douglas Brinkley aptly put it: “Most presidents, when they go abroad, are trying to win hearts and minds for the United States’ democratic ways, so they are always in salesman mode.

“Trump is trying to smash institutions and orchestrate a grand realignment of power politics. He’s not interested in selling [other countries] on how marvelous their culture is.”

One former aide of President George W. Bush said, “Every place we went, we always tried to do something to get him out and give him the local cultural experience.”  The aim was to “dispel some of the American-centric perception that foreigners had of us and to show respect for local culture.

Trump, on the other hand, relishes the trappings of extravagant state visits, such as in his visit to Beijing.

I totally agree with Douglas Brinkley’s take that Trump’s decision not to mix with the public “makes him seem like the arrogant American that looks down his nose at all foreigners.”

--From Crain’s New York Business;

“(New York) Gov. Andrew Cuomo’s infrastructure investments are paying off – for his campaign, at least.

“A Long Island-based state contractor gave the governor’s re-election effort a whopping $162,405 in the first six months of 2018, apparently making it the largest contributor in that period.  The Haughland Group’s donations came from three affiliated limited-liability companies, all based out of the same address in Plainview.  Haughland Group LLC and Grace Industries LLC each gave the Democrat $53,000, while the Haughland Energy Group LLC kicked in $43,000 – plus an in-kind contribution worth $13,405 by covering what the Cuomo campaign disclosure refers to as ‘event costs.’

“The governor’s campaign received an additional $25,000 from the Long Island Contractor’s Association’s political action committee, where principal William Haughland Jr. sits on the board of directors.

“Haughland Group’s website shows it and its affiliates have received hundreds of millions of dollars in contracts from Cuomo-controlled entities like New York City Transit, the Long Island Rail Road, the Long Island Power Authority, the Port Authority and the New York State Department of Transportation for everything from road paving to electrical work. The firm also appears to have been by far the lowest bidder on a $38 million contract for light-circuit replacement at Port Authority owned John F. Kennedy Airport in December.

“Cuomo has made reimagining and rebuilding the state’s infrastructure one of the core missions of his second term.”

Cough cough...cough...

--President Trump on meeting Queen Elizabeth, in an interview with Piers Morgan last weekend:

“The Queen is terrific. She is so sharp, so wise, so beautiful.  Up close, you see she’s so beautiful. She’s a very special person...when I say beautiful – inside and out.  That is a beautiful woman.”

Good lord....I need a beer.

---

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

God bless America.

---

Gold $1231
Oil $70.31

Returns for the week 7/16-7/20

Dow Jones  +0.2%  [25058]
S&P 500  +0.02%  [2801]
S&P MidCap  +0.1%
Russell 2000  +0.6%
Nasdaq  -0.1%  [7820]

Returns for the period 1/1/18-7/20/18

Dow Jones  +1.4%
S&P 500  +4.8%
S&P MidCap  +5.2%
Russell 2000  +10.5%
Nasdaq  +13.3%

Bulls 55.3
Bears 
18.5

Have a great week.

Brian Trumbore



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Week in Review

07/21/2018

For the week 7/16-7/20

[Posted 11:45 PM ET...Friday]

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  079794.

Edition 1,006

Trump World...Helsinki

Following Donald Trump’s inauguration on Friday, Jan. 20, 2017, I opened that night with some of the following:

“What a week.  It started with president-elect Trump saying in an interview with German and British media that he was open to lifting sanctions on Russia, NATO was ‘obsolete’ and he wouldn’t commit to the ‘One China’ policy.  Our European allies were terrified, the Kremlin was smiling, and China was torqued off. Days later he took the oath of office....

“Trump wasn’t the least bit magnanimous [in his Inaugural Address, which I quoted extensively], nor did he give our allies any cause for optimism. He ripped them.  There was also no talk of freedom and liberty.

“But Trump’s supporters loved it....

“For now, though, it’s ‘wait 24 hours,’ even though this is the total antithesis of our president’s behavior.  You know where I stand.  I’m reasonably optimistic on the domestic front, but I’m scared to death when it comes to U.S. foreign policy and the immediate threats we face.  I like the president’s foreign policy team, but in the end he makes the call, and the first one is likely to be, ‘What to do with Kim?’”

I’ve been doing this since Feb. 1999 (Nov. 1997 if you count the reviews from my days at PIMCO).  If nothing else I’ve been consistent.  And having covered the George W. Bush and Barack Obama presidencies in their entirety, long-time readers know I rate those two as among the five worst in U.S. history.

Long-time readers also know that I believe the year 2012 will be looked on as the critical year of the entire century, when the books close on it (I’m guessing I die in 2029 in a kiln explosion, a la Fawn Leibowitz...if I’m not hit by an SUV crossing the street beforehand...so maybe someone else will pick up the column after).

Not much has changed since Jan. 20, 2017.  I haven’t changed my tone one iota.  With President Trump, my concerns are still almost totally related to foreign policy.  And you can see from the above that our leader hasn’t changed his tone much when it comes to Russia, Europe and NATO, the latter two still largely viewed as enemies, in his eyes, for some nutso reason.

I also know that Donald Trump loves to say, as he did at a recent campaign rally in Montana, noted in this space at the time, that when it came to his then-upcoming summit with Vladimir Putin: “I have been preparing for this stuff my whole life.”

And so with such great preparation came one of the great disasters in U.S. diplomatic history.  Yet afterwards, we had this.

Trump tweet: “The Summit with Russia was a great success, except with the real enemy of the people, the Fake News Media. I look forward to our second meeting so that we can start implementing some of the many things discussed, including stopping terrorism, security for Israel, nuclear....”

For this week, I guess I have to be included in the ‘Fake News’ crowd.  Donald Trump doesn’t like, nay, despises anyone who criticizes him.  Thus I’m ‘Fake News’ with the rest of them for believing Helsinki wasn’t a “great success.”

Last week, I wrote some of the following that, frankly, was rather prescient.  It was late Friday night, after the NATO summit disaster, and an equal one in the U.K., but three days before Helsinki.

July 13:

“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....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...are deeply troubling....

“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.”

---

And the fire is spreading tonight.  In Monday’s press conference, aside from Trump’s defense of Putin, discussed extensively below as only I do such things, a reporter also asked Putin: “Did you want President Trump to win the election? Did you direct any of your officials to help him do that?”

Putin quickly responded: “Yes, I wanted him to win, because he spoke about normalizing Russian-American relations,” a statement that both destroyed Trump’s narrative of the past 1 ½ years, but also was an admission, in part, that Putin, and Russia, meddled.

In the aftermath of Monday, the week had so many twists and turns, seemingly hourly, Trump dropping endless grenades, and then having a staffer fall on them to cover for him, that this column ends up being the longest ever.

But now we know that President Trump, despite the cascade of criticism and vitriol, is doubling down, inviting Vladimir to Washington this autumn, even before anyone has a freakin’ clue what the two discussed in their closed door, two-hour+ meeting. 

And to make matters worse, if they possibly can be, you have Putin telling an audience of Russian ambassadors on Thursday: “We see that there are forces in the United States that can easily sacrifice Russian-U.S. relations for the sake of their own ambitions.  Let’s see how the events develop, especially considering that certain forces are trying to disavow the results of the meeting in Helsinki.”

Then there was the revelation this afternoon that Trump’s longtime lawyer, Michael Cohen, secretly recorded a conversation with Trump two months before the presidential election in which they discussed payments to a former Playboy model, Karen McDougal, who has claimed she had a year-long affair with Trump in 2006, shortly after Melania gave birth to Barron.

I’m the ‘wait 24 hours’ guy.  We’ll see how this one develops.

More importantly, for now, just what the hell did President Trump agree to give President Putin?  What agreements did Trump reach with Russia, that the Russians are already talking cryptically about, such as on arms control?  Did Trump agree to take no action if Putin gins up a crisis in Montenegro?  We know there are plans on the shelf for the Baltics.

---

We move on.

In an interview with “CBS Evening News” anchor Jeff Glor on Wednesday, discussed further below, Trump made the following statement the media didn’t focus on, but to me it sums up the week, and this president, perfectly.  I provide a few paragraphs prior to the highlighted statement of his for context.

GLOR: Who gives you the best advice? When you come back and you read all these stories, you said, you know, what the fuss is all about. Who do you talk to?

TRUMP: Well, I will tell you, I don’t know what the fuss is all about. I think we did extremely well.  And I think the press makes up the, look, it’s fake news. And people understand. I think the press largely makes up a lot of the fuss about a lot of things. And I’m not talking about everything.

TRUMP: It’s crazy. You do something that’s positive, and they try and make it as negative as possible. Not all. And I have to say this, some of the most honorable people I know, some great people, are reporters, journalists, et cetera. But the level of dishonesty in your profession is extremely high.

GLOR: But the press covered the substance, the wording of that press conference accurately.

TRUMP: I don’t care what they covered. They don’t, they didn’t cover my meeting. The important thing, frankly, was the meeting that lasted for two and a half hours, or almost two and a half hours. And in that meeting, we discussed many, many things that were very, very positive for both countries.

I was driving home from a little shindig when I heard the above...amazing.  The press didn’t cover it, Mr. President, because no one knows what the hell happened!!!

And there was Director of National Intelligence Coats on Thursday afternoon, at the Aspen Security Forum, telling moderator Andrea Mitchell that he does not know what happened in the meeting.  Later in the interview, Mitchell told Coats of the information that hit while the two were sitting there...that Putin had been invited to visit the White House in the fall and Coats said he didn’t know of that either!

[Coats reiterated Thursday, again, that “Russians are the ones trying to undermine our basic values...our elections.”]

Back to the interview...

GLOR: What tangibly emerged from that conversation? What do you feel you achieved?

TRUMP: I think we achieved a lot.  Things emerged...that were very important. Nuclear proliferation between Russia and the United States,  that’s 90 percent of the nuclear weapons.  Protection of Israel. He feels good about that, I feel good about that, very good about that. That was a big factor. We talked about North Korea.  He said he will help.  He agrees with what I’m doing.  He thinks I’m doing a great job with respect to North Korea.  He said he would help. I think he will. Let’s see what happens.

---

Meanwhile, Tuesday, Trump said he misspoke when he suggested otherwise in Monday’s press conference.

“I will begin by stating that I have full faith and support for America’s great intelligence agencies, I always have,” Trump said before a meeting with members of Congress at the White House.  “And I have felt very strongly that, while Russia’s actions had no impact at all on the outcome of the election, let me be totally clear in saying that, and I have said this many times, I accept our intelligence community’s conclusion that Russia’s meddling in the 2016 election took place. It could be other people, also. There are lots of people out there.  7.2 billion, to be exact, I’d add.

Trump then said he needed to correct a statement made during the press conference with Putin.

“The sentence should have been: ‘I don’t see any reason why it wouldn’t be Russia.’ Sort of a double negative.  So you can put that in, and I think that probably clarifies things pretty good by itself,” reading from a printed script marked with the words, “There was No Collusion.”

Wednesday, in the interview with Jeff Glor, Trump again expressed confidence in U.S. intelligence agencies and their assessment of Russian interference, but declined to say whether he believes Vladimir Putin was lying when he denied Russia was behind the meddling effort. 

Trump said he believes it’s “true” Russia meddled in the 2016 election and said he directly warned Putin against interfering in U.S. elections during their one-on-one meeting.

Asked what he said to Putin, Trump responded, “Very strong on the fact that we can’t have meddling, we can’t have any of that...I let him know that we can’t have this, we’re not going to have it, and that’s the way it’s going to be.”

As for Director of National Intelligence Dan Coats, Trump told Jeff Glor, “Well, I accept.  I mean, he’s an expert.  This is what he does. He’s been doing a very good job.  I have tremendous faith in Dan Coats, and if he says that, I would accept that. I will tell you though, it better not be. It better not be.”

Trump said he also accepts Coats’ assessment that the threat from Russia is ongoing. But he declined to say whether his faith in the intelligence community leads him to the conclusion that Putin’s denials are untrue.  “So if you believe U.S. intelligence agencies, is Putin lying to you?” Glor asked.

“I don’t want to get into whether or not he’s lying,” Trump said. “I can only say that I do have confidence in our intelligence agencies as currently constituted.  I think that Dan Coats is excellent.  I think that [CIA Director] Gina [Haspel] is excellent. I think we have excellent people in the agencies, and when they tell me something, it means a lot.”

[The same day, Wednesday, FBI Director Christopher A. Wray, told the Aspen Security Forum: “The intelligence community’s assessment has not changed. My view has not changed, which is that Russia attempted to interfere with the last election and continues to engage in malign influence operations to this day.” The Russian efforts are “aimed at sowing discord and divisiveness in this country,” he continued.  “We haven’t yet seen an effort to target specific election infrastructure this time.  We could be just a moment away from the next level...It’s a threat we need to take extremely seriously and respond to with fierce determination and focus.”]

Earlier Wednesday, Trump sparked confusion about where he stands on whether Russia is an existing threat, given Coats’ assessment that the threat to America’s digital infrastructure is current.  White House press secretary Sarah Sanders told reporters that Mr. Trump’s response to a reporter’s question had been misconstrued.  When he said ‘no,’ she said, he was not answering the reporter’s question about whether he thought Russia is still targeting the U.S.

Those in the room who observed the pool reporter’s question believe the president was answering her.

And there was another issue.  Trump said he would discuss a Russian proposal to question American citizens, including former U.S. Ambassador Michael McFaul, whom the Kremlin accuses of committing crimes in Russia.

By the time this last one played out on Thursday, the White House had backed off the idea, as the Senate was voting 98-0 on a motion that prohibits the transfer to Russia of a figure such as McFaul.

Among the comments made by members of Congress....

House Speaker Paul Ryan (R-Wis.): “There is no question that Russia interfered in our election and continues attempts to undermine democracy here and round the world. That is not just the finding of the American intelligence community but also the House Committee on Intelligence. The president must appreciate that Russia is not our ally.  There is no moral equivalence between the United States and Russia, which remains hostile to our most basic values and ideals.  The United States must be focused on holding Russia accountable and putting an end to its vile attacks on democracy.”

Sen. John McCain (R-Ariz.): “(It was) one of the most disgraceful performances by an American president in memory.  The damage inflicted by President Trump’s naivete, egotism, false equivalence, and sympathy for autocrats is difficult to calculate. But it is clear that the summit in Helsinki was a tragic mistake.”

Sen. Bob Corker (R-Tenn.): “I’ll take a back seat to no one in the United States Senate on challenging what happened at NATO, what happened in Helsinki.  I take a back seat to no one on pressing this administration for some of the worst things that I’ve seen happen in public as it relates to our country.”

Sen. Ben Sasse (R-Neb.) blasted Trump’s statement blaming both sides in the U.S.-Russia relationship as “bizarre and flat-out wrong.”

“America wants a good relationship with the Russian people but Vladimir Putin and his thugs are responsible for Soviet-style aggression.”

Sen. Jeff Flake (R-Ariz.): “I never thought I would see the day when our American President would stand on the stage with the Russian President and place blame on the United States for Russian aggression. This is shameful.”

Mitt Romney: “President Trump’s decision to side with Putin over American intelligence agencies is disgraceful and detrimental to our democratic principles.   Russia remains our number one geopolitical adversary; claiming a moral equivalence between the United States and Russia not only defies reason and history, it undermines our national integrity and impairs our global credibility.”

Former House Speaker Newt Gingrich: “President Trump must clarify his statements in Helsinki on our intelligence system and Putin. It is the most serious mistake of his presidency and must be corrected – immediately.”

For the record, the European press blistered Trump’s performance with headlines like “Best ally of Putin” ... “Trump makes it easy for Putin” ... “Trump 0, Putin 1” ... Helsinki marked an “American surrender” ... Britain’s Guardian newspaper, in its lead headline, rolled out the T-word – “treasonous.”

But in Russia, Putin’s performance was of course hailed as a national triumph.  The state newspaper Rossiyskaya Gazeta trumpeted: “The West’s attempts to isolate Russia failed.”

And it’s true that Europe’s far right issued its own plaudits, such as from Italy’s hardline Interior Minister Matteo Salvini, who praised Russia for having a government “that acts in the interests of its people” and lamented that such behavior was “rare in Europe.”

But an op-ed in Le Monde called the Trump-Putin meeting a “dangerous liaison” for the entire world.

“Trump is praising Putin while at the same time he is constantly attacking without any reason America’s closest allies,” columnist Martin Klingst wrote in Germany’s Die Zeit online.

I have to add, again, that neither Putin nor Trump drink...just sayin’. 

In a post-summit CBS News poll published Thursday, less than a third of Americans approve of how President Trump handled Helsinki, 32 percent, but 68 percent of Republicans think he did a good job.  Overall, 55 percent were unhappy.  [Among Independents, 53 percent were not happy with how Trump handled things, 29 percent approved.]

A Reuters poll, also taken after Monday’s summit, had similar numbers.  55 percent of registered voters disapproved of Trump’s dealings with Russia, while 37 percent approved, but 71 percent of GOP voters supported Trump’s handling of Russia.

Opinion....not all of it unfavorable to Mr. Trump...

Editorial / New York Daily News

“Before the entire world Monday, the self-styled tough-guy, America-First President revealed himself to be Russian President Vladimir Putin’s poodle.

“Putin flatly denied what every U.S. intelligence agency has concluded, what new indictments by Special Counsel Robert Mueller now underline: That agents of the GRU, the intelligence agency Putin used to work for and still leads, spearheaded 2016 presidential election interference.

“The Russian president counters the mountain of evidence with an empty and robotic assertion: ‘the Russian State has not interfered and will never interfere in internal American affairs.’

“Associated Press reporter – and Daily News alum – Jonathan Lemire gave Trump a binary choice: ‘who do you believe?’

“At first, the man it pains us to say is our President refused to answer the question. He attacked Democrats for losing the election and dissembled, weaving together bits of conspiracy theories. Then he got down to brass tacks: He believes Putin.

“ ‘Coats said they think it’s Russia,’ Trump said, referring to his director of national intelligence.  ‘Putin says it’s not Russia.  I don’t see any reason why it would be’ Russia. That sound you hear is the head of the U.S. executive branch stabbing his intelligence agencies in the back in order to side, against all evidence, alongside the leader of a country that meddled in an American election and wants to do it again.

“Trump, in fact, blessed Putin as ‘extremely strong and powerful’ in his denial – words he would never assign to the reams of proof compiled by the top four American intelligence agencies – and talked up the Russian president’s ‘incredible offer’ to have his own agents review what U.S. officials have found.

“He derides reports with which he disagrees as ‘fake news,’ then buys the Russian narrative hook, line, sinker, pole and boat.

“Ignorant about decades of Moscow meddling, from the Korean and Vietnam Wars, to Cuba and Eastern Europe, Trump says relations have ‘NEVER been worse.’  Worse than the ignorance is the finger-pointing: He blames ‘many years of U.S. foolishness and stupidity and now, the Rigged Witch Hunt.’

“Nothing about Russia’s annexation of Crimea. Or its complicity in the shooting down of a civilian airliner.  Or its meddling in the 2016 elections.

“ ‘We’re all to blame,’ said the American President Monday, the foreign-policy equivalent of his ‘both sides’ drivel after a white supremacist rally in Charlottesville. It would be high comedy if it were not a national tragedy.  And a national emergency.”

Editorial / New York Post

“President Trump sought to boost U.S.-Russian ties when he met with Vladimir Putin in Helsinki on Monday. But his failure to publicly hold the Russian accountable for his aggressive behavior – on numerous fronts – will only embolden him and fuel more tension down the road.

“Most troubling was when Trump effectively endorsed Putin’s denial that Russia interfered in the 2016 election, contradicting not only Republican-controlled congressional committees, but even Trump’s own national security adviser and director of national intelligence. Putin ‘said it’s not Russia,’ declared Trump, adding: ‘I don’t see any reason why it would be.’  Huh?

“The president was right to meet with Putin in a bid to promote dialogue and establish a personal relationship with his Russian counterpart. But that also means holding Putin accountable, not just for election meddling but his outright aggression and complicity in Bashar al-Assad’s war against the Syrian people, among other things.

“Given an opportunity on the world stage, Trump backed away.  Little wonder that his performance has drawn howls of outrage from normally supportive officials.

“ ‘The president must appreciate that Russia is not our ally,’ said House Speaker Paul Ryan.  ‘There is no question that Russia interfered in our election.’

“Added Sen. Marco Rubio: ‘Foreign policy must be based on reality, not hyperbole or wishful thinking.’

“The harshest criticism came from Sen. John McCain, who charged that ‘no prior president has ever abased himself more abjectly before a tyrant.’

“President Trump had a real opportunity to forge a new relationship with Russia by projecting strength and commanding respect. He failed to do so – and it likely will come back to haunt him.”

Editorial / Wall Street Journal

“Donald Trump left for Europe a week ago with his reputation enhanced by a strong Supreme Court nomination. He returned Monday with that reputation diminished after a tumultuous week of indulging what amounts to the Trump First Doctrine.

“Mr. Trump marched through Europe with more swagger than strategy. His diplomacy is personal, rooted in instinct and impulse, and he treats other leaders above all on how much they praise Donald J. Trump.  He says what pops into his head to shock but then disavows it if there’s a backlash. He criticizes institutions and policies to grab headlines but then claims victory no matter  the outcome.

“The world hasn’t seen a U.S. President like this in modern times, and as ever in Trump World everyone else will have to adapt. Let’s navigate between the critics who predict the end of world order and the cheerleaders who see only genius, and try to offer a realistic assessment of the fallout from a troubling week.

NATO: The result here seems better than many feared. Mr. Trump bullied the allies with rhetoric and insulted Germany by claiming it is ‘totally controlled’ by Russia. But his charges about inadequate military spending and Russia’s gas pipeline had the advantage of being true, as most leaders acknowledged.

“The 23-page communique that Mr. Trump endorsed is a solid document that improves NATO’s capabilities to deter and resist a threat from Russia. Mr. Trump’s last-minute demand that countries raise military spending to 4% of GDP was weird, but he is right that more countries are likely to meet the 2% target.

“One risk is that Mr. Trump’s constant criticism of NATO will undermine public support for it in the U.S. – and, more dangerously, undermine the alliance’s deterrence against Russia. If Vladimir Putin concludes Mr. Trump isn’t willing to protect the Baltic states, he may pull another Crimea.

The Brits: Mr. Trump turned a friendly visit into a fiasco by criticizing Prime Minister Theresa May’s Brexit strategy in an interview with the Sun newspaper. He backtracked a day later, calling his own comments on tape ‘fake news,’ and Mrs. May was gracious.  But Mr. Trump should encourage a U.S.-British post-Brexit trade deal both in the U.S. interest and to help Britain negotiate the most favorable Brexit terms from the European Union.  Other leaders will conclude from his rude treatment of Mrs. May that working with Mr. Trump is more perilous than fighting him.

The EU: In contrast to NATO, Mr. Trump does seem to want to undermine the European compact. He called it a ‘foe’ on trade, which will make negotiating a better trade deal even less likely.  He seems determined to impose a 20% or higher tariff on European autos to strike at Germany, which would also hit France and others. The U.S. isn’t part of the EU, but American Presidents have found it useful as an ally to leverage sanctions against, say, Russia or Iran.  Mr. Trump is stoking European resentments that will bite back sooner or later when he wants Europe’s help.

Russia: Details from the private Trump-Putin talks in Helsinki will spill out in coming days, but Monday’s joint press conference was a personal and national embarrassment. On stage with the dictator whose election meddling has done so much harm to his Presidency, Mr. Trump couldn’t even bring himself to say he believed his own intelligence advisers like Dan Coats over the Russian strongman.

“ ‘I have – I have confidence in both parties,’ Mr. Trump said.  ‘So I have great confidence in my intelligence people, but I will tell you that President Putin was extremely strong and powerful in his denial today.’  Denials from liars usually are strong and powerful.

“The charitable explanation for this kowtow to the Kremlin is that Mr. Trump can’t get past his fury that critics claim his election was tainted by Russian interference. And so he couldn’t resist, in front of the world, going off on a solipsistic ramble about ‘Hillary Clinton’s emails’ and Democratic ‘servers.’  He can’t seem to figure out that the more he indulges his ego in this fashion, and the more he seems to indulge Mr. Putin, the more ammunition he gives to his opponents.

“For a rare moment in his Presidency, Mr. Trump also projected weakness. He was the one on stage beseeching Mr. Putin for a better relationship, while the Russian played it cool and matter of fact.  Mr. Trump touted their personal rapport, saying the bilateral ‘relationship has never been worse that it is now.  However, that changed as of about four hours ago.  I really believe that.’  In four hours?

“Mr. Putin focused on his agenda of consolidating Russian strategic gains in Syria, Ukraine and arms control, and suggesting that the American might help. Mr. Trump even seemed to soften his stance against Russia’s Nord Stream 2 gas pipeline to Germany.

“By going soft on Mr. Putin, Mr. Trump will paradoxically find it even harder to make deals with the Russian. Republicans and Democrats will unite in Congress, as they should, to limit his diplomatic running room. Mr. Trump may decide to court Mr. Putin anyway, like Barack Obama did Iran’s mullahs, but political isolation concerning a foreign adversary is a weak and dangerous place to be.”

Walter Russell Mead / Wall Street Journal

“Among the president’s remarkable assumptions about Vladimir Putin’s Russia: that it can be induced to cooperate with the U.S. on a wide range of security issues, including Syria and Iran; and that it can replace Germany as America’s principal Eurasian partner – or, if not, the U.S. can use the threat of a Russian alliance to extract better terms from Germany and the European Union.  The president is confident that he possesses the bargaining ability and diplomatic talent to manage the complex negotiations involved.

“Why does Mr. Trump seem so determined to defy his advisers and play a Russia card that costs him dearly in Washington and nourishes the suspicions of the investigators probing his Russia connections?  His fiercest critics are sure they know the answer: Vladimir Putin has ‘compromised’ the president, leaving him no choice but to appease the Russian dictator.

“Special counsel Robert Mueller will be in a better position to assess that question than the journalists who speculate about it wildly.  Meanwhile, after Mr. Trump’s meeting with Mr. Putin in Helsinki, it’s worth remembering that his Russia policy is less of an outlier than some of his critics assume. Both George W. Bush and Barack Obama also naively overestimated their ability to charm Mr. Putin.

“Mr. Obama’s policy in particular bore similarities to Mr. Trump’s.  Both men held Washington’s foreign-policy establishment (‘the blob’ or ‘the deep state’) in contempt.  Both came to the job with a belief that their unique life stories and personal qualities would enable them to transform global politics in a historic way.  Both were willing to accept a Russian presence in Syria and to overlook Russian complicity in Bashar Assad’s atrocities.  Long after the 2009 ‘reset’ failed, Mr. Obama was willing to flout domestic public opinion to make concessions to Russia. As he whispered to Russia’s then-President Dmitry Medvedev in 2012: ‘This is my last election I have more flexibility,’ on issues like missile defense.

“While the press celebrated rather than pilloried him for it [Ed. not true], Mr. Obama also made overtures to a U.S. adversary (Iran) over the heads of longtime allies (Israel and the Gulf states).  Mr. Trump’s Russia overtures over Germany’s head are just as ill-considered.

“What differentiates Mr. Trump from Mr. Obama most sharply is his approach to Europe.  Mr. Obama saw Europe as a rich and generally well-intentioned part of the world that punches well below its weight in world affairs. Mr. Trump’s view has been profoundly influenced by hard-core Brexiteers like Nigel Farage and anti-Islamist campaigners who see in the EU a mix of fecklessness in defending Western values and ruthlessness in promoting its own bureaucratic power.

“Similarly, both Mr. Trump and the Brexiteers see the EU as a screen for German domination of the Continent. And Mr. Trump’s concern that ‘excessive’ levels of migrants from Islamic countries threaten the social cohesion of Western societies tallies with the views of politicians in countries across Europe who resent German power and fear the imposition of post-Christian, post-nationalist values through the EU.

“From this perspective, Mr. Putin looks less like a malign force bent on dismantling the cathedral of liberty and more like an unsavory but potentially useful partner. After all, the one indisputable success of the EU is forming a bloc that can collectively resist American pressure on trade. Mr. Trump sees the trade balance as a fundamental inequity in the trans-Atlantic relationship. From this mercantilist perspective, cooperating with Mr. Putin’s anti-EU agenda is appealing to the president.

“A fresh start with Russia appears to be as much of an idee fixe for Mr. Trump as outreach to Iran was for his predecessor.  Mr. Obama never fully appreciated that the U.S. political system limits the ability of presidents to bring about diplomatic revolutions in the teeth of congressional resistance.  It remains to be seen whether and how quickly Mr. Trump will grasp this important truth.”

Editorial / Washington Post

“The enduring image of the U.S.-Russian summit in Helsinki on Monday will be that of President Trump standing next to Vladimir Putin and suggesting he found Mr. Putin’s ‘powerful’ denial at least as persuasive as the U.S. intelligence community’s unanimous finding that Russia intervened in the 2016 election.  Coupled with another groundless attack on the FBI and an apparent endorsement of a patently disingenuous offer by Mr. Putin to collaborate with the investigation of special counsel Robert S. Mueller III, Mr. Trump appeared to align himself with the Kremlin against American law enforcement before the Russian ruler and a global audience.

“Mr. Trump had said  he would raise the issue of Russia’s interference in the election with Mr. Putin, but the result was a series of statements that could have been scripted by Moscow.... He referred to various discredited conspiracy theories about the hack while lambasting the FBI.  When offered an open-ended opportunity to cite any behavior by Russia that had contributed to poor relations, the president sidestepped, saying, ‘I hold both countries responsible.’  As Mr. Trump apparently sees it, Russia’s invasions of Ukraine and Georgia, war crimes in Syria, poison attack in Britain and the shooting down of a Malaysian civilian airliner over Ukraine are morally equivalent to the policies pursued by previous U.S. administrations.

“It’s not yet known what Mr. Trump and Mr. Putin discussed in their private meeting, or whether they reached any tangible agreements. Both leaders suggested there had been accord on securing Israel’s border with Syria and on providing humanitarian aid to Syrian refugees, though they offered no details. Even if he obtained nothing concrete from Mr. Trump, Mr. Putin scored a symbolic triumph by appearing to stand as an equal with the U.S. president in a relationship with ‘special responsibility for maintaining international security,’ as he put it.

“While Mr. Trump’s insistence on granting Mr. Putin that status was misguided, it paled beside his betrayal of the FBI and his own senior intelligence officials.  Incredibly, Mr. Trump appeared to endorse a cynical suggestion by Mr. Putin that Mr. Mueller’s investigators be granted interviews with a dozen Russian intelligence officers indicted in the DNC hack in exchange for Russian access to associates of William Browder, a financier whose exposure of high-level corruption and human rights crimes in Moscow led to the adoption by Congress of the Magnitsky Act, which imposed sanctions on those responsible....

“In Helsinki, Mr. Trump again insisted ‘there was no collusion’ with Russia.  Yet in refusing to acknowledge the plain facts about Russia’s behavior, while trashing his own country’s justice system, Mr. Trump in fact was openly colluding with the criminal leader of a hostile power.”

William D. Hartung / Defense News

“President Trump’s dismissal of Russian interference in the 2016 election – choosing to believe Vladimir Putin over U.S. intelligence and law enforcement agencies has rightly sparked outrage and astonishment. But we shouldn’t let Trump’s disgraceful performance in Russia overshadow the other key issues raised by his recent trip.

“In particular, Trump’s tantrum over the need for NATO allies to spend more on defense deserves greater scrutiny. Whether the goal is 2 percent of GDP – the alliance’s long-stated goal – or 4 percent, a fantastic figure Trump floated as well – the real question is whether NATO or the United States need to spend more on traditionally military assets to ensure their security. Contrary to Trump’s assertions, the answer is no.

“According to the Stockholm International Peace Research Institute, the 29 members of the NATO alliance spent a cumulative $900 billion on defense last year, while Russia spent $66 billion. Even allowing for the fact that much of the U.S. share of that total is spent on global security challenges, NATO far outspends Russia. The top four European spenders – France, Germany, the United Kingdom, and Italy – together spend more than two-and-one-half times what Russia does.  If security is just about who spends the most money, NATO is already far ahead of Moscow. The real question is what NATO countries spend their money on.

“The Russian challenge does not require a buildup of costly military assets like tanks, aircraft, or ships. Russian tanks will not be rolling into East and Central Europe, and NATO aircraft will not be engaging in aerial dogfights with Russian planes. The biggest Russian threats to the United States and Europe are potential cyberattacks, political interference through the systematic deployment of funds and propaganda, and, possibly, the kind of hybrid warfare Moscow waged in Ukraine. None of these threats can be effectively addressed by accumulating more traditional military power.

“For Europe, the best route to greater security will involve addressing the most pressing internal problems, from combatting the rise of right-wing, and in some cases neo-fascist parties; finding an equitable solution to its refugee crisis; and reforming its political and economic system to give hope to those left behind by European integration.  These changes will make it harder for right-wing parties to get political traction, and will make European citizens less vulnerable to Russian propaganda efforts.

“As for military spending, the challenge remains what it has been for some time: crafting a coherent Europe-wide force, or at least a grouping of national forces that can act in an integrated fashion in a crisis.  This will involve the ability to deploy well-trained troops to crisis points rapidly.  It will also require, to the extent politically possible, an effort to reduce redundancy in procurement that wastes a significant portion of the continent’s current military investments.

“The one threat that President Trump can and should address is the continuing nuclear challenge posed by the possession of massive overkill by Washington and Russia. Progress on arms control is complicated in the short-term by Trump’s loss of credibility in the United States and globally due to his erratic behavior and uncritical embrace of Vladimir Putin. But at a minimum, Trump should agree to extend the New START nuclear arms agreement, which benefits U.S. security by limiting U.S. and Russian nuclear deployments to 1,550 weapons each, and, as or more importantly, gives the U.S. the ability to inspect and monitor nuclear developments in Russia.”

Editorial / Washington Post

“It is still not publicly known what President Trump and Russian President Vladimir Putin discussed on Monday during their two hours of one-on-one conversation in Helsinki. But the White House confirmed Wednesday that they did talk about an issue Mr. Putin later raised at their joint news conference in a way that was inappropriate as well as disturbing. Addressing the indictment of 12 Russian military officers on charges of hacking Democrats’ computers and using the stolen data to influence the 2016 election, Mr. Putin suggested the investigative team of special counsel Robert S. Mueller III could be invited to witness their questioning by Russian authorities – provided that similar access was given to Americans ‘who have something to do with illegal actions on the territory of Russia.’ ‘I think that’s an incredible offer,’ volunteered Mr. Trump.

“As it turned out, Mr. Putin was trying to equate the Mueller investigation with a sinister Russian campaign against Bill Browder, an American-born financier who has become a Putin nemesis. After his lawyer, Sergei Magnitsky, was jailed and killed for exposing a massive fraud involving senior Russian officials, Mr. Browder persuaded Congress to pass the 2012 Magnitsky Act, which has led to sanctions against numerous officials in the Putin clique. In an attempt to get the sanctions lifted, the Putin government has tried to portray Mr. Browder as a criminal, repeatedly and unsuccessfully seeking his arrest by Interpol....

“That Mr. Trump would endorse this cynical and preposterous proposal might be chalked up to ignorance or confusion – except that Mr. Trump knows all about Mr. Putin’s false claims against Mr. Browder. The same charges were the subject of the June 9, 2016, Trump Tower meeting between Russian lawyer Natalia Veselnitskaya and three senior Trump campaign officials, including Donald Trump Jr.  The younger Trump agreed to the meeting, which is reportedly a focus of Mr. Mueller’s investigation, after being promised damaging information on Ms. Clinton.  The president later dictated a misleading statement, saying the meeting was about adoptions; Mr. Putin had halted U.S. adoptions of Russian children following the passage of the Magnitsky Act.  Mr. Putin’s airing of the same allegations about Mr. Browder and Ms. Clinton in Helsinki only bolsters the case that Ms. Veselnitskaya was acting on the Kremlin’s behalf when she visited Trump Tower.  In turn, Mr. Trump’s rush to embrace Mr. Putin’s disingenuous proposal to question eminent Americans about those claims is in keeping with his alignment with Mr. Putin against Mr. Mueller and the U.S. justice system.  It shows he did not misspeak at that news conference: he was, in fact, championing Mr. Putin’s agenda.”

Thomas L. Friedman / New York Times

“If your puppy makes a mess on your carpet and you shout ‘Bad dog,’ there is a good chance that that puppy’s ears will droop, his head will bow and he may even whimper. In other words, even a puppy acts ashamed when caught misbehaving. That is not true of Donald Trump. Day in and day out, he proves to us that he has no shame. We’ve never had a president with no shame – and it’s become a huge source of power for him and trouble for us.

“And what makes Trump even more powerful and problematic is that this president with no shame is combined with a party with no spine and a major network with no integrity – save for a few real journalists at Fox News like the outstanding Chris Wallace.

“When a president with no shame is backed by a party with no spine and a network with no integrity, you have two big problems.

“First, there is no one inside his party or base who is going to sustainably stop Trump from being himself and doing whatever he bloody pleases. The Republican Party has completely lost its way. Don’t be fooled by the last-second tut-tutting of G.O.P. senators about Trump’s kowtowing to Vladimir Putin in Helsinki and spurning of our intelligence agencies.

“Until and unless the G.O.P.-led Congress passes legislation that protects special counsel Robert Mueller from being fired by Trump or enacts into law specific, deeper sanctions on Russia if it is ever again caught trying to tilt our elections – or secures Trump’s tax returns or the transcript of his two hours and 10 minutes of private conversation with Putin – it’s all just talk to cover the G.O.P’s behind.

“Let the Republicans in Congress do something hard and concrete that shows they love our country more than they fear Trump’s base and I will believe their words.

“I can’t put it better than Michael Gerson, the former George W. Bush speechwriter, did in the Washington Post Monday: ‘Much of the G.O.P. is playing down Russian aggression. And it is actively undermining the investigation of that aggression. Trump’s political tools have become Putin’s useful idiots. The party of national strength has become the obstacle to the effective protection of the country.’

“The G.O.P. has lost its way because it has been selling itself for years to whoever could keep it in power, and that is now Trump and his base.  And Trump’s base actually hates the people who hate Trump – i.e., liberals who they think look down on members of the base – more than it cares about Trump.  This is about culture, not politics, and culture doesn’t change with the news cycle. And neither do business models – and Fox News’ business model is to feed, and feed off of, that culture war by allowing many of its commentators to be Trump’s parrots and bullhorns.

“The fact that Trump’s party and his network always look for ways to excuse him has been hugely liberating for Trump.  He can actually deny he said things that were recorded – like his trashing of the British prime minister. He can take one side of any issue (like trashing key NATO allies to satisfy his base) and, when he gets blowback, take the other side (claim to love the Atlantic alliance). And he can declare that he really meant to ask why ‘wouldn’t’ Russia be the one hacking us instead of why ‘would’ it, as he did say.    If you believe that last one, I have a bridge near the Kremlin I’d love to sell you.

“ ‘Hey, give him a break,’ say Trump’s supporters, ‘there is a method to his madness.’  And that is true. What they don’t admit, though, is that there is tremendous madness to Trump’s method.  And the, there is just his sheer madness – ideas he holds that are ignorant gut impulses that bear no relation to science, math or history.

“For instance, Trump is right: We do need to confront China on its trade restrictions, forced technology transfers and nonreciprocal trade arrangements. But then, look at the madness to his methods.  How would you try to influence China on trade if you were thinking strategically?

“For starters, you’d sign the Trans-Pacific Partnership, creating a free-trade alliance around American values, standards and interests, with 11 other Pacific economies, creating a trade agreement covering 40 percent of global G.D.P. Then you’d forgo ridiculous steel and aluminum tariffs on our European Union allies and sign them all up instead to join us in our efforts to curb China’s trade abuses, which the E.U. suffers from just as much as we do....

“And then there is the sheer madness.  Threatening the U.K. that if it doesn’t do a full Brexit it will not get preferential trade treatment from Trump, calling the bloc a ‘foe’ on trade, and sneering at the number of refugees it has admitted.

“Where do you start? The E.U. is the United States of Europe – the other great center in the world of free markets, free people, liberty and democracy. It has kept the peace in Europe after a century of strife there – that dragged us into two world wars – and its economic growth as a trading partner has made both America and the E.U. steadily richer and more stable. It is sheer madness to believe that it is in U.S. interests to see the European Union fracture!

“Ask any senior U.S. military officer and you’ll be told that our greatest strategic competitive advantages is that we have a network of allies, like the E.U., and the Russians and Chinese do not.  They only have customers and vassals.  Why would we give that up for closer ties to Putin?

“Also, speaking of sheer madness, so much of the immigration that has swamped Europe of late has come from migrants from Syria and sub-Saharan Africa. Both migrations are the product of political turmoil fed by climate change, the collapse of small-scale agriculture and rapid population growth in the Middle East and Africa.  (Ditto Central America.) And what is Trump’s policy? Trash all global efforts to mitigate climate change, ban all U.S. government support for family planning overseas – and get out of Syria, rather than use our leverage there to try to stabilize its refugee flow.

“The only way to change this situation is not by hoping that the president develops some shame or that this version of the G.O.P. develops some spine.  It is by Democrats winning the House, the Senate or both in the midterm elections.

“Only by dealing an electoral defeat to this version of the G.O.P. in the midterms will we possibly get a healthy conservative party again (which we need) and curb Trump’s power.

“Everything else is just words – and words without power change nothing.”

Holman W. Jenkins, Jr. / Wall Street Journal

“Robert Mueller did his reputation for nonpartisanship no service by launching his indictment of Russia’s military hackers on the eve of what 99% of the media now say was a disastrous performance by President Trump in his summit with Vladimir Putin.

“This is the same Mr. Mueller who, as FBI chief, sat for five years on the indictment of a Russian uranium executive when it would have been embarrassing to Mr. Obama’s own Russian rapprochement – and doubly embarrassing to his secretary of state, Hillary Clinton, because of the connection to the Clinton Foundation to the Russian uranium business in question.

“Mr. Mueller’s timing on Friday was unnecessary. His indictment is only for show.  The Russian culprits will never be seen in a U.S. court.

“It raises a question I did not expect to be raised: Should we now see Mr. Mueller as part of the retinue that includes former Obama CIA chief John Brennan, former Director of National Intelligence James Clapper and (ambiguously) former FBI chief James Comey?  These men don’t like Mr. Trump or his Russia rapprochement; Mr. Brennan openly calls him a traitor.

“One hesitates to draw the comparison, but Truman and Eisenhower were assailed as agents of the Soviet Union by Joseph McCarthy. Reagan was accused (by George Will) of selling out to Gorbachev.  Critics of FDR’s foreign policy were actually proved right in the historical archives: The British were seeking to assure his re-election in 1940. Politics never did stop at the water’s edge.  It can’t.  All presidents use foreign policy the way they do domestic policy: to create, expand or protect their domestic political capital. That’s how our system works.

“And their opponents will always have recourse to the accusation that a president is a dupe or worse of foreign interests.

“Mr. Trump’s performance in Helsinki left a great deal to be desired, but he delivered the policy he has promised since the 2016 campaign. It is identical to the policy of his two most recent predecessors.

“Mr. Trump has a history of financial relations with Russians.  He has a history of statements saying that American leaders were ‘weak’ and relations with Russia would improve if the U.S. had a ‘strong’ leader.

“He has sought to expand America’s military power; he has sought to expand its energy power. One senses his walloping of Germany over the Nord Stream pipeline is less aimed at weakening Russia than at expanding U.S. gas sales but it would still weaken Russia....

“The best you can say about all this, there’s a consistency here. Mr. Trump may not know Palmerston, who said countries don’t have permanent friends, only permanent interests, but I wouldn’t put it past him to have seen the quote in a Charles Krauthammer column.

“Of course, you can never disprove sinister influences, an impossibility on which certain fellow journalists will be hanging their reputations for years to come. But a reliable assumption that covers all cases is that presidents act in their own interest.  Meanwhile, we have a democratic process, not to mention an extensive permanent bureaucracy with its own ideas, to help sort it out....

“Mr. Trump isn’t the answer to Mr. Putin’s dreams. The answer to his dreams is the U.S. tearing itself apart over tendentious, partisan claims of ‘treason,’ which ought to have some cheerleaders of this meme thinking twice.

“You would also think that Americans by now would have no trouble understanding that small, jealous men can rise to positions of authority.

“When looking at Mr. Trump or his enemies – such as Messrs. Brennan, Clapper and Comey, or Rep. Adam Schiff – do you honestly see Jesus in any of them? I don’t.  Nor would I expect to. Nor, thank God, do I believe it’s necessary in order for the United States to survive and prosper.”

Editorial / Wall Street Journal...later in the week...

“President Trump rarely admits mistakes, so it was good on Tuesday to see him reverse his claim of Monday that Russia may not have interfered in the 2016 U.S. election.  The problem is that he still doesn’t seem to understand the nature of the adversary known as Vladimir Putin whom he wants to make his friend.

“ ‘I have full faith in our intelligence agencies,’ Mr. Trump said Tuesday at the White House. He added that he unintentionally erred Monday when he said, ‘I don’t see any reason why it would be Russia’ that had done the cyber-hacking. He said he meant to say, ‘I don’t see any reason why it wouldn’t be Russia.’

“We wonder who thought of that one, but never mind. At least Mr. Trump has at last publicly sided with his own advisers over the former KGB agent in the Kremlin.  He also said ‘we are doing everything in our power to prevent Russian interference’ in the 2018 election, which his intelligence advisers have also warned him about.

“Less encouraging is Mr. Trump’s continued enthusiasm for working with Mr. Putin on issues like Syria and arms control.  On nuclear weapons in particular, Mr. Trump is a neophyte compared with the Russian who wants to rewrite the historical record to lure the President into further reducing the U.S. arsenal.

“Nuclear weapons are ‘the greatest threat of our world today,’ Mr. Trump told reporters Tuesday. Russia is ‘a great nuclear power, we’re a great nuclear power. We have to do something about nuclear, and so that was a matter that we discussed actually in great detail, and President Putin agrees with me.’

“Uh oh.  In an interview with Fox News host Chris Wallace Monday, Mr. Putin lamented America’s ‘unilateral withdrawal’ from the 1972 Anti-Ballistic Missile Treaty (ABM) during the George W. Bush administration.  ‘We didn’t want the United States to withdraw from the ABM treaty, but they did despite our request not to do it,’ Mr. Putin said.

“What Mr. Putin didn’t explain is that the ABM Treaty, which limited deployments of missile defenses, was a bilateral pact that the U.S. adhered to and the Soviets repeatedly violated, notably by building a large, phased-array radar at Krasnoyarsk. When the Soviet Union collapsed in 1991, the ABM Treaty was effectively voided, yet Republican and Democratic Presidents kept the treaty in place.

“George W. Bush finally withdrew from ABM in 2002, explaining that the Cold War had ended, Russia was no longer an enemy, and the treaty hindered the U.S. ‘ability to develop ways to protect our people from future terrorist or rogue state missile attacks.’ The Bush Administration understood that the treaty left the U.S. defenseless against a missile from the likes of Iran and North Korea....

“Yet on Monday Mr. Putin said Russia’s development of new offensive weaponry like the Sarmat intercontinental ballistic missile was ‘born as a response to the unilateral withdrawal of the United States from the ABM Treaty.’

“In his news conference with Mr. Trump, Mr. Putin also excused Russian violations of the 1987 intermediate-range Nuclear Forces Treaty, which bars ground-launched ballistic and cruise missiles with ranges of 500 to 5,500 kilometers.  Mr. Putin  blamed ‘implemental issues.’  He didn’t say that the Pentagon believes a new medium-range nuclear cruise missile that Russia has deployed in Europe violates the INF treaty. And Mr. Trump didn’t call him on it.

“Mr. Putin wants to draw Mr. Trump into an arms-control negotiation that would revive the ABM limits while expanding Barack Obama’s New Start reductions in U.S. missiles.  Mr. Trump is so confident of his personal deal-making skills, and so untutored in nuclear arms, that we hope the negotiations never begin.

“This is where Congress needs to containment strategy – for Mr. Putin and for Mr. Trump’s desire to cut deals with him.  Members of both parties can make clear that no new arms deal is possible until Mr. Putin stops cheating on current treaties; that no limit on missile defenses is tolerable; and that any new deal must be submitted to the Senate as a treaty requiring a two-thirds vote for ratification.”

Jonah Goldberg / New York Post

“Last week, I wrote that the best way to think about a Trump Doctrine is as nothing more than Trumpism on the international stage.  By Trumpism, I do not mean a coherent ideological program, but a psychological phenomenon, or simply the manifestation of his character.

“Monday, we literally saw President Trump on an international stage, in Helsinki, and he seemed hell-bent on proving me right.

“During a joint news appearance with Russian President Vladimir Putin, Trump demonstrated that, when put to the test, he cannot see any issue through a prism other than his grievances and ego.

“In a performance that should elicit some resignations from his administration, the president sided with Russia over America’s national-security community, including Dan Coats, the Trump-appointed director of national intelligence.

“Days ago, Coats issued a blistering warning that not only had Russia meddled in our election – undisputed by almost everyone save the president himself – but that it is preparing to do so again.

“But when asked about Russian interference in Helsinki, Trump replied, ‘All I can do is ask the question. My people came to me, Dan Coats came to me and some others. They said they think it’s Russia.  I have President Putin.  He just said it’s not Russia. I will say this. I don’t see any reason why it would be Russia...I have confidence in both parties.’  (He attempted, halfheartedly and unconvincingly, to walk this back Tuesday.)

“When asked about frosty relations between the two countries, Trump said, ‘I hold both countries responsible... I think we’re all to blame... I do feel that we have both made some mistakes.’

“Amid these and other appalling statements, Trump made it clear that he can only understand the investigation into Russian interference as an attempt to rob him of credit for his electoral victory, and thus to delegitimize his presidency.

“For most people with a grasp of the facts – supporters and critics alike – the question of Russian interference and the question of Russian collusion with the Trump campaign are separate.

“Russia did interfere in the election, full stop. Whether there was collusion is still an open question, even if many Trump supporters have made up their minds about it. Whether Russian interference, or collusion, got Trump over the finish line is ultimately unknowable, though I think it’s very unlikely.

“But for Trump these distinctions are meaningless. Even when his own Department of Justice indicts 12 Russian intelligence agents, the salient issue for Trump in Helsinki is that ‘they admit these are not people involved in the campaign.’  All you need to know is: We ran a brilliant campaign, and that’s why I’m president.

“The great parlor game in Washington (and beyond) is to theorize why Trump is so incapable of speaking ill of Putin and so determined to make apologies for Russia....

“One theory is that the Russians have ‘kompromat’ – that is, embarrassing or incriminating intelligence on Trump. Another is that he is a willing asset of the Russians – ‘Agent Orange’ – with whom he colluded to win the presidency.

“These theories can’t be wholly dismissed, even if some overheated versions get way ahead of the available facts. But their real shortcoming is that they are less plausible than the Aesopian explanation.  This is who Trump is.

“Even if Russia hadn’t meddled in the election at all, Trump would still admire Putin because Trump admires men like Putin – which is why he’s praised numerous other dictators and strongmen.”

Daniel Henninger / Wall Street Journal

“The controversy overflowing the banks of the press conference between Donald Trump and Vladimir Putin is a moment to step back and assess the nonstop maelstrom called the Trump presidency.

“Mr. Trump’s famous modus operandi is the art of the deal. Keep everyone guessing and off balance. Decision first, details later. Drive events, stay on offense, force everyone to react. In this, Mr. Trump has succeeded.

“No one – from the individuals who work daily in the White House to friends and enemies in foreign capitals – knows what he may do next.  A high-ranking official from an Asian ally who visited the Journal’s offices recently was asked if his government has a clear idea of what Mr. Trump wants them to do on trade.  ‘No,’ he said, ‘we do not.’

“The whole world is back on its heels, which is where, according to theory, the art-of-the-deal master wants them.

“There is another pop culture phrase nearly everyone knows: ‘Show me the money!’ It means there comes a time when the man offering deals has to stop talking and start producing results.

“Mr. Trump has three major foreign-policy initiatives going: North Korea, trade and Russia. So far, none have produced a deal or anything close.  Instead, we get Mr. Trump’s repeated, Jerry Maguire-like assurances that something big is in the works.

“Mr. Trump said shortly after his sit-down with Kim Jong Un, ‘The North Korean nuclear threat is over.’  Then this Tuesday, Mr. Trump said there is ‘no time limit’ on the negotiations. That deal sits at square one, the same tough starting point other presidents faced.  Meanwhile, Mr. Kim’s scientists will spend every day improving his missiles’ survival and accuracy.

“On trade, we don’t have a deal of any sort equal to the massive roll of the dice taken by pulling out of the Trans-Pacific Partnership, upending the North American Free Trade Agreement, and imposing tariffs on all the U.S.’s major trading partners.

“The only deals getting done are among our trading partners, with the U.S. excluded.  Japan this week signed a huge free-trade deal with the European Union.  Europe is finishing similar trade deals with Canada and Mexico.

“When U.S. allies, from Tokyo to London, become actively confused and doubtful about their lead partner’s commitments, they start looking for alternative arrangements of convenience. Two weeks ago, Japanese Prime Minister Shinzo Abe announced he will go to China  and hopes for a reciprocal visit to Tokyo by Chinese President-for-life Xi Jinping. Germany last week signed significant trade deals during a meeting in Berlin between Angela Merkel and Chinese Prime Minister Li Keqiang. Slowly, the U.S. is being isolated.

“On Tuesday at the White House, addressing the Putin controversy, Mr. Trump said his meeting with the Russian ‘was really strong.’  He added, ‘They were willing to do things that frankly I didn’t think they would be willing to do.’  Like what?  Given the barrage of criticism this week, if anything resembling real progress had been accomplished in Helsinki, the White House would have made it public by now.

“The only voice addressing the substance of the Putin meeting remains that of Mr. Trump, who in a tweet Wednesday promised.  ‘Big results will come!’  Mr. Putin got the results he wanted on Monday in Finland. The man with the Cheshire cat smile will be moving on now.

“Mr. Trump’s supporters say he deserves more time to negotiate wins on these big foreign-policy bets.  It’s not going to get better.

“Boarding his plane for the meetings in Europe, Mr. Trump said, ‘Frankly, Putin may be the easiest of them all.’ That confident insouciance can be endearing, but we are seeing the limits to Mr. Trump’s art of the deal.  Past some point of complexity, such as the global supply chain or North Korea’s nuclear program, decision first and strategy later (‘We’ll see what happens’) degrades into deadlock. Or what may be worse, happy talk, which in time erodes credibility.

“When Mr. Trump entered office amid a generalized panic among political elites, the first thing some of us noticed was that he was filling his government with first-rate people.  To revive the economy, they included economic advisers Gary Cohn and Kevin Hassett, EPA Administrator Scott Pruitt and OMB Director Mick Mulvaney. On taxes, Paul Ryan and Kevin Brady provided a detailed template. The economy raced to full employment.  The stock market boomed.

“On the Supreme Court, the most astute minds in the conservative legal movement gave Mr. Trump a list of stellar options. He picked Neil Gorsuch and Brett Kavanaugh. More wins.

“Mr. Trump has said that in Mike Pompeo, Jim Mattis and John Bolton he has the foreign-policy team he always wanted. He also said he wanted to do one-on-ones with Messrs. Xi, Kim and Putin. He has done that.  The moment has arrived to start listening less to America’s adversaries and more to his own good people.  That, in his first year, was the art of the win.”

George Will / Washington Post

“Like the purloined letter in Edgar Allan Poe’s short story with that title, collusion with Russia is hiding in plain sight. We shall learn from special counsel Robert S. Mueller III’s investigation whether in 2016 there was collusion with Russia by members of the Trump campaign. The world, however, saw in Helsinki something more grave – ongoing collusion between Trump, now in power, and Russia. The collusion is in what Trump says (refusing to back the United States’ intelligence agencies) and in what evidently went unsaid (such as: You ought to stop disrupting Ukraine, downing civilian airliners, attempting to assassinate people abroad using poisons, and so on, and on).

“Americans elected a president who – this is a safe surmise – knew that he had more to fear from making his tax returns public than from keeping them secret.  The most innocent inference is that for decades he has depended on an American weakness, susceptibility to the tacky charisma of wealth, which would evaporate when his tax returns revealed that he has always lied about his wealth, too.  A more ominous explanation might be that his redundantly demonstrated incompetence as a businessman tumbled him into unsavory financial dependencies on Russians. A still more sinister explanation might be that the Russians have something else, something worse, to keep him compliant.

“The explanation is in doubt; what needs to be explained – his compliance – is not. Granted, Trump has a weak man’s banal fascination with strong men whose disdain for him is evidently unimaginable to him.   And, yes, he only perfunctorily pretends to have priorities beyond personal aggrandizement.  But just as astronomers inferred, from anomalies in the orbits of the planet Uranus, the existence of Neptune before actually seeing it, Mueller might infer, and then find, still-hidden sources of the behavior of this sad, embarrassing wreck of a man.”

Wall Street...Trade

Wall Street continues to slough off trade tensions and geopolitics, focusing instead on growth and second-quarter earnings, with the major market averages finishing fractionally mixed.

We did have another strong retail sales report for June, up 0.5%, with May revised upward to 1.3%.  June industrial production was also up a solid 0.6%, in line with expectations.

But June housing starts fell 12.3%, the biggest drop since the election.

Put it all together, though, and the Atlanta Fed’s GDPNow barometer is at 4.5% for the second quarter.  The first estimate on Q2 GDP from the Commerce Department comes out next Friday, July 27, and this is a biggie; Republicans able to tout it into the mid-term elections.  President Trump certainly will be.

In his semi-annual testimony to Congress on the health of the U.S. economy, Federal Reserve Chair Jay Powell argued against protectionism, saying it could hurt growth and adding that he does not view the European Union as a “foe,” in contrast to President Trump’s remarks.

Powell said in testimony to the Senate Banking Committee, “really there’s no precedent for this kind of broad trade discussions in my adult life.”

While Powell said he preferred to “stay in his lane” in discussing policy, on the question of trade, countries that have “remained open to trade, and have not erected barriers, including tariffs, have grown faster, had higher incomes, higher productivity, and countries that have gone in a more protectionist direction have done worse.”

On the impact of tariffs on agriculture, Powell said: “I hardly need to tell you what tariffs will do for agriculture. We lead the world in productivity and we’re great exporters and we would be hard hit with these tariffs...I think it would be tough on rural communities and I think we would feel that at the national level too.”

Otherwise, Powell was very sanguine on the economy and inflation.

But President Trump made waves in commenting on the Federal Reserve and its interest rate stance.  Presidents don’t traditionally comment on the Fed’s monetary policy, but Trump told CNBC that he is “not thrilled” about the recent rate hikes (two so far this year, two more planned).

“I don’t like all of this work that we’re putting into the economy and then I see rates going up.”

Every time the economy strengthens “they want to raise rates again,” he said.  Trump did say, however, he wouldn’t interfere with the Fed.  “I’m letting them do what they feel is best.”

But if the president publicly tells a Fed chair to stop raising rates, the Fed has to keep going because it must show it’s maintaining its independence, so Trump is shooting himself in the foot...again.

[Both of the Fed’s rate hikes this year have been approved unanimously, by the way.]

Trump also tweeted after the CNBC interview: “China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars (sic) gets stronger and stronger with each passing day – taking away our big competitive edge. As usual, not a level playing field...

“...The United States should not be penalized because we are doing so well.  Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?”

[It needs to be noted the president couldn’t give a damn about the deficit.]

On the trade front, today, President Trump said he was ready to intensify his trade war with China by slapping tariffs on all $500bn of imports from the country.

“I’m ready to go to 500,” he said in the CNBC interview.

Trump’s comments come before the most recent round of U.S. tariffs has had time to take effect.

Last week, Washington listed $200bn worth of additional Chinese products it intends to place tariffs on as soon as September; a list including more than 6,000 items, including food products, minerals and consumer goods, all subject to a 10% tariff.  The public comment period lasting until the end of August.

The U.S. and China have already imposed tit-for-tat tariffs of $34bn on each other’s goods, but there has been no high-level contacts between the two in weeks.

“We’re down a tremendous amount,” said Trump, reiterating his view that China’s trade surplus with the U.S. amounts to unfair trading practices.

For his part, Chinese President Xi Jinping is trying to play cool and smart to win the trade war against the U.S. by fixing domestic economic weak links, and offering a friendly face to other trading partners and American firms.

Beijing is trying to manage the dispute’s economic impact on growth without sidelining their strategic pursuits such as debt reduction, analysts are saying.

One area Xi will focus on is the friction with the U.S. has exposed China’s lack of home-grown “core technologies” to help it to control its own fate.  The earlier decision on the part of Washington to ban key component sales to ZTE nearly killed the Chinese telecom equipment maker, exposing the Achilles’ heel of the world’s second-largest economy.  [The ban has been lifted.]

Meanwhile, the president continues to threaten to impose sweeping tariffs on imported automobiles, which would impact a broad array of industries.  The Commerce Department has been holding hearings as it probes whether imports of passenger vehicles imperil U.S. national security.  The administration has received extremely limited support for the idea that foreign cars undermine America’s ability to defend itself.

Commerce Secretary Wilbur Ross opened the hearing seeking to dispel the notion the administration has already made up its mind.  The department has received nearly 2,300 written submissions from industry groups, unions, foreign governments and individuals commenting on the investigation.

“It’s clearly too early now to say if this investigation will ultimately result in a Section 232 recommendation on national security grounds, as we did earlier with steel and aluminum,” Ross said. “But President Trump does understand how indispensable the U.S. automobile industry is.”

A U.S. assault on foreign cars would further strain relations with allies such as Germany and Canada as Trump questions pillars of the Western order such as the Group of 7 and NATO.

President Trump is scheduled to meet European Commission President Jean-Claude Juncker next week in Washington as Europe pushes for a global deal to cut auto tariffs.

The EU is preparing a new list of American goods to hit with protective measures if Juncker’s mission fails.

Republican candidates in November are pleading with Trump to avoid duties on cars, but this may not deter the president, as he continues to call the EU a “foe” on trade.

Such as this tweet this week: “The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the U.S., but not for long!”

And as for America’s farmers, Trump tweeted: “Farmers have been on a downward trend for 15 years.  The price of soybeans has fallen 50% since 5 years before the Election. A big reason is bad (terrible) Trade Deals with other countries. They put on massive Tariffs and Barriers. Canada charges 275% on Dairy. Farmers will WIN!”

They ain’t today, Mr. President.           

Finally, the European Union and Japan signed one of the world’s biggest free trade deals this week, covering nearly a third of the world’s GDP and 600 million people.

One of the biggest EU exports to Japan is dairy goods, while cars are one of Japan’s biggest exports.

The move contrasts sharply with actions by the Trump administration.

EU Commission head Juncker said: “[The] impact of today’s agreement goes far beyond our shores. Together we are making, by signing this agreement, a statement about the future of free and fair trade.

“We are showing that we are stronger and better off when we work together. And we are leading by example, showing that trade is about more than tariffs and barriers. It is about values, principles and finding win-win solutions for all those concerned.”

Editorial / Wall Street Journal

“President Trump called the European Union a trading ‘foe’ last week, and on Tuesday European leaders replied by signing an economic partnership with Japan that will eliminate almost all tariffs on bilateral goods.  The negotiations had dragged on for years, but Mr. Trump’s protectionism pushed both sides to reach a deal that shows how trade liberalization will increasingly bypass the U.S.

“We wrote about the potential for the Japan-EU deal to put American food exports at a disadvantage when it was finalized in December. The removal of Japanese quotas and duties on European farm products will hurt American hog farmers, who currently enjoy a strong market position in Japan. EU processed-food exports are expected to grow by as much as 180%.

“The biggest impact will be in manufacturing industries dear to Mr. Trump’s heart.  In addition to removing tariffs, the deal will harmonize standards and remove nontariff barriers. As the U.S. raises duties on imported raw materials and components, its attractiveness as a manufacturing base will fall and supply chains will cut out American suppliers.

“The EU projects that its exports to Japan of chemicals will increase 22% and mechanical engineering products 16%, according to Deutsche Welle. European companies will gain better access to government contracts, something the U.S. has long sought.  Meanwhile, as European tariffs on Japanese cars decline to zero from 10%, American automakers will face stiffer competition on the continent.

“Japanese Prime Minister Shinzo Abe is resisting U.S. pressure to negotiate a bilateral deal that would offer benefits similar to those in the Trans-Pacific Partnership (TPP). The remaining 11 countries defied predictions that TPP would collapse after Mr. Trump pulled the U.S. out in 2017, and they signed a renegotiated version in March.  Part of Mr. Abe’s calculation is that the lost trade will prove so painful for the U.S. that it will choose to rejoin, whether under Mr. Trump or his successor.

“China is also seeking closer economic relations with Japan and the EU to mitigate the effects of its escalating trade war with the U.S.  Beijing recently de-emphasized tariff retaliation against the U.S. and began to offer preferential treatment to multinationals from other countries. Instead of forcing Beijing to open up its markets to American companies, the Trump tariffs will help their competitors.

“Mr. Trump picked fights with America’s largest economic partners because he assumes that, like him, they would focus on bilateral flows of finished goods and treat trade as a zero-sum game.  That is proving wrong. As the EU-Japan deal and renegotiated TPP show, they see a route to prosperity by liberalizing trade among themselves.  The rest of the world will benefit from freer trade while American companies and consumers lose.”

Europe and Asia

Just a few economic notes for the eurozone.

June inflation for the EA19 came in at 2% vs. 1.3% annualized a year ago, as published by Eurostat.  But ex-food and energy, the rate was only 1.2%.

Eurostat also reported that the ratio of government debt to GDP was 86.8% in the first quarter for the eurozone, up a tick from the prior period, and down from 89.2% in Q1 2017.

Germany is at 62.9%, but Italy is 133.4% and Greece 180.4%.

Eurobits...

Brexit: Boris Johnson launched a veiled attack on Eurosceptic colleagues who have remained loyal to Prime Minister May, as he insisted it was “not too late to save Brexit.”

The former foreign secretary, who quit in protest at his government’s plan to leave the EU, said it was “absolute nonsense” to suggest a “botched treaty” can be improved after Brexit.

Michael Gove, a leading Brexiter, apparently has told colleagues that their best strategy is to see the deal pass the March 2019 deadline and flesh out the details of the trade relationship later.

But Johnson argues: “We will not get another chance to get it right.”

“And it is absolute nonsense to imagine, as I fear some of my colleagues do, that we can somehow afford to make a botched treaty now, and then break and reset the bone later on.”

When he quit, Johnson said May’s plan would leave Britain with “the status of colony.” Speaking in the Commons chamber on Wednesday, he added: “We are volunteering for economic vassalage.”

Johnson said a “fog of self-doubt” had descended on the government that Mrs. May’s plan would leave Britain in a state of “miserable permanent limbo.”

“We have time in these negotiations, we have changed tack once and we can change again. The problem is not that we failed to make the case for a free-trade agreement of the kind spelt out at Lancaster House, we haven’t even tried.  We must try now because we will not get another to get it right.”

One minister told the Financial Times: “I don’t agree with him but at least he sounded serious and had brushed his hair: It’s a shame we didn’t have a bit more of that when he was foreign secretary.” [Laura Hughes and George Parker / FT]

Earlier in the week, Prime Minister May bowed to pressure from Brexit supporters in her Conservative Party, accepting their changes to a customs bill that underpins Britain’s departure from the European Union, though the actual changes were more technical than fundamental.

But in hardening the language to emphasize that the future collection of duties and taxes by Britain and the EU is on a reciprocal basis, Brexit supporters may have made May’s plan less sellable to the bloc.

May’s ‘white paper’ on Brexit, issued the prior week, is still but a starting point for a second phase of talks with the EU, which must intensify mightily in August, ahead of an October deadline.

Meanwhile, last weekend, Mrs. May revealed that Donald Trump told  her she should sue the EU rather than negotiate.  Last Friday at a joint press conference, Trump said he had given her a suggestion but she had found it too “brutal.”

Asked by the BBC what Trump said, she replied: “He told me I should sue the EU – not go into negotiations.”

--The European Union’s executive branch is taking Hungary to court over the government’s treatment of asylum seekers, escalating a battle over how to balance the continent’s legal guarantees for refugees with popular demand for tighter borders.

The European Commission, after threatening legal action against Hungary for three years over its strict anti-migrant laws, said it would ask the EU’s highest courts to consider the government in violation of several EU treaties requiring protection for foreigners seeking asylum on the continent.

It will likely be up to the European Court of Justice to rule on a fundamental debate roiling Europe these days, with broad implications.

Hungarian voters have strongly endorsed the nationalist politics of Prime Minister Viktor Orban, whose sole issue has been keeping out refugees since 2015, amid the great migration that year.  The opposition Jobbik party is even tougher on migrants.

Poland and Slovakia back Orban’s hardline stance.

“We are, of course, ready for the debates that this procedure is going to bring,” said Hungary’s Foreign Minister Peter Szijjarto.

Later this year, Orban hopes to pass a constitutional amendment that would block the EU from enforcing refugee settlement rules here.

Turning to Asia... China reported second-quarter GDP came in at 6.7%, vs. 6.8% in Q1, according to the National Bureau of Statistics, as the amazing consistency of the numbers continues (cough cough). The government’s goal is 6.5% for 2018.

First-half fixed assets investment did hit a record low, growing just 7.3% vs. 21.1% in the first half of 2017, amid weakening investment in infrastructure. 

For June, industrial production rose 6%, while retail sales for June rose 9.4% from 10.4% in the entire first half.

In Japan, core consumer prices rose 0.8 percent in June from a year earlier, according to government data.  The core CPI, which includes energy but excludes fresh food prices, was in line with expectations.  Stripping away food and energy, the rise was just 0.2 percent from a year ago.  The Bank of Japan is still striving for much higher inflation, 2%, so there is no reason today to contemplate changing its zero interest rate policy

Street Bytes

--The Dow Jones added 0.2% to 25058, the S&P 500 just a mere fraction of a point, 0.02%, and Nasdaq declined 0.1%, though the tech-heavy index earlier hit a new closing high.

--U.S. Treasury Yields

6-mo. 2.13%  2-yr. 2.59%  10-yr. 2.89%  30-yr. 3.03%

Five straight weeks the yield on the 10-year has closed below 2.90%, when we all assumed that 3.00%+ was going to be the new norm with the Fed raising rates.

--The U.S. Energy Information Administration said in its weekly supply report that crude-oil stockpiles jumped by 5.8 million barrels, when a decline was expected from the previous week.  The report also showed U.S. production jumped to a record 11 million barrels a day.

Oil fell to $67 following Wednesday’s report, a one-month low, but rebounded to finish the week at $70.31.

Separately, the International Energy Agency said global demand growth in the second half of the year would slow to 1.3 million barrels a day from 1.5 million in the first half.

Lastly, it is expected that China will be snapping up much of the Iranian oil that other nations won’t buy because of the threat of U.S. sanctions, especially with growing trade tensions between Beijing and Washington.

China buying the extra oil could dull the economic impact of those sanctions.  China and Iran have been in negotiations on the extra oil, with an Iranian official saying, “We don’t have any problem selling our oil” to China.

Monday, U.S. Treasury Secretary Steven Mnuchin said the United States’ aim was to squeeze Iranian oil exports “to zero.”

Mnuchin said that Washington wanted to avoid disrupting markets and would in some cases consider waivers, but that it had been made clear to allies that it expects them to enforce sanctions against Iran.

--As alluded to above, Google was hit with a record $5.1 billion fine by European Union antitrust officials on Wednesday for abusing its power in the smartphone market, in the region’s latest move to rein in the clout of American tech companies.  Just last year, the EU levied a $2.8bn fine on Google last year for unfairly favoring its own services in internet search results.

EU officials said Google used its Android operating system to strike deals with handset manufacturers such as HTC, Huawei and Samsung.  The agreements required Google’s services, such as the search bar and Chrome browser, to be favored over its rivals’ offerings.

Margrethe Vestager, Europe’s antitrust chief, said: “Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under E.U. antitrust rules.

--Microsoft’s shares hit an all-time high on the heels of an optimistic growth forecast, thanks to surging demand for its cloud services.  The number of new customer contracts worth more than $10m for the company’s Azure cloud platform doubled in the latest quarter, according to CFO Amy Hood. 

The Street had been expecting the rate of growth in Azure revenues to moderate, but the business continued its recent streak to rise 89 percent, with overall company sales growth of 17 percent to $30bn – making for Microsoft’s strongest revenue quarter for years.  Earnings also exceeded expectations and the shares rose 2%.

The big investment in data centers around the world lifted spending on property and equipment by 74 percent to $4bn in the latest period, and Microsoft said capital spending would rise further in the current quarter, before starting to moderate.

But investors brushed off the higher spending levels to focus on revenue from the commercial cloud – the key indicator of Microsoft’s cloud business – which rose 53 percent to $6.9bn.

Microsoft’s performance was also helped by a robust market for PCs, its traditional business.  Last week I noted how PC shipments rose in the second quarter for the first time in six years, at a time when smartphone sales have declined.

--Amazon boasted that Prime Day was its best ever, though, per usual, Amazon gave few details in a press release.  Wednesday, the company hit the $900 billion market cap figure for the first time, with only Apple ahead of it at $935bn, though AMZN finished the week at $880bn.

But how sparse were Amazon’s Prime Day details? Try this: Whole Foods customers “saved millions of dollars,” and the “best selling deal [there] was organic strawberries.”

Amazon reported that its members bought more than 100 million items during the 36-hour shop-a-thon, which ended early Wednesday morning.  But no comparisons with the prior year.

The  company’s website quickly ran into some snags at the beginning of Prime Day and it wasn’t possible to place orders for a few hours.

--Morgan Stanley reported second-quarter earnings that rose 39% from a year ago, completing a superb big bank earnings season with few signs global trade tensions are impacting the financial sector.

MS reported a profit of $2.4 billion on $10.6bn in revenue, beating the Street on both handily.

The last time Morgan Stanley reported two consecutive quarters of $10 billion-plus revenue was 2007.

Steady economic growth, lower taxes, an uptick in demand for loans, and renewed volatility in the price of some securities have helped the Big Six banks this year.

Jonathan Pruzan of MS said, “Corporations feel good, consumers feel good. The pockets of volatility seem to be isolated and not rolling over into the broader market.

“If that changes, and it starts to put people in defensive mode, we’ll have a different second half.”

--The day before Morgan Stanley reported, Goldman Sachs announced its best first half in nine years, revenue and earnings in the quarter that were well ahead of expectations, with net profit up 40% from a year earlier to $2.57 billion. 

Fixed-income currency and commodity trading revenue jumped 45%, though it’s off a low base from the first half of  2017.  Equity trading revenue, though, was basically flat.  Investment banking revenue soared 88%.

The results ensure CEO Lloyd Blankfein leaves on a high note, Goldman confirming this week that David Solomon, currently president and chief operating officer, will succeed him.

Blankfein, 63, steps down Sept. 30 after 12 years at the helm, though he’ll remain as chairman until the end of the year and then will transition to a “senior chairman” role, available as needed.

Under his tenure, Blankfein steered Goldman through the financial crisis, with the bank having to shell out about $5 billion in fines for its role in selling bad home loans – far less than rivals JPMorgan and Bank of America.

But it was also under his leadership that Goldman got labeled the “vampire squid” – in part for deals designed to sour for unwitting investors.

Some, such as bank analyst Dick Bove, have said Blankfein was responsible for a “lost decade.”

As for Solomon, expect him to shake things up, including pruning Goldman’s management committee, while pushing new ideas and acquisitions.

“Everything’s on the table,” Solomon has been telling top executives.

--Bank of America Corp. reported a 33% increase in second-quarter profit, $6.784 billion, with earnings per share handily beating Wall Street’s forecast. Revenue fell slightly, however, due to a one-time gain related to the sale of a business a year earlier.  Without that gain, revenue would have risen 3%.

Rising interest rates have provided a major lift, with lenders like BofA pocketing the difference between what they pay on deposits and the rate they collect on loans.  Thus far, the banks are reaping the benefits from the Fed’s rate hikes because customers aren’t broadly demanding more interest on their deposits, but eventually, the banks are going to have to pay more interest to keep depositors around, crimping the financial benefit of future rate increases.  Ergo, eventually the flattening yield curve will catch up to the banks.

Separately, the recent tax-law changes provided a major lift. The bank paid $1.71 billion in income tax in the quarter, down from $3.015 billion in the second quarter last year, before the legislation was passed.

--BlackRock, the world’s biggest investment group, saw its assets dip for the first time since late 2015, from $6.32 trillion to $6.3tn at the end of June, owing to a surging U.S. currency eroding the dollar value of its growing overseas business.

But analysts focused more on the sharp slowdown in BlackRock’s overall inflows this year, which fell to $20bn in the quarter – down from more than $100bn in the same period last year.  The shares fell a bit in response.

BlackRock, by far the world’s biggest manager of exchange-traded funds, saw inflows fall sharply to a two-year low in the second quarter, though CEO Larry Fink told the Financial Times: “We’re seeing huge churn,” but, “we believe the longer-term trend is still intact,” with Q2 just being a blip in the seismic investor shift towards cheaper passive products such as ETFs.

--Shares in Netflix tumbled about 6% (though they were initially down 14% in after-hours trading) as the company reported weak subscriber growth in the second quarter, after regularly beating its own subscriber forecast.  The company also issued a tepid forecast on third-quarter growth.

CEO Reed Hastings, in a letter to shareholders, called it a “strong but not stellar Q2.”

“As a reminder, the quarterly guidance we provide is our actual internal forecast at the time we report and we strive for accuracy, meaning in some quarters we will be high and other quarters low relative to our guidance.  This Q2, we over-forecasted global net additions which amounted to 5.2m vs. a forecast of 6.2m and flat compared to Q2 a year ago.”

Revenue in the three months ended June rose to $3.9 billion, with earnings per share of 88 cents.

During the quarter, the company added 670,000 domestic streaming subscribers, and 4.47 million international subs.

For the current quarter, the company is projecting revenue of $3.988 billion, below the consensus for $4.126bn.

Overall, Netflix has 130 million total members globally, while the company plans on rolling out 700 original shows and movies on the service this year, including 80 for non-English-speaking markets.  Last week it scored 112 Emmy Awards nominations, more than any other television network and breaking a streak that HBO held on to for 17 years.

But this also means its ad spending is ballooning, to the tune of $1 billion for the first half of 2018, up from $546 million in the prior-year period.

--IBM said it generated more than half of its quarterly revenue from newer services such as cloud and artificial intelligence, the first time it has generated that large a percentage from the initiatives as it continues to shift away from equipment sales and other legacy businesses.

IBM reported a third consecutive quarter of revenue growth from a year earlier, after nearly a six-year stretch of shrinking quarterly sales under CEO Ginny Rometty.

Revenue in the second quarter rose 3.7% to $20 billion, slightly ahead of expectations, while profit rose 3.1% to $2.4 billion.  The company maintained its forecast for adjusted earnings for the year.

--Johnson & Johnson’s results topped forecasts for the quarter in both profit and revenue.

Revenues in the pharmaceutical division were 19.9% ahead of the prior year thanks to higher sales of its drugs for immune disorders and cancer.

Sales of Stelara, a drug for psoriasis and arthritis, grew by 36% to hit $1.34bn during the quarter, comfortably beating consensus.

Revenues for a prostate cancer drug, Zytiga, also soared, 63% to $909m, the two drugs helping offset the impact of falling sales of Remicade, the company’s top-selling arthritis medicine.

--Comcast Corp. dropped its bid for 21st Century Fox’s entertainment assets amid mounting odds, clearing the way for Walt Disney Co. to acquire the pieces of Rupert Murdoch’s media empire for $71.3bn.  So a major victory for Disney CEO Robert Iger.

But Comcast said it was still pursuing European pay-television giant Sky PLC, which Iger sees as a “crown jewel” in the deal for Fox. Comcast has the higher offer for the operator, in which Fox already owns a 39% stake.

Comcast views Sky as a mini-version of Comcast-NBCUniversal that could give them a boost in the global streaming race.

Fox has been trying since 2016 to buy the rest of Sky, while Disney has indicated in regulatory filings that it is in charge of whether Fox continues pursuing Sky.

--General Electric reported so-so second-quarter earnings, while revenue rose 3% to $30.1 billion, above forecasts. 

GE said adjusted EPS for the year would be $1.00-$1.07, above estimates, but the stock fell on the news to $13.12, near the 52-week low of $12.60.

--Oilfield services giant Schlumberger reported that due to rising oil prices, revenue from North America rose 43 percent as the number of active oil rigs in the U.S. stood at 863, up from 765 a year earlier, according to Baker Hughes’ weekly report (week ending July 13).

But revenue from Schlumberger’s international business fell 1.4 percent. Total revenue was up 11.3 percent to $8.30 billion, with second-quarter net income of $430 million, after reporting a loss in the same period a year earlier.

--Boeing secured a $3.9 billion deal to build the new jets that will fly as Air Force One, ending a tortuous 18-month negotiation with President Trump, who had threatened to cancel the sale over the costs of replacing the aging 747 jumbo jets.  The Air Force oversees the program.

The president has been weighing in on the color scheme as well, saying this week he prefers the planes be red, white and blue, rather than the traditional baby blue first selected by Jackie Kennedy.

--I’ve mentioned that Ryanair was facing a bunch of labor issues this summer and next week, up to 100,000 passengers face disruption as the budget airline grounds 600 European flights due to cabin crew strikes. That’s 12 percent of its flights across the continent.

--David Neeleman, the founder of JetBlue and a major investor in the Portuguese airline TAP and Brazilian carrier Azul, says he is leading a group of investors to create a new airline in the United States.

“After years of U.S. airline consolidation, the conditions are improving for a new generation of U.S. airlines to emerge, focused on passengers, service and satisfaction,” he said in a statement.

The investors group made a commitment with European aircraft manufacturer Airbus to buy 60 A220-300 jets, with deliveries to begin in 2021.

The last new airline to launch in the U.S. with regularly scheduled commercial flights was Virgin America in 2007.

--Texas Instruments Inc. CEO Brian Crutcher resigned after spending less than two months in the role, exiting over what the company said were code-of-conduct violations.

TI said on Tuesday, “the violations are related to personal behavior that is not consistent with our ethics and core values, but not related to company strategy, operations or financial reporting.”

Just last June 21, Intel CEO Brian Krzanich was forced to resign after violating company policy by having a relationship with an employee.

--Tesla founder Elon Musk apologized to British caver Vern Unsworth for comments he made about him following the rescue of a dozen Thai schoolboys and their coach from a cave in northern Thailand.

Sunday, Musk launched a vicious Twitter attack against Unsworth, who was part of the recue team, calling him a “pedo” after the frogman criticized Musk for his failed bid to aid the situation.

Musk had sent a mini-submarine to the site to help with the rescue, but Unsworth said, “It just had absolutely no chance of working.  He had no conception of what the cave passage was like.  The submarine I believe was about 5 feet, 6 inches long, rigid, so it wouldn’t have gone round corners or round any obstacles,” Unsworth said.

“It wouldn’t have made the first 50 meters into the cave from the dive start point. It was just a PR stunt.”

Musk then tweeted of Unsworth: “Never saw this British expat guy who lives in Thailand (sus) at any point when we were in the caves.

“Only people in sight were the Thai navy/army guys, who were great. Thai navy seals escorted us in – total opposite of wanting us to leave.”

Musk goes on with some detail, belittling the dangers, and then he says, “Sorry pedo guy, you really did ask for it.”

“His actions against me do not justify my actions against him, and for that I apologize to Mr. Unsworth and to the companies I represent as leader,” Musk then said in a tweet. “The fault is mine and mine alone.”

Many are rightfully questioning Elon’s ability to steer his various companies effectively. 

--Papa John’s founder John Schnatter is not going quietly into the night after he was forced to resign following the revelation he used the N-word in an internal conference call with a marketing firm in May.

Now Schnatter is accusing that firm – Los Angeles-based Laundry Service – of trying to extort $6 million to keep quiet about the call.

Schnatter told a Louisville, Ky., CBS affiliate, “We held firm and they ran to Forbes, which printed it.”

Foreign Affairs

Russia: The arrest of Maria Butina, a Russian accused of being a covert agent, this week is significant.  She is being held without bail, after it is alleged she pursued a brazen effort to infiltrate conservative circles and influence powerful Republicans while she secretly was in contact with Russian intelligence operatives, a senior Russian official and a billionaire oligarch close to the Kremlin whom she called her “funder,” federal prosecutors said on Wednesday.

At Federal District Court in Washington, D.C., prosecutors said Butina was the point person in a calculated, long-term campaign intended to steer high-level politicians toward Moscow’s objectives.

Prosecutors said in a memo that she “should be considered on a par with other covert Russian agents.”

The FBI has been surveilling Butina for the past year.  There is no doubt a lot more to come on this story.

The story hits at the same time that Vladimir Putin can’t be thrilled with the indictment of 12 GRU intelligence officials in connection with the Mueller probe, and then today, a story hit in the BBC that Russia’s Federal Security Service (FSB) has raided a space research facility after a suspected leak of hypersonic missile secrets to Western spies.

The state space agency Roskosmos said its security staff were cooperating with FSB officers on a criminal case.

Russia’s Kommersant daily says about 10 staff at a Roskosmos facility, TsNIIMash, are under suspicion.  On Thursday Russia released video of new hypersonic missile systems.

“It was established that the leak came from an employee,” a source told Kommersant.

Separately, police in the U.K. believe they have identified the suspected perpetrators of the Novichok attack on a Russian ex-spy and his daughter, Sergei and Yulia Skripal, in Salisbury in March.

Several Russians were involved in the attempted murder.  Earlier this month, Dawn Sturgess, 44, died after being poisoned by the same nerve agent, in Amesbury. Her partner was also poisoned June 30 and remains seriously ill.

Lastly, with the conclusion of the World Cup tournament in Russia, which went off without a hitch, some 700,000 foreign fans packed the streets of the 11 host cities, Moscow seeing a 60 percent increase in foreign tourists, bringing the overall number of visitors to the Russian capital during the event to 3 million, according to the head of Moscow’s sport and tourism department.

Among the beneficiaries were Russia’s electronics retailer, with sales of TV sets and smartphones surging 20 percent in May-June compared with a year ago.  Many Russians stayed home to watch the matches on television rather than take a holiday.  According to a Russian research center, 23 percent of Russians said they had no summer travel plans this year vs. 7 percent in 2016.

New car sales growth slowed, with analysts blaming the World Cup as the factor that distracted buyers.           

North Korea: The nation’s economy contracted at the sharpest rate in two decades in 2017, according to an estimate by South Korea’s central bank on Friday, in a clear sign international sanctions imposed on Pyongyang have hit hard.

GDP contracted by 3.5 percent from the prior year, the worst since a 6.5 percent drop in 1997 when the North was hit by a devastating famine, the Bank of Korea said.

Industrial production, which accounts for about a third of the nation’s total output, dropped by 8.5 percent as factory production collapsed on restrictions of flows of oil and other energy resources into the country.

External trade volume fell significantly with the exports ban on coal, steel, fisheries and textile products, according to the BOK.

But that was 2017. What about now, with the sanctions still in place?  Kim Jong Un in April vowed to switch the country’s strategic focus from the development of its nuclear arsenal to emulating China’s “socialist economic construction.”

So there is intense pressure, you would think, on Kim to negotiate with the U.S. to get Washington to remove the sanctions.

As for China, North Korea’s biggest trading partner, it enforced sanctions strictly in the second half of 2017, suspending coal purchases that greatly reduced the North’s main export revenue source, while suspending fuel sales to the reclusive state.

China’s total trade with the North dropped 59 percent in the first half of 2018 from a year earlier, according to China’s customs data, while the BOK uses figures compiled by the government and spy agencies to make its economic estimates.  North Korea doesn’t publish economic data.

But the UN North Korea Sanctions Committee report accused both China and South Korea of being reluctant to enforce a ban on coal exports from the North, citing five shipments that arrived in China last August.

The Chinese Foreign Affairs Ministry said on Friday that China had obeyed the UN Security Council Resolution.  But Beijing recently promised to restore its economic ties with Pyongyang, with President Xi telling Kim during the latter’s third visit this year to China last month that China would support North Korea’s efforts to develop the economy.

On Thursday, Russia and China delayed a United States push for a Security Council committee to ban refined petroleum exports to North Korea.

So with all the above, it was interesting to see Kim Jong Un this week launch a barrage of criticism at officials over delays in completing economic projects.  Normally, the political leaders praise officials during factory visits.

But this time state media said Kim was “speechless” a power plant was only 70% complete and “appalled” by hot-spring bathtubs “dirtier than fish tanks.”

Kim’s latest inspection tour took him to four sites in a province bordering China.

Separately, last weekend U.S. and North Korean military officials met on the inter-Korean border to discuss the return of remains of U.S. soldiers killed in the Korean War, this after U.S. officials were blown off the Thursday before when a meeting had been scheduled. The meeting then ended up taking place Sunday at Panmunjom. There was no news from either side afterwards.

One more...the costs of the canceled military exercises between the U.S. and South Korea, a concession by President Trump to Kim Jong Un in Singapore, was estimated to cost $14 million, according to the Pentagon.  The figure is kind of funny, seeing as how President Trump talked of the “incredible savings” from canceling it, yet the military parade planned for November in Washington is now estimated to cost $12 million.

Syria / Iran: The Syrian regime accused Israel of striking a Syrian army base near Aleppo late Sunday night, the official Syrian news agency SANA reported.

“The Zionist enemy returned in its desperate attempts to support defeated terror organizations in Deraa and in Quneitra and it attacked, using missiles, one of our military outposts north of the Nayrab Airport.  Damage was caused to property only,” SANA said, quoting a military source.

But the Syrian Observatory for Human Rights said on Monday that nine Syrian soldiers were killed in the attack.

Syrian government forces backed by Russian air power have been retaking large swathes of territory on the Syrian Golan Heights from rebel groups along the Israeli border.  Iranian forces and affiliated Shiite militias are also said to be playing a minor role in the offensive.

Israel is concerned that the Assad regime will allow Iran and its proxy militia Hezbollah to entrench themselves near Israel’s Golan Heights, with Defense Minister Avigdor Liberman saying earlier that Israel has “identified elements” belonging to Iran and Hezbollah in the Golan.

“This effort to establish a terrorist infrastructure under the auspices of the regime, as far as we are concerned, is unacceptable and we will act with force against any terrorist infrastructure that we see and identify here in the region,” Liberman warned.

“We are not prepared to accept an Iranian presence in Syria anywhere.  As you have heard more than once, we will act against any Iranian consolidation in Syria,” the defense minister said.

At the Helsinki summit, we were told Presidents Trump and Putin agreed to work together on solving the Syrian crisis – but there were zero details, while saying the focus was on guaranteeing Israel’s security.

But as noted above, Russia has been supporting Assad’s push to retake the border area with both Israel and Jordan in the southwest, routing the remaining pockets of opposition.  Israel, though, has been ramping up its airstrikes against Iranian military targets and the pro-Iranian militia presence there.

Prime Minister Netanyahu has said he told Putin that Israel has no problem with Assad’s forces as long as they don’t attempt to penetrate the demilitarized zone.

Meanwhile, Putin hasn’t said anything about Israeli airstrikes on Iranian forces, but Trump hasn’t said anything on the future of U.S. troops in Syria, mostly deployed in the Kurdish-controlled areas of eastern Syria that have been liberated from ISIS – and that contain a large share of Syria’s oil and gas reserves.  Trump has repeatedly said he wants all U.S. forces gone from Syria, so did Trump and Putin discuss this as part of their one-on-one?  Was an agreement made?  We don’t know.

At the same time, there is little prospect for a significant Iran pullout.

Trump did say, “Cooperation between our countries has the potential to save hundreds of thousands of lives.”  [In the current Syrian-Russian-Iranian offensive in the southwest, over 250 civilians have been killed, with hundreds of thousands displaced.]

But Robert Ford, who served as U.S. ambassador to Syria until the war began, told the Wall Street Journal, “I don’t know what the Americans can cooperate with the Russians on in Syria. I am at a loss.  The Russian track record in Syria is known to everyone. They have repeatedly failed to live up to commitments made to the American administration.”

Sen. Lindsey Graham (R-S.C.) said: “It is imperative that Congress hold hearings on the extent and scope of any cooperation with Russia in Syria regarding Iran’s presence.”

Curiously, in his remarks in Helsinki, Trump didn’t criticize Assad.

Israel: Israel passed a contentious basic law on Thursday that anchors itself as the nation-state of the Jewish people, promotes the development of Jewish communities and downgrades the status of Arabic from an official language to one with a “special status.”

So the law enshrines the Jewish people’s exclusive right to self-determination in Israel, a move that was hailed by supporters as “historic” and denounced by detractors as discriminatory, racist and a blow to democracy.

While the law is largely symbolic, opponents say it harms the delicate balance between the country’s Jewish majority and its Arab minority, which makes up about 21 percent of the population.

But the law is a flagship measure for the most right-wing – religious governing coalition in Israeli history.

Prime Minister Benjamin Netanyahu said after the vote: “This is a defining moment in the annals of Zionism and the annals of the state of Israel. We have determined in law the founding principle of our existence.  Israel is the nation state of the Jewish people, and respects the rights of all of its citizens.”

But the law further divides Israel, the measure passing by a vote of just 62-55 with two abstentions.  One member of the 120-seat Parliament absent.  Moments after the vote, Arab members of the Parliament ripped up copies of the bill while crying out “Apartheid!” [Isabel Kershner / New York Times]

Afghanistan: The number of civilians killed in the long-running war in Afghanistan reached a record high in the first six months of this year, the UN says.

Some 1,692 fatalities were recorded, with militant attacks and suicide bombs said to be the leading causes of death.  The figures are the highest since the UN started keeping records in 2009.

The Taliban now “threaten 70% of Afghanistan,” according to experts, with the major gains coming since NATO formally ended the combat mission, handing it over to Afghan forces whom it had trained back in 2014.

Nicaragua: More than 300 people have died during months of anti-government protests, highlighted by an attack on a church where dozens of protesters had sought shelter after more violence erupted in the country.  At least two students were killed at the church, 11 people nationwide last weekend.  Among the dead was a 10-year-old girl, according to the Nicaraguan Human Rights Association.

The students, who had been taking part in protests on a day of a national strike, came under attack from paramilitaries and became trapped in the church on Friday evening.

Protesters have been demanding the resignation of President Daniel Ortega, who was elected 11 years ago after leading a revolutionary government in the 1980s.  He has faced widespread public anger after calling for unpopular social security changes three months ago and then violently suppressing peaceful demonstrations.

Since then, tens of thousands of Nicaraguans have engaged in a broad-based uprising against the government, marching in the streets and building barricades to thwart the masked paramilitary forces.

Random Musings

--Presidential tracking polls...

Gallup: 43% approval of President Trump’s job performance, 52% disapproval (July 15)*
Rasmussen: 44% approval, 55% disapproval (July 20)

*So with the Gallup tracking poll, which as you know is now weekly, not rolling three days, being for results ending Sunday, before the Helsinki summit, it’s going to be interesting tracking this number the next few weeks in particular.  Will there be the slightest move in the base?  Doubtful.

In the survey, Trump had the approval of 90% of Republicans, 38% of Independents.

--Former President Barack Obama delivered a speech in South Africa at an event marking the 100th anniversary of Nelson Mandela’s birth.  Without mentioning President Trump, Obama offered a stinging rebuke of “strongman politics”, warning about growing nationalism, xenophobia and bigotry in the U.S. and around the world, while offering a defense of the liberal international order and democracy.

The speech was a day after the Helsinki summit.

“Look around,” said Obama.  “Strongman politics are ascendant suddenly, whereby elections and some pretense of democracy are maintained, the form of it, but those in power seek to undermine every institution or norm that gives democracy meaning.”

Obama opened his nearly 90-minute speech with a nod to current events, saying that times were “strange and uncertain” and that “each day’s news cycle is bringing more head-spinning and disturbing headlines.”  He said that leaders embracing the “politics of fear, resentment and retrenchment” were undermining the international order established after World War II.

“That kind of politics is now on the move,” Obama said. “It’s on a move at a pace that would have seemed unimaginable just a few years ago. I’m not being alarmist; I’m simply stating the facts.”

The former president added: “We see the utter loss of shame among political leaders, where they’re caught in a lie and they just double down and lie some more.  Look, let me say: Politicians have always lied, but it used to be that if you caught them lying, they’d be like, ‘Ah, man.’”  [Matthew Haag / New York Times]

--Former Sen. Joe Lieberman / Wall Street Journal

“Alexander Ocasio-Cortex’s surprise primary victory over Rep. Joe Crowley seems likely to hurt Congress, America and the Democratic Party. It doesn’t have to.

“Because the policies Ms. Ocasio-Cortez advocates are so far from the mainstream, her election in November would make it harder for Congress to stop fighting and start fixing problems. Thanks to a small percentage of primary votes, all of the people of New York’s 14th Congressional District stand to lose a very effective representative in Washington.

“Fortunately, Joe Crowley and the voters in his district can prevent this damage.  On Election Day, his name will be on the ballot as the endorsed candidate of the Working Families Party. But for Mr. Crowley to have a chance at getting re-elected, he will have to decide if he wants to remain an active candidate. I hope he does.

“Ms. Ocasio-Cortez is a proud member of the Democratic Socialists of America, whose platform, like hers, is more Socialist than Democratic. Her dreams of new federal spending would bankrupt the country or require very large tax increases, including on the working class.  Her approach foresees government ownership of many private companies, which would decimate the economy and put millions out of work.

“Ms. Ocasio-Cortez didn’t speak much about foreign policy during the primary, but when she did, it was from the DSA policy book – meaning support for socialist governments, even if they are dictatorial and corrupt (Venezuela), opposition to American leadership in the world, even to alleviate humanitarian disasters (Syria), and reflexive criticism of one of America’s great democratic allies (Israel).

“She has received the most attention for calling to ‘Abolish ICE,’ Immigration and Customs Enforcement. This makes no sense unless you no longer want any rules on immigration or customs to be enforced.  I have not heard anyone say that.  Nonetheless, at least three credible candidates for the Democratic presidential nomination rushed to endorse Ms. Ocasio-Cortez’s position.

“Republicans are calling Ms. Ocasio-Cortez the ‘new face’ of the Democratic Party. That’s why Nancy Pelosi has tried to put distance between Ms. Ocasio-Cortez and House Democrats.  ‘They made a choice in one district,’ Mrs. Pelosi said.  ‘It is not to be viewed as something that stands for anything else.’ She knows that if Democrats are to regain a majority, it will be by winning swing districts with sensible, mainstream candidates. Ms. Ocasio-Cortez is making that task harder across America.

“Joe Crowley’s re-election would be evidence that Democrats are capable of governing again. His voting record shows that Mr. Crowley is a progressive. I know him as a bridge builder and problem solver, which is exactly what Congress needs more of in both parties.

“Mr. Crowley faces a difficult choice.  I know because I faced the same one in 2006 after losing in a Democratic primary. I ran as an independent because I wanted all the voters to decide whether I deserved to continue to serve them in the Senate.  It was a risk, but I concluded it was worth it to know that I had taken my fight for the kind of government I believed in as far as I possibly could.

“For the sake of Congress and our country, I hope Joe Crowley will give all the voters of his district the opportunity to re-elect him in November – and I hope they find his name on their ballots.”

--Directly related to the above, as the Wall Street Journal reported, Delaware Democratic Senator Chris Coons has launched a one-man campaign imploring his party to face the facts, “to exchange ‘pie-in-the-sky’ promises such as abolishing (ICE) for pragmatic policies.  Without naming names, the subject of his ire was clear: Democratic colleagues aiming to win favor from the party’s liberal base as they test out 2020 presidential bids.

“Some members of our party, I fear, are instead taking the easy road, and proposing ideas that might sound great in a tweet, like free college, and free health care,” Sen. Coons said in a speech to New Democracy, a centrist Democratic group.

“If the next two years is just a race to offer increasingly unrealistic proposals, to rally just those who are already with us, our strongest supporters, it’ll be difficult for us to make a credible case we should be allowed to govern again,” he warned.

--David Nakamura of the Washington Post had a piece on a topic near and dear to my heart...how U.S. presidents treat foreign trips.  As in Donald Trump is the first in memory to totally eschew meeting with locals, in any setting.  He clearly has zero desire to, and as presidential historian Douglas Brinkley aptly put it: “Most presidents, when they go abroad, are trying to win hearts and minds for the United States’ democratic ways, so they are always in salesman mode.

“Trump is trying to smash institutions and orchestrate a grand realignment of power politics. He’s not interested in selling [other countries] on how marvelous their culture is.”

One former aide of President George W. Bush said, “Every place we went, we always tried to do something to get him out and give him the local cultural experience.”  The aim was to “dispel some of the American-centric perception that foreigners had of us and to show respect for local culture.

Trump, on the other hand, relishes the trappings of extravagant state visits, such as in his visit to Beijing.

I totally agree with Douglas Brinkley’s take that Trump’s decision not to mix with the public “makes him seem like the arrogant American that looks down his nose at all foreigners.”

--From Crain’s New York Business;

“(New York) Gov. Andrew Cuomo’s infrastructure investments are paying off – for his campaign, at least.

“A Long Island-based state contractor gave the governor’s re-election effort a whopping $162,405 in the first six months of 2018, apparently making it the largest contributor in that period.  The Haughland Group’s donations came from three affiliated limited-liability companies, all based out of the same address in Plainview.  Haughland Group LLC and Grace Industries LLC each gave the Democrat $53,000, while the Haughland Energy Group LLC kicked in $43,000 – plus an in-kind contribution worth $13,405 by covering what the Cuomo campaign disclosure refers to as ‘event costs.’

“The governor’s campaign received an additional $25,000 from the Long Island Contractor’s Association’s political action committee, where principal William Haughland Jr. sits on the board of directors.

“Haughland Group’s website shows it and its affiliates have received hundreds of millions of dollars in contracts from Cuomo-controlled entities like New York City Transit, the Long Island Rail Road, the Long Island Power Authority, the Port Authority and the New York State Department of Transportation for everything from road paving to electrical work. The firm also appears to have been by far the lowest bidder on a $38 million contract for light-circuit replacement at Port Authority owned John F. Kennedy Airport in December.

“Cuomo has made reimagining and rebuilding the state’s infrastructure one of the core missions of his second term.”

Cough cough...cough...

--President Trump on meeting Queen Elizabeth, in an interview with Piers Morgan last weekend:

“The Queen is terrific. She is so sharp, so wise, so beautiful.  Up close, you see she’s so beautiful. She’s a very special person...when I say beautiful – inside and out.  That is a beautiful woman.”

Good lord....I need a beer.

---

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

God bless America.

---

Gold $1231
Oil $70.31

Returns for the week 7/16-7/20

Dow Jones  +0.2%  [25058]
S&P 500  +0.02%  [2801]
S&P MidCap  +0.1%
Russell 2000  +0.6%
Nasdaq  -0.1%  [7820]

Returns for the period 1/1/18-7/20/18

Dow Jones  +1.4%
S&P 500  +4.8%
S&P MidCap  +5.2%
Russell 2000  +10.5%
Nasdaq  +13.3%

Bulls 55.3
Bears 
18.5

Have a great week.

Brian Trumbore