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08/25/2018

For the week 8/20-8/24

[Posted Friday, 11:30 PM ET]

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Special thanks to George R.

Edition 1,011

Not an easy week for moi...I apologize that what follows is a bit disjointed, but there was a ton to try to piece together.

Trump World...All the President’s Men

We’ll remember Tuesday, Aug. 21, 2018, for a while.  As President Trump was on his way to a campaign rally in West Virginia, his former campaign manager, Paul Manafort, was found guilty of eight counts of tax and bank fraud, and his former lawyer, Michael Cohen, pleaded guilty to eight counts of tax evasion, fraud and breaking campaign-finance laws.

Cohen acknowledged making payments to Stormy Daniels and Karen McDougal, which were not reported to the Federal Election Commission, with Cohen admitting he paid the money “at the direction” of Mr. Trump “for the principal purpose of influencing the election.”  A bombshell. 

Cohen’s attorney, Lanny Davis, reiterated after: “Today he (Cohen) stood up and testified under oath that Donald Trump directed him to commit a crime by making payments to two women for the principal purpose of influencing an election.

“If those payments were a crime for Michael Cohen, then why wouldn’t they be a crime for Donald Trump?”

Thoughts immediately turned to what the occupant of the Oval Office could do in response.

But Trump’s personal lawyers have been cautioning the president against even considering clemency for former aides under investigation until Mueller’s inquiry was over.  Rudy Giuliani said on Thursday that Trump agreed with their advice, though it’s clear pardoning Manafort is on Trump’s mind, witness his praise for a now convicted major felon who deprived U.S. taxpayers of $millions in revenue for the Treasury.

And Trump complained in an interview broadcast Thursday on Fox News that “it almost ought to be illegal” to cooperate with the government, adding that “campaign violations are considered not a big deal, frankly.”

But he also said in the interview with Fox’s Ainsley Earhardt that he had no knowledge of the payment to Stormy Daniels at the time, but learned about it after the fact.

“Later on I knew.  Later on,” Trump said, adding the subsequent payments he made to Cohen to reimburse him “didn’t come out of the campaign, they came from me.”

Of course Trump saying he didn’t learn of the payments until later on contradicted previous statements of his, including on Air Force One, as well as an audiotape that Cohen released.

Trump also said Attorney General Jeff Sessions “never took control” of the Justice Department and that Manafort was “brave.”

“One of the reasons I respect Paul Manafort so much is he went through that trial,” Trump said.

Trump, in the interview with Earhardt, also argued it “almost ought to be illegal” for “flippers” to get plea deals in exchange for testimony, a reference to Michael Cohen.

“For 30, 40 years I’ve been watching flippers...It almost ought to be outlawed.”

Cue “The Sopranos.”

As for his attorney general: “If you look at Hillary Clinton’s person, you take a look at the people that work for Hillary Clinton, and look at the crimes that Clinton did with the emails and she deletes 33,000 emails after she gets a subpoena from Congress, and this Justice Department does nothing about it and all of the other crimes that they’ve done,” Trump said.

But “[Sessions] took the job then he said ‘I’m going to recuse myself,’ Trump said.  “I said ‘What kind of a man is this?’”

The president said Sessions only got a job because of his loyalty to the campaign.

In the face of such criticism from the president, Sessions then fired back against Trump in a statement about an hour after the interview aired, declaring he was in control of the Justice Department.

“I took control of the Department of Justice the day I was sworn in, which is why we have had unprecedented success at effectuating the president’s agenda – one that protects the safety and security and rights of the American people, reduces violent crime, enforces our immigration laws, promotes economic growth, and advances religious liberty,” Sessions said.

Sessions went on to defend the department that Trump has subjected to months of withering attacks. 

“While I am attorney general, the actions of the Department of Justice will not be improperly influenced by political considerations,” Sessions said.  “I demand the highest standards, and where they are not met, I take action.  However, no nation has a more talented, more dedicated group of law enforcement investigators and prosecutors than the United States.

“I am proud to serve with them and proud of the work we have done in successfully advancing the rule of law,” he said.

Separately, we learned the Manhattan District Attorney’s office had begun exploring a criminal case against the Trump Organization and some of its executives stemming from Michael Cohen’s hush money payments, as reported by the New York Times, which said the case was in in “its earliest stages.”

And we learned that Allen Weisselberg, who has spent decades working for the Trump Organization as finance chief, has cooperated  with federal prosecutors in exchange for immunity in the case against Michael Cohen, relating to the payments made to Stormy Daniels and Karen McDougal...thus far.  Weisselberg’s cooperation could expand into other ongoing investigations.

And American Media Inc.’s David Pecker is cooperating, AMI being the publisher of the National Enquirer.  According to reports, he has a safe of material.

We also learned last weekend that White House counsel, Donald McGahn II, has given 30 hours of interviews to Robert Mueller, according to the New York Times.

Back to the Manafort trial, a juror in same said that all but one of the jurors wanted to convict him on all 18 counts.

The juror, Paula Duncan, spoke to both Fox News and NBC News, and said that jurors “again and again” laid out for the lone holdout the evidence that convinced them that Manafort was guilty. But the holdout, a woman, said she harbored reasonable doubt, Duncan said.

Duncan added, “I did not want Paul Manafort to be guilty, but he was, and no one’s above the law.”

---

It was an extraordinary few days, and it only seemed fitting that it was preceded by an exchange Rudy Giuliani had with NBC moderator for “Meet the Press,” Chuck Todd, on Sunday.

Giuliani was arguing that the president should not testify to the Russia probe, as he might be “trapped into perjury.”

“Truth is truth,” Todd countered.  To which Giuliani thundered: “Truth isn’t truth!”

Todd put his hand on his forehead and said: “This is going to become a bad meme.”

Giuliani then made his main point – that accusations of obstruction of justice against the president hinge on a conversation he had with then FBI director James Comey in February 2017, and that Mr. Trump’s account of that conversation differs radically from Mr. Comey’s.

“If you’re just a genius, tell me what the truth is!” Giuliani told Todd.  “We have a credibility gap between the two of them. You’ve got to select between the two of them.”

The whole exchange echoed the one Todd had with Kellyanne Conway last year, when she said the White House was entitled to present “alternative facts.”

Meanwhile, we still don’t know what happened between Trump and Putin in Helsinki...let alone what Mueller has...or what’s on all the other tapes of Cohen’s (Sean Hannity will go down, I’m guessing over time, due to his connections to Cohen...it’s why Hannity is pushing Lanny Davis to accept a pardon from Trump for his client if offered), and while I hate to even mention this name because of my loathing for the woman, does Omarosa really have anything?

What we know for sure is that the Russians have been listening to everything taking place in the Oval Office...or have insiders on the payroll.  I don’t carelessly go out on the limb on something like this.

---

Opinion....

Editorial / The Economist

“Neither Mr. Manafort’s conviction nor Mr. Cohen’s plea is directly related to the allegations of collusion with Russia that have dogged the Trump campaign, and are being investigated by Robert Mueller, the special counsel. Yet neither case would have been brought without his investigation.  This week’s events mean that Mr. Mueller now stands on firmer ground. It will be harder for the president to dismiss him without it looking as though he is obstructing justice.  And in such cases, convictions often lead to more convictions as those found guilty look for ways to save themselves.  The question now is whether, and how far, Mr. Manafort and Mr. Cohen will turn against their former boss in return for leniency. As the slow drip of revelations and convictions continues, Americans will have to confront a simple question: is Mr. Trump above the law?

“Mr. Cohen says Mr. Trump asked him to make hush-money payments – something that is not illegal for ordinary citizens, but counts as an undeclared donation when done on behalf of a political candidate, as Mr. Trump was at the time. So what? After all, America treats breaches of campaign-finance law much more like speeding tickets than burglary: they are often the result of filling in a form wrongly, or incorrectly accounting for campaign spending. There are good reasons for this indulgent approach.  When voters elect someone who has bent the rules, it sets up a conflict between the courts and the electorate that is hard to resolve cleanly.

“Mr. Trump does not stand accused of getting his paperwork wrong, however, but of paying bribes to scotch a damaging story. That is a far more serious offense, and one that was enough to end the career of John Edwards, an aspiring Democratic presidential candidate, when he was caught doing something similar in 2008.  There is no way of knowing if Mr. Trump would still have won had the story come out.  Even so, the possibility that he might not have raises questions about his legitimacy, not just his observance of campaign-finance laws.

“What of the convention, which has been in place since the Nixon era, that the Justice Department will not indict a sitting president? Again, there are good reasons for this. As with breaches of campaign-finance law, such an indictment would set up a conflict between the bureaucracy and the president’s democratic mandate that has no happy ending.  The convention would doubtless be void if there were credible evidence that a sitting president had, say, committed murder. But the payment of hush money to avoid an inconvenient story about an extramarital affair falls a long way short of that.

“The authors of the constitution wanted to allow the president to get on with his job without unnecessary distractions. But, fresh from a war against King George III, they were very clear that the presidency should not be an elected monarchy.  If a president does it, that does not make it legal. The constitutional problem that America is heading towards is that the Justice Department’s protocol not to prosecute sitting presidents dates from another age, when a president could be expected to resign with a modicum of honor before any charges were drawn up, as Nixon did.  That norm no longer applies. The unwritten convention now says in effect that, if his skin is thick enough, a president is indeed above the law.

“This means the only solution to any clash that Mr. Trump sets up between the courts and the voters is a political one.  Ultimately the decision to remove a president is a matter of politics, not law. It could hardly be otherwise, as America’s Founding Fathers foresaw.  In ‘Federalist 65,’ Alexander Hamilton explained why it was the Senate, rather than the Supreme Court, that should sit in judgment on the president, for ‘who can so properly be the inquisitors for the nation as the representatives themselves?’  No other body, he thought, would have the necessary ‘confidence in its situation’ to do so.

“Alas, that confidence has gone missing, leaving American democracy in a strange place. Thus far Republicans in Congress have stood by the president.  The only thing likely to change that is a performance in the mid-terms so bad that enough of them come to see the president as an electoral liability. Although Democrats may well win a majority in the House, a two-thirds majority in the Senate – the threshold required to remove a president – looks unachievable.

“Mr. Cohen’s plea has made the president of the United States an unindicted co-conspirator in a pair of federal crimes. That makes this a sad week for America. But it is a shameful one for the Republican Party, whose members remain more dedicated to minimizing Mr. Trump’s malfeasance than to the ideal that nobody, not even the president, is above the law.”

Rich Lowry / New York Post

“If it wasn’t obvious before, it should be now: President Trump is in an impeachment fight.

“It hasn’t fully ripened yet. That won’t happen unless Democrats take the House and do so with a healthy margin in the fall. But Michael Cohen’s statement that he committed campaign-finance violations at the behest of Trump makes it that much more likely Democrats will impeach him once they have the power and the votes to do it.

“This means Trump is in a political fight more than a legal one.  His concern shouldn’t be the Southern District of New York – current Justice Department says a sitting president can’t be indicted – but the House Judiciary Committee.  His strategy shouldn’t be aimed at convincing prosecutors that he stayed on the right side of the law, but the broader public that he deserves to stay in office.

“The most powerful tool that he has in that effort is telling the truth, exactly the approach most uncongenial to him.

“The American public has a nearly boundless ability to forgive. Wayward politicians have fallen back on it throughout our history, whether it was Alexander Hamilton pouring out his guts over his sordid affair with Maria Reynolds, or John F. Kennedy admitting error in the Bay of Pigs, or Bill Clinton (after a season of extravagant and increasingly tinny denials) ‘fessing up to his fling with Monica Lewinsky.

“It is in this spirit that Donald Trump should confess his affairs with Stormy Daniels and Karen McDougal, admit he wanted to keep them quiet for a variety of reasons (sheer embarrassment, the potential financial fallout, and the emotional effect on his wife and youngest son) and apologize to the public for his deception. Then, he should say he’s directing his lawyers to approach the Federal Election Commission to negotiate a large payment for any violation of its rules.

“There are several advantages to this approach. First, Trump doesn’t lose anything in terms of his reputation because literally no one believes his denials of the alleged affairs.

“Second, it gets his story on a much more believable footing  The idea that Michael Cohen paid off women who were making up stories, and Trump knew nothing about it in real time – despite a tape suggesting otherwise – and then happily ponied up from his own funds as soon as he learned about it is otherworldly.

“Third, it would be a shock to the system like few other things he could do in office.  Such is his reflexive aggression that a little contrition would play as big as the firing of James Comey.

“Fourth, there’s a good chance that Democrats will seem petty and vindictive for impeaching him over the payments if he’s really tried to put the underlying conduct behind him (this certainly didn’t work out well for Republicans in the Clinton impeachment).

“The downside?  Trump’s base wants him to be a fighter. But it also wants him to get the best of his political enemies, and this would be a means to do it. He is remembered as brazening out the ‘Access Hollywood’ tape, although he initially addressed it with a speech including the line, ‘I said it, I was wrong and I apologize.’

“Then, there’s any legal exposure of coming clean.  His lawyers might not like it, but he has to decide whether he’s going to worry chiefly about fighting off an impeachment push and winning again in 2020, or forestalling the threat of getting indicted sometime in 2021 should he lose his reelection.

“There’s no guarantee, but if he is seen as dealing with the issue forthrightly now, it makes it harder for prosecutors to go after him in another three years because there’s a norm against further pursuing defeated politicians (one that he would be wise to stop eroding, by the way).

“Of course, all of this is fantasy, given Trump’s natural instincts.  A pugilist who never admits error, he surely believes that he can bluff and improvise his way out of the mess, and wait to abandon elements of his current version of events until strictly necessary.  He thinks, not unreasonably, he can continue to make his investigators the issue and that so long as he has the vast majority of his party with him he has a brake against a removal vote in the Senate.

“He might be right. This is what he’s done his entire adult life. But the stakes are larger than ever before, and even a moment’s reflection on how he got in this fix would suggest perhaps giving forthrightness a try.”

Editorial / Wall Street Journal

“Shhhhhh.  Whatever else you do, don’t mention the ‘I word’ between now and November. That’s the public message from Democratic leaders and most of their media friends this week after Michael Cohen’s guilty plea and his criminal allegations against President Trump. Between now and Election Day, ‘impeachment’ is the forbidden word.

“ ‘If and when the information emerges about that, we’ll see,’ says once and perhaps future House Speaker Nancy Pelosi.  ‘It’s not a priority on the agenda going forward unless something else comes forward.’

“Mr. Cohen’s charges are serious, says Senate Democratic Whip Dick Durbin, but impeachment talk is ‘premature’ because ‘more information has to come forward’ and it’s ‘too early in the process to be using these words.’

“Under the coy headline ‘Can Trump Survive?’ – you already know his answer – Washington Post columnist E.J. Dionne counsels Democrats that ‘the argument for impeaching Trump suddenly became very strong, but this does not mean that turning 2018 into an impeachment election is prudent.’

“And if you believe in this misdirection, you probably also believe that Donald Trump didn’t canoodle with Stormy Daniels.

“The political reality is that Democrats are all but certain to impeach Mr. Trump if they take the House in November. After what they’ve said and the process they’ve set in motion, Democrats won’t have much choice. They simply don’t want to admit this now before the election lest they rile up too many deplorables and independents who thought they elected a President for four years.

“Let’s make the reasonable guess that Democrats retake the House with 228 seats, a narrow but solid majority. They’ll have done so after two years of claiming that Mr. Trump is an illegitimate President who conspired with the Kremlin to steal the 2016 election, that he is profiting from the Presidency for personal gain, that he obstructed justice by firing James Comey, and that after Michael Cohen’s plea the President is now ‘an unindicted co-conspirator’ in campaign-finance fraud.

“If Democrats finally gain the power to do something about this menace to mankind, do they suddenly say ‘never mind’?

“No doubt Democrats would start slowly by revving up the investigative machinery: subpoenas, hearings, all covered to a fare-thee-well by the media. Michael Cohen will be a major witness, as will the others named in the plea-deal documents.  The Trump tax returns will get a star turn.

“Once this starts, it will be hard to stop even if Democratic leaders want to.  It will be even harder to stop if special counsel Robert Mueller writes a report to his superiors (that will inevitably leak) saying he couldn’t indict a sitting President but here is the evidence that he may have obstructed justice or have shady finances. The evidence may not even matter much since impeachment is a political process and Congress defines what are ‘high crimes and misdemeanors.’

“Meanwhile, the battle for the 2020 Democratic nomination will be underway, with multiple candidates vying for the hearts and minds of liberal voters. They’ll compete to see who can be the loudest voice for impeachment....

“There will be more-in-sorrow-than-anger calls for sober judgment, but political momentum has a mind of its own. The party’s liberal base will demand that Democrats be counted on an impeachment vote, and so will its media elites, who want vindication for believing that Mr. Trump could never have legitimately defeated their heroine.

“The smarter political play might be to wait until 2020 and ride a potential wave of national fatigue with Mr. Trump, but don’t underestimate the degree to which liberals want this President to be politically humiliated and legally punished. Read their Twitter feeds and columns if  you don’t believe us.

“We don’t know how impeachment would play out politically in 2019 and 2020.  An impeachment based on acts that have nothing to do with Russian collusion would offend much of the public, but as the New York Times joyfully put it this week, ‘that may not matter.’ While a conviction in the Senate may seem improbable at this point, Democrats might not care because they’ll have made Republicans defend Mr. Trump’s behavior.

“The main point about this election year is that no one should believe Democrats when they say that impeaching Donald Trump isn’t on their agenda.  It’s their only agenda.”

Editorial / Los Angeles Times

“What were the president’s reactions to these judgments against men he had raised to positions of trust in the campaign that ushered him into the White House?  They were disgustingly dismissive.

“About Cohen, he tweeted – falsely – that ‘Michael Cohen plead[ed] guilty to  two counts of campaign finance violations that are not a crime.’  There is no question that what Cohen admitted to – making large, undisclosed payments on behalf of a campaign in deliberate violation of contribution limits and reporting requirements – is  a crime. Then Trump added: ‘President Obama had a big campaign finance violation and it was easily settled!’  That’s because the Obama campaign didn’t report quickly enough a tiny fraction of the $722 million collected.  By contrast, Cohen deliberately hid two large contributions that were designed to keep scandalous allegations from voters.

“For Manafort, he expressed respect for a ‘brave man’ who ‘refused to break’ and he made it clear that he regarded Manafort’s prosecution as part of the ‘witch hunt’ he has incessantly complained about. That raises the highly alarming possibility that Trump might seek to erase Manafort’s conviction by means of a presidential pardon.

“Such an abuse of the pardon power...would be grounds for an impeachment inquiry. So, of course, would any evidence adduced by Mueller that Trump was aware of criminal coordination between his campaign and Russia or obstructed justice.  And impeachment isn’t the only way this presidency could end if there were proof that the president had engaged in criminal misconduct before or after he took office.  Richard Nixon resigned when leaders of his own party convinced him that he had lost support in Congress.

“Would Republican leaders of the current Congress have the fortitude to take that message to Trump in a similar situation?  Or are congressional Republicans so deeply in Trump’s pocket that they would continue to back him regardless of the evidence gathered against him? Will we see even so much as a single congressional inquiry into the payments Cohen swears he made on Trump’s behalf?

“So far, Republican officeholders have condoned Trump’s excesses and outrages so as not to alienate their Trump-supporting constituents, and their reaction to this week’s events has been characteristically evasive. But the verdict and guilty plea in northern Virginia and Manhattan are categorically different from the Trump controversies and conflagrations that have come before.  If this week’s events don’t stiffen their spines, voters should deprive them of their majority.”

Gerald F. Seib / Wall Street Journal

“Of all the characters who floated around the Trump presidential campaign in 2016 – a mixed bag of hired hands, hangers-on, latecomers and a small group of core loyalists – the one who seemed least likely to cause a problem for the boss was Michael Cohen.

“Yet, on Tuesday, the darkest day of the Trump presidency so far, it was Mr. Cohen who dealt the most grievous blow. The longtime personal lawyer who flew below the radar line directly implicated the president in a federal crime, making undisclosed hush payments to two women in the closing stages of the presidential race in violation of federal campaign-finance law.

“With that step, Mr. Cohen not only named the president but undercut the belief that if President Trump could show there was no collusion between his campaign and Russian operatives in 2016, his legal problems would crumble and the investigations swirling around him would evaporate.

“In fact, at least on Tuesday, Mr. Trump’s problems spread well beyond the collusion question. The conviction of his former campaign chairman Paul Manafort on tax evasion and bank fraud charges undercut Mr. Trump’s assertion that his was a campaign and a presidency that would ‘drain the swamp’ of the unsavory professional political class.

“Mr. Manafort was and is of precisely that political class. The actions for which he was convicted had nothing to do with his work for the president, yet the optics are, to say the least, unhelpful for Mr. Trump.

“Mr. Trump can and will distance himself from both Mr. Manafort and the felonies of which he now has been convicted. Indeed, after landing in West Virginia for a campaign rally, Mr. Trump expressed sympathy for Mr. Manafort but said ‘this has nothing to do with Russian collusion.’  He continued to describe the hunt for a Russian connection as a ‘witch hunt.’

“It will be much harder to create distance from Mr. Cohen.

“With just a few words in a federal courtroom, Mr. Cohen asserted that he acted at the behest of the president in directing money to a porn star and a Playboy model to buy their silence about alleged affairs with Mr. Trump as part of the effort to win the 2016 presidential campaign. The money wasn’t disclosed, and that makes it a violation of campaign laws....

“(The) contours of the story Mr. Cohen obliquely referred to – payoffs to two young women who alleged extramarital affairs with Mr. Trump – aren’t hard to understand.  Some in Mr. Trump’s orbit had long worried that his exposure on that front, legally and politically, could well turn out to be higher than his exposure to the Russian collusion charge. On Tuesday, at least, that appeared to be true....

“(The) Cohen charge now figures to be wrapped into whatever report Mr. Mueller prepares at the end of his investigation, at which point the question will become whether prosecutors have uncovered any actions that could result in impeachment.

“And at that point, Democrats hope they will have taken control of Congress and will be in position to make the decision.  Ironically, Mr. Trump was in West Virginia trying to ensure that Democratic takeover doesn’t happen.”

Karl Rove / Wall Street Journal

“They show up for every presidential campaign: wannabes like George Papadopoulos, self-promoters like Carter Page, and worse, grifters like Paul Manafort and straphangers like Michael Cohen.

“Grifters attach themselves to campaigns to refresh their credentials so they can sell their services to foreign governments and political parties, or businesses looking to buy influence. Straphangers hope to land a job in the West Wing – and if that’s not possible, to cash in on their connections.

“The consequences for President Trump of having people like this around him became clearer than ever Tuesday, when his former campaign chairman, Mr. Manafort, was found guilty of tax and bank fraud and hiding foreign bank accounts, while the president’s longtime personal lawyer and ‘fixer,’ Mr. Cohen, pleaded guilty to tax evasion, making false statements, and campaign-finance violations.

“So what’s the political fallout from these courtroom bombshells?....

“Following Tuesday’s verdict, the president declared that special counsel Robert Mueller’s successful prosecution of Mr. Manafort ‘has nothing to do with Russian collusion.’  Mr. Trump is right – for now. Only the final special-counsel report will settle that definitively. Still, there’s a reason to be skeptical of the collusion narrative. Every presidential campaign leaks, and the Trump campaign leaked more than any in history. If there had been collusion, the public would likely know about it by now.

“Some defenders of the president dismiss the Manafort verdict as a witch hunt. This is wrong and unwise.  Mr. Mueller acted within his mandate, and Mr. Manafort was found guilty of failing to pay taxes on $30 million of income from consulting in Ukraine, $18 million of which he spent on clothing, antiques, real estate and home expenses. Though they may be distressed by the notion of 69-year-old Mr. Manafort spending decades in prison, Mr. Trump’s allies could spend their energy better by pointing out that the president was not involved in his schemes and was in fact used by him.

“Mr. Cohen’s guilty pleas are more troubling for Mr. Trump, and not simply because Mr. Cohen admitted to paying hush money to Stormy Daniels and Karen McDougal, who claim to have had affairs with Mr. Trump.  Mr. Cohen now says Mr. Trump directed him to make the payments to protect his election prospects, an action some believe constitutes a violation of campaign-finance laws.

“But many legal analysts doubt the payments were illegal....

“Still, Tuesday’s events will bring significant damage. Messrs. Manafort’s and Cohen’s legal troubles will further cement in the public’s mind that corrupt people weaseled their way into Mr. Trump’s orbit before and during his presidential campaign. This notion will be reinforced further when Mr. Manafort’s next trial begins in September, over charges of money laundering, failing to register as a foreign agent, and lying to federal agents.

“The events will also strengthen congressional Democrats’ argument that their party is a necessary check on the president. Yet while Democrats have the advantage now, they could easily overplay their hand and turn off swing voters who don’t want America plunged into a political circus like the one Republicans created by impeaching Bill Clinton in 1998.

“Given Justice Department guidelines, Mr. Mueller – in contrast to James Comey – is unlikely to act in ways that affect the election once September begins. The president may still choose to lash out at the special-counsel investigation, but that would hurt him and his party. Rather than attacking the Mueller probe, Mr. Trump’s best approach would be to focus on his agenda.  That would be a better strategy than reviving Tuesday’s sordid drama.”

---

Trump tweets: “I feel very badly for Paul Manafort and his wonderful family.  ‘Justice’ took a 12 year old tax case, among other things, applied tremendous pressure on him and, unlike Michael Cohen, he refused to ‘break’ – make up stories in order to get a ‘deal.’ Such respect for a brave man!”

“If anyone is looking for a good lawyer, I would strongly suggest that you don’t retain the services of Michael Cohen!”

“Even James Clapper has admonished John Brennan for having gone totally off the rails.  Maybe Clapper is being nice to me so he doesn’t lose his Security Clearance for lying to Congress!”

“Disgraced and discredited Bob Mueller and his whole group of Angry Democrat Thugs spent over 30 hours with the White House Councel (sic), only with my approval, for purposes of transparency. Anybody need that much time when they know there is no Russian Collusion is just someone...

“...looking for trouble. They are enjoying ruining people’s lives and REFUSE to look at the real corruption on the Democrat side – the lies, the firings, the deleted Emails and soooo much more!  Mueller’s Angry Dems are looking to impact the election. They are a National Disgrace!”

“Where’s the Collusion?  They made up a phony crime called Collusion, and when there was no Collusion they say there was Obstruction (of a phony crime that never existed). If you FIGHT BACK or say anything bad about the Rigged Witch Hunt, they scream Obstruction!”

“The Failing New York Times wrote a story that made it seem like the White House Councel (sic) had TURNED on the President, when in fact it is just the opposite - & the two Fake reporters knew this.  This is why the Fake News Media has become the Enemy of the People. So bad for America!”

Wall Street and Trade

Wednesday marked day 3,453 of the bull market, the longest streak in history, at least post-World War II, according to some investors’ definition (if you round up, which is kind of lousy methodology for such a big record), and then Friday, the S&P 500 and Nasdaq both closed at all-time highs, due in no small part to the measured talk coming out of the following.

The Kansas City Federal Reserve held its annual meeting in Jackson Hole, Wyoming, this week, and Fed Chair Jerome Powell addressed the gathering Friday, saying the U.S. economy has strengthened substantially, though there was no elevated risk of overheating.  Powell added further gradual rate increases lie ahead, and emphasized the Fed would respond to inflation as needed.

He said the Fed faces two major risks, of “moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilizing overheating,” Powell said.  “The current path...[is] taking seriously both of these risks.”

Earlier the Federal Reserve signaled that another interest-rate hike is likely to take place soon, while a growing discussion of trade disputes is adding uncertainty to the outlook as higher tariffs could dent U.S. household purchasing power, per minutes from its July 31-Aug. 1 Federal Open Market Committee confab.

“Many participants suggested that if incoming data continued to support their current economic outlook, it would likely soon be appropriate to take another step in removing policy accommodation,” the minutes showed on Wednesday.

And...“Wide-ranging tariff increases would also reduce the purchasing power of U.S. households.  Some participants suggested that, in the event of a major escalation in trade disputes, the complex nature of trade issues, including the entire range of their effects on output and inflation, presented a challenge in determining the appropriate monetary policy response.”

So put it all together and the Fed is hiking interest rates at its next Open Market Committee meeting, Sept. 25-26, and this no doubt will infuriate President Trump, who is likely to get grumpier and grumpier leading up to the decision for all number of reasons, none having to do with the economy or the Federal Reserve.

On Monday, Trump said in an interview with Reuters that he was “not thrilled” with the Fed under his own appointee for raising interest rates and said the central bank should do more to help him to boost the economy.  He also accused China and Europe of manipulating their respective currencies.

“I’m not thrilled with his raising of interest rates, no.  I’m not thrilled,” Trump said, referring to Jay Powell.  Alluding to his trade negotiations, Trump said, “We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed.  The other countries are accommodated.”

Powell last month said in an interview that the Fed has a “long tradition” of independence from political concerns, and that no one in the Trump administration has said anything to him that gave him pause on that front.

Yeah, but just wait until Sept. 26 when the Fed hikes again.

Regarding China, Trump said they were manipulating their currency to make up for having to pay tariffs on imports imposed by Washington.

[A spokesman for the People’s Bank of China told reporters, “We will not pursue competitive currency devaluation and will not use the currency as a weapon to deal with trade frictions.”]

Separately, in economic news, July existing-home sales came in less than expected, a 5.34 million annualized rate, down a fourth consecutive month, and down 1.5% from a year ago, according to the National Association of Realtors.  The median existing home price was $269,600, up 4.5% from July 2017.

July durable goods were worse than expected, down 1.7%, but up 0.2% ex-transportation.

As for the Atlanta Fed’s GDPNow barometer for third-quarter growth, it sits at a robust 4.6%.

As for the trade issue, talks between the United States and China in Washington this week concluded with no concrete steps toward ending the bilateral trade war that started last month. The relatively low-level negotiations were clouded in skepticism before they began, which was then borne out.

China’s Commerce Ministry issued a short statement, saying the two sides had “constructive and frank exchanges” and would “keep in touch.”

White House Deputy Press Secretary Lindsay Walters told reporters: “We concluded two days of discussions with counterparts from China and exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship, including by addressing structural issues in China such as those identified in the Section 301 report.”

Critics said it was kind of stupid to hold a low-level meeting, when prior talks involved China’s vice-premier Liu He and U.S. Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross.

But in the case of China, it seems they were just testing the waters to see if the White House has recalibrated after the initial round of tariffs have been in place for almost two months.

Thursday, the trade war continued to escalate, as the U.S. enacted punitive tariffs of 25 percent on $16bn of Chinese imports (on top of the initial $34 billion), an action that was immediately matched by Beijing.

But this was the week public hearings began on levying tariffs on a further $200bn of Chinese goods, which could go into effect in September.  Initially proposed at 10 percent, the duties could be raised to as much as 25 percent at Trump’s direction.

The additional tariffs would effectively slap levies on half of all Chinese exports to the U.S., or roughly double what China imports from the U.S.

Witnesses have been coming out in force for the hearings with the U.S. Trade Representative’s office, speaking to the potential of the punitive action to decimate their industries, which range from electronics to apparel to chemicals.

Bottom line, the relationship between Washington and Beijing was not improved this week.

As for the negotiations between the U.S. and Mexico, as part of the talks on a re-jiggered NAFTA agreement, officials from both sides played down the chances of an imminent deal but said progress had been made.

The talks are centered on rules for car makers and regional requirements on manufacturing content and increasing requirements for how much of an auto must be manufactured in North America for it to be imported free of tariffs.  A preliminary agreement to raise the amount of a car manufactured within North America to 75% from a current 62.5% has been reached.

Both sides expressed hopes some agreement could be reached in the coming days to allow Canada to re-enter the discussions later next week.  At that point the three sides would need to agree on a demand from President Trump that there be a sunset clause that would end the deal every five years unless explicitly renewed. Both Mexico and Canada have rejected the proposal thus far.

There is a distinct timetable, as Mexico swears in its new president, Andres Manuel Lopez Obrador, on Dec. 1, while U.S. law calls for a three-month period after a deal is reached before Congress can ratify it.  So if negotiations are completed next week, the deal could be signed in late November at the earliest.  If talks extend into September, Lopez Obrador will demand a bigger say in what has been negotiated.

One other immediate trade issue. Commerce Secretary Ross indicated the administration is pushing back its timetable for imposing tariffs on auto imports.  Originally, Ross said in late July he would complete a study and recommendations on whether car imports could be seen as a threat to national security “sometime in the month of August.”  But now Ross admits the report might not be ready by end of next week, citing the ongoing NAFTA negotiations, as well as talks with the European Union.

The government must first publish a report before imposing tariffs.

Europe and Asia

A few economic notes on the eurozone.  Euro area wages rose 2.2% in the second quarter, the most since 2012, up from 1.7% in Q1.

And Markit released its flash readings for August, with the eurozone composite at 54.4 vs. 54.3 in July (50 being the dividing line between growth and contraction).

The EA19 services reading was also 54.4 vs. 54.2 last month, with manufacturing at 54.6 vs. 55.1.

The flash manufacturing reading for Germany was 56.1 in August vs. 56.9 in July, while for France it was 53.7 vs. 53.3.

Chris Williamson / IHS Markit

“The survey data indicate that the eurozone economy looks to have continued to grow at a steady rate in August, raising hopes that the third quarter could see GDP growth match the 0.4% expansion seen in the second quarter.  In fact, the survey evidence suggests that the official data so far this year could yet be revised slightly higher.

“Jobs growth also remains encouragingly robust, which should help further stimulate consumer spending and help offset signs of continuing weakness in exports.

“With the indicators of current activity, employment and price gauges remaining elevated, the August survey sends a hawkish signal to policymakers.  But the forward-looking indicators suggest the business mood could cool as summer passes.

“Warning lights are flashing.  Analysis of past data indicates that demand needs to pick up to sustain current output and employment growth in coming months.  Yet the risks seem tilted to the downside.

“Escalating political worries, rising prices and a recent slowdown in order book growth have all contributed to the gloomiest outlook for almost two years, according to companies’ expectations of their future output.  In manufacturing, optimism is down to its lowest for almost three years, as a near-stalling of exports corroborated escalating trade war worries.

“With manufacturing looking the most susceptible to a trade-led slowdown in coming months, hopes are pinned on a robust service sector helping to drive economic growth as we move into the autumn, yet even here optimism is down to its lowest for nearly two years.”

Eurobits....

--The U.K. and the European Union will negotiate on Brexit “continuously” from now on, the bloc’s chief negotiator Michel Barnier said, with time running out to cut a deal.

“The negotiations are now entering the final stage,” Barnier told reporters in Brussels after meeting Brexit Secretary Dominic Raab on Tuesday.  “We can find common ground” but it will need Britain to “respect the single market.”

Talks have been at a virtual impasse for months, with the two sides needing to reach an agreement on Britain’s withdrawal terms by mid-October’s EU summit.

But Barnier hinted the long-planned deadline could be extended to November, though it has to be “well before the end of the year,” he said.

Negotiators are working on three tracks...future trade, economic and security relationships.

Barnier’s remark about the U.K. respecting the EU’s single market is significant, as the government of Theresa May has been seeking to remain in the bloc’s rules for trade, but to go it alone in services.

And you still have the issue of Northern Ireland, as the two sides seek to avoid a policed border between the North and the Republic of Ireland, with the U.K. rejecting the EU’s plan to keep the British province in the bloc’s customs union.

Therese Raphael / Bloomberg

“As negotiators from the U.K. and the European Union meet in Brussels, Brexit is said to be entering the endgame.  This isn’t an ordinary endgame though: All the  major pieces are still on the board and pretty much the full range of potential outcomes – from no deal to no Brexit, and everything in between – remain live possibilities....

“A new paper from the Institute for Government lays out five scenarios that could unfold this autumn.  The upshot is that ‘the risks of either a deliberate or an accidental no deal are quite high, given the apparent stalemate in the negotiations, the precariousness of the prime minister’s parliamentary position and the defaults now incorporated in the system.’

“Of the five scenarios, only one envisions a relatively smooth route to an orderly Brexit: It posits a successfully negotiated withdrawal agreement and parliamentary approval. The other four carry a very high risk of a no-deal Brexit.

“Prime Minister Theresa May could, for example, strike a deal that Parliament then rejects on the grounds that it leaves Britain a ‘vassal state,’ as Brexiter Jacob Rees-Mogg put it.  May could try to renegotiate, of course. But she might run out of time or get turned back by Brussels, and Parliament may still reject whatever alternative she proposes.

“Although the bias in Parliament is clearly to have a deal, there’s no agreement on what kind.  Even if May fails to reach an agreement and Parliament rejects the no-deal option, it’s not clear how the legislature could get to a better outcome. And even if Parliament did manage to nudge the government back to the negotiating table, it’s not clear that it would get an appropriate option back.

“What makes this particularly devilish is that the old Leave versus Remain division has effectively become a deal or no-deal division. There are many Leavers who don’t like May’s proposed deal, but who would still favor an agreement of some kind because they think Parliament might reject a no-deal result, throwing Brexit itself into doubt. Then there are Remainers who don’t like May’s proposal but who would support it as preferable to the cost and chaos of no deal at all.

“Against that possible coalition of the disgruntled-but-willing is a potentially stronger force: Remainers who oppose May’s deal because they find it too great a compromise and hope that they can cancel Brexit altogether; and Leavers like Rees-Mogg who oppose it as a sell-out.

“If that isn’t confusing enough, party affiliation is no guide here. There are Labour Party MPs whose main priority is ensuring Britain doesn’t leave without a deal; and others whose chief interest is in overthrowing the government, whatever happens with Brexit.  While the prime minister has won key votes with the help of some Labour Leavers, it’s unclear if she’ll be able to count on them.

“It’s the same, pretty much, on the Tory side: There are those who want to get over the line on Brexit with a deal of some sort, those who see May’s proposed deal as an economy-killer, and others for whom only a total break with all EU structures is acceptable and who believe May must be relieved of her position in the process.  The Conservative Party conference in September is likely to be a beauty parade of would-be prime ministers touting their alternative Brexit visions.

“And yet even these scenarios don’t account for the full range of possibilities.  Say May gets an agreement.  Parliament must pass a motion to endorse it and then must pass the Withdrawal Agreement Bill for it to go into effect. But disgruntled members could at any point seek to wreck the deal or hamstring future talks with amendments.”

Buckle up...it’s gonna be a bumpy ride.

--Castigated by President Trump for relying too much on Russian gas supplies, German Chancellor Angela Merkel headed to Azerbaijan this week to discuss the development of a southern pipeline to deliver gas to Europe from the Caspian.

Merkel’s openness to finding alternative sources of affordable gas comes even as she remains committed to the Nord Stream 2 pipeline, which will carry gas from Russia under the Baltic Sea to Germany.

--Greece has successfully completed a three-year eurozone bailout program worth $70.8 billion designed to tackle its debt crisis.

After the biggest bailout in global financial history, totaling more than 260bn euro, the country will be paying loans off for several decades. But for the first time in eight years, it can borrow at market rates.

To get to this point, however, Greece had to endure deeply unpopular austerity measures.

Professor Costas Meghir, an economist with Yale University based in the Greek capital Athens, warned that the end of the bailout program did not mean the Greek economy’s problems had been solved.

“It’s of course a very important milestone, both psychologically and in practice but it doesn’t mean that the problems are over,” he told the BBC.

“It doesn’t mean that austerity is over either. In some sense, the Greek government has to be even more disciplined now, because it has to rely on foreign markets at reasonable interest rates to be able to borrow.

“Austerity can only end once pro-growth policies are put in place that would allow flourishing of investing, for direct investment and of business more generally and this hasn’t really happened to a sufficient extent yet.”

Some 300,000 Greeks have emigrated in search of work since the crisis began while those depending on state benefits have seen their income whittled away.

--According to the Italian paper Corriere della Sera, President Trump told Italian Prime Minister Giuseppe Conte during a recent meeting at the White House that the United States was ready to offer Italy help in funding its public debt.  Oh brother.

Turning to Asia...last week I noted how China’s reading on fixed investment (infrastructure) was down to its lowest growth rate since 1999. But now the government this week gave the go-ahead to a series of major urban infrastructure projects after a 12-month pause in a return to the investment-driven policies for spurring growth that it had promised to leave on the shelf.

In Japan, the above-noted Markit flash readings on manufacturing put Japan’s August figure at 52.5 vs. 52.3 last month.

Street Byes

--As noted above, stocks finished higher this week, with the S&P 500 and Nasdaq (as well as the Russell 2000 small-cap index) hitting new all-time highs. The Dow Jones, up 0.5% on the week to 25790, is still about 825 points shy of its all-time mark, but the S&P, up 0.9%, sits at a new high of 2874, while Nasdaq, up 1.7%, set a closing record of 7945 today.

Any trade tensions have long taken a back seat to strong earnings, the outlook for which remains very bright.

--U.S. Treasury Yields

6-mo. 2.23%  2-yr. 2.62%  10-yr. 2.81%  30-yr. 2.96%

The bond market was again largely unchanged this week, and not a lot of turmoil overseas as well.

--Oil prices rose to a two-week high on Wednesday after the U.S. Energy Information Administration reported that the amount of crude in storage fell by 5.8 million barrels, far more than forecast.  The day before, the American Petroleum Institute estimated stockpiles fell by 5.2 million barrels.

Renewed trade negotiations between the U.S. and China (at least earlier in the week) and looming U.S. sanctions on Iran’s oil industry have boosted market sentiment as well.  Regarding the latter, the measures targeting Iran’s oil industry are set to be implemented by November.

--Saudi Arabia’s state-owned oil giant has suspended its plans to go public, which has upset investment banks around the world looking for some hefty fees, seeing as this would have been the biggest initial offering on record.

Saudi Arabia and its advisers are instead focusing on buying a stake in Sabic, a huge Saudi chemical producer, according to various sources.  So no Saudi Aramco IPO for at least a year it would seem.

The kingdom’s de facto ruler, Crown Prince Mohammed bin Salman, was hoping to use the $billions the IPO would raise for his Vision 2030 plan, which is designed to wean the country off its dependence on oil.

Sabic is a giant in its own right, which Saudi Aramco has a 70 percent stake in, having earned a net profit of nearly $5 billion in 2017.  A deal between the two would still allow the country’s sovereign wealth fund (with $billions of dollars) to make some of the Vision 2030 plans come to fruition.

--Facebook said Tuesday that it has removed 652 pages on the social media network that were operating a coordinated political influence operation ahead of the midterm elections.

The company released a statement that said the campaigns were intended to mislead users and originated in Iran and Russia.

“We ban this kind of behavior because we want people to be able to trust the connections they make on Facebook,” the statement read.

“And while we’re making progress rooting out this abuse, as we’ve said before, it’s an ongoing challenge because the people responsible are determined and well-funded.”

Facebook’s security people tracked two campaigns back to Iranian state media, which were followed by hundreds of thousands of people.

The Russian campaigns were tied to the Kremlin’s military intelligence unit.

--Speaking of Iran’s cyber campaigns against the United States, Google said on Thursday that it has removed dozens of YouTube channels it says are linked to an influence operation run by Iran’s state broadcaster.

--Toll Brothers Inc., one of the nation’s largest builders of high-end homes, saw its revenue jump 27%, with profits up 30%, as customers added $165,000 on average toward the customization and design of their houses in the period.

Toll said it expects the average price for its homes in the current fiscal year to be $835,000 to $860,000, raising the low end of its previous guidance.

So Toll is bucking the trend, as the data on previously owned homes above shows.  [Sales of existing homes over $1 million rose 7.6% in June compared with a year earlier, while sales of homes from $750,000 to $1 million rose 6%, according to the National Association of Realtors.  But at the same time, sales between $100,000 and $250,000 fell 7.1% - which is about affordability for middle-class buyers, higher mortgage rates a major hindrance.

--Similar to Toll Brothers, high-end retailers also reported robust results.  Nordstrom Inc. said sales rose 7% in its most recent quarter, while Coach, which is owned by Tapestry Inc., reported a 5% increase.

Meanwhile, Target Corp. said same-store sales rose at the fastest rate in more than a decade, as the company’s focus on upgrading its stores and e-commerce capabilities pays off, while a booming economy has helped lift sales across the retail industry.

Comp sales rose 6.5% in the quarter ended Aug. 4 from a year ago, Target’s best performance since 2005. Total revenue climbed 6.9% to $17.78 billion.

Just outstanding. CEO Brian Cornell said the company is gaining market-share across a range of categories from electronics and homewares to toys and apparel.

Comparable digital sales rose 41% in the period, boosted by a one-day sale in July that was meant to test its systems prior to the holiday period.

Profit for the quarter rose 19% to $799 million, up from $671 million, for the comparable quarter a year earlier.

--Kohl’s also reported strong same-store sales in the quarter to Aug. 4, up 3.1%, with net sales rising 3.9% to $4.31 billion, net income 40% to $292 million, compared with $208 million a year ago, though the company’s earnings guidance was a bit tepid and the shares fell in response, but they were up 45% on the year.

And TJX Co., parent of T.J. Maxx, saw its same-store sales rise 6%, up 7% for the division that includes the T.J. Maxx and Marshalls chains.

--But then there’s Sears Holdings Corp., which announced there will be yet another wave of closings, 46 additional Sears and Kmart stores nationwide. Liquidation sales will begin as early as Aug. 30.

The 46 are on top of 70 in July, with the once-mammoth chain down to 570 Sears stores  and 432 Kmarts.

--After a tweet at 2:32 a.m. on Sunday, where Elon Musk said he wasn’t logging 120-hour work weeks because he liked the stress – but because it was necessary for the electric-car maker’s success – Musk was largely silent this week.

“Ford & Tesla are the only 2 American car companies to avoid bankruptcy. I just got home from the factory. You think this is an option. It is not.”

The tweet was in response to Arianna Huffington’s blog post, urging Musk to get more zzzs.

Huffington, a member of the Uber board and the author of the 2016 book, “The Sleep Revolution: Transforming Your Life, One Night at a Time,” suggesting Musk’s manic work habits are self-defeating.

“Working 120-hour weeks doesn’t leverage your unique qualities, it wastes them,” she warned Musk.

Tesla remains under investigation for Musk’s tweet from Aug. 7 when he suddenly announced plans to take the company private at $420 a share and that he’d secured funding, which wasn’t the case.  [The stock closed at $322.75 today.]

--E-commerce giant Alibaba Group Holdings Ltd. reported a 61% increase in sales, with Chinese consumers continuing to ramp up spending on the internet despite slowing economic growth.

The operator of China’s two largest e-commerce platforms, Taobao and Tmall, reported revenue of $11.83 billion.  Alibaba’s vice chairman, Joe Tsai, said “Domestic consumption is supported by three important trends we have seen in the past several years, and which we believe will continue to be the case.  Real wage growth with more people joining the middle class, healthy household balance sheets based on high savings rates, and easier access to consumer credit.”

The company reported a profit of $1.27 billion.

Alibaba has been trying to diversity into the internet-services sector and it recently invested $2.2 billion in Focus Media, a prominent Chinese outdoor advertiser, to strengthen advertising beyond its online platforms.

--Bayer, the parent of American agro-chemicals giant Monsanto, said the number of outstanding court cases arising from Monsanto’s glyphosate-based weedkillers, which some believe are carcinogenic, has risen from 5,200 to 8,000, which could cost the German firm $billions in damages.

Last month a jury awarded a California groundskeeper, Dewayne Johnson, $289 million, Johnson claiming Monsanto herbicides containing glyphosate had caused his non-Hodgkin’s lymphoma.

Monsanto was acquired by Bayer for $63bn earlier this month.

--The Australian government has barred Chinese tech giant Huawei, and another Chinese company, ZTE, from providing equipment to support the country’s new telecommunications networks.  Mobile carriers around the world have been preparing to build infrastructure using fifth-generation, or 5G, wireless technology, which promises to enable the ultrafast communications necessary for technologies such as self-driving cars.

Huawei, one of the world’s largest makers of telecom gear and smartphones, already sells equipment to major Australian telecom carriers, and has told Australian lawmakers that concerns that its gear could be used by the Chinese government for spying were “ill-informed and not based on facts.”

But two Australian ministers, in a statement Thursday, said companies that “are likely to be subject to extrajudicial directions from a foreign government” pose unacceptable security risks.

Huawei’s deputy chairman, Eric Xu, hit out at the Aussie pols, saying that “their minds are still in the agrarian age.”

Mr. Xu added: “Their behavior shows not just an ignorance of how science and innovation works today, but also their own lack of confidence.”  [Raymond Zhong / New York Times]

--Meanwhile, Xiaomi, the world’s fourth largest smartphone supplier, reported a surprise profit for the quarter ended June 30, sales rising 68%, with its smartphone revenue up 58%.  This was the company’s first report as a public entity after floating an IPO in Hong Kong last month.

Xiaomi is seeking to build up its market position in the so-called Internet of Things (IoT) market. With a saturated market in China, Xiaomi has been targeting India, the world’s second largest smartphone market, as well as Europe.

--JPMorgan Chase & Co. is boosting its digital investing service with free trades, at least 100 free stock or exchange-traded-fund trades for  a year, with no account minimums; a total sea change in pricing that sent the world of online brokerages into disarray.

Schwab charges $4.95 a trade and TD Ameritrade and E*Trade charge $6.95.

At JPM, most customers will be charged $2.95 per trade if they exceed the 100 trades in the first year. The investment bank had announced a $300 million investment into digital wealth management two years ago to “accelerate our ability to capture more...investments,” CFO Marianne Lake said earlier in the year.

--Back to the housing market, sales of the most expensive New York apartments fell sharply in the first half of the year, but many sellers have adjusted by cutting asking prices to make deals, brokers said.

Overall sales of apartments priced at $5 million or more fell by 31% during the first half of the year, compared with the same period in 2017, according to a luxury market report by Stribling (and the Wall Street Journal).

--PepsiCo Inc. agreed to buy home-carbonation company SodaStream International Ltd. for $3.2 billion, as the cola giant continues to diversify away from sugary sodas and salty snacks.

Israel-based SodaStream’s countertop water-carbonation machines allow people to carbonate tap water and other beverages at home by filling a reusable bottle and then flavoring it with an array of syrups.

--Down goes Fox (News)...down goes Fox (News)....well for at least one night, Tuesday, as the Cohen and Manafort news hit.  According to Nielsen, Fox News finished third in the coveted 25-to-54 age group, behind CNN and MSNBC.  Kind of interesting, considering the day was clearly the worst of Trump’s presidency.

MSNBC won with 709,000 viewers in the demographic, followed by CNN with 638,000, and then Fox at 613,000.

Among all viewers, though, MSNBC had the most with 3.3 million, followed by Fox with 2.9m, and 1.7m for  CNN.

MSNBC’s Rachel Maddow scored 3.8m viewers for her 9:00 p.m. hour, her second-largest audience ever.

But Fox has been No. 1 since 2002 – cornering the market on viewers who see other established media outlets as being too liberal; a position only solidified during the Trump era.

--Animal crackers are now free range, having long been depicted behind bars in iconic packaging that resembled circus boxcars.

Mondelez International, makers of animal crackers, bowed to pressure from People for the Ethical Treatment of Animals.

“We’re delighted,” a PETA spokesman said Tuesday.  “We’re celebrating the redesign just as we celebrated the end of the circus.”

The product is still named Barnum’s Animals crackers, a nod to circus impresario P.T. Barnum, launched in 1902 by Nabisco’s forerunner, the National Biscuit Co; Mondelez owning Nabisco.

Foreign Affairs

China: I talked about the trade talks above, but elsewhere, Chinese state media released a video mocking President Trump for making China stronger. As reported by Javier Hernandez in the New York Times, “It shows him in unflattering poses, his brow furrowed and his mouth agape. Its sarcastic title: ‘Thanks Mr. Trump, you are GREAT!’”

Amid the trade tensions, Chinese news outlets have largely refrained from taking shots at Trump directly, but this video portrays him as a bumbling fool indirectly advancing China’s interests.

However, as quickly as it appeared, it was pulled. 

Kerry Brown, a professor of Chinese politics at King’s College London, noted, “They sense his increasing domestic weakness and see a chance to pile pressure on.”

But Brown thought the criticism would be muted to avoid a backlash in the U.S.

Meanwhile, Taiwan vowed on Tuesday to fight China’s “increasingly out of control” behavior after Taipei lost another ally to Beijing when El Salvador became the third country to switch allegiances to China this year.

Taiwan now has formal relations with only 17 countries worldwide, many of them small, less developed countries in Central America and the Pacific, including Belize and Nauru.

Speaking in Taipei, President Tsai Ing-wen said Taiwan would not bow to pressure, describing El Salvador’s decision as further evidence of China’s efforts to squeeze the island, which have included regular Chinese bomber patrols around Taiwan.

“We will turn to countries with similar values to fight together against China’s increasingly out-of-control international behavior,” Tsai said.

Taiwan’s Foreign Minister Joseph Wu told reporters that Taipei was not willing to engage in “money competition” with its giant neighbor.

El Salvador, according to Wu, had been continuously asking for “massive funding support” since last year for a port development, but Taiwan found it “unsuitable” after assessing it.

“Pressure from China would only make Taiwan more determined to continue our path of democracy and freedom,” he said.

“China’s rude and unreasonable behavior will certainly have negative impact to cross-strait relations.  This is also not how a responsible country should behave.”

To repeat, Beijing considers Taiwan to be a wayward province of “one China,” state-to-state relations not possible, and refuses to renounce the use of force to bring the island under its control.

For its part, El Salvador’s president, Salvador Sanchez Ceren, said his country, which built ties with the Republic of China in 1933, would see “great benefits” and “extraordinary opportunities” in the new relationship with Beijing.

A spokeswoman for the de facto U.S. embassy in Taiwan, Amanda Mansour, said China’s efforts were “harmful” and had undermined “the framework that has enabled peace, stability, and development for decades.”

Mansour wrote: “The United States urges China to abstain from coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.”

The U.S. ambassador in El Salvador, Jean Manes, wrote in a Twitter post on Tuesday the United States was analyzing El Salvador’s “worrisome” decision to break ties with Taiwan.

“Without a doubt, this will impact our relationship with the (Salvadoran) government. We continue supporting the Salvadoran people.”

The White House then issued a statement Friday, saying El Salvador’s decision to cut ties with Taiwan was a “grave concern” to the United States, and warned that the Central American nation might be “disappointed over the long run” after falling prey to “China’s apparent interference in the domestic politics of a Western Hemisphere country.”...

“Around the world, governments are waking up to the fact that China’s economic inducements facilitate economic dependency and domination, not partnership.” [South China Morning Post]

North Korea: Last weekend North Korean state media blamed Donald Trump’s political opponents for the “deadlock” over denuclearization, urging Trump to act boldly to make progress on the issue.

On Saturday Rodong Sinmun, the North’s most prominent daily, praised Trump for seeking to improve U.S.-North Korea ties and achieve world peace, which it said would be the “feat of the century.”

“However, he faces too many opponents,” it said in a signed commentary.

The newspaper said Democrats and even some Republicans were hampering Trump’s efforts for their own partisan interests while media hostile to Trump are undermining his policies.

It accused bureaucrats and Trump’s aides of “speaking and moving in contradiction to the president’s will” and “distorting facts and covering up his eyes and ears in order to mislead him to a wrong decision.”

North Korea is demanding America agree to declare an end to the 1950-53 Korean war, accusing the U.S. of failing to reciprocate a series of its “goodwill measures.”

Josh Rogin / Washington Post...prior to Friday afternoon’s mini-bombshell....

“Secretary of State Mike Pompeo is making a bold and risky push to reinvigorate a diplomatic effort with North Korea that is struggling to make progress amid increasingly belligerent rhetoric from Pyongyang. Inside the Trump administration, frustration mounts as officials debate how bad the situation really is and what to do about it.

“When Pompeo arrives in Pyongyang next week, alongside his freshly appointed special envoy Stephen Biegun, he will be under severe pressure to show tangible evidence that his diplomacy is producing real results. If Pompeo’s trip is a failure, skeptics inside the administration and around Washington will push for a change in tactics to acknowledge the reality that North Korean leader Kim Jong Un is not living up to his promises. It will be the most significant trip of Pompeo’s diplomatic career.

“Despite his public optimism, President Trump privately has been expressing frustration with the negative publicity surrounding his North Korean diplomacy, according to administration officials. This week, the International Atomic Energy Agency expressed ‘grave concern’ in a new report that claims Pyongyang is continuing to develop its nuclear capabilities, despite Kim’s pledge to denuclearize.

“Last week, North Korea’s foreign ministry issued a statement blaming unnamed ‘high-level officials’ in the Trump administration for ‘going against the intention of President Trump’ by criticizing the Kim regime’s lack of progress. The main goal of Pompeo’s trip, officials said, is to reverse the downward trend, set the diplomacy on a positive footing and quiet the critics in Washington and Pyongyang.

“But Pompeo has few tools to induce more concessions from Kim.  And if he takes a harder line, he risks blowing up the negotiations altogether.

“ ‘Pompeo is stuck,’ said one senior administration official who was not authorized to speak. ‘He’s a prisoner of championing a policy that’s based on what the president would love to see happen, but not based on reality and the facts on the ground.’....

“(Some) officials want to see Trump pivot toward a tougher public stance to respond to Kim’s misbehavior.  The Trump team cannot even agree on how grave the situation is.

“ ‘It’s now a process designed to measure not how much progress we’re making, but how much damage is being done,’ the senior administration official said.

“That confusion leaves Pompeo with the difficult task of reversing the downward trend in the diplomacy without having anything new to offer.  His last trip to Pyongyang ended in failure, when Kim refused to meet him and the North Koreans blasted him as soon as he left.  He must show something publicly this time to prove to the public, internal administration critics and the president that the diplomacy is not going as badly as it looks....

“(The) fundamental problem with the Trump-Kim scheme remains: Until there is tangible evidence Kim is actually willing to denuclearize, each concession only plays into his strategy to stall for time, relieve financial pressure and normalize his regime’s status as a de facto nuclear state.

“Unlike Trump, Pompeo has never said he believes Kim is sincere, only that the United States must test that sincerity. Time is almost up for North Korea to pass or fail that test.  Pompeo must not return from his fourth trip to Pyongyang empty-handed.”

Well, out of nowhere, President Trump said this afternoon he had asked Pompeo to skip the trip.

“I feel we are not making sufficient progress with respect to the denuclearization of the Korean Peninsula,” Trump said in a series of Twitter posts.  “In the meantime I would like to send my warmest  regards and respect to Chairman Kim. I look forward to seeing him soon!”

Trump said the nuclear negotiations had been hampered by a lack of support from China.

“Secretary Pompeo looks forward to going to North Korea in the near future, most likely after our Trading relationship with China is resolved,” Trump tweeted.

But relations with China are getting worse, not better, while Trump seems to be leaving the door open to a meeting between himself and Kim.

Iran: U.S. National Security Adviser John Bolton traveled to Israel this week and said the Trump administration is looking to ratchet up the pressure on Iran to abandon its nuclear program, going beyond existing international sanctions.

“We’re not just going to stop at where the sanctions were in 2015, our goal, our objective really is essentially we’d like to say no waivers to the sanctions.”

Having withdrawn from the Iran nuclear deal in May, Washington earlier this month slapped Iran with sanctions targeting its trade of gold and other precious metals, its car industry and the purchase of U.S. dollars.  November is then the time for tougher sanctions on Iran’s oil sales and banking sector.

The issue of waivers is going to be a big one.  Normally, the United States would grant them in certain circumstances, including trade in medical and humanitarian goods, but other waivers allowing companies to trade with Iran through foreign subsidiaries are to be removed in November.  Bolton said this week “very limited” sanctions waivers had been granted, though he didn’t identify who received them. Bolton said one focus is finding alternative oil sources for countries that have been purchasing from Iran.

French energy giant Total has officially quit its multi-billion-dollar gas project in Iran, following the reimposition of U.S. sanctions.

“Total has officially left the agreement for the development of phase 11 of South Pars [gas field],” Iran’s oil minister, Bijan Namdar Zanganeh, told an official news agency.  Total applied for a waiver from Washington, which wasn’t granted.

Zanganeh also appeared before parliament to underline the dire state of Iran’s oil and gas facilities, which he said were “worn out” and in need of renovation that Iran could not afford.

While the other parties to the nuclear deal – Britain, Germany, France, China and Russia – have vowed to stay in the accord, their companies, such as Total, risk huge penalties if they keep doing business in Iran. 

Iraq, whose economy is closely linked to Iran, is going to be asking Washington for permission to ignore some U.S. sanctions on its neighbor, Iraqi government and central bank officials said. Initially, Iraqi Prime Minister Haider al-Abadi said Baghdad would respect all U.S. moves, but he faced heavy criticism from rivals.

The biggest impact of the U.S. withdrawal has been on Iran’s economy.  London-based BMI Research expects it to contract by 4.3% next year, after growth of 1.8% in 2018.

But amid all the pressure, Iran’s leaders don’t appear to have changed the country’s military posture in the Middle East, which was Trump’s goal.

Israeli officials have been pushing Russia to use its influence to force Iranian forces out of Syria, with Israel and Russia reaching an agreement to keep Iranian forces far from the Israeli border, but there is little chance Iran will give up its presence elsewhere in the country.

Iranian President Hassan Rouhani said this week the country had to develop its military forces.

“We should make ourselves ready to fight against the military powers who want to take over our territory and our resources,” Rouhani said in a speech broadcast live on state television.

Syria / Iraq: Islamic State released what it said was a recorded speech by elusive leader Abu Bakr al-Baghdadi, who called for more attacks in the West and urged members of other militant groups to join his terrorist outfit.

According to a translation provided by SITE Intelligence Group: “The supporters of the Caliphate should follow in their path, and trust in Allah, and carry out an attack that breaks their heart, and rip them apart, either with gunfire or a stab to their bodies, or a bombing in their countries.”

Baghdadi is believed to be in poor health, and it’s not clear when the recording was made, or whether it is his voice, but ISIS hasn’t faked these recordings in the past.  If it’s him, it would be his first public communication in almost a year.

But the audio gave several indications it was recorded recently, as Baghdadi mocks the U.S. for its spat with Turkey over the jailed American pastor Andrew Brunson.  Baghdadi also praised recent terrorism in Canada and Europe and implored followers to launch more vehicle attacks in Western cities.

During his bout of silence, ISIS has lost most of its territory in its former heartland in Syria and Iraq.  But one estimate from the United Nations puts the number of Islamic State fighters in the two countries still at 20,000 to 30,000, primarily in the vast desert area between the two countries.

ISIS has stepped up its campaign in Egypt, Yemen and Afghanistan.

In Iraq, the Supreme Court ratified the results of the May 12 parliamentary election, its spokesman said last Sunday, setting in motion a 90-day constitutional deadline for the winning parties to form a government.

Parliament in June ordered a nationwide manual recount of the results, which were tallied electronically, after a government report said there were widespread violations and blamed the electoral commission.

Yet the recount showed little had changed from the initial results as populist Shiite cleric Moqtada al-Sadr retained his lead, positioning him to play a central role in forming the country’s next government.

So lawmakers now gather to elect a speaker, then president and finally a prime minister and cabinet within 90 days.  The process will go beyond that.

Lastly, U.S. forces will stay in Iraq “as long as needed” to help stabilize regions previously controlled by Islamic State, a spokesman for the U.S.-led international coalition fighting the militants, Colonel Sean Ryan, said on Sunday.

The number of American soldiers could go down, however, depending on when other forces from NATO deploy to help train the Iraqi army.  Ryan added there are about 5,200 U.S. troops currently based in Iraq.  The U.S. also has roughly 2,000 troops in Syria.

Afghanistan: Afghan President Ashraf Ghani on Sunday proposed a conditional three-month cease-fire in the government’s U.S.-backed war against the Taliban, seeking to regain political momentum after a series of devastating attacks across the country at the hands of the insurgents.

Ghani said government forces would observe a truce in fighting through Nov. 19 if the Taliban reciprocated.  But militarily, the Taliban has little incentive to respond to Ghani’s cease-fire offer.

Ghani is certain to run again in an election set for next April, but the last election was marred by fraud, forcing the U.S. to broker a power-sharing agreement between Ghani and his main rival, Abdullah Abdullah.

The Taliban said on Wednesday it would send senior members to Russia for peace talks, but this was after the Afghan government declined the offer to attend such a conference.  Washington has also turned it down.

Russia: Microsoft Corp. charged that hackers linked to Russia’s government sought to launch cyberattacks on the U.S. Senate and conservative American think tanks, warning that Moscow is broadening attacks ahead of November’s congressional elections.

Microsoft said it took control of six web domains that hackers had created to mimic sites belonging to the Senate and then think tanks.  Users who visited the fake sites were asked to enter login credentials. It is the latest in a string of actions Microsoft has taken to thwart what it charges are Russian government hacking attempts.

The Kremlin rejected the Microsoft allegations and said there was no evidence to support them.  “We don’t know what hackers they are talking about,” Kremlin spokesman Dmitry Peskov told reporters. You can stop laughing.

Separately, Russian Foreign Minister Sergei Lavrov accused Britain of trying to impose its own policies on Russia on the European Union and the United States. Lavrov was responding to an initiative by Britain’s foreign minister, Jeremy Hunt, who told an audience in Washington that London wants the EU, which it is in the process of leaving, to increase sanctions on Moscow.

Lastly, Russia is gearing up to hold its largest war games in nearly 40 years, according to the defense ministry; five days of joint drills with China and Mongolia in the country’s east.

Russia and China have forged what they describe as a “strategic partnership,” expressing their shared opposition to the “unipolar” world – the term they use for perceived U.S. global domination.

Venezuela: Ecuador has enacted new rules to stop Venezuelan migrants from entering the country without a passport, leaving many stranded in neighboring Colombia.

Thousands of Venezuelans fleeing their country’s economic and political crisis have been crossing into Ecuador from Colombia using only identity cards.  Many are heading south to join families in Peru and Chile.

Needless to say, Colombia isn’t happy either.  More than a million Venezuelan migrants have entered Colombia in the past 15 months, according to official estimates, and more than 4,000 have been arriving at Ecuador’s border every day.

Australia: In an internal coup, Scott Morrison became Australia’s new prime minister after Malcolm Turnbull was forced out by party rivals in a bruising leadership challenge.

Turnbull had been under pressure from poor polling and what he described as an “insurgency” by conservative MPs.

Morrison, the treasurer, won an internal ballot 45-40 over former Home Affairs Minister Peter Dutton – who had been Turnbull’s most vocal threat. 

Turnbull is the fourth Australian PM in a decade to be ousted by colleagues.

He said on Friday, “It has been such a privilege to be the leader of this great nation.  I love Australia. I love Australians.”

Last week Turnbull, a moderate, was swept up in a row over energy policy that ignited long-existing tensions between himself and the party’s right wing.

Dutton, a conservative, then challenged Turnbull, unsuccessfully, but his defeat stoked further discord.  Morrison then entered the race after Turnbull lost key backers.

But the government only has a one-seat majority and Turnbull signaled he would resign from parliament, which would force a by-election, putting the majority at risk, and forcing the new premier to call early elections.

India: The southwestern state of Kerala (where I spent a period of time way back in 1985 working for a spice broker) has been dealing with historic flooding that has killed hundreds, and forced hundreds of thousands into relief camps, with disease now a very real concern.  The monsoons are an annual event, but Kerala has seen non-stop rain for over two weeks and the worst flooding in a century.

I spent my time in Cochin, the spice capital of the world, and I can picture the hundreds of thousands who are also now without jobs there.  [It’s where I received one of my three prized possessions that I wrote of weeks ago.]

South Africa: Not once had President Trump tweeted about Africa, but out of nowhere on Wednesday, Trump wrote: “I have asked Secretary of State @SecPompeo to closely study the South Africa land and farm seizures and expropriations and large scale killing of farmers.”

Trump’s comment, which came after a report on Fox News’ Tucker Carlson show, inflamed an already high-octane debate over land in South Africa, a still deeply divided country nearly a quarter of a century after Nelson Mandela swept to power.

South Africa’s foreign ministry sought clarification of Trump’s comments, with a spokeswoman for President Cyril Ramaphosa adding Trump was “misinformed.”

“South Africa totally rejects this narrow perception which only seeks to divide our nation and reminds us of our colonial past,” a tweet from South Africa’s official government account said in response to Trump’s comments.

Ramaphosa announced on Aug. 1 that the ruling African National Congress (ANC) plans to change the constitution to allow the expropriation of land without compensation, as whites still own most of South Africa’s land.

Random Musings

--Presidential Tracking polls....

Gallup: 42% approval of President Trump’s job performance, 52% disapproval (Aug. 19).  This is going to be very interesting the next two weeks.
Rasmussen: 46% approval, 53% disapproval (Aug. 24)

--The latest national Monmouth University Poll finds President Trump with an overall job approval of 43%, 50% disapproval; basically in line with where his ratings have been since January.

The poll, which was conducted prior to Tuesday’s Cohen / Manafort headlines, had just 30% of Americans believing Trump hired the best people, while 58% said he does not.

52% said the Russia probe should continue, 45% say it should end, little changed from April.

Surprisingly, just 37% approve of the tax reform plan passed by Congress last year while 45% disapprove.

And just 35% say things in the country are going in the right direction, while 57% say they have gotten off on the wrong track.  [In June the split was 40 / 53.]

--What a dirtball...Californian Republican Congressman Duncan Hunter, that is....his wife no better.  The two were indicted by a federal grand jury Tuesday on charges they used $250,000 in campaign funds for personal use and filed false campaign finance reports with the Federal Election Commission to mask their actions.

A 48-page indictment details lavish spending from 2009 to 2016, including family vacations to Italy and Hawaii, home utilities, school tuition for their children, video games and dental work.  The San Diego Union-Tribune first identified the improper spending, triggering a federal investigation by the Justice Department.

For example, family dental bills were listed as a charitable contribution to “Smiles for Life,” the government alleges.  Tickets for “Riverdance” became “San Diego Civic Center for Republican Women Federated/Fundraising,” according to the indictment. Clothing purchases at a golf course were falsely reported as golf “balls for the wounded warriors.”

U.S. Atty. Adam Braverman said, “The indictment alleges that Congressman Hunter and his wife repeatedly dipped into campaign coffers as if they were personal bank accounts, and falsified FEC campaign finance reports to cover their tracks.  Elected representatives should jealously guard the public’s trust, not abuse their positions for personal gain.  Today’s indictment is a reminder that no one is above the law.”

Hunter’s people released a statement calling the indictment politically motivated because of his support for President Trump, and I agree on one thing, the timing sucks, as it did with New York Republican Congressman Chris Collins.

Hunter previously said he did not handle the campaign’s credit card and did nothing improper, but the excuse is beyond bogus.   The government countered Hunter was repeatedly warned that using campaign funds for personal spending was inappropriate.

Unlike Collins, who suspended his campaign, Hunter is staying in his race for re-election in what is normally a very safe seat.  Trump won the district, as well, by 15 points.  Hunter’s opponent, a former Obama administration employee, Ammar Campa-Najjar, is basically a socialist.  But Hunter’s legal issues provide a window of opportunity.

Yeah, Hunter is innocent until proven guilty, but the guy paid more than $1,300 for video game purchases out of his campaign, and the family rabbit got a plane ride.  You can’t make this stuff up.

Hunter’s father, Rep. Duncan Hunter Sr., held the seat prior to his son and the father looked so lame in declaring his son’s innocence.  Duncan Jr. also threw his wife under the bus.

--Former UN Secretary-General Kofi Annan died.  He was 80.  He was the first black African to take up the role of the world’s top diplomat, serving from 1997 to 2006.  He also won a Nobel Peace Prize for humanitarian work.

Annan has a complicated history.  As I used to write all the time, he would have been a good next-door neighbor, checking on your flowers while you were away.  He was genteel.

But that wasn’t what was required during much of his time leading the UN, as well as when he was head of the UN’s peacekeeping department, 1993-1997, a time of ignominious failures in Somalia, Rwanda and Bosnia.

Philip Gourevitch / New Yorker

“Yet, right up until his death, on Saturday, in Switzerland, (Annan) steadfastly refused to acknowledge any meaningful sense of personal or institutional responsibility for these debacles, even as he spoke tirelessly of the world’s desperate need for more responsible leadership – ‘cool heads and sober judgment,’ as he put it in an interview with the BBC, in April, in one of his final public appearances, on the occasion of his eightieth birthday.

“Annan’s image of cool was, of course, just that: an image. There is no mistaking the prickly personal pique, for instance, in a cable he sent in 1995, on the eve of the first anniversary of the genocide in Rwanda, to another UN official.  The tone of defensive derision is established in the first sentence: ‘Every now and then some journalist or human rights advocate remarks, usually on the media, that either they themselves or someone else had warned UNAMIR’ – the UN peacekeeping mission in Rwanda – ‘of the impending genocide.’ Annan then wrote, ‘We do not recall any specific reports from Kigali to this effect.’ A review of the peacekeeping files, he wrote, had turned up only four cables from Kigali in the months preceding the genocide that mentioned ‘ethnic tensions as being possibly related – or not related – to specific incidents of violence.’

“But, in reality, one of the four cables Annan listed consisted of an alarmingly specific report of preparations for the genocide, sent by his force commander in Kigali, the Canadian General Romeo Dallaire, in January of 1994.  Dallaire had heard from a trusted informant on the payroll of Rwanda’s ruling party, who described plans to ‘provoke a civil war,’ and to kill Belgian peacekeepers in order to scuttle the UN mission.  The informant himself said he was involved in drawing up lists of Tutsis in Kigali, and Dallaire wrote, ‘He suspects it is for their extermination. Example he gave was that in twenty minutes his personnel could kill up to a thousand Tutsis.’ Dallaire asked for permission to act on this information by raiding and seizing illegal arms caches.  Annan’s office replied at once, in a cable under his name, and signed by his deputy, telling Dallaire not to act but, rather, to follow diplomatic protocol and share his information with Rwanda’s President – the head of the party that Dallaire wanted to act against.  Three months later, in April of 1994, everything that Dallaire described in his warning took place, and in the course of a hundred days around a million Tutsis were massacred.”

In May of 1998, when confronted with a report by Mr. Gourevitch, Annan, who had since been promoted to Secretary-General – dismissed reporters’ questions on the above exchange, saying, “This is an old story which is being rehashed.” And he said, “I have no regrets.”

Gourevitch:

“The following year, when a UN-commissioned investigation described Annan’s failure to share the information in Dallaire’s fax with the Security Council as ‘incomprehensible,’ he remained studiously cool and impersonal.

“ ‘All of us must bitterly regret that we did not do more to prevent it,’ he said.  ‘On behalf of the United Nations, I acknowledge this failure and express my deep remorse.’....

“(Annan) fancied himself a great leader, but he was constitutionally incapable of accepting the burdens that great leadership entails.  In his final press conference as Secretary-General, he spoke bitterly, even mockingly, of being asked to carry the weight of his office.  ‘There is a tendency in certain places to blame the Secretary-General for everything, for Rwanda, for Srebrenica, for Darfur,’ he said.  ‘But should we not also blame the Secretary-General for Iraq, Afghanistan, Lebanon, the tsunami, earthquakes?  Perhaps the Secretary-General should be blamed for all of those things. We can have fun with that, if you want.’ This past April, when he sat for his interview with the BBC, Annan was pressed one last time to acknowledge that some of his actions and inactions on the world stage had had consequences. He was as dismissive as ever.  Of Bosnia, he said, ‘It’s always easy to find a scapegoat.’  Of Rwanda, he said, ‘We were helpless.’  May he rest in peace.”

--The Vatican said Tuesday that Pope Francis is expected to meet with victims of sexual abuse during his visit to Ireland this weekend, as well as speak out about the problem.

Francis is under pressure to strongly condemn those responsible, given Ireland’s devastating history of priests who raped and molested children and bishops who covered for them.

Monday, Francis issued a letter to Catholics around the world condemning the crime of priestly sexual abuse and its cover-up and demanding accountability, in response to new revelations in the U.S.

Francis begged forgiveness for the pain suffered by victims and said lay Catholics must be involved in any effort to root out abuse and cover-up.  He blasted the clerical culture that has been blamed for the crisis, with church leaders more concerned for their reputation than the safety of children.

“With shame and repentance, we acknowledge as an ecclesial community that we were not where we should have been, that we did not act in a timely manner, realizing the magnitude and the gravity of the damage done to so many lives,” Francis wrote.  “We showed no care for the little ones; we abandoned them.”

Francis said, looking to the future, “no effort must be spared to create a culture able to prevent such situations from happening, but also to prevent the possibility of their being covered up and perpetuated.”

But the Pope didn’t provide any indication of what concrete measures he is prepared to take to sanction those bishops – in the U.S. and beyond – who covered up for sexually abusive priests.

And Francis has kept three suspect cardinals, members of his nine-member kitchen cabinet, who have been accused of covering up for pedophiles and sex abuse.

--Asia Argento, an actress and director at the center of the #MeToo movement, recently paid off a former child actor who said she sexually assaulted him in a Marina del Rey hotel room when he was 17, the New York Times reported last Sunday.

Argento, 42, settled a notice of intent to sue from Jimmy Bennett, who in 2004 played her son in a film, for $380,000 in the months after she publicly accused Hollywood producer Harvey Weinstein of sexually assaulting her.

The age of consent in California is 18, and Bennett, now 22, was 17 at the time of the alleged assault in 2013.

But then Argento this week denied she ever had sex with Bennett, and said her ex-boyfriend, the late Anthony Bourdain, paid Bennett off, fearing bad press, and because Bourdain was worried about Bennett’s state of mind.

--The thickest sea ice in the Arctic has started to break up, opening waters north of Greenland that are normally frozen, according to experts.  As reported by Laura Donnelly of the Irish Independent, “One meteorologist described the phenomenon – recorded for the first time this year – as ‘scary,’ and scientists said it could prove catastrophic for polar bears and seals.

“The sea off the north coast of Greenland had long been known as ‘the last ice area’ because it was expected to be the last place to remain frozen, given it had the oldest and thickest ice.”

Now a lot of this has to do with winds, as well as heatwaves in the northern hemisphere, and the water could close over in a few days, but the pattern is worrisome.

--I was reading a piece from the Chicago Tribune on drowning deaths in Lake Michigan this year and this is kind of startling; 22 people have drowned, which is actually less than the 30 who did at this time last year.  But in the Chicago area, five children have become victims.  That’s way too many.

Yes, it’s all about rip currents.  And according to the Centers for Disease Control and Prevention, which is responsible for such statistics, about 1 in 5 who drown in the U.S. are children 14 and younger.

Lake Michigan is the deadliest of the Great Lakes, with 310 drownings since 2010 (690 overall in all of the Great Lakes).

As director of a project looking into all the deaths, Dave Benjamin, put it, “I believe that every one of these drownings is preventable. What’s missing is public education.”

Last weekend, three young boys died in Lake Michigan.

--According to a study in the journal Lancet Psychiatry this month, as reported by the Wall Street Journal’s Sumathi Reddy, when it comes to links between physical activity and mental health, team sports fared best, followed by cycling, either on the road or a stationary bike.

People who played team sports like soccer and basketball reported 22.3% fewer poor mental-health days than those who didn’t exercise. Those who ran or jogged fared 19% better, while those who did household chores were 11.8% better.

---

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

Our prayers go out to Senator John McCain and his family.

God bless America.

---

Gold $1212
Oil 
$68.52

Returns for the week 8/20-8/24

Dow Jones  +0.5%  [25790]
S&P 500 +0.9%  [2874]
S&P MidCap  +1.2%
Russell 2000  +1.9%
Nasdaq  +1.7%  [7945]

Returns for the period 1/1/18-8/24/18

Dow Jones  +4.3%
S&P 500  +7.5%
S&P MidCap  +7.1%
Russell 2000  +12.4%
Nasdaq  +15.1%

Bulls  57.7
Bears 
18.3

Enjoy the last real week of summer, at least for many of us.

Brian Trumbore



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-08/25/2018-      
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Week in Review

08/25/2018

For the week 8/20-8/24

[Posted Friday, 11:30 PM ET]

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

Special thanks to George R.

Edition 1,011

Not an easy week for moi...I apologize that what follows is a bit disjointed, but there was a ton to try to piece together.

Trump World...All the President’s Men

We’ll remember Tuesday, Aug. 21, 2018, for a while.  As President Trump was on his way to a campaign rally in West Virginia, his former campaign manager, Paul Manafort, was found guilty of eight counts of tax and bank fraud, and his former lawyer, Michael Cohen, pleaded guilty to eight counts of tax evasion, fraud and breaking campaign-finance laws.

Cohen acknowledged making payments to Stormy Daniels and Karen McDougal, which were not reported to the Federal Election Commission, with Cohen admitting he paid the money “at the direction” of Mr. Trump “for the principal purpose of influencing the election.”  A bombshell. 

Cohen’s attorney, Lanny Davis, reiterated after: “Today he (Cohen) stood up and testified under oath that Donald Trump directed him to commit a crime by making payments to two women for the principal purpose of influencing an election.

“If those payments were a crime for Michael Cohen, then why wouldn’t they be a crime for Donald Trump?”

Thoughts immediately turned to what the occupant of the Oval Office could do in response.

But Trump’s personal lawyers have been cautioning the president against even considering clemency for former aides under investigation until Mueller’s inquiry was over.  Rudy Giuliani said on Thursday that Trump agreed with their advice, though it’s clear pardoning Manafort is on Trump’s mind, witness his praise for a now convicted major felon who deprived U.S. taxpayers of $millions in revenue for the Treasury.

And Trump complained in an interview broadcast Thursday on Fox News that “it almost ought to be illegal” to cooperate with the government, adding that “campaign violations are considered not a big deal, frankly.”

But he also said in the interview with Fox’s Ainsley Earhardt that he had no knowledge of the payment to Stormy Daniels at the time, but learned about it after the fact.

“Later on I knew.  Later on,” Trump said, adding the subsequent payments he made to Cohen to reimburse him “didn’t come out of the campaign, they came from me.”

Of course Trump saying he didn’t learn of the payments until later on contradicted previous statements of his, including on Air Force One, as well as an audiotape that Cohen released.

Trump also said Attorney General Jeff Sessions “never took control” of the Justice Department and that Manafort was “brave.”

“One of the reasons I respect Paul Manafort so much is he went through that trial,” Trump said.

Trump, in the interview with Earhardt, also argued it “almost ought to be illegal” for “flippers” to get plea deals in exchange for testimony, a reference to Michael Cohen.

“For 30, 40 years I’ve been watching flippers...It almost ought to be outlawed.”

Cue “The Sopranos.”

As for his attorney general: “If you look at Hillary Clinton’s person, you take a look at the people that work for Hillary Clinton, and look at the crimes that Clinton did with the emails and she deletes 33,000 emails after she gets a subpoena from Congress, and this Justice Department does nothing about it and all of the other crimes that they’ve done,” Trump said.

But “[Sessions] took the job then he said ‘I’m going to recuse myself,’ Trump said.  “I said ‘What kind of a man is this?’”

The president said Sessions only got a job because of his loyalty to the campaign.

In the face of such criticism from the president, Sessions then fired back against Trump in a statement about an hour after the interview aired, declaring he was in control of the Justice Department.

“I took control of the Department of Justice the day I was sworn in, which is why we have had unprecedented success at effectuating the president’s agenda – one that protects the safety and security and rights of the American people, reduces violent crime, enforces our immigration laws, promotes economic growth, and advances religious liberty,” Sessions said.

Sessions went on to defend the department that Trump has subjected to months of withering attacks. 

“While I am attorney general, the actions of the Department of Justice will not be improperly influenced by political considerations,” Sessions said.  “I demand the highest standards, and where they are not met, I take action.  However, no nation has a more talented, more dedicated group of law enforcement investigators and prosecutors than the United States.

“I am proud to serve with them and proud of the work we have done in successfully advancing the rule of law,” he said.

Separately, we learned the Manhattan District Attorney’s office had begun exploring a criminal case against the Trump Organization and some of its executives stemming from Michael Cohen’s hush money payments, as reported by the New York Times, which said the case was in in “its earliest stages.”

And we learned that Allen Weisselberg, who has spent decades working for the Trump Organization as finance chief, has cooperated  with federal prosecutors in exchange for immunity in the case against Michael Cohen, relating to the payments made to Stormy Daniels and Karen McDougal...thus far.  Weisselberg’s cooperation could expand into other ongoing investigations.

And American Media Inc.’s David Pecker is cooperating, AMI being the publisher of the National Enquirer.  According to reports, he has a safe of material.

We also learned last weekend that White House counsel, Donald McGahn II, has given 30 hours of interviews to Robert Mueller, according to the New York Times.

Back to the Manafort trial, a juror in same said that all but one of the jurors wanted to convict him on all 18 counts.

The juror, Paula Duncan, spoke to both Fox News and NBC News, and said that jurors “again and again” laid out for the lone holdout the evidence that convinced them that Manafort was guilty. But the holdout, a woman, said she harbored reasonable doubt, Duncan said.

Duncan added, “I did not want Paul Manafort to be guilty, but he was, and no one’s above the law.”

---

It was an extraordinary few days, and it only seemed fitting that it was preceded by an exchange Rudy Giuliani had with NBC moderator for “Meet the Press,” Chuck Todd, on Sunday.

Giuliani was arguing that the president should not testify to the Russia probe, as he might be “trapped into perjury.”

“Truth is truth,” Todd countered.  To which Giuliani thundered: “Truth isn’t truth!”

Todd put his hand on his forehead and said: “This is going to become a bad meme.”

Giuliani then made his main point – that accusations of obstruction of justice against the president hinge on a conversation he had with then FBI director James Comey in February 2017, and that Mr. Trump’s account of that conversation differs radically from Mr. Comey’s.

“If you’re just a genius, tell me what the truth is!” Giuliani told Todd.  “We have a credibility gap between the two of them. You’ve got to select between the two of them.”

The whole exchange echoed the one Todd had with Kellyanne Conway last year, when she said the White House was entitled to present “alternative facts.”

Meanwhile, we still don’t know what happened between Trump and Putin in Helsinki...let alone what Mueller has...or what’s on all the other tapes of Cohen’s (Sean Hannity will go down, I’m guessing over time, due to his connections to Cohen...it’s why Hannity is pushing Lanny Davis to accept a pardon from Trump for his client if offered), and while I hate to even mention this name because of my loathing for the woman, does Omarosa really have anything?

What we know for sure is that the Russians have been listening to everything taking place in the Oval Office...or have insiders on the payroll.  I don’t carelessly go out on the limb on something like this.

---

Opinion....

Editorial / The Economist

“Neither Mr. Manafort’s conviction nor Mr. Cohen’s plea is directly related to the allegations of collusion with Russia that have dogged the Trump campaign, and are being investigated by Robert Mueller, the special counsel. Yet neither case would have been brought without his investigation.  This week’s events mean that Mr. Mueller now stands on firmer ground. It will be harder for the president to dismiss him without it looking as though he is obstructing justice.  And in such cases, convictions often lead to more convictions as those found guilty look for ways to save themselves.  The question now is whether, and how far, Mr. Manafort and Mr. Cohen will turn against their former boss in return for leniency. As the slow drip of revelations and convictions continues, Americans will have to confront a simple question: is Mr. Trump above the law?

“Mr. Cohen says Mr. Trump asked him to make hush-money payments – something that is not illegal for ordinary citizens, but counts as an undeclared donation when done on behalf of a political candidate, as Mr. Trump was at the time. So what? After all, America treats breaches of campaign-finance law much more like speeding tickets than burglary: they are often the result of filling in a form wrongly, or incorrectly accounting for campaign spending. There are good reasons for this indulgent approach.  When voters elect someone who has bent the rules, it sets up a conflict between the courts and the electorate that is hard to resolve cleanly.

“Mr. Trump does not stand accused of getting his paperwork wrong, however, but of paying bribes to scotch a damaging story. That is a far more serious offense, and one that was enough to end the career of John Edwards, an aspiring Democratic presidential candidate, when he was caught doing something similar in 2008.  There is no way of knowing if Mr. Trump would still have won had the story come out.  Even so, the possibility that he might not have raises questions about his legitimacy, not just his observance of campaign-finance laws.

“What of the convention, which has been in place since the Nixon era, that the Justice Department will not indict a sitting president? Again, there are good reasons for this. As with breaches of campaign-finance law, such an indictment would set up a conflict between the bureaucracy and the president’s democratic mandate that has no happy ending.  The convention would doubtless be void if there were credible evidence that a sitting president had, say, committed murder. But the payment of hush money to avoid an inconvenient story about an extramarital affair falls a long way short of that.

“The authors of the constitution wanted to allow the president to get on with his job without unnecessary distractions. But, fresh from a war against King George III, they were very clear that the presidency should not be an elected monarchy.  If a president does it, that does not make it legal. The constitutional problem that America is heading towards is that the Justice Department’s protocol not to prosecute sitting presidents dates from another age, when a president could be expected to resign with a modicum of honor before any charges were drawn up, as Nixon did.  That norm no longer applies. The unwritten convention now says in effect that, if his skin is thick enough, a president is indeed above the law.

“This means the only solution to any clash that Mr. Trump sets up between the courts and the voters is a political one.  Ultimately the decision to remove a president is a matter of politics, not law. It could hardly be otherwise, as America’s Founding Fathers foresaw.  In ‘Federalist 65,’ Alexander Hamilton explained why it was the Senate, rather than the Supreme Court, that should sit in judgment on the president, for ‘who can so properly be the inquisitors for the nation as the representatives themselves?’  No other body, he thought, would have the necessary ‘confidence in its situation’ to do so.

“Alas, that confidence has gone missing, leaving American democracy in a strange place. Thus far Republicans in Congress have stood by the president.  The only thing likely to change that is a performance in the mid-terms so bad that enough of them come to see the president as an electoral liability. Although Democrats may well win a majority in the House, a two-thirds majority in the Senate – the threshold required to remove a president – looks unachievable.

“Mr. Cohen’s plea has made the president of the United States an unindicted co-conspirator in a pair of federal crimes. That makes this a sad week for America. But it is a shameful one for the Republican Party, whose members remain more dedicated to minimizing Mr. Trump’s malfeasance than to the ideal that nobody, not even the president, is above the law.”

Rich Lowry / New York Post

“If it wasn’t obvious before, it should be now: President Trump is in an impeachment fight.

“It hasn’t fully ripened yet. That won’t happen unless Democrats take the House and do so with a healthy margin in the fall. But Michael Cohen’s statement that he committed campaign-finance violations at the behest of Trump makes it that much more likely Democrats will impeach him once they have the power and the votes to do it.

“This means Trump is in a political fight more than a legal one.  His concern shouldn’t be the Southern District of New York – current Justice Department says a sitting president can’t be indicted – but the House Judiciary Committee.  His strategy shouldn’t be aimed at convincing prosecutors that he stayed on the right side of the law, but the broader public that he deserves to stay in office.

“The most powerful tool that he has in that effort is telling the truth, exactly the approach most uncongenial to him.

“The American public has a nearly boundless ability to forgive. Wayward politicians have fallen back on it throughout our history, whether it was Alexander Hamilton pouring out his guts over his sordid affair with Maria Reynolds, or John F. Kennedy admitting error in the Bay of Pigs, or Bill Clinton (after a season of extravagant and increasingly tinny denials) ‘fessing up to his fling with Monica Lewinsky.

“It is in this spirit that Donald Trump should confess his affairs with Stormy Daniels and Karen McDougal, admit he wanted to keep them quiet for a variety of reasons (sheer embarrassment, the potential financial fallout, and the emotional effect on his wife and youngest son) and apologize to the public for his deception. Then, he should say he’s directing his lawyers to approach the Federal Election Commission to negotiate a large payment for any violation of its rules.

“There are several advantages to this approach. First, Trump doesn’t lose anything in terms of his reputation because literally no one believes his denials of the alleged affairs.

“Second, it gets his story on a much more believable footing  The idea that Michael Cohen paid off women who were making up stories, and Trump knew nothing about it in real time – despite a tape suggesting otherwise – and then happily ponied up from his own funds as soon as he learned about it is otherworldly.

“Third, it would be a shock to the system like few other things he could do in office.  Such is his reflexive aggression that a little contrition would play as big as the firing of James Comey.

“Fourth, there’s a good chance that Democrats will seem petty and vindictive for impeaching him over the payments if he’s really tried to put the underlying conduct behind him (this certainly didn’t work out well for Republicans in the Clinton impeachment).

“The downside?  Trump’s base wants him to be a fighter. But it also wants him to get the best of his political enemies, and this would be a means to do it. He is remembered as brazening out the ‘Access Hollywood’ tape, although he initially addressed it with a speech including the line, ‘I said it, I was wrong and I apologize.’

“Then, there’s any legal exposure of coming clean.  His lawyers might not like it, but he has to decide whether he’s going to worry chiefly about fighting off an impeachment push and winning again in 2020, or forestalling the threat of getting indicted sometime in 2021 should he lose his reelection.

“There’s no guarantee, but if he is seen as dealing with the issue forthrightly now, it makes it harder for prosecutors to go after him in another three years because there’s a norm against further pursuing defeated politicians (one that he would be wise to stop eroding, by the way).

“Of course, all of this is fantasy, given Trump’s natural instincts.  A pugilist who never admits error, he surely believes that he can bluff and improvise his way out of the mess, and wait to abandon elements of his current version of events until strictly necessary.  He thinks, not unreasonably, he can continue to make his investigators the issue and that so long as he has the vast majority of his party with him he has a brake against a removal vote in the Senate.

“He might be right. This is what he’s done his entire adult life. But the stakes are larger than ever before, and even a moment’s reflection on how he got in this fix would suggest perhaps giving forthrightness a try.”

Editorial / Wall Street Journal

“Shhhhhh.  Whatever else you do, don’t mention the ‘I word’ between now and November. That’s the public message from Democratic leaders and most of their media friends this week after Michael Cohen’s guilty plea and his criminal allegations against President Trump. Between now and Election Day, ‘impeachment’ is the forbidden word.

“ ‘If and when the information emerges about that, we’ll see,’ says once and perhaps future House Speaker Nancy Pelosi.  ‘It’s not a priority on the agenda going forward unless something else comes forward.’

“Mr. Cohen’s charges are serious, says Senate Democratic Whip Dick Durbin, but impeachment talk is ‘premature’ because ‘more information has to come forward’ and it’s ‘too early in the process to be using these words.’

“Under the coy headline ‘Can Trump Survive?’ – you already know his answer – Washington Post columnist E.J. Dionne counsels Democrats that ‘the argument for impeaching Trump suddenly became very strong, but this does not mean that turning 2018 into an impeachment election is prudent.’

“And if you believe in this misdirection, you probably also believe that Donald Trump didn’t canoodle with Stormy Daniels.

“The political reality is that Democrats are all but certain to impeach Mr. Trump if they take the House in November. After what they’ve said and the process they’ve set in motion, Democrats won’t have much choice. They simply don’t want to admit this now before the election lest they rile up too many deplorables and independents who thought they elected a President for four years.

“Let’s make the reasonable guess that Democrats retake the House with 228 seats, a narrow but solid majority. They’ll have done so after two years of claiming that Mr. Trump is an illegitimate President who conspired with the Kremlin to steal the 2016 election, that he is profiting from the Presidency for personal gain, that he obstructed justice by firing James Comey, and that after Michael Cohen’s plea the President is now ‘an unindicted co-conspirator’ in campaign-finance fraud.

“If Democrats finally gain the power to do something about this menace to mankind, do they suddenly say ‘never mind’?

“No doubt Democrats would start slowly by revving up the investigative machinery: subpoenas, hearings, all covered to a fare-thee-well by the media. Michael Cohen will be a major witness, as will the others named in the plea-deal documents.  The Trump tax returns will get a star turn.

“Once this starts, it will be hard to stop even if Democratic leaders want to.  It will be even harder to stop if special counsel Robert Mueller writes a report to his superiors (that will inevitably leak) saying he couldn’t indict a sitting President but here is the evidence that he may have obstructed justice or have shady finances. The evidence may not even matter much since impeachment is a political process and Congress defines what are ‘high crimes and misdemeanors.’

“Meanwhile, the battle for the 2020 Democratic nomination will be underway, with multiple candidates vying for the hearts and minds of liberal voters. They’ll compete to see who can be the loudest voice for impeachment....

“There will be more-in-sorrow-than-anger calls for sober judgment, but political momentum has a mind of its own. The party’s liberal base will demand that Democrats be counted on an impeachment vote, and so will its media elites, who want vindication for believing that Mr. Trump could never have legitimately defeated their heroine.

“The smarter political play might be to wait until 2020 and ride a potential wave of national fatigue with Mr. Trump, but don’t underestimate the degree to which liberals want this President to be politically humiliated and legally punished. Read their Twitter feeds and columns if  you don’t believe us.

“We don’t know how impeachment would play out politically in 2019 and 2020.  An impeachment based on acts that have nothing to do with Russian collusion would offend much of the public, but as the New York Times joyfully put it this week, ‘that may not matter.’ While a conviction in the Senate may seem improbable at this point, Democrats might not care because they’ll have made Republicans defend Mr. Trump’s behavior.

“The main point about this election year is that no one should believe Democrats when they say that impeaching Donald Trump isn’t on their agenda.  It’s their only agenda.”

Editorial / Los Angeles Times

“What were the president’s reactions to these judgments against men he had raised to positions of trust in the campaign that ushered him into the White House?  They were disgustingly dismissive.

“About Cohen, he tweeted – falsely – that ‘Michael Cohen plead[ed] guilty to  two counts of campaign finance violations that are not a crime.’  There is no question that what Cohen admitted to – making large, undisclosed payments on behalf of a campaign in deliberate violation of contribution limits and reporting requirements – is  a crime. Then Trump added: ‘President Obama had a big campaign finance violation and it was easily settled!’  That’s because the Obama campaign didn’t report quickly enough a tiny fraction of the $722 million collected.  By contrast, Cohen deliberately hid two large contributions that were designed to keep scandalous allegations from voters.

“For Manafort, he expressed respect for a ‘brave man’ who ‘refused to break’ and he made it clear that he regarded Manafort’s prosecution as part of the ‘witch hunt’ he has incessantly complained about. That raises the highly alarming possibility that Trump might seek to erase Manafort’s conviction by means of a presidential pardon.

“Such an abuse of the pardon power...would be grounds for an impeachment inquiry. So, of course, would any evidence adduced by Mueller that Trump was aware of criminal coordination between his campaign and Russia or obstructed justice.  And impeachment isn’t the only way this presidency could end if there were proof that the president had engaged in criminal misconduct before or after he took office.  Richard Nixon resigned when leaders of his own party convinced him that he had lost support in Congress.

“Would Republican leaders of the current Congress have the fortitude to take that message to Trump in a similar situation?  Or are congressional Republicans so deeply in Trump’s pocket that they would continue to back him regardless of the evidence gathered against him? Will we see even so much as a single congressional inquiry into the payments Cohen swears he made on Trump’s behalf?

“So far, Republican officeholders have condoned Trump’s excesses and outrages so as not to alienate their Trump-supporting constituents, and their reaction to this week’s events has been characteristically evasive. But the verdict and guilty plea in northern Virginia and Manhattan are categorically different from the Trump controversies and conflagrations that have come before.  If this week’s events don’t stiffen their spines, voters should deprive them of their majority.”

Gerald F. Seib / Wall Street Journal

“Of all the characters who floated around the Trump presidential campaign in 2016 – a mixed bag of hired hands, hangers-on, latecomers and a small group of core loyalists – the one who seemed least likely to cause a problem for the boss was Michael Cohen.

“Yet, on Tuesday, the darkest day of the Trump presidency so far, it was Mr. Cohen who dealt the most grievous blow. The longtime personal lawyer who flew below the radar line directly implicated the president in a federal crime, making undisclosed hush payments to two women in the closing stages of the presidential race in violation of federal campaign-finance law.

“With that step, Mr. Cohen not only named the president but undercut the belief that if President Trump could show there was no collusion between his campaign and Russian operatives in 2016, his legal problems would crumble and the investigations swirling around him would evaporate.

“In fact, at least on Tuesday, Mr. Trump’s problems spread well beyond the collusion question. The conviction of his former campaign chairman Paul Manafort on tax evasion and bank fraud charges undercut Mr. Trump’s assertion that his was a campaign and a presidency that would ‘drain the swamp’ of the unsavory professional political class.

“Mr. Manafort was and is of precisely that political class. The actions for which he was convicted had nothing to do with his work for the president, yet the optics are, to say the least, unhelpful for Mr. Trump.

“Mr. Trump can and will distance himself from both Mr. Manafort and the felonies of which he now has been convicted. Indeed, after landing in West Virginia for a campaign rally, Mr. Trump expressed sympathy for Mr. Manafort but said ‘this has nothing to do with Russian collusion.’  He continued to describe the hunt for a Russian connection as a ‘witch hunt.’

“It will be much harder to create distance from Mr. Cohen.

“With just a few words in a federal courtroom, Mr. Cohen asserted that he acted at the behest of the president in directing money to a porn star and a Playboy model to buy their silence about alleged affairs with Mr. Trump as part of the effort to win the 2016 presidential campaign. The money wasn’t disclosed, and that makes it a violation of campaign laws....

“(The) contours of the story Mr. Cohen obliquely referred to – payoffs to two young women who alleged extramarital affairs with Mr. Trump – aren’t hard to understand.  Some in Mr. Trump’s orbit had long worried that his exposure on that front, legally and politically, could well turn out to be higher than his exposure to the Russian collusion charge. On Tuesday, at least, that appeared to be true....

“(The) Cohen charge now figures to be wrapped into whatever report Mr. Mueller prepares at the end of his investigation, at which point the question will become whether prosecutors have uncovered any actions that could result in impeachment.

“And at that point, Democrats hope they will have taken control of Congress and will be in position to make the decision.  Ironically, Mr. Trump was in West Virginia trying to ensure that Democratic takeover doesn’t happen.”

Karl Rove / Wall Street Journal

“They show up for every presidential campaign: wannabes like George Papadopoulos, self-promoters like Carter Page, and worse, grifters like Paul Manafort and straphangers like Michael Cohen.

“Grifters attach themselves to campaigns to refresh their credentials so they can sell their services to foreign governments and political parties, or businesses looking to buy influence. Straphangers hope to land a job in the West Wing – and if that’s not possible, to cash in on their connections.

“The consequences for President Trump of having people like this around him became clearer than ever Tuesday, when his former campaign chairman, Mr. Manafort, was found guilty of tax and bank fraud and hiding foreign bank accounts, while the president’s longtime personal lawyer and ‘fixer,’ Mr. Cohen, pleaded guilty to tax evasion, making false statements, and campaign-finance violations.

“So what’s the political fallout from these courtroom bombshells?....

“Following Tuesday’s verdict, the president declared that special counsel Robert Mueller’s successful prosecution of Mr. Manafort ‘has nothing to do with Russian collusion.’  Mr. Trump is right – for now. Only the final special-counsel report will settle that definitively. Still, there’s a reason to be skeptical of the collusion narrative. Every presidential campaign leaks, and the Trump campaign leaked more than any in history. If there had been collusion, the public would likely know about it by now.

“Some defenders of the president dismiss the Manafort verdict as a witch hunt. This is wrong and unwise.  Mr. Mueller acted within his mandate, and Mr. Manafort was found guilty of failing to pay taxes on $30 million of income from consulting in Ukraine, $18 million of which he spent on clothing, antiques, real estate and home expenses. Though they may be distressed by the notion of 69-year-old Mr. Manafort spending decades in prison, Mr. Trump’s allies could spend their energy better by pointing out that the president was not involved in his schemes and was in fact used by him.

“Mr. Cohen’s guilty pleas are more troubling for Mr. Trump, and not simply because Mr. Cohen admitted to paying hush money to Stormy Daniels and Karen McDougal, who claim to have had affairs with Mr. Trump.  Mr. Cohen now says Mr. Trump directed him to make the payments to protect his election prospects, an action some believe constitutes a violation of campaign-finance laws.

“But many legal analysts doubt the payments were illegal....

“Still, Tuesday’s events will bring significant damage. Messrs. Manafort’s and Cohen’s legal troubles will further cement in the public’s mind that corrupt people weaseled their way into Mr. Trump’s orbit before and during his presidential campaign. This notion will be reinforced further when Mr. Manafort’s next trial begins in September, over charges of money laundering, failing to register as a foreign agent, and lying to federal agents.

“The events will also strengthen congressional Democrats’ argument that their party is a necessary check on the president. Yet while Democrats have the advantage now, they could easily overplay their hand and turn off swing voters who don’t want America plunged into a political circus like the one Republicans created by impeaching Bill Clinton in 1998.

“Given Justice Department guidelines, Mr. Mueller – in contrast to James Comey – is unlikely to act in ways that affect the election once September begins. The president may still choose to lash out at the special-counsel investigation, but that would hurt him and his party. Rather than attacking the Mueller probe, Mr. Trump’s best approach would be to focus on his agenda.  That would be a better strategy than reviving Tuesday’s sordid drama.”

---

Trump tweets: “I feel very badly for Paul Manafort and his wonderful family.  ‘Justice’ took a 12 year old tax case, among other things, applied tremendous pressure on him and, unlike Michael Cohen, he refused to ‘break’ – make up stories in order to get a ‘deal.’ Such respect for a brave man!”

“If anyone is looking for a good lawyer, I would strongly suggest that you don’t retain the services of Michael Cohen!”

“Even James Clapper has admonished John Brennan for having gone totally off the rails.  Maybe Clapper is being nice to me so he doesn’t lose his Security Clearance for lying to Congress!”

“Disgraced and discredited Bob Mueller and his whole group of Angry Democrat Thugs spent over 30 hours with the White House Councel (sic), only with my approval, for purposes of transparency. Anybody need that much time when they know there is no Russian Collusion is just someone...

“...looking for trouble. They are enjoying ruining people’s lives and REFUSE to look at the real corruption on the Democrat side – the lies, the firings, the deleted Emails and soooo much more!  Mueller’s Angry Dems are looking to impact the election. They are a National Disgrace!”

“Where’s the Collusion?  They made up a phony crime called Collusion, and when there was no Collusion they say there was Obstruction (of a phony crime that never existed). If you FIGHT BACK or say anything bad about the Rigged Witch Hunt, they scream Obstruction!”

“The Failing New York Times wrote a story that made it seem like the White House Councel (sic) had TURNED on the President, when in fact it is just the opposite - & the two Fake reporters knew this.  This is why the Fake News Media has become the Enemy of the People. So bad for America!”

Wall Street and Trade

Wednesday marked day 3,453 of the bull market, the longest streak in history, at least post-World War II, according to some investors’ definition (if you round up, which is kind of lousy methodology for such a big record), and then Friday, the S&P 500 and Nasdaq both closed at all-time highs, due in no small part to the measured talk coming out of the following.

The Kansas City Federal Reserve held its annual meeting in Jackson Hole, Wyoming, this week, and Fed Chair Jerome Powell addressed the gathering Friday, saying the U.S. economy has strengthened substantially, though there was no elevated risk of overheating.  Powell added further gradual rate increases lie ahead, and emphasized the Fed would respond to inflation as needed.

He said the Fed faces two major risks, of “moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilizing overheating,” Powell said.  “The current path...[is] taking seriously both of these risks.”

Earlier the Federal Reserve signaled that another interest-rate hike is likely to take place soon, while a growing discussion of trade disputes is adding uncertainty to the outlook as higher tariffs could dent U.S. household purchasing power, per minutes from its July 31-Aug. 1 Federal Open Market Committee confab.

“Many participants suggested that if incoming data continued to support their current economic outlook, it would likely soon be appropriate to take another step in removing policy accommodation,” the minutes showed on Wednesday.

And...“Wide-ranging tariff increases would also reduce the purchasing power of U.S. households.  Some participants suggested that, in the event of a major escalation in trade disputes, the complex nature of trade issues, including the entire range of their effects on output and inflation, presented a challenge in determining the appropriate monetary policy response.”

So put it all together and the Fed is hiking interest rates at its next Open Market Committee meeting, Sept. 25-26, and this no doubt will infuriate President Trump, who is likely to get grumpier and grumpier leading up to the decision for all number of reasons, none having to do with the economy or the Federal Reserve.

On Monday, Trump said in an interview with Reuters that he was “not thrilled” with the Fed under his own appointee for raising interest rates and said the central bank should do more to help him to boost the economy.  He also accused China and Europe of manipulating their respective currencies.

“I’m not thrilled with his raising of interest rates, no.  I’m not thrilled,” Trump said, referring to Jay Powell.  Alluding to his trade negotiations, Trump said, “We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed.  The other countries are accommodated.”

Powell last month said in an interview that the Fed has a “long tradition” of independence from political concerns, and that no one in the Trump administration has said anything to him that gave him pause on that front.

Yeah, but just wait until Sept. 26 when the Fed hikes again.

Regarding China, Trump said they were manipulating their currency to make up for having to pay tariffs on imports imposed by Washington.

[A spokesman for the People’s Bank of China told reporters, “We will not pursue competitive currency devaluation and will not use the currency as a weapon to deal with trade frictions.”]

Separately, in economic news, July existing-home sales came in less than expected, a 5.34 million annualized rate, down a fourth consecutive month, and down 1.5% from a year ago, according to the National Association of Realtors.  The median existing home price was $269,600, up 4.5% from July 2017.

July durable goods were worse than expected, down 1.7%, but up 0.2% ex-transportation.

As for the Atlanta Fed’s GDPNow barometer for third-quarter growth, it sits at a robust 4.6%.

As for the trade issue, talks between the United States and China in Washington this week concluded with no concrete steps toward ending the bilateral trade war that started last month. The relatively low-level negotiations were clouded in skepticism before they began, which was then borne out.

China’s Commerce Ministry issued a short statement, saying the two sides had “constructive and frank exchanges” and would “keep in touch.”

White House Deputy Press Secretary Lindsay Walters told reporters: “We concluded two days of discussions with counterparts from China and exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship, including by addressing structural issues in China such as those identified in the Section 301 report.”

Critics said it was kind of stupid to hold a low-level meeting, when prior talks involved China’s vice-premier Liu He and U.S. Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross.

But in the case of China, it seems they were just testing the waters to see if the White House has recalibrated after the initial round of tariffs have been in place for almost two months.

Thursday, the trade war continued to escalate, as the U.S. enacted punitive tariffs of 25 percent on $16bn of Chinese imports (on top of the initial $34 billion), an action that was immediately matched by Beijing.

But this was the week public hearings began on levying tariffs on a further $200bn of Chinese goods, which could go into effect in September.  Initially proposed at 10 percent, the duties could be raised to as much as 25 percent at Trump’s direction.

The additional tariffs would effectively slap levies on half of all Chinese exports to the U.S., or roughly double what China imports from the U.S.

Witnesses have been coming out in force for the hearings with the U.S. Trade Representative’s office, speaking to the potential of the punitive action to decimate their industries, which range from electronics to apparel to chemicals.

Bottom line, the relationship between Washington and Beijing was not improved this week.

As for the negotiations between the U.S. and Mexico, as part of the talks on a re-jiggered NAFTA agreement, officials from both sides played down the chances of an imminent deal but said progress had been made.

The talks are centered on rules for car makers and regional requirements on manufacturing content and increasing requirements for how much of an auto must be manufactured in North America for it to be imported free of tariffs.  A preliminary agreement to raise the amount of a car manufactured within North America to 75% from a current 62.5% has been reached.

Both sides expressed hopes some agreement could be reached in the coming days to allow Canada to re-enter the discussions later next week.  At that point the three sides would need to agree on a demand from President Trump that there be a sunset clause that would end the deal every five years unless explicitly renewed. Both Mexico and Canada have rejected the proposal thus far.

There is a distinct timetable, as Mexico swears in its new president, Andres Manuel Lopez Obrador, on Dec. 1, while U.S. law calls for a three-month period after a deal is reached before Congress can ratify it.  So if negotiations are completed next week, the deal could be signed in late November at the earliest.  If talks extend into September, Lopez Obrador will demand a bigger say in what has been negotiated.

One other immediate trade issue. Commerce Secretary Ross indicated the administration is pushing back its timetable for imposing tariffs on auto imports.  Originally, Ross said in late July he would complete a study and recommendations on whether car imports could be seen as a threat to national security “sometime in the month of August.”  But now Ross admits the report might not be ready by end of next week, citing the ongoing NAFTA negotiations, as well as talks with the European Union.

The government must first publish a report before imposing tariffs.

Europe and Asia

A few economic notes on the eurozone.  Euro area wages rose 2.2% in the second quarter, the most since 2012, up from 1.7% in Q1.

And Markit released its flash readings for August, with the eurozone composite at 54.4 vs. 54.3 in July (50 being the dividing line between growth and contraction).

The EA19 services reading was also 54.4 vs. 54.2 last month, with manufacturing at 54.6 vs. 55.1.

The flash manufacturing reading for Germany was 56.1 in August vs. 56.9 in July, while for France it was 53.7 vs. 53.3.

Chris Williamson / IHS Markit

“The survey data indicate that the eurozone economy looks to have continued to grow at a steady rate in August, raising hopes that the third quarter could see GDP growth match the 0.4% expansion seen in the second quarter.  In fact, the survey evidence suggests that the official data so far this year could yet be revised slightly higher.

“Jobs growth also remains encouragingly robust, which should help further stimulate consumer spending and help offset signs of continuing weakness in exports.

“With the indicators of current activity, employment and price gauges remaining elevated, the August survey sends a hawkish signal to policymakers.  But the forward-looking indicators suggest the business mood could cool as summer passes.

“Warning lights are flashing.  Analysis of past data indicates that demand needs to pick up to sustain current output and employment growth in coming months.  Yet the risks seem tilted to the downside.

“Escalating political worries, rising prices and a recent slowdown in order book growth have all contributed to the gloomiest outlook for almost two years, according to companies’ expectations of their future output.  In manufacturing, optimism is down to its lowest for almost three years, as a near-stalling of exports corroborated escalating trade war worries.

“With manufacturing looking the most susceptible to a trade-led slowdown in coming months, hopes are pinned on a robust service sector helping to drive economic growth as we move into the autumn, yet even here optimism is down to its lowest for nearly two years.”

Eurobits....

--The U.K. and the European Union will negotiate on Brexit “continuously” from now on, the bloc’s chief negotiator Michel Barnier said, with time running out to cut a deal.

“The negotiations are now entering the final stage,” Barnier told reporters in Brussels after meeting Brexit Secretary Dominic Raab on Tuesday.  “We can find common ground” but it will need Britain to “respect the single market.”

Talks have been at a virtual impasse for months, with the two sides needing to reach an agreement on Britain’s withdrawal terms by mid-October’s EU summit.

But Barnier hinted the long-planned deadline could be extended to November, though it has to be “well before the end of the year,” he said.

Negotiators are working on three tracks...future trade, economic and security relationships.

Barnier’s remark about the U.K. respecting the EU’s single market is significant, as the government of Theresa May has been seeking to remain in the bloc’s rules for trade, but to go it alone in services.

And you still have the issue of Northern Ireland, as the two sides seek to avoid a policed border between the North and the Republic of Ireland, with the U.K. rejecting the EU’s plan to keep the British province in the bloc’s customs union.

Therese Raphael / Bloomberg

“As negotiators from the U.K. and the European Union meet in Brussels, Brexit is said to be entering the endgame.  This isn’t an ordinary endgame though: All the  major pieces are still on the board and pretty much the full range of potential outcomes – from no deal to no Brexit, and everything in between – remain live possibilities....

“A new paper from the Institute for Government lays out five scenarios that could unfold this autumn.  The upshot is that ‘the risks of either a deliberate or an accidental no deal are quite high, given the apparent stalemate in the negotiations, the precariousness of the prime minister’s parliamentary position and the defaults now incorporated in the system.’

“Of the five scenarios, only one envisions a relatively smooth route to an orderly Brexit: It posits a successfully negotiated withdrawal agreement and parliamentary approval. The other four carry a very high risk of a no-deal Brexit.

“Prime Minister Theresa May could, for example, strike a deal that Parliament then rejects on the grounds that it leaves Britain a ‘vassal state,’ as Brexiter Jacob Rees-Mogg put it.  May could try to renegotiate, of course. But she might run out of time or get turned back by Brussels, and Parliament may still reject whatever alternative she proposes.

“Although the bias in Parliament is clearly to have a deal, there’s no agreement on what kind.  Even if May fails to reach an agreement and Parliament rejects the no-deal option, it’s not clear how the legislature could get to a better outcome. And even if Parliament did manage to nudge the government back to the negotiating table, it’s not clear that it would get an appropriate option back.

“What makes this particularly devilish is that the old Leave versus Remain division has effectively become a deal or no-deal division. There are many Leavers who don’t like May’s proposed deal, but who would still favor an agreement of some kind because they think Parliament might reject a no-deal result, throwing Brexit itself into doubt. Then there are Remainers who don’t like May’s proposal but who would support it as preferable to the cost and chaos of no deal at all.

“Against that possible coalition of the disgruntled-but-willing is a potentially stronger force: Remainers who oppose May’s deal because they find it too great a compromise and hope that they can cancel Brexit altogether; and Leavers like Rees-Mogg who oppose it as a sell-out.

“If that isn’t confusing enough, party affiliation is no guide here. There are Labour Party MPs whose main priority is ensuring Britain doesn’t leave without a deal; and others whose chief interest is in overthrowing the government, whatever happens with Brexit.  While the prime minister has won key votes with the help of some Labour Leavers, it’s unclear if she’ll be able to count on them.

“It’s the same, pretty much, on the Tory side: There are those who want to get over the line on Brexit with a deal of some sort, those who see May’s proposed deal as an economy-killer, and others for whom only a total break with all EU structures is acceptable and who believe May must be relieved of her position in the process.  The Conservative Party conference in September is likely to be a beauty parade of would-be prime ministers touting their alternative Brexit visions.

“And yet even these scenarios don’t account for the full range of possibilities.  Say May gets an agreement.  Parliament must pass a motion to endorse it and then must pass the Withdrawal Agreement Bill for it to go into effect. But disgruntled members could at any point seek to wreck the deal or hamstring future talks with amendments.”

Buckle up...it’s gonna be a bumpy ride.

--Castigated by President Trump for relying too much on Russian gas supplies, German Chancellor Angela Merkel headed to Azerbaijan this week to discuss the development of a southern pipeline to deliver gas to Europe from the Caspian.

Merkel’s openness to finding alternative sources of affordable gas comes even as she remains committed to the Nord Stream 2 pipeline, which will carry gas from Russia under the Baltic Sea to Germany.

--Greece has successfully completed a three-year eurozone bailout program worth $70.8 billion designed to tackle its debt crisis.

After the biggest bailout in global financial history, totaling more than 260bn euro, the country will be paying loans off for several decades. But for the first time in eight years, it can borrow at market rates.

To get to this point, however, Greece had to endure deeply unpopular austerity measures.

Professor Costas Meghir, an economist with Yale University based in the Greek capital Athens, warned that the end of the bailout program did not mean the Greek economy’s problems had been solved.

“It’s of course a very important milestone, both psychologically and in practice but it doesn’t mean that the problems are over,” he told the BBC.

“It doesn’t mean that austerity is over either. In some sense, the Greek government has to be even more disciplined now, because it has to rely on foreign markets at reasonable interest rates to be able to borrow.

“Austerity can only end once pro-growth policies are put in place that would allow flourishing of investing, for direct investment and of business more generally and this hasn’t really happened to a sufficient extent yet.”

Some 300,000 Greeks have emigrated in search of work since the crisis began while those depending on state benefits have seen their income whittled away.

--According to the Italian paper Corriere della Sera, President Trump told Italian Prime Minister Giuseppe Conte during a recent meeting at the White House that the United States was ready to offer Italy help in funding its public debt.  Oh brother.

Turning to Asia...last week I noted how China’s reading on fixed investment (infrastructure) was down to its lowest growth rate since 1999. But now the government this week gave the go-ahead to a series of major urban infrastructure projects after a 12-month pause in a return to the investment-driven policies for spurring growth that it had promised to leave on the shelf.

In Japan, the above-noted Markit flash readings on manufacturing put Japan’s August figure at 52.5 vs. 52.3 last month.

Street Byes

--As noted above, stocks finished higher this week, with the S&P 500 and Nasdaq (as well as the Russell 2000 small-cap index) hitting new all-time highs. The Dow Jones, up 0.5% on the week to 25790, is still about 825 points shy of its all-time mark, but the S&P, up 0.9%, sits at a new high of 2874, while Nasdaq, up 1.7%, set a closing record of 7945 today.

Any trade tensions have long taken a back seat to strong earnings, the outlook for which remains very bright.

--U.S. Treasury Yields

6-mo. 2.23%  2-yr. 2.62%  10-yr. 2.81%  30-yr. 2.96%

The bond market was again largely unchanged this week, and not a lot of turmoil overseas as well.

--Oil prices rose to a two-week high on Wednesday after the U.S. Energy Information Administration reported that the amount of crude in storage fell by 5.8 million barrels, far more than forecast.  The day before, the American Petroleum Institute estimated stockpiles fell by 5.2 million barrels.

Renewed trade negotiations between the U.S. and China (at least earlier in the week) and looming U.S. sanctions on Iran’s oil industry have boosted market sentiment as well.  Regarding the latter, the measures targeting Iran’s oil industry are set to be implemented by November.

--Saudi Arabia’s state-owned oil giant has suspended its plans to go public, which has upset investment banks around the world looking for some hefty fees, seeing as this would have been the biggest initial offering on record.

Saudi Arabia and its advisers are instead focusing on buying a stake in Sabic, a huge Saudi chemical producer, according to various sources.  So no Saudi Aramco IPO for at least a year it would seem.

The kingdom’s de facto ruler, Crown Prince Mohammed bin Salman, was hoping to use the $billions the IPO would raise for his Vision 2030 plan, which is designed to wean the country off its dependence on oil.

Sabic is a giant in its own right, which Saudi Aramco has a 70 percent stake in, having earned a net profit of nearly $5 billion in 2017.  A deal between the two would still allow the country’s sovereign wealth fund (with $billions of dollars) to make some of the Vision 2030 plans come to fruition.

--Facebook said Tuesday that it has removed 652 pages on the social media network that were operating a coordinated political influence operation ahead of the midterm elections.

The company released a statement that said the campaigns were intended to mislead users and originated in Iran and Russia.

“We ban this kind of behavior because we want people to be able to trust the connections they make on Facebook,” the statement read.

“And while we’re making progress rooting out this abuse, as we’ve said before, it’s an ongoing challenge because the people responsible are determined and well-funded.”

Facebook’s security people tracked two campaigns back to Iranian state media, which were followed by hundreds of thousands of people.

The Russian campaigns were tied to the Kremlin’s military intelligence unit.

--Speaking of Iran’s cyber campaigns against the United States, Google said on Thursday that it has removed dozens of YouTube channels it says are linked to an influence operation run by Iran’s state broadcaster.

--Toll Brothers Inc., one of the nation’s largest builders of high-end homes, saw its revenue jump 27%, with profits up 30%, as customers added $165,000 on average toward the customization and design of their houses in the period.

Toll said it expects the average price for its homes in the current fiscal year to be $835,000 to $860,000, raising the low end of its previous guidance.

So Toll is bucking the trend, as the data on previously owned homes above shows.  [Sales of existing homes over $1 million rose 7.6% in June compared with a year earlier, while sales of homes from $750,000 to $1 million rose 6%, according to the National Association of Realtors.  But at the same time, sales between $100,000 and $250,000 fell 7.1% - which is about affordability for middle-class buyers, higher mortgage rates a major hindrance.

--Similar to Toll Brothers, high-end retailers also reported robust results.  Nordstrom Inc. said sales rose 7% in its most recent quarter, while Coach, which is owned by Tapestry Inc., reported a 5% increase.

Meanwhile, Target Corp. said same-store sales rose at the fastest rate in more than a decade, as the company’s focus on upgrading its stores and e-commerce capabilities pays off, while a booming economy has helped lift sales across the retail industry.

Comp sales rose 6.5% in the quarter ended Aug. 4 from a year ago, Target’s best performance since 2005. Total revenue climbed 6.9% to $17.78 billion.

Just outstanding. CEO Brian Cornell said the company is gaining market-share across a range of categories from electronics and homewares to toys and apparel.

Comparable digital sales rose 41% in the period, boosted by a one-day sale in July that was meant to test its systems prior to the holiday period.

Profit for the quarter rose 19% to $799 million, up from $671 million, for the comparable quarter a year earlier.

--Kohl’s also reported strong same-store sales in the quarter to Aug. 4, up 3.1%, with net sales rising 3.9% to $4.31 billion, net income 40% to $292 million, compared with $208 million a year ago, though the company’s earnings guidance was a bit tepid and the shares fell in response, but they were up 45% on the year.

And TJX Co., parent of T.J. Maxx, saw its same-store sales rise 6%, up 7% for the division that includes the T.J. Maxx and Marshalls chains.

--But then there’s Sears Holdings Corp., which announced there will be yet another wave of closings, 46 additional Sears and Kmart stores nationwide. Liquidation sales will begin as early as Aug. 30.

The 46 are on top of 70 in July, with the once-mammoth chain down to 570 Sears stores  and 432 Kmarts.

--After a tweet at 2:32 a.m. on Sunday, where Elon Musk said he wasn’t logging 120-hour work weeks because he liked the stress – but because it was necessary for the electric-car maker’s success – Musk was largely silent this week.

“Ford & Tesla are the only 2 American car companies to avoid bankruptcy. I just got home from the factory. You think this is an option. It is not.”

The tweet was in response to Arianna Huffington’s blog post, urging Musk to get more zzzs.

Huffington, a member of the Uber board and the author of the 2016 book, “The Sleep Revolution: Transforming Your Life, One Night at a Time,” suggesting Musk’s manic work habits are self-defeating.

“Working 120-hour weeks doesn’t leverage your unique qualities, it wastes them,” she warned Musk.

Tesla remains under investigation for Musk’s tweet from Aug. 7 when he suddenly announced plans to take the company private at $420 a share and that he’d secured funding, which wasn’t the case.  [The stock closed at $322.75 today.]

--E-commerce giant Alibaba Group Holdings Ltd. reported a 61% increase in sales, with Chinese consumers continuing to ramp up spending on the internet despite slowing economic growth.

The operator of China’s two largest e-commerce platforms, Taobao and Tmall, reported revenue of $11.83 billion.  Alibaba’s vice chairman, Joe Tsai, said “Domestic consumption is supported by three important trends we have seen in the past several years, and which we believe will continue to be the case.  Real wage growth with more people joining the middle class, healthy household balance sheets based on high savings rates, and easier access to consumer credit.”

The company reported a profit of $1.27 billion.

Alibaba has been trying to diversity into the internet-services sector and it recently invested $2.2 billion in Focus Media, a prominent Chinese outdoor advertiser, to strengthen advertising beyond its online platforms.

--Bayer, the parent of American agro-chemicals giant Monsanto, said the number of outstanding court cases arising from Monsanto’s glyphosate-based weedkillers, which some believe are carcinogenic, has risen from 5,200 to 8,000, which could cost the German firm $billions in damages.

Last month a jury awarded a California groundskeeper, Dewayne Johnson, $289 million, Johnson claiming Monsanto herbicides containing glyphosate had caused his non-Hodgkin’s lymphoma.

Monsanto was acquired by Bayer for $63bn earlier this month.

--The Australian government has barred Chinese tech giant Huawei, and another Chinese company, ZTE, from providing equipment to support the country’s new telecommunications networks.  Mobile carriers around the world have been preparing to build infrastructure using fifth-generation, or 5G, wireless technology, which promises to enable the ultrafast communications necessary for technologies such as self-driving cars.

Huawei, one of the world’s largest makers of telecom gear and smartphones, already sells equipment to major Australian telecom carriers, and has told Australian lawmakers that concerns that its gear could be used by the Chinese government for spying were “ill-informed and not based on facts.”

But two Australian ministers, in a statement Thursday, said companies that “are likely to be subject to extrajudicial directions from a foreign government” pose unacceptable security risks.

Huawei’s deputy chairman, Eric Xu, hit out at the Aussie pols, saying that “their minds are still in the agrarian age.”

Mr. Xu added: “Their behavior shows not just an ignorance of how science and innovation works today, but also their own lack of confidence.”  [Raymond Zhong / New York Times]

--Meanwhile, Xiaomi, the world’s fourth largest smartphone supplier, reported a surprise profit for the quarter ended June 30, sales rising 68%, with its smartphone revenue up 58%.  This was the company’s first report as a public entity after floating an IPO in Hong Kong last month.

Xiaomi is seeking to build up its market position in the so-called Internet of Things (IoT) market. With a saturated market in China, Xiaomi has been targeting India, the world’s second largest smartphone market, as well as Europe.

--JPMorgan Chase & Co. is boosting its digital investing service with free trades, at least 100 free stock or exchange-traded-fund trades for  a year, with no account minimums; a total sea change in pricing that sent the world of online brokerages into disarray.

Schwab charges $4.95 a trade and TD Ameritrade and E*Trade charge $6.95.

At JPM, most customers will be charged $2.95 per trade if they exceed the 100 trades in the first year. The investment bank had announced a $300 million investment into digital wealth management two years ago to “accelerate our ability to capture more...investments,” CFO Marianne Lake said earlier in the year.

--Back to the housing market, sales of the most expensive New York apartments fell sharply in the first half of the year, but many sellers have adjusted by cutting asking prices to make deals, brokers said.

Overall sales of apartments priced at $5 million or more fell by 31% during the first half of the year, compared with the same period in 2017, according to a luxury market report by Stribling (and the Wall Street Journal).

--PepsiCo Inc. agreed to buy home-carbonation company SodaStream International Ltd. for $3.2 billion, as the cola giant continues to diversify away from sugary sodas and salty snacks.

Israel-based SodaStream’s countertop water-carbonation machines allow people to carbonate tap water and other beverages at home by filling a reusable bottle and then flavoring it with an array of syrups.

--Down goes Fox (News)...down goes Fox (News)....well for at least one night, Tuesday, as the Cohen and Manafort news hit.  According to Nielsen, Fox News finished third in the coveted 25-to-54 age group, behind CNN and MSNBC.  Kind of interesting, considering the day was clearly the worst of Trump’s presidency.

MSNBC won with 709,000 viewers in the demographic, followed by CNN with 638,000, and then Fox at 613,000.

Among all viewers, though, MSNBC had the most with 3.3 million, followed by Fox with 2.9m, and 1.7m for  CNN.

MSNBC’s Rachel Maddow scored 3.8m viewers for her 9:00 p.m. hour, her second-largest audience ever.

But Fox has been No. 1 since 2002 – cornering the market on viewers who see other established media outlets as being too liberal; a position only solidified during the Trump era.

--Animal crackers are now free range, having long been depicted behind bars in iconic packaging that resembled circus boxcars.

Mondelez International, makers of animal crackers, bowed to pressure from People for the Ethical Treatment of Animals.

“We’re delighted,” a PETA spokesman said Tuesday.  “We’re celebrating the redesign just as we celebrated the end of the circus.”

The product is still named Barnum’s Animals crackers, a nod to circus impresario P.T. Barnum, launched in 1902 by Nabisco’s forerunner, the National Biscuit Co; Mondelez owning Nabisco.

Foreign Affairs

China: I talked about the trade talks above, but elsewhere, Chinese state media released a video mocking President Trump for making China stronger. As reported by Javier Hernandez in the New York Times, “It shows him in unflattering poses, his brow furrowed and his mouth agape. Its sarcastic title: ‘Thanks Mr. Trump, you are GREAT!’”

Amid the trade tensions, Chinese news outlets have largely refrained from taking shots at Trump directly, but this video portrays him as a bumbling fool indirectly advancing China’s interests.

However, as quickly as it appeared, it was pulled. 

Kerry Brown, a professor of Chinese politics at King’s College London, noted, “They sense his increasing domestic weakness and see a chance to pile pressure on.”

But Brown thought the criticism would be muted to avoid a backlash in the U.S.

Meanwhile, Taiwan vowed on Tuesday to fight China’s “increasingly out of control” behavior after Taipei lost another ally to Beijing when El Salvador became the third country to switch allegiances to China this year.

Taiwan now has formal relations with only 17 countries worldwide, many of them small, less developed countries in Central America and the Pacific, including Belize and Nauru.

Speaking in Taipei, President Tsai Ing-wen said Taiwan would not bow to pressure, describing El Salvador’s decision as further evidence of China’s efforts to squeeze the island, which have included regular Chinese bomber patrols around Taiwan.

“We will turn to countries with similar values to fight together against China’s increasingly out-of-control international behavior,” Tsai said.

Taiwan’s Foreign Minister Joseph Wu told reporters that Taipei was not willing to engage in “money competition” with its giant neighbor.

El Salvador, according to Wu, had been continuously asking for “massive funding support” since last year for a port development, but Taiwan found it “unsuitable” after assessing it.

“Pressure from China would only make Taiwan more determined to continue our path of democracy and freedom,” he said.

“China’s rude and unreasonable behavior will certainly have negative impact to cross-strait relations.  This is also not how a responsible country should behave.”

To repeat, Beijing considers Taiwan to be a wayward province of “one China,” state-to-state relations not possible, and refuses to renounce the use of force to bring the island under its control.

For its part, El Salvador’s president, Salvador Sanchez Ceren, said his country, which built ties with the Republic of China in 1933, would see “great benefits” and “extraordinary opportunities” in the new relationship with Beijing.

A spokeswoman for the de facto U.S. embassy in Taiwan, Amanda Mansour, said China’s efforts were “harmful” and had undermined “the framework that has enabled peace, stability, and development for decades.”

Mansour wrote: “The United States urges China to abstain from coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.”

The U.S. ambassador in El Salvador, Jean Manes, wrote in a Twitter post on Tuesday the United States was analyzing El Salvador’s “worrisome” decision to break ties with Taiwan.

“Without a doubt, this will impact our relationship with the (Salvadoran) government. We continue supporting the Salvadoran people.”

The White House then issued a statement Friday, saying El Salvador’s decision to cut ties with Taiwan was a “grave concern” to the United States, and warned that the Central American nation might be “disappointed over the long run” after falling prey to “China’s apparent interference in the domestic politics of a Western Hemisphere country.”...

“Around the world, governments are waking up to the fact that China’s economic inducements facilitate economic dependency and domination, not partnership.” [South China Morning Post]

North Korea: Last weekend North Korean state media blamed Donald Trump’s political opponents for the “deadlock” over denuclearization, urging Trump to act boldly to make progress on the issue.

On Saturday Rodong Sinmun, the North’s most prominent daily, praised Trump for seeking to improve U.S.-North Korea ties and achieve world peace, which it said would be the “feat of the century.”

“However, he faces too many opponents,” it said in a signed commentary.

The newspaper said Democrats and even some Republicans were hampering Trump’s efforts for their own partisan interests while media hostile to Trump are undermining his policies.

It accused bureaucrats and Trump’s aides of “speaking and moving in contradiction to the president’s will” and “distorting facts and covering up his eyes and ears in order to mislead him to a wrong decision.”

North Korea is demanding America agree to declare an end to the 1950-53 Korean war, accusing the U.S. of failing to reciprocate a series of its “goodwill measures.”

Josh Rogin / Washington Post...prior to Friday afternoon’s mini-bombshell....

“Secretary of State Mike Pompeo is making a bold and risky push to reinvigorate a diplomatic effort with North Korea that is struggling to make progress amid increasingly belligerent rhetoric from Pyongyang. Inside the Trump administration, frustration mounts as officials debate how bad the situation really is and what to do about it.

“When Pompeo arrives in Pyongyang next week, alongside his freshly appointed special envoy Stephen Biegun, he will be under severe pressure to show tangible evidence that his diplomacy is producing real results. If Pompeo’s trip is a failure, skeptics inside the administration and around Washington will push for a change in tactics to acknowledge the reality that North Korean leader Kim Jong Un is not living up to his promises. It will be the most significant trip of Pompeo’s diplomatic career.

“Despite his public optimism, President Trump privately has been expressing frustration with the negative publicity surrounding his North Korean diplomacy, according to administration officials. This week, the International Atomic Energy Agency expressed ‘grave concern’ in a new report that claims Pyongyang is continuing to develop its nuclear capabilities, despite Kim’s pledge to denuclearize.

“Last week, North Korea’s foreign ministry issued a statement blaming unnamed ‘high-level officials’ in the Trump administration for ‘going against the intention of President Trump’ by criticizing the Kim regime’s lack of progress. The main goal of Pompeo’s trip, officials said, is to reverse the downward trend, set the diplomacy on a positive footing and quiet the critics in Washington and Pyongyang.

“But Pompeo has few tools to induce more concessions from Kim.  And if he takes a harder line, he risks blowing up the negotiations altogether.

“ ‘Pompeo is stuck,’ said one senior administration official who was not authorized to speak. ‘He’s a prisoner of championing a policy that’s based on what the president would love to see happen, but not based on reality and the facts on the ground.’....

“(Some) officials want to see Trump pivot toward a tougher public stance to respond to Kim’s misbehavior.  The Trump team cannot even agree on how grave the situation is.

“ ‘It’s now a process designed to measure not how much progress we’re making, but how much damage is being done,’ the senior administration official said.

“That confusion leaves Pompeo with the difficult task of reversing the downward trend in the diplomacy without having anything new to offer.  His last trip to Pyongyang ended in failure, when Kim refused to meet him and the North Koreans blasted him as soon as he left.  He must show something publicly this time to prove to the public, internal administration critics and the president that the diplomacy is not going as badly as it looks....

“(The) fundamental problem with the Trump-Kim scheme remains: Until there is tangible evidence Kim is actually willing to denuclearize, each concession only plays into his strategy to stall for time, relieve financial pressure and normalize his regime’s status as a de facto nuclear state.

“Unlike Trump, Pompeo has never said he believes Kim is sincere, only that the United States must test that sincerity. Time is almost up for North Korea to pass or fail that test.  Pompeo must not return from his fourth trip to Pyongyang empty-handed.”

Well, out of nowhere, President Trump said this afternoon he had asked Pompeo to skip the trip.

“I feel we are not making sufficient progress with respect to the denuclearization of the Korean Peninsula,” Trump said in a series of Twitter posts.  “In the meantime I would like to send my warmest  regards and respect to Chairman Kim. I look forward to seeing him soon!”

Trump said the nuclear negotiations had been hampered by a lack of support from China.

“Secretary Pompeo looks forward to going to North Korea in the near future, most likely after our Trading relationship with China is resolved,” Trump tweeted.

But relations with China are getting worse, not better, while Trump seems to be leaving the door open to a meeting between himself and Kim.

Iran: U.S. National Security Adviser John Bolton traveled to Israel this week and said the Trump administration is looking to ratchet up the pressure on Iran to abandon its nuclear program, going beyond existing international sanctions.

“We’re not just going to stop at where the sanctions were in 2015, our goal, our objective really is essentially we’d like to say no waivers to the sanctions.”

Having withdrawn from the Iran nuclear deal in May, Washington earlier this month slapped Iran with sanctions targeting its trade of gold and other precious metals, its car industry and the purchase of U.S. dollars.  November is then the time for tougher sanctions on Iran’s oil sales and banking sector.

The issue of waivers is going to be a big one.  Normally, the United States would grant them in certain circumstances, including trade in medical and humanitarian goods, but other waivers allowing companies to trade with Iran through foreign subsidiaries are to be removed in November.  Bolton said this week “very limited” sanctions waivers had been granted, though he didn’t identify who received them. Bolton said one focus is finding alternative oil sources for countries that have been purchasing from Iran.

French energy giant Total has officially quit its multi-billion-dollar gas project in Iran, following the reimposition of U.S. sanctions.

“Total has officially left the agreement for the development of phase 11 of South Pars [gas field],” Iran’s oil minister, Bijan Namdar Zanganeh, told an official news agency.  Total applied for a waiver from Washington, which wasn’t granted.

Zanganeh also appeared before parliament to underline the dire state of Iran’s oil and gas facilities, which he said were “worn out” and in need of renovation that Iran could not afford.

While the other parties to the nuclear deal – Britain, Germany, France, China and Russia – have vowed to stay in the accord, their companies, such as Total, risk huge penalties if they keep doing business in Iran. 

Iraq, whose economy is closely linked to Iran, is going to be asking Washington for permission to ignore some U.S. sanctions on its neighbor, Iraqi government and central bank officials said. Initially, Iraqi Prime Minister Haider al-Abadi said Baghdad would respect all U.S. moves, but he faced heavy criticism from rivals.

The biggest impact of the U.S. withdrawal has been on Iran’s economy.  London-based BMI Research expects it to contract by 4.3% next year, after growth of 1.8% in 2018.

But amid all the pressure, Iran’s leaders don’t appear to have changed the country’s military posture in the Middle East, which was Trump’s goal.

Israeli officials have been pushing Russia to use its influence to force Iranian forces out of Syria, with Israel and Russia reaching an agreement to keep Iranian forces far from the Israeli border, but there is little chance Iran will give up its presence elsewhere in the country.

Iranian President Hassan Rouhani said this week the country had to develop its military forces.

“We should make ourselves ready to fight against the military powers who want to take over our territory and our resources,” Rouhani said in a speech broadcast live on state television.

Syria / Iraq: Islamic State released what it said was a recorded speech by elusive leader Abu Bakr al-Baghdadi, who called for more attacks in the West and urged members of other militant groups to join his terrorist outfit.

According to a translation provided by SITE Intelligence Group: “The supporters of the Caliphate should follow in their path, and trust in Allah, and carry out an attack that breaks their heart, and rip them apart, either with gunfire or a stab to their bodies, or a bombing in their countries.”

Baghdadi is believed to be in poor health, and it’s not clear when the recording was made, or whether it is his voice, but ISIS hasn’t faked these recordings in the past.  If it’s him, it would be his first public communication in almost a year.

But the audio gave several indications it was recorded recently, as Baghdadi mocks the U.S. for its spat with Turkey over the jailed American pastor Andrew Brunson.  Baghdadi also praised recent terrorism in Canada and Europe and implored followers to launch more vehicle attacks in Western cities.

During his bout of silence, ISIS has lost most of its territory in its former heartland in Syria and Iraq.  But one estimate from the United Nations puts the number of Islamic State fighters in the two countries still at 20,000 to 30,000, primarily in the vast desert area between the two countries.

ISIS has stepped up its campaign in Egypt, Yemen and Afghanistan.

In Iraq, the Supreme Court ratified the results of the May 12 parliamentary election, its spokesman said last Sunday, setting in motion a 90-day constitutional deadline for the winning parties to form a government.

Parliament in June ordered a nationwide manual recount of the results, which were tallied electronically, after a government report said there were widespread violations and blamed the electoral commission.

Yet the recount showed little had changed from the initial results as populist Shiite cleric Moqtada al-Sadr retained his lead, positioning him to play a central role in forming the country’s next government.

So lawmakers now gather to elect a speaker, then president and finally a prime minister and cabinet within 90 days.  The process will go beyond that.

Lastly, U.S. forces will stay in Iraq “as long as needed” to help stabilize regions previously controlled by Islamic State, a spokesman for the U.S.-led international coalition fighting the militants, Colonel Sean Ryan, said on Sunday.

The number of American soldiers could go down, however, depending on when other forces from NATO deploy to help train the Iraqi army.  Ryan added there are about 5,200 U.S. troops currently based in Iraq.  The U.S. also has roughly 2,000 troops in Syria.

Afghanistan: Afghan President Ashraf Ghani on Sunday proposed a conditional three-month cease-fire in the government’s U.S.-backed war against the Taliban, seeking to regain political momentum after a series of devastating attacks across the country at the hands of the insurgents.

Ghani said government forces would observe a truce in fighting through Nov. 19 if the Taliban reciprocated.  But militarily, the Taliban has little incentive to respond to Ghani’s cease-fire offer.

Ghani is certain to run again in an election set for next April, but the last election was marred by fraud, forcing the U.S. to broker a power-sharing agreement between Ghani and his main rival, Abdullah Abdullah.

The Taliban said on Wednesday it would send senior members to Russia for peace talks, but this was after the Afghan government declined the offer to attend such a conference.  Washington has also turned it down.

Russia: Microsoft Corp. charged that hackers linked to Russia’s government sought to launch cyberattacks on the U.S. Senate and conservative American think tanks, warning that Moscow is broadening attacks ahead of November’s congressional elections.

Microsoft said it took control of six web domains that hackers had created to mimic sites belonging to the Senate and then think tanks.  Users who visited the fake sites were asked to enter login credentials. It is the latest in a string of actions Microsoft has taken to thwart what it charges are Russian government hacking attempts.

The Kremlin rejected the Microsoft allegations and said there was no evidence to support them.  “We don’t know what hackers they are talking about,” Kremlin spokesman Dmitry Peskov told reporters. You can stop laughing.

Separately, Russian Foreign Minister Sergei Lavrov accused Britain of trying to impose its own policies on Russia on the European Union and the United States. Lavrov was responding to an initiative by Britain’s foreign minister, Jeremy Hunt, who told an audience in Washington that London wants the EU, which it is in the process of leaving, to increase sanctions on Moscow.

Lastly, Russia is gearing up to hold its largest war games in nearly 40 years, according to the defense ministry; five days of joint drills with China and Mongolia in the country’s east.

Russia and China have forged what they describe as a “strategic partnership,” expressing their shared opposition to the “unipolar” world – the term they use for perceived U.S. global domination.

Venezuela: Ecuador has enacted new rules to stop Venezuelan migrants from entering the country without a passport, leaving many stranded in neighboring Colombia.

Thousands of Venezuelans fleeing their country’s economic and political crisis have been crossing into Ecuador from Colombia using only identity cards.  Many are heading south to join families in Peru and Chile.

Needless to say, Colombia isn’t happy either.  More than a million Venezuelan migrants have entered Colombia in the past 15 months, according to official estimates, and more than 4,000 have been arriving at Ecuador’s border every day.

Australia: In an internal coup, Scott Morrison became Australia’s new prime minister after Malcolm Turnbull was forced out by party rivals in a bruising leadership challenge.

Turnbull had been under pressure from poor polling and what he described as an “insurgency” by conservative MPs.

Morrison, the treasurer, won an internal ballot 45-40 over former Home Affairs Minister Peter Dutton – who had been Turnbull’s most vocal threat. 

Turnbull is the fourth Australian PM in a decade to be ousted by colleagues.

He said on Friday, “It has been such a privilege to be the leader of this great nation.  I love Australia. I love Australians.”

Last week Turnbull, a moderate, was swept up in a row over energy policy that ignited long-existing tensions between himself and the party’s right wing.

Dutton, a conservative, then challenged Turnbull, unsuccessfully, but his defeat stoked further discord.  Morrison then entered the race after Turnbull lost key backers.

But the government only has a one-seat majority and Turnbull signaled he would resign from parliament, which would force a by-election, putting the majority at risk, and forcing the new premier to call early elections.

India: The southwestern state of Kerala (where I spent a period of time way back in 1985 working for a spice broker) has been dealing with historic flooding that has killed hundreds, and forced hundreds of thousands into relief camps, with disease now a very real concern.  The monsoons are an annual event, but Kerala has seen non-stop rain for over two weeks and the worst flooding in a century.

I spent my time in Cochin, the spice capital of the world, and I can picture the hundreds of thousands who are also now without jobs there.  [It’s where I received one of my three prized possessions that I wrote of weeks ago.]

South Africa: Not once had President Trump tweeted about Africa, but out of nowhere on Wednesday, Trump wrote: “I have asked Secretary of State @SecPompeo to closely study the South Africa land and farm seizures and expropriations and large scale killing of farmers.”

Trump’s comment, which came after a report on Fox News’ Tucker Carlson show, inflamed an already high-octane debate over land in South Africa, a still deeply divided country nearly a quarter of a century after Nelson Mandela swept to power.

South Africa’s foreign ministry sought clarification of Trump’s comments, with a spokeswoman for President Cyril Ramaphosa adding Trump was “misinformed.”

“South Africa totally rejects this narrow perception which only seeks to divide our nation and reminds us of our colonial past,” a tweet from South Africa’s official government account said in response to Trump’s comments.

Ramaphosa announced on Aug. 1 that the ruling African National Congress (ANC) plans to change the constitution to allow the expropriation of land without compensation, as whites still own most of South Africa’s land.

Random Musings

--Presidential Tracking polls....

Gallup: 42% approval of President Trump’s job performance, 52% disapproval (Aug. 19).  This is going to be very interesting the next two weeks.
Rasmussen: 46% approval, 53% disapproval (Aug. 24)

--The latest national Monmouth University Poll finds President Trump with an overall job approval of 43%, 50% disapproval; basically in line with where his ratings have been since January.

The poll, which was conducted prior to Tuesday’s Cohen / Manafort headlines, had just 30% of Americans believing Trump hired the best people, while 58% said he does not.

52% said the Russia probe should continue, 45% say it should end, little changed from April.

Surprisingly, just 37% approve of the tax reform plan passed by Congress last year while 45% disapprove.

And just 35% say things in the country are going in the right direction, while 57% say they have gotten off on the wrong track.  [In June the split was 40 / 53.]

--What a dirtball...Californian Republican Congressman Duncan Hunter, that is....his wife no better.  The two were indicted by a federal grand jury Tuesday on charges they used $250,000 in campaign funds for personal use and filed false campaign finance reports with the Federal Election Commission to mask their actions.

A 48-page indictment details lavish spending from 2009 to 2016, including family vacations to Italy and Hawaii, home utilities, school tuition for their children, video games and dental work.  The San Diego Union-Tribune first identified the improper spending, triggering a federal investigation by the Justice Department.

For example, family dental bills were listed as a charitable contribution to “Smiles for Life,” the government alleges.  Tickets for “Riverdance” became “San Diego Civic Center for Republican Women Federated/Fundraising,” according to the indictment. Clothing purchases at a golf course were falsely reported as golf “balls for the wounded warriors.”

U.S. Atty. Adam Braverman said, “The indictment alleges that Congressman Hunter and his wife repeatedly dipped into campaign coffers as if they were personal bank accounts, and falsified FEC campaign finance reports to cover their tracks.  Elected representatives should jealously guard the public’s trust, not abuse their positions for personal gain.  Today’s indictment is a reminder that no one is above the law.”

Hunter’s people released a statement calling the indictment politically motivated because of his support for President Trump, and I agree on one thing, the timing sucks, as it did with New York Republican Congressman Chris Collins.

Hunter previously said he did not handle the campaign’s credit card and did nothing improper, but the excuse is beyond bogus.   The government countered Hunter was repeatedly warned that using campaign funds for personal spending was inappropriate.

Unlike Collins, who suspended his campaign, Hunter is staying in his race for re-election in what is normally a very safe seat.  Trump won the district, as well, by 15 points.  Hunter’s opponent, a former Obama administration employee, Ammar Campa-Najjar, is basically a socialist.  But Hunter’s legal issues provide a window of opportunity.

Yeah, Hunter is innocent until proven guilty, but the guy paid more than $1,300 for video game purchases out of his campaign, and the family rabbit got a plane ride.  You can’t make this stuff up.

Hunter’s father, Rep. Duncan Hunter Sr., held the seat prior to his son and the father looked so lame in declaring his son’s innocence.  Duncan Jr. also threw his wife under the bus.

--Former UN Secretary-General Kofi Annan died.  He was 80.  He was the first black African to take up the role of the world’s top diplomat, serving from 1997 to 2006.  He also won a Nobel Peace Prize for humanitarian work.

Annan has a complicated history.  As I used to write all the time, he would have been a good next-door neighbor, checking on your flowers while you were away.  He was genteel.

But that wasn’t what was required during much of his time leading the UN, as well as when he was head of the UN’s peacekeeping department, 1993-1997, a time of ignominious failures in Somalia, Rwanda and Bosnia.

Philip Gourevitch / New Yorker

“Yet, right up until his death, on Saturday, in Switzerland, (Annan) steadfastly refused to acknowledge any meaningful sense of personal or institutional responsibility for these debacles, even as he spoke tirelessly of the world’s desperate need for more responsible leadership – ‘cool heads and sober judgment,’ as he put it in an interview with the BBC, in April, in one of his final public appearances, on the occasion of his eightieth birthday.

“Annan’s image of cool was, of course, just that: an image. There is no mistaking the prickly personal pique, for instance, in a cable he sent in 1995, on the eve of the first anniversary of the genocide in Rwanda, to another UN official.  The tone of defensive derision is established in the first sentence: ‘Every now and then some journalist or human rights advocate remarks, usually on the media, that either they themselves or someone else had warned UNAMIR’ – the UN peacekeeping mission in Rwanda – ‘of the impending genocide.’ Annan then wrote, ‘We do not recall any specific reports from Kigali to this effect.’ A review of the peacekeeping files, he wrote, had turned up only four cables from Kigali in the months preceding the genocide that mentioned ‘ethnic tensions as being possibly related – or not related – to specific incidents of violence.’

“But, in reality, one of the four cables Annan listed consisted of an alarmingly specific report of preparations for the genocide, sent by his force commander in Kigali, the Canadian General Romeo Dallaire, in January of 1994.  Dallaire had heard from a trusted informant on the payroll of Rwanda’s ruling party, who described plans to ‘provoke a civil war,’ and to kill Belgian peacekeepers in order to scuttle the UN mission.  The informant himself said he was involved in drawing up lists of Tutsis in Kigali, and Dallaire wrote, ‘He suspects it is for their extermination. Example he gave was that in twenty minutes his personnel could kill up to a thousand Tutsis.’ Dallaire asked for permission to act on this information by raiding and seizing illegal arms caches.  Annan’s office replied at once, in a cable under his name, and signed by his deputy, telling Dallaire not to act but, rather, to follow diplomatic protocol and share his information with Rwanda’s President – the head of the party that Dallaire wanted to act against.  Three months later, in April of 1994, everything that Dallaire described in his warning took place, and in the course of a hundred days around a million Tutsis were massacred.”

In May of 1998, when confronted with a report by Mr. Gourevitch, Annan, who had since been promoted to Secretary-General – dismissed reporters’ questions on the above exchange, saying, “This is an old story which is being rehashed.” And he said, “I have no regrets.”

Gourevitch:

“The following year, when a UN-commissioned investigation described Annan’s failure to share the information in Dallaire’s fax with the Security Council as ‘incomprehensible,’ he remained studiously cool and impersonal.

“ ‘All of us must bitterly regret that we did not do more to prevent it,’ he said.  ‘On behalf of the United Nations, I acknowledge this failure and express my deep remorse.’....

“(Annan) fancied himself a great leader, but he was constitutionally incapable of accepting the burdens that great leadership entails.  In his final press conference as Secretary-General, he spoke bitterly, even mockingly, of being asked to carry the weight of his office.  ‘There is a tendency in certain places to blame the Secretary-General for everything, for Rwanda, for Srebrenica, for Darfur,’ he said.  ‘But should we not also blame the Secretary-General for Iraq, Afghanistan, Lebanon, the tsunami, earthquakes?  Perhaps the Secretary-General should be blamed for all of those things. We can have fun with that, if you want.’ This past April, when he sat for his interview with the BBC, Annan was pressed one last time to acknowledge that some of his actions and inactions on the world stage had had consequences. He was as dismissive as ever.  Of Bosnia, he said, ‘It’s always easy to find a scapegoat.’  Of Rwanda, he said, ‘We were helpless.’  May he rest in peace.”

--The Vatican said Tuesday that Pope Francis is expected to meet with victims of sexual abuse during his visit to Ireland this weekend, as well as speak out about the problem.

Francis is under pressure to strongly condemn those responsible, given Ireland’s devastating history of priests who raped and molested children and bishops who covered for them.

Monday, Francis issued a letter to Catholics around the world condemning the crime of priestly sexual abuse and its cover-up and demanding accountability, in response to new revelations in the U.S.

Francis begged forgiveness for the pain suffered by victims and said lay Catholics must be involved in any effort to root out abuse and cover-up.  He blasted the clerical culture that has been blamed for the crisis, with church leaders more concerned for their reputation than the safety of children.

“With shame and repentance, we acknowledge as an ecclesial community that we were not where we should have been, that we did not act in a timely manner, realizing the magnitude and the gravity of the damage done to so many lives,” Francis wrote.  “We showed no care for the little ones; we abandoned them.”

Francis said, looking to the future, “no effort must be spared to create a culture able to prevent such situations from happening, but also to prevent the possibility of their being covered up and perpetuated.”

But the Pope didn’t provide any indication of what concrete measures he is prepared to take to sanction those bishops – in the U.S. and beyond – who covered up for sexually abusive priests.

And Francis has kept three suspect cardinals, members of his nine-member kitchen cabinet, who have been accused of covering up for pedophiles and sex abuse.

--Asia Argento, an actress and director at the center of the #MeToo movement, recently paid off a former child actor who said she sexually assaulted him in a Marina del Rey hotel room when he was 17, the New York Times reported last Sunday.

Argento, 42, settled a notice of intent to sue from Jimmy Bennett, who in 2004 played her son in a film, for $380,000 in the months after she publicly accused Hollywood producer Harvey Weinstein of sexually assaulting her.

The age of consent in California is 18, and Bennett, now 22, was 17 at the time of the alleged assault in 2013.

But then Argento this week denied she ever had sex with Bennett, and said her ex-boyfriend, the late Anthony Bourdain, paid Bennett off, fearing bad press, and because Bourdain was worried about Bennett’s state of mind.

--The thickest sea ice in the Arctic has started to break up, opening waters north of Greenland that are normally frozen, according to experts.  As reported by Laura Donnelly of the Irish Independent, “One meteorologist described the phenomenon – recorded for the first time this year – as ‘scary,’ and scientists said it could prove catastrophic for polar bears and seals.

“The sea off the north coast of Greenland had long been known as ‘the last ice area’ because it was expected to be the last place to remain frozen, given it had the oldest and thickest ice.”

Now a lot of this has to do with winds, as well as heatwaves in the northern hemisphere, and the water could close over in a few days, but the pattern is worrisome.

--I was reading a piece from the Chicago Tribune on drowning deaths in Lake Michigan this year and this is kind of startling; 22 people have drowned, which is actually less than the 30 who did at this time last year.  But in the Chicago area, five children have become victims.  That’s way too many.

Yes, it’s all about rip currents.  And according to the Centers for Disease Control and Prevention, which is responsible for such statistics, about 1 in 5 who drown in the U.S. are children 14 and younger.

Lake Michigan is the deadliest of the Great Lakes, with 310 drownings since 2010 (690 overall in all of the Great Lakes).

As director of a project looking into all the deaths, Dave Benjamin, put it, “I believe that every one of these drownings is preventable. What’s missing is public education.”

Last weekend, three young boys died in Lake Michigan.

--According to a study in the journal Lancet Psychiatry this month, as reported by the Wall Street Journal’s Sumathi Reddy, when it comes to links between physical activity and mental health, team sports fared best, followed by cycling, either on the road or a stationary bike.

People who played team sports like soccer and basketball reported 22.3% fewer poor mental-health days than those who didn’t exercise. Those who ran or jogged fared 19% better, while those who did household chores were 11.8% better.

---

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

Our prayers go out to Senator John McCain and his family.

God bless America.

---

Gold $1212
Oil 
$68.52

Returns for the week 8/20-8/24

Dow Jones  +0.5%  [25790]
S&P 500 +0.9%  [2874]
S&P MidCap  +1.2%
Russell 2000  +1.9%
Nasdaq  +1.7%  [7945]

Returns for the period 1/1/18-8/24/18

Dow Jones  +4.3%
S&P 500  +7.5%
S&P MidCap  +7.1%
Russell 2000  +12.4%
Nasdaq  +15.1%

Bulls  57.7
Bears 
18.3

Enjoy the last real week of summer, at least for many of us.

Brian Trumbore