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09/08/2018

For the week 9/3-9/7

[Posted 11:30 PM ET, Friday]

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

Special thanks to Dan C. this week.

Edition 1,013

Trump World

It truly is astounding that the stable genius in the White House can’t understand that in terms of the mid-term elections, all he needed to do was tout the state of the economy and shut up.  No way we’d be talking about a potential Blue Wave.  The GOP would retain the House.

I understand Trump supporters love that he is the great disruptor, and I have said I would never give him a grade until his first term is over.  I have also never used the “I-word” in my own takes thus far, and I still won’t at this point.

But when the president says the following, regarding the anonymous New York Times op-ed piece: “I would say Jeff (Sessions) should be investigating who the author of that piece was because I really believe it’s national security,” we have a problem.  Ditto when Trump earlier blamed Sessions’ Justice Department for the charges leveled against two Republican dirtball congressmen, as discussed below.

Some say, ‘Well, this is Trump being Trump.’  It’s more than that.  It’s an utter abuse of power.  No American should stand for it.

It also befits a man who simply has no knowledge of the Constitution, or what this country stands for, its history...let alone it befits a man without a moral core.

But as I told you the day he was inaugurated, which was the same day of the week as this column is posted, I have no problem with most of Trump’s economic policies, it’s in the foreign policy realm that I’m concerned.  I’m astounded more people still aren’t up in arms that we remain in the dark as to the Helsinki summit, to cite but one example.

And I grow more and more livid about how he lies to the American people on the issue of NATO.  A few days after Helsinki, Secretary of State Mike Pompeo was hauled before the Senate Foreign Relations Committee and Sen. Bob Corker (R-Tenn.), clearly miffed as I was at Trump’s performance at the NATO summit days before Helsinki, asked Pompeo to tell the truth, that NATO was paying its bills.  They are. Pompeo confirmed.

But as Trump said to his throng at Thursday’s Billings, Mont., rally, the NATO leaders asked him “will you leave us” if we don’t pay more of the tab?  “And I said, ‘Yes, I will.’”  “We’ll pay!” Trump said was the leaders’ response.  Just a total f’n lie!

[If you don’t understand where I’m coming from...the NATO budget is entirely different from each nation’s defense budget, including our own...a critical distinction, but you’d never know it listening to the president, or Sean Hannity.]

Everything Trump says on the foreign policy front, including in terms of diplomatic relations, more than stretches the truth.  Most of his trade facts do as well. 

Yes, I get exasperated.  I’m the ‘wait 24 hours’ guy, after all.  I wait for the facts, and the opinion of both sides, before weighing in.  I didn’t pass along a single false story that was submitted to me personally during the 2016 campaign.  I haven’t peddled a single conspiracy theory as fact.

And I’m sure as hell not starting now.  Donald Trump can duly crow about his administration’s successes to date.  But the nation won’t continue to skate by when it comes to his excesses, his incompetence. 

For now, we continue with another chaotic week.

Back on August 4, I wrote in this space:

“Bob Woodward’s book on the inner workings of the Trump White House, ‘Fear,’ is due out Sept. 11 and no doubt will be a big topic of discussion; Mr. Woodward having apparently sourced the book exhaustively in terms of everything has been recorded, and he has hard copies of documents from those who work (or worked) there. Woodward will be on all the Sunday and network mornings shows that first week, but we know it won’t swing anyone in the Trump base. The issue will be, so close to the mid-terms, do some independents who might be leaning Trump reconsider?  It’s bound to be devastating.”

Not a bad preview, if I may say so myself.  It is indeed a devastating portrayal, but so many in the country don’t care...to Trump’s benefit.

For now I do have to note some of the examples in “Fear” that address the president’s instability, according to the author.

After Syrian leader Bashar al-Assad launched a chemical attack on civilians in April 2007, Trump called Mattis and said he wanted to assassinate the dictator. “Let’s f---ing kill him!  Let’s go in. Let’s kill the f---ing lot of them,” Trump said.

A near-constant subject of withering presidential attacks was Jeff Sessions. Trump told assistant Rob Porter that Sessions was a “traitor” for recusing himself from overseeing the Russia investigation, Woodward writes.  Mocking Sessions’ accent, Trump added, “This guy is mentally retarded.  He’s this dumb Southerner. ...He couldn’t even be a one-person country lawyer down in Alabama.”

But this following anecdote is also appalling.  At a dinner with Mattis and Gen. Joseph Dunford Jr., the chairman of the Joint Chiefs of Staff, among others, Trump lashed out at a vocal critic, Sen. John McCain.  He falsely suggested that the former Navy pilot had been a coward for taking early release from a prisoner-of-war camp in Vietnam because of his father’s military rank and leaving others behind.

Mattis swiftly corrected his boss: “No, Mr. President, I think you’ve got it reversed.” The defense secretary explained that McCain had in fact turned down early release and was brutally tortured during his five years at the Hanoi Hilton.

“Oh, okay,” Trump replied, according to Woodward’s reporting.

Again and again, Woodward recounts at length how Trump’s national security team was shaken by his lack of curiosity and knowledge about world affairs and his contempt for the mainstream perspectives of military and intelligence leaders.

It will be interesting to see what Woodward holds back for the “shows,” as the president would say.  But, again, it’s not going to move the base one bit...especially given the economy.  The only thing that could peel a few voters off would be a geopolitical crisis of some kind where blame could be thrown Trump’s way...an October surprise.

Right after we learned of the details of the Woodward book, an anonymous essay was then published in the New York Times, depicting a “quiet resistance” trying to thwart the president when he makes what the essay writer called “half-baked, ill-informed and occasionally reckless decisions.” 

Anonymous / New York Times

“President Trump is facing a test to his presidency unlike any faced by a modern American leader.

“It’s not just that the special counsel looms large.  Or that the country is bitterly divided over Mr. Trump’s leadership.  Or even that his party might well lose the House to an opposition hellbent on his downfall.

“The dilemma – which he does not fully grasp – is that many of the senior officials in his own administration are working diligently from within to frustrate parts of his agenda and his worst inclinations.

“I would know. I am one of them.

“To be clear, ours is not the popular ‘resistance’ of the left. We want the administration to succeed and think that many of its policies have already made America safer and more prosperous.

“But we believe our first duty is to this country, and the president continues to act in a manner that is detrimental to the health of our republic....

“It may be cold comfort in this chaotic era, but Americans should know that there are adults in the room.  We fully recognize what is happening.  And we are trying to do what’s right even when Donald Trump won’t.

“The result is a two-track presidency.”

A parade of administration officials stepped forward to deny writing the op-ed.  It was extraordinary to see everyone from Vice President Mike Pence to economic adviser Larry Kudlow, with Defense Secretary Jim Mattis, chief of staff John Kelly, and Secretary of State Mike Pompeo in between.

The unnamed author became the target of a hunt by an infuriated president.  Wednesday evening he tweeted a single word: “TREASON?”

And in another tweet: “Does the so-called ‘Senior Administration Official’ really exist, or is it just the Failing New York Times with another phony source?”

And: “If the GUTLESS anonymous person does indeed exist, the Times must, for National Security purposes, turn him/her over to government at once!”

Trump ally, Republican Senator Rand Paul, who really has turned into a tool, said the president should administer polygraph examinations.

Sarah Huckabee Sanders, the White House press secretary, said anyone who wanted to know the identity of “the anonymous coward” should call The Times and she posted on Twitter the newspaper’s main switchboard phone number.  “They are the only ones complicit in this deceitful act.  We stand united together and fully support our President Donald J. Trump.”

Melania Trump even issued a statement: “To the writer of the Op-Ed – you are not protecting this country, you are sabotaging it with your cowardly actions.”

Trump suggested Thursday night at a rally in Billings, Montana that the anonymous op-ed author was a “low-level” staffer and said the betrayal was so horrible that Democrats are feeling sorry for him.

“Even liberals that hate me, say, that’s terrible what they did,” Trump said.

Trump railed against the fake news media, of course, and asked journalists for help hunting down the author who penned the “horrible” op-ed.

“I think their reporters should go and investigate who it is. That would actually be a good scoop,” Trump said to cheers.  “Nobody knows who the hell he is – or she.”

“For the sake of our national security, the New York Times should publish his name at once,” Trump added.

Earlier, before he got on stage, he told Fox News’ Pete Hegseth that the Times’ decision to publish the anonymous op-ed was a crime.

“Virtually you know it’s treason.”

Then this afternoon, on Air Force One, Trump said Attorney General Sessions should investigate ‘anonymous.’

Amidst the latest turmoil, President Trump sought validation from an unlikely source, North Korea’s chubby dictator.

“Kim Jong Un of North Korea proclaims ‘unwavering faith in President Trump,’” the president tweeted early Thursday morning.  “Thank you to Chairman Kim.  We will get it done together!’

This is unsettling, to say the least.

Michael Gerson / Washington Post

“One of the major problems with President Trump’s impulsivity is its utter predictability.

“A recent op-ed in the New York Times by an anonymous administration official accused the president of impetuous, reckless rants, and Trump responded with impetuous, reckless rants (‘TREASON?’).   Bob Woodward’s new book ‘Fear’ recounts a private ‘nervous breakdown’ in the administration and Trump responded with a public nervous breakdown – accusing Woodward of being a ‘Dem operative’ and raising a possible change in the libel laws.  Amid this crisis, North Korean leader Kim Jong Un expressed his ‘unwavering faith in President Trump,’ and the president reacted just as the North Korean leader surely knew he would – touting the positive opinion of a homicidal despot on Twitter as a character reference.

“If you prick him, does he not explode? If you stroke him, does  he not purr?

“The president’s form of deception is qualitatively different from the deviousness of Richard M. Nixon or the smoothness of Bill Clinton. Trump pursues no deep or subtle strategies. He does not even consistently seek his own interests. He responds like a child or a narcissist – but I repeat myself – to positive or negative stimulation.  It is the reason a discussion on ‘Fox & Friends’ can so often set the agenda of the president. It is the reason that Trump’s lawyers, in the end, can’t allow him to be interviewed by special counsel Robert S. Mueller III.  It would be like a 9-year-old defending a PhD dissertation.  Or maybe a rabbit jumping into a buzz saw.

“This lesson can’t be lost on foreign intelligence services, which can pre-order a comprehensive accounts of the president’s psychological and political vulnerabilities for $18 online... Here is the increasingly evident reality of the Trump era: We are a superpower run by a simpleton.  From a foreign policy perspective, this is far worse than being run by a skilled liar. It is an invitation to manipulation and contempt.”

Editorial / Wall Street Journal

“One consequence of having such a polarizing and personally flawed man as President is the degree to which his opponents justify their own destructive excess in response.  An example is Cory Booker consciously violating Senate rules Thursday in an attempt to deny Brett Kavanaugh a Supreme Court seat.  Another is the decision by a ‘senior official’ to publish an op-ed in the New York Times describing the internal government ‘resistance’ to Donald Trump.

“Let’s stipulate that publishing an article with an anonymous byline is sometimes worth doing, and we have done it ourselves.  In 1991 we shielded the name of a woman who was raped amid the debate over publishing the names of victims.  We have published op-eds protecting the identities of writers who could face arrest or worse at the hands of dictators or terrorists, while informing readers that the author was using a pseudonym.

“We don’t recall offering anonymity to someone in government or American politics, though perhaps we have and we can’t say we would never do so.  It would depend on the circumstances. The op-ed in this case doesn’t meet those standards, not least because it isn’t news.  The fact that senior Administration officials have been trying to block Mr. Trump’s uninformed policy impulses, and mute his self-destructive anger and narcissism, has been reported hundreds of times.

“Recall when Agriculture Secretary Sonny Perdue and others rushed to persuade Mr. Trump not to withdraw from NAFTA on a whim in early 2017.  Or how Defense Secretary Jim Mattis and others persuaded him that NATO is in America’s interests.  Or how White House counsel Don McGahn advised Mr. Trump against firing special counsel Robert Mueller.  In these and many other cases the cooler heads prevailed, to the country’s benefit.

“This week’s op-ed appears to have no such specific or noble purpose.  An anonymous writer’s motive is impossible to know, but the op-ed is already having the opposite effect of its self-proclaimed virtue.

“Surely the writer knew that such insider criticism in the anti-Trump New York Times would be like waving a red cape in front of a raging bull... The U.S. looks foolish before the world, which makes us wonder if the writer’s real purpose is to assist the looming campaign for impeachment. This is certainly the New York Times agenda.

“A willful Mr. Trump will do the opposite of what the writer wants if his identify is discovered. The honorable and more effective way for the author to accomplish his professed goal would have been to have kept working quietly inside the Administration, or resign and speak on the record.

“One irony is that the same people praising Anonymous have for months been denouncing all who work for Mr. Trump as moral cretins who will be condemned by history.  The anti-Trumpers are calling for purges and ostracism.  Yet now Anonymous is a saint for baring his objections without a byline in the bulletin board of the anti-Trump resistance.  Brave dude....

“The tragedy of this Presidency is that his rants and insults – even toward people who work for him – threaten to overwhelm his policy achievements. They fire up his loyalties but put off millions who expect better from a President.  Mr. Trump is now determined against good advice to make this fall’s election a referendum on himself, and if Republicans lose the House the path to his destruction will accelerate.

“As in the 2016 election, one argument millions see for supporting this President is the fury and vindictiveness of his opponents. The real heroes of this difficult period are the Mattises and McMasters, the Kudlows and Cohns, the McConnells and Ryans, who’ve worked for the good of the country amid the tumultuous personality in the Oval Office and the fevered resistance.”

Trumpets....

--The Senate Supreme Court confirmation hearings for Brett Kavanaugh have been truly pathetic, best exemplified by New Jersey Democratic Senator Cory Booker’s idiotic display Thursday.

Jonah Goldberg / New York Post

“Supreme Court confirmation hearings have mostly been theater for a long time. The dismaying thing about the latest episode – the Brett Kavanaugh show – is that it became the theater of the absurd.

“In the classic absurdist dramas of the 1950s and 1960s, Brittanica.com explains, European playwrights ‘did away with most of the logical structures of traditional theatre.  There is little dramatic action as conventionally understood; however frantically the characters perform, their busyness serves to underscore the fact that nothing happens to change their existence.’

“That’s a pretty good description of the sound and fury signifying nothing on display this week from Democrats and protesters alike.

“The central complaint of the Democrats is that they haven’t been given access to records from Kavanaugh’s time working in the Bush administration.  They demand their release by the current White House, or the Senate Judiciary Committee, or Kavanaugh or, perhaps by this writing, Aslan the Lion deity of Narnia.

“Explaining the ginned-up controversy would be a waste of time, because the point of these demands merely is to put on an absurdist drama in which the finale is never in doubt.

“Judge Brett Kavanaugh, an indisputably qualified nominee, even according to the typically liberal American Bar Association, will be confirmed no matter what the Democrats do and no matter how many indecipherable yawps get shouted by the hysterics in the hearing room....

“Nebraska Sen. Ben Sasse, in one of the best opening statements of any hearing I’ve ever heard, cut through it all.

“ ‘Since your nomination in July,’ Sasse said, ‘you’ve been accused of hating women, hating children, hating clean air, wanting dirty water.  You’ve been declared an existential threat to our nation.  Alumni of Yale Law School incensed that faculty members at your alma mater praised your selection, wrote a public letter to the school saying quote, ‘People will die if Brett Kavanaugh is confirmed.’’

“ ‘This drivel is patently absurd,’ he continued, ‘and I worry that we’re going to hear more of it over the next few days. But the good news is, it is absurd and the American people don’t believe any of it.’

“Sasse eloquently expanded on a point I’ve been banging my spoon on my highchair about for a while now. The legislative branch is becoming a parliament of pundits, in which both parties teem with people desperate to emote, preen and shriek for voters and donors who follow politics like it’s a form of entertainment, and, in this case, a theater of the absurd.”

Editorial / Washington Post

“The three days of testimony from Supreme Court nominee Brett M. Kavanaugh that concluded on Thursday were less a showcase for Mr. Kavanaugh, who delivered a steady, if evasive, performance, than a depressing display of the breakdown of Senate norms.”

As for the aforementioned Cory Booker, he exclaimed Thursday that “This is the closest I’ll ever get in my life to an ‘I am Spartacus moment,’ and threatened to divulge confidential documents to the public, even if it meant risking losing his job.

“I am going to release the email about racial profiling and I understand that the penalty comes with potential ousting from the Senate,” Booker declared.

But the emails had already been released.

A vote on Kavanaugh is apparently now set for Sept. 30.  It will be 55-45.

--Former Trump campaign adviser George Papadopoulos, who last year pleaded guilty to lying to the FBI about his contacts with Russian intermediaries before the 2016 election, was sentenced today to 14 days in jail.  He is the first Trump campaign adviser to be sentenced as part of the Mueller probe. Three others pleaded guilty or were convicted of felonies and await sentencing.

Incapable of just keeping his mouth shut, President Trump tweeted tonight: “14 days for $28 MILLION - $2 MILLION a day.  No Collusion.  A great day for America!”

--Two associates of Trump adviser Roger Stone have been questioned in the Russia probe.  Randy Credico, a comedian and talk show host, testified in front of a grand jury today about his years-long relationship with Stone and about Wikileaks.  Another Stone associate, right-wing commentator Jerome Corsi, was also scheduled to testify today.  The focus seems to be Stone’s ties to Wikileaks and its founder Julian Assange.

Credico visited Assange in 2017 in the Ecuadorean Embassy in London where he took refuge six years ago to avoid extradition to Sweden in a sexual assault case.  Credico is seen as a possible intermediary between Stone and Assange.  Corsi was apparently questioned about his emails and phone communications with Stone starting in 2016.

--Trump tweets: “Just like the NFL, whose ratings have gone WAY DOWN, Nike is getting absolutely killed with anger and boycotts.  I wonder if they had any idea that it would be this way?  As far as the NFL is concerned, I just find it hard to watch, and always will, until they stand for the FLAG!”

[Ed. they all did for Thursday night’s Eagles-Falcons game.]

“Almost everyone agrees that my Administration has done more in less than two years than any other Administration in the history of our Country. I’m tough as hell on people & if I weren’t, nothing would get done. Also, I question everybody & everything – which is why I got elected!”

“Isn’t it a shame that someone can write an article or book, totally make up stories and form a picture of a person that is literally the exact opposite of the fact, and get away with it without retribution or cost.  Don’t know why Washington politicians don’t change libel laws?”

And this... “Two long running, Obama era, investigations of two very popular Republican Congressmen were brought to a well publicized [sic] charge, just ahead of the Mid-Terms, by the Jeff Sessions Justice Department. Two easy wins now in doubt because there is not enough time.  Good job, Jeff.....

“...The Democrats, none of whom voted for Jess Sessions, must love him now. Same thing with Lyin’ James Comey. The Dems all hated him, wanted him out, thought he was disgusting – UNTIL I FIRED HIM!  Immediately he became a wonderful man, a saint like figure in fact.  Really sick!”

What’s sick, Mr. President, is your defense of two congressmen who were charged with serious crimes.

Republican Senator Ben Sasse (Neb.) responded: “The United States is not some banana republic with a two-tiered system of justice – one for the majority party and one for the minority party.  These two men have been charged with crimes because of evidence, not because of who the president was when the investigations began.”

Wall Street and Trade

The U.S. economy continues to rock and roll.  The August ISM figure on manufacturing came in at a 14-year high, 61.3 vs. an estimate of 57.5 (50 being the dividing line between growth and contraction), while the service-sector, non-manufacturing reading was 58.5, also better than forecast.

July construction spending, though, was just 0.1%, less than expected, and July factory orders fell 0.8%, but the ISM numbers are key.

Then today, we had the August employment report and 201,000 jobs were created, the unemployment rate remaining at 3.9%, though June and July were revised downward to 208,000 and 147,000, respectively, nonetheless resulting in a strong 3-month average of 185,000.

The U-6 underemployment rate was 7.4%, quite a comedown from its Great Recession high of 15% or so.

The key to the jobs report, however, was the figure for average hourly earnings, a strong 0.4% increase, putting the number at 2.9% year-over-year, the best figure since spring of 2009. That’s great to see, and better than the inflation rate, though we’re still getting whacked on healthcare and other costs, to be fair.

Add it all up and the Atlanta Fed’s GDPNow barometer for the third quarter is at 4.4%, though a consensus reading of economists puts the forecast at about 3.5%, still very strong.

*** I posted quarterly GDP figures since 2012, yearly since 2007, on my Wall Street History link and will update that piece as needed in the coming quarters.

Robert Samuelson / Washington Post

“The news is better than you might think.

“A decade after the onset of the 2008-2009 global financial crisis – an event usually dated to the bankruptcy of Lehman Bros. – the world economy seems to be repairing itself.

“To be sure, worries remain.

“The latest is that overborrowed ‘emerging-market’ countries – Argentina, Brazil, China, India, Turkey and the like – may cause a new crisis. If they can’t earn (through trade) the dollars needed to repay loans, they would default and perhaps trigger contagion. Frightened investors would flee other emerging-market countries.  President Trump’s trade wars magnify the danger.

“This prognosis is sobering; it may also be too pessimistic. In a new report, the McKinsey Global Institute – the research arm of the famed management consulting firm – has summarized the financial changes, for good and ill, that have occurred in this 10 years. There are pluses and minuses, but on balance the pluses seem to prevail.

“Here’s a rundown of McKinsey’s score card.

“ (1) American and some European consumers have reduced their debt significantly, presumably by paying down existing debts and limiting new borrowing.  American consumers cut their debt by the equivalent of 19 percentage points of gross domestic product (GDP) – roughly $3.8 trillion in today’s dollars.

“Most of this debt presumably reflected cuts in home mortgages. Other countries with real estate booms also cut borrowing: Spain’s consumer debt fell 20 percentage points as a share of GDP; the United Kingdom’s dropped by 6 percentage points of GDP.  Lower debts make it easier for households to continue spending, rather than diverting money to repaying loans.

“ (2) Cross-border movements of money – referred to as ‘capital flows’ by economists – have declined dramatically, about 50 percent, since their peak in 2007.... ‘With less money flowing across borders,’ says McKinsey, ‘the risk of a 2008-style crisis ricocheting around the world has been reduced.’...

“ (3) Global ‘imbalances’ – large trade surpluses or deficits – have diminished. The best-known are the chronic U.S. trade deficits and China’s sizable surpluses.

“But as McKinsey notes, the actual current account imbalances have shrunk, even though the rhetoric from Trump and others suggests just the opposite.  Reports McKinsey: ‘China’s surplus reached 9.9 percent of GDP at its peak in 2007 but is now down to just 1.4 percent of GDP. The U.S. deficit hit 5.9 percent of GDP in its peak at 2006 but had declined to 2.4 percent by 2017.’”

As Robert Samuelson writes, “there are still many negatives,” such as China’s growing debt load...from 145 percent of GDP in 2007 to 256 percent in 2017.  You need growth to service debts, after all.

But as McKinsey puts it: “One thing we know from history is that the next crisis will not look like the last one.  If 2008 taught us anything, it’s the importance of being vigilant when times are still good.”

On the trade front...during Saturday’s funeral service for John McCain in Washington, at the same time President Trump was tweeting: “There is no political necessity to keep Canada in the new NAFTA deal.  If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out.  Congress should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be better off...

“...Remember, NAFTA was one of the WORST Trade Deals ever made. The U.S. lost thousands of businesses and millions of jobs. We were far better off before NAFTA – should never have been signed.  Even the Vat Tax was not accounted for. We make new deal or go back to pre-NAFTA!”

Today, Canada’s top trade negotiator, Foreign Minister Chrystia Freeland, repeated her upbeat assessment of the negotiations to save NAFTA, or some semblance thereof since Trump is changing the name regardless of what Canada and the U.S. agree to.  The main sticking point appears to be the dairy issue that Trump loves to bellow about.

The U.S. and Mexico have already reached a preliminary agreement and President Trump has threatened to push ahead without Canada.  He told reporters on Air Force One today: “You know, people can say, ‘Oh, I’m too tough on Canada.’  Look, Canada’s been ripping us off for a long time. And now they’ve got to treat us fairly.”

On the U.S.-China front, President Trump warned today that he has tariffs ready to go on $267 billion worth of Chinese imports in addition to the $200 billion of the Asian nation’s goods awaiting action by him.  Implementing both sets of tariffs would subject virtually all U.S. imports from China to new duties as the world’s two largest economies escalate their battle over Trump’s demands that Beijing make major economic policy changes.

Trump has already imposed 25 percent tariffs on $50 billion worth of Chinese goods, mostly industrial machinery and intermediate electronic parts, including semiconductors.

Apple says the proposed tariff list on the $200 billion would impact its products and the products used in the company’s U.S. operations.  Parts such as hard drives and cables for Apple’s U.S. data centers, Apple adapters, though the company didn’t say the iPhone or iPad would be affected as yet.

Europe and Asia

There was a ton of economic news for the eurozone (EA19), with second-quarter GDP coming in at 0.4% over the previous quarter, Q1 also being 0.4%, and 2.1% year-over-year vs. Q1’s 2.3% annual rate.  [The growth rate hit 2.8% in the third quarter of 2017.]

Germany is running at a 1.9% annualized rate, France 1.7% (both slowing significantly), Spain 2.7%, Italy 1.2%, Netherland 2.7% and Greece 1.8%.  The U.K. is at 1.3%. [Eurostat]

By comparison the U.S. was at 4.2% for the second quarter.

On the PMI data front, the final numbers for August (from IHS Markit) revealed a composite reading on the EA19 of 54.5 vs. 54.3 in July.  The manufacturing figure was 54.6 in August vs. 55.1 in July; the services reading last month was 54.4 vs. 54.2 the prior month.

Germany’s manufacturing PMI for August was 55.9 vs. 56.9 in July
France 53.5
Spain 53.0
Italy 50.1 vs. 51.5
Netherlands 59.1
Greece 53.9

A few service sector readings:

Germany 55.0
France 55.4
Spain 52.7
Italy 52.6

Chris Williamson, chief economist / IHS Markit

“The Eurozone PMI shows the recent run of robust growth of business activity, new orders and employment extending into August. However, the expansion is looking increasingly uneven and the business mood has become more unsettled during the summer.

“The survey data for the third quarter so far suggest the single currency area is on course to at least match the 0.4% expansion of GDP seen in the second quarter, yet the downturn in optimism raises questions over whether this pace of growth can be sustained into the fourth quarter.

“Growth also looks worryingly unbalanced.”

Solid expansion still signaled for Germany and France; not so much for Italy and Spain.

Eurobits....

Brexit: Talks between the European Union and the U.K. remain stuck over the question of how to avoid a hard border between Northern Ireland, which is part of the U.K., and the Irish Republic, as well as other key items to be addressed.  Both the U.K. and EU want to finalize the divorce terms by November to allow time to get the agreement through all the respective parliaments before exit day, March 29.

But the consensus in the U.K. is to keep close trade ties with the EU.  Migration has decreased as a key issue in Britain, which is bad for Prime Minister Theresa May, because her Brexit plan is built on a promise to leave the EU’s single market in order to be free to control migration, and not be subject to EU rules.

Firms both in Europe and outside the area are feeling pain from Brexit. Pfizer says its costs for dealing with the upcoming split will reach $100 million, as Britain’s rupture with the EU threatens to slow goods at borders and force firms to duplicate regulatory efforts.  In Pfizer’s case, their costs stem from transferring product testing and licenses to other countries, changing clinical-trial procedures, and other preventive measures.  What a pain in the butt. And totally unnecessary...except the Brits lost their minds in June 2016.

A key is the Conservative party conference at the end of September, where an alternative Brexit plan from what Theresa May has put forward will be unveiled.  Mrs. May’s chief rival, Boris Johnson, has been savaging May’s Brexit plans, most recently in an op-ed in the Daily Telegraph, saying they would leave the U.K. with “diddly squat” and hand the EU a victory.

Downing Street fired back, saying Johnson has offered “no new ideas” and that “serious leadership with a serious plan” was needed.

EU chief Brexit negotiator Michel Barnier told a German newspaper on Sunday that he strongly opposed Britain’s existing proposal because it continues to cherry-pick.

“If we let the British pick the raisins out of our rules, that would have serious consequences.  Then all sorts of other third countries could insist that we offer them the same benefits. That would be the end of the single market and the European project,” he said.  Barnier is right.

It’s no surprise that British voters are more skeptical about Brexit than they’ve ever been and would probably vote against leaving the European Union if the government called a second referendum, according to new research.

There is a growing fear among previously pro-Brexit voters that leaving the EU will damage the economy, the report from NatCen, a social research institute found.

“As many as 59 percent said they would vote Remain in another referendum, while only 41 percent indicated they would back Leave,” the report said.  “This is by far and away the highest level of support for Remain that we have recorded.”

The research is based on repeated interviews with the same 2,048 people and compares their answers to questions on the same issues over the past two years.  The findings only bolster the growing campaign inside the U.K. for a new referendum on the final terms of the divorce.

But Prime Minister May has promised not to call a second referendum, even as the opposition Labour Party is keeping the option open of supporting a national vote on the outcome of the negotiations.  On Tuesday, the GMB trade union, which donates funds to Labour, came out in favor of another referendum to give the public the chance to approve or reject the final Brexit deal.

The NatCen study concludes that “Nothing is more likely to persuade someone who voted Leave in 2016 that perhaps they made the wrong choice than the perception that the U.K. economy will suffer as a result of Brexit,” the study said.

When you look at the NatCen data, and break it  down to actual voting patterns in the country, you get 54 percent voting to stay in the EU, when in 2016, 52 percent voted to leave the bloc.

Italy: The new government will be announcing a budget this fall and the bond market, for one, has been rattled on the potential size of the deficit, and increased debt, that Italy will be taking on.  As noted above, growth is minimal, but promises made in the government’s coalition agreement to address the lack of growth, and income inequality, such as a guaranteed income and pension reform, would add up to between 4.5% and 7% of GDP of additional spending, according to a study by UBS.  Various ratings agencies have been cutting the country’s debt to negative, citing concerns the country’s debt load would be far more exposed to potential shocks, but the fact that Fitch, for one, didn’t cut its rating further led to a little rally in the Italian 10-year this week.

Italy is the eurozone’s biggest government borrower.  The populist leaders have been brushing off their finance minister’s attempts to reassure investors, insisting voters’ needs must come before European spending constraints.

Deputy Prime Minister Matteo Salvini said at an event last weekend that the government will “try to respect all the hurdles Europe imposes, but the well-being of Italian citizens comes first.” he said.

Sweden: A far-right party with roots in neo-Nazism, the Sweden Democrats, is poised to become a leading political force in Sunday’s elections.  The leader, Jimmie Akesson, is taking advantage of rising crime in Sweden that he blames on the country’s liberal asylum policy.

Akesson told the Wall Street Journal: “Our questioning of mass migration and how to push back against crime – everybody is talking about that now. That’s of course in our favor.”

Sweden, one of the world’s most affluent and progressive nations, is poised for a big swing from a broad liberal consensus to extreme polarization.  Polls put the Sweden Democrats in first or second place, which could leave the center-right and center-left blocs struggling to form a stable government, this as the economy is growing at a strong 3.3% rate.

But immigration has become the defining issue.

Turning to Asia...China’s private Caixin PMIs were revealed this week; 50.6 in August vs. 50.8 in July on the manufacturing end, 52.0 vs. 52.3 for the service sector.

Japan’s Aug. manufacturing PMI, via Markit, was 52.5 vs. 52.3 the prior month.

South Korea’s manufacturing PMI for August came in at 49.9 vs. 48.3, as that economy continues to struggle, while Taiwan’s was 53.0  vs. 53.1.

Street Bytes

--Stocks opened the traditionally rough month of September on a down note; the Dow Jones falling 0.2% to 25916, while the S&P 500 lost 0.9% and Nasdaq 2.6%.  Renewed trade tensions regarding China today didn’t help, but the market continues to shrug off the turmoil in the White House.  It might not be so sanguine come the mid-terms.

--U.S. Treasury Yields

6-mo. 2.30%  2-yr. 2.70%  10-yr. 2.94%  30-yr. 3.10%

The yield on the 10-year ticked up on the strong economic data, but it has been in a range of 2.80% to 2.95% for 16 weeks now.

--Amazon became the second American company to cross the trillion-dollar market capitalization line.  But after it touched $2,050 per share to hit the magic number, the stock slid to finish the week at $1,952, a market cap of $952bn.

Amazon captures 49 cents of every e-commerce dollar in the United States, and now employs more than 550,000 people and generates $178 billion in annual revenue.

At the same time, Amazon’s search for a second headquarters has generated a different level of excitement in a number of major metropolitan areas.

But Amazon is now facing widespread criticism for its low wages to employees, and intense work pressures for its warehouse staff, as noted in numerous reports.  This issue is definitely one being taken advantage of for the mid-term elections by the likes of the left-wing of the Democratic Party.  We’ll see how well it plays at the voting booth.

--Auto sales in the U.S. were flat in August, owing to a worse-than-expected month from General Motors, but most other auto makers reported increases in sales in August.  Sales the rest of the year are expected to be flat, but the forecast for 2018 is still at about 17 million vehicles sold vs. 2016’s record 17.6 million.  Strong.

SUVs, pickup trucks and vans accounted for about 68% of new-vehicle retail sales in August, the highest-ever level for the month, according to J.D. Power.

GM, which no longer officially reports monthly sales, saw its sales for last month nonetheless decline 13%, according to a source, when a drop of 8% was forecast.

But Ford and Nissan reported single-digit gains, while Fiat Chrysler saw its sales increase 10%, propelled by its Jeep and Ram pickup brand.  Sales of the Jeep Cherokee, for example, rose 85%.

Toyota reported a slight decrease, with sales of its flagship Camry sedan down 19%.

--Separately, Ford has recalled around 2 million of its best-selling and most profitable vehicles, F-150 trucks, in the latest blow to the company at a time when investors are increasingly skeptical of the CEO’s turnaround plan.  Ford said the 2015-2018 model F-150 regular cab and SuperCrew cab vehicles in North America were being recalled for a driver and front passenger seat belt “pretensioner” flaw that could lead to fires.  A Ford investigation found that some front seat belt pretensioners can generate excessive sparks when they deploy.  The company said in a statement: “Ford is aware of 17 reports of smoke or fire in the United States and six in Canada.  Ford is not aware of any accidents or injuries as a result of this condition,” it added.

So this comes at a time when Ford employees are awaiting details of CEO Jim Hackett’s promised “fitness” plan and the serious possibility of significant job losses as the company faces pressure to improve operations.  The Sunday Times of London reported that for starters, the company’s money-losing European division could face massive cuts of up to 24,000 jobs.

--Toyota Motor Corp. is recalling over one million Prius and C-HR crossover sport-utility vehicles globally to repair a portion of the electrical system that could cause a fire.

The recall affects certain 2016-2018 model-year Prius, Prius Prime plug-in hybrids and hybrid gas-electric versions of the C-HRs.

The issue came up at the assembly lines in Japan; investigators discovering the defect after a Toyota vehicle was damaged by a fire.

The company said notices would be sent to those impacted via the mail.

--And then there was Tesla and the ongoing saga of Elon Musk.  The shares of the electric carmaker fell 6% today to $264.50, quite a comedown from Musk’s Aug. 7 tweet that he had an offer to take the company private at $420. It has been nothing but trouble ever since.

Thursday, Musk appeared in a popular podcast, the Joe Rogan Experience, and appeared to smoke pot, which is legal in California, while the company’s chief accounting officer resigned after just a month in the job.  Dave Morton said in an SEC filing:

“Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations.  As a result, this caused me to reconsider my future.”

Morton did go on to say: “I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreement with Tesla’s leadership or its financial reporting.”

--Shares in Nike initially slid from last Friday’s $82.20 to about $79 as the company faced criticism over its new ad campaign featuring Colin Kaepernick, but today they closed at $80.30.  As former NBA star Derrick Coleman would have said, “Whoopty-damn-do.”

Sally Jenkins / Washington Post

“Kick has always been political, and Nike has always sought to capture new generations with its use of intense color.  This is a company that built itself on chroma-flourescent blues and acetate volt greens.  The Colin Kaepernick campaign falls in that category: It’s a transactional piece of advertising that seeks to hook into the vanguard yearnings and values of its buyers by using a surprising hue. If the campaign is important, it’s not as an act of corporate conscience, but rather as a reflection of coming American demographics, which Nike is always so good at identifying and signifying.

“Burning shoes and flaming hashtags are not unwelcome at Nike.  The viral images of swooshes on fire won’t bother the markets who decided to use Kaepernick one bit. This is a company that has been losing ground to Vans and for the first time in a decade didn’t have the most popular shoe in America in 2017, surpassed by Adidas Superstar. What Nike always has been best at is staying ahead, and the risk of employing Kaepernick in a campaign is nothing compared with what it risks by falling behind.  Here’s why:

“Millennials, those Americans between the ages of 22 and 37, are projected to surpass baby boomers as the nation’s largest living adult generation in 2019, and fully 44 percent of them are of some race other than white. For post-millennials, that number rises to 48 percent, and for post-post-millennials (American children under age 10), it grows to more than 50 percent.

“These Americans are ‘very different than earlier generations’ in a variety of ways, according to demographer William Frey, author of ‘Diversity Explosion: How New Racial Demographics Are Remaking America.’ They are more prone to interracial marrying, friendlier to immigration and often want their consumption to have a social component. If Nike is willing to offend its graying buyers in order to court these multiple generations with a racial justice campaign, ‘it’s a good bet that a lot of younger people will be attracted and go along with that,’ Frey said....

“Nike knows movements. Its shoes are in a way chronicles of seismic American shifts, sort of like Stetsons, stovepipes, fedoras and trucker caps.  It has long been a hallmark of Nike’s collective genius to recognize that sneakers are significant artifacts. They mark our youths and our fads, chart our decades and our societal shifts from decorative to active and back again. There is a reason Prada and Gucci got into making sneakers and that Galliano put so many of them on the runway this spring.  A 2016 curatorial museum exhibit titled, ‘Out of the Box, the Rise of Sneaker Culture,’ was made up on 200 years of kicks, and every pair had meaning....

“Nike as a company has always had an overtly long view. It thoroughly understands its place in American culture, right at the juxtaposition of fashion and technology. It designs shoes as if it expects they will indeed one day be curated, possibly even wind up in the Smithsonian. What it sees in Kaepernick is not just a digital poster but the face of an entire new wave. In that sense, Nike’s campaign is not radical.  It’s the furthest thing from it. It’s just the future.”

Another stat, buttressing the above...nearly two-thirds of individuals who wear Nikes in the United States are under 35 years old.

Meanwhile, President Trump told the Daily Caller: “I think it’s a terrible message that they’re sending and the purpose of them doing it, maybe there’s a reason for them doing it, but I think as far as sending a message, I think it’s a terrible message and a message that shouldn’t be sent.  There’s no reason for it.”

But Trump also told the Daily Caller that while he disagrees with “the Colin Kaepernick endorsement, it is what this country is all about, that you have certain freedoms to do things that other people think you shouldn’t do, but I personally am on a different side of it.”

Of course he’ll give less rational answers on the campaign trail, I imagine, and in tweets.

Multiple sources told ESPN’s Dan Graziano that the NFL was not aware of the Nike ad campaign until it was launched Monday.  The league then issued a statement Tuesday.

“The National Football League believes in dialogue, understanding and unity,” Jocelyn Moore, the NFL’s executive vice president of communications and public affairs, said in a statement.  “We embrace the role and responsibility of everyone involved with this game to promote meaningful, positive change in our communities.

“The social justice issues that Colin and other professional athletes have raised deserve our attention and action.”

Gino Fisanotti, Nike’s vice president of brand for North America, told ESPN on Monday, “We believe Colin is one of the most inspirational athletes of this generation, who has leveraged the power of sport to help move the world forward.”

--Bayer AG said the number of American plaintiffs alleging its weedkill caused cancer has risen to 8,700 as of late August, up from 5,200 a few months earlier.  The German chemical giant just lowered its full-year guidance as a result of delays in closing its $63 billion purchase of Monsanto, which is the maker of the product at issue, Roundup.  The future liability, in light of the recent $289.2 million judgement in California against Monsanto, and Bayer, is incalculable.  Sure, that incredible figure will no doubt get reduced significantly, but the legal costs going forward for Bayer will be enormous.

That said, Bayer said it hasn’t seen a decline in demand for its glyphosate products that many independent studies have found are safe (Ranger Pro being another).

--Liu Qiangdong, founder and chief executive of Chinese commerce group JD.com, has returned to his home country on Monday, after spending one night in custody following an allegation of sexual assault in Minnesota.

A company spokesperson said: “We were informed that our CEO Richard Qiangdong Liu was taken into custody by Minneapolis police on August 31, 2018.  He has been released without any charges, and without requirement for bail.  Mr. Liu has returned to work in China.”

Mr. Liu’s attorney then said: “Mr. Liu was taken into custody by the Minneapolis Police.  He was then released without any charges or bail being required. He is free to go back to his homeland and return to work. Under these circumstances based on our substantial experience in the criminal justice system in Minnesota charges are highly unlikely in the future to be brought against our client.  Additionally, our client denies any wrongdoing.”

According to the Financial Times, the allegation involved Mr. Liu and a Chinese student at the University of Minnesota and allegedly occurred during a business trip to the U.S.

The Minneapolis Police Department, however, said the investigation was ongoing, and that Liu was released pending a formal complaint.  A spokesman said, “We can charge him anytime up to the statute of limitations running out.”

So will Mr. Liu ever return to the United States?  We’ll see how this shakes out in the courts.  JD.com is now China’s second-largest e-commerce company after Alibaba.  Investors include Chinese internet giant Tencent and U.S. retail group Walmart.

--And this breaking news tonight, Friday. Alibaba co-founder Jack Ma is retiring to pursue philanthropy in education, according to the New York Times.

--An outbreak of the highly contagious swine fever continues to severely impact China’s pig market.  Thursday, China announced its tenth case of the disease in just over a month.   Much of the northeast is now locked down in terms of pig farms being quarantined, which is driving up prices in the south ahead of a week-long October holiday. Experts estimate 30,000 pigs are trucked out of the country’s north each day, with the bulk of the slaughterhouses in the south.

The pig market is a huge business in China, and many experts believe the government is not capable of controlling swine fever.  While China is self-sufficient in this area, it will now need to import more pork.

Swine fever is not contagious for humans, but no one is obviously going to eat diseased pork.

--Independent board members of CBS Corp. are negotiating a possible exit for CEO Leslie Moonves and asking for assurances of autonomy from controlling shareholder National Amusements Inc., as first reported by CNBC.

The move comes as CBS and National Amusements, led by Shari Redstone, are trying to settle a legal dispute over control of the media company that is scheduled for trial in Delaware next month.

Moonves, 68, is being investigated by law firms appointed by CBS’ board over sexual-harassment allegations reported by the New Yorker.

Moonves and Redstone have a terrible relationship, as Redstone pursues her desire to merge CBS and Viacom Inc.

--Twitter is permanently banning right-wing conspiracy theorist Alex Jones and his “infowars” show for abusive behavior.

Twitter says Jones won’t be able to create new accounts or take over any existing ones. Twitter says Jones posted a video on Wednesday that is in violation of the company’s policy against ‘abusive behavior.’    The video in question shows Jones shouting at and berating CNN journalist Oliver Darcy for some 10 minutes during congressional hearings about social media.

Twitter had previously suspended Jones for a week. But until now it had resisted muzzling him further.  Other tech companies have limited Jones by suspending him for longer periods, as Facebook did, and by taking down his pages and radio stations.

But the Twitter permanent ban raises issues of consistency and social-media services in general in terms of applying their rules against harassment and other bad behavior.

Critics on Twitter also pointed out that Jones was allowed to harass Sandy Hook parents for six year with no repercussions.

--The Academy of Motion Picture Arts and Sciences has announced its new planned “popular” Oscar “merits further study” and will not present the new category at its upcoming 91st Academy Awards.

The organization stated that “while remaining committed to celebrating a wide spectrum of movies,” it recognized that implementing any new award nine months into the year “creates challenges for films that have already been released.”

I think the Academy just realized it was an incredibly stupid idea.

Foreign Affairs

Syria: As I wrote last week, the international story of the next few weeks is Idlib...the last major rebel stronghold in the northwest of Syria.  Extensive bombing of the province by Russian and Syrian aircraft this week is a precursor to a final massive assault by Syrian, Russian and Iranian forces, which would result in a humanitarian catastrophe and millions of new refugees.

President Trump tweeted: “President Bashar al-Assad of Syria must not recklessly attack Idlib Province. The Russians and Iranians would be making a grave humanitarian mistake to take part in this potential human tragedy. Hundreds of thousands of people could be killed. Don’t let that happen!”

Within hours of this, Russian jets began an intense barrage on the region.  Russia has been building up its naval presence in the Mediterranean, on Syria’s coast, for weeks.

The presidents of Iran, Russia and Turkey held a summit in Tehran that could decide the fate of the province.

Turkey, which has long backed rebel groups, fears an all-out assault will trigger another refugee crisis on its southern border. Russia and Iran believe the rebels in Idlib must be wiped out.

Today, Turkish President Erdogan also said Turkey is “extremely annoyed” by the United States’ support of a terrorist organization, as Turkey sees it, the Syrian Kurdish YPG.

Jim Jeffrey, the new U.S. adviser for Syria, said on Thursday there is “lots of evidence” that chemical weapons are being prepared by Syrian government forces.

“I am very sure that we have very, very good grounds to be making these warnings,” said Jeffrey, who was named on August 17 as Secretary of State Mike Pompeo’s special adviser on the country, overseeing talks on a political transition.

“Any offensive is to us objectionable as a reckless escalation,” Jeffrey told reporters in his first interview on the situation since his appointment.  “There is lots of evidence that chemical weapons are being prepared.”

The Syrian government has repeatedly denied ever using chemical weapons.  But the U.S. State Department warned on Monday that Washington would respond to any chemical attacks by the Syrian government or its allies, and France has weighed in it would respond as well.

Experts from the UN and the Organization for the Prohibition of Chemical Weapons have said they are confident government forces were behind an attack involving the nerve agent Sarin on a rebel-held town in southern Idlib in April 2017 that killed more than 80 people.

Meanwhile, President Trump, who just months ago said he wanted “to get out” of Syria and bring U.S. troops home soon, has agreed to a new strategy that would see a permanent military presence in Syria, at least for the foreseeable future, according to the State Department.

While the administration’s stated purpose of our current troop level, about 2,200, is for the campaign against Islamic State, now it is being redefined to include the exit of all Iranian military and proxy forces from Syria, and the establishment of a stable and non-threatening government for all the Syrian people.

“The new policy is we’re no longer pulling out by the end of the year,” said the aforementioned Jim Jeffrey. “That means we are not in a hurry.”

Mona Yaoubian, an expert on Syria at the U.S. Institute of Peace, told Defense News, “This is going to be far more catastrophic than anything we witnessed so far.”  The large numbers of civilians and the fact that there’s nowhere for them to go makes the impending fighting a particular risk for them.  “I think by all accounts, the regime is going to stop at nothing to take this territory back. And so we expect a particularly brutal onslaught on the part of the Syrian regime backed by the Russians,” she said.

Assad has sworn to recapture every inch of Syria and has made big gains against rebels since Russia joined his war effort in 2015.

Editorial / Washington Post

“Can a tweet stop another bloodbath in Syria? Evidently not. Hours after President Trump used his favorite medium to warn Russia not to join in a new offensive on the northern province of Idlib, saying it would be ‘a grave humanitarian mistake,’ Russian aircraft carried out dozens of strikes in the rebel-held province on Tuesday, reportedly killing at least a dozen civilians. That was just the beginning of what could be the most horrific episode yet in the seven-year-old civil war. About 3 million civilians are trapped in Idlib, of whom as many as half are refugees from other parts of Syria. Mr. Trump was hardly exaggerating when he wrote that ‘hundreds of thousands of people could be killed.’

“As Secretary of State Mike Pompeo noted, Russia pledged to preserve Idlib as a ‘deescalation zone’ and end the war through diplomacy.  Yet it now appears poised to throw its planes behind an assault by the government of Bashar al-Assad, also backed by Iran, to capture the territory by force.  Moscow cites the presence of an al-Qaeda-linked rebel group, which controls much of Idlib; Foreign Minister Sergei Lavrov says it is a ‘festering abscess’ that must be ‘liquidated.”  But the United Nations’ Syrian envoy estimates there are only about 10,000 fighters in the extremist group. If they follow the usual modus operandi, the Assad, Iranian and Russian forces will fight them by systematically targeting the civilian population and infrastructure, including food markets, schools and hospitals.

“The damage could spread far beyond Syria. A full-scale offensive could send hundreds of thousands of refugees streaming north toward Turkey, where some 3.5 million Syrians already are harbored.  For now, Turkish President Recep Tayyip Erdogan is preventing refugees from continuing on to Europe, where their mass arrival in 2015 prompted a far-reaching political backlash. But if Idlib erupts, that could change.

“Faced with these stakes, the Trump administration’s response has been pathetically weak. Mr. Pompeo resorted to tweeting that ‘the world is watching’ – echoing the feckless words used by then-Secretary of State John F. Kerry when Syrian and Russian forces reduced the city of Aleppo to rubble.  The only red line drawn by the White House is against the use of chemical weapons; in that case, a statement said, it would ‘respond swiftly and appropriately.’

“Deterring chemical attacks is important, but to stand by while a humanitarian catastrophe is created by conventional means, and the Assad-Russian-Iran alliance consolidates control over Syria, would be another damaging abdication of U.S. leadership....

“Unfortunately, the Assad regime and its Russian allies have a long record of rejecting compromise for scorched earth. They will also judge that tweets from the president of the United States can be safely disregarded.”

Separately, Israel continued to strike military positions in Syria, targeting Iranian positions.  Israeli warplanes have been entering Syria via Lebanon, screaming at low altitude over Beirut, which must be disconcerting to residents there.

Iran: Aside from its heavy involvement in Syria, and elsewhere, Iran announced it plans to boost its ballistic and cruise missile capacity and acquire modern fighter planes and submarines, according to the Iranian state news agency.  News of the military development plans came a day after Iran dismissed a French call for negotiations on Tehran’s future nuclear plans, its ballistic missile arsenal and its role in wars in Syria and Yemen, following the U.S. pullout from Tehran’s nuclear agreement with world powers.

Iran has been staging extensive war games recently as a show of deterrence against a potential U.S. attack down the road.

Iran rejected a Reuters report that it had moved missiles to Iraq, Secretary of State Pompeo saying he was “deeply concerned” by the stories.

Iraq: Eleven Iraqi political groups, including those led by cleric Moqtada al-Sadr and Prime Minister Haider al-Abadi, announced an alliance on Sunday that would be the largest bloc in the newly elected parliament. The alliance includes 162 lawmakers from eleven electoral lists, according to the state news agency.

I’ve said a government wouldn’t be formed for months, but this alliance is still short of a majority (329 seats in parliament total) and I have my doubts.  You need a speaker, first, and then the real process of forming a government begins.

Meanwhile, at least 12 protesters have died this week in civil unrest fueled by anger against perceived corruption and misrule by Iraq’s political elite across the south of the country, including Basra.  Government buildings there have been stormed and torched.  There have also been major protests at some of Iraq’s key oilfields in the region. This is where Iran has a strong presence.

The protests were fueled by the lack of power and safe drinking water in the heat of summer.  This will have an impact on efforts to form a new government in Baghdad.  Moqtada al-Sadr, the Shiite cleric, said Baghdad must release more funds to Basra, where Shiites reside in large numbers, thus Iran’s presence.

Afghanistan/Pakistan: The Taliban said the Afghan Haqqani network founder, Jalaluddin Haqqani, an ex- U.S. ally turned fierce enemy, has died after years of ill health.  He had been paralyzed for the last 10 years.

The Haqqani network was declared a terrorist organization by the United States in 2012.  Haqqani had not been heard from in several years, and reports of his death had been widespread since 2015.

Separately, the U.S. military said it was cancelling $300 million in aid to Pakistan over what it calls Islamabad’s failure to take action against militant groups.  President Trump has previously accused Pakistan of deceiving the U.S. while receiving billions of dollars.

Pentagon spokesman Lt. Col. Kone Faulkner said, “We continue to press Pakistan to indiscriminately target all terrorist groups,” including the Taliban and the Haqqani network.

China: After El Salvador became the fifth ally of Taiwan to switch diplomatic recognition from the self-ruled island to Beijing since Tsai Ing-wen became president of Taiwan, analysts say Taipei must do all it can to resist Beijing’s diplomatic squeeze and retain its 17 remaining allies (down from 22) or risk losing its sovereignty if the number shrinks to zero.

Beijing has ramped up its campaign to woo away Taipei’s allies in an attempt to force Tsai to accept the “one China” principle that she has refused to acknowledge thus far.

Some of Tsai’s supporters, however, say Taiwan would be better off without any of these ‘allies,’ freeing the island from the financial and economic aid it supplies to mostly impoverished African and Latin American countries.  Last year Taiwan spent $293 million in its economic cooperation programs with its remaining Latin American allies, for example.

But I’m worried China is preparing to make a move on the island, having predicted they could do it by year end.

Josh Rogin / Washington Post

“The Chinese government is ramping up its worldwide effort to strip Taiwan of its international recognition, legitimacy and economic freedom, but the United States seems either unwilling or unable to confront Beijing. The Trump administration must challenge Chinese intimidation of Taiwan wherever it emerges – especially in our own backyard.

“The paradox of the Trump administration’s Taiwan approach is that, despite the presence of pro-Taiwan officials throughout the government, the actual policy has moved only incrementally, well short of what would be a proportional response to Beijing’s increasingly aggressive diplomatic, economic and military campaign against Taiwan.

“The United States’ Taiwan policy is hampered by two challenges: the lack of a comprehensive strategy and the personal resistance of President Trump. Convinced his personal friendship with Chinese President Xi Jinping will yield results for the United States on either trade or North Korea, Trump has resisted more assertive moves to bolster the U.S.-Taiwan relationship, several officials said.

“ ‘This administration, from a personnel perspective, has the most hawkish Taiwan team ever,’ one senior administration official told me.   ‘But if Xi calls and complains, the president’s instinct is to defer to that because there is always some pending issue in which we want something from the Chinese.’....

“(True), the administration has taken public stands against many of Beijing’s actions. Last month, the White House criticized El Salvador for breaking diplomatic ties with Taiwan. Earlier this year, the administration called out Beijing for attempting to force international airlines to scrub Taiwan from their websites.

“Though the Trump administration approved a $1.4 billion arms sale to Taiwan last year, there is no word of any further deals. And in June, the administration failed to send any Cabinet-level officials to the opening of the new headquarters for the American Institute in Taiwan, our de facto embassy. This is not the Taiwan policy that Trump officials such as national security adviser John Bolton have long championed....

“Meanwhile, the United States must help Taiwan bolster its own defenses opposite China’s overwhelming military buildup....

“ ‘The cross-strait military balance has already shifted fundamentally but we can never have China draw the conclusion they can attack Taiwan with impunity and achieve a political goal,’ said Bonnie S. Glaser, a senior adviser at the Center for Strategic and International Studies....

“(The) Global Times, a state-run media outlet in China, stated (this week), ‘Taiwan’s ‘independent sovereignty’ is like melting ice, and it is swimming against the dominant global tide.’....

“Most importantly, Trump officials must persuade the president that defending Taiwan is not an irritant in the U.S.-China relationship.  It is a test case for America’s willingness to respond to Beijing’s global aggression.”

And this just in...tonight, the United States said it had recalled its top diplomats in the Dominican Republic, El Salvador and Panama over those countries’ decisions to no longer recognize Taiwan.  Good!

North / South Korea: President Trump thanked Kim Jong Un on Thursday for his “unwavering faith” in him despite a breakdown in negotiations between the two countries over the North Korean regime’s denuclearization.

“Kim Jong Un of North Korea proclaims ‘unwavering faith in President Trump.’ Thank you to Chairman Kim.  We will get it done together!” Trump tweeted after a meeting between Kim and South Korean leaders.

According to South Korean officials, Kim wants to achieve denuclearization of the Korean Peninsula before Trump finishes his term. Trump then fell for this hook, line and sinker.

The South’s delegation held talks with Kim to set up a summit planned for Sept. 18-20 in Pyongyang between Kim and South Korean President Moon Jae-in, their third meeting since April.

“Chairman Kim Jong Un has made it clear several times that he is firmly committed to denuclearization, and he expressed frustration over skepticism in the international community over his commitment,” South Korean national security adviser Chung Eui-yong said.

“He said he’s pre-emptively taken steps necessary for denuclearization and wants to see these goodwill measures being met with goodwill measures,” added Chung, who met with Kim on Wednesday in Pyongyang.

Kim cited the dismantling of the Punggye-ri nuclear test site and Dongchang-ri missile launch facility as evidence of his commitment to end nuclear testing permanently, Chung said, as the Washington Post reported.

And he asked for a message to be delivered to Trump.

“I can’t release it here, but Kim said he wants conditions to be created that will make him feel right about his decision to denuclearize,” said Chung.

Kim is still seeking a formal declaration from Washington to end the Korean War – something Pyongyang has said is vital to building trust and ending decades of hostility.  Kim said such a declaration would not imply a withdrawal of U.S. forces or a weakening of the U.S.-South Korean military alliance, according to Chung.

“Chairman Kim also emphasized he has never spoken ill of Trump to his aides or anyone really. He also said, on the basis of such trust, he hopes to end 70 years of hostile relations with the United States, improve the bilateral relationship and fulfill denuclearization,” he said.

On Thursday, Secretary of State Pompeo said North Korea still has “enormous” work to do to meet commitments made to Trump at the Singapore summit.

Meanwhile, as the New York Times reported, “A North Korean spy was charged in the hacking of Sony Pictures Entertainment in 2014, the Justice Department announced on Thursday, accusing the North of orchestrating a broad conspiracy that caused hundreds of millions of dollars’ worth of economic damage over the past five years in the United States and around the world.

“Park Jin-hyok was charged with computer fraud and wire fraud; taking part on attacks on film companies and distributors, including Sony Pictures, financial institutions and defense contractors, law enforcement officials said.  Park was also accused of being part of the development of the WannaCry 2.0 ransomware attack that infected an estimated 230,000 computers worldwide and crippled the British health care system last year.”

John C. Demers, the head of the Justice Department’s National Security Division, said in a statement:

“The North Korean government, through a state-sponsored group, robbed a central bank and citizens of other nations, retaliated against free speech in order to chill it half a world away, and created disruptive malware that indiscriminately affected victims in more than 150 other countries, causing hundreds of millions, if not billions, of dollars’ worth of damage.

“These charges will send a message that we will track down malicious actors no matter how or where they hide,” he added.  [David Sanger, Katie Benner and Adam Goldman / New York Times]

But with the U.S. having no formal relations with North Korea, Park will never appear in a U.S. courtroom, of this you can be sure.

President Trump didn’t tweet about the arrest and its implications.

Russia: British authorities, with some superb detective work, charged two men that they believe are Russian military intelligence officers with the attempted murder of a former spy and his daughter in March.

Alexander Petrov and Ruslan Boshirov were charged by prosecutors with four offenses related to the poisoning of Sergei Skripal and his daughter.  Sergei had lived in Britain since a 2010 spy exchange with Moscow.  The charges included the use and possession of nerve agent Novichok.

In a statement to lawmakers Wednesday, Prime Minister Theresa May said the attack was almost certainly authorized at “a senior level” of the Russian state. She added that the U.K. government concluded the two are officers with Russia’s military intelligence service, the GRU.

Russia’s Foreign Ministry responded that the names of the two men accused meant nothing to Moscow.

Separately, a leader of Russian-backed separatists in eastern Ukraine, Alexander Zakharchenko, was killed in an explosion at a café in Donetsk city, a terrorist attack. Russia’s foreign ministry suspected Ukraine of organizing the killing.

But there were other reports that Zakharchenko had fallen out of favor with Moscow.

Meanwhile, this from the Moscow Times:

“Russian state television started a new weekly show devoted to Vladimir Putin, lauding the president’s leadership qualities, physical energy and attentiveness to public needs.

“The first hour-long episode of ‘Moscow.  Kremlin.  Putin’ broadcast in prime time on Rossiya-1 TV on Sunday and featured breathless commentary on Putin’s meetings and visits in the past week, including footage of him on vacation in Siberia and meetings with students in Sochi.  A discussion on a controversial pension reform that has dented Putin’s popularity praised the president’s sense of responsibility in tackling the issue, while failing to mention protests attended by thousands of Russians in major cities.

“ ‘Putin doesn’t only love children, he loves people in general,’ Kremlin spokesman Dmitry Peskov told host Vladimir Soloviev during a segment on the president’s attitude towards Russia’s young.  ‘He’s a very human person.’”

Cough cough.

Japan: What an awful week here, as a powerful earthquake on Japan’s island of Hokkaido crippled the region, with a rising death toll and some 1.6 million residents without power days after.  It was the second disaster to hit Japan this week, after a deadly typhoon lashed the country’s west coast.

Thousands of travelers have been stranded for days at Kansai International Airport in Osaka, owing to flooding from the typhoon, requiring the evacuation by boat!  Kansai is on an artificial island long prone to flooding.

Of Japan’s 23.3 million Asian tourists who visited Japan in 2017, 6.6 million entered through Kansai International, the government said.

Brazil: And what an awful week here. The front-runner in Brazil’s presidential election, Jair Bolsonaro, was stabbed at a campaign rally on Thursday and initially was described as being in grave condition, but now reports say he will have a full recovery, though this will take months. The stab wound entered his intestines and there is real fear of infection.

Bolsonaro, a far-right politician, was attacked while a crowd of supporters carried him on their shoulders. A suspect was immediately arrested.

The candidate has outraged many in Brazil with racist and homophobic comments, but he has performed strongly in recent opinion polls, which suggest he would get the most votes in next month’s presidential elections if former President Luis Inacio Lula da Silva remains blocked from standing.  The left-wing Lula had been the favorite even as he’s currently in prison, before the courts said he wasn’t eligible.

Talk about surreal.  The once-leading candidate is in prison, and the new leader in the polls is recovering in a hospital.

One of Bolsonaro’s key campaign platforms was his pledge to turn around the growth in violent crime, and the fact he was then a victim of it would only bolster his standing at the polls, one would think.  Everyone – including his detractors – has rallied around him to condemn the attack.

As if this wasn’t bad enough, days earlier, a huge fire broke out at the National Museum of Brazil in Rio de Janeiro, the oldest scientific institution in the country, with some of the oldest artifacts on the South American continent.

Everything was destroyed.

The museum once served as the residence for the Portuguese royal family and had just celebrated its 200-year anniversary earlier this year.

Brazilian President Michel Temer said in a tweet that it was a “sad day for all Brazilians,” adding: “The value of our history cannot be measured by the damage to the building.”

The museum’s director called it a “cultural tragedy.”

The natural history collection included important dinosaur bones and a 12,000-year-old human skeleton of a woman – the oldest ever found in the Americas.

Employees had recently expressed concern over budget cuts and the dilapidated state of the building.  And get this, the fire hydrants outside the museum were dry and water had to be trucked from a lake to battle the blaze.  It was too late.

There were major protests in the days following the tragedy that needed to be disbursed by riot police.

Brazil is a country in turmoil for sure.  [Ditto neighbor Argentina, which I may get into next time.]

Random Musings

--Presidential tracking polls....

Gallup: 41% approval of President Trump’s job performance, 53% disapproval (Sept. 2)
Rasmussen: 48% approval, 52% disapproval (Sept. 7)

--A new USA TODAY/Suffolk University Poll asked the generic House vote question and 50% of those surveyed said they were more likely to vote for the Democratic congressional candidate in their district, vs. 39% who said they would vote Republican.

Most of these recent polls have the Dems with an 8- to 11-point advantage, with analysts saying the Dems need to keep it at at least 8 to have a shot at flipping the 23 House seats that would bring a majority.

In the same survey, by a 58-34 margin, registered voters want to elect a Congress that mostly stands up to Trump rather than one that mostly cooperates with him.

As for the president’s job approval rating, it was 40%, 56% disapprove.

This poll was conducted Aug. 23-28.

--The number of women candidates on the ballot is shattering records, according to the Center for American Women and Politics at Rutgers University.  An unprecedented number of women been nominated for the House, the Senate, for governorships and for state legislatures.

226 women have won nominations in House races thus far, blowing past the previous record total of 167 in 2016. Another 251 women are seeking nominations in states that haven’t yet held their primaries.

--Arizona Gov. Rob Ducey (Rep.) made a great selection in convincing former Sen. Jon Kyl to return to Washington to serve out the remainder of the late John McCain’s Senate term, until a 2020 special election.

Kyl represented Arizona in the Senate from 1995 to 2013 – ultimately becoming the party’s number two.

But Kyl said he only wanted to serve into January – which would allow him to vote for Brett Kavanaugh for the Supreme Court, Kyl having shepherded Kavanaugh through the Senate as he met those who would be voting on him – but he’s added he’s open to remaining in the Senate until 2020, when an election will be held to fill McCain’s seat until 2022.  But at age 76, Kyl said he definitely wouldn’t be running again, making it clear that competition for the seat will be fierce in 2020.

Cindy McCain hailed Kyl’s selection, writing on Twitter that he is “a dear friend” and that it’s “a great tribute to John that he is prepared to go back into public service.”

Meanwhile, Ducey is facing his own re-election in November, and as Democratic enthusiasm is surging, he could ill afford to anger any Republicans.  

--Boston City Councilor Ayanna Pressley upset Rep. Michael Capuano in Massachusetts’ Democratic primary, making it all but certain that Pressley will become the first black woman elected to Congress from the state in November.  It would also give the party’s progressive wing another win in their effort to pull the party leftward.

Pressley is drawing comparisons to Alexandria Ocasio-Cortez, who ousted 10-term New York Rep. Joe Crowley in a Democratic primary in June, for which Ocasio-Cortez faces no opposition in November.

--Chicago Mayor Rahm Emanuel shocked the political world in the Windy City by announcing he wasn’t running for a third term.

When I first saw this, I was thinking Chicago elections were in November 2019, but the reason why this was kind of a cataclysmic deal is because the election is actually in February (2/26), with a run-off, if needed, in April.

So there is very little time for candidates to launch effective campaigns but they are off and running.

Emanuel has had a very bumpy two terms, having first been elected in February 2011, when he became the city’s first Jewish mayor.  He was seen to be a man of great promise, having served in Congress in Illinois and later working as President Obama’s chief of staff for nearly two years.

But Emanuel has faced all kinds of big issues, like a lengthy teachers’ strike, and his efforts to close the City’s huge budget and pension-funding gaps, which entailed the closing of 50 Chicago public schools.

And of course you had the soaring crime rate in Chi-town, which overwhelmed Emanuel and his police force.

Emanuel captured 55.2% of the vote in a four-candidate field in 2011, and then 55.7% in a runoff in 2015.

President Obama called Emanuel “a tireless and brilliant public servant” and a friend.

--Russian officials said Tuesday that the hole found in the International Space Station may have been the work of a psychologically disturbed astronaut.  Boy, talk about Trump paranoia in the White House, imagine this coming out on the ISS?

At first the small but potentially deadly hole that was discovered last week was initially believed to have been caused by a tiny meteorite.

But Russian officials, including retired cosmonaut and current member of President Putin’s ruling party, Maxim Surayev, told the state-run RIA Novosti news agency: “If a cosmonaut pulled this strange stunt – and that can’t be ruled out – it’s really bad.... We’re all human, and anyone might want to go home, but this method is really low,” he said, according to Phys.org.

A drill capable of making the hole was stored on the craft, Surayev noted.

If the hole hadn’t been spotted, the six astronauts on the space station would have run out of air in 18 days, according to Russian officials.

Russian space-agency chief Dmitry Rogozin said, “There were several attempts at drilling. There is a version that we do not rule out: deliberate interference in space.”

Rogozin added: “It was done by a human hand.  There are traces of a drill sliding along the surface.”

The hole was detected Aug. 29, when the astronauts – three Americans, two Russians and a German – noticed a drop in pressure.

The U.K.’s Telegraph reported that the crew patched it up with a rubber filling.

Roscosmos, the state-run Russian space agency, has since launched an investigation to find a culprit.

What a bizarre story.

--Timothy Cardinal Dolan on Tuesday addressed the sexual-abuse and coverup scandals rocking the Catholic Church – saying even he’s at a loss.

“When people say to me you know, we’re angry, we’re confused, bewildered, frustrated, I think they might expect me to be on the defensive, and I’ll say, ‘Nice to meet you. So am I.’  We’re all in this together,” the New York archbishop told Father Dave Dwyer on ‘The Catholic Show’ on Sirius XM.

“No sin is isolated to the single act. It affects, it keeps affecting people, there’s not a person in the church that’s not been affected by this,” he said. The scandals are of an “oil spill nature,” he added – touching everyone from the Catholic people “walking into the factory or the classroom or the office” and feeling embarrassed for the priest who “can’t shake the feeling” that his parishioners are wondering whether he’s a predator.

Dolan said even his own mother of almost 90 called him to say she’d skipped lunch at her nursing home in shame.

“I’m ashamed to go to the dining room,” he said she told him. “I’m so embarrassed to be a Catholic. I don’t know what to say to anybody.”

In June, Dolan announced that the New York Archdiocese had found “credible” allegations that Cardinal McCarrick sexually abused a 16-year-old altar boy at St. Patrick’s Cathedral in the 1970s – but didn’t comment further.  [New York Post]

Last I saw, Dolan hadn’t commented on Archbishop Carlo Maria Vigano’s letter accusing Pope Francis of covering up claims of sexual abuse.

--There was a fascinating piece in the Washington Post by Chico Harlan and Stefano Pitrelli on Pope Benedict XVI, who became the first pontiff in six centuries to abdicate the papacy, transitioning to a life of near seclusion in a Vatican City monastery.

But now, think about it.  He knows so much about the latest allegations concerning Pope Francis and a coverup.

“Some Vatican watchers and insiders say the mere fact of Benedict’s 2013 abdication has made the modern papacy more vulnerable, emboldening voices of dissent. They say it’s hard to imagine a letter like the one released last week by Archbishop Carlo Maria Vigano, provoking Pope Francis with a call to resign, without Benedict having created the possibility that modern popes might give up their seats before death.

“Try as he might to stay out of the fray, Benedict has been used as a symbol of resistance for a segment of traditionalists who oppose elements of Francis’ reformist papacy and see Benedict’s vision of Catholicism as more aligned with theirs....

“Once known as ‘God’s Rottweiler,’ Benedict was not embraced by Catholics worldwide during his eight-year pontificate. But he won admiration among those who respected the depth of his academic work and his conviction that church teachings shouldn’t bend with the times.”

Benedict is now 91, frail (according to friends) and moves with the help of a walker – “but he is mentally sharp.”

For years Vatican observers have wondered why Benedict stepped down in 2013. Was it “blackmail or pressure relating to scandals within the Vatican bureaucracy.”

Chico Harlan and Stefano Pitrelli:

“Those who have visited Benedict as pope emeritus say he has also tried to avoid fostering insurrection. Four years ago, after a hint that Francis might adopt a more relaxed stance on Communion for divorced Catholics, a small group of cardinals asked Benedict to intervene, according to the mainstream Italian daily La Repubblica. Benedict told them that he wasn’t the pope and shouldn’t be involved – and afterward privately alerted Francis.

(Marcello) Pera, (a friend of Benedict and former president of the Italian Senate), who co-wrote a book with Benedict, tells a similar story about the ex-pope’s unwillingness to talk about his successor’s moves.  Pera said he visited Benedict shortly after Francis was elected and brought up his misgivings about the new pope – how he seemed more political, and willing to tailor his teachings to a secular audience.

“ ‘I am worried about the church,’ Pera said to Benedict.

“ ‘The church is of Jesus Christ,’ he remembers Benedict replying.  ‘You shouldn’t be worried.’”

Meanwhile, Vigano’s letter on Francis and his knowledge of the scandals specifically cites Benedict and Francis as knowing for years about the sexual misconduct of now-disgraced Theodore McCarrick; Vigano claiming that in 2009 or 2010, Benedict privately levied sanctions on McCarrick, after years of warnings about McCarrick’s sexual misconduct.  The letter then said Francis “did not take into account” those sanctions and made McCarrick his “trusted counselor.”

There is a man sitting in silence who knows everything, still known as Pope Benedict, not his civilian name, Ratzinger, and will we ever hear from him again?  I doubt it.

--The Miss America pageant has been taking place in Atlantic City, and executives, including Gretchen Carlson, have been singing the praises of the rebranding efforts, and “Miss America the scientist,” “Miss America the advocate for change,” as the Star-Ledger’s Amy Kuperinsky put it.

But Carlson, chairwoman of the Miss America board, and others atop the leadership, have ticked off current contestants and former Miss Americas, state pageants and volunteers in their decision to cut the pageant’s famous swimsuit competition.

Onstage competition started Wednesday at Boardwalk Hall, with three nights of preliminaries before the televised pageant final on Sunday.

Yes, some contestants think “Miss America 2.0” is the future, but others told the Star-Ledger that the loss of a chance to strut the runway in heels and bikinis means a slight ding in the shine of what it means to be Miss America.

--Lastly, since I posted last time before Senator John McCain’s funeral service at the National Cathedral the next day, and burial, Sunday, some final thoughts.

Henry Kissinger’s Eulogy:

“Like most people of my age I feel a longing for what is lost and cannot be restored.  If the happy and casual beauty of youth prove ephemeral, something better can endure and endure until our last moment on Earth and that is the moment in our lives when we sacrifice for something greater than ourselves.  Heroes inspire us by the matter of factness of their sacrifice and the elevation of the root vision.

“The world will be lonelier without John McCain, his faith in America and his instinctive sense of moral duty.  None of us will ever forget how even in his parting John has bestowed on us a much needed moment of unity and renewed faith in the possibilities of America.  Henceforth, the country’s honor is ours to sustain.”

Ken Burns / Washington Post

“In 2017, as Lynn Novick and I were finishing our film on the Vietnam War, I called Sen. John McCain to see if I could stop by his office and show some clips to him.  He agreed, and when I asked if there were any sections of the 18-hour film that he’d particularly like to see, McCain said ‘the Vietnamese parts’ – the stories that included the North Vietnamese soldiers and civilians.

“McCain and I had first spoken about the film a decade earlier, just  as it was getting underway. I wanted to let him know that, while we didn’t intend to interview him or his then-Senate colleague and fellow Vietnam War veteran John F. Kerry, we did  plan to tell their stories. In typical McCain fashion, he had suggested we avoid his story completely – his service as a Navy pilot, his 5 ½ years confined and often tortured as a prisoner of war.

“The film, he said, should include the stories of the ‘ordinary’ Americans who went to war. Doing so would be a chance to ‘save lives,’ he said, by ending the war for some in a deeply personal, even psychological way. At the same time, he noted that any film that truly wanted to understand the Vietnam War had to listen to the Vietnamese as well, both America’s allies in the South and adversaries in the North.

“McCain had already done the work of ending the war for thousands of American families, bringing them closure by putting to rest the pernicious and persistent lie that U.S. soldiers had been left behind in Indochina. He also helped free hundreds of thousands of South Vietnamese veterans who had been imprisoned and he made it possible for the United States and Vietnam to interact as normal nations....

“McCain was, of course, well-known for a personal dedication to truth-telling.  His bracing honesty and self-criticism are almost unknown in politics today. Perhaps it was his willingness to engage in self-reflection that allowed him to create bridges to bipartisanship and to see his life beyond narrow party objectives. But he didn’t let friendship stand in the way of speaking his mind; during the Obama administration, McCain relentlessly criticized the Iran nuclear deal championed by his old friend Kerry, the secretary of state.

“These days, one of the films I’m working on is about the writer Ernest Hemingway.  McCain volunteered to be interviewed for it, and not long ago we were able to get him on camera to share a few thoughts about his favorite Hemingway novel, ‘For Whom the Bell Tolls.’  As he had noted elsewhere over the years, McCain long identified with the book’s flawed hero, Robert Jordan, who struggles with moral dilemmas and is grievously wounded in this tale of the Spanish Civil War.  Contemplating Jordan’s story, McCain said, helped him survive the horrors of his imprisonment.

“McCain might not have appeared on camera for our Vietnam War film, but it is very much his story, as it is everyone else’s who either fought in the U.S. military or chose to resist. It is also the story of the Vietnamese who battled against the United States, men and women who eventually gained McCain’s respect, even admiration, and with whom he and others sought to create a better future.

“He realized we could learn from these stories.  But, as with all stories, you have to be willing to listen.  In a world where considering opposing views seems increasingly endangered, you can honor the memory of John McCain by stopping to hear the stories of others.”

Roger Cohen / New York Times

“The services across the nation marking the passing of Senator John McCain are also a requiem for the American century.  He lived through the zenith of postwar American power; believed, despite setbacks, in America’s unique capacity to forge a more open and democratic world; and held America’s word as pledge in the cause of liberty....

“The president of the United States is persona non grata at services that speak of bipartisanship, of American ideals, of self-sacrifice rather than self-interest, of an American global commitment that goes beyond ‘Pay up now!’ Trump stands outside the American tradition.

“In years past, I would watch McCain at the Munich Security Conference. The experience was never less than bracing. Beside him, others seemed mealy-mouthed.  He had known the extremes of human experience, lived in full.  His voice contained that fullness.  He was a man of conviction.  He preferred to be wrong than to bend.

“Torture over more than five years of captivity had imbued him with a humanity that transcended politics, even if did not dim his cantankerous bellicosity.  He had bombed Vietnam in a losing war of confused aims and official obfuscation.  He emerged unbowed in his belief in ‘the world’s greatest republic, a nation of ideals, not blood and soil,’ as he put it in his farewell letter, McCain was obstinate, sometimes to the point of obtuseness.

“America’s many failures were as nothing beside American achievement.  Stubbornness defined him in an age of finger-to-the-wind opportunism.  As a spineless Republican Party folded into the Trump Party, McCain came to stand almost alone as a politician of principle. His party moved.  He did not....

“I disagreed with McCain about many things: his incorrigible ich to bomb Iran, his bizarre back-and-forth on Barack Obama’s Affordable Care Act.  He ran a comically disastrous campaign as the Republican candidate for the presidency in 2008.  His choice of Sarah Palin as his running mate elevated the jingoistic idiocy that has become a Republican hallmark.  It was a terrible mistake. The Straight Talk Express, as his bus was named in both his presidential campaigns, has degenerated a decade later into Trump’s ‘tell-it-like-it-is’ Fox News spectacular.

“I wish I could believe the outpouring of sympathy for McCain marks the moment when principle and bipartisanship will rise above lies and fracture in American politics.  But I don’t, at least not in the near term.  The nationalist, nativist, xenophobic tide has not yet run its course.  In many respects, McCain was a dinosaur.”

Bret Stephens / New York Times

“On his last visit to the Munich Security Conference in 2017, shortly before his cancer diagnosis, he spoke of his own mounting sense of alarm.  Alarm, he said, at ‘the hardening of resentment we see toward immigrants’ and ‘the growing inability, and even unwillingness, to separate truth from lies.’  Alarm that ‘more of our fellow citizens seem to be flirting with authoritarianism and romanticizing it as our moral equivalent.’ Alarm, above all, ‘that many of our peoples, including in my own country, are giving up on the West.’

“It was no mystery to anyone in his audience that day where the real source of his alarm lay: An American president who, in matters of both character and conviction, was low and vapid and mean-spirited and bottomlessly dishonorable – McCain’s opposite in every respect.

“But everyone in that audience would also have known that McCain had enough sense of history, and enough confidence in the future, not to mistake evidence of decay for proof of decline.  In the scale of American blunders – from the Dred Scott decision to the Neutrality Acts of the 1930s to the tragedy of Vietnam – is the Trump presidency really unique?  And in the long, upward arc of American history, will its consequences be so dire or decisive?

“It happens that in the years when McCain and his fellow P.O.W.s were straining to keep faith with America, much of America had lost faith with them.  It didn’t matter. The America they were keeping faith with was not so much a people, or even a country, as it was a set of ideas that elevated and transcended both.

“Those ideas, about human liberty, dignity and possibility, lie beyond the reach of President Trump to traduce, or Jeff Sessions to betray, or any English department in the country to deconstruct.  They are the ideas to which McCain held fast in his torment, to which billions worldwide aspire, and to which every American implicitly subscribes, even those who pretend otherwise. They are the ideas that will see us through this presidency.

“ ‘Do not despair of our present difficulties but believe always in the promise and greatness of America, because nothing is inevitable here,’ wrote McCain in his farewell message.  Words to live by in our time of mourning and strain.”

Last Saturday at the National Cathedral, the star was Meghan McCain.  “The America of John McCain has no need to be made great again because America was always great.”

Of course while the funeral service was going on, President Trump was tweeting about “corrupt” news reporting and how Canada has “taken advantage of our Country for many years!” and the “fake dossier.”

The contrast with what was going on at McCain’s service could not have been more stark.

Patti Davis / Washington Post

“McCain died at a time when our country has been ripped apart by anger, racism and a petulant leader’s noisy, hateful rhetoric. We needed this week to remember what dignity looks like, what reverence for America sounds like, what tears feel like when they fall softly for a life lived with courage, gratitude and honesty.  Leaders are not always the ones who hold the highest positions.  Leaders are those who, by example, show us what we are capable of being.”

If you haven’t seen it, the HBO documentary on McCain’s life is outstanding.  Along with his final book, a collaboration with former chief of staff and speech writer, Mark Salter, the Senator was determined to complete these before he died.

McCain also called in Salter and longtime aide Rick Davis upon receiving his last diagnosis.

Davis recalled, via the Arizona Republic:

“ ‘OK, we’ve got to start planning my funeral.’ We’re like, ‘Uh, can’t it wait? This is depressing.’ He said, ‘No.  We’ve got to get it done. We’ve got to get it done right now.’”

McCain was also determined to clear out an area of his property that had become overgrown.

As Rick Davis said: “It was so nice that he was able to articulate himself what the end was going to look like. It was just amazing. You look now and you say, ‘Thank God, we got the book done. Thank God, we got the planning for the funeral done. Thank God, we got the HBO thing done.  And we got that area cleared, thank God. Because he was going to drive us all nuts with that.

“He was a man in a hurry all the way to the end.”

A friend of mine from my PIMCO days, Paul P., passed along a cool note that a buddy of his from childhood, that Paul had told me of before, was one of the four Oceana F/A-18 Super Hornets who performed the final flyover for McCain.  What a great honor...and memory.

---

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

God bless America.

---

Gold $1201
Oil $67.86

Returns for the week 9/3-9/7

Dow Jones  -0.2%  [25916]
S&P 500  -1.0%  [2871]
S&P MidCap  -0.9%
Russell 2000  -1.6%
Nasdaq  -2.6%  [7902]

Returns for the period 1/1/18-9/7/18

Dow Jones  +4.8%
S&P 500  +7.4%
S&P MidCap  +6.7%
Russell 2000  +11.6%
Nasdaq  +14.5%

Bulls 60.0
Bears 18.1

Dr. Bortrum posted a new column!

Have a great week.  Go Jets!

Brian Trumbore

 



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Week in Review

09/08/2018

For the week 9/3-9/7

[Posted 11:30 PM ET, Friday]

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

Special thanks to Dan C. this week.

Edition 1,013

Trump World

It truly is astounding that the stable genius in the White House can’t understand that in terms of the mid-term elections, all he needed to do was tout the state of the economy and shut up.  No way we’d be talking about a potential Blue Wave.  The GOP would retain the House.

I understand Trump supporters love that he is the great disruptor, and I have said I would never give him a grade until his first term is over.  I have also never used the “I-word” in my own takes thus far, and I still won’t at this point.

But when the president says the following, regarding the anonymous New York Times op-ed piece: “I would say Jeff (Sessions) should be investigating who the author of that piece was because I really believe it’s national security,” we have a problem.  Ditto when Trump earlier blamed Sessions’ Justice Department for the charges leveled against two Republican dirtball congressmen, as discussed below.

Some say, ‘Well, this is Trump being Trump.’  It’s more than that.  It’s an utter abuse of power.  No American should stand for it.

It also befits a man who simply has no knowledge of the Constitution, or what this country stands for, its history...let alone it befits a man without a moral core.

But as I told you the day he was inaugurated, which was the same day of the week as this column is posted, I have no problem with most of Trump’s economic policies, it’s in the foreign policy realm that I’m concerned.  I’m astounded more people still aren’t up in arms that we remain in the dark as to the Helsinki summit, to cite but one example.

And I grow more and more livid about how he lies to the American people on the issue of NATO.  A few days after Helsinki, Secretary of State Mike Pompeo was hauled before the Senate Foreign Relations Committee and Sen. Bob Corker (R-Tenn.), clearly miffed as I was at Trump’s performance at the NATO summit days before Helsinki, asked Pompeo to tell the truth, that NATO was paying its bills.  They are. Pompeo confirmed.

But as Trump said to his throng at Thursday’s Billings, Mont., rally, the NATO leaders asked him “will you leave us” if we don’t pay more of the tab?  “And I said, ‘Yes, I will.’”  “We’ll pay!” Trump said was the leaders’ response.  Just a total f’n lie!

[If you don’t understand where I’m coming from...the NATO budget is entirely different from each nation’s defense budget, including our own...a critical distinction, but you’d never know it listening to the president, or Sean Hannity.]

Everything Trump says on the foreign policy front, including in terms of diplomatic relations, more than stretches the truth.  Most of his trade facts do as well. 

Yes, I get exasperated.  I’m the ‘wait 24 hours’ guy, after all.  I wait for the facts, and the opinion of both sides, before weighing in.  I didn’t pass along a single false story that was submitted to me personally during the 2016 campaign.  I haven’t peddled a single conspiracy theory as fact.

And I’m sure as hell not starting now.  Donald Trump can duly crow about his administration’s successes to date.  But the nation won’t continue to skate by when it comes to his excesses, his incompetence. 

For now, we continue with another chaotic week.

Back on August 4, I wrote in this space:

“Bob Woodward’s book on the inner workings of the Trump White House, ‘Fear,’ is due out Sept. 11 and no doubt will be a big topic of discussion; Mr. Woodward having apparently sourced the book exhaustively in terms of everything has been recorded, and he has hard copies of documents from those who work (or worked) there. Woodward will be on all the Sunday and network mornings shows that first week, but we know it won’t swing anyone in the Trump base. The issue will be, so close to the mid-terms, do some independents who might be leaning Trump reconsider?  It’s bound to be devastating.”

Not a bad preview, if I may say so myself.  It is indeed a devastating portrayal, but so many in the country don’t care...to Trump’s benefit.

For now I do have to note some of the examples in “Fear” that address the president’s instability, according to the author.

After Syrian leader Bashar al-Assad launched a chemical attack on civilians in April 2007, Trump called Mattis and said he wanted to assassinate the dictator. “Let’s f---ing kill him!  Let’s go in. Let’s kill the f---ing lot of them,” Trump said.

A near-constant subject of withering presidential attacks was Jeff Sessions. Trump told assistant Rob Porter that Sessions was a “traitor” for recusing himself from overseeing the Russia investigation, Woodward writes.  Mocking Sessions’ accent, Trump added, “This guy is mentally retarded.  He’s this dumb Southerner. ...He couldn’t even be a one-person country lawyer down in Alabama.”

But this following anecdote is also appalling.  At a dinner with Mattis and Gen. Joseph Dunford Jr., the chairman of the Joint Chiefs of Staff, among others, Trump lashed out at a vocal critic, Sen. John McCain.  He falsely suggested that the former Navy pilot had been a coward for taking early release from a prisoner-of-war camp in Vietnam because of his father’s military rank and leaving others behind.

Mattis swiftly corrected his boss: “No, Mr. President, I think you’ve got it reversed.” The defense secretary explained that McCain had in fact turned down early release and was brutally tortured during his five years at the Hanoi Hilton.

“Oh, okay,” Trump replied, according to Woodward’s reporting.

Again and again, Woodward recounts at length how Trump’s national security team was shaken by his lack of curiosity and knowledge about world affairs and his contempt for the mainstream perspectives of military and intelligence leaders.

It will be interesting to see what Woodward holds back for the “shows,” as the president would say.  But, again, it’s not going to move the base one bit...especially given the economy.  The only thing that could peel a few voters off would be a geopolitical crisis of some kind where blame could be thrown Trump’s way...an October surprise.

Right after we learned of the details of the Woodward book, an anonymous essay was then published in the New York Times, depicting a “quiet resistance” trying to thwart the president when he makes what the essay writer called “half-baked, ill-informed and occasionally reckless decisions.” 

Anonymous / New York Times

“President Trump is facing a test to his presidency unlike any faced by a modern American leader.

“It’s not just that the special counsel looms large.  Or that the country is bitterly divided over Mr. Trump’s leadership.  Or even that his party might well lose the House to an opposition hellbent on his downfall.

“The dilemma – which he does not fully grasp – is that many of the senior officials in his own administration are working diligently from within to frustrate parts of his agenda and his worst inclinations.

“I would know. I am one of them.

“To be clear, ours is not the popular ‘resistance’ of the left. We want the administration to succeed and think that many of its policies have already made America safer and more prosperous.

“But we believe our first duty is to this country, and the president continues to act in a manner that is detrimental to the health of our republic....

“It may be cold comfort in this chaotic era, but Americans should know that there are adults in the room.  We fully recognize what is happening.  And we are trying to do what’s right even when Donald Trump won’t.

“The result is a two-track presidency.”

A parade of administration officials stepped forward to deny writing the op-ed.  It was extraordinary to see everyone from Vice President Mike Pence to economic adviser Larry Kudlow, with Defense Secretary Jim Mattis, chief of staff John Kelly, and Secretary of State Mike Pompeo in between.

The unnamed author became the target of a hunt by an infuriated president.  Wednesday evening he tweeted a single word: “TREASON?”

And in another tweet: “Does the so-called ‘Senior Administration Official’ really exist, or is it just the Failing New York Times with another phony source?”

And: “If the GUTLESS anonymous person does indeed exist, the Times must, for National Security purposes, turn him/her over to government at once!”

Trump ally, Republican Senator Rand Paul, who really has turned into a tool, said the president should administer polygraph examinations.

Sarah Huckabee Sanders, the White House press secretary, said anyone who wanted to know the identity of “the anonymous coward” should call The Times and she posted on Twitter the newspaper’s main switchboard phone number.  “They are the only ones complicit in this deceitful act.  We stand united together and fully support our President Donald J. Trump.”

Melania Trump even issued a statement: “To the writer of the Op-Ed – you are not protecting this country, you are sabotaging it with your cowardly actions.”

Trump suggested Thursday night at a rally in Billings, Montana that the anonymous op-ed author was a “low-level” staffer and said the betrayal was so horrible that Democrats are feeling sorry for him.

“Even liberals that hate me, say, that’s terrible what they did,” Trump said.

Trump railed against the fake news media, of course, and asked journalists for help hunting down the author who penned the “horrible” op-ed.

“I think their reporters should go and investigate who it is. That would actually be a good scoop,” Trump said to cheers.  “Nobody knows who the hell he is – or she.”

“For the sake of our national security, the New York Times should publish his name at once,” Trump added.

Earlier, before he got on stage, he told Fox News’ Pete Hegseth that the Times’ decision to publish the anonymous op-ed was a crime.

“Virtually you know it’s treason.”

Then this afternoon, on Air Force One, Trump said Attorney General Sessions should investigate ‘anonymous.’

Amidst the latest turmoil, President Trump sought validation from an unlikely source, North Korea’s chubby dictator.

“Kim Jong Un of North Korea proclaims ‘unwavering faith in President Trump,’” the president tweeted early Thursday morning.  “Thank you to Chairman Kim.  We will get it done together!’

This is unsettling, to say the least.

Michael Gerson / Washington Post

“One of the major problems with President Trump’s impulsivity is its utter predictability.

“A recent op-ed in the New York Times by an anonymous administration official accused the president of impetuous, reckless rants, and Trump responded with impetuous, reckless rants (‘TREASON?’).   Bob Woodward’s new book ‘Fear’ recounts a private ‘nervous breakdown’ in the administration and Trump responded with a public nervous breakdown – accusing Woodward of being a ‘Dem operative’ and raising a possible change in the libel laws.  Amid this crisis, North Korean leader Kim Jong Un expressed his ‘unwavering faith in President Trump,’ and the president reacted just as the North Korean leader surely knew he would – touting the positive opinion of a homicidal despot on Twitter as a character reference.

“If you prick him, does he not explode? If you stroke him, does  he not purr?

“The president’s form of deception is qualitatively different from the deviousness of Richard M. Nixon or the smoothness of Bill Clinton. Trump pursues no deep or subtle strategies. He does not even consistently seek his own interests. He responds like a child or a narcissist – but I repeat myself – to positive or negative stimulation.  It is the reason a discussion on ‘Fox & Friends’ can so often set the agenda of the president. It is the reason that Trump’s lawyers, in the end, can’t allow him to be interviewed by special counsel Robert S. Mueller III.  It would be like a 9-year-old defending a PhD dissertation.  Or maybe a rabbit jumping into a buzz saw.

“This lesson can’t be lost on foreign intelligence services, which can pre-order a comprehensive accounts of the president’s psychological and political vulnerabilities for $18 online... Here is the increasingly evident reality of the Trump era: We are a superpower run by a simpleton.  From a foreign policy perspective, this is far worse than being run by a skilled liar. It is an invitation to manipulation and contempt.”

Editorial / Wall Street Journal

“One consequence of having such a polarizing and personally flawed man as President is the degree to which his opponents justify their own destructive excess in response.  An example is Cory Booker consciously violating Senate rules Thursday in an attempt to deny Brett Kavanaugh a Supreme Court seat.  Another is the decision by a ‘senior official’ to publish an op-ed in the New York Times describing the internal government ‘resistance’ to Donald Trump.

“Let’s stipulate that publishing an article with an anonymous byline is sometimes worth doing, and we have done it ourselves.  In 1991 we shielded the name of a woman who was raped amid the debate over publishing the names of victims.  We have published op-eds protecting the identities of writers who could face arrest or worse at the hands of dictators or terrorists, while informing readers that the author was using a pseudonym.

“We don’t recall offering anonymity to someone in government or American politics, though perhaps we have and we can’t say we would never do so.  It would depend on the circumstances. The op-ed in this case doesn’t meet those standards, not least because it isn’t news.  The fact that senior Administration officials have been trying to block Mr. Trump’s uninformed policy impulses, and mute his self-destructive anger and narcissism, has been reported hundreds of times.

“Recall when Agriculture Secretary Sonny Perdue and others rushed to persuade Mr. Trump not to withdraw from NAFTA on a whim in early 2017.  Or how Defense Secretary Jim Mattis and others persuaded him that NATO is in America’s interests.  Or how White House counsel Don McGahn advised Mr. Trump against firing special counsel Robert Mueller.  In these and many other cases the cooler heads prevailed, to the country’s benefit.

“This week’s op-ed appears to have no such specific or noble purpose.  An anonymous writer’s motive is impossible to know, but the op-ed is already having the opposite effect of its self-proclaimed virtue.

“Surely the writer knew that such insider criticism in the anti-Trump New York Times would be like waving a red cape in front of a raging bull... The U.S. looks foolish before the world, which makes us wonder if the writer’s real purpose is to assist the looming campaign for impeachment. This is certainly the New York Times agenda.

“A willful Mr. Trump will do the opposite of what the writer wants if his identify is discovered. The honorable and more effective way for the author to accomplish his professed goal would have been to have kept working quietly inside the Administration, or resign and speak on the record.

“One irony is that the same people praising Anonymous have for months been denouncing all who work for Mr. Trump as moral cretins who will be condemned by history.  The anti-Trumpers are calling for purges and ostracism.  Yet now Anonymous is a saint for baring his objections without a byline in the bulletin board of the anti-Trump resistance.  Brave dude....

“The tragedy of this Presidency is that his rants and insults – even toward people who work for him – threaten to overwhelm his policy achievements. They fire up his loyalties but put off millions who expect better from a President.  Mr. Trump is now determined against good advice to make this fall’s election a referendum on himself, and if Republicans lose the House the path to his destruction will accelerate.

“As in the 2016 election, one argument millions see for supporting this President is the fury and vindictiveness of his opponents. The real heroes of this difficult period are the Mattises and McMasters, the Kudlows and Cohns, the McConnells and Ryans, who’ve worked for the good of the country amid the tumultuous personality in the Oval Office and the fevered resistance.”

Trumpets....

--The Senate Supreme Court confirmation hearings for Brett Kavanaugh have been truly pathetic, best exemplified by New Jersey Democratic Senator Cory Booker’s idiotic display Thursday.

Jonah Goldberg / New York Post

“Supreme Court confirmation hearings have mostly been theater for a long time. The dismaying thing about the latest episode – the Brett Kavanaugh show – is that it became the theater of the absurd.

“In the classic absurdist dramas of the 1950s and 1960s, Brittanica.com explains, European playwrights ‘did away with most of the logical structures of traditional theatre.  There is little dramatic action as conventionally understood; however frantically the characters perform, their busyness serves to underscore the fact that nothing happens to change their existence.’

“That’s a pretty good description of the sound and fury signifying nothing on display this week from Democrats and protesters alike.

“The central complaint of the Democrats is that they haven’t been given access to records from Kavanaugh’s time working in the Bush administration.  They demand their release by the current White House, or the Senate Judiciary Committee, or Kavanaugh or, perhaps by this writing, Aslan the Lion deity of Narnia.

“Explaining the ginned-up controversy would be a waste of time, because the point of these demands merely is to put on an absurdist drama in which the finale is never in doubt.

“Judge Brett Kavanaugh, an indisputably qualified nominee, even according to the typically liberal American Bar Association, will be confirmed no matter what the Democrats do and no matter how many indecipherable yawps get shouted by the hysterics in the hearing room....

“Nebraska Sen. Ben Sasse, in one of the best opening statements of any hearing I’ve ever heard, cut through it all.

“ ‘Since your nomination in July,’ Sasse said, ‘you’ve been accused of hating women, hating children, hating clean air, wanting dirty water.  You’ve been declared an existential threat to our nation.  Alumni of Yale Law School incensed that faculty members at your alma mater praised your selection, wrote a public letter to the school saying quote, ‘People will die if Brett Kavanaugh is confirmed.’’

“ ‘This drivel is patently absurd,’ he continued, ‘and I worry that we’re going to hear more of it over the next few days. But the good news is, it is absurd and the American people don’t believe any of it.’

“Sasse eloquently expanded on a point I’ve been banging my spoon on my highchair about for a while now. The legislative branch is becoming a parliament of pundits, in which both parties teem with people desperate to emote, preen and shriek for voters and donors who follow politics like it’s a form of entertainment, and, in this case, a theater of the absurd.”

Editorial / Washington Post

“The three days of testimony from Supreme Court nominee Brett M. Kavanaugh that concluded on Thursday were less a showcase for Mr. Kavanaugh, who delivered a steady, if evasive, performance, than a depressing display of the breakdown of Senate norms.”

As for the aforementioned Cory Booker, he exclaimed Thursday that “This is the closest I’ll ever get in my life to an ‘I am Spartacus moment,’ and threatened to divulge confidential documents to the public, even if it meant risking losing his job.

“I am going to release the email about racial profiling and I understand that the penalty comes with potential ousting from the Senate,” Booker declared.

But the emails had already been released.

A vote on Kavanaugh is apparently now set for Sept. 30.  It will be 55-45.

--Former Trump campaign adviser George Papadopoulos, who last year pleaded guilty to lying to the FBI about his contacts with Russian intermediaries before the 2016 election, was sentenced today to 14 days in jail.  He is the first Trump campaign adviser to be sentenced as part of the Mueller probe. Three others pleaded guilty or were convicted of felonies and await sentencing.

Incapable of just keeping his mouth shut, President Trump tweeted tonight: “14 days for $28 MILLION - $2 MILLION a day.  No Collusion.  A great day for America!”

--Two associates of Trump adviser Roger Stone have been questioned in the Russia probe.  Randy Credico, a comedian and talk show host, testified in front of a grand jury today about his years-long relationship with Stone and about Wikileaks.  Another Stone associate, right-wing commentator Jerome Corsi, was also scheduled to testify today.  The focus seems to be Stone’s ties to Wikileaks and its founder Julian Assange.

Credico visited Assange in 2017 in the Ecuadorean Embassy in London where he took refuge six years ago to avoid extradition to Sweden in a sexual assault case.  Credico is seen as a possible intermediary between Stone and Assange.  Corsi was apparently questioned about his emails and phone communications with Stone starting in 2016.

--Trump tweets: “Just like the NFL, whose ratings have gone WAY DOWN, Nike is getting absolutely killed with anger and boycotts.  I wonder if they had any idea that it would be this way?  As far as the NFL is concerned, I just find it hard to watch, and always will, until they stand for the FLAG!”

[Ed. they all did for Thursday night’s Eagles-Falcons game.]

“Almost everyone agrees that my Administration has done more in less than two years than any other Administration in the history of our Country. I’m tough as hell on people & if I weren’t, nothing would get done. Also, I question everybody & everything – which is why I got elected!”

“Isn’t it a shame that someone can write an article or book, totally make up stories and form a picture of a person that is literally the exact opposite of the fact, and get away with it without retribution or cost.  Don’t know why Washington politicians don’t change libel laws?”

And this... “Two long running, Obama era, investigations of two very popular Republican Congressmen were brought to a well publicized [sic] charge, just ahead of the Mid-Terms, by the Jeff Sessions Justice Department. Two easy wins now in doubt because there is not enough time.  Good job, Jeff.....

“...The Democrats, none of whom voted for Jess Sessions, must love him now. Same thing with Lyin’ James Comey. The Dems all hated him, wanted him out, thought he was disgusting – UNTIL I FIRED HIM!  Immediately he became a wonderful man, a saint like figure in fact.  Really sick!”

What’s sick, Mr. President, is your defense of two congressmen who were charged with serious crimes.

Republican Senator Ben Sasse (Neb.) responded: “The United States is not some banana republic with a two-tiered system of justice – one for the majority party and one for the minority party.  These two men have been charged with crimes because of evidence, not because of who the president was when the investigations began.”

Wall Street and Trade

The U.S. economy continues to rock and roll.  The August ISM figure on manufacturing came in at a 14-year high, 61.3 vs. an estimate of 57.5 (50 being the dividing line between growth and contraction), while the service-sector, non-manufacturing reading was 58.5, also better than forecast.

July construction spending, though, was just 0.1%, less than expected, and July factory orders fell 0.8%, but the ISM numbers are key.

Then today, we had the August employment report and 201,000 jobs were created, the unemployment rate remaining at 3.9%, though June and July were revised downward to 208,000 and 147,000, respectively, nonetheless resulting in a strong 3-month average of 185,000.

The U-6 underemployment rate was 7.4%, quite a comedown from its Great Recession high of 15% or so.

The key to the jobs report, however, was the figure for average hourly earnings, a strong 0.4% increase, putting the number at 2.9% year-over-year, the best figure since spring of 2009. That’s great to see, and better than the inflation rate, though we’re still getting whacked on healthcare and other costs, to be fair.

Add it all up and the Atlanta Fed’s GDPNow barometer for the third quarter is at 4.4%, though a consensus reading of economists puts the forecast at about 3.5%, still very strong.

*** I posted quarterly GDP figures since 2012, yearly since 2007, on my Wall Street History link and will update that piece as needed in the coming quarters.

Robert Samuelson / Washington Post

“The news is better than you might think.

“A decade after the onset of the 2008-2009 global financial crisis – an event usually dated to the bankruptcy of Lehman Bros. – the world economy seems to be repairing itself.

“To be sure, worries remain.

“The latest is that overborrowed ‘emerging-market’ countries – Argentina, Brazil, China, India, Turkey and the like – may cause a new crisis. If they can’t earn (through trade) the dollars needed to repay loans, they would default and perhaps trigger contagion. Frightened investors would flee other emerging-market countries.  President Trump’s trade wars magnify the danger.

“This prognosis is sobering; it may also be too pessimistic. In a new report, the McKinsey Global Institute – the research arm of the famed management consulting firm – has summarized the financial changes, for good and ill, that have occurred in this 10 years. There are pluses and minuses, but on balance the pluses seem to prevail.

“Here’s a rundown of McKinsey’s score card.

“ (1) American and some European consumers have reduced their debt significantly, presumably by paying down existing debts and limiting new borrowing.  American consumers cut their debt by the equivalent of 19 percentage points of gross domestic product (GDP) – roughly $3.8 trillion in today’s dollars.

“Most of this debt presumably reflected cuts in home mortgages. Other countries with real estate booms also cut borrowing: Spain’s consumer debt fell 20 percentage points as a share of GDP; the United Kingdom’s dropped by 6 percentage points of GDP.  Lower debts make it easier for households to continue spending, rather than diverting money to repaying loans.

“ (2) Cross-border movements of money – referred to as ‘capital flows’ by economists – have declined dramatically, about 50 percent, since their peak in 2007.... ‘With less money flowing across borders,’ says McKinsey, ‘the risk of a 2008-style crisis ricocheting around the world has been reduced.’...

“ (3) Global ‘imbalances’ – large trade surpluses or deficits – have diminished. The best-known are the chronic U.S. trade deficits and China’s sizable surpluses.

“But as McKinsey notes, the actual current account imbalances have shrunk, even though the rhetoric from Trump and others suggests just the opposite.  Reports McKinsey: ‘China’s surplus reached 9.9 percent of GDP at its peak in 2007 but is now down to just 1.4 percent of GDP. The U.S. deficit hit 5.9 percent of GDP in its peak at 2006 but had declined to 2.4 percent by 2017.’”

As Robert Samuelson writes, “there are still many negatives,” such as China’s growing debt load...from 145 percent of GDP in 2007 to 256 percent in 2017.  You need growth to service debts, after all.

But as McKinsey puts it: “One thing we know from history is that the next crisis will not look like the last one.  If 2008 taught us anything, it’s the importance of being vigilant when times are still good.”

On the trade front...during Saturday’s funeral service for John McCain in Washington, at the same time President Trump was tweeting: “There is no political necessity to keep Canada in the new NAFTA deal.  If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out.  Congress should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be better off...

“...Remember, NAFTA was one of the WORST Trade Deals ever made. The U.S. lost thousands of businesses and millions of jobs. We were far better off before NAFTA – should never have been signed.  Even the Vat Tax was not accounted for. We make new deal or go back to pre-NAFTA!”

Today, Canada’s top trade negotiator, Foreign Minister Chrystia Freeland, repeated her upbeat assessment of the negotiations to save NAFTA, or some semblance thereof since Trump is changing the name regardless of what Canada and the U.S. agree to.  The main sticking point appears to be the dairy issue that Trump loves to bellow about.

The U.S. and Mexico have already reached a preliminary agreement and President Trump has threatened to push ahead without Canada.  He told reporters on Air Force One today: “You know, people can say, ‘Oh, I’m too tough on Canada.’  Look, Canada’s been ripping us off for a long time. And now they’ve got to treat us fairly.”

On the U.S.-China front, President Trump warned today that he has tariffs ready to go on $267 billion worth of Chinese imports in addition to the $200 billion of the Asian nation’s goods awaiting action by him.  Implementing both sets of tariffs would subject virtually all U.S. imports from China to new duties as the world’s two largest economies escalate their battle over Trump’s demands that Beijing make major economic policy changes.

Trump has already imposed 25 percent tariffs on $50 billion worth of Chinese goods, mostly industrial machinery and intermediate electronic parts, including semiconductors.

Apple says the proposed tariff list on the $200 billion would impact its products and the products used in the company’s U.S. operations.  Parts such as hard drives and cables for Apple’s U.S. data centers, Apple adapters, though the company didn’t say the iPhone or iPad would be affected as yet.

Europe and Asia

There was a ton of economic news for the eurozone (EA19), with second-quarter GDP coming in at 0.4% over the previous quarter, Q1 also being 0.4%, and 2.1% year-over-year vs. Q1’s 2.3% annual rate.  [The growth rate hit 2.8% in the third quarter of 2017.]

Germany is running at a 1.9% annualized rate, France 1.7% (both slowing significantly), Spain 2.7%, Italy 1.2%, Netherland 2.7% and Greece 1.8%.  The U.K. is at 1.3%. [Eurostat]

By comparison the U.S. was at 4.2% for the second quarter.

On the PMI data front, the final numbers for August (from IHS Markit) revealed a composite reading on the EA19 of 54.5 vs. 54.3 in July.  The manufacturing figure was 54.6 in August vs. 55.1 in July; the services reading last month was 54.4 vs. 54.2 the prior month.

Germany’s manufacturing PMI for August was 55.9 vs. 56.9 in July
France 53.5
Spain 53.0
Italy 50.1 vs. 51.5
Netherlands 59.1
Greece 53.9

A few service sector readings:

Germany 55.0
France 55.4
Spain 52.7
Italy 52.6

Chris Williamson, chief economist / IHS Markit

“The Eurozone PMI shows the recent run of robust growth of business activity, new orders and employment extending into August. However, the expansion is looking increasingly uneven and the business mood has become more unsettled during the summer.

“The survey data for the third quarter so far suggest the single currency area is on course to at least match the 0.4% expansion of GDP seen in the second quarter, yet the downturn in optimism raises questions over whether this pace of growth can be sustained into the fourth quarter.

“Growth also looks worryingly unbalanced.”

Solid expansion still signaled for Germany and France; not so much for Italy and Spain.

Eurobits....

Brexit: Talks between the European Union and the U.K. remain stuck over the question of how to avoid a hard border between Northern Ireland, which is part of the U.K., and the Irish Republic, as well as other key items to be addressed.  Both the U.K. and EU want to finalize the divorce terms by November to allow time to get the agreement through all the respective parliaments before exit day, March 29.

But the consensus in the U.K. is to keep close trade ties with the EU.  Migration has decreased as a key issue in Britain, which is bad for Prime Minister Theresa May, because her Brexit plan is built on a promise to leave the EU’s single market in order to be free to control migration, and not be subject to EU rules.

Firms both in Europe and outside the area are feeling pain from Brexit. Pfizer says its costs for dealing with the upcoming split will reach $100 million, as Britain’s rupture with the EU threatens to slow goods at borders and force firms to duplicate regulatory efforts.  In Pfizer’s case, their costs stem from transferring product testing and licenses to other countries, changing clinical-trial procedures, and other preventive measures.  What a pain in the butt. And totally unnecessary...except the Brits lost their minds in June 2016.

A key is the Conservative party conference at the end of September, where an alternative Brexit plan from what Theresa May has put forward will be unveiled.  Mrs. May’s chief rival, Boris Johnson, has been savaging May’s Brexit plans, most recently in an op-ed in the Daily Telegraph, saying they would leave the U.K. with “diddly squat” and hand the EU a victory.

Downing Street fired back, saying Johnson has offered “no new ideas” and that “serious leadership with a serious plan” was needed.

EU chief Brexit negotiator Michel Barnier told a German newspaper on Sunday that he strongly opposed Britain’s existing proposal because it continues to cherry-pick.

“If we let the British pick the raisins out of our rules, that would have serious consequences.  Then all sorts of other third countries could insist that we offer them the same benefits. That would be the end of the single market and the European project,” he said.  Barnier is right.

It’s no surprise that British voters are more skeptical about Brexit than they’ve ever been and would probably vote against leaving the European Union if the government called a second referendum, according to new research.

There is a growing fear among previously pro-Brexit voters that leaving the EU will damage the economy, the report from NatCen, a social research institute found.

“As many as 59 percent said they would vote Remain in another referendum, while only 41 percent indicated they would back Leave,” the report said.  “This is by far and away the highest level of support for Remain that we have recorded.”

The research is based on repeated interviews with the same 2,048 people and compares their answers to questions on the same issues over the past two years.  The findings only bolster the growing campaign inside the U.K. for a new referendum on the final terms of the divorce.

But Prime Minister May has promised not to call a second referendum, even as the opposition Labour Party is keeping the option open of supporting a national vote on the outcome of the negotiations.  On Tuesday, the GMB trade union, which donates funds to Labour, came out in favor of another referendum to give the public the chance to approve or reject the final Brexit deal.

The NatCen study concludes that “Nothing is more likely to persuade someone who voted Leave in 2016 that perhaps they made the wrong choice than the perception that the U.K. economy will suffer as a result of Brexit,” the study said.

When you look at the NatCen data, and break it  down to actual voting patterns in the country, you get 54 percent voting to stay in the EU, when in 2016, 52 percent voted to leave the bloc.

Italy: The new government will be announcing a budget this fall and the bond market, for one, has been rattled on the potential size of the deficit, and increased debt, that Italy will be taking on.  As noted above, growth is minimal, but promises made in the government’s coalition agreement to address the lack of growth, and income inequality, such as a guaranteed income and pension reform, would add up to between 4.5% and 7% of GDP of additional spending, according to a study by UBS.  Various ratings agencies have been cutting the country’s debt to negative, citing concerns the country’s debt load would be far more exposed to potential shocks, but the fact that Fitch, for one, didn’t cut its rating further led to a little rally in the Italian 10-year this week.

Italy is the eurozone’s biggest government borrower.  The populist leaders have been brushing off their finance minister’s attempts to reassure investors, insisting voters’ needs must come before European spending constraints.

Deputy Prime Minister Matteo Salvini said at an event last weekend that the government will “try to respect all the hurdles Europe imposes, but the well-being of Italian citizens comes first.” he said.

Sweden: A far-right party with roots in neo-Nazism, the Sweden Democrats, is poised to become a leading political force in Sunday’s elections.  The leader, Jimmie Akesson, is taking advantage of rising crime in Sweden that he blames on the country’s liberal asylum policy.

Akesson told the Wall Street Journal: “Our questioning of mass migration and how to push back against crime – everybody is talking about that now. That’s of course in our favor.”

Sweden, one of the world’s most affluent and progressive nations, is poised for a big swing from a broad liberal consensus to extreme polarization.  Polls put the Sweden Democrats in first or second place, which could leave the center-right and center-left blocs struggling to form a stable government, this as the economy is growing at a strong 3.3% rate.

But immigration has become the defining issue.

Turning to Asia...China’s private Caixin PMIs were revealed this week; 50.6 in August vs. 50.8 in July on the manufacturing end, 52.0 vs. 52.3 for the service sector.

Japan’s Aug. manufacturing PMI, via Markit, was 52.5 vs. 52.3 the prior month.

South Korea’s manufacturing PMI for August came in at 49.9 vs. 48.3, as that economy continues to struggle, while Taiwan’s was 53.0  vs. 53.1.

Street Bytes

--Stocks opened the traditionally rough month of September on a down note; the Dow Jones falling 0.2% to 25916, while the S&P 500 lost 0.9% and Nasdaq 2.6%.  Renewed trade tensions regarding China today didn’t help, but the market continues to shrug off the turmoil in the White House.  It might not be so sanguine come the mid-terms.

--U.S. Treasury Yields

6-mo. 2.30%  2-yr. 2.70%  10-yr. 2.94%  30-yr. 3.10%

The yield on the 10-year ticked up on the strong economic data, but it has been in a range of 2.80% to 2.95% for 16 weeks now.

--Amazon became the second American company to cross the trillion-dollar market capitalization line.  But after it touched $2,050 per share to hit the magic number, the stock slid to finish the week at $1,952, a market cap of $952bn.

Amazon captures 49 cents of every e-commerce dollar in the United States, and now employs more than 550,000 people and generates $178 billion in annual revenue.

At the same time, Amazon’s search for a second headquarters has generated a different level of excitement in a number of major metropolitan areas.

But Amazon is now facing widespread criticism for its low wages to employees, and intense work pressures for its warehouse staff, as noted in numerous reports.  This issue is definitely one being taken advantage of for the mid-term elections by the likes of the left-wing of the Democratic Party.  We’ll see how well it plays at the voting booth.

--Auto sales in the U.S. were flat in August, owing to a worse-than-expected month from General Motors, but most other auto makers reported increases in sales in August.  Sales the rest of the year are expected to be flat, but the forecast for 2018 is still at about 17 million vehicles sold vs. 2016’s record 17.6 million.  Strong.

SUVs, pickup trucks and vans accounted for about 68% of new-vehicle retail sales in August, the highest-ever level for the month, according to J.D. Power.

GM, which no longer officially reports monthly sales, saw its sales for last month nonetheless decline 13%, according to a source, when a drop of 8% was forecast.

But Ford and Nissan reported single-digit gains, while Fiat Chrysler saw its sales increase 10%, propelled by its Jeep and Ram pickup brand.  Sales of the Jeep Cherokee, for example, rose 85%.

Toyota reported a slight decrease, with sales of its flagship Camry sedan down 19%.

--Separately, Ford has recalled around 2 million of its best-selling and most profitable vehicles, F-150 trucks, in the latest blow to the company at a time when investors are increasingly skeptical of the CEO’s turnaround plan.  Ford said the 2015-2018 model F-150 regular cab and SuperCrew cab vehicles in North America were being recalled for a driver and front passenger seat belt “pretensioner” flaw that could lead to fires.  A Ford investigation found that some front seat belt pretensioners can generate excessive sparks when they deploy.  The company said in a statement: “Ford is aware of 17 reports of smoke or fire in the United States and six in Canada.  Ford is not aware of any accidents or injuries as a result of this condition,” it added.

So this comes at a time when Ford employees are awaiting details of CEO Jim Hackett’s promised “fitness” plan and the serious possibility of significant job losses as the company faces pressure to improve operations.  The Sunday Times of London reported that for starters, the company’s money-losing European division could face massive cuts of up to 24,000 jobs.

--Toyota Motor Corp. is recalling over one million Prius and C-HR crossover sport-utility vehicles globally to repair a portion of the electrical system that could cause a fire.

The recall affects certain 2016-2018 model-year Prius, Prius Prime plug-in hybrids and hybrid gas-electric versions of the C-HRs.

The issue came up at the assembly lines in Japan; investigators discovering the defect after a Toyota vehicle was damaged by a fire.

The company said notices would be sent to those impacted via the mail.

--And then there was Tesla and the ongoing saga of Elon Musk.  The shares of the electric carmaker fell 6% today to $264.50, quite a comedown from Musk’s Aug. 7 tweet that he had an offer to take the company private at $420. It has been nothing but trouble ever since.

Thursday, Musk appeared in a popular podcast, the Joe Rogan Experience, and appeared to smoke pot, which is legal in California, while the company’s chief accounting officer resigned after just a month in the job.  Dave Morton said in an SEC filing:

“Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations.  As a result, this caused me to reconsider my future.”

Morton did go on to say: “I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreement with Tesla’s leadership or its financial reporting.”

--Shares in Nike initially slid from last Friday’s $82.20 to about $79 as the company faced criticism over its new ad campaign featuring Colin Kaepernick, but today they closed at $80.30.  As former NBA star Derrick Coleman would have said, “Whoopty-damn-do.”

Sally Jenkins / Washington Post

“Kick has always been political, and Nike has always sought to capture new generations with its use of intense color.  This is a company that built itself on chroma-flourescent blues and acetate volt greens.  The Colin Kaepernick campaign falls in that category: It’s a transactional piece of advertising that seeks to hook into the vanguard yearnings and values of its buyers by using a surprising hue. If the campaign is important, it’s not as an act of corporate conscience, but rather as a reflection of coming American demographics, which Nike is always so good at identifying and signifying.

“Burning shoes and flaming hashtags are not unwelcome at Nike.  The viral images of swooshes on fire won’t bother the markets who decided to use Kaepernick one bit. This is a company that has been losing ground to Vans and for the first time in a decade didn’t have the most popular shoe in America in 2017, surpassed by Adidas Superstar. What Nike always has been best at is staying ahead, and the risk of employing Kaepernick in a campaign is nothing compared with what it risks by falling behind.  Here’s why:

“Millennials, those Americans between the ages of 22 and 37, are projected to surpass baby boomers as the nation’s largest living adult generation in 2019, and fully 44 percent of them are of some race other than white. For post-millennials, that number rises to 48 percent, and for post-post-millennials (American children under age 10), it grows to more than 50 percent.

“These Americans are ‘very different than earlier generations’ in a variety of ways, according to demographer William Frey, author of ‘Diversity Explosion: How New Racial Demographics Are Remaking America.’ They are more prone to interracial marrying, friendlier to immigration and often want their consumption to have a social component. If Nike is willing to offend its graying buyers in order to court these multiple generations with a racial justice campaign, ‘it’s a good bet that a lot of younger people will be attracted and go along with that,’ Frey said....

“Nike knows movements. Its shoes are in a way chronicles of seismic American shifts, sort of like Stetsons, stovepipes, fedoras and trucker caps.  It has long been a hallmark of Nike’s collective genius to recognize that sneakers are significant artifacts. They mark our youths and our fads, chart our decades and our societal shifts from decorative to active and back again. There is a reason Prada and Gucci got into making sneakers and that Galliano put so many of them on the runway this spring.  A 2016 curatorial museum exhibit titled, ‘Out of the Box, the Rise of Sneaker Culture,’ was made up on 200 years of kicks, and every pair had meaning....

“Nike as a company has always had an overtly long view. It thoroughly understands its place in American culture, right at the juxtaposition of fashion and technology. It designs shoes as if it expects they will indeed one day be curated, possibly even wind up in the Smithsonian. What it sees in Kaepernick is not just a digital poster but the face of an entire new wave. In that sense, Nike’s campaign is not radical.  It’s the furthest thing from it. It’s just the future.”

Another stat, buttressing the above...nearly two-thirds of individuals who wear Nikes in the United States are under 35 years old.

Meanwhile, President Trump told the Daily Caller: “I think it’s a terrible message that they’re sending and the purpose of them doing it, maybe there’s a reason for them doing it, but I think as far as sending a message, I think it’s a terrible message and a message that shouldn’t be sent.  There’s no reason for it.”

But Trump also told the Daily Caller that while he disagrees with “the Colin Kaepernick endorsement, it is what this country is all about, that you have certain freedoms to do things that other people think you shouldn’t do, but I personally am on a different side of it.”

Of course he’ll give less rational answers on the campaign trail, I imagine, and in tweets.

Multiple sources told ESPN’s Dan Graziano that the NFL was not aware of the Nike ad campaign until it was launched Monday.  The league then issued a statement Tuesday.

“The National Football League believes in dialogue, understanding and unity,” Jocelyn Moore, the NFL’s executive vice president of communications and public affairs, said in a statement.  “We embrace the role and responsibility of everyone involved with this game to promote meaningful, positive change in our communities.

“The social justice issues that Colin and other professional athletes have raised deserve our attention and action.”

Gino Fisanotti, Nike’s vice president of brand for North America, told ESPN on Monday, “We believe Colin is one of the most inspirational athletes of this generation, who has leveraged the power of sport to help move the world forward.”

--Bayer AG said the number of American plaintiffs alleging its weedkill caused cancer has risen to 8,700 as of late August, up from 5,200 a few months earlier.  The German chemical giant just lowered its full-year guidance as a result of delays in closing its $63 billion purchase of Monsanto, which is the maker of the product at issue, Roundup.  The future liability, in light of the recent $289.2 million judgement in California against Monsanto, and Bayer, is incalculable.  Sure, that incredible figure will no doubt get reduced significantly, but the legal costs going forward for Bayer will be enormous.

That said, Bayer said it hasn’t seen a decline in demand for its glyphosate products that many independent studies have found are safe (Ranger Pro being another).

--Liu Qiangdong, founder and chief executive of Chinese commerce group JD.com, has returned to his home country on Monday, after spending one night in custody following an allegation of sexual assault in Minnesota.

A company spokesperson said: “We were informed that our CEO Richard Qiangdong Liu was taken into custody by Minneapolis police on August 31, 2018.  He has been released without any charges, and without requirement for bail.  Mr. Liu has returned to work in China.”

Mr. Liu’s attorney then said: “Mr. Liu was taken into custody by the Minneapolis Police.  He was then released without any charges or bail being required. He is free to go back to his homeland and return to work. Under these circumstances based on our substantial experience in the criminal justice system in Minnesota charges are highly unlikely in the future to be brought against our client.  Additionally, our client denies any wrongdoing.”

According to the Financial Times, the allegation involved Mr. Liu and a Chinese student at the University of Minnesota and allegedly occurred during a business trip to the U.S.

The Minneapolis Police Department, however, said the investigation was ongoing, and that Liu was released pending a formal complaint.  A spokesman said, “We can charge him anytime up to the statute of limitations running out.”

So will Mr. Liu ever return to the United States?  We’ll see how this shakes out in the courts.  JD.com is now China’s second-largest e-commerce company after Alibaba.  Investors include Chinese internet giant Tencent and U.S. retail group Walmart.

--And this breaking news tonight, Friday. Alibaba co-founder Jack Ma is retiring to pursue philanthropy in education, according to the New York Times.

--An outbreak of the highly contagious swine fever continues to severely impact China’s pig market.  Thursday, China announced its tenth case of the disease in just over a month.   Much of the northeast is now locked down in terms of pig farms being quarantined, which is driving up prices in the south ahead of a week-long October holiday. Experts estimate 30,000 pigs are trucked out of the country’s north each day, with the bulk of the slaughterhouses in the south.

The pig market is a huge business in China, and many experts believe the government is not capable of controlling swine fever.  While China is self-sufficient in this area, it will now need to import more pork.

Swine fever is not contagious for humans, but no one is obviously going to eat diseased pork.

--Independent board members of CBS Corp. are negotiating a possible exit for CEO Leslie Moonves and asking for assurances of autonomy from controlling shareholder National Amusements Inc., as first reported by CNBC.

The move comes as CBS and National Amusements, led by Shari Redstone, are trying to settle a legal dispute over control of the media company that is scheduled for trial in Delaware next month.

Moonves, 68, is being investigated by law firms appointed by CBS’ board over sexual-harassment allegations reported by the New Yorker.

Moonves and Redstone have a terrible relationship, as Redstone pursues her desire to merge CBS and Viacom Inc.

--Twitter is permanently banning right-wing conspiracy theorist Alex Jones and his “infowars” show for abusive behavior.

Twitter says Jones won’t be able to create new accounts or take over any existing ones. Twitter says Jones posted a video on Wednesday that is in violation of the company’s policy against ‘abusive behavior.’    The video in question shows Jones shouting at and berating CNN journalist Oliver Darcy for some 10 minutes during congressional hearings about social media.

Twitter had previously suspended Jones for a week. But until now it had resisted muzzling him further.  Other tech companies have limited Jones by suspending him for longer periods, as Facebook did, and by taking down his pages and radio stations.

But the Twitter permanent ban raises issues of consistency and social-media services in general in terms of applying their rules against harassment and other bad behavior.

Critics on Twitter also pointed out that Jones was allowed to harass Sandy Hook parents for six year with no repercussions.

--The Academy of Motion Picture Arts and Sciences has announced its new planned “popular” Oscar “merits further study” and will not present the new category at its upcoming 91st Academy Awards.

The organization stated that “while remaining committed to celebrating a wide spectrum of movies,” it recognized that implementing any new award nine months into the year “creates challenges for films that have already been released.”

I think the Academy just realized it was an incredibly stupid idea.

Foreign Affairs

Syria: As I wrote last week, the international story of the next few weeks is Idlib...the last major rebel stronghold in the northwest of Syria.  Extensive bombing of the province by Russian and Syrian aircraft this week is a precursor to a final massive assault by Syrian, Russian and Iranian forces, which would result in a humanitarian catastrophe and millions of new refugees.

President Trump tweeted: “President Bashar al-Assad of Syria must not recklessly attack Idlib Province. The Russians and Iranians would be making a grave humanitarian mistake to take part in this potential human tragedy. Hundreds of thousands of people could be killed. Don’t let that happen!”

Within hours of this, Russian jets began an intense barrage on the region.  Russia has been building up its naval presence in the Mediterranean, on Syria’s coast, for weeks.

The presidents of Iran, Russia and Turkey held a summit in Tehran that could decide the fate of the province.

Turkey, which has long backed rebel groups, fears an all-out assault will trigger another refugee crisis on its southern border. Russia and Iran believe the rebels in Idlib must be wiped out.

Today, Turkish President Erdogan also said Turkey is “extremely annoyed” by the United States’ support of a terrorist organization, as Turkey sees it, the Syrian Kurdish YPG.

Jim Jeffrey, the new U.S. adviser for Syria, said on Thursday there is “lots of evidence” that chemical weapons are being prepared by Syrian government forces.

“I am very sure that we have very, very good grounds to be making these warnings,” said Jeffrey, who was named on August 17 as Secretary of State Mike Pompeo’s special adviser on the country, overseeing talks on a political transition.

“Any offensive is to us objectionable as a reckless escalation,” Jeffrey told reporters in his first interview on the situation since his appointment.  “There is lots of evidence that chemical weapons are being prepared.”

The Syrian government has repeatedly denied ever using chemical weapons.  But the U.S. State Department warned on Monday that Washington would respond to any chemical attacks by the Syrian government or its allies, and France has weighed in it would respond as well.

Experts from the UN and the Organization for the Prohibition of Chemical Weapons have said they are confident government forces were behind an attack involving the nerve agent Sarin on a rebel-held town in southern Idlib in April 2017 that killed more than 80 people.

Meanwhile, President Trump, who just months ago said he wanted “to get out” of Syria and bring U.S. troops home soon, has agreed to a new strategy that would see a permanent military presence in Syria, at least for the foreseeable future, according to the State Department.

While the administration’s stated purpose of our current troop level, about 2,200, is for the campaign against Islamic State, now it is being redefined to include the exit of all Iranian military and proxy forces from Syria, and the establishment of a stable and non-threatening government for all the Syrian people.

“The new policy is we’re no longer pulling out by the end of the year,” said the aforementioned Jim Jeffrey. “That means we are not in a hurry.”

Mona Yaoubian, an expert on Syria at the U.S. Institute of Peace, told Defense News, “This is going to be far more catastrophic than anything we witnessed so far.”  The large numbers of civilians and the fact that there’s nowhere for them to go makes the impending fighting a particular risk for them.  “I think by all accounts, the regime is going to stop at nothing to take this territory back. And so we expect a particularly brutal onslaught on the part of the Syrian regime backed by the Russians,” she said.

Assad has sworn to recapture every inch of Syria and has made big gains against rebels since Russia joined his war effort in 2015.

Editorial / Washington Post

“Can a tweet stop another bloodbath in Syria? Evidently not. Hours after President Trump used his favorite medium to warn Russia not to join in a new offensive on the northern province of Idlib, saying it would be ‘a grave humanitarian mistake,’ Russian aircraft carried out dozens of strikes in the rebel-held province on Tuesday, reportedly killing at least a dozen civilians. That was just the beginning of what could be the most horrific episode yet in the seven-year-old civil war. About 3 million civilians are trapped in Idlib, of whom as many as half are refugees from other parts of Syria. Mr. Trump was hardly exaggerating when he wrote that ‘hundreds of thousands of people could be killed.’

“As Secretary of State Mike Pompeo noted, Russia pledged to preserve Idlib as a ‘deescalation zone’ and end the war through diplomacy.  Yet it now appears poised to throw its planes behind an assault by the government of Bashar al-Assad, also backed by Iran, to capture the territory by force.  Moscow cites the presence of an al-Qaeda-linked rebel group, which controls much of Idlib; Foreign Minister Sergei Lavrov says it is a ‘festering abscess’ that must be ‘liquidated.”  But the United Nations’ Syrian envoy estimates there are only about 10,000 fighters in the extremist group. If they follow the usual modus operandi, the Assad, Iranian and Russian forces will fight them by systematically targeting the civilian population and infrastructure, including food markets, schools and hospitals.

“The damage could spread far beyond Syria. A full-scale offensive could send hundreds of thousands of refugees streaming north toward Turkey, where some 3.5 million Syrians already are harbored.  For now, Turkish President Recep Tayyip Erdogan is preventing refugees from continuing on to Europe, where their mass arrival in 2015 prompted a far-reaching political backlash. But if Idlib erupts, that could change.

“Faced with these stakes, the Trump administration’s response has been pathetically weak. Mr. Pompeo resorted to tweeting that ‘the world is watching’ – echoing the feckless words used by then-Secretary of State John F. Kerry when Syrian and Russian forces reduced the city of Aleppo to rubble.  The only red line drawn by the White House is against the use of chemical weapons; in that case, a statement said, it would ‘respond swiftly and appropriately.’

“Deterring chemical attacks is important, but to stand by while a humanitarian catastrophe is created by conventional means, and the Assad-Russian-Iran alliance consolidates control over Syria, would be another damaging abdication of U.S. leadership....

“Unfortunately, the Assad regime and its Russian allies have a long record of rejecting compromise for scorched earth. They will also judge that tweets from the president of the United States can be safely disregarded.”

Separately, Israel continued to strike military positions in Syria, targeting Iranian positions.  Israeli warplanes have been entering Syria via Lebanon, screaming at low altitude over Beirut, which must be disconcerting to residents there.

Iran: Aside from its heavy involvement in Syria, and elsewhere, Iran announced it plans to boost its ballistic and cruise missile capacity and acquire modern fighter planes and submarines, according to the Iranian state news agency.  News of the military development plans came a day after Iran dismissed a French call for negotiations on Tehran’s future nuclear plans, its ballistic missile arsenal and its role in wars in Syria and Yemen, following the U.S. pullout from Tehran’s nuclear agreement with world powers.

Iran has been staging extensive war games recently as a show of deterrence against a potential U.S. attack down the road.

Iran rejected a Reuters report that it had moved missiles to Iraq, Secretary of State Pompeo saying he was “deeply concerned” by the stories.

Iraq: Eleven Iraqi political groups, including those led by cleric Moqtada al-Sadr and Prime Minister Haider al-Abadi, announced an alliance on Sunday that would be the largest bloc in the newly elected parliament. The alliance includes 162 lawmakers from eleven electoral lists, according to the state news agency.

I’ve said a government wouldn’t be formed for months, but this alliance is still short of a majority (329 seats in parliament total) and I have my doubts.  You need a speaker, first, and then the real process of forming a government begins.

Meanwhile, at least 12 protesters have died this week in civil unrest fueled by anger against perceived corruption and misrule by Iraq’s political elite across the south of the country, including Basra.  Government buildings there have been stormed and torched.  There have also been major protests at some of Iraq’s key oilfields in the region. This is where Iran has a strong presence.

The protests were fueled by the lack of power and safe drinking water in the heat of summer.  This will have an impact on efforts to form a new government in Baghdad.  Moqtada al-Sadr, the Shiite cleric, said Baghdad must release more funds to Basra, where Shiites reside in large numbers, thus Iran’s presence.

Afghanistan/Pakistan: The Taliban said the Afghan Haqqani network founder, Jalaluddin Haqqani, an ex- U.S. ally turned fierce enemy, has died after years of ill health.  He had been paralyzed for the last 10 years.

The Haqqani network was declared a terrorist organization by the United States in 2012.  Haqqani had not been heard from in several years, and reports of his death had been widespread since 2015.

Separately, the U.S. military said it was cancelling $300 million in aid to Pakistan over what it calls Islamabad’s failure to take action against militant groups.  President Trump has previously accused Pakistan of deceiving the U.S. while receiving billions of dollars.

Pentagon spokesman Lt. Col. Kone Faulkner said, “We continue to press Pakistan to indiscriminately target all terrorist groups,” including the Taliban and the Haqqani network.

China: After El Salvador became the fifth ally of Taiwan to switch diplomatic recognition from the self-ruled island to Beijing since Tsai Ing-wen became president of Taiwan, analysts say Taipei must do all it can to resist Beijing’s diplomatic squeeze and retain its 17 remaining allies (down from 22) or risk losing its sovereignty if the number shrinks to zero.

Beijing has ramped up its campaign to woo away Taipei’s allies in an attempt to force Tsai to accept the “one China” principle that she has refused to acknowledge thus far.

Some of Tsai’s supporters, however, say Taiwan would be better off without any of these ‘allies,’ freeing the island from the financial and economic aid it supplies to mostly impoverished African and Latin American countries.  Last year Taiwan spent $293 million in its economic cooperation programs with its remaining Latin American allies, for example.

But I’m worried China is preparing to make a move on the island, having predicted they could do it by year end.

Josh Rogin / Washington Post

“The Chinese government is ramping up its worldwide effort to strip Taiwan of its international recognition, legitimacy and economic freedom, but the United States seems either unwilling or unable to confront Beijing. The Trump administration must challenge Chinese intimidation of Taiwan wherever it emerges – especially in our own backyard.

“The paradox of the Trump administration’s Taiwan approach is that, despite the presence of pro-Taiwan officials throughout the government, the actual policy has moved only incrementally, well short of what would be a proportional response to Beijing’s increasingly aggressive diplomatic, economic and military campaign against Taiwan.

“The United States’ Taiwan policy is hampered by two challenges: the lack of a comprehensive strategy and the personal resistance of President Trump. Convinced his personal friendship with Chinese President Xi Jinping will yield results for the United States on either trade or North Korea, Trump has resisted more assertive moves to bolster the U.S.-Taiwan relationship, several officials said.

“ ‘This administration, from a personnel perspective, has the most hawkish Taiwan team ever,’ one senior administration official told me.   ‘But if Xi calls and complains, the president’s instinct is to defer to that because there is always some pending issue in which we want something from the Chinese.’....

“(True), the administration has taken public stands against many of Beijing’s actions. Last month, the White House criticized El Salvador for breaking diplomatic ties with Taiwan. Earlier this year, the administration called out Beijing for attempting to force international airlines to scrub Taiwan from their websites.

“Though the Trump administration approved a $1.4 billion arms sale to Taiwan last year, there is no word of any further deals. And in June, the administration failed to send any Cabinet-level officials to the opening of the new headquarters for the American Institute in Taiwan, our de facto embassy. This is not the Taiwan policy that Trump officials such as national security adviser John Bolton have long championed....

“Meanwhile, the United States must help Taiwan bolster its own defenses opposite China’s overwhelming military buildup....

“ ‘The cross-strait military balance has already shifted fundamentally but we can never have China draw the conclusion they can attack Taiwan with impunity and achieve a political goal,’ said Bonnie S. Glaser, a senior adviser at the Center for Strategic and International Studies....

“(The) Global Times, a state-run media outlet in China, stated (this week), ‘Taiwan’s ‘independent sovereignty’ is like melting ice, and it is swimming against the dominant global tide.’....

“Most importantly, Trump officials must persuade the president that defending Taiwan is not an irritant in the U.S.-China relationship.  It is a test case for America’s willingness to respond to Beijing’s global aggression.”

And this just in...tonight, the United States said it had recalled its top diplomats in the Dominican Republic, El Salvador and Panama over those countries’ decisions to no longer recognize Taiwan.  Good!

North / South Korea: President Trump thanked Kim Jong Un on Thursday for his “unwavering faith” in him despite a breakdown in negotiations between the two countries over the North Korean regime’s denuclearization.

“Kim Jong Un of North Korea proclaims ‘unwavering faith in President Trump.’ Thank you to Chairman Kim.  We will get it done together!” Trump tweeted after a meeting between Kim and South Korean leaders.

According to South Korean officials, Kim wants to achieve denuclearization of the Korean Peninsula before Trump finishes his term. Trump then fell for this hook, line and sinker.

The South’s delegation held talks with Kim to set up a summit planned for Sept. 18-20 in Pyongyang between Kim and South Korean President Moon Jae-in, their third meeting since April.

“Chairman Kim Jong Un has made it clear several times that he is firmly committed to denuclearization, and he expressed frustration over skepticism in the international community over his commitment,” South Korean national security adviser Chung Eui-yong said.

“He said he’s pre-emptively taken steps necessary for denuclearization and wants to see these goodwill measures being met with goodwill measures,” added Chung, who met with Kim on Wednesday in Pyongyang.

Kim cited the dismantling of the Punggye-ri nuclear test site and Dongchang-ri missile launch facility as evidence of his commitment to end nuclear testing permanently, Chung said, as the Washington Post reported.

And he asked for a message to be delivered to Trump.

“I can’t release it here, but Kim said he wants conditions to be created that will make him feel right about his decision to denuclearize,” said Chung.

Kim is still seeking a formal declaration from Washington to end the Korean War – something Pyongyang has said is vital to building trust and ending decades of hostility.  Kim said such a declaration would not imply a withdrawal of U.S. forces or a weakening of the U.S.-South Korean military alliance, according to Chung.

“Chairman Kim also emphasized he has never spoken ill of Trump to his aides or anyone really. He also said, on the basis of such trust, he hopes to end 70 years of hostile relations with the United States, improve the bilateral relationship and fulfill denuclearization,” he said.

On Thursday, Secretary of State Pompeo said North Korea still has “enormous” work to do to meet commitments made to Trump at the Singapore summit.

Meanwhile, as the New York Times reported, “A North Korean spy was charged in the hacking of Sony Pictures Entertainment in 2014, the Justice Department announced on Thursday, accusing the North of orchestrating a broad conspiracy that caused hundreds of millions of dollars’ worth of economic damage over the past five years in the United States and around the world.

“Park Jin-hyok was charged with computer fraud and wire fraud; taking part on attacks on film companies and distributors, including Sony Pictures, financial institutions and defense contractors, law enforcement officials said.  Park was also accused of being part of the development of the WannaCry 2.0 ransomware attack that infected an estimated 230,000 computers worldwide and crippled the British health care system last year.”

John C. Demers, the head of the Justice Department’s National Security Division, said in a statement:

“The North Korean government, through a state-sponsored group, robbed a central bank and citizens of other nations, retaliated against free speech in order to chill it half a world away, and created disruptive malware that indiscriminately affected victims in more than 150 other countries, causing hundreds of millions, if not billions, of dollars’ worth of damage.

“These charges will send a message that we will track down malicious actors no matter how or where they hide,” he added.  [David Sanger, Katie Benner and Adam Goldman / New York Times]

But with the U.S. having no formal relations with North Korea, Park will never appear in a U.S. courtroom, of this you can be sure.

President Trump didn’t tweet about the arrest and its implications.

Russia: British authorities, with some superb detective work, charged two men that they believe are Russian military intelligence officers with the attempted murder of a former spy and his daughter in March.

Alexander Petrov and Ruslan Boshirov were charged by prosecutors with four offenses related to the poisoning of Sergei Skripal and his daughter.  Sergei had lived in Britain since a 2010 spy exchange with Moscow.  The charges included the use and possession of nerve agent Novichok.

In a statement to lawmakers Wednesday, Prime Minister Theresa May said the attack was almost certainly authorized at “a senior level” of the Russian state. She added that the U.K. government concluded the two are officers with Russia’s military intelligence service, the GRU.

Russia’s Foreign Ministry responded that the names of the two men accused meant nothing to Moscow.

Separately, a leader of Russian-backed separatists in eastern Ukraine, Alexander Zakharchenko, was killed in an explosion at a café in Donetsk city, a terrorist attack. Russia’s foreign ministry suspected Ukraine of organizing the killing.

But there were other reports that Zakharchenko had fallen out of favor with Moscow.

Meanwhile, this from the Moscow Times:

“Russian state television started a new weekly show devoted to Vladimir Putin, lauding the president’s leadership qualities, physical energy and attentiveness to public needs.

“The first hour-long episode of ‘Moscow.  Kremlin.  Putin’ broadcast in prime time on Rossiya-1 TV on Sunday and featured breathless commentary on Putin’s meetings and visits in the past week, including footage of him on vacation in Siberia and meetings with students in Sochi.  A discussion on a controversial pension reform that has dented Putin’s popularity praised the president’s sense of responsibility in tackling the issue, while failing to mention protests attended by thousands of Russians in major cities.

“ ‘Putin doesn’t only love children, he loves people in general,’ Kremlin spokesman Dmitry Peskov told host Vladimir Soloviev during a segment on the president’s attitude towards Russia’s young.  ‘He’s a very human person.’”

Cough cough.

Japan: What an awful week here, as a powerful earthquake on Japan’s island of Hokkaido crippled the region, with a rising death toll and some 1.6 million residents without power days after.  It was the second disaster to hit Japan this week, after a deadly typhoon lashed the country’s west coast.

Thousands of travelers have been stranded for days at Kansai International Airport in Osaka, owing to flooding from the typhoon, requiring the evacuation by boat!  Kansai is on an artificial island long prone to flooding.

Of Japan’s 23.3 million Asian tourists who visited Japan in 2017, 6.6 million entered through Kansai International, the government said.

Brazil: And what an awful week here. The front-runner in Brazil’s presidential election, Jair Bolsonaro, was stabbed at a campaign rally on Thursday and initially was described as being in grave condition, but now reports say he will have a full recovery, though this will take months. The stab wound entered his intestines and there is real fear of infection.

Bolsonaro, a far-right politician, was attacked while a crowd of supporters carried him on their shoulders. A suspect was immediately arrested.

The candidate has outraged many in Brazil with racist and homophobic comments, but he has performed strongly in recent opinion polls, which suggest he would get the most votes in next month’s presidential elections if former President Luis Inacio Lula da Silva remains blocked from standing.  The left-wing Lula had been the favorite even as he’s currently in prison, before the courts said he wasn’t eligible.

Talk about surreal.  The once-leading candidate is in prison, and the new leader in the polls is recovering in a hospital.

One of Bolsonaro’s key campaign platforms was his pledge to turn around the growth in violent crime, and the fact he was then a victim of it would only bolster his standing at the polls, one would think.  Everyone – including his detractors – has rallied around him to condemn the attack.

As if this wasn’t bad enough, days earlier, a huge fire broke out at the National Museum of Brazil in Rio de Janeiro, the oldest scientific institution in the country, with some of the oldest artifacts on the South American continent.

Everything was destroyed.

The museum once served as the residence for the Portuguese royal family and had just celebrated its 200-year anniversary earlier this year.

Brazilian President Michel Temer said in a tweet that it was a “sad day for all Brazilians,” adding: “The value of our history cannot be measured by the damage to the building.”

The museum’s director called it a “cultural tragedy.”

The natural history collection included important dinosaur bones and a 12,000-year-old human skeleton of a woman – the oldest ever found in the Americas.

Employees had recently expressed concern over budget cuts and the dilapidated state of the building.  And get this, the fire hydrants outside the museum were dry and water had to be trucked from a lake to battle the blaze.  It was too late.

There were major protests in the days following the tragedy that needed to be disbursed by riot police.

Brazil is a country in turmoil for sure.  [Ditto neighbor Argentina, which I may get into next time.]

Random Musings

--Presidential tracking polls....

Gallup: 41% approval of President Trump’s job performance, 53% disapproval (Sept. 2)
Rasmussen: 48% approval, 52% disapproval (Sept. 7)

--A new USA TODAY/Suffolk University Poll asked the generic House vote question and 50% of those surveyed said they were more likely to vote for the Democratic congressional candidate in their district, vs. 39% who said they would vote Republican.

Most of these recent polls have the Dems with an 8- to 11-point advantage, with analysts saying the Dems need to keep it at at least 8 to have a shot at flipping the 23 House seats that would bring a majority.

In the same survey, by a 58-34 margin, registered voters want to elect a Congress that mostly stands up to Trump rather than one that mostly cooperates with him.

As for the president’s job approval rating, it was 40%, 56% disapprove.

This poll was conducted Aug. 23-28.

--The number of women candidates on the ballot is shattering records, according to the Center for American Women and Politics at Rutgers University.  An unprecedented number of women been nominated for the House, the Senate, for governorships and for state legislatures.

226 women have won nominations in House races thus far, blowing past the previous record total of 167 in 2016. Another 251 women are seeking nominations in states that haven’t yet held their primaries.

--Arizona Gov. Rob Ducey (Rep.) made a great selection in convincing former Sen. Jon Kyl to return to Washington to serve out the remainder of the late John McCain’s Senate term, until a 2020 special election.

Kyl represented Arizona in the Senate from 1995 to 2013 – ultimately becoming the party’s number two.

But Kyl said he only wanted to serve into January – which would allow him to vote for Brett Kavanaugh for the Supreme Court, Kyl having shepherded Kavanaugh through the Senate as he met those who would be voting on him – but he’s added he’s open to remaining in the Senate until 2020, when an election will be held to fill McCain’s seat until 2022.  But at age 76, Kyl said he definitely wouldn’t be running again, making it clear that competition for the seat will be fierce in 2020.

Cindy McCain hailed Kyl’s selection, writing on Twitter that he is “a dear friend” and that it’s “a great tribute to John that he is prepared to go back into public service.”

Meanwhile, Ducey is facing his own re-election in November, and as Democratic enthusiasm is surging, he could ill afford to anger any Republicans.  

--Boston City Councilor Ayanna Pressley upset Rep. Michael Capuano in Massachusetts’ Democratic primary, making it all but certain that Pressley will become the first black woman elected to Congress from the state in November.  It would also give the party’s progressive wing another win in their effort to pull the party leftward.

Pressley is drawing comparisons to Alexandria Ocasio-Cortez, who ousted 10-term New York Rep. Joe Crowley in a Democratic primary in June, for which Ocasio-Cortez faces no opposition in November.

--Chicago Mayor Rahm Emanuel shocked the political world in the Windy City by announcing he wasn’t running for a third term.

When I first saw this, I was thinking Chicago elections were in November 2019, but the reason why this was kind of a cataclysmic deal is because the election is actually in February (2/26), with a run-off, if needed, in April.

So there is very little time for candidates to launch effective campaigns but they are off and running.

Emanuel has had a very bumpy two terms, having first been elected in February 2011, when he became the city’s first Jewish mayor.  He was seen to be a man of great promise, having served in Congress in Illinois and later working as President Obama’s chief of staff for nearly two years.

But Emanuel has faced all kinds of big issues, like a lengthy teachers’ strike, and his efforts to close the City’s huge budget and pension-funding gaps, which entailed the closing of 50 Chicago public schools.

And of course you had the soaring crime rate in Chi-town, which overwhelmed Emanuel and his police force.

Emanuel captured 55.2% of the vote in a four-candidate field in 2011, and then 55.7% in a runoff in 2015.

President Obama called Emanuel “a tireless and brilliant public servant” and a friend.

--Russian officials said Tuesday that the hole found in the International Space Station may have been the work of a psychologically disturbed astronaut.  Boy, talk about Trump paranoia in the White House, imagine this coming out on the ISS?

At first the small but potentially deadly hole that was discovered last week was initially believed to have been caused by a tiny meteorite.

But Russian officials, including retired cosmonaut and current member of President Putin’s ruling party, Maxim Surayev, told the state-run RIA Novosti news agency: “If a cosmonaut pulled this strange stunt – and that can’t be ruled out – it’s really bad.... We’re all human, and anyone might want to go home, but this method is really low,” he said, according to Phys.org.

A drill capable of making the hole was stored on the craft, Surayev noted.

If the hole hadn’t been spotted, the six astronauts on the space station would have run out of air in 18 days, according to Russian officials.

Russian space-agency chief Dmitry Rogozin said, “There were several attempts at drilling. There is a version that we do not rule out: deliberate interference in space.”

Rogozin added: “It was done by a human hand.  There are traces of a drill sliding along the surface.”

The hole was detected Aug. 29, when the astronauts – three Americans, two Russians and a German – noticed a drop in pressure.

The U.K.’s Telegraph reported that the crew patched it up with a rubber filling.

Roscosmos, the state-run Russian space agency, has since launched an investigation to find a culprit.

What a bizarre story.

--Timothy Cardinal Dolan on Tuesday addressed the sexual-abuse and coverup scandals rocking the Catholic Church – saying even he’s at a loss.

“When people say to me you know, we’re angry, we’re confused, bewildered, frustrated, I think they might expect me to be on the defensive, and I’ll say, ‘Nice to meet you. So am I.’  We’re all in this together,” the New York archbishop told Father Dave Dwyer on ‘The Catholic Show’ on Sirius XM.

“No sin is isolated to the single act. It affects, it keeps affecting people, there’s not a person in the church that’s not been affected by this,” he said. The scandals are of an “oil spill nature,” he added – touching everyone from the Catholic people “walking into the factory or the classroom or the office” and feeling embarrassed for the priest who “can’t shake the feeling” that his parishioners are wondering whether he’s a predator.

Dolan said even his own mother of almost 90 called him to say she’d skipped lunch at her nursing home in shame.

“I’m ashamed to go to the dining room,” he said she told him. “I’m so embarrassed to be a Catholic. I don’t know what to say to anybody.”

In June, Dolan announced that the New York Archdiocese had found “credible” allegations that Cardinal McCarrick sexually abused a 16-year-old altar boy at St. Patrick’s Cathedral in the 1970s – but didn’t comment further.  [New York Post]

Last I saw, Dolan hadn’t commented on Archbishop Carlo Maria Vigano’s letter accusing Pope Francis of covering up claims of sexual abuse.

--There was a fascinating piece in the Washington Post by Chico Harlan and Stefano Pitrelli on Pope Benedict XVI, who became the first pontiff in six centuries to abdicate the papacy, transitioning to a life of near seclusion in a Vatican City monastery.

But now, think about it.  He knows so much about the latest allegations concerning Pope Francis and a coverup.

“Some Vatican watchers and insiders say the mere fact of Benedict’s 2013 abdication has made the modern papacy more vulnerable, emboldening voices of dissent. They say it’s hard to imagine a letter like the one released last week by Archbishop Carlo Maria Vigano, provoking Pope Francis with a call to resign, without Benedict having created the possibility that modern popes might give up their seats before death.

“Try as he might to stay out of the fray, Benedict has been used as a symbol of resistance for a segment of traditionalists who oppose elements of Francis’ reformist papacy and see Benedict’s vision of Catholicism as more aligned with theirs....

“Once known as ‘God’s Rottweiler,’ Benedict was not embraced by Catholics worldwide during his eight-year pontificate. But he won admiration among those who respected the depth of his academic work and his conviction that church teachings shouldn’t bend with the times.”

Benedict is now 91, frail (according to friends) and moves with the help of a walker – “but he is mentally sharp.”

For years Vatican observers have wondered why Benedict stepped down in 2013. Was it “blackmail or pressure relating to scandals within the Vatican bureaucracy.”

Chico Harlan and Stefano Pitrelli:

“Those who have visited Benedict as pope emeritus say he has also tried to avoid fostering insurrection. Four years ago, after a hint that Francis might adopt a more relaxed stance on Communion for divorced Catholics, a small group of cardinals asked Benedict to intervene, according to the mainstream Italian daily La Repubblica. Benedict told them that he wasn’t the pope and shouldn’t be involved – and afterward privately alerted Francis.

(Marcello) Pera, (a friend of Benedict and former president of the Italian Senate), who co-wrote a book with Benedict, tells a similar story about the ex-pope’s unwillingness to talk about his successor’s moves.  Pera said he visited Benedict shortly after Francis was elected and brought up his misgivings about the new pope – how he seemed more political, and willing to tailor his teachings to a secular audience.

“ ‘I am worried about the church,’ Pera said to Benedict.

“ ‘The church is of Jesus Christ,’ he remembers Benedict replying.  ‘You shouldn’t be worried.’”

Meanwhile, Vigano’s letter on Francis and his knowledge of the scandals specifically cites Benedict and Francis as knowing for years about the sexual misconduct of now-disgraced Theodore McCarrick; Vigano claiming that in 2009 or 2010, Benedict privately levied sanctions on McCarrick, after years of warnings about McCarrick’s sexual misconduct.  The letter then said Francis “did not take into account” those sanctions and made McCarrick his “trusted counselor.”

There is a man sitting in silence who knows everything, still known as Pope Benedict, not his civilian name, Ratzinger, and will we ever hear from him again?  I doubt it.

--The Miss America pageant has been taking place in Atlantic City, and executives, including Gretchen Carlson, have been singing the praises of the rebranding efforts, and “Miss America the scientist,” “Miss America the advocate for change,” as the Star-Ledger’s Amy Kuperinsky put it.

But Carlson, chairwoman of the Miss America board, and others atop the leadership, have ticked off current contestants and former Miss Americas, state pageants and volunteers in their decision to cut the pageant’s famous swimsuit competition.

Onstage competition started Wednesday at Boardwalk Hall, with three nights of preliminaries before the televised pageant final on Sunday.

Yes, some contestants think “Miss America 2.0” is the future, but others told the Star-Ledger that the loss of a chance to strut the runway in heels and bikinis means a slight ding in the shine of what it means to be Miss America.

--Lastly, since I posted last time before Senator John McCain’s funeral service at the National Cathedral the next day, and burial, Sunday, some final thoughts.

Henry Kissinger’s Eulogy:

“Like most people of my age I feel a longing for what is lost and cannot be restored.  If the happy and casual beauty of youth prove ephemeral, something better can endure and endure until our last moment on Earth and that is the moment in our lives when we sacrifice for something greater than ourselves.  Heroes inspire us by the matter of factness of their sacrifice and the elevation of the root vision.

“The world will be lonelier without John McCain, his faith in America and his instinctive sense of moral duty.  None of us will ever forget how even in his parting John has bestowed on us a much needed moment of unity and renewed faith in the possibilities of America.  Henceforth, the country’s honor is ours to sustain.”

Ken Burns / Washington Post

“In 2017, as Lynn Novick and I were finishing our film on the Vietnam War, I called Sen. John McCain to see if I could stop by his office and show some clips to him.  He agreed, and when I asked if there were any sections of the 18-hour film that he’d particularly like to see, McCain said ‘the Vietnamese parts’ – the stories that included the North Vietnamese soldiers and civilians.

“McCain and I had first spoken about the film a decade earlier, just  as it was getting underway. I wanted to let him know that, while we didn’t intend to interview him or his then-Senate colleague and fellow Vietnam War veteran John F. Kerry, we did  plan to tell their stories. In typical McCain fashion, he had suggested we avoid his story completely – his service as a Navy pilot, his 5 ½ years confined and often tortured as a prisoner of war.

“The film, he said, should include the stories of the ‘ordinary’ Americans who went to war. Doing so would be a chance to ‘save lives,’ he said, by ending the war for some in a deeply personal, even psychological way. At the same time, he noted that any film that truly wanted to understand the Vietnam War had to listen to the Vietnamese as well, both America’s allies in the South and adversaries in the North.

“McCain had already done the work of ending the war for thousands of American families, bringing them closure by putting to rest the pernicious and persistent lie that U.S. soldiers had been left behind in Indochina. He also helped free hundreds of thousands of South Vietnamese veterans who had been imprisoned and he made it possible for the United States and Vietnam to interact as normal nations....

“McCain was, of course, well-known for a personal dedication to truth-telling.  His bracing honesty and self-criticism are almost unknown in politics today. Perhaps it was his willingness to engage in self-reflection that allowed him to create bridges to bipartisanship and to see his life beyond narrow party objectives. But he didn’t let friendship stand in the way of speaking his mind; during the Obama administration, McCain relentlessly criticized the Iran nuclear deal championed by his old friend Kerry, the secretary of state.

“These days, one of the films I’m working on is about the writer Ernest Hemingway.  McCain volunteered to be interviewed for it, and not long ago we were able to get him on camera to share a few thoughts about his favorite Hemingway novel, ‘For Whom the Bell Tolls.’  As he had noted elsewhere over the years, McCain long identified with the book’s flawed hero, Robert Jordan, who struggles with moral dilemmas and is grievously wounded in this tale of the Spanish Civil War.  Contemplating Jordan’s story, McCain said, helped him survive the horrors of his imprisonment.

“McCain might not have appeared on camera for our Vietnam War film, but it is very much his story, as it is everyone else’s who either fought in the U.S. military or chose to resist. It is also the story of the Vietnamese who battled against the United States, men and women who eventually gained McCain’s respect, even admiration, and with whom he and others sought to create a better future.

“He realized we could learn from these stories.  But, as with all stories, you have to be willing to listen.  In a world where considering opposing views seems increasingly endangered, you can honor the memory of John McCain by stopping to hear the stories of others.”

Roger Cohen / New York Times

“The services across the nation marking the passing of Senator John McCain are also a requiem for the American century.  He lived through the zenith of postwar American power; believed, despite setbacks, in America’s unique capacity to forge a more open and democratic world; and held America’s word as pledge in the cause of liberty....

“The president of the United States is persona non grata at services that speak of bipartisanship, of American ideals, of self-sacrifice rather than self-interest, of an American global commitment that goes beyond ‘Pay up now!’ Trump stands outside the American tradition.

“In years past, I would watch McCain at the Munich Security Conference. The experience was never less than bracing. Beside him, others seemed mealy-mouthed.  He had known the extremes of human experience, lived in full.  His voice contained that fullness.  He was a man of conviction.  He preferred to be wrong than to bend.

“Torture over more than five years of captivity had imbued him with a humanity that transcended politics, even if did not dim his cantankerous bellicosity.  He had bombed Vietnam in a losing war of confused aims and official obfuscation.  He emerged unbowed in his belief in ‘the world’s greatest republic, a nation of ideals, not blood and soil,’ as he put it in his farewell letter, McCain was obstinate, sometimes to the point of obtuseness.

“America’s many failures were as nothing beside American achievement.  Stubbornness defined him in an age of finger-to-the-wind opportunism.  As a spineless Republican Party folded into the Trump Party, McCain came to stand almost alone as a politician of principle. His party moved.  He did not....

“I disagreed with McCain about many things: his incorrigible ich to bomb Iran, his bizarre back-and-forth on Barack Obama’s Affordable Care Act.  He ran a comically disastrous campaign as the Republican candidate for the presidency in 2008.  His choice of Sarah Palin as his running mate elevated the jingoistic idiocy that has become a Republican hallmark.  It was a terrible mistake. The Straight Talk Express, as his bus was named in both his presidential campaigns, has degenerated a decade later into Trump’s ‘tell-it-like-it-is’ Fox News spectacular.

“I wish I could believe the outpouring of sympathy for McCain marks the moment when principle and bipartisanship will rise above lies and fracture in American politics.  But I don’t, at least not in the near term.  The nationalist, nativist, xenophobic tide has not yet run its course.  In many respects, McCain was a dinosaur.”

Bret Stephens / New York Times

“On his last visit to the Munich Security Conference in 2017, shortly before his cancer diagnosis, he spoke of his own mounting sense of alarm.  Alarm, he said, at ‘the hardening of resentment we see toward immigrants’ and ‘the growing inability, and even unwillingness, to separate truth from lies.’  Alarm that ‘more of our fellow citizens seem to be flirting with authoritarianism and romanticizing it as our moral equivalent.’ Alarm, above all, ‘that many of our peoples, including in my own country, are giving up on the West.’

“It was no mystery to anyone in his audience that day where the real source of his alarm lay: An American president who, in matters of both character and conviction, was low and vapid and mean-spirited and bottomlessly dishonorable – McCain’s opposite in every respect.

“But everyone in that audience would also have known that McCain had enough sense of history, and enough confidence in the future, not to mistake evidence of decay for proof of decline.  In the scale of American blunders – from the Dred Scott decision to the Neutrality Acts of the 1930s to the tragedy of Vietnam – is the Trump presidency really unique?  And in the long, upward arc of American history, will its consequences be so dire or decisive?

“It happens that in the years when McCain and his fellow P.O.W.s were straining to keep faith with America, much of America had lost faith with them.  It didn’t matter. The America they were keeping faith with was not so much a people, or even a country, as it was a set of ideas that elevated and transcended both.

“Those ideas, about human liberty, dignity and possibility, lie beyond the reach of President Trump to traduce, or Jeff Sessions to betray, or any English department in the country to deconstruct.  They are the ideas to which McCain held fast in his torment, to which billions worldwide aspire, and to which every American implicitly subscribes, even those who pretend otherwise. They are the ideas that will see us through this presidency.

“ ‘Do not despair of our present difficulties but believe always in the promise and greatness of America, because nothing is inevitable here,’ wrote McCain in his farewell message.  Words to live by in our time of mourning and strain.”

Last Saturday at the National Cathedral, the star was Meghan McCain.  “The America of John McCain has no need to be made great again because America was always great.”

Of course while the funeral service was going on, President Trump was tweeting about “corrupt” news reporting and how Canada has “taken advantage of our Country for many years!” and the “fake dossier.”

The contrast with what was going on at McCain’s service could not have been more stark.

Patti Davis / Washington Post

“McCain died at a time when our country has been ripped apart by anger, racism and a petulant leader’s noisy, hateful rhetoric. We needed this week to remember what dignity looks like, what reverence for America sounds like, what tears feel like when they fall softly for a life lived with courage, gratitude and honesty.  Leaders are not always the ones who hold the highest positions.  Leaders are those who, by example, show us what we are capable of being.”

If you haven’t seen it, the HBO documentary on McCain’s life is outstanding.  Along with his final book, a collaboration with former chief of staff and speech writer, Mark Salter, the Senator was determined to complete these before he died.

McCain also called in Salter and longtime aide Rick Davis upon receiving his last diagnosis.

Davis recalled, via the Arizona Republic:

“ ‘OK, we’ve got to start planning my funeral.’ We’re like, ‘Uh, can’t it wait? This is depressing.’ He said, ‘No.  We’ve got to get it done. We’ve got to get it done right now.’”

McCain was also determined to clear out an area of his property that had become overgrown.

As Rick Davis said: “It was so nice that he was able to articulate himself what the end was going to look like. It was just amazing. You look now and you say, ‘Thank God, we got the book done. Thank God, we got the planning for the funeral done. Thank God, we got the HBO thing done.  And we got that area cleared, thank God. Because he was going to drive us all nuts with that.

“He was a man in a hurry all the way to the end.”

A friend of mine from my PIMCO days, Paul P., passed along a cool note that a buddy of his from childhood, that Paul had told me of before, was one of the four Oceana F/A-18 Super Hornets who performed the final flyover for McCain.  What a great honor...and memory.

---

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

God bless America.

---

Gold $1201
Oil $67.86

Returns for the week 9/3-9/7

Dow Jones  -0.2%  [25916]
S&P 500  -1.0%  [2871]
S&P MidCap  -0.9%
Russell 2000  -1.6%
Nasdaq  -2.6%  [7902]

Returns for the period 1/1/18-9/7/18

Dow Jones  +4.8%
S&P 500  +7.4%
S&P MidCap  +6.7%
Russell 2000  +11.6%
Nasdaq  +14.5%

Bulls 60.0
Bears 18.1

Dr. Bortrum posted a new column!

Have a great week.  Go Jets!

Brian Trumbore