Week in Review

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Week in Review

03/17/2018

For the week 3/12-3/16

[Posted 11:50 PM ET, Friday]

***I held off posting because like many of you, I was watching the startling upset of No. 1 Virginia just now in the NCAA Basketball Tournament. The biggest ever in the history of the sport.  Congratulations to UMBC.  Much more in my next Bar Chat column.

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Edition 988...getting closer, cough cough...

Trump World

It’s Friday night.  Let’s take a look at what’s on our dear leader’s plate, shall we?  North Korea, Russia, China, Iran, Syria, a looming trade war. The perfect time for chaos in the White House, as the president feverishly jumps around the dial, seeking positive stories on his leadership, which means he eventually settles on Fox, and he smiles...for the moment content...as he schemes on his next move. 

All this while a smokin’ hot First Lady is in another bedroom.  I don’t know about you, but I would......or have a few beers down at the White House bowling alley, entertaining staff, members of Congress and their families.

And it just needs to be said. Two of the more troublesome figures of today, Donald Trump and Vladimir Putin, don’t drink.  I kind of wish they did.

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President Trump fired Secretary of State Rex Tillerson this week via Twitter, naming CIA Director Mike Pompeo as his replacement. All of Washington, both parties, was appalled at the lack of class in Trump not personally calling Tillerson to fire him.

As he headed out the door, Tillerson warned of Russia’s “troubling behavior and actions,” while failing to thank the president or praise his policies in a public statement.

“Russia must assess carefully as to how its actions are in the best interest of the Russian people and of the world more broadly. Continuing on their current trajectory is likely to lead to greater isolation on their part, a situation which is not in anyone’s interest.”

Trump tweet: “Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!”

Speaking to reporters later, Trump said his differences with Tillerson came down to personal “chemistry.”

“We got along actually quite well, but we disagreed on things,” he said. “When you look at the Iran deal, I think it’s terrible. I guess he thought it was OK.

“With Mike Pompeo, we have a very similar thought process.  I think it’s going to go very well.”

Yes, when he accepted the Republican nomination for president in 2016, Trump described the nation’s ills and said: “I alone can fix it.”

So now he’s replacing fired top aides with loyalists who share his world view and will ignore everything else when it comes to his behavior.  As so many are saying in Washington these days, Trump feels as if he’s gotten the handle of being president and he’s going to largely go it alone. 

The president told reporters Tuesday he made the decision to hold talks with Kim Jong Un “by myself” and didn’t consult Tillerson in advance, for example.

“I’m really at a point where we’re getting very close to having the Cabinet and other things that I want,” Trump added.

But the government, particularly the foreign policy apparatus, is severely understaffed at a time of growing global challenges, and as I go to post, it is assumed national security adviser H.R. McMaster is being removed, as well as other major changes, though we are told Trump and Chief of Staff John Kelly have reached a truce, for the time being.

The president is eating this all up, which is truly sick.

David Ignatius / Washington Post

“The Great Disrupter and the Boy Scout were never comfortable partners. So there was a sense of inevitability to President Trump’s announcement Tuesday that he was dumping Rex Tillerson as secretary of state and installing Mike Pompeo, the man  he wanted in the job back in November.

“The gregarious, risk-taking Pompeo has an easy rapport with Trump that the more cautious, reticent Tillerson never achieved. A successful secretary of state needs to be able to speak for the president – something Tillerson could never do and Pompeo will probably achieve from Day One.

“Trump’s tone in announcing the reshuffle was almost that of an exultant commander picking his ‘war Cabinet,’ though the challenges for now will be diplomatic.  In Trump’s face-to-face negotiations with North Korea’s Kim Jong Un, possibly the apex of his presidency, Pompeo will be his key adviser and perhaps emissary.

“ ‘Tremendous energy, tremendous intellect,’ Trump said of Pompeo. ‘We are always on the same wavelength.’....

“Tillerson was at his wounded best as he said an abrupt goodbye Tuesday afternoon.  He was dignified and generous, even as the fatigue and stress were evident in his face.  He rightly took credit for framing the diplomatic strategy that engaged North Korea – but also conceded his inability to fashion clear policies for Syria, China and Russia.  He dispensed with the usual ritual testimonial to a president who has treated him so poorly, instead thanking his colleagues at the State Department and the Pentagon....

“The danger is that Pompeo, so much in sync with Trump, will remove the dampers that have sometimes tempered the president’s disruptive instincts....

“Trump nominated a career CIA officer, Deputy Director Gina Haspel, as Pompeo’s successor. She’s popular with colleagues at Langley, but her confirmation hearings will be contentious because of her involvement in the CIA’s secret detention and interrogation programs.  Former Obama administration intelligence officials speak highly of her, which may blunt Democratic criticism. Sen. Tom Cotton (R-Ark.), the conservative firebrand, would have been a much more controversial choice, giving the CIA a face even more partisan than that of Pompeo.

“The fulcrum in foreign policy has been (Defense Secretary Jim) Mattis and Tillerson. The center-weight will shift to Trump and Pompeo. The policy process may be smoother, with a chief diplomat who knows (and shapes) the president’s mind.

“But Tillerson’s demise removes a restraint on the president’s sometimes impulsive behavior. Trump resented tutelage from a man who privately called him a ‘moron,’ but Tillerson’s advice on Iran, Russia, China and North Korea was sensible and generally correct.”

Meanwhile, the New York Times first reported that special counsel, Robert S. Mueller III, has subpoenaed the Trump Organization to turn over documents, including some related to Russia, the first known instance of the special counsel demanding records directly related to President Trump’s businesses. The breadth of the subpoena was unclear, but it seems Mueller could be looking into Trump’s real estate holdings in Russia, which the Trump Organization has denied there ever were any, yet there was a possible deal in the works in 2015.

But President Trump has warned previously that if the special counsel decided to go after the Trump Organization that would cross a red line.

And earlier, the president tweeted with glee: “THE HOUSE INTELLIGENCE COMMITTEE HAS, AFTER A 14 MONTH LONG IN-DEPTH INVESTIGATION, FOUND NO EVIDENCE OF COLLUSION OR COORDINATION BETWEEN THE TRUMP CAMPAIGN AND RUSSIA TO INFLUENCE THE 2016 PRESIDENTIAL ELECTION.”

Republican lawmakers on the committee drafted a report saying the panel’s probe into Russian election interference found no evidence Moscow colluded with Trump’s campaign. The panel found “bad judgment” and some “inappropriate meetings” between members of the Trump campaign and Russians, but no sign that those amounted to collusion.

Rep. Mike Conaway (R-Tex.), who has been heading the probe since last spring, cited the much-scrutinized June 2016 meeting at Trump Tower in New York between a Russian lawyer linked to the Kremlin and top Trump campaign aides, including one of Trump’s sons and his son-in-law.  “That meeting should never have taken place.  But we can’t find anything that leads us to a collusion string.”

Committee Democrats weren’t allowed to see the 150-page draft report before the contents were revealed. The top Democrat on the panel, California Rep. Adam Schiff, said in a statement that the Republicans’ announcement was a “tragic milestone for this Congress” and “yet another capitulation to the executive branch.”

“By ending its oversight role in the only authorized investigation in the House, the Majority has placed the interests of protecting the President over protecting the country, and history will judge its actions harshly.”

Trumpets....

--Trump boasted in a fundraising speech to donors in Missouri on Wednesday that he made up information in a meeting with Canadian Prime Minister Justin Trudeau that the United States runs a trade deficit with its neighbor without knowing whether that was the case.

“Trudeau came to see me. He’s a good guy, Justin. He said, ‘No, no, we have no trade deficit with you, we have none. Donald, please,’” Trump said, mimicking Trudeau, according to the audio obtained at first by the Washington Post.  “Nice guy, good-looking guy, comes in – Donald, we have no trade deficit.’ He’s very proud because everybody else, you know, we’re getting killed.

“...So, he’s proud. I said, ‘Wrong, Justin, you do.’ I didn’t even know. ...I had no idea. I just said, ‘You’re wrong.’  You know why? Because we’re so stupid. ...And I thought they were smart. I said, ‘You’re wrong, Justin.’ He said, ‘Nope, we have no trade deficit.’ I said, ‘Well, in that case, I feel differently,’ I said, ‘but I don’t believe it.’  I sent one of our guys out, his guy, my guy, they went out, I said, ‘Check, because I can’t believe it.’

“Well, sir, you’re actually right. We have no deficit, but that doesn’t include energy and timber. ...And when you do, we lost $17 billion a year.’ It’s incredible.”

The facts are the United States has a trade surplus with Canada.

Even worse was Trump’s warning to the group that he seems to be threatening to pull U.S. troops stationed in South Korea if he didn’t get what he wanted on trade with Seoul.  He said that South Korea had gotten rich but that U.S. politicians never negotiated better deals. “We have a very big trade deficit with them, and we protect them,” Trump said.  “We lose money on trade, and we lose money on the military. We have right now 32,000 soldiers on the border between North and South Korea. Let’s see what happens.”

“Our allies care about themselves,” he said. “They don’t care about us.”

This is the mindset before negotiations with Kim Jong Un.  That is freakin’ scary.

At another point in his rambling comments, Trump accused Japan of using gimmicks to deny U.S. auto companies access to their consumers, including this:

“It’s the bowling ball test. They take a bowling ball from 20 feet up in the air and drop it on the hood of the car,” Trump said of Japan. “If the hood dents, the car doesn’t qualify. It’s horrible,” he said.  It was unclear what the hell he was talking about.  Some think that in the back of his mind, he remembered a Letterman skit where Dave dropped a bowling ball on a car from atop his studio and somehow extrapolated that.

The White House said Trump was telling a joke.  When you listen to the tone, it wasn’t.

Trump was in Missouri to raise money for Josh Hawley, who is taking on incumbent Democratic Sen. Claire McCaskill.  He called McCaskill “bad for Missouri and bad for the country.”  But, just as he had done last weekend in a rally for congressional candidate Rick Saccone in Pennsylvania (see below), Trump said little about Hawley and instead, the Chief Narcissist bragged about how he won the presidency.

--The Wall Street Journal reported that a second Trump lawyer, Jill A. Martin, is listed as counsel in an arbitration case involving porn star Stormy Daniels, and that documents marked “HIGHLY CONFIDENTIAL PROCEEDING” emerged tying Trump’s flagship holding company to the effort to silence Stormy, aka Stephanie Clifford.

The White House and Trump lawyer, Michael Cohen, have repeatedly sought to distance the president from the $130,000 payment made to Clifford shortly before the 2016 presidential election, Cohen maintaining he acted on his own.

Cohen and White House representatives have denied any sexual encounter took place between Trump and Clifford, with a growing body of evidence saying otherwise, while it’s not known if the president participated in the agreement to silence the bosomy, err, actress.

Earlier, Stormy said she would return the $130,000 from President Trump’s lawyer in exchange for being released from a contract barring her from discussing an alleged sexual encounter with Trump, according to her attorney.

Late tonight, as I go to post, the Washington Post is reporting Michael Cohen claims Stormy has violated the nondisclosure agreement 20 times and thus has to pay $20 million in damages.

Cohen asked for damages in a court filling today.  I totally loathe this guy...and have from the first time I saw him.  He makes my skin crawl.

--Trump’s personal assistant, John McEntee, was fired this week because he is a big-time gambler, making him a risk to handle sensitive information (vulnerable to outside influence), according to the Washington Post. A background check revealed McEntee wagered tens of thousands of dollars at a time.

McEntee had served as Trump’s “body man” with virtually unlimited access to the president.

--The evidence against former Trump campaign manager Paul Manafort is so strong it could land him in prison for the rest of his life, according to a federal judge’s order made public Tuesday.  U.S. District Judge T.S. Ellis III, who sits in Alexandria, Va., and who is handling Manafort’s second indictment on bank fraud and tax evasion, said he poses “a substantial risk of flight” because of his wealth and the seriousness of the charges against him.

So Manafort learned of his new terms of “home incarceration.”  In essence, a “24-hour-a-day lockdown” at his Alexandria home, except under certain circumstances.

--President Trump made his first trip to California since the election and inspected prototype border walls, while doing some fundraising.  He also escalated his fight with Democratic Gov. Jerry Brown, saying he was doing “a terrible job.” Brown responded on Twitter: “Thanks for the shout-out...But bridges are still better than walls. And California remains the 6th largest economy in the world and the most prosperous state in America. #Facts.”

--Lastly, in another late-breaking development, Andrew McCabe, the former deputy director of the FBI and a frequent target of President Trump, was fired by Attorney General Jeff Sessions, thus imperiling his pension.  More on this next time.

Wall Street

On the issue of trade and potential tariffs, last weekend President Trump tweeted: “The European Union, wonderful countries who treat the U.S. very badly on trade, are complaining about the tariffs on Steel & Aluminum. If they drop their horrific barriers & tariffs on U.S. products going in, we will likewise drop ours. Big deficit. If not, we Tax Cars etc. FAIR!”

Hours before the tweet, European Union trade chief Cecilia Malmstrom said she had “no immediate clarity” on whether the bloc will be let off the hook from planned U.S. tariffs.

Malmstrom had described on Twitter what she called “frank” but fruitless talks with U.S. Trade Representative Robert Lighthizer in Brussels on Saturday.

Thus far, Canada, Mexico and Australia have secured exemptions from the tariffs of 25 percent on imported steel and 10 percent on aluminum announced by Trump the prior week (and supposedly to take effect next week), though Canada’s and Mexico’s were conditioned on progress renegotiating NAFTA. Australia secured its exemption in a phone call Saturday morning between Trump and Prime Minister Malcolm Turnbull.

German Economy Minister Brigitte Zypries told Reuters on Sunday: “Trump’s policies are putting the order of a free global economy at risk.  He does not want to understand its architecture, which is based on a rule-based system of open markets. Anyone who is questioning this is jeopardizing prosperity, growth and employment.”

Chinese Commerce Minister Zhong Shan said any trade war with the United States would only bring disaster to the world economy.

Greg Ip / Wall Street Journal

“President Donald Trump declared (last) Thursday the U.S. had become too dependent on foreigners for aluminum ‘that is essential for key military and commercial systems’ and slapped a 10% tariff on imports.

“If true national security is the goal, then this doesn’t go far enough.  You can’t make aluminum without bauxite, yet the U.S. is completely dependent on imports for bauxite; the last domestic mine closed nearly 30 years ago.

“This doesn’t seem to have been addressed by Mr. Trump or Commerce Secretary Wilbur Ross, which illustrates the flaws in the national security justification for their tariffs. They are based on the authority granted under section 232 of the Trade Expansion Act of 1962 to restrict trade in the interests of national security. The overriding motive, though, is to preserve jobs in a politically sensitive industry battered by imports.

“This has real consequences: Industries unhappy with paying the tariff could sue to overturn the order, arguing that Mr. Trump overstepped his authority.  If other countries believe protection, not national security, is the true goal, they may feel entitled to retaliate without waiting for the World Trade Organization to rule....

“The Commerce Department defined national security broadly enough to justify tariffs on almost anything – or nothing: Anything that weakens the ‘internal economy’ hurts national security, and 16 sectors from food and agriculture to health care must be protected.”

On the economic front, the inflation data for February didn’t offer up any big surprises, with both CPI and PPI coming in at 0.2%, and also 0.2% ex-food and energy, in line, while for the CPI, year-over-year the headline number is 2.2%, 1.8% on core, and for PPI the figures are 2.8%, 2.5% ex-food and energy.

So the Fed won’t be panicking over this data when they gather next week for the Open Market Committee meeting.  The Fed will hike rates, what is currently expected to be the first of three in 2018, but the markets will be looking for clues the Fed isn’t frothing at the mouth to do four.

Separately, retail sales for February were disappointing, -0.1%, while industrial production was a stronger than expected 1.1%.

February housing starts were down 7% to an annualized rate of 1.236 million, thus continuing a months-long trend of less than exciting data from this sector.

But when you add up all the above, the Atlanta Fed’s GDPNow barometer for first-quarter growth has suddenly plummeted from 3.5% on March 1 to 1.8% today.  The consensus is around 2.5%.

Europe and Asia

Nothing of import this week concerning the euro economy in general.

Brexit: Next week is critical on this front as European Union leaders gather for a summit where Brexit is high on the agenda, and the government of British Prime Minister Theresa better bring home some optimism on the future path of negotiations, i.e., a transition agreement, or the PM may not survive much longer. The addition of Russia on the agenda, as detailed below, doesn’t help as it creates a distraction for the real task at hand.

At least Scotland and Wales are within reach of a deal with the central government over power-sharing, Scotland’s Nicola Sturgeon said on Wednesday, easing the pressure on the government as it negotiates its exit from the EU.

Scotland and Wales have significant powers over health, education and agriculture, among other areas. Brexit will require a remapping of those powers, many of which are rooted in Britain’s EU membership

Italy: Luigi Di Maio, leader of Italy’s anti-establishment Five Star Movement, insisted political rivals should support the government he presented before the March 4 elections.

“The elections were a slap in the face for the old ways of doing politics,” Di Maio told reporters in Rome after his party emerged as the largest vote-getter, but still well short of securing a majority in the lower house.

Di Maio, 31, said Five Star wouldn’t consider joining a broader coalition of national unity.  So the odds of political deadlock are high.  The center-right alliance between the League, led by Matteo Salvini, and ex-premier Silvio Berlusconi, has reached out to potential allies within the center-left Democratic Party.

Di Maio is attempting to reassure skeptics and project a moderate image, amid concerns a populist administration would weigh on the country’s feeble recovery and on the euro area.

“I challenge anyone to demonstrate we had an extremist position,” he said.  “I did my campaign saying it was no longer the time to leave the euro, and that Five Star didn’t want to leave the EU.” He added the EU limit on a budget deficit of 3 percent of gross domestic product should be reviewed or overshot, but that “Changes can be made by talking to Brussels, not against Brussels.”

Ian Bremmer / TIME

“Both Five Star and the League openly flaunted their disdain for E.U. fiscal rules on the campaign trail, and any government comprising either will be pressured to deliver on their campaign spending promises. Doing so will hit Italy’s past deficit reduction efforts, and maybe even reverse them entirely. Italy struggles to comply with EU-mandated debt and structural adjustment targets as it is.  A more confrontational Italy will also spook capital markets at a precarious time for the Italian economy, the eurozone’s third largest.

“It will also undermine the bid for European reform led by Macron and Merkel....

“But Italy’s government is likely to prove friendlier to the governments in Poland and Hungary, which are now openly defying EU rules.  At a moment when negotiations over Britain’s exit are beginning to gather steam, as separatist pressures continue in Spain, as Eastern European governments challenge Brussels and as outsiders like Russia and Turkey test European unity, Italy’s latest political convulsion is not a hopeful sign.”

Austria: The nation’s president has demanded explanations over police raids targeting offices and staff of the main domestic intelligence service, in a case that has stoked concerns about the far right’s control of the Interior Ministry.

The anti-immigration Freedom Party (FPO), the junior partner in the new coalition government led by Chancellor Sebastian Kurz’s conservatives, controls the Interior, Foreign and Defense ministries.  That has prompted its opponents to question how it will handle the sensitive information in those departments.

The Interior Ministry dismissed the media reports.

“The story constructed by the media that the Interior Ministry obtained or wanted to obtain access to data on right-wing extremism with a (police) unit headed by a member of the FPO is in the realm of ‘fake news,’” it said in a statement.

What was particularly disturbing was the police raids, including the searching of homes of members of the domestic intelligence service, were carried out by a police unit not normally responsible for such operations and which is headed by a member of the FPO.

Place yourself in Austria and imagine how big a story this is, given the nation’s dark past.  And you also see here another example of the influence of Trump... “fake news” being employed as a defense.

Germany / France: Chancellor Angela Merkel pushed back on French President Emmanuel Macron’s ambitious plans to overhaul the European Union when they met today in Paris, as Merkel and her country remain skeptical about the pooling of fiscal resources and liabilities among the 19 eurozone member states.

Macron has pledged to strengthen the EU and buttress the foundation of the common currency, but his plans include giving the EA19 a joint finance minister and a substantial budget for investment and speeding up the integration of the banking system, with a joint backstop and a common deposit guarantee program.

But with Germany’s economy rolling along, and its tough domestic overhauls and fiscal belt-tightening appearing to bear fruit, Berlin is less concerned with any reform efforts by Macron, deeming them unnecessary in terms of stabilizing the euro area.  The two leaders are, however, committed to laying out a roadmap for eurozone overhauls in time for the June summit of European leaders.

In Asia...just a note or two on China (though I have lots of political stuff on the country down below). Industrial production for January and February from a year earlier rose 7.2%, according to the National Bureau of Statistics, well above the 6.2% pace in December and forecasts.  China combines January and February to limit distortions from the timing of the Lunar New Year holiday, which fell in January last year and February this year.

Fixed-asset investment (road, railroads, airports) climbed 7.9% from a year earlier, also better than expected. Retail sales grew 9.7% from a year earlier.  Last week we had the 44.5% surge in exports for February.

So it would appear the overall economy is off to a rather strong start here.

Street Bytes

--Stocks continued their recent up, down, up, down pattern, with the Dow Jones falling 1.5% to 24946, while the S&P 500 lost 1.2% and Nasdaq 1.0%.

Uncertainty over the potential for a trade war, as well as anxiety over the chaos in the White House, including the revelation Robert Mueller was investigating the Trump Organization, didn’t help.

--U.S. Treasury Yields

6-mo. 1.94%  2-yr. 2.29%  10-yr. 2.84%  30-yr. 3.08%

All about the Fed this coming week, and the language in the official statement.

--The Trump administration, specifically the president himself, has blocked the $142bn takeover by Broadcom of rival chipmaker Qualcomm.  Never before had a sitting president barred a deal over national security concerns, with dealmakers warning the move to bar Broadcom from pursuing its hostile takeover of Qualcomm would send ripples across corporate America, stoking fears of retaliation by foreign governments against U.S. companies, namely China, for starters.

Frank Aquila, a top mergers and acquisitions lawyer at Sullivan & Cromwell, told the Financial Times’, “The fact that the president took pre-emptive action before a deal was even signed is extremely disturbing and inconsistent with all of our notions of due process.”

“It will also make it more difficult for American companies to cry foul when they are blocked in other countries for political reasons.”

What’s ironic is that Broadcom (registered in Singapore) recently announced it was moving its legal base back to America – a move announced with great fanfare by President Trump at the White House, just days before the company launched its bid for Qualcomm.

The president’s action came days after the Committee on Foreign Investment in the United States (Cfius), an inter-agency group that examines foreign deals, issued a warning that the Broadcom-Qualcomm deal could endanger the United States’ lead in critical 5G technology as China overtakes us.

The immediate risk is that Broadcom would cut Qualcomm’s investment in 5G, effectively handing the lead in the race to develop the next generation of wireless technology to China’s Huawei.  Huawei and Qualcomm are the only companies committed long-term to next-gen wireless.

Treasury Secretary Steven Mnuchin played down the idea the administration was hardening its attitude towards foreign investment, saying Cfius was focused on the national security implications.

But had Broadcom’s move back to the U.S. occurred already (it’s to be completed next month, supposedly), the takeover of Qualcomm may not have been subject to scrutiny from Cfius.

In one of his last acts in office, President Obama issued a report calling for the Trump administration to find ways to protect the semiconductor industry.  Obama had blocked the Chinese-backed takeover of Aixtron, a German company with U.S. operations.

But what have I been telling you for years...years...about the danger to Apple shareholders. With an estimated half of their sales in China at this point, I have argued the company is exceedingly foolish in staking a large part of their future there because at a moment’s notice, China can play the nationalism card, for any reason, as its domestic cellphone producers, having stolen Apple’s technology, are rapidly producing phones with as high a quality, and at a fraction of the cost.

But this move by the Trump White House to block the acquisition of Qualcomm will of course make it more difficult for not just Qualcomm, but the likes of Apple, IBM, Microsoft and Intel to gain share, without submitting to China’s demands on not just storing customer data on its soil, but sharing technology with Chinese partners

And this has nothing to do with the potential for a trade war.  But it has a lot to do with having a dictator in charge now in Xi Jinping.

--Speaking of China, Ford Motor Co.’s sales there plunged 23% in the first two months of 2018, this despite an uptick overall in the world’s largest auto market.  More than 4.5 million vehicles were sold in China in Jan. and Feb., up 1.7% compared with the same period in 2017, according to the China Association of Automobile Manufacturers.

General Motors, on the other hand, saw its sales in China increase by 11.6% in the first two months.

--The SEC has charged former Silicon Valley wunderkind, Elizabeth Holmes, with “massive fraud.”  On Wednesday, the agency accused Theranos CEO Holmes and a top lieutenant of defrauding investors of more than $700 million through false claims about its technology.

Holmes was a Steve Jobs wannabe, dressing exclusively in black turtlenecks to emulate him, while talking up a blood-testing company that at one point boasted a valuation north of $9 billion. She settled with regulators for $500,000 while neither admitting nor denying the accusations.

Theranos disclosed in a 2016 letter to investors it was under a criminal probe. But as yet, no criminal charges have been filed and it’s not clear if there is still an ongoing investigation, meaning at least for now, Ms. Holmes is getting off exceedingly light.

The SEC details that Holmes ran “an elaborate, years-long fraud in which (Theranos) exaggerated or made false statements about the company’s technology, business, and financial performance.”

For example, Theranos said it was on track to make $100 million by the end of 2014, when the actual figure was “a little more than $100,000.”

Holmes also misled employees about the institutional backing for the company, and she issued pitch books with testimonials from other pharmaceutical executives that were in fact written by company employees, according to the SEC.

This is one of the biggest scandals to rock the tech world since the bursting of the bubble in 1999.

Theranos began to unravel in 2015 following a Wall Street Journal story that reported its blood tests were actually being conducted by commercial analyzers, and that the technology wasn’t special.

--What a sad story...and yet another indictment of the leveraged buyout game.  Toys R Us is now being forced to sell or close all 800 of its U.S. stores, affecting as many as 33,000 jobs, as the company winds down its operations after six decades, though it seems the company is attempting to keep the name and retain a few stores in the hope that one day it will reemerge. 

The company has struggled to pay down nearly $8 billion in debt – much of it dating back to a 2005 LBO.

There have been reports Toys R Us had stopped paying its suppliers this week, including the biggest toy makers. The company also announced Wednesday it was closing its 100 U.K. stores.

Yes, Toys R Us is a victim of Amazon, Walmart and Target in particular, as they win over a larger share of the toy market.

But what a nightmare for owners of the retail space now being abandoned; new tenants virtually impossible to find.  We have a large Toys R Us store nearby in one of the first big strip malls in America (Blue Star Shopping Center in Watchung, for my fellow New Jerseyans), that has  a huge space in the middle of it and unless its someone like Amazon using it for warehousing, the shopping center owner will never fill it. [My Dollar Tree is part of this mall.]

And what a nightmare for the toy industry overall, as the likes of Mattel and Hasbro no longer have a large chain to sell their wares, forcing them to scramble to secure other outlets.  Many toy companies sold 30% or more of their products through Toys R Us.

--Sears Holdings Corp. announced $540 million in new loan agreements, even as sales fell by nearly a third as the retailer continued to close stores; total sales falling to $4.4 billion for the three months ending Feb. 3, from $6.1 billion a year earlier.  Ex-the closures, sales at existing Sears stores plunged 18.1% and 12.2% at Kmart locations, which doesn’t measure up well vs. other retailers.

But somehow the company is staving off bankruptcy

--Dick’s Sporting Goods Inc., the retailer that recently raised the minimum age to purchase firearms following the massacre at a Florida high school, said on Tuesday it expected the impact from the changes to linger throughout 2018, with the shares falling 5% on the announcement.  Including the changes to the firearms sales policies, the company said it now expects same-store sales to be flat to a low single-digit decline as traffic declines.

--Ford is recalling 1.3 million vehicles whose steering wheels could come loose because of a potentially defective bolt.  The recall applies to 2014-18 Ford Fusion and Lincoln MKZ models. The issue could cause the steering wheel to loosen and in worst case scenario, detach from the steering column, which wouldn’t make for a great day.

--After rumors last week that Goldman Sachs CEO Lloyd Blankfein was resigning at the end of the year, which Blankfein himself dismissed (for the time being), Goldman announced that David Solomon will become the sole president, elevating him over Harvey Schwartz as the eventual successor to Blankfein.  Mrs. Schwartz was not happy.  Mrs. Solomon, on the other hand, was heard telling friends, “My David is so smart!”

Solomon and Schwartz have been competing directly for a shot at the top job since being promoted to co-presidents in late 2016, after Gary Cohn left to join President Trump’s administration.  Solomon is a former investment banker, and his status was bolstered by strength in that segment, with Goldman posting record revenue last year for the unit. But Schwartz comes from the firm’s fixed-income trading business and that has been sucking wind.

--Southeastern Grocers, parent company of Winn-Dixie, announced it was closing 94 underperforming supermarkets in seven southern states. After the closures, the company will have 582 stores. Southeastern is also the parent company of Bi-Lo, Harveys and Fresco.

--Nike Inc. said it had received complaints about inappropriate workplace behavior, with No. 2 executive, Trevor Edwards, resigning, setting off a management shuffle at the company. But a company spokesman said there were no allegations against Edwards.

CEO Mark Parker said that as a result of the shake-up, he now planned to remain chairman and CEO beyond 2020, saying there needed to be “a sharper focus on our culture.”

--Tiffany reported fiscal fourth-quarter earnings of $61.9 million, better than expected, with net sales up 9%.  But same-store sales were up only 1%, less than expected, and the company’s guidance was lackluster, so the shares fell on the news.  CEO Alessandro Bogliolo said, “We expect increasing investment in areas such as technology, marketing communications, visual merchandising, digital and store presentations, to hinder pre-tax earnings growth in the near-term.”

--A mother and daughter whose puppy died while flying United are alleging that a flight attendant knowingly forced the animal into an overhead bin.  Yes, just another awful problem for the airline that needs to fire its CEO, Oscar Munoz.  But it’s also a classic case of ‘wait 24 hours,’ until we really get all the facts.  Unfortunately, these days, there is no waiting 24 hours...the story gets whisked around the universe at lightspeed.

The mother and daughter are saying the flight attendant responsible is lying about the encounter, alleging the United employee knew there was a dog in the bag when asked to place it in the overhead bin.

But a passenger on the flight told ABC News that the flight attendant didn’t know there was a dog in the bag when she insisted on moving it to the overhead compartment.  Upon hearing that there was a dog in the bag  after the flight landed the flight attendant “seemed frazzled and shocked,” the passenger said.  “She said she did not know there was a dog in the bag, and if so she never would have instructed it to be put on the bin above.”

At the same time, you hear the little girl talk about the whole deal and she’s believable.

However, she says this, “In the end, she (the flight attendant) says she didn’t know it was a dog, but she actually touched the bag and felt him there. She’s basically lying to us now.”

Yeah, Sophia, but....if she didn’t actually see the dog, it could be anything in the bag (say if there was a side vent for breathing).

United said in a statement: “This was a tragic accident that should have never occurred, as pets should never be placed in the overhead bin. We assume full responsibility for this tragedy and express our deepest condolences to the family and are committed to supporting them.”

I agree with United.

On the other hand, the truth is the airline has sucked since the merger with Continental, unending chaos, and United does have the highest rate of incidents involving animal loss, injury or death, according to the Department of Transportation; more than twice as many as its competitors.

What is clear is that the idea of transporting animals on flights these days has gotten way out of hand, and airlines have been reviewing their policies, after a number of incidents involving “comfort” animals.

Airlines aren’t supposed to be arks, people.  But then people are jerks.

--Rihanna called out Snapchat for running a sickening ad that asked users if they “would rather slap Rihanna or punch Chris Brown” and sent the stock tumbling as much as 5 percent.

“Now SNAPCHAT I know you already know you ain’t my fav app out there!” she wrote in an Instagram tirade on Thursday. “I’d love to call this ignorance, but I know you ain’t that dumb!”

Snapchat’s parent, Snap Inc., responded by calling the ad “disgusting” and saying it “never should have appeared on our service.”

Earlier this month, Kylie Jenner complained about the texting app’s redesign, causing the company to lose more than $1 billion in market value.

--In the annual Harris Poll Reputation Quotient survey released Tuesday, Apple and Alphabet’s Google corporate brands dropped over last year, while Amazon maintained the top spot for the third consecutive year, with Tesla rising from 9 to 3, chiefly because it sent a Tesla Roadster into space aboard a SpaceX rocket – not because of its failure to stick to production deadlines.

Apple dropped to 29 from No. 5, while Google fell from 8 to No. 28.

Rounding out the top five are 2. Wegman’s Food Markets (huh) 4. Chick-fil-A 5. The Walt Disney Co.

--Finland has been rated the No. 1 nation in the World Happiness Report released Wednesday by the United Nations, this despite its long, dark winters and short summers.  I’m a little surprised, seeing as the Russian Bear should be increasingly viewed as a threat to residents.

A main focus of the report this year was migration and the happiness of immigrants, which was included for the first time.  Of the 5.5 million people living in Finland, about 300,000 are immigrants.

Finland is followed by Norway, Denmark, Iceland and Switzerland.  Gee, do you sense a pattern?

The U.S. is down to 18.

The least happy countries, according to the UN, are Burundi, Central African Republic, and South Sudan...which I’m taking off my bucket list.

--Talk of bitcoin has died down considerably after the bursting of the bubble at $20,000 in December.  Wednesday, it fell 13 percent to about $8,000, after Capitol Hill lawmakers weighed a move to regulate the cryptocurrency space.

--CNN is moving morning co-anchor Chris Cuomo to prime time, the 9 p.m. Eastern hour starting in the spring, with Anderson Cooper’s “AC360,” which usually airs from 8 to 10 p.m. Eastern, being cut back to an hour.

So the new “Cuomo Prime Time” will go head-to-head against the two highest-rated programs on cables news – MSNBC’s “The Rachel Maddow Show” and Fox News’ “Hannity.”

This will be interesting.  I suspect Cuomo will do OK, at least in relative terms.

John Berman is replacing Cuomo on “New Day.”

Foreign Affairs

Russia / Britain: On Wednesday, British Prime Minister Theresa May ordered that 23 Russian diplomats leave after authorities concluded a nerve agent was used to poison a former spy and his daughter on British soil, and then the U.S. imposed its toughest sanctions yet Thursday on Russian operatives already indicted by Special Counsel Robert Mueller for meddling in the 2016 presidential campaign.

Prime Minister May said in an address to the House of Commons: “This represents an unlawful use of force by the Russian state against the United Kingdom. It must therefore be met with a full and robust response.”

As part of the actions taken against Russia, no British ministers or royals will attend the World Cup in Russia this summer, and that it would “freeze Russian state assets wherever we have evidence that they may be used to threaten the life or property of U.K. nationals or residents.”

“They have treated the use of a military-grade nerve agent in Europe with sarcasm, contempt and defiance,” Mrs. May said of Russia. “Their response has demonstrated complete disdain for the gravity of these events. They have provided no credible explanation.”

Russian Foreign Minister Sergei Lavrov shrugged off the British allegations as “absolutely rude, unsubstantiated and baseless” and suggested the poisonings were a set-up to discredit Moscow, which, sickeningly, is the line of thought being promoted on Russian TV.

“No real new sanctions were announced and the chance they will be agreed with the EU is insignificant,” said Vladimir Frolov, a foreign-policy analyst and former diplomat in Moscow. “So far, I don’t see that these statements would harm or scare Moscow.”

Meanwhile, Putin continues to support Syria’s President Bashar al-Assad, whose military is accused of using chemical weapons against civilians in the besieged region of eastern Ghouta.  Also Thursday, the FBI and Department of Homeland Security issued an alert, warning, “Since at least March 2016, Russian government cyber actors” have targeted “government entities and multiple U.S. critical infrastructure sectors,” including those of energy, nuclear, water and aviation. 

Earlier, in an NBC News interview with Megyn Kelly, Putin mused that maybe it was “Ukrainians, Tatars, Jews” who were responsible for efforts to interfere in the 2016 campaign.

U.S. UN Ambassador Nikki Haley said on Wednesday in the Security Council: “We take no pleasure in having to constantly criticize Russia. But we need Russia to stop giving us so many reasons to do so.”

Prime Minister Theresa May then scored a major victory for herself in getting the U.S., U.K., France and Germany to issue a joint statement that the attack on the Skripals “constitutes the first offensive use of a nerve agent in Europe since the Second World War.”

“It is an assault on U.K. sovereignty and any such use by a State party is a clear violation of the Chemical Weapons Convention and a breach of international law. It threatens the security of us all.”

President Trump said Thursday, in addressing the U.K. findings, that it’s “a very sad situation. Certainly looks like the Russians were behind it.  Something that should never ever happen. And we’re taking it very seriously, as I think are many others.”  But once again, no direct criticism of Vladimir Putin.

For his sake, Putin can easily withstand the sanctions as they exist today, but there are stories the British government could begin targeting Russian oligarchs’ financial interests in London, with real estate being a popular spot for wealthy Russians to hide their wealth. That would hurt Putin big time because he would eventually lose the oligarchs’ support.

And the West could target Russian banks with crippling sanctions, as was the case with Iran before the 2015 nuclear agreement.

Ralph Peters / New York Post

“(There) are two practical – and deeply alarming – reasons why Putin ordered that nerve-agent drive-by now. First, he was sending a message to any potential double agents that Russia would kill them – and their families – no matter where they might find refuge or how long it might take.

“The second reason, though, is the one that should jerk us awake: Putin was warning the likes of Paul Manafort and others associated with the Trump campaign that they need to keep their mouths shut about their Russian ties – or face the consequences.

“Even if the poison-gas attacks on Syrian children don’t move us, Putin’s willingness to order mob hits within NATO-member states should get our attention.

“We’re faced with a brilliant thug who, despite serious missteps, has overmatched two U.S. presidential administrations and may have tragic influence over a third. Instead of fighting him off, we’re fighting among ourselves.

“What the world needs in order to contain Vladimir Putin is American leadership. And there’s none in sight.”

David Ignatius / Washington Post

“Russian President Vladimir Putin told NBC’s Megyn Kelly this month that in using power, you ‘must be ready to go all the way to achieve the goals.’  Now, it seems, Putin has gone all the way too far.

“Putin’s aggressive use of covert action to settle scores hit  an international tripwire after the poisoning of a former Russian spy and his daughter in the quiet British cathedral town of Salisbury. An outraged Britain was joined Thursday by France, Germany and the United States in condemning the use of the banned Soviet-era toxin known as Novichok.

“A joint statement denounced the attack as ‘the first offensive use of a nerve agent in Europe since the Second World War’ and called it ‘a breach of international law’ that comes ‘against the background of a pattern of earlier irresponsible Russian behavior.’ That strong language warrants action by NATO and the United Nations.

“The Trump administration, after a year of mealy-mouthed, temporizing statements, also announced sanctions Thursday against Russia’s ‘malicious cyberattacks.’ The sanctions...will have little practical effect beyond those already in place. What matters is that President Trump finally seems to have eased, at least for the moment, his dubious defense of Putin....

“So how can the United States and its closest allies alter Putin’s behavior, if they’re truly serious about holding Russia to account? The answer, say several former senior CIA officials, is to use America’s network of alliances to put Russia under strain....

“Russia’s greatest vulnerability is its dependence on sales of oil and gas.  Here, the United States is uniquely positioned for payback. Consider the ways in which Trump could stress Russia on the energy front....

“Russia’s outrageous behavior in Syria should be on the table, too.  Moscow betrayed the Syrian Kurds, its longtime allies, when it withdrew its forces in January from the Afrin enclave and allowed Turkey to attack Kurdish forces there. The slaughter of civilians in Afrin has been almost as grim as in Ghouta. Incredibly, when asked about chemical weapons use in Syria, Putin told Kelly: ‘One wants to say, ‘Boring.’’....

“Putin used the phrase ‘so what’ nine times during the interview. That’s his tell. He thinks he can get away with it, based on his experience over the past 18 years in power. He hacks political campaigns around the world and insists he’s blameless because, as he told Kelly, ‘the Internet is yours.’ He cynically manipulates the battlefield in Syria, causing thousands of civilian deaths thee, and pretends he has a peace plan. When he gets caught cheating, he throws up his hands in mock innocence.

“By his reckless actions, Putin has sharply raised the price of his admission to the club he needs to join if his dreams of a revived Russia are not to come crashing down around him.  Putin says he wants to talk. Okay, let’s talk. But first, Putin needs to start cleaning up the mess he has created.”

Editorial / Wall Street Journal

“Vladimir Putin has invaded Ukraine, propped up Syria’s Assad regime, meddled in the 2016 U.S. presidential elections, and this month someone in his government approved a chemical-weapons attack on British soil.  The Western response so far is the equivalent of a foot stomp and public whining....

“More substantively, Treasury Secretary Steven Mnuchin on Thursday announced new U.S. sanctions against five Russian entities and 19 individuals for ‘attempted interference in U.S. elections, destructive cyber-attacks, and intrusion targeting critical infrastructure.’ This is welcome after a long delay and is the Trump Administration’s first sanctions response to the 2016 election interference, but it’s still not adequate as a response to Mr. Putin’s assaults.

“Mrs. May threatened more punitive measures, and one option that might get Mr. Putin’s attention would be to seize the financial assets and property of Russians connected to him. The Russian strongman’s power depends on his ability to enrich his cronies, and they all have money overseas where Mr. Putin or a successor can’t easily snatch it if the whim strikes.

“Mr. Putin keeps taunting the West because he has learned that its leaders lack the political nerve to strike back in a way that matters.  Until the West threatens his finances, Mr. Putin won’t be deterred from future aggression.”

Friday, British Foreign Secretary Boris Johnson said it was overwhelmingly likely that Vladimir Putin himself made the decision to use a nerve toxin on British soil.

“We have nothing against the Russians themselves. There is to be no Russophobia as a result of what is happening,” Johnson told reporters at the Battle of Britain bunker from which World War Two fighter operations were controlled. “Our quarrel is with Putin’s Kremlin, and with his decision, and we think it overwhelmingly likely that it was his decision, to direct the use of a nerve agent on the streets of the U.K., on the streets of Europe for the first time since the Second World War.”

Russia it was expanding its “black list” of Americans. Deputy Foreign Minister Sergei Ryabkov said Moscow still wants to maintain a dialogue with Washington and takes counter-measures due to “American political stubbornness,” RIA cited him as saying.  “Those (American) politicians are playing with fire by destroying Russian-American relationship because simultaneously they shake global stability.”

Also Friday, British police said they had launched a murder investigation following the death this week of a Russian associate of late tycoon Boris Berezovsky.

68-year-old Nikolai Gluschkov died as the result of “compression to the neck,” according to London police. There was, however, at this time, nothing to suggest a link to the attempted murders of Sergei Skripal and his daughter.

Sunday, Russians go to the polls (how many the only question) to give Putin another six years.

China: Last weekend, the National People’s Congress announced the final result of the vote to repeal presidential term limits, making Xi Jinping supreme dictator for life. Only two of the 2,964 deputies voted against the constitutional revisions, three others abstained.

The two who voted against are amazingly courageous...and should be invited to Washington to be feted. Then again, I’m sure they are already in a Chinese prison.  As for the three who abstained, no word on whether their defense that they were in the bathroom will stand up.

The U.S. Chamber of Commerce issued a statement this week that said in part, the Trump administration’s plan to impose heavy tariffs on China will have a “devastating impact” on the U.S. economy, this as the White House threatened tariffs of $30 billion or more on Chinese goods unless Beijing scraps a law forcing foreign businesses to transfer proprietary technology to their Chinese partners.

“The administration is right to focus on the negative economic impact of China’s industrial policies and unfair trade practices, but the U.S. Chamber would strongly disagree with a decision to impose sweeping tariffs.

“As we’re starting to see, tariffs would lead to a destructive trade war with serious consequences for U.S. economic growth and job creation.

“The livelihood of America’s consumers, businesses, farmers, and ranchers are at risk if the administration proceeds with this plan.”

Chamber President Thomas Donohue said the tariffs were “damaging taxes on American consumers” that would wipe out any gains American families received from tax cuts.

In January, Beijing announced that last year it had recorded a record trade surplus with America of $275.8 billion – an 8.6 percent rise from 2016; the total being 65 percent of China’s total global trade surplus.

Washington wants China to cut the surplus with the U.S. by $100 billion.

Separately, one of my predictions for the year was that China would make a move on Taiwan in 2018, not wait until later as most potentially see.

From the South China Morning Post this week:

“Beijing is mapping out specific tactics to lure Taiwan into its orbit and possibly pave the way for forcible seizure of the self-ruled island, although there is no timetable for such a drastic move, according to a senior mainland Taiwan affairs advise.

“Li Yihu, dean of Peking University’s Taiwan Studies Institute, said Beijing was reinforcing its ‘carrot and stick’ approach to dealing with Taiwan’s independence forces after passing historic constitutional amendments on Sunday to remove presidential term limits on the mainland.

“Beijing has been using economic sweeteners or ‘carrots’ such as offers of better paying jobs, access to bigger markets and equal treatment to lure Taiwanese to the mainland.

“Analysts have cautioned that if the sweeteners fail to work, the mainland could bring down its ‘stick’ – moving to forcibly seize the wayward island.

“Li said that although he doubted that Xi had set a timetable for a Taiwan takeover, the Taiwan issue would remain prominent on the leader’s agenda....

“Resolving the ‘Taiwan problem’ is seen as a major step in achieving Xi’s goal of ‘national rejuvenation....

“Analysts have speculated that a vote by the mainland’s legislature to repeal presidential term limits, allowing the president to stay on past 2023, will empower Xi to take a tougher approach to Taiwan by forcibly taking back the island.”

As I noted the other week, the U.S. Congress had passed legislation that encourages the United States to send senior officials to Taiwan to meet Taiwanese counterparts and vice versa, angering China to no end.  Today, President Trump signed it.  This is big, though the bill would have gone into effect on Saturday even if Trump had not signed it.

While it seems like a little deal to most people, it isn’t.  Far more next week, but for now it exacerbates trade tensions, for starters, bigly.

Syria: As I said would be the case once Bashar Assad pressed his offensive on the Damascus suburb of eastern Ghouta, an evacuation is finally taking place, with as many as 20,000 fleeing the offensive there, while in the northern Syria town of Afrin, another 30,000 have fled as Turkish forces and their allies step up a siege.

Afrin has been under bombardment from the air and ground by Turkey as it targets the Kurdish People’s Protection Units (YPG), a militia that it regards as an extension of the Kurdish rebels it faces back home.

Turkish President Erdogan said his country would not stop the offensive until Afrin is taken.

In Syria overall, nearly 12 million have been displaced in the seven-year war; 6.1 million internally, while another 5.6 million have fled abroad.

Some aid convoys have been entering the Ghouta town of Douma but the International Committee of the Red Cross said it was but a fraction of what was needed.

This week, the Syrian Observatory for Human Rights issued a new death toll in the war....511,000. The Observatory, which tracks death tolls using a network of contacts inside Syria, said it had identified more than 350,000 of those killed, and the remainder were cases where it knew deaths had occurred but did not know the victims’ names. About 85 percent of the dead were civilians killed by the forces of the Syrian government and its allies, the Observatory said.

Separately, Syrian jets have been striking several rebel-held towns in southern Deraa province this week, with Washington warning such bombing violates a U.S.-Russian “de-escalation zone.”

Walter Russell Mead / Wall Street Journal

“The post-Obama Middle East is a grim and ugly place: the brutal wars in Syria, the deepened chaos in Iraq, the shambolic Libya mess, the vaulting ambition of Iran, the intrusion of Russia, the smoldering failure of the Arab Spring, and the collapse of the U.S.-Turkish relationship.

“President Obama cannot be blamed for everything that went wrong in the Middle East on his watch. But it’s clear the Trump administration inherited an incoherent strategy, a discredited democracy agenda, alienated allies, and an American public so traumatized by successive American policy misfires that it has become skeptical about any American engagement in the region.

“It is not a surprise under these circumstances that the Trump administration wants to change course, or that its efforts to do so have enjoyed significant support in the region.  If the rise of Iran has created a crisis in the Middle East, it has also created a great opportunity.  Israel and most of the Arab world are so horrified by the Iranian threat, and so unnerved by the vagaries of recent American policy, that the new administration has been able to repair relations with many old allies relatively quickly.

“But if relations with Israel and Arab states have rapidly warmed, relations with Turkey have deteriorated dangerously – so much that the U.S. is looking for alternatives to its important air base in Incirlik. Richard Haass, president of the Council on Foreign Relations, has even called for the removal of American nuclear weapons from the country.

“The Turkish alliance has been a pillar of America’s Middle East strategy since the Truman administration: indeed, it was Britain’s decision to end aid to Turkey and Greece in February 1947 that prompted the U.S. strategic review culminating in the Truman Doctrine and the Marshall Plan. With Iran hostile and the Arab world in disarray, Turkey is more important than ever to American policy.

“Yet rebuilding relations with Turkey will force the U.S. to make some hard choices. One is about human rights. ...If the Trump administration wants a close strategic relationship with Mr. Erdogan, it will have to accept some bitter and wounding criticism from human-rights advocates at home and in Europe.

“The second choice is even harder. Syrian Kurds have been America’s most useful partners in the war against ISIS.  But their politics and ambitions directly conflict with the policy of Mr. Erdogan, who considers Syrian Kurds to be allies of terrorist forces in Turkey. Turkey bears a significant portion of the blame for the continuing conflict with the PKK, the Kurdish organization that has been fighting the Turkish government since 1984.. Nevertheless, if the U.S. wants Turkey’s help, it will have to address Turkish concerns about America’s alliance with Syrian Kurds more effectively....

“The Middle East coalition the Trump administration needs to rebuild must inevitably contain countries that don’t like or trust one another. Egypt and Saudi Arabia see Turkey’s support for the Muslim Brotherhood as a strategic threat.  Mr. Erdogan and Israeli Prime Minister Benjamin Netanyahu hold each other in contempt. The recent warming of relations between Israel and the Gulf states is both temporary and fragile.

“The U.S., and only the U.S., can hold this coalition together. Without it, there is no viable path for containing Iran. Turkey is a key member of any realistic coalition to rebalance the Middle East; getting to yes with Mr. Erdogan is one of the administration’s most crucial challenges in the region.”

Iran: Iranians braced for further turmoil in the relationship with the United States with the nomination of CIA Director Mike Pompeo to be the new secretary of State.

“The hawks overcame the doves in the American administration,” a former diplomat, Ali Khorram, wrote in a daily newspaper in Iran aligned with reformists.

Khorram described Pompeo as “cowboyish in character and eager to start a war similar to the war in Iraq.”

Pompeo has called for the United States to leave the nuclear deal, President Trump long calling it “the worst deal ever,” citing it as a reason for firing Rex Tillerson.  Trump said, “With Mike...we hae a very similar thought process.”

Trump has until May 12 to issue fresh waivers on sanctions against Iran, or the penalties will be renewed, threatening the agreement.  Russia, another signatory to the pact, has said it would unravel if one party withdraws.

Iranian leadership, despite defiance from hardliners, doesn’t want to see the deal unravel because it has helped end its economic isolation.

Separately, Saudi Arabia’s Crown Prince Mohammed bin Salman ratcheted up his rhetoric when it comes to rival Iran, comparing Supreme Leader Ayatollah Ali Khamenei to Hitler, and said that his country would acquire a nuclear bomb “as soon as possible” if Iran developed nuclear weapons.  His statements were part of a prerecorded interview with “60 Minutes” to be aired on Sunday.

Saudi Arabia: Speaking of the Saudis and Mohammed bin Salman (MBS), the New York Times reported:

“In November, the Saudi government locked up hundreds of influential businessmen – many of them members of the royal family – in the Riyadh Ritz-Carlton in what it called an anti-corruption campaign.

“Most have since been released but they are hardly free. Instead, this large sector of Saudi Arabia’s movers and shakers are living in fear and uncertainty.

“During months of captivity, many were subject to coercion and physical abuse, witnesses said. In the early days of the crackdown, at least 17 detainees were hospitalized for physical abuse and one later died in custody with a neck that appeared twisted, a badly swollen body and other signs of abuse, according to a person who saw the body.

“In an email to The New York Times on Sunday, the government denied accusations of physical abuse as ‘absolutely untrue.’”

Don’t look for President Trump to question MBS when they meet at the White House next week.  But assuming there is a joint press conference, we’ll see if an American reporter asks him about the Times story.

Afghanistan: The violence continues.  A suicide bomber targeting Afghanistan’s minority Hazaras blew himself up at a police checkpoint in Kabul, killing at least nine; the bomber targeting a gathering of Hazaras who were commemorating the death of their leader, Abdul Ali Mazari, killed at the hands of the Taliban. The bomber came as close to the gathering as he could.

And at least 24 members of the Afghan security forces were killed in a Taliban attack in the western province of Farah

George F. Will / Washington Post

“The war is over.”

--Defense Secretary Donald H. Rumsfeld in Afghanistan in April 2002

“I believe victory is closer than ever before.”

--Vice President Pence in Afghanistan in December

“With metronomic regularity, every thousand days or so, Americans should give some thought to the longest war in their nation’s history. The war in Afghanistan, which is becoming one of the longest in world history, reaches its 6,000th day on Monday, when it will have ground on for substantially more than four times longer than U.S. involvement in World War II from Pearl Harbor to V-J Day (1,365 days)....

“For 73 years, U.S. troops have been on the Rhine, where their presence helped win the Cold War – and now serves vital U.S. interests as Vladimir Putin ignites Cold War 2.0. Significant numbers of U.S. troops have been in South Korea for 68 years, and few people are foolish enough to doubt the usefulness of this deployment, or to think that it will or should end soon.  It is conceivable, and conceivably desirable, that U.S. forces will be in Afghanistan, lending intelligence, logistical and even lethal support to that nation’s military and security forces for another 1,000 – perhaps 6,000 – days.

“It would, however, be helpful to have an explanation of U.S. interests and objectives beyond vice-presidential boilerplate about how ‘We will see it through to the end.’  And (to U.S. troops) how ‘the road before you is promising.’ And how the president has ‘unleashed the full range of American military might.’ And how ‘reality and facts and a relentless  pursuit of victory will guide us.’ And how U.S. forces have ‘crushed the enemy in the field’ (or at least ‘put the Taliban on the defensive’) in ‘this fight for freedom in Afghanistan,’ where Bagram Airfield is ‘a beacon of freedom.’  If the U.S. objective is freedom there rather than security here, or if the theory is that the latter somehow depends on the former, the administration should clearly say so, and defend those propositions, or liquidate this undertaking, which has, so far, cost about $1 trillion and more than 2,200 American lives.”

Iraq: In a tragic reminder that the U.S. still has a sizable force in Iraq, all seven service members aboard a U.S. helicopter were killed when it crashed in western Iraq on Thursday, the Pentagon said today. The crash did not appear to be the result of enemy activity, it added.

The helicopter, a type of Black Hawk, was not on a combat mission.

North Korea: The North’s foreign minister is in Sweden for a surprise visit, ahead of a possible meeting between President Trump and Kim Jong Un.  Pyongyang said Ri Yong-ho’s trip was for “bilateral relations and issues of mutual concern.”

Sweden has full diplomatic relations with North Korea and, as a non-aligned nation, is a natural conduit between the U.S. and North Korea.

But curiously, while Trump keeps talking about the coming talks, North Korea still has issued no formal word since Kim extended the invitation via South Korean officials in Washington. The State Department this week said it had yet to hear directly from Pyongyang. So many questions remain unanswered, such as where it would take place?  Sweden is a possibility, though I don’t see Kim, who has never visited a foreign country as leader, traveling that far. Also, what will North Korea ask for in exchange for holding the summit?

But at this point, it looks just 50/50 to me as to whether it actually even takes place.

Random Musings

--Presidential tracking polls....

Gallup: 39% approval for President Trump, 56% disapproval [March 11]
Rasmussen: 47% approval, 52% disapproval

--You never want to make too much of a single congressional special election, but, assuming the absentee and provisional ballots confirm, in Pennsylvania’s 18th District, which Donald Trump won by 20 points (and Mitt Romney by 17), Democrat Conor Lamb pulled off the narrowest of upsets, defeating Republican Rick Saccone, this after President Trump made a campaign stop last weekend in support of him.  Not exactly a healthy sign for Republicans come November’s mid-terms.

In recent years, the district was seen as so Republican that Democrats didn’t even field a candidate. Further, while Republican turnout was solid, Democrats tapped their union muscle and other traditionally Democratic-friendly organizations.

Trump, stumping for Saccone, called the Democrat “Lamb the Sham,” and said, “The people of Pittsburgh cannot be conned by this guy Lamb, because he’s not going to vote for us.”

Afterwards, Trump took none of the blame. He said Saccone would have done worse without him, adding Lamb won the seat because he was “like Trump” but that he would vote with Nancy Pelosi.

Editorial / Wall Street Journal

“Mr. Lamb could afford to soft-sell opposition to Mr. Trump because he knows Democrats are itching to vote against the President in any case.  Like Republicans against Barack Obama in 2010, Democrats will ‘crawl over broken glass’ to demonstrate their opposition, as Texas Senator Ted Cruz recently put it. An anti-Trump wave is building that could take out the GOP House and even Senate majorities.

“Republicans are touting their tax reform and the strong economy as a cure-all but tariffs muddy the message and they didn’t sell the tax cuts well in Pennsylvania.  They also let Mr. Lamb blame them for cuts to Medicare and Social Security that they don’t have the nerve to vote for.  It’s quite a feat to lose for something you have no intention of doing.

“Republicans in Congress seem prepared to rest on their tax cut success from last year and coast for the rest of the year. Maybe they should press some issues that might give voters a reason to keep them in the majority.”

--The parents of Seth Rich, the young Democratic aide whose unsolved murder became fodder for right-wing conspiracy theories about the 2016 presidential race, filed a lawsuit this week against Fox News , claiming the network’s coverage fueled damaging rumors about his death.

The suit, filed in Federal District Court in Manhattan, accuses Fox of “extreme and outrageous” conduct, claiming that a network reporter, and a regular Fox News guest, intentionally fabricated a story that portrayed Rich as the person who leaked internal Democratic National Committee emails to WikiLeaks in 2016, which proved damaging to Hillary Clinton’s campaign.

The story, as Fox regulars will recall, first appeared on their web site, implying the murder of Rich on the streets of Washington was revenge in retaliation for him leaking the emails. But D.C. police never found evidence supporting the story, and both the police and the parents believed Rich, then 27, was killed during a robbery attempt.

Fox News retracted the article a week after it was published, but the theory persisted among right-wing broadcasters and prominent conservatives from Rush Limbaugh to Newt Gingrich.

But Sean Hannity was the most vocal proponent of the garbage, although he, too, eventually backed off...grudgingly.

--President Trump wants to promote “Fox & Friends Weekend” host Pete Hegseth to the new secretary of Department of Veterans Affairs, with Trump expected to fire VA Sec. David Shulkin.  Hegseth is an Army veteran, Princeton grad, who was awarded a Bronze Star in Iraq, and has been head of the political advocacy group Vets For Freedom.

Hegseth had been under consideration for the VA post after Trump was elected, but veterans’ groups opposed him.  

And another Fox News staple, John Bolton, could be replacing McMaster down the road.

--Kathleen Parker / Washington Post

“She can’t let go.

“She can’t stop talking about what happened. She wrote an entire book about it. Now she’s telling people in other countries about why she should have won. In India last weekend, she told an audience that she won in all the smart, cool places – and then hit a pandering low that puts a catalogue of others to shame.

“Hillary Clinton just can’t quit herself.

“Not then. Not now....

“Americans either love or hate the electoral college, depending on whether it benefits them.  And every few years, we want to scrap the whole thing and let the majority have its way. Or, should I say, let demographics and birthrates rule the day.

“Irony, meanwhile, is one happy glutton these days. Donald Trump’s unexpected victory meant that the ‘mob,’ as perceived by Clinton supporters, merged with the electoral college to pick a populist demagogue.

“To say a majority of the country awoke the morning after Election Day shell-shocked and mute is to understate the effect not so much of Clinton’s loss but of Trump’s win. As in, What?!  On my block in very-blue Washington on the morning after, three neighbors simultaneously ventured outside to collect the newspaper or walk the dog and stood staring at each other, wordlessly. It was as though the presidency had died.

“But life does skip right along, doesn’t it? A triumphant President Trump hasn’t slackened his pace as he shows one staff member, appointee or Cabinet member after another the door...

“(As for Clinton), she was always a little tone-deaf. In India last week on a private trip with her friend and loyal adviser Huma Abedin, Clinton gave a few speeches as part of her ongoing global book tour to promote, wait for it, ‘What Happened.’

“At least Al Gore, who suffered a similar fate – winning the popular vote in 2000 but losing the electoral college to George W. Bush – went on to only grow a beard and make documentaries about the end of the Earth.  Clinton seems committed to a personal Groundhog Day, in which she adds not new talents and feats of heroism but fresh targets to blame for her destiny denied....

“Such a lack of awareness, combined with Clinton’s clear disdain for millions of Americans whom she would have served as president, confirms she shouldn’t have won after all. By her insinuations, she has demonstrated a loathsome prejudice against the poorly educated and unemployed, as well as rural whites, social conservatives and women who stay home with their children – to name a few.

“What happened, you ask?

“That.”

--Michael Gerson / Washington Post

“With their reactions to the Roy Moore candidacy and the Stormy Daniels scandal, the Trump evangelicals have scaled the heights of hypocrisy to the summit. Family-values conservatives who dismiss credible accusations of sexual abuse and wink at hush money for a porn star have ceased to represent family values in any meaningful sense.  They have made a national joke of moral standards that were once, presumably, deeply held. At least when a Democrat violated them....

“Trump evangelicals defend their support for the president in the pose of political realists. A president, they argue, is not a pastor. A certain amount of compromise is necessary to get conservative judges and more favorable treatment of Christian institutions. This is the way of the world....

“But this argument would be more credible if so many Trump evangelicals were not such sycophants. It is one thing to point to the difficult binary choice between Trump and Hillary Clinton. It is another to provide Trump political cover in every scandal and offer preemptive absolution of every character failure.

“There is something else at work here other than weary realism – something that Tony Perkins of the Family Research Council recently clarified. Conservatives, he said, ‘were tired of being kicked around by Barack Obama and his leftists. And I think they are finally glad that there’s somebody on the playground that is willing to punch the bully.’ In this explanation, Trump’s approach to public discourse is actually the main selling point. His bullying – his cruelty, crudity and personal insults – is admired because it is directed at other bullies.

“This is, perhaps, politically and psychologically understandable. But it has absolutely nothing to do with the Sermon on the Mount.  Nothing to do with any recognizable version of Christian ethics. The very thing that should repel evangelicals – Trump’s dehumanization of others – is what seems to fascinate and attract some conservative Christians. It is yet another example of discrediting hypocrisy.”

--On this topic, during last Saturday night’s campaign-style rally for congressional candidate Rick Saccone, Trump told the fired-up crowd he had always been tough on North Korea, recalling an interview he did on “Meet the Press” in 1999 as evidence.

He then mocked the NBC show’s current host.

“Meet the Press, a show now headed by sleepy-eyes Chuck Todd,” Trump said. “He is a sleeping son of a bitch, I’ll tell you.”

The next morning on Todd’s show, the moderator had Treasury Secretary Steven Mnuchin and Todd asked him about Trump’s comment, and Mnuchin said, “He’s using these vulgarities in the context of a campaign rally, and obviously, there were a lot of funny moments in that rally.”

“So is that acceptable?” Todd shot back. “So you’re saying that’s acceptable behavior for the rest of the administration too?”

Mnuchin responded: “This is something that is at a campaign rally. And the president likes making funny names.”

Oh yeah, the president is just a real laugh-riot.

--The Metropolitan Opera fired music director emeritus James Levine after an investigation found evidence of sexual abuse and harassment.

Levine, 74, has been music or artistic director at the Met since 1976, until he stepped down under pressure two years ago.

--Boy, be aware if you go to Cancun that the murder rate there is soaring – 169 killings in the first half of 2017, as just reported, owing to a thriving drug trade and widespread extortion. Most of the murders go unsolved, but now the multi-billion tourism industry is at risk.

The BBC reported that British journalist Krishnan Guru-Murthy traveled to Mexico for the Special Broadcasting Service, a public broadcaster in Australia, to investigate why the murders are taking place, and Guru-Murthy was stunned by what he found.

“This is one of the most beautiful views in the world and we are the only people here,” he said from Cancun’s main beach.

Later on, just before sunset, “he found himself in the middle of a crime scene – a man had been gunned down in the sand. Four men had come in through a luxury hotel and attacked the man, who later died in the hospital.”

“And this was meant to be one of the safer places in the area.”

Guru-Murthy was also shocked by the lack of police presence, with many tourists unaware of the gruesome sight just feet away.

It was the third shooting on the beach in Cancun this year, but tourists will struggle to find any information about the shootings online.

If people flee the destination, it would be an economic disaster for the region; facing a demise similar to that of Acapulco, once one of the world’s most glamorous locations but now Mexico’s murder capital.

“Guru-Murthy also visited Acapulco, and just five minutes after landing, was notified of a nearby crime scene with four bodies – including children.”

--I wasn’t going to say anything about the Miami bridge disaster, but as I go to post, the New York Times is reporting the following:

“An engineer reported cracks on a newly installed pedestrian bridge two days before it collapsed on a busy roadway here, killing at least six people, state officials said on Friday.

“The report, by the lead engineer with the company in charge of the bridge’s design, was made in a voice mail message for a Florida Department of Transportation employee. That employee was out of the office, however, and did not receive it until Friday, a day after the collapse.”

--The New York Post first reported that Donald Trump Jr. and his wife, Vanessa, are headed for divorce.  They married in 2005 and have five children.  As reported by Emily Smith of the Post:

“An issue, two of the sources say, is that Don Jr. ‘appears to have changed recently, and friends are concerned about him.’  Their concerns were increased by Don Jr.’s tweeting, including when he liked a tweet linking antidepressants to mass murder, and another liking a tweet attacking a teen survivor of the Stoneman Douglas High School shooting.”

It seems Vanessa wanted to keep the marriage together while President Trump was in office, but she can’t take it anymore.  I can’t either.

--In yet another example of why ‘Man’ sucks, a California man was arrested after wildlife authorities found 126 dead raptors, two dead bobcats and a stuffed mountain lion on a rural property near a wildlife  refuge.

The California Dept. of Fish and Wildlife said Richard Parker, 67, faces multiple charges, including taking birds of prey and non-game birds, and possession of wildlife unlawfully taken.

Wildlife officials say it’s likely the biggest single instance of raptor poaching in California history.

Parker faces maximum state penalties of up to six months in jail and a $5,000 fine for each illegally killed raptor, a $10,000 fine for an illegally killed mountain lion and possible federal penalties, according to officials.  I’d strap him to a rock and let the birds of prey have a veritable feast.

--Corrections: I want to thank Chris in Connecticut for catching a bad typo when I had Donald Trump’s net worth in the $millions when it should have read $billions.  That I have no problem correcting, ethically, as it might have saved me from the president’s fury.  [Boy Chris, wish I could tell your reporter story, re your own typo, but it wouldn’t be prudent.]

And I forgot to note the week before that I called Gibraltar’s monkeys baboons (going off memory; I should have double-checked), when Dr. W. reminded me they are macaques, Barbary macaques to be exact.  Since macaques can look like baboons (especially when they are glowering), I opted to keep my mistake in the column.  I think I’m going to Heaven when my life ends, at least thus far, but I could be met by an army of macaques at The Gate....which would kind of suck, after going through all the trouble to get there.

--Finally, we note the passing of renowned British physicist Professor Stephen Hawking, one of the world’s greatest scientific minds, who died peacefully at his home in Cambridge, England, at the age of 76, decades beyond what he was expected to live to.

Astrophysicist Neil deGrasse Tyson said on Twitter: “His passing has left an intellectual vacuum in his wake. But it’s not empty. Think of it as a kind of vacuum energy permeating the fabric of space time that defies measure.”

British Defense Minister Tobias Ellwood said Prof. Hawking was “an inspiration to us all, whatever our station in life, to reach for the stars.”

Even actor Macaulay Culkin, in describing Hawking as a “genius,” added he was his favorite Simpsons character, and it’s true, as Hawking himself once said, he is probably more famous for appearing in the cartoon than for his work, at least among a certain generation.

Hawking roamed the cosmos from his wheelchair, having been diagnosed with Lou Gehrig’s disease as a graduate student in 1963.  He was given only a few years to live.

When you think about that single fact, it truly is incredible; the disease reducing his bodily control to the flexing of a finger and some eye movements, but his mental faculties were untouched. 

Michio Kaku, a professor of theoretical physics at the City University of New York, said in an interview: “Not since Albert Einstein has a scientist so captured the public imagination and endeared himself to tens of millions of people around the world.”

Dr. Hawking did that largely through the book “A Brief History of Time: From the Big Bank to Black Holes,” published in 1988.  It has sold more than 10 million copies.  Even I read this one.  Can’t say I understood a single word of it, but it must have been entertaining enough for me to remember reading the whole thing.

Few in our lifetime deserve to rest in peace more than Stephen Hawking.

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

God bless America.

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Gold 1313
Oil 62.25

Returns for the week 3/12-3/16

Dow Jones  -1.5%  [24946]
S&P 500  -1.2%  [2752]
S&P MidCap  -0.7%
Russell 2000  -0.7%
Nasdaq  -1.0%  [7481]

Returns for the period 1/1/18-3/16/18

Dow Jones  +0.9%
S&P 500  +2.9%
S&P MidCap  +1.9%
Russell 2000  +3.3%
Nasdaq  +8.4%

Bulls 54.9
Bears  15.7 [Source: Investors Intelligence]

Have a great week.

Brian Trumbore

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