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

 

Week in Review

http://www.gofundme.com/s3h2w8

AddThis Feed Button

   

04/14/2018

For the week 4/9-4/13

[Posted 12:00 AM ET, Saturday]

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 Jeff B. this week.

Edition 992

Trump World

Forget “what a week,” what a past 12 hours?!  This is being posted around midnight, Friday, after we learned from President Trump at 9:00 PM Eastern time that the U.S., along with Britain and France (God bless them), had struck Syrian regime chemical weapons targets, including in Homs and Damascus. I watched the Pentagon briefing an hour later and it is too soon to speak of any further details, only that this quick allied attack, already over, was far greater in scope than the unilateral action the United States took a year ago against a Syrian airbase responsible for a similar chemical attack

So I apologize that some of what follows, read the discussion on Syria, is dated, but this is “Week in Review,” after all, and your editor is compiling the single greatest history of our times, not Sean Hannity’s, or Anderson Cooper’s, latest “breaking news monologue.”

What makes this day so extraordinary is that the Syrian attack comes hours after the revelation that Trump’s personal attorney, Michael Cohen, is under criminal investigation, while a top Republican donor, and party deputy finance chairman, was forced to resign upon the revelation Cohen fixed a large payment for him (see below).

And President Trump, recklessly, called Cohen (according to multiple reports) today to “check in,” which if true is amazingly stupid.

Here’s the bottom line.....at least for the next few hours. While I in no way believe the Syrian strike was a “wag the dog” moment amid swirling controversies in the White House, the fact is Donald Trump has to be on tenterhooks tonight.  This coming week has the potential to...I am not exaggerating in the least...spell the coming demise of this presidency, depending on how much we learn from the multiple investigations.

As the “wait 24 hours” guy I do not say this lightly.  Just watch chief of staff John Kelly, for starters.  And let’s see what happens with Rod Rosenstein and Robert Mueller, and whether the president tries to eject the former, which would likely lead to the firing of the latter.

If Donald Trump knows what’s good for him, and there is zero indication he does, he will shut the heck up on Twitter and make a very public statement he is going to let the investigation(s) run their course.

Otherwise, by the end of this quarter, he could be toast.  And if you are “long” the market, trust me, that would not be good.

Trumpets....

--According to former FBI director James Comey, in his new book, “A Higher Loyalty: Truth, Lies, and Leadership,” President Trump wanted Comey to investigate the infamous “pee tape” allegations – to reassure Melania that  he hadn’t actually paid Russian hookers to urinate on a hotel bed.

“He brought up what he called the ‘golden showers thing’ ...adding that it bothered him if there was ‘even a one percent chance’ his wife, Melania, thought it was true,” Comey writes.

“He just rolled on, unprompted, explaining why it couldn’t possibly be true, ending by saying he was thinking of asking me to investigate the allegation to prove it was a lie. I said it was up to him.”

The conversation took place during the same private dinner on Jan. 27, 2017, where Comey claims the president demanded “loyalty” – and just days after the publication of an intelligence dossier alleging that the  Kremlin had a tape of Trump consorting with prostitutes.

Meanwhile, Comey criticizes President Trump as unethical and “untethered to truth” while calling his leadership of the country “ego driven and about personal loyalty.”

Comey casts Trump as a mafia boss-like figure who sought to blur the line between law enforcement and politics and tried to pressure him regarding his investigation into Russian election interference.

The former director takes some personal jabs at Trump, including how he had “bright white half-moons” under his eyes that he suggested came from tanning goggles.

Yup, it’s that kind of book. [I don’t need to buy it.]

Trump fired Comey in May 2017, setting off a scramble at the Justice Department that led to the appointment of Robert S. Mueller III as special counsel overseeing the Russia investigation.

The book comes at a particularly sensitive time for the president, who is incensed over a recent FBI raid of his personal lawyer’s home and office, raising the prospect that Trump could fire Deputy Atty. Gen. Rod Rosenstein, who appointed Mueller, or try to shut down the inquiry on his own.

Comey is launching a two-week book tour, and the Republican National Committee is ready to lead the public effort to counter him. The president’s legal team will be looking for any inconsistencies between the book and Comey’s public testimony, under oath, before Congress; seeking to impeach Comey’s credibility as a key witness in Mueller’s obstruction investigation.

Among the revelations, Comey writes that then-Homeland Security Secretary John F. Kelly – now Trump’s chief of staff – offered to quit out of a sense of disgust as to how Comey was dismissed. Kelly has been increasingly marginalized, according to multiple reports.

Comey also claims he was so sure that Hillary Clinton would win the 2016 presidential election that he publicly announced re-opening her email investigation because he feared not doing so could make her appear “illegitimate.”

Comey says he opted to go public with information that the FBI had discovered some of Clinton’s emails on Anthony Weiner’s laptop:

“I believed it was my duty to inform Congress that we were restarting the investigation,” he writes about the October 2016 statement. “I would say as little as possible, but the FBI had to speak.”

It was Oct. 28, 2016, that Comey sent a letter to Congress informing them about the investigation, a decision Clinton believes cost her the presidency.

Trump tweets: “James Comey is a proven LEAKER & LIAR. Virtually everyone in Washington thought he should be fired for the terrible job he did – until he was, in fact, fired.  He leaked CLASSIFIED information, for which he should be prosecuted. He lied to Congress under OATH. He is a weak and....

“...untruthful slime ball who was, as time has proven, a terrible Director of the FBI. His handling of the Crooked Hillary Clinton case, and the events surrounding it, will go down as one of the worst ‘botch jobs’ of history. It was my great honor to fire James Comey!”

--Meanwhile, President Trump’s personal attorney, Michael Cohen, had his computers and phones seized on Monday as the FBI executed a search warrant that sought, among other records, all communications between the lawyer and Trump and campaign aides about “potential sources of negative publicity” in the lead-up to the 2016 election.  The Washington Post then reported that Cohen sometimes taped conversations with associates, according to three people familiar with his practice, and allies of the president were afraid the recordings were seized.

Investigators were also said to be looking for any records related to adult-firm star Stormy Daniels and ex-Playboy playmate Karen McDougal in relation to payments they received after alleged affairs with Trump.

But the main point is FBI agents were reportedly seeking details on Cohen’s relationship with the Trump campaign and any efforts to suppress negative information about Trump...and whether any campaign finance laws were violated.

At the same time, it was also reported the warrant executed by agents also demanded documents related to the “Access Hollywood” tape and any attempts to suppress that.

Trump tweet in response to the raids: It’s a disgrace, it’s, frankly, a real disgrace, it’s an attack on our country in a true sense. It’s an attack on all we stand for.”

“Attorney-client privilege is dead!”

“A TOTAL WITCH HUNT!!!”

Then late today, we learned that a major Republican donor, Elliott Broidy, with close ties to the White House, resigned as deputy finance chairman of the Republican National Committee after the revelation that he had agreed to pay $1.6 million to a former Playboy model who became pregnant during an affair.

As the New York Times reported, “The deal was arranged in the final months of 2017 by President Trump’s personal lawyer and fixer, Michael D. Cohen.”

If this account is accurate, not good for said “fixer,” let alone Melania’s husband.

--Other Trump tweets: “Tremendous pressure is building, like never before, for the Border Wall and an end to crime cradling Sanctuary Cities. Started the Wall in San Diego, where the people were pushing really hard to get it. They will soon be protected!”

“If I wanted to fire Robert Mueller in December, as reported by the Failing New York Times, I would have fired him. Just more Fake News from a biased newspaper!”

--Editorial / New York Post

“President Trump made no sense Wednesday when he blamed strained U.S.-Russian ties on special counsel Robert Mueller’s Russia probe.

“ ‘Much of the bad blood with Russia is caused by the Fake & Corrupt Russia Investigation,’ Trump tweeted, after earlier declaring that America’s relationship with Russia is worse than ever.

“Yes, Washington and Moscow are at odds on several fronts. But, sorry, Mr. President: That has nothing to do with Mueller.

“Fact is, Vladimir Putin has been increasingly hostile ever since moving on Georgia, Crimea and Eastern Ukraine. He aims to subvert European and U.S. political systems, including through cyberattacks. His minions recently poisoned a former British spy and his daughter on U.K. soil.  He and Syrian butcher Bashar al-Assad work together bombing hospitals and gassing civilians....

“(Trump’s) actions have been far tougher than Barack Obama’s, with serious new sanctions last week against Putin’s inner circle and dozens of diplomats expelled after the U.K. poisoning attack.

“But Trump’s words Wednesday made it seem like Mueller, not Putin, is at fault. Investigators have found no collusion, he tweeted, so ‘they go crazy!’ – referring to the raid of his private attorney’s records.

“The whole ‘collusion’ case may be utter junk; and certainly Democratic operatives wish to undermine Trump. But the Kremlin isn’t angry about the inquiry – it’s thrilled by the turmoil Russian meddling caused.

“Trump also tweeted off-base after Russia vowed to shoot down U.S. missiles aimed at Syria in response to its recent chemical attack: ‘Get ready Russia, because [missiles] will be coming.’

“Huh? Trump spent years chiding Obama for ‘broadcasting when we are going to attack Syria.’ The Twitterverse erupted with quotes of his 2013 question: ‘Why can’t we just be quiet and...catch them by surprise?’

“Please, Mr. President: Think before you tweet.”  Impossible.

--New national security adviser John Bolton started work Tuesday and Trump accepted the resignation of homeland security adviser Tom Bossert, as Bolton sought to remold the president’s national security team.

--Meanwhile, the Justice Department Inspector General’s report on how the FBI and Justice handled the investigation into Hillary Clinton is coming in the next week or so.

But today, a Justice Department watchdog report concluded that Andrew McCabe, the former FBI deputy director fired by Team Trump, repeatedly misled investigators about his role in a leak to the media about Hillary Clinton just days before the 2016 election.

The report alleges that McCabe authorized FBI officials to speak with a Wall Street Journal reporter for a story about an investigation into the Clinton Foundation and then misled FBI and Justice Department officials when later questioned about it.

McCabe denied the report’s allegations, but it is sure to give additional fodder for President Trump to continue attacking him.

Editorial / Wall Street Journal

“If there is no more evidence than is now public about collusion with Russia, many voters will conclude the exercise was mainly partisan. Ditto if prosecutor John Huber finds evidence that Obama officials were colluding with some in the FBI to defeat Mr. Trump. Most Americans will judge the president based on the overall evidence.

“Mr. Trump can’t control Mr. Mueller, but he can control himself. That may be the only way he can save his presidency.”

--Lastly, the other day there was a fire at Trump Tower.  I was following the local news coverage when Trump tweeted: “Fire at Trump Tower is out. Very confined (well built building). Firemen (and women) did a great job. THANK YOU!”

Ah, Mr. President? We learned after you tweeted this that one of your tenants died in the scary blaze that had major pieces of burning structure falling to the ground.  Trump didn’t issue another tweet. We also learned that the well-built building doesn’t have a sprinkler system because it was built before New York City code required it.

*According to a January 1999 article in the New York Post, Trump personally “called a dozen council members to lobby against sprinklers.”  He also donated $5,000 to retire the campaign debt of Peter Vallone, then the council’s speaker. Trump told the New York Times he had both “received and placed calls” to city officials about the sprinkler proposal.

The City Council finally adopted legislation for sprinklers that same year, but exempted older buildings – such as Trump Tower, built in 1983. Trump did opt to put sprinklers in all 350 units at the Trump World Tower, a building across from the United Nations that was under development then, even though a loophole in the new law would have allowed him to skip doing so because the permits had been filed prior to the passage of the law.

--I couldn’t give a damn about the pardoning of Scooter Libby, former chief of staff to Vice President Richard Cheney, who was convicted of perjury and obstruction of justice related to the leak of a CIA officer’s identity.

But President Trump said in a statement: “I don’t know Mr. Libby, but for years I have heard that he has been treated unfairly.  Hopefully, this full pardon will help rectify a very sad portion of his life.”

Ergo, Trump was sending a signal to his own aides and associates...he can pardon them as well.

Libby was sentenced to 30 months in prison and fined $250,000, but his sentence was commuted by then-President George W. Bush.

Wall Street: We start with some inflation data for March. Both the producer and consumer price numbers were above expectations, the PPI up 0.3%, ditto on core (ex-food and energy), while the CPI was -0.1%, 0.2% ex-the stuff we use.  For the 12 months, the PPI was 2.8%, 2.7% on core, with the CPI at 2.4%, 2.1%; all four above February’s figures and an arrow in the quiver for the hawks at the Federal Reserve.

The Atlanta Fed’s GDPNow barometer for the first quarter is projecting growth of just 2.0%.

Trade: On Tuesday, in his keynote speech at the Boao Forum for Asia, Chinese President Xi Jinping offered his first public comments since starting a second term as leader, with Xi pledging to open China’s doors “wider and wider” to the world, pledging to ease foreign ownership limits in the financial and automotive industries, lower tariffs on imported cars, and improve protection for intellectual property rights.

Wall Street, ever playing the role of Village Idiot, was waiting for such measured conciliatory talk and rallied on the news, while President Trump took to Twitter, as noted below, to say he was “very thankful” for the concessions made by Xi.

Now it’s true the Street was concerned Xi would take the opportunity to blast Trump’s trade threats, but that’s not how Xi rolls.  He has said the exact same things before, that he was opening up markets to foreigners, only to then slam the door, and/or demand concessions such as giving up intellectual property (forced technology transfers) in exchange for market access.

And while some in the U.S. talked of Xi “blinking” in the face of U.S. pressure, China’s state media described Xi’s promises as simply the next stage in the country’s economic restructuring and reform, albeit with the caveat that countries that “frequently launch trade wars against other countries” would not benefit from it.

In a commentary published Tuesday, the People’s Daily said: “China’s reform and opening up is entirely autonomous, and it is gradually expanding and progressing according to its own timetable and road.

“Some people believe that China’s new measures for opening up are forced by the pressure of a trade war. (It’s) clear that they do not understand a strategic choice and the internal logic of China’s development.”

It also needs to be pointed out that just as in the new U.S.-South Korea trade deal, where Trump trumpeted non-existent gains for U.S. automakers (like an increased quota when the U.S. is currently selling way below the existing one), talk of lower tariffs for U.S. cars being exported to China is ludicrous because over 95% of U.S. autos sold in China today are made in China through joint ventures!

As that great NBA player, and trade expert, Derrick Coleman would have said, “Whoopty-damn-do!”

And in terms of intellectual property and better protections, China has already stolen what it needs to build better products that the Chinese consumer will increasingly accept (and as Xi mandates), while it will continue to rip the U.S. off, particularly in pharmaceuticals and drug development, through its network of spies here. That’s just a fact.  [Not to beat the dead horse any more than I already have, as I peer down at my Chinese neighbors from the headquarters of StocksandNews.]

It also needs to be noted that Xi just consolidated power – for life – and he did make a lot of enemies along the way, so the last thing he is about to do is cave to the U.S. under threats from Donald Trump.  The People’s Daily commented after the speech that the notion China’s moves were in response to U.S. pressure was “fantasy without regard for facts.”

Now it’s about negotiations between Washington and Beijing. We’ll see what emerges. I will keep an open mind, sort of.

Meanwhile, out of the other side of China’s mouth, it is now looking to line up other countries against the U.S., especially European companies that could benefit should China react to stepped up pressure by the U.S. by retaliating against American companies and businesses.

Trump tweet: “Very thankful for President Xi of China’s kind words on tariffs  and automobile barriers...also, his enlightenment on intellectual property and technology transfers. We will make great progress together!”

Earlier, Trump tweeted: “President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!”

Earlier still: “The United States hasn’t had a Trade Surplus with China in 40 years. They must end unfair trade, take down barriers and charge only Reciprocal Tariffs. The U.S. is losing $500 Billion a year, and has been losing Billions of Dollars for decades. Cannot continue.”

Monday, Trump promised relief to U.S. farmers caught up in his dispute with China.

“These are great patriots,” he said, acknowledging they could be hit by new Chinese tariffs aimed at the president’s political base. “They understand that they’re doing this for the country. And we’ll make it up to them. And, in the end, they’re going to be much stronger than they are right now.”

Huh? The president added, “It will take a little while to get there.”

China has said it would levy penalties on U.S. soybeans, sorghum and other agricultural products following the Trump administration’s unveiling of plans to impose tariffs of 25% on Chinese products worth $50 billion.

Before China’s announced move, net farm income in 2018 was already projected to decrease by $4.3 billion, or 6.7%, to $59.5 billion, according to a USDA forecast updated last month. This would put U.S. farm profits at their lowest level since 2006.

But then on Thursday, President Trump signaled in a meeting with a group of Republicans from farm states that he was directing his advisers to examine if the U.S. could negotiate its way back into the Pacific trade deal he walked away from when he first took office, the Trans-Pacific Partnership (TPP), that I said at the time was lunacy.

Editorial / Wall Street Journal

“Who knows if this was merely another please-the-crowd attempt that will vanish like a tweet. But those in the room say Mr. Trump directed chief economic adviser Larry Kudlow and trade negotiator Robert Lighthizer to see if they could negotiate a better deal than the original one.

“That won’t be easy, not least because Mr. Lighthizer was barely out the door before he or his office was telling reporters the directive wasn’t serious. But later in the afternoon deputy press secretary Lindsay Walters confirmed that the president had asked the two advisers to try. Let’s hope they make the effort.

“Our sources say Mr. Trump was responding in particular to an argument that the TPP would be economic and strategic leverage with China, which isn’t a member of the 11-nation pact.  [Ed. which was my point, and that of supporters of TPP like the Wall Street Journal last year!]...But now that he’s in a trade showdown with Beijing, Mr. Trump might see the logic of better trade relations with other Pacific nations.

“As Nebraska Senator Ben Sasse, who was at the meeting, noted afterward: ‘The best thing the United States can do to push back against Chinese cheating now is to lead the other eleven Pacific nations that believe in free trade and the rule of law.’

“Mr. Trump is also hearing that his tariff-first policy is setting up farm states for an economic beating from foreign retaliation. American growers are petrified they’ll lose export markets.  Midwest farmers tend to rotate soybeans and corn, and they face a decision soon about which to plant this year.”

Well, the Journal wrote the above Thursday night.  Friday morning, the president tweeted:

“Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!”

Today, members of the TPP, which was just signed, said while they would welcome the United States’ participation, they aren’t about to renegotiate a treaty that took years to put together just to please the president.

It’s too freakin’ late, President Trump! #Moron

In other words, the TPP isolated China, and had multiple provisions to protect intellectual property, while in the case of American farmers, signatories such as Japan, that were going to open their markets to the U.S., are already going elsewhere to stay within the new club, as it was designed to do.

This same president idiotically withdrew the United States from the Paris Climate Accord, when as I told you at the time, we could have just stayed in it and ignored the targets!  “Contributions” were not binding!  We look far better being inside than outside.

On a totally different topic, the nonpartisan Congressional Budget Office released its new projections for the budget deficit and it has it topping $1 trillion in 2020 despite healthy economic growth, at least in the short run.

The national debt, which has topped $21 trillion, is expected to soar to more than $33 trillion in 2028. By then, debt held by the public will almost match the size of the nation’s economy, reaching 96 percent of GDP, a higher level than any point since just after World War II and beyond the level that economists say could precipitate a crisis.  [90 percent is generally seen as the dividing line.]

The CBO projection is the first since President Trump signed a tax cut that is expected to cost the government nearly $1.9 trillion over 11 years, then signed legislation significantly boosting military and domestic spending over the next two years.

The current fiscal year, which ends Sept. 30, should have a budget deficit of $804 billion, up from $665 billion last fiscal year, according to CBO projections.

The CBO last issued projections in June, and at the time it expected the deficit to widen from 2.8% of GDP in 2018 to 5.2% in 2027, but the revised figures have a deficit rising from 4% of GDP in fiscal 2018 to 5.4% in 2022, then easing to 5.1% in 2028.

The CBO does expect economic output will expand 3.3% in the fourth quarter of this year, up from its June 2017 estimate of 2% growth. But then annual growth will slow in subsequent years, to below 2% in fiscal 2020 and beyond, and this is where Republicans will argue the figures are being severely understated given tax reform.

But the mounting debt is of little concern in Congress, or the White House. That said, Republicans hardly have what is a traditional campaign issue, blaming Democrats for the government’s fiscal condition.

Europe and Asia

There was zero broad eurozone economic news of any real import (ditto Asia), after the deluge the week before, so on to....

Eurobits....

Italy: Center-right leaders staged a show of unity after a second round of talks with Italy’s president, with euroskeptic League leader Matteo Salvini getting a shot at forming a new government, as ex-premier Silvio Berlusconi, Salvini’s junior partner in the center-right alliance, introduced Salvini as “our leader” following head of state Sergio Mattarella’s meeting with the two, along with Giorgia Meloni, leader of the far-right Brothers of Italy (I bet they have raucous meetings), who is part of the new effort.

Salvini said the center-right was ready to “form a strong and lasting government with a premier indicated by the League.”  He said its priorities would be tax cuts, jobs for young people, pension reform, fighting poverty and “firm opposition to clandestine immigration.”  [Most of these further explode Italy’s dangerous deficit...it being absolutely insane that with a current 134% debt to GDP ratio, the yield on its 10-year is at 1.79%...but I digress.]

The center-right led the anti-establishment Five Star Movement in March 4 elections, but neither had a majority.

Five Star said it would govern with Salvini, but not Berlusconi, who is a figurehead, having been banned from holding public office because of a 2013 conviction on tax fraud, but is still a kingmaker.

Salvini said he would govern with Five Star only if his allies agree.

Salvini is strongly pro-Russian and on Wednesday he tweeted that reports of a chemical attack were fake news and wrote: “Enough wars, thanks!”

Hungary: Prime Minister Viktor Orban handily won re-election, with his party, Fidesz, along with its ally, the Christian Democrats, securing two-thirds of the seats in Parliament, allowing Orban to continue the country’s transformation from a vibrant democracy into a semi-autocratic state under one party’s control.

Orban can now change the Constitution and further bend the nation to his will.

“Hungary won a big victory,” he told supporters.  He added that there was still “a big fight ahead” but that the parliamentary majority would allow him to continue to protect Hungary.

The leader of the largest opposition party, Jobbik’s Gabor Vona, lamented the tenor of the election, which he called “the hate campaign.”

The West is duly concerned, with Orban’s style of government seen as a threat to the rule of law and a free press.  Instead of looking to France or Germany for inspiration, Orban has talked fondly of autocratic systems in Turkey and Russia.

But, as I noted the other week, Hungary is still a member of the European Union and heavily reliant on EU aid, especially for projects such as roads and bridges and other critical infrastructure.

Nationalist parties across Europe will take heart from Orban’s victory.

[I’m on record as supporting Orban’s hardline immigrant policy.  Virtually everything else I disagree with.]

Brexit: Not for nothing, but since the EU summit with the U.K. last month that laid out a transition period, post-Brexit, there has been zero progress, let alone serious talks, and  a ton has to be accomplished to reach a final deal by this coming October and a critical EU summit.

For  example, the U.K. has yet to put forward an alternative solution for the Irish border; finding a way to avoid customs checks at the border being one of the biggest issues the two sides disagree over. The British government disputes the wording in the draft Brexit treaty that would effectively keep Northern Ireland in the EU’s customs union and parts of the single market unless the U.K. comes up with a better solution.

Germany: Chancellor Angela Merkel downplayed squabbling in her new grand coalition, saying arguments were inevitable but ministers should now get down to the business of running the country.

The acrimony is over everything from refugees and the role of Islam in Germany to law and order and the future of the welfare state.

Most immediately, the cabinet is due to pass a budget on May 2 that plans no new borrowing and is aiming for a balanced budget, continuing the tradition established by the previous finance minister, Wolfgang Schauble.

--EU governments have agreed to a deal to tighten rules on cheap migrant labor, delivering French President Emmanuel Macron one of his key promises to deliver “equal pay for equal work” for all European workers.

Since his election last year, Macron has demanded an end to the practice of “social dumping” – where cheaper workers from eastern Europe can work for less money in higher-wage countries under the EU’s “posted workers” rules.

On Wednesday, the EU’s 28 governments agreed to limit “postings” to 12 months from an original 24 months, with a possibility of a six-month extension.

Macron has described the practice where a Polish construction worker can work in France and receive less pay or benefits than a French worker as a “betrayal of the European spirit.”

Poland has slammed the demands as “arrogant,” Poland being the biggest source of migrant labor to western member states, amid fears the rule changes will hamper its citizens from finding work in the countries.

But Macron’s war against migrant labor rules has found broad support in the European Commission and among countries like Germany and the Netherlands.

--Ousted Catalan leader Carles Puigdemont will embark on a European campaign to promote independence after being freed from jail by a German court despite an extradition request from Spain.

But Puigdemont said he has no plans to return to Spanish soil, where he faces arrest, and insists the conflict requires international mediation.  He’ll remain on bail in Berlin until a German judge makes a final decision on his extradition.

--Two of Europe’s biggest airlines, Lufthansa and Air France, were hit by major strikes that in the case of the former forced cancellation of 800 of 1,600 scheduled flights  the other day, while Air France cancelled one in four of its flights as airline staff take action in support of a 6% pay raise. The walkouts have been planned for various days this month so travelers beware.

My advice, stay home and watch the late Suzanne Pleshette in “If It’s Tuesday, This Must Be Belgium...”  [cough cough]

Street Bytes

--Stocks rose on the seemingly dovish trade talk from Chinese President Xi, along with the optimistic outlook for corporate earnings, as released the next few weeks.  But this was before tonight’s action on Syria and we await to see what the reaction is by the likes of Bashar Assad and Vladimir Putin.

The Dow Jones rose 1.8%, while the S&P 500 was up 2.0% and Nasdaq 2.8%. The Dow and S&P remain down fractionally on the year.

--U.S. Treasury Yields

6-mo. 1.95%  2-yr. 2.36%  10-yr. 2.82%  30-yr. 3.03%

The difference between the two-year Treasury and 10-year is at its flattest level since 2007.  Tighter monetary policy from the Federal Reserve has stoked the rise in the short end of the curve, while the 10-year has been largely stagnant of late over uncertainty with Trump administration trade policy and market volatility.

Separately, Boston Fed President Eric Rosengren, in a speech on Friday, said the Fed would need to raise interest rates at least three more times this year in the face of a robust economy, even with potential trade disputes.

Well, if it’s three more rather than two, that will be problematic for the markets, but geopolitics will have something to say about that.

Much more next week, especially after tonight’s late news from Syria.

--Oil surged to its highest level since December 2014 ($67.39) amid geopolitical concerns, particularly in the Middle East. At the same time a year’s worth of production cuts by OPEC has helped set the stage for the rally, with Venezuela’s oil output in freefall, the combination of which is offsetting booming production in the U.S. and Canada, while global demand rises.

--As I hinted at last week, I was accumulating information from friend Brad K. on the steel buying front, Brad running a business that buys large amounts of same, and as he passes on info from suppliers and buyers, let’s just say it’s chaotic, all due to proposed tariffs that have not even been formally put in place. As Brad put it, “steel buyers are in for a world of hurt...unlike anything I’ve yet to experience given (the lack of options).”

This afternoon, Brad noted: “Canada (has) better pricing, yet they are booking for August (and scrutinizing each and every order, anything deemed a bit off...no steel for them).  U.S. mills far shorter lead times, yet they are commanding pricing above the 25% tariff level (and getting it)....Good dealer I know called and simply mentioned the company that he recommends for fencing had raised all their pricing 10%. Who cares about the cost of a fence...likely not many....”

Does this matter yet in terms of U.S. consumers...and the Fed, down the road?  Not yet, as Brad avers.  As for U.S. steel producers, for now they would be happy campers...but I go back to what I wrote upon the signing of the tax cut legislation. There are major incentives for corporations to spend money on capital expenditures (expand plants) due to immediate expensing provisions.

But longer term, will the demand be there? That’s why I’m not paying any attention to White House photo ops with workers in the industry...who a year from now could be out of work.

Brad, thank you for your great intel....keep it coming...MP lunch by June.

--JPMorgan Chase unveiled better-than-expected results for its first quarter, supported by an increase in core loans and client investment assets.

The asset management firm generated total revenue of $27.91 billion in the first quarter, up from $24.94 billion in the same period a year ago, beating expectations, while earnings per share came in at $2.37, also ahead of the Street’s $2.28 per share outlook.

Average core loans rose 8%, while average deposits of $660 billion were up 6%.  Client investment assets rose 13% to $276 billion, with record net flows during the quarter.

Post-tax cut legislation, JPM said it expects an effective income tax rate of around 20% for the year.

“2018 is off to a good start with our business performing well across the board, driving strong top-line growth and building on the momentum from last year,” said CEO Jamie Dimon.

--Wells Fargo said its preliminary results were subject to change due to possible fines from regulators over past customer-account abuses. The bank said the penalties were related to its “compliance risk management program and past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions.”

The Consumer Financial Protection Bureau and Office of the Comptroller of the Currency have collectively offered to resolve the probes for a total of $1 billion, the bank said today.

“Accordingly, the preliminary financial results we report today may need to be revised...”

--Citigroup reported a higher-than-expected quarterly profit driven by strength in its consumer banking business and a surge in equities trading.

Total revenue rose about 3 percent.

--It was all about Facebook this week.

While some in Silicon Valley and on business channels cringed at some of Zuckerberg’s interrogators and their seeming lack of knowledge on how Facebook and other social media sites work, during Tuesday’s Senate hearing, John Thune (R-S.D.) and Chuck Grassley (R-Iowa) both said federal intervention in tech platforms might be necessary, while Sen. John Kennedy (R-La.), one of my faves, said, “I don’t want to vote to have to regulate Facebook, but by God I will.”  [Sen. Kennedy, though, didn’t understand that Facebook users do have some control over their data, which agitated Zuckerberg.]

Some in the Valley worry that Congress will pass legislation that will end up crippling young startups with carelessly crafted rules.

But here was my problem....Zuckerberg did come off as a know-it-all with disdain for us illiterates.  Personally, I am not a fan of the guy, but this goes back to his first comments years ago about changing the world for the better.  It’s a bunch of total bulls---.

Among the takeaways from his testimony, Zuckerberg didn’t commit to a proposal that would require the site to automatically let users “opt out” of having their data collected or shared.  Today, users have to go through a bunch of settings that block such data sharing.

When asked about what kind of regulation or legislation Facebook would support to beef up Americans’ privacy in their use of social media platforms, over and over again Zuckerberg responded with stuff like “This deserves a lot of discussion...Everyone in the world deserves good privacy protection...I’m committed to getting this right...My team is working on it and we’ll get back to you....”

The guy didn’t really answer more than a handful of questions, though lawmakers largely didn’t ask the right ones. Zuckerberg and Facebook have been criticized for failing to police content adequately, and Zuckerberg said he thinks artificial intelligence can help the company solve the issue in five to 10 years.

Republican senators and House members raised the issue: if Facebook polices content more effectively, how can they be sure they won’t do so with an anti-conservative bias?  Zuckerberg said he wants Facebook to be neutral, but will be taking a harder line on what it views as extreme content.

It is also clear Facebook doesn’t know how much data was harvested by Cambridge Analytica, bought and sold against its policies during the era  when apps could scrape, and that it has no way to track what happened to that data now.

Sen. Grassley asked Zuckerberg: “Do you know of any instances where user data was improperly transferred to third parties in breach of Facebook’s terms?”

“I don’t have all the examples of apps that we’ve banned here,” Zuckerberg replied.  He admitted Facebook didn’t do enough to prevent its tools from being misused and will audit tens of thousands of apps, which is impossible.

The bottom line was that Zuckerberg was often disingenuous, at best.  He kept repeating that all data from users can be deleted from Facebook, but did not have answers to repeated questions about how long it takes the data to disappear, which is the main component of the European Union’s citizens’ digital rights regulations.  Wait ‘til you read Brian Chen’s piece below from the New York Times on this paramount issue.

Facebook’s deletion guidelines say “it may take up to 90 days from the beginning of the deletion process to delete all of the things you’ve posted,” but this is a lie!

“I don’t know, sitting here, what our current systems are on that. But the intent is to get all the content out of the system as quickly as possible,” Zuckerberg said.

Again, total bulls---.

Dana Millbank / Washington Post

“Zuckerberg came prepared with one message to those who would regulate Facebook: Trust me. ‘I’m committed to getting this right,’ he promised. Problem is, whenever the questioning got tough, Zuckerberg made clear that he could not be trusted to give an answer. How many improper data transfers to third parties have there been?

“ ‘I can have my team follow up with you.’

“How many fake accounts have been removed?

“ ‘I’m happy to have my team follow up with you.’

“Were Facebook employees involved with Cambridge Analytica’s help for Donald Trump?

“ ‘I can certainly have my team get back to you.’

“Can Facebook track browsing activity after a user logs off?

“ ‘It would probably be better to have my team follow up afterwards.’

“What regulations would he support?

“ ‘I’ll have my team follow up with you.’

“Where do the 87 million Facebook users who had their data scraped for Cambridge Analytica come from?

“ ‘We can follow up with your office.’

“Does Facebook collect user data through cross-device tracking?

“ ‘I want to have my team follow up with you on that.’ ....

“Zuckerberg was practically crying out for adult supervision.”

Editorial / New York Post

“Facebook founder and CEO Mark Zuckerberg faced more aggressive questioning from the House on Wednesday than he did from the Senate a day earlier, but the net result was pretty much the same:

“He’s truly sorry (again) for any concerns, but Facebook users know that the social-media app harvests their personal data for advertisers and they’re in full control of their privacy.

“Except that they don’t – and they’re not.

“Yes, users voluntarily post data to their timelines. But few realize how much Facebook collects, including ‘cross device’ targeting that tracks the apps on their phones, as well as their offline activity – such as their physical location, what they buy in stores and all of their web browsing.

“Data, in other words, that users have not specifically provided – or that they even know Facebook is collecting and using.

“Fewer still understand that Facebook’s privacy settings are far less private than Zuckerberg &
Co. would have them think.

“Little of this came out, because the politicians questioning Zuckerberg by and large had no real understanding of how Facebook works. And the few who did were hobbled by strict time limits.

“That left Zuckerberg able to seem deferential even as he used carefully scripted talking points to run verbal rings around most of his interrogators (including those asking about anti-conservative bias) and to run out the clock on everyone else.

“Facebook’s investors were pleased by the show: The company’s stock price rose nearly 6 percent over the two days.

“And  while Zuckerberg finally conceded that some government regulation of social media ‘is inevitable,’ he also warned that Congress would ‘have to be careful’ about exactly what rules it imposes.

“Then again, Zuckerberg could take some voluntary steps, like those suggested by Bloomberg’s Shira Ovide: Turn off location tracking, stop spying on non-Facebook activity and fully disclose how advertisers target users.

“Of course, that would hurt Facebook’s power, not to mention its bottom line. But if Zuckerberg keeps evading, he can expect much worse from Congress.”

Daniel Henninger / Wall Street Journal

“Somehow in our time all the problems of human existence have boiled down to one cause: Russian collusion.

“What is the main reason Mark Zuckerberg was hauled in front of three committees of Congress? It is because the media connected a long series of dots to suggest that possibility that Russian bots exploited the personal Facebook data obtained by a firm named Cambridge Analytica to...put Donald Trump in the White House. Without the link to collusion – an infinitely elastic phrase with no legal meaning – Mr. Zuckerberg never would have had to leave Menlo Park.

“The live Zuckerberg testimony was torture, forcing anyone interested to hear innumerable senators and House members share their thoughts on technology.  Lowering the bar on Senate discourse below swamp level, Louisiana Republican John Kennedy said the Facebook user agreement ‘sucks.’

“Despite the legislators’ thunderings about regulation, the likelihood of the House and Senate enacting rules for the web is more remote than Halley’s Comet, due back in 43 years.  Congress has failed for years to bring royalty payments for creators of music into the digital age.

“It’s a sport now to mock Mark Zuckerberg, but taking an idea from your dorm room to a market cap of more than $400 billion proves he’s no dope. What Mark Zuckerberg thinks about what he did deserves attention.

“Mr. Zuckerberg divided his prepared testimony between two subjects. The first, headlined ‘Cambridge Analytica,’ was a proxy for the personal-privacy issue; the other was ‘Russian Election Interference,’ a proxy for the collusion obsession....

“(Zuckerberg) said Facebook was aware of ‘traditional’ Russian cyberthreats ‘for years,’ including a group called APT28, which he noted our intelligence services had linked to the Russians.

“This time frame revives a relevant question: Why didn’t the Obama administration alert the American people in 2015 or earlier to the threat of Russian political subversion?  Protecting us from Russian bots wasn’t Mark Zuckerberg’s responsibility....

“Privacy on the web matters, but the odds are overwhelming that before Congress gets to it, another technology – probably blockchain – will mitigate the problem. Of more pressing concern are Mr. Zuckerberg’s thoughts on what he keeps calling the values of the Facebook ‘community.’ Meaning what?

“A primary criticism of social-media platforms like Facebook is that they expose users to content that encourages ‘hate’ or is ‘hurtful.’

“Facebook’s answer to this perceived problem has been to hire some 15,000 people dedicated to ‘community operations and review,’ with more monitors on the way.

“During his pre-Congress apology tour, Mr. Zuckerberg elaborated on this subject to Vox: ‘Over the long term, what I’d really like to get to is an independent appeal. So maybe folks at Facebook make the first decision based on the community standards that are outlined, and then people can get a second opinion.

“ ‘You can imagine some sort of structure, almost like a Supreme Court, that is made up of independent folks who don’t work for Facebook, who ultimately make the final judgment call on what should be acceptable speech in a community that reflects the social norms and values of people all around the world.’

“Up to now, there has been no such thing in the United States as ‘acceptable speech’ defined by the norms and values of people all around the world. Because of his status, Mr. Zuckerberg is a thought leader, and so this idea is not far-fetched.

“The bedrock idea of free speech is under pressure in the U.S. now. But if I had to guess which will arrive first – federal regulation of individual privacy or a speech panel of ‘independent folks’ defining what is acceptable – on current course, I think I know which one it will be.”

Rich Lowry / New York Post

“The problem isn’t that Zuckerberg is a businessman, and an exceptionally gifted one, but that he pretends to have stumbled out of the lyrics of John Lennon’s song ‘Imagine.’  To listen to him, Facebook is all about connectivity and openness – he just happens to have made roughly $63 billion as the T-shirt-wearing champion of ‘the global community,’ whatever that means.

“It’s this pose that makes him and other Facebook officials sound so shifty. In a rocky interview with Savannah Guthrie of ‘The Today Show’ last week, Sheryl Sandberg was asked what product Facebook sells.  ‘We’re selling the opportunity to connect with people,’ she said...before catching herself, ‘but it’s not for sale.’

“Something or other must be for sale, or Facebook is the first company to rocket to the top ranks of corporate America based on having no product or profit motive.  Guthrie, persisting, stated that Facebook sweeps up data for the use of advertisers. Sandberg objected, ‘We are not sweeping data.  People are inputting data.’

“Uh, yeah. That’s the genius of it. In a reported exchange with a friend while he was a student at Harvard, Zuckerberg boasted of having data on thousands of students because ‘people just submitted it.’

“Zuckerberg has now managed the same trick on a global scale.  On the one hand, Facebook has indeed made efforts to protect the data of its users, knowing that it can’t risk a fundamental breach of trust.  On the other, Zuckerberg has repeatedly said he’s sorry for offenses against his users’ privacy because his business model contradicts his self-righteous public posture.

“The company is deeply committed to that posture. In the ‘Today’ interview, Sandberg made a confession as humble brag, ‘We were very idealistic and not rigorous enough.’  In his prepared testimony before a House committee, Zuckerberg declared, ‘Facebook is an idealistic and optimistic company. For most of our existence, we focused on all the good that connecting people can bring.’....

“Perhaps the public pressure will force the social network to give its customers even more control over the use of their data. At a minimum, it will have achieved something if it gets Facebook to give up the saccharine one-world rhetoric about its mission and admit the bottom line is as important to it as any other profit-making company.”

Brian X. Chen / New York Times...very important piece....

“When I downloaded a copy of my Facebook data last week, I didn’t expect to see much. My profile is sparse, I rarely post anything on the site, and I seldom click on ads....

“But when I opened my file, it was like opening Pandora’s box.

“With a few clicks, I learned that about 500 advertisers – many that I had never heard of...had my contact information, which could include my email address, phone number and full name. Facebook also had my entire phone book, including the number to ring my apartment buzzer. The social network had even kept a permanent record of the roughly 100 people I had deleted from my friends list over the last 14 years, including my exes.

“There was so much that Facebook knew about me – more than I wanted to know. But after looking at the totality of what the Silicon Valley company had obtained about yours truly, I decided to try to better understand how and why my data was collected and stored.  I also sought to find out how much of my data could be removed....

“During his testimony, Mr. Zuckerberg repeatedly said Facebook has a tool for downloading your data that ‘allows people to see and take out all the information they’ve put into Facebook.’

“But that’s an overstatement. Most basic information, like my birthday, could not be deleted.  More important, the pieces of data that I found objectionable, like the record of people I had unfriended, could not be removed from Facebook, either.

“ ‘They don’t delete anything, and that’s a general policy,’ said Gabriel Weinberg, the founder of DuckDuckGo, which offers internet privacy tools. He added that data was kept around to eventually help brands serve targeted ads....

“When you download a copy of your Facebook data, you will see a folder containing multiple subfolders and files. The most important one is the ‘index’ file, which is essentially a raw data set of your Facebook account, where you can click through your profile, friends list, timeline and messages, among other features.

“One surprising part of my index file was a section called Contact Info.  This contained the 764 names and phone numbers of everyone in my iPhone’s address book.  Upon closer inspection, it turned out that Facebook had stored my entire phone book because I had uploaded it when setting up Facebook’s messaging app, Messenger.

“This was unsettling. I had hoped Messenger would use my contacts list to find others who were also using the app so that I could connect with them easily – and hold on to the relevant contact information only for the people who were on Messenger. Yet Facebook kept the entire list, including the phone numbers for my car mechanic, my apartment door buzzer and a pizzeria.

“This felt unnecessary, though Facebook holds on to your phone book partly to keep it synchronized with your contacts list on Messenger and to help find people who newly sign up for the messaging service. I opted to turn off synchronizing and deleted all my phone book entries.

“My Facebook data also revealed how little the social network forgets. For instance, in addition to recording the exact date I signed up for Facebook in 2004, there was a record of when I deactivated Facebook in October 2010, only to reactivate it four days later – something I barely remember doing....

“But what bothered me was the data that I had explicitly deleted but that lingered in plain sight.  On my friends list, Facebook had a record of ‘Removed Friends,’ a dossier of the 112 people I had removed along with the date I clicked the ‘Unfriend’ button. Why should Facebook remember the people I’ve cut off from my life?

“Facebook’s explanation was dissatisfying. The company said it might use my list of deleted friends so that those people did not appear in my feed with the feature ‘On This Day,’ which resurfaces memories from years past to help people reminisce. I’d rather have the option to delete the list of deleted friends for good.

“Knowing this, I also downloaded copies of my Google data with a tool called Google Takeout. The data sets were exponentially larger than my Facebook data...

“Here was the biggest surprise in what Google collected on me: In a folder labeled Ads, Google kept a history of many news articles I had read, like a Newsweek story about Apple employees walking into glass walls and a New York Times story about the editor of our Modern Love column. I didn’t click on ads for either of these stories, but the search giant logged them because the sites had loaded ads served by Google.

“In another folder, labeled Android, Google had a record of apps I had opened on an Android phone since 2015, along with the date and time. This felt like an extraordinary level of detail.”

In the end, here’s my personal takeaway from all the above. I have been criticized by friends and business associates for not using my smartphone.  Yes, I have one, but I refuse to give my number to anyone because I don’t want to be bothered.  99% of the time, I’m reachable if necessary.  I have the phone with me for emergencies, and to check sports and news headlines.  When I’m traveling, I use my laptop.  At home it’s the desktop.

After all this week’s testimony and revelations, I will use my phone even less. Today’s snoopers, including the likes of Facebook and Google, are gearing their tracking technology for smartphones.  As much as possible, I want to limit my footprint.

We also need to hold Mark Zuckerberg’s feet to the fire on his whole 15,000-20,000 content inspectors’ talking point.  Who are these people?  Look at what I do with StocksandNews.

Number one, my guiding principle is ‘wait 24 hours.’  Number two, it is to read as many sources as possible.

I am proud I didn’t publish any of the “fake news” stories of the last election cycle that were being fed to me by many of you, frankly. I’ve noticed I don’t receive them anymore, but I’m waiting for them to ramp up again this summer with the midterms.

Actually, tell Mark Zuckerberg, if you are a shareholder of FB, to just hire me and fire the other 20,000.  He’ll have a more responsible product...and a more profitable one.

---

--According to the nonpartisan Tax Policy Center, for 2018, U.S. households in the top 205 will pay about 87% of income taxes, up from about 84% last year.

By contrast, the lower 60% of households will pay no net federal income tax in 2018 vs. 2% of it last year.

--Smartphone sales topped 1.5 billion units in 2017, a meager 2.7% rise, according to research firm Gartner, with an unprecedented 5.6% drop in sales in the December quarter, the first year-on-year quarterly decline since Gartner started tracking the market in 2004.  [Strategy Analytics pegged the drop at 9%...the worst ever.]

People are holding their smartphones longer and there is nothing compelling enough in the new phones.  [Tiernan Ray / Barron’s]

--The Department of Defense stopped accepting most deliveries of F-35 jets from Lockheed Martin Corp. because of a dispute over who will cover costs for fixing a production error, three people familiar with the situation told Reuters.  Lockheed then confirmed that the Pentagon had halted deliveries of the jet over a contractual issue, but didn’t give details.  Last year, the Pentagon stopped accepting F-35s for 30 days after discovering corrosion where panels were fastened to the airframe, an issue affecting more than 200 of the stealthy jets.

The issue is being fixed but the costs are substantial as it requires Lockheed sending technicians all over the world to mend the aircraft.  I don’t see what the issue is.   Pay up, freakin’ Lockheed!

But I bring this up because our president likes to tout how great American military hardware is, as he trumpets sales to foreign governments, but this issue impacts deliveries to them too.

The F-35 has been plagued by massive cost overruns in the past, magnified by the fact it is the Pentagon’s most expensive weapons program.

--In an executive order issued at 9 p.m. on Thursday, President Trump suddenly demanded an evaluation of the Postal Service’s finances, weeks after accusing Amazon of not paying its fair share in postage.

In the order, Trump created a task force to examine the service’s “unsustainable financial path” and directed the new group to “conduct a thorough evaluation of the operations and finances of the U.S.P.S.”

While Amazon is not mentioned in the order, clearly the president wants the group to substantiate his repeated claim that the arrangement between the U.S.P.S. and Amazon, its biggest shipper of packages, is a money loser.

Trump’s own advisers have urged him to back off, but the president refuses to believe arguments that the huge number of packages shipped by Amazon is actually helping keep the Postal Service afloat.

--BlackRock Inc. pulled in nearly $57 billion in new investor cash in the first three months of the year, with the firm’s exchange-traded funds attracting $34.65 billion in net inflows in the quarter. Earnings and revenues rose 27% and 16% from the same year-ago period.

--Supermarket giant Kroger is making plans to hire about 11,000 workers even as it faces heated competition from Walmart to Amazon.  In the past two years, Kroger has created 22,000 positions. A statement from the company read: “Over the last decade, Kroger has added 100,000 new jobs in communities across America. In addition to fueling the U.S. economy, many of our supermarket jobs are an opportunity for associates to grow and advance their careers.”

Kroger operates more than 2,700 groceries in 35 states under a variety of names, including Smith’s, Fred Meyer, Ralphs and King Soopers.  It has remained largely traditional while others are undergoing major changes.

Good luck, Kroger!

--A report by the nonprofit National Committee on U.S.-China Relations and research firm Rhodium Group found that total foreign direct investment in the U.S. from China fell to about $29 billion in 2017 from $46 billion the previous year. The pullback was underway before President Trump’s threats on trade between the two nations.

China’s State Council last August laid down new regulations on outbound investments to reduce the risk of runaway debt and to blunt capital flight.

--According to a biannual survey of teens’ fast-food preferences, chicken joint Chick-fil-A came out on top, ahead of KFC, Chipotle and McDonald’s, which is a little surprising considering the controversy over the chief operating officer’s opposition to gay marriage.  This didn’t impact New York University, which opened a Chick-fil-A recently, NYU a bastion of social justice warriors.

Personally, I’m still miffed I don’t have a Taco Bell or KFC within ten minutes.  I may have to start a riot.  Or I could just drink a beer.

Foreign Affairs

Syria / Russia: Last Saturday, Syrian, and/or Russian, forces conducted a reported chemical attack, apparently chlorine gas, on Douma – the last rebel-held area of the onetime opposition enclave of eastern Ghouta – a Damascus suburb.  As many as 75 were reported to have been killed and the video from the scene was horrific.

President Trump tweeted Sunday: “President Putin, Russia and Iran are responsible for backing Animal Assad. Big price to pay.”

Syria and Russia denounced the allegations as “fabrications” and warned against them being used as a pretext for any military action.  More than 1,700 civilians have been killed on the assault on eastern Ghouta since an offensive was launched in mid-February.  Tens of thousands were displaced.

Monday, Israeli F-15 war planes conducted an attack on a major air base in central Syria, reportedly killing 14, including three Iranians.

At the UN, U.S. Ambassador Nikki Haley squarely blamed Moscow for the gas attack because the Russian military has supported Syrian President Assad’s forces.

“Russian hands,” Haley said, “are all covered in the blood of Syrian children.” She scolded Russia for repeatedly refusing to punish Syria by vetoing five Security Council resolutions that singled out Assad for condemnation.

“The day we prayed would never come has come again,” Haley told the council, a year after a similar chemical weapons attack in Syria. “Only a monster does this.”

Russia’s ambassador, Vassily Nebenzia, blasted the U.S. for its “boorish” behavior and for threatening Moscow with sanctions, “blackmail” and hostilities that “go beyond the Cold War.”  Nebenzia said the attack in Douma was staged by anti-Assad “terrorists,” and reports about the use of chemical weapons and photographs of the victims were “fake news.”

Tuesday, Moscow’s UN envoy said, “I would once again beseech (the U.S.) to refrain from the plans that you’re currently developing,” warning Washington that it will “bear responsibility” for any “illegal military adventure” it carries out.

Wednesday, Trump taunted Syria. The same day, Vladimir Putin and Israeli Prime Minister Netanyahu held a call on the crisis, and Putin urged Israel not to take action in Syria.  Israel said Netanyahu told Putin that Israel will not permit Iran to set up a military presence there.  Speaking later at a Holocaust memorial event, Netanyahu issued a threat to Iran not to “test Israel’s resolve.”

President Trump and his national security team discussed U.S. options Thursday, with worries increasing about a confrontation with Russia.  Trump tempered his earlier remarks yesterday and even as he consulted allies such as Britain and France, there were signs of efforts to prevent the crisis from spiraling out of control.

“Never said when an attack on Syria would take place. Could be very soon or not so soon at all!” Trump tweeted.

U.S. defense secretary Jim Mattis said his main concern about a military response was how to stop it “escalating out of control”

Senior Russian figures, including the head of the military, warned that U.S. missiles would be shot down and their launch sites targeted if Russian personnel come under threat.

Russia warned Thursday that the U.S. launching air strikes in response to the suspected chemical attack could spark a war between the two countries.

“The immediate priority is to avert the danger of war,” Moscow’s UN ambassador Nebenzia said.  He accused Washington of putting international peace at risk and said the situation was “very dangerous.”

“We cannot exclude any possibilities, unfortunately,” Nebenzia told reporters.  With the Russian military presence in Syria, there was a heightened “danger of escalation.”

In his confirmation hearing, Mike Pompeo, Trump’s pick for secretary of state, said “soft policy” toward Russia is “now over.”

Russia’s military said Thursday that Syrian government troops had taken control of the city of Douma, signaling the end of the offensive to take the rebel enclave in eastern Ghouta.

Damascus and Moscow continued to deny responsibility for any gas attack. A defiant Assad, in a meeting with a delegation from Iran, said the threats of an attack by the West were “based on the lies fabricated by these countries” and their proxies in Syria.

Leonid Bershidsky / Bloomberg

“A false narrative emerging in the U.S. holds that Trump has just recently turned tough on Russia. One look at the long chronology of his administration’s hostility toward Putin’s Russia should dispel that.

“It includes the early appointment of Russia hawks such as United Nations representative Nikki Haley and Central Intelligence Agency director Pompeo; the first-ever U.S. missile strike on Putin ally Syrian President Bashar al-Assad’s military installation in April 2017; the abrupt closure of three Russian diplomatic facilities in the U.S. in late August (which Russia accurately described as ‘blatantly hostile’); the decision to send lethal weapons to Ukraine in December; a deadly counterattack on a group of Russia mercenaries in Syria in February.  A column Wednesday by The Intercept’s Glenn Greenwald, who like me has long disagreed with the ‘Trump is a Russian puppet’ narrative, contains a slightly different list of the Trump administration’s anti-Kremlin actions.

“Trump can blow hot and cold on Putin and Russia in tweets, just as he did in the course of one day on Wednesday, first threatening Russia with ‘nice and new and ‘smart’’ missiles and then saying there’s ‘no reason’ for the U.S.-Russia relationship to be so bad. But Americans should be used to the low price Trump puts on the meaning of words. He, like many habitual social network users, employs language to communicate emotions rather than precise messages.

“The missile tweet says ‘I’m angry’ and the seemingly conciliatory tweet telegraphs ‘I’m frustrated.’ What matters with Trump are actions or, rather, transactions. And on that level, he hasn’t been a pro-Russian president from the start, as those who alleged without any evidence that the Kremlin had some kind of leverage over Trump seemed to think.

“The  more recent moves – the biggest ever expulsion of Russian diplomats from the U.S. following the poisoning in the U.K. of a former Russian double agent, the harshest ever sanctions imposed on a Russian billionaire (aluminum tycoon Oleg Deripaska), fresh anti-Russian appointments (Pompeo’s move to State and John Bolton’s elevation to national security adviser) – merely continue this line of actions. They constitute an escalation but not a policy shift....

“Trump rarely seeks advice or heeds it if it’s volunteered anyhow; his Russian policy hasn’t been imposed from outside. The U.S. president wants reportable wins.  He doesn’t, however, work quietly to obtain them.  He demands to be handed them because they’re due to him as the man in the ultimate position of strength. Trump appeared to have expected a more compliant Putin ever since the Russian president’s remark that Trump is a ‘colorful’ and ‘talented’ individual was mistranslated as ‘brilliant.’  ‘So far, we’re off to a good start,’ candidate Trump commented in 2016.  ‘He said, ‘Trump is a genius,’ OK?’

“Putin, however, has provided no gifts and no wins. If he ever had an interest in Trump’s victory, it was for the havoc it would wreak on the U.S. establishment. He, too, always negotiates from a position of strength, even when this stance masks actual weakness....

“More than ever since the collapse of the Soviet Union, the U.S. and Russia need to set the boundaries of their hostile engagement. The festering macho conflict will ensure that the two nations will clash over and over again.  One big test of whether there are any grown men in the war rooms of both Washington and Moscow is whether any U.S. or allied action against Assad is coordinated with Russia on a military level, as happened with last year’s missile attack.  Let’s hope so.”

David Ignatius / Washington Post

“After fulminating about retaliation for the latest suspected Syrian chemical weapons attack, the Trump administration cooled off long enough to consider the dangers of such a strike. That’s to the credit of Defense Secretary Jim Mattis, who favored a measured response, and also of President Trump, who tempered his initial bellicose language about an assault.

“Trump showed a year ago that he intends to enforce global norms against the use of chemical weapons.  And that remains the right stance. But sadly, he still doesn’t have a Syria policy. He wants to withdraw U.S. forces even as he tries to look tough – a recipe for failure on both fronts.

“ ‘Whiplash’ is probably the best word to describe what Syria watchers are feeling.  Two weeks ago, Trump was hectoring his advisers about the need to bring U.S. troops home. Then, after Saturday’s apparent chemical attack on Douma, the president was tweeting about firing missiles in retaliation and making Russia pay a ‘big price’ for backing President Bashar al-Assad.

“This mixed message is still the core problem in Syria. There’s a banner headline – the United States is responding to chemical weapons, in addition to destroying the Islamic State – but the body of the story is missing.  Perhaps Trump will more clearly see now the need for a broader U.S. strategy to help stabilize Syria.

“The best thing that happened this week was that the policy process paused for a careful consideration of military options. Mattis warned the president privately about the dangers, with U.S. and Russian forces so close in Syria and the Mediterranean. Trump evidently listened and deferred action for several days, allowing more study. The United States is also coordinating policy options with Britain, France and other allies, another positive development.

“Mattis voiced his concerns in testimony to a House committee Thursday.  ‘On a strategic level, it’s how do we keep this from escalating out of control, if you get my drift on that,’ he said....

“The trick for U.S. planners is how to calibrate military action this time so that it sends a clear deterrence message to Syria and Russia, without escalating the conflict....

“But such measured actions are harder when they’re preceded by presidential taunts. Trump tweeted on Sunday morning after the Douma attack: ‘President Putin, Russia and Iran are responsible for backing Animal Assad. Big price to pay.’  He cranked up the volume Wednesday morning, tweeting about firing missiles in retaliation: ‘Get ready Russia, because they will be coming, nice and new and ‘smart!’’

“Trump appeared to realize this diatribe was a mistake... Slowing the retaliatory reflex was welcome, partly because it gave Trump time to cool off after the FBI search of the premises of his personal lawyer, Michael Cohen – not the moment to be making decisions about war and peace.  This week’s delay should also reassure analysts, here and abroad, who feared that Mattis’ standing with Trump would be diminished after the firing of his friend Rex Tillerson as secretary of state.

“As with any use of military force, planners need to think carefully about ‘the day after.’  Would a U.S. strike trigger a widening conflict in a part of Syria where its leverage is limited? Would Russian President Vladimir Putin feel he must make his own show of toughness by matching Trump and moving up the escalatory ladder? And what would Trump do if this action, unlike the Syria reprisal of a year ago, failed to win applause?

“Trump, like President Barack Obama, is finding that it’s easier to talk about withdrawing from Middle East wars than to actually do it. When Trump takes military action in Syria, he owns the consequences.”

Editorial / Wall Street Journal

“Donald Trump treasures nothing more than unconstrained access to the world through Twitter. So you know the president is having a bad week when his tweets come back to haunt even him, as they have with Syria. The Syrian tweets were especially damaging – to him personally and his role as Commander in Chief of the U.S. military.

“Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and ‘smart!’  You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoy it!”

“After tweeting that the U.S. is planning missile strikes against Syria and its patron Russia, the twitterverse resurrected his past words mocking Barack Obama for ‘broadcasting when we are going to attack Syria.’ Mr. Trump has little use for consistency, but the contradiction is an acute embarrassment.

“By Thursday military analysts were saying that Mr. Trump’s premature public announcements of missile strikes had compromised the U.S. ability to execute a coordinated effective response to Syrian strongman Bashar Assad’s likely use of chemical weapons against civilians in Douma.  Amid this confusion, the president tweeted what for him was a mea culpa: ‘Never said when an attack on Syria would take place. Could be very soon or not so soon at all!’

“It is never easy to figure where Mr. Trump’s omnipresent persona connects with real policy, but Syria is the moment to make the effort. Beyond the Trump tweets lie harsh realities that need to be addressed. It’s true that Mr. Obama’s inaction dealt the Trump Presidency a tough hand in the Middle East, and that Mr. Trump struck the Assad forces last April with Tomahawk cruise missiles.  He also allowed the Pentagon to intensify its effort to erode Islamic State in Iraq and Syria.

“Since then, though, Mr. Trump has shown ambivalence toward the region, saying in Ohio recently that ‘We’ll be coming out of Syria, like, very soon.’  His ambivalence has produced unfortunate results. The U.S. has had no identifiable policy toward Syria in a year. Meanwhile, Russia and Iran have moved to consolidate a joint hegemony that would dominate Syria and Iraq and threaten Israel.

“Iran’s goal, beyond extending its political dominance from Tehran to the Mediterranean, is to use Syria as a military base to station an army of Hezbollah fighters backed by the Iranian Revolutionary Guard Corps. The target is Israel. The risk is a Middle East war that inevitably would draw in the U.S.

“Turkey, a NATO ally, has interpreted U.S. ambivalence as a pretext to settle old scores against Syria’s Kurds. That undermines our influence in the region and will erode hard-won gains against Islamic State, which is dispersed but survives.

“Surveying all this is Vladimir Putin, whose troops and irregular forces, supported by Iran, have enabled Assad to obliterate his opposition in Aleppo, Ghouta and now, with chemical weapons, Douma. This is another day at the office for the opportunistic Mr. Putin, who has obtained long-term leases with Syria on the naval base in Tartus and the air base at Hmeimim.

“Keeping Russia out of the Middle East was a signature U.S. achievement during the Cold War. Now Russia has platforms for threatening NATO’s southern flank, as it is already doing with active military operations across the Baltic and North Seas....

“The goal now, in an extremely difficult situation, should be for the U.S. to formulate a response that acts as a deterrent. The word ‘deterrent’ is key. Last year’s Tomahawk strike could have been a deterrent if it had been followed up with other measures. It was not....

“Mr. Trump needs to give his team and its allies time to shape a strategy the world will recognize as a sustained commitment to deterring Russian and Iranian aggression in the region and, yes, Assad’s ‘animal’ assaults on Syrian civilians. What is needed is a substantial degradation of the Syrian regime’s military capacity. That may well include calling Mr. Putin’s bluff on collateral Russian casualties.

“Meanwhile, let the Twitter account go silent on Syria. The next public event needs to be a display of effective American leadership.”

China: In a surprise move, Beijing announced on Thursday that it would hold live-fire drills in the Taiwan Strait next week – something that is both a message to Taipei and a show of geopolitical support for Russia during its time of friction with the United States, as reported by the South China Morning Post.

The announcement came after President Xi Jinping chaired a meeting of the Central Military Commission on the southern island of Hainan to inspect the biggest naval parade in the country’s history, a massive flexing of naval muscle, also aimed directly at the U.S.

The coming drills in the Taiwan Strait come as Trump threatens a strike against Syrian forces, and analysts see China supporting its strategic partner, Russia, at a sensitive moment.

The live-fire drill is expected to take place on April 18, making it the first naval exercise in the waters since September 2015, which occurred in the run-up to the last presidential election on the island, which was then won by Tsai Ing-wen, who still has yet to recognize the “1992 consensus,” which Beijing insists is the foundation for cross-strait dialogue.

Thursday’s naval parade involved China’s first aircraft carrier, the Liaoning, about 50 other warships and some 10,000 troops and nearly 80 aircraft.

Xi appeared on board the Liaoning for the first time, urging the troops to stay vigilant and be ready to defend China’s sovereignty and national interests.

Tuesday, the USS Theodore Roosevelt staged what it described as a routine training exercise on its way to the Philippines.

North Korea: Pyongyang directly confirmed its willingness to hold the unprecedented summit between President Trump and Kim Jong Un, and for the first time said it was prepared to discuss the denuclearization of the Korean Peninsula, according to U.S. officials, but at the same time, North Korea has not broken its public silence on the summit, which is still supposedly planned for May, but there have been stories this could be moved to June.  No venue has been selected

And before you go breaking out the ‘good stuff’ and celebrating North Korea’s talk of denuclearization, understand this would occur, if ever, only if the U.S. removed its troops from South Korea and withdrew its so-called nuclear umbrella of deterrence from South Korea and Japan. And no one knows what kind of timetable Kim Jong Un would even be calling for as well.  Plus you have verification arrangements that would have to be worked out. No doubt, Kim would be hiding some of his weapons....but I’m jumping way ahead of the actual discussions.

Apparently, the U.S. doesn’t want the summit to be held in South Korea, like in the demilitarized zone between the two Koreas, over fears it might invite Seoul to play too much of a mediator role.  Mongolia has been mentioned as a possible site.  [When you look at a map, and knowing Kim doesn’t want to fly, this is really the only possible option.  It sure isn’t going to be in China.  If I heard it was there, I’m fleeing to Canada without saying goodbye to loved ones.]

Russia, part II: The Russian Embassy in London said it would consider any secret resettlement of Sergei and Yulia Skripal, the former Russian double agent and his daughter who were poisoned last month, as an abduction of its citizens. 

The Embassy said on its website: “The world, while having no opportunity to interact with them, will have every reason to see this as an abduction of the two Russian nationals or at least as their isolation.”  You can stop laughing.

Ms. Skripal left the hospital after more than five weeks.  Last I saw, the father is recovering nicely.  Getting them to a secret and secure location will be one of the great tasks for British intelligence services in recent times.

Separately, the Russian financial markets were hit hard, with the ruble touching its weakest level since late 2016 at one point, owing to more U.S. sanctions, particularly against 17 senior government officials plus seven oligarchs and 12 companies they own or control, sparking an investor exodus.

But the surge in the oil price has minimized the fallout in terms of the Russian government and treasury.  Remember, the Kremlin’s budget is based on $40 oil and we sit today at $67-$72, depending on whether you are talking West Texas or Brent.

That said, the shares in companies of a holding group that manages the assets of tycoon Oleg Deripaska, plummeted as much as 50 percent after the levying of new sanctions on him and his companies.

Prime Minister Dmitry Medvedev instructed his cabinet to devise measures to support the companies in addition to drafting retaliatory measures against the United States.

Algeria: There was a huge national tragedy here this week with the crash of a military transport plane in a field outside Algiers, the capital.  At last word, 257 were killed, most of them military, the defense ministry said. There were a few survivors.  Some of the soldiers were involved in a border dispute with neighboring Western Sahara, in a territory also claimed by Morocco.

The plane was a Russian Ilyushin transport aircraft.

Latin America: Owing to the Syrian crisis, President Trump abruptly canceled his appearance at the Summit of the Americas this week, sending Vice President Pence instead. The timing is particularly bad.

Editorial / Washington Post

“Held eight times since 1994, the gathering is the most important in the Western hemisphere, and in the past it has given U.S. presidents a chance to exercise leadership. The White House had hoped to rally support for firmer action on the political and economic implosion of Venezuela. Now that effort will probably be stillborn – and Mr. Trump’s already poor image in Latin America will be further tarnished.

“Venezuela is not the only country where greater U.S. attention is needed. Peru, the host of the summit, just lost its relatively capable president, Pedro Pablo Kuczynski, who resigned while facing impeachment, nominally because of his connection to a continent-wide corruption scandal involving a Brazilian construction company.

“Brazil’s own political system, meanwhile, suffered another shock last week when a judge ordered former president Luiz Inacio Lula da Silva to begin serving a prison sentence even though he leads by a wide margin in polls for the next presidential election in October....

“(His) detention places Brazil’s liberal institutions in conflict with each other. Supporters say the courts have gutted the election of legitimacy by imprisoning the leading candidate, a leftist who served two terms between 2003 and 2011.  But many other Brazilians are cheering what they see as a victory for the rule of law and for a painful but needed campaign by judges against rampant political corruption....

“Brazilians, like people across Latin America, have been offended by Mr. Trump’s jibes at immigrants and his threats to break free-trade treaties. Polling by Gallup put his approval rating in the region at 16 percent. An appearance at the summit and some effort to support the causes of fighting corruption and preserving democracy could have helped. Instead, Mr. Trump has dealt another blow to U.S. standing in the hemisphere.”

Random Musings

--Presidential tracking polls...

Gallup: 41% approval for President Trump (highest in this one since May), 54% disapproval [April 8]
Rasmussen: 50% approval, 49% disapproval

--As long rumored, House Speaker Paul Ryan (R-Wis.) announced Wednesday he will retire at the end of his term, which is a highly unusual move for a sitting Speaker that further complicates Republicans’ hopes of holding the House.  The announcement also sets up a divisive House GOP leadership battle between Kevin McCarthy and Steve Scalise.

Ryan said he would stay in office until January and that the possibility of the Democrats taking over the House did not enter into his decision.  More importantly, the Speaker said, “My dad died when I was 16 – the age my daughter is. My kids aren’t getting any younger and if I stay, they’re only going to know me as a weekend dad.”

In this, Paul Ryan has been totally sincere over the years and his father’s early death is the reason why he is such a physical fitness freak.

One thing that will suffer as a result of Ryan’s announcement is fundraising. GOP donors will be wary, with Ryan’s move just the latest among Republican lawmakers. Since January 2017, 46 House Republicans have announced they were retiring or resigned outright, some to run for higher office, but scandal and quitting among iffy prospects at home has also factored in the decision-making. Ten committee chairmen are bowing out.

Just an hour after Ryan’s announcement, Rep. Dennis Ross (Fla.) said he was retiring at the end of the year, even though his seat was deemed safe.

But Ryan has become increasingly unpopular in his 2 ½ years as Speaker and he faced his most difficult reelection ever against an ironworker who has raised gobs of money from liberal donors.

And now there are growing calls within the Republican caucus for Ryan to step aside and allow a quicker transition to a new leader, though Ryan is insisting he would serve until the end of his term.

The Speaker has also always had a testy relationship with President Trump, and Trump may try to force Ryan to step aside, especially as he seems to get along well with both McCarthy and Scalise.

*Late Friday, Ryan endorsed McCarthy to be his successor, per a coming interview for NBC’s “Meet the Press,” but there is no timetable (soon or January?) and the Freedom Caucus’ Jim Jordan said today he’d like to run to head the party.  [I am not a fan of Rep. Jordan, who needs to put his freakin’ suit jacket on.  Some of us are tired of his macho man look.]

Michael Steel, a former top adviser to House Speaker John Boehner, told the Washington Post: “Speaker Ryan is an embodiment of a particular kind of optimistic, pro-growth, pro-free market inclusive conservatism. And that is a very different feel and tone of where the party is going under President Trump.”

Donors will now shift their focus to the Senate and retaining that. The House is gone.  Democrats need a net gain of 23 House seats to win the majority. Former GOP Speaker Newt Gingrich said last week: “If the elections were held next week, we’d be in deep trouble.”

Editorial / Wall Street Journal

“Paul Ryan’s decision not to run for re-election for Congress is a blow to Republicans, and his departure at age 48 will leave a particular void in the GOP’s growth and reform wing. But the lesson of his 20 years in Congress is that the Members who matter are those who change the public debate about policies of consequence.

“Mr. Ryan deserves credit for taking the job of Speaker that no one else wanted after John Boehner resigned in 2015. He knew the legislative grinder was likely to end his chances of becoming President, but he did it anyway.  His policy chops and listening skills helped rally the fractious GOP House into a governing majority rather than merely an opposition to Barack Obama. They developed the ‘Better Way’ reform platform in 2016, and in this Congress they’ve passed most of it through the House and much into law.

“The irony is that Mr. Ryan has become a target of the populist and Trumpian right though few in Congress have fought harder or longer for conservative reform.  He rose from the backbenches by promoting his ‘roadmap’ for tax and entitlement reform when the Tom DeLay Republicans preferred the status quo. First at the Budget Committee, then at Ways and Means, Mr. Ryan built a GOP  reform consensus that became the party’s agenda.

“His principal triumph is tax reform, a generational achievement that broke a bottleneck to U.S. business competitiveness and faster economic growth. Donald Trump’s presidential support was important, but tax reform would not have happened without Mr. Ryan’s years of detailed policy work and evangelism. The reason the New York Times and Washington Post loathe him is precisely because he takes ideas seriously and can persuade his colleagues. That makes him far more of a threat to the left than is any talk-radio host.

“Mr. Ryan failed on entitlement reform, though premium support for Medicare had a chance if Mitt Romney had won in 2012.  Mr. Trump has wanted to duck the entitlement problem, but Mr. Ryan still persuaded him to support ObamaCare repeal and Medicaid reform. Both passed the House only to fail in the Senate. But entitlement reform is inevitable given the fiscal realities, and Mr. Ryan’s ideas are still a roadmap for the future.

“The talk-show right won’t admit this because Mr. Ryan understands the occasional need to compromise and hasn’t embraced extreme anti-immigration positions. They have railed against Mr. Ryan as a totem of ‘the establishment,’ which was always more epithet than argument. Mr. Ryan knows that the point of politics is to win power to pass your agenda, not remain in feckless opposition to the supposedly unreformable entitlement state.

“On this score, Mr. Ryan also deserves credit for managing the Trump volcano. He criticized the candidate and later President Trump when appropriate for his often ugly and polarizing politics. But he has never fallen for the trap of reflexive, self-serving dismissals that win media cheers but accomplish nothing.

“Sixty-three million people voted for Mr. Trump, and Mr. Ryan believes that Republicans in Congress have an obligation to use the opportunity of their majorities to help the country. The victories on tax reform, deregulation, judicial nominations and military spending are a vindication of that strategy.”

Karl Rove / Wall Street Journal

“Paul Ryan’s announcement Wednesday that he will not seek re-election is bad news for Republicans, Congress and America’s political culture. Mr. Ryan says he’s confident Republicans will keep their House majority in the midterms, but his decision reflects a recognition that one of two outcomes is likely – neither of which is promising for GOP leadership.

“One is that Democrats take the House. After being his party’s vice presidential nominee and third in line to the presidency, a demotion to minority leader is unappealing, especially if the Democrats are more interested in resistance than constructive action.

“The other possibility is that Republicans end up with a diminished majority that makes governing more difficult. Even with the current 23-seat majority, the 25 or so Freedom Caucus members have the power to thwart the conference’s ambitions. If Republicans retain a razor-thin margin, Mr. Ryan would probably prefer someone else deal with the caucus’s threats to nix legislation that doesn’t meet its hard-line demands by voting with the Democrats.

“Mr. Ryan has worked tirelessly to put Republicans on the strongest possible footing for the midterms. Since becoming speaker he’s transferred $80 million from his campaign to the National Republican Congressional Committee and helped the Congressional Leadership Fund super PAC accumulate $25 million cash on hand. It’s now up to his potential successors – Majority Leader Kevin McCarthy, Majority Whip Steve Scalise and anyone else who aspires to leadership – to step up.

“Mr. Ryan leaves his party with not only money to spend but an example to follow. His tireless, years long advocacy for fundamental tax reform led to the passage of legislation that will create jobs and fatten paychecks, while incidentally helping vulnerable Republicans at the polls.  His work as Budget Committee chairman persuaded Republicans to embrace entitlement reform in their budget resolutions, charting a path to save the great safety nets of Social Security and Medicare from bankruptcy.  And he has been an eloquent evangelist for free-trade policies that level the global playing field and provide more opportunities for Americans to sell goods and services around the world, even as the politics of trade soured in both parties.

“Mr. Ryan will leave Congress with the respect of virtually every member of his caucus, to say nothing of Democrats who can’t help but like him despite their policy differences. No one else could have matched his performance at keeping House Republicans moving in a constructive direction over the last three years. That he did so while also deftly managing relations with this White House – not known for its maturity or predictability – is all the more impressive.”

The flipside of the above is encapsulated in the thoughts of Richard Cohen of the Washington Post.

“A thoroughly decent man, a conservative Republican in the once-traditional sense, he was as appalled by Trump as any American should be.  But just as certain evangelical Christian leaders subordinated their morality to their zeal to outlaw abortion, Ryan chose to remain speaker and get a tax bill rather than confront Trump. I understand. He got his tax bill, and so he moves off the stage as nothing more than an accountant.  He ducked the fight that really mattered.

“The excuse that Republicans offer to explain their silence about Trump is that their base supports him.  Opposition would mean a primary challenge, likely defeat and no improvement...

“But that is not the case with Ryan. He’s out.  He will face no opposition.  Why didn’t he unload on Trump while announcing his retirement from the House?  Why didn’t he say that Trump’s scapegoating of immigrants is abhorrent? Why didn’t he denounce Trump’s dishonest attacks on the press? Why didn’t he say something about Trump’s use of his personal lawyer to extract nondisclosure agreements from several women? Why didn’t he ask about the strange affinity Trump has for Vladimir Putin? Why?  Why?  Why?

“Ryan fades having already faded. His silence on the most important issue facing America is a gross dereliction of duty, but it secures his place in history: He has none.”

Personally, I like Paul Ryan a lot.

--Florida Gov. Rick Scott announced he would run for the Senate seat held by Democrat Bill Nelson, in what is likely to be one of the most competitive, and costly, in the nation.  Scott couldn’t seek re-election as governor because of term limits.

The GOP holds a 51-49 majority in the Senate, but as opposed to the dire situation in the House, Republicans could pick up a seat or two, including this one.

--Finally, on a lighter note, we had the case of the contestant on “Wheel of Fortune” who lost out on an easy $7,100 Monday after botching his pronunciation of the word “Flamenco.”

“Jonny” was facing a complete answer on the board reading: “Flamenco Dance Lessons.”

But rather than saying “flamenco,” the man said “flamingo.”  Host Pat Sajak buzzed him for a wrong answer, and Jonny was in a state of disbelief.

Jonny’s opponent, Ashley, then picked up the pieces and the $7,100.

---

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

God bless America.

---

Gold $1348
Oil $67.39...up $5.44 on the week

Returns for the week 4/9-4/13

Dow Jones  +1.8%  [24360]
S&P 500  +2.0%  [2656]
S&P MidCap +1.6%
Russell 2000  +2.4%
Nasdaq  +2.8%  [7106]

Returns for the period 1/1/18-4/13/18

Dow Jones  -1.5%
S&P 500  -0.7%
S&P MidCap  -0.9%
Russell 2000  +0.9%
Nasdaq  +2.9%

Bulls 42.2
Bears 18.6  [The prior week’s splits were 47.6 / 18.1]

Have a great week.  My Mets are 11-1!

Eleven-and-one!!!

Brian Trumbore



AddThis Feed Button

-04/14/2018-      
Web Epoch NJ Web Design  |  (c) Copyright 2016 StocksandNews.com, LLC.

Week in Review

04/14/2018

For the week 4/9-4/13

[Posted 12:00 AM ET, Saturday]

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 Jeff B. this week.

Edition 992

Trump World

Forget “what a week,” what a past 12 hours?!  This is being posted around midnight, Friday, after we learned from President Trump at 9:00 PM Eastern time that the U.S., along with Britain and France (God bless them), had struck Syrian regime chemical weapons targets, including in Homs and Damascus. I watched the Pentagon briefing an hour later and it is too soon to speak of any further details, only that this quick allied attack, already over, was far greater in scope than the unilateral action the United States took a year ago against a Syrian airbase responsible for a similar chemical attack

So I apologize that some of what follows, read the discussion on Syria, is dated, but this is “Week in Review,” after all, and your editor is compiling the single greatest history of our times, not Sean Hannity’s, or Anderson Cooper’s, latest “breaking news monologue.”

What makes this day so extraordinary is that the Syrian attack comes hours after the revelation that Trump’s personal attorney, Michael Cohen, is under criminal investigation, while a top Republican donor, and party deputy finance chairman, was forced to resign upon the revelation Cohen fixed a large payment for him (see below).

And President Trump, recklessly, called Cohen (according to multiple reports) today to “check in,” which if true is amazingly stupid.

Here’s the bottom line.....at least for the next few hours. While I in no way believe the Syrian strike was a “wag the dog” moment amid swirling controversies in the White House, the fact is Donald Trump has to be on tenterhooks tonight.  This coming week has the potential to...I am not exaggerating in the least...spell the coming demise of this presidency, depending on how much we learn from the multiple investigations.

As the “wait 24 hours” guy I do not say this lightly.  Just watch chief of staff John Kelly, for starters.  And let’s see what happens with Rod Rosenstein and Robert Mueller, and whether the president tries to eject the former, which would likely lead to the firing of the latter.

If Donald Trump knows what’s good for him, and there is zero indication he does, he will shut the heck up on Twitter and make a very public statement he is going to let the investigation(s) run their course.

Otherwise, by the end of this quarter, he could be toast.  And if you are “long” the market, trust me, that would not be good.

Trumpets....

--According to former FBI director James Comey, in his new book, “A Higher Loyalty: Truth, Lies, and Leadership,” President Trump wanted Comey to investigate the infamous “pee tape” allegations – to reassure Melania that  he hadn’t actually paid Russian hookers to urinate on a hotel bed.

“He brought up what he called the ‘golden showers thing’ ...adding that it bothered him if there was ‘even a one percent chance’ his wife, Melania, thought it was true,” Comey writes.

“He just rolled on, unprompted, explaining why it couldn’t possibly be true, ending by saying he was thinking of asking me to investigate the allegation to prove it was a lie. I said it was up to him.”

The conversation took place during the same private dinner on Jan. 27, 2017, where Comey claims the president demanded “loyalty” – and just days after the publication of an intelligence dossier alleging that the  Kremlin had a tape of Trump consorting with prostitutes.

Meanwhile, Comey criticizes President Trump as unethical and “untethered to truth” while calling his leadership of the country “ego driven and about personal loyalty.”

Comey casts Trump as a mafia boss-like figure who sought to blur the line between law enforcement and politics and tried to pressure him regarding his investigation into Russian election interference.

The former director takes some personal jabs at Trump, including how he had “bright white half-moons” under his eyes that he suggested came from tanning goggles.

Yup, it’s that kind of book. [I don’t need to buy it.]

Trump fired Comey in May 2017, setting off a scramble at the Justice Department that led to the appointment of Robert S. Mueller III as special counsel overseeing the Russia investigation.

The book comes at a particularly sensitive time for the president, who is incensed over a recent FBI raid of his personal lawyer’s home and office, raising the prospect that Trump could fire Deputy Atty. Gen. Rod Rosenstein, who appointed Mueller, or try to shut down the inquiry on his own.

Comey is launching a two-week book tour, and the Republican National Committee is ready to lead the public effort to counter him. The president’s legal team will be looking for any inconsistencies between the book and Comey’s public testimony, under oath, before Congress; seeking to impeach Comey’s credibility as a key witness in Mueller’s obstruction investigation.

Among the revelations, Comey writes that then-Homeland Security Secretary John F. Kelly – now Trump’s chief of staff – offered to quit out of a sense of disgust as to how Comey was dismissed. Kelly has been increasingly marginalized, according to multiple reports.

Comey also claims he was so sure that Hillary Clinton would win the 2016 presidential election that he publicly announced re-opening her email investigation because he feared not doing so could make her appear “illegitimate.”

Comey says he opted to go public with information that the FBI had discovered some of Clinton’s emails on Anthony Weiner’s laptop:

“I believed it was my duty to inform Congress that we were restarting the investigation,” he writes about the October 2016 statement. “I would say as little as possible, but the FBI had to speak.”

It was Oct. 28, 2016, that Comey sent a letter to Congress informing them about the investigation, a decision Clinton believes cost her the presidency.

Trump tweets: “James Comey is a proven LEAKER & LIAR. Virtually everyone in Washington thought he should be fired for the terrible job he did – until he was, in fact, fired.  He leaked CLASSIFIED information, for which he should be prosecuted. He lied to Congress under OATH. He is a weak and....

“...untruthful slime ball who was, as time has proven, a terrible Director of the FBI. His handling of the Crooked Hillary Clinton case, and the events surrounding it, will go down as one of the worst ‘botch jobs’ of history. It was my great honor to fire James Comey!”

--Meanwhile, President Trump’s personal attorney, Michael Cohen, had his computers and phones seized on Monday as the FBI executed a search warrant that sought, among other records, all communications between the lawyer and Trump and campaign aides about “potential sources of negative publicity” in the lead-up to the 2016 election.  The Washington Post then reported that Cohen sometimes taped conversations with associates, according to three people familiar with his practice, and allies of the president were afraid the recordings were seized.

Investigators were also said to be looking for any records related to adult-firm star Stormy Daniels and ex-Playboy playmate Karen McDougal in relation to payments they received after alleged affairs with Trump.

But the main point is FBI agents were reportedly seeking details on Cohen’s relationship with the Trump campaign and any efforts to suppress negative information about Trump...and whether any campaign finance laws were violated.

At the same time, it was also reported the warrant executed by agents also demanded documents related to the “Access Hollywood” tape and any attempts to suppress that.

Trump tweet in response to the raids: It’s a disgrace, it’s, frankly, a real disgrace, it’s an attack on our country in a true sense. It’s an attack on all we stand for.”

“Attorney-client privilege is dead!”

“A TOTAL WITCH HUNT!!!”

Then late today, we learned that a major Republican donor, Elliott Broidy, with close ties to the White House, resigned as deputy finance chairman of the Republican National Committee after the revelation that he had agreed to pay $1.6 million to a former Playboy model who became pregnant during an affair.

As the New York Times reported, “The deal was arranged in the final months of 2017 by President Trump’s personal lawyer and fixer, Michael D. Cohen.”

If this account is accurate, not good for said “fixer,” let alone Melania’s husband.

--Other Trump tweets: “Tremendous pressure is building, like never before, for the Border Wall and an end to crime cradling Sanctuary Cities. Started the Wall in San Diego, where the people were pushing really hard to get it. They will soon be protected!”

“If I wanted to fire Robert Mueller in December, as reported by the Failing New York Times, I would have fired him. Just more Fake News from a biased newspaper!”

--Editorial / New York Post

“President Trump made no sense Wednesday when he blamed strained U.S.-Russian ties on special counsel Robert Mueller’s Russia probe.

“ ‘Much of the bad blood with Russia is caused by the Fake & Corrupt Russia Investigation,’ Trump tweeted, after earlier declaring that America’s relationship with Russia is worse than ever.

“Yes, Washington and Moscow are at odds on several fronts. But, sorry, Mr. President: That has nothing to do with Mueller.

“Fact is, Vladimir Putin has been increasingly hostile ever since moving on Georgia, Crimea and Eastern Ukraine. He aims to subvert European and U.S. political systems, including through cyberattacks. His minions recently poisoned a former British spy and his daughter on U.K. soil.  He and Syrian butcher Bashar al-Assad work together bombing hospitals and gassing civilians....

“(Trump’s) actions have been far tougher than Barack Obama’s, with serious new sanctions last week against Putin’s inner circle and dozens of diplomats expelled after the U.K. poisoning attack.

“But Trump’s words Wednesday made it seem like Mueller, not Putin, is at fault. Investigators have found no collusion, he tweeted, so ‘they go crazy!’ – referring to the raid of his private attorney’s records.

“The whole ‘collusion’ case may be utter junk; and certainly Democratic operatives wish to undermine Trump. But the Kremlin isn’t angry about the inquiry – it’s thrilled by the turmoil Russian meddling caused.

“Trump also tweeted off-base after Russia vowed to shoot down U.S. missiles aimed at Syria in response to its recent chemical attack: ‘Get ready Russia, because [missiles] will be coming.’

“Huh? Trump spent years chiding Obama for ‘broadcasting when we are going to attack Syria.’ The Twitterverse erupted with quotes of his 2013 question: ‘Why can’t we just be quiet and...catch them by surprise?’

“Please, Mr. President: Think before you tweet.”  Impossible.

--New national security adviser John Bolton started work Tuesday and Trump accepted the resignation of homeland security adviser Tom Bossert, as Bolton sought to remold the president’s national security team.

--Meanwhile, the Justice Department Inspector General’s report on how the FBI and Justice handled the investigation into Hillary Clinton is coming in the next week or so.

But today, a Justice Department watchdog report concluded that Andrew McCabe, the former FBI deputy director fired by Team Trump, repeatedly misled investigators about his role in a leak to the media about Hillary Clinton just days before the 2016 election.

The report alleges that McCabe authorized FBI officials to speak with a Wall Street Journal reporter for a story about an investigation into the Clinton Foundation and then misled FBI and Justice Department officials when later questioned about it.

McCabe denied the report’s allegations, but it is sure to give additional fodder for President Trump to continue attacking him.

Editorial / Wall Street Journal

“If there is no more evidence than is now public about collusion with Russia, many voters will conclude the exercise was mainly partisan. Ditto if prosecutor John Huber finds evidence that Obama officials were colluding with some in the FBI to defeat Mr. Trump. Most Americans will judge the president based on the overall evidence.

“Mr. Trump can’t control Mr. Mueller, but he can control himself. That may be the only way he can save his presidency.”

--Lastly, the other day there was a fire at Trump Tower.  I was following the local news coverage when Trump tweeted: “Fire at Trump Tower is out. Very confined (well built building). Firemen (and women) did a great job. THANK YOU!”

Ah, Mr. President? We learned after you tweeted this that one of your tenants died in the scary blaze that had major pieces of burning structure falling to the ground.  Trump didn’t issue another tweet. We also learned that the well-built building doesn’t have a sprinkler system because it was built before New York City code required it.

*According to a January 1999 article in the New York Post, Trump personally “called a dozen council members to lobby against sprinklers.”  He also donated $5,000 to retire the campaign debt of Peter Vallone, then the council’s speaker. Trump told the New York Times he had both “received and placed calls” to city officials about the sprinkler proposal.

The City Council finally adopted legislation for sprinklers that same year, but exempted older buildings – such as Trump Tower, built in 1983. Trump did opt to put sprinklers in all 350 units at the Trump World Tower, a building across from the United Nations that was under development then, even though a loophole in the new law would have allowed him to skip doing so because the permits had been filed prior to the passage of the law.

--I couldn’t give a damn about the pardoning of Scooter Libby, former chief of staff to Vice President Richard Cheney, who was convicted of perjury and obstruction of justice related to the leak of a CIA officer’s identity.

But President Trump said in a statement: “I don’t know Mr. Libby, but for years I have heard that he has been treated unfairly.  Hopefully, this full pardon will help rectify a very sad portion of his life.”

Ergo, Trump was sending a signal to his own aides and associates...he can pardon them as well.

Libby was sentenced to 30 months in prison and fined $250,000, but his sentence was commuted by then-President George W. Bush.

Wall Street: We start with some inflation data for March. Both the producer and consumer price numbers were above expectations, the PPI up 0.3%, ditto on core (ex-food and energy), while the CPI was -0.1%, 0.2% ex-the stuff we use.  For the 12 months, the PPI was 2.8%, 2.7% on core, with the CPI at 2.4%, 2.1%; all four above February’s figures and an arrow in the quiver for the hawks at the Federal Reserve.

The Atlanta Fed’s GDPNow barometer for the first quarter is projecting growth of just 2.0%.

Trade: On Tuesday, in his keynote speech at the Boao Forum for Asia, Chinese President Xi Jinping offered his first public comments since starting a second term as leader, with Xi pledging to open China’s doors “wider and wider” to the world, pledging to ease foreign ownership limits in the financial and automotive industries, lower tariffs on imported cars, and improve protection for intellectual property rights.

Wall Street, ever playing the role of Village Idiot, was waiting for such measured conciliatory talk and rallied on the news, while President Trump took to Twitter, as noted below, to say he was “very thankful” for the concessions made by Xi.

Now it’s true the Street was concerned Xi would take the opportunity to blast Trump’s trade threats, but that’s not how Xi rolls.  He has said the exact same things before, that he was opening up markets to foreigners, only to then slam the door, and/or demand concessions such as giving up intellectual property (forced technology transfers) in exchange for market access.

And while some in the U.S. talked of Xi “blinking” in the face of U.S. pressure, China’s state media described Xi’s promises as simply the next stage in the country’s economic restructuring and reform, albeit with the caveat that countries that “frequently launch trade wars against other countries” would not benefit from it.

In a commentary published Tuesday, the People’s Daily said: “China’s reform and opening up is entirely autonomous, and it is gradually expanding and progressing according to its own timetable and road.

“Some people believe that China’s new measures for opening up are forced by the pressure of a trade war. (It’s) clear that they do not understand a strategic choice and the internal logic of China’s development.”

It also needs to be pointed out that just as in the new U.S.-South Korea trade deal, where Trump trumpeted non-existent gains for U.S. automakers (like an increased quota when the U.S. is currently selling way below the existing one), talk of lower tariffs for U.S. cars being exported to China is ludicrous because over 95% of U.S. autos sold in China today are made in China through joint ventures!

As that great NBA player, and trade expert, Derrick Coleman would have said, “Whoopty-damn-do!”

And in terms of intellectual property and better protections, China has already stolen what it needs to build better products that the Chinese consumer will increasingly accept (and as Xi mandates), while it will continue to rip the U.S. off, particularly in pharmaceuticals and drug development, through its network of spies here. That’s just a fact.  [Not to beat the dead horse any more than I already have, as I peer down at my Chinese neighbors from the headquarters of StocksandNews.]

It also needs to be noted that Xi just consolidated power – for life – and he did make a lot of enemies along the way, so the last thing he is about to do is cave to the U.S. under threats from Donald Trump.  The People’s Daily commented after the speech that the notion China’s moves were in response to U.S. pressure was “fantasy without regard for facts.”

Now it’s about negotiations between Washington and Beijing. We’ll see what emerges. I will keep an open mind, sort of.

Meanwhile, out of the other side of China’s mouth, it is now looking to line up other countries against the U.S., especially European companies that could benefit should China react to stepped up pressure by the U.S. by retaliating against American companies and businesses.

Trump tweet: “Very thankful for President Xi of China’s kind words on tariffs  and automobile barriers...also, his enlightenment on intellectual property and technology transfers. We will make great progress together!”

Earlier, Trump tweeted: “President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!”

Earlier still: “The United States hasn’t had a Trade Surplus with China in 40 years. They must end unfair trade, take down barriers and charge only Reciprocal Tariffs. The U.S. is losing $500 Billion a year, and has been losing Billions of Dollars for decades. Cannot continue.”

Monday, Trump promised relief to U.S. farmers caught up in his dispute with China.

“These are great patriots,” he said, acknowledging they could be hit by new Chinese tariffs aimed at the president’s political base. “They understand that they’re doing this for the country. And we’ll make it up to them. And, in the end, they’re going to be much stronger than they are right now.”

Huh? The president added, “It will take a little while to get there.”

China has said it would levy penalties on U.S. soybeans, sorghum and other agricultural products following the Trump administration’s unveiling of plans to impose tariffs of 25% on Chinese products worth $50 billion.

Before China’s announced move, net farm income in 2018 was already projected to decrease by $4.3 billion, or 6.7%, to $59.5 billion, according to a USDA forecast updated last month. This would put U.S. farm profits at their lowest level since 2006.

But then on Thursday, President Trump signaled in a meeting with a group of Republicans from farm states that he was directing his advisers to examine if the U.S. could negotiate its way back into the Pacific trade deal he walked away from when he first took office, the Trans-Pacific Partnership (TPP), that I said at the time was lunacy.

Editorial / Wall Street Journal

“Who knows if this was merely another please-the-crowd attempt that will vanish like a tweet. But those in the room say Mr. Trump directed chief economic adviser Larry Kudlow and trade negotiator Robert Lighthizer to see if they could negotiate a better deal than the original one.

“That won’t be easy, not least because Mr. Lighthizer was barely out the door before he or his office was telling reporters the directive wasn’t serious. But later in the afternoon deputy press secretary Lindsay Walters confirmed that the president had asked the two advisers to try. Let’s hope they make the effort.

“Our sources say Mr. Trump was responding in particular to an argument that the TPP would be economic and strategic leverage with China, which isn’t a member of the 11-nation pact.  [Ed. which was my point, and that of supporters of TPP like the Wall Street Journal last year!]...But now that he’s in a trade showdown with Beijing, Mr. Trump might see the logic of better trade relations with other Pacific nations.

“As Nebraska Senator Ben Sasse, who was at the meeting, noted afterward: ‘The best thing the United States can do to push back against Chinese cheating now is to lead the other eleven Pacific nations that believe in free trade and the rule of law.’

“Mr. Trump is also hearing that his tariff-first policy is setting up farm states for an economic beating from foreign retaliation. American growers are petrified they’ll lose export markets.  Midwest farmers tend to rotate soybeans and corn, and they face a decision soon about which to plant this year.”

Well, the Journal wrote the above Thursday night.  Friday morning, the president tweeted:

“Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!”

Today, members of the TPP, which was just signed, said while they would welcome the United States’ participation, they aren’t about to renegotiate a treaty that took years to put together just to please the president.

It’s too freakin’ late, President Trump! #Moron

In other words, the TPP isolated China, and had multiple provisions to protect intellectual property, while in the case of American farmers, signatories such as Japan, that were going to open their markets to the U.S., are already going elsewhere to stay within the new club, as it was designed to do.

This same president idiotically withdrew the United States from the Paris Climate Accord, when as I told you at the time, we could have just stayed in it and ignored the targets!  “Contributions” were not binding!  We look far better being inside than outside.

On a totally different topic, the nonpartisan Congressional Budget Office released its new projections for the budget deficit and it has it topping $1 trillion in 2020 despite healthy economic growth, at least in the short run.

The national debt, which has topped $21 trillion, is expected to soar to more than $33 trillion in 2028. By then, debt held by the public will almost match the size of the nation’s economy, reaching 96 percent of GDP, a higher level than any point since just after World War II and beyond the level that economists say could precipitate a crisis.  [90 percent is generally seen as the dividing line.]

The CBO projection is the first since President Trump signed a tax cut that is expected to cost the government nearly $1.9 trillion over 11 years, then signed legislation significantly boosting military and domestic spending over the next two years.

The current fiscal year, which ends Sept. 30, should have a budget deficit of $804 billion, up from $665 billion last fiscal year, according to CBO projections.

The CBO last issued projections in June, and at the time it expected the deficit to widen from 2.8% of GDP in 2018 to 5.2% in 2027, but the revised figures have a deficit rising from 4% of GDP in fiscal 2018 to 5.4% in 2022, then easing to 5.1% in 2028.

The CBO does expect economic output will expand 3.3% in the fourth quarter of this year, up from its June 2017 estimate of 2% growth. But then annual growth will slow in subsequent years, to below 2% in fiscal 2020 and beyond, and this is where Republicans will argue the figures are being severely understated given tax reform.

But the mounting debt is of little concern in Congress, or the White House. That said, Republicans hardly have what is a traditional campaign issue, blaming Democrats for the government’s fiscal condition.

Europe and Asia

There was zero broad eurozone economic news of any real import (ditto Asia), after the deluge the week before, so on to....

Eurobits....

Italy: Center-right leaders staged a show of unity after a second round of talks with Italy’s president, with euroskeptic League leader Matteo Salvini getting a shot at forming a new government, as ex-premier Silvio Berlusconi, Salvini’s junior partner in the center-right alliance, introduced Salvini as “our leader” following head of state Sergio Mattarella’s meeting with the two, along with Giorgia Meloni, leader of the far-right Brothers of Italy (I bet they have raucous meetings), who is part of the new effort.

Salvini said the center-right was ready to “form a strong and lasting government with a premier indicated by the League.”  He said its priorities would be tax cuts, jobs for young people, pension reform, fighting poverty and “firm opposition to clandestine immigration.”  [Most of these further explode Italy’s dangerous deficit...it being absolutely insane that with a current 134% debt to GDP ratio, the yield on its 10-year is at 1.79%...but I digress.]

The center-right led the anti-establishment Five Star Movement in March 4 elections, but neither had a majority.

Five Star said it would govern with Salvini, but not Berlusconi, who is a figurehead, having been banned from holding public office because of a 2013 conviction on tax fraud, but is still a kingmaker.

Salvini said he would govern with Five Star only if his allies agree.

Salvini is strongly pro-Russian and on Wednesday he tweeted that reports of a chemical attack were fake news and wrote: “Enough wars, thanks!”

Hungary: Prime Minister Viktor Orban handily won re-election, with his party, Fidesz, along with its ally, the Christian Democrats, securing two-thirds of the seats in Parliament, allowing Orban to continue the country’s transformation from a vibrant democracy into a semi-autocratic state under one party’s control.

Orban can now change the Constitution and further bend the nation to his will.

“Hungary won a big victory,” he told supporters.  He added that there was still “a big fight ahead” but that the parliamentary majority would allow him to continue to protect Hungary.

The leader of the largest opposition party, Jobbik’s Gabor Vona, lamented the tenor of the election, which he called “the hate campaign.”

The West is duly concerned, with Orban’s style of government seen as a threat to the rule of law and a free press.  Instead of looking to France or Germany for inspiration, Orban has talked fondly of autocratic systems in Turkey and Russia.

But, as I noted the other week, Hungary is still a member of the European Union and heavily reliant on EU aid, especially for projects such as roads and bridges and other critical infrastructure.

Nationalist parties across Europe will take heart from Orban’s victory.

[I’m on record as supporting Orban’s hardline immigrant policy.  Virtually everything else I disagree with.]

Brexit: Not for nothing, but since the EU summit with the U.K. last month that laid out a transition period, post-Brexit, there has been zero progress, let alone serious talks, and  a ton has to be accomplished to reach a final deal by this coming October and a critical EU summit.

For  example, the U.K. has yet to put forward an alternative solution for the Irish border; finding a way to avoid customs checks at the border being one of the biggest issues the two sides disagree over. The British government disputes the wording in the draft Brexit treaty that would effectively keep Northern Ireland in the EU’s customs union and parts of the single market unless the U.K. comes up with a better solution.

Germany: Chancellor Angela Merkel downplayed squabbling in her new grand coalition, saying arguments were inevitable but ministers should now get down to the business of running the country.

The acrimony is over everything from refugees and the role of Islam in Germany to law and order and the future of the welfare state.

Most immediately, the cabinet is due to pass a budget on May 2 that plans no new borrowing and is aiming for a balanced budget, continuing the tradition established by the previous finance minister, Wolfgang Schauble.

--EU governments have agreed to a deal to tighten rules on cheap migrant labor, delivering French President Emmanuel Macron one of his key promises to deliver “equal pay for equal work” for all European workers.

Since his election last year, Macron has demanded an end to the practice of “social dumping” – where cheaper workers from eastern Europe can work for less money in higher-wage countries under the EU’s “posted workers” rules.

On Wednesday, the EU’s 28 governments agreed to limit “postings” to 12 months from an original 24 months, with a possibility of a six-month extension.

Macron has described the practice where a Polish construction worker can work in France and receive less pay or benefits than a French worker as a “betrayal of the European spirit.”

Poland has slammed the demands as “arrogant,” Poland being the biggest source of migrant labor to western member states, amid fears the rule changes will hamper its citizens from finding work in the countries.

But Macron’s war against migrant labor rules has found broad support in the European Commission and among countries like Germany and the Netherlands.

--Ousted Catalan leader Carles Puigdemont will embark on a European campaign to promote independence after being freed from jail by a German court despite an extradition request from Spain.

But Puigdemont said he has no plans to return to Spanish soil, where he faces arrest, and insists the conflict requires international mediation.  He’ll remain on bail in Berlin until a German judge makes a final decision on his extradition.

--Two of Europe’s biggest airlines, Lufthansa and Air France, were hit by major strikes that in the case of the former forced cancellation of 800 of 1,600 scheduled flights  the other day, while Air France cancelled one in four of its flights as airline staff take action in support of a 6% pay raise. The walkouts have been planned for various days this month so travelers beware.

My advice, stay home and watch the late Suzanne Pleshette in “If It’s Tuesday, This Must Be Belgium...”  [cough cough]

Street Bytes

--Stocks rose on the seemingly dovish trade talk from Chinese President Xi, along with the optimistic outlook for corporate earnings, as released the next few weeks.  But this was before tonight’s action on Syria and we await to see what the reaction is by the likes of Bashar Assad and Vladimir Putin.

The Dow Jones rose 1.8%, while the S&P 500 was up 2.0% and Nasdaq 2.8%. The Dow and S&P remain down fractionally on the year.

--U.S. Treasury Yields

6-mo. 1.95%  2-yr. 2.36%  10-yr. 2.82%  30-yr. 3.03%

The difference between the two-year Treasury and 10-year is at its flattest level since 2007.  Tighter monetary policy from the Federal Reserve has stoked the rise in the short end of the curve, while the 10-year has been largely stagnant of late over uncertainty with Trump administration trade policy and market volatility.

Separately, Boston Fed President Eric Rosengren, in a speech on Friday, said the Fed would need to raise interest rates at least three more times this year in the face of a robust economy, even with potential trade disputes.

Well, if it’s three more rather than two, that will be problematic for the markets, but geopolitics will have something to say about that.

Much more next week, especially after tonight’s late news from Syria.

--Oil surged to its highest level since December 2014 ($67.39) amid geopolitical concerns, particularly in the Middle East. At the same time a year’s worth of production cuts by OPEC has helped set the stage for the rally, with Venezuela’s oil output in freefall, the combination of which is offsetting booming production in the U.S. and Canada, while global demand rises.

--As I hinted at last week, I was accumulating information from friend Brad K. on the steel buying front, Brad running a business that buys large amounts of same, and as he passes on info from suppliers and buyers, let’s just say it’s chaotic, all due to proposed tariffs that have not even been formally put in place. As Brad put it, “steel buyers are in for a world of hurt...unlike anything I’ve yet to experience given (the lack of options).”

This afternoon, Brad noted: “Canada (has) better pricing, yet they are booking for August (and scrutinizing each and every order, anything deemed a bit off...no steel for them).  U.S. mills far shorter lead times, yet they are commanding pricing above the 25% tariff level (and getting it)....Good dealer I know called and simply mentioned the company that he recommends for fencing had raised all their pricing 10%. Who cares about the cost of a fence...likely not many....”

Does this matter yet in terms of U.S. consumers...and the Fed, down the road?  Not yet, as Brad avers.  As for U.S. steel producers, for now they would be happy campers...but I go back to what I wrote upon the signing of the tax cut legislation. There are major incentives for corporations to spend money on capital expenditures (expand plants) due to immediate expensing provisions.

But longer term, will the demand be there? That’s why I’m not paying any attention to White House photo ops with workers in the industry...who a year from now could be out of work.

Brad, thank you for your great intel....keep it coming...MP lunch by June.

--JPMorgan Chase unveiled better-than-expected results for its first quarter, supported by an increase in core loans and client investment assets.

The asset management firm generated total revenue of $27.91 billion in the first quarter, up from $24.94 billion in the same period a year ago, beating expectations, while earnings per share came in at $2.37, also ahead of the Street’s $2.28 per share outlook.

Average core loans rose 8%, while average deposits of $660 billion were up 6%.  Client investment assets rose 13% to $276 billion, with record net flows during the quarter.

Post-tax cut legislation, JPM said it expects an effective income tax rate of around 20% for the year.

“2018 is off to a good start with our business performing well across the board, driving strong top-line growth and building on the momentum from last year,” said CEO Jamie Dimon.

--Wells Fargo said its preliminary results were subject to change due to possible fines from regulators over past customer-account abuses. The bank said the penalties were related to its “compliance risk management program and past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions.”

The Consumer Financial Protection Bureau and Office of the Comptroller of the Currency have collectively offered to resolve the probes for a total of $1 billion, the bank said today.

“Accordingly, the preliminary financial results we report today may need to be revised...”

--Citigroup reported a higher-than-expected quarterly profit driven by strength in its consumer banking business and a surge in equities trading.

Total revenue rose about 3 percent.

--It was all about Facebook this week.

While some in Silicon Valley and on business channels cringed at some of Zuckerberg’s interrogators and their seeming lack of knowledge on how Facebook and other social media sites work, during Tuesday’s Senate hearing, John Thune (R-S.D.) and Chuck Grassley (R-Iowa) both said federal intervention in tech platforms might be necessary, while Sen. John Kennedy (R-La.), one of my faves, said, “I don’t want to vote to have to regulate Facebook, but by God I will.”  [Sen. Kennedy, though, didn’t understand that Facebook users do have some control over their data, which agitated Zuckerberg.]

Some in the Valley worry that Congress will pass legislation that will end up crippling young startups with carelessly crafted rules.

But here was my problem....Zuckerberg did come off as a know-it-all with disdain for us illiterates.  Personally, I am not a fan of the guy, but this goes back to his first comments years ago about changing the world for the better.  It’s a bunch of total bulls---.

Among the takeaways from his testimony, Zuckerberg didn’t commit to a proposal that would require the site to automatically let users “opt out” of having their data collected or shared.  Today, users have to go through a bunch of settings that block such data sharing.

When asked about what kind of regulation or legislation Facebook would support to beef up Americans’ privacy in their use of social media platforms, over and over again Zuckerberg responded with stuff like “This deserves a lot of discussion...Everyone in the world deserves good privacy protection...I’m committed to getting this right...My team is working on it and we’ll get back to you....”

The guy didn’t really answer more than a handful of questions, though lawmakers largely didn’t ask the right ones. Zuckerberg and Facebook have been criticized for failing to police content adequately, and Zuckerberg said he thinks artificial intelligence can help the company solve the issue in five to 10 years.

Republican senators and House members raised the issue: if Facebook polices content more effectively, how can they be sure they won’t do so with an anti-conservative bias?  Zuckerberg said he wants Facebook to be neutral, but will be taking a harder line on what it views as extreme content.

It is also clear Facebook doesn’t know how much data was harvested by Cambridge Analytica, bought and sold against its policies during the era  when apps could scrape, and that it has no way to track what happened to that data now.

Sen. Grassley asked Zuckerberg: “Do you know of any instances where user data was improperly transferred to third parties in breach of Facebook’s terms?”

“I don’t have all the examples of apps that we’ve banned here,” Zuckerberg replied.  He admitted Facebook didn’t do enough to prevent its tools from being misused and will audit tens of thousands of apps, which is impossible.

The bottom line was that Zuckerberg was often disingenuous, at best.  He kept repeating that all data from users can be deleted from Facebook, but did not have answers to repeated questions about how long it takes the data to disappear, which is the main component of the European Union’s citizens’ digital rights regulations.  Wait ‘til you read Brian Chen’s piece below from the New York Times on this paramount issue.

Facebook’s deletion guidelines say “it may take up to 90 days from the beginning of the deletion process to delete all of the things you’ve posted,” but this is a lie!

“I don’t know, sitting here, what our current systems are on that. But the intent is to get all the content out of the system as quickly as possible,” Zuckerberg said.

Again, total bulls---.

Dana Millbank / Washington Post

“Zuckerberg came prepared with one message to those who would regulate Facebook: Trust me. ‘I’m committed to getting this right,’ he promised. Problem is, whenever the questioning got tough, Zuckerberg made clear that he could not be trusted to give an answer. How many improper data transfers to third parties have there been?

“ ‘I can have my team follow up with you.’

“How many fake accounts have been removed?

“ ‘I’m happy to have my team follow up with you.’

“Were Facebook employees involved with Cambridge Analytica’s help for Donald Trump?

“ ‘I can certainly have my team get back to you.’

“Can Facebook track browsing activity after a user logs off?

“ ‘It would probably be better to have my team follow up afterwards.’

“What regulations would he support?

“ ‘I’ll have my team follow up with you.’

“Where do the 87 million Facebook users who had their data scraped for Cambridge Analytica come from?

“ ‘We can follow up with your office.’

“Does Facebook collect user data through cross-device tracking?

“ ‘I want to have my team follow up with you on that.’ ....

“Zuckerberg was practically crying out for adult supervision.”

Editorial / New York Post

“Facebook founder and CEO Mark Zuckerberg faced more aggressive questioning from the House on Wednesday than he did from the Senate a day earlier, but the net result was pretty much the same:

“He’s truly sorry (again) for any concerns, but Facebook users know that the social-media app harvests their personal data for advertisers and they’re in full control of their privacy.

“Except that they don’t – and they’re not.

“Yes, users voluntarily post data to their timelines. But few realize how much Facebook collects, including ‘cross device’ targeting that tracks the apps on their phones, as well as their offline activity – such as their physical location, what they buy in stores and all of their web browsing.

“Data, in other words, that users have not specifically provided – or that they even know Facebook is collecting and using.

“Fewer still understand that Facebook’s privacy settings are far less private than Zuckerberg &
Co. would have them think.

“Little of this came out, because the politicians questioning Zuckerberg by and large had no real understanding of how Facebook works. And the few who did were hobbled by strict time limits.

“That left Zuckerberg able to seem deferential even as he used carefully scripted talking points to run verbal rings around most of his interrogators (including those asking about anti-conservative bias) and to run out the clock on everyone else.

“Facebook’s investors were pleased by the show: The company’s stock price rose nearly 6 percent over the two days.

“And  while Zuckerberg finally conceded that some government regulation of social media ‘is inevitable,’ he also warned that Congress would ‘have to be careful’ about exactly what rules it imposes.

“Then again, Zuckerberg could take some voluntary steps, like those suggested by Bloomberg’s Shira Ovide: Turn off location tracking, stop spying on non-Facebook activity and fully disclose how advertisers target users.

“Of course, that would hurt Facebook’s power, not to mention its bottom line. But if Zuckerberg keeps evading, he can expect much worse from Congress.”

Daniel Henninger / Wall Street Journal

“Somehow in our time all the problems of human existence have boiled down to one cause: Russian collusion.

“What is the main reason Mark Zuckerberg was hauled in front of three committees of Congress? It is because the media connected a long series of dots to suggest that possibility that Russian bots exploited the personal Facebook data obtained by a firm named Cambridge Analytica to...put Donald Trump in the White House. Without the link to collusion – an infinitely elastic phrase with no legal meaning – Mr. Zuckerberg never would have had to leave Menlo Park.

“The live Zuckerberg testimony was torture, forcing anyone interested to hear innumerable senators and House members share their thoughts on technology.  Lowering the bar on Senate discourse below swamp level, Louisiana Republican John Kennedy said the Facebook user agreement ‘sucks.’

“Despite the legislators’ thunderings about regulation, the likelihood of the House and Senate enacting rules for the web is more remote than Halley’s Comet, due back in 43 years.  Congress has failed for years to bring royalty payments for creators of music into the digital age.

“It’s a sport now to mock Mark Zuckerberg, but taking an idea from your dorm room to a market cap of more than $400 billion proves he’s no dope. What Mark Zuckerberg thinks about what he did deserves attention.

“Mr. Zuckerberg divided his prepared testimony between two subjects. The first, headlined ‘Cambridge Analytica,’ was a proxy for the personal-privacy issue; the other was ‘Russian Election Interference,’ a proxy for the collusion obsession....

“(Zuckerberg) said Facebook was aware of ‘traditional’ Russian cyberthreats ‘for years,’ including a group called APT28, which he noted our intelligence services had linked to the Russians.

“This time frame revives a relevant question: Why didn’t the Obama administration alert the American people in 2015 or earlier to the threat of Russian political subversion?  Protecting us from Russian bots wasn’t Mark Zuckerberg’s responsibility....

“Privacy on the web matters, but the odds are overwhelming that before Congress gets to it, another technology – probably blockchain – will mitigate the problem. Of more pressing concern are Mr. Zuckerberg’s thoughts on what he keeps calling the values of the Facebook ‘community.’ Meaning what?

“A primary criticism of social-media platforms like Facebook is that they expose users to content that encourages ‘hate’ or is ‘hurtful.’

“Facebook’s answer to this perceived problem has been to hire some 15,000 people dedicated to ‘community operations and review,’ with more monitors on the way.

“During his pre-Congress apology tour, Mr. Zuckerberg elaborated on this subject to Vox: ‘Over the long term, what I’d really like to get to is an independent appeal. So maybe folks at Facebook make the first decision based on the community standards that are outlined, and then people can get a second opinion.

“ ‘You can imagine some sort of structure, almost like a Supreme Court, that is made up of independent folks who don’t work for Facebook, who ultimately make the final judgment call on what should be acceptable speech in a community that reflects the social norms and values of people all around the world.’

“Up to now, there has been no such thing in the United States as ‘acceptable speech’ defined by the norms and values of people all around the world. Because of his status, Mr. Zuckerberg is a thought leader, and so this idea is not far-fetched.

“The bedrock idea of free speech is under pressure in the U.S. now. But if I had to guess which will arrive first – federal regulation of individual privacy or a speech panel of ‘independent folks’ defining what is acceptable – on current course, I think I know which one it will be.”

Rich Lowry / New York Post

“The problem isn’t that Zuckerberg is a businessman, and an exceptionally gifted one, but that he pretends to have stumbled out of the lyrics of John Lennon’s song ‘Imagine.’  To listen to him, Facebook is all about connectivity and openness – he just happens to have made roughly $63 billion as the T-shirt-wearing champion of ‘the global community,’ whatever that means.

“It’s this pose that makes him and other Facebook officials sound so shifty. In a rocky interview with Savannah Guthrie of ‘The Today Show’ last week, Sheryl Sandberg was asked what product Facebook sells.  ‘We’re selling the opportunity to connect with people,’ she said...before catching herself, ‘but it’s not for sale.’

“Something or other must be for sale, or Facebook is the first company to rocket to the top ranks of corporate America based on having no product or profit motive.  Guthrie, persisting, stated that Facebook sweeps up data for the use of advertisers. Sandberg objected, ‘We are not sweeping data.  People are inputting data.’

“Uh, yeah. That’s the genius of it. In a reported exchange with a friend while he was a student at Harvard, Zuckerberg boasted of having data on thousands of students because ‘people just submitted it.’

“Zuckerberg has now managed the same trick on a global scale.  On the one hand, Facebook has indeed made efforts to protect the data of its users, knowing that it can’t risk a fundamental breach of trust.  On the other, Zuckerberg has repeatedly said he’s sorry for offenses against his users’ privacy because his business model contradicts his self-righteous public posture.

“The company is deeply committed to that posture. In the ‘Today’ interview, Sandberg made a confession as humble brag, ‘We were very idealistic and not rigorous enough.’  In his prepared testimony before a House committee, Zuckerberg declared, ‘Facebook is an idealistic and optimistic company. For most of our existence, we focused on all the good that connecting people can bring.’....

“Perhaps the public pressure will force the social network to give its customers even more control over the use of their data. At a minimum, it will have achieved something if it gets Facebook to give up the saccharine one-world rhetoric about its mission and admit the bottom line is as important to it as any other profit-making company.”

Brian X. Chen / New York Times...very important piece....

“When I downloaded a copy of my Facebook data last week, I didn’t expect to see much. My profile is sparse, I rarely post anything on the site, and I seldom click on ads....

“But when I opened my file, it was like opening Pandora’s box.

“With a few clicks, I learned that about 500 advertisers – many that I had never heard of...had my contact information, which could include my email address, phone number and full name. Facebook also had my entire phone book, including the number to ring my apartment buzzer. The social network had even kept a permanent record of the roughly 100 people I had deleted from my friends list over the last 14 years, including my exes.

“There was so much that Facebook knew about me – more than I wanted to know. But after looking at the totality of what the Silicon Valley company had obtained about yours truly, I decided to try to better understand how and why my data was collected and stored.  I also sought to find out how much of my data could be removed....

“During his testimony, Mr. Zuckerberg repeatedly said Facebook has a tool for downloading your data that ‘allows people to see and take out all the information they’ve put into Facebook.’

“But that’s an overstatement. Most basic information, like my birthday, could not be deleted.  More important, the pieces of data that I found objectionable, like the record of people I had unfriended, could not be removed from Facebook, either.

“ ‘They don’t delete anything, and that’s a general policy,’ said Gabriel Weinberg, the founder of DuckDuckGo, which offers internet privacy tools. He added that data was kept around to eventually help brands serve targeted ads....

“When you download a copy of your Facebook data, you will see a folder containing multiple subfolders and files. The most important one is the ‘index’ file, which is essentially a raw data set of your Facebook account, where you can click through your profile, friends list, timeline and messages, among other features.

“One surprising part of my index file was a section called Contact Info.  This contained the 764 names and phone numbers of everyone in my iPhone’s address book.  Upon closer inspection, it turned out that Facebook had stored my entire phone book because I had uploaded it when setting up Facebook’s messaging app, Messenger.

“This was unsettling. I had hoped Messenger would use my contacts list to find others who were also using the app so that I could connect with them easily – and hold on to the relevant contact information only for the people who were on Messenger. Yet Facebook kept the entire list, including the phone numbers for my car mechanic, my apartment door buzzer and a pizzeria.

“This felt unnecessary, though Facebook holds on to your phone book partly to keep it synchronized with your contacts list on Messenger and to help find people who newly sign up for the messaging service. I opted to turn off synchronizing and deleted all my phone book entries.

“My Facebook data also revealed how little the social network forgets. For instance, in addition to recording the exact date I signed up for Facebook in 2004, there was a record of when I deactivated Facebook in October 2010, only to reactivate it four days later – something I barely remember doing....

“But what bothered me was the data that I had explicitly deleted but that lingered in plain sight.  On my friends list, Facebook had a record of ‘Removed Friends,’ a dossier of the 112 people I had removed along with the date I clicked the ‘Unfriend’ button. Why should Facebook remember the people I’ve cut off from my life?

“Facebook’s explanation was dissatisfying. The company said it might use my list of deleted friends so that those people did not appear in my feed with the feature ‘On This Day,’ which resurfaces memories from years past to help people reminisce. I’d rather have the option to delete the list of deleted friends for good.

“Knowing this, I also downloaded copies of my Google data with a tool called Google Takeout. The data sets were exponentially larger than my Facebook data...

“Here was the biggest surprise in what Google collected on me: In a folder labeled Ads, Google kept a history of many news articles I had read, like a Newsweek story about Apple employees walking into glass walls and a New York Times story about the editor of our Modern Love column. I didn’t click on ads for either of these stories, but the search giant logged them because the sites had loaded ads served by Google.

“In another folder, labeled Android, Google had a record of apps I had opened on an Android phone since 2015, along with the date and time. This felt like an extraordinary level of detail.”

In the end, here’s my personal takeaway from all the above. I have been criticized by friends and business associates for not using my smartphone.  Yes, I have one, but I refuse to give my number to anyone because I don’t want to be bothered.  99% of the time, I’m reachable if necessary.  I have the phone with me for emergencies, and to check sports and news headlines.  When I’m traveling, I use my laptop.  At home it’s the desktop.

After all this week’s testimony and revelations, I will use my phone even less. Today’s snoopers, including the likes of Facebook and Google, are gearing their tracking technology for smartphones.  As much as possible, I want to limit my footprint.

We also need to hold Mark Zuckerberg’s feet to the fire on his whole 15,000-20,000 content inspectors’ talking point.  Who are these people?  Look at what I do with StocksandNews.

Number one, my guiding principle is ‘wait 24 hours.’  Number two, it is to read as many sources as possible.

I am proud I didn’t publish any of the “fake news” stories of the last election cycle that were being fed to me by many of you, frankly. I’ve noticed I don’t receive them anymore, but I’m waiting for them to ramp up again this summer with the midterms.

Actually, tell Mark Zuckerberg, if you are a shareholder of FB, to just hire me and fire the other 20,000.  He’ll have a more responsible product...and a more profitable one.

---

--According to the nonpartisan Tax Policy Center, for 2018, U.S. households in the top 205 will pay about 87% of income taxes, up from about 84% last year.

By contrast, the lower 60% of households will pay no net federal income tax in 2018 vs. 2% of it last year.

--Smartphone sales topped 1.5 billion units in 2017, a meager 2.7% rise, according to research firm Gartner, with an unprecedented 5.6% drop in sales in the December quarter, the first year-on-year quarterly decline since Gartner started tracking the market in 2004.  [Strategy Analytics pegged the drop at 9%...the worst ever.]

People are holding their smartphones longer and there is nothing compelling enough in the new phones.  [Tiernan Ray / Barron’s]

--The Department of Defense stopped accepting most deliveries of F-35 jets from Lockheed Martin Corp. because of a dispute over who will cover costs for fixing a production error, three people familiar with the situation told Reuters.  Lockheed then confirmed that the Pentagon had halted deliveries of the jet over a contractual issue, but didn’t give details.  Last year, the Pentagon stopped accepting F-35s for 30 days after discovering corrosion where panels were fastened to the airframe, an issue affecting more than 200 of the stealthy jets.

The issue is being fixed but the costs are substantial as it requires Lockheed sending technicians all over the world to mend the aircraft.  I don’t see what the issue is.   Pay up, freakin’ Lockheed!

But I bring this up because our president likes to tout how great American military hardware is, as he trumpets sales to foreign governments, but this issue impacts deliveries to them too.

The F-35 has been plagued by massive cost overruns in the past, magnified by the fact it is the Pentagon’s most expensive weapons program.

--In an executive order issued at 9 p.m. on Thursday, President Trump suddenly demanded an evaluation of the Postal Service’s finances, weeks after accusing Amazon of not paying its fair share in postage.

In the order, Trump created a task force to examine the service’s “unsustainable financial path” and directed the new group to “conduct a thorough evaluation of the operations and finances of the U.S.P.S.”

While Amazon is not mentioned in the order, clearly the president wants the group to substantiate his repeated claim that the arrangement between the U.S.P.S. and Amazon, its biggest shipper of packages, is a money loser.

Trump’s own advisers have urged him to back off, but the president refuses to believe arguments that the huge number of packages shipped by Amazon is actually helping keep the Postal Service afloat.

--BlackRock Inc. pulled in nearly $57 billion in new investor cash in the first three months of the year, with the firm’s exchange-traded funds attracting $34.65 billion in net inflows in the quarter. Earnings and revenues rose 27% and 16% from the same year-ago period.

--Supermarket giant Kroger is making plans to hire about 11,000 workers even as it faces heated competition from Walmart to Amazon.  In the past two years, Kroger has created 22,000 positions. A statement from the company read: “Over the last decade, Kroger has added 100,000 new jobs in communities across America. In addition to fueling the U.S. economy, many of our supermarket jobs are an opportunity for associates to grow and advance their careers.”

Kroger operates more than 2,700 groceries in 35 states under a variety of names, including Smith’s, Fred Meyer, Ralphs and King Soopers.  It has remained largely traditional while others are undergoing major changes.

Good luck, Kroger!

--A report by the nonprofit National Committee on U.S.-China Relations and research firm Rhodium Group found that total foreign direct investment in the U.S. from China fell to about $29 billion in 2017 from $46 billion the previous year. The pullback was underway before President Trump’s threats on trade between the two nations.

China’s State Council last August laid down new regulations on outbound investments to reduce the risk of runaway debt and to blunt capital flight.

--According to a biannual survey of teens’ fast-food preferences, chicken joint Chick-fil-A came out on top, ahead of KFC, Chipotle and McDonald’s, which is a little surprising considering the controversy over the chief operating officer’s opposition to gay marriage.  This didn’t impact New York University, which opened a Chick-fil-A recently, NYU a bastion of social justice warriors.

Personally, I’m still miffed I don’t have a Taco Bell or KFC within ten minutes.  I may have to start a riot.  Or I could just drink a beer.

Foreign Affairs

Syria / Russia: Last Saturday, Syrian, and/or Russian, forces conducted a reported chemical attack, apparently chlorine gas, on Douma – the last rebel-held area of the onetime opposition enclave of eastern Ghouta – a Damascus suburb.  As many as 75 were reported to have been killed and the video from the scene was horrific.

President Trump tweeted Sunday: “President Putin, Russia and Iran are responsible for backing Animal Assad. Big price to pay.”

Syria and Russia denounced the allegations as “fabrications” and warned against them being used as a pretext for any military action.  More than 1,700 civilians have been killed on the assault on eastern Ghouta since an offensive was launched in mid-February.  Tens of thousands were displaced.

Monday, Israeli F-15 war planes conducted an attack on a major air base in central Syria, reportedly killing 14, including three Iranians.

At the UN, U.S. Ambassador Nikki Haley squarely blamed Moscow for the gas attack because the Russian military has supported Syrian President Assad’s forces.

“Russian hands,” Haley said, “are all covered in the blood of Syrian children.” She scolded Russia for repeatedly refusing to punish Syria by vetoing five Security Council resolutions that singled out Assad for condemnation.

“The day we prayed would never come has come again,” Haley told the council, a year after a similar chemical weapons attack in Syria. “Only a monster does this.”

Russia’s ambassador, Vassily Nebenzia, blasted the U.S. for its “boorish” behavior and for threatening Moscow with sanctions, “blackmail” and hostilities that “go beyond the Cold War.”  Nebenzia said the attack in Douma was staged by anti-Assad “terrorists,” and reports about the use of chemical weapons and photographs of the victims were “fake news.”

Tuesday, Moscow’s UN envoy said, “I would once again beseech (the U.S.) to refrain from the plans that you’re currently developing,” warning Washington that it will “bear responsibility” for any “illegal military adventure” it carries out.

Wednesday, Trump taunted Syria. The same day, Vladimir Putin and Israeli Prime Minister Netanyahu held a call on the crisis, and Putin urged Israel not to take action in Syria.  Israel said Netanyahu told Putin that Israel will not permit Iran to set up a military presence there.  Speaking later at a Holocaust memorial event, Netanyahu issued a threat to Iran not to “test Israel’s resolve.”

President Trump and his national security team discussed U.S. options Thursday, with worries increasing about a confrontation with Russia.  Trump tempered his earlier remarks yesterday and even as he consulted allies such as Britain and France, there were signs of efforts to prevent the crisis from spiraling out of control.

“Never said when an attack on Syria would take place. Could be very soon or not so soon at all!” Trump tweeted.

U.S. defense secretary Jim Mattis said his main concern about a military response was how to stop it “escalating out of control”

Senior Russian figures, including the head of the military, warned that U.S. missiles would be shot down and their launch sites targeted if Russian personnel come under threat.

Russia warned Thursday that the U.S. launching air strikes in response to the suspected chemical attack could spark a war between the two countries.

“The immediate priority is to avert the danger of war,” Moscow’s UN ambassador Nebenzia said.  He accused Washington of putting international peace at risk and said the situation was “very dangerous.”

“We cannot exclude any possibilities, unfortunately,” Nebenzia told reporters.  With the Russian military presence in Syria, there was a heightened “danger of escalation.”

In his confirmation hearing, Mike Pompeo, Trump’s pick for secretary of state, said “soft policy” toward Russia is “now over.”

Russia’s military said Thursday that Syrian government troops had taken control of the city of Douma, signaling the end of the offensive to take the rebel enclave in eastern Ghouta.

Damascus and Moscow continued to deny responsibility for any gas attack. A defiant Assad, in a meeting with a delegation from Iran, said the threats of an attack by the West were “based on the lies fabricated by these countries” and their proxies in Syria.

Leonid Bershidsky / Bloomberg

“A false narrative emerging in the U.S. holds that Trump has just recently turned tough on Russia. One look at the long chronology of his administration’s hostility toward Putin’s Russia should dispel that.

“It includes the early appointment of Russia hawks such as United Nations representative Nikki Haley and Central Intelligence Agency director Pompeo; the first-ever U.S. missile strike on Putin ally Syrian President Bashar al-Assad’s military installation in April 2017; the abrupt closure of three Russian diplomatic facilities in the U.S. in late August (which Russia accurately described as ‘blatantly hostile’); the decision to send lethal weapons to Ukraine in December; a deadly counterattack on a group of Russia mercenaries in Syria in February.  A column Wednesday by The Intercept’s Glenn Greenwald, who like me has long disagreed with the ‘Trump is a Russian puppet’ narrative, contains a slightly different list of the Trump administration’s anti-Kremlin actions.

“Trump can blow hot and cold on Putin and Russia in tweets, just as he did in the course of one day on Wednesday, first threatening Russia with ‘nice and new and ‘smart’’ missiles and then saying there’s ‘no reason’ for the U.S.-Russia relationship to be so bad. But Americans should be used to the low price Trump puts on the meaning of words. He, like many habitual social network users, employs language to communicate emotions rather than precise messages.

“The missile tweet says ‘I’m angry’ and the seemingly conciliatory tweet telegraphs ‘I’m frustrated.’ What matters with Trump are actions or, rather, transactions. And on that level, he hasn’t been a pro-Russian president from the start, as those who alleged without any evidence that the Kremlin had some kind of leverage over Trump seemed to think.

“The  more recent moves – the biggest ever expulsion of Russian diplomats from the U.S. following the poisoning in the U.K. of a former Russian double agent, the harshest ever sanctions imposed on a Russian billionaire (aluminum tycoon Oleg Deripaska), fresh anti-Russian appointments (Pompeo’s move to State and John Bolton’s elevation to national security adviser) – merely continue this line of actions. They constitute an escalation but not a policy shift....

“Trump rarely seeks advice or heeds it if it’s volunteered anyhow; his Russian policy hasn’t been imposed from outside. The U.S. president wants reportable wins.  He doesn’t, however, work quietly to obtain them.  He demands to be handed them because they’re due to him as the man in the ultimate position of strength. Trump appeared to have expected a more compliant Putin ever since the Russian president’s remark that Trump is a ‘colorful’ and ‘talented’ individual was mistranslated as ‘brilliant.’  ‘So far, we’re off to a good start,’ candidate Trump commented in 2016.  ‘He said, ‘Trump is a genius,’ OK?’

“Putin, however, has provided no gifts and no wins. If he ever had an interest in Trump’s victory, it was for the havoc it would wreak on the U.S. establishment. He, too, always negotiates from a position of strength, even when this stance masks actual weakness....

“More than ever since the collapse of the Soviet Union, the U.S. and Russia need to set the boundaries of their hostile engagement. The festering macho conflict will ensure that the two nations will clash over and over again.  One big test of whether there are any grown men in the war rooms of both Washington and Moscow is whether any U.S. or allied action against Assad is coordinated with Russia on a military level, as happened with last year’s missile attack.  Let’s hope so.”

David Ignatius / Washington Post

“After fulminating about retaliation for the latest suspected Syrian chemical weapons attack, the Trump administration cooled off long enough to consider the dangers of such a strike. That’s to the credit of Defense Secretary Jim Mattis, who favored a measured response, and also of President Trump, who tempered his initial bellicose language about an assault.

“Trump showed a year ago that he intends to enforce global norms against the use of chemical weapons.  And that remains the right stance. But sadly, he still doesn’t have a Syria policy. He wants to withdraw U.S. forces even as he tries to look tough – a recipe for failure on both fronts.

“ ‘Whiplash’ is probably the best word to describe what Syria watchers are feeling.  Two weeks ago, Trump was hectoring his advisers about the need to bring U.S. troops home. Then, after Saturday’s apparent chemical attack on Douma, the president was tweeting about firing missiles in retaliation and making Russia pay a ‘big price’ for backing President Bashar al-Assad.

“This mixed message is still the core problem in Syria. There’s a banner headline – the United States is responding to chemical weapons, in addition to destroying the Islamic State – but the body of the story is missing.  Perhaps Trump will more clearly see now the need for a broader U.S. strategy to help stabilize Syria.

“The best thing that happened this week was that the policy process paused for a careful consideration of military options. Mattis warned the president privately about the dangers, with U.S. and Russian forces so close in Syria and the Mediterranean. Trump evidently listened and deferred action for several days, allowing more study. The United States is also coordinating policy options with Britain, France and other allies, another positive development.

“Mattis voiced his concerns in testimony to a House committee Thursday.  ‘On a strategic level, it’s how do we keep this from escalating out of control, if you get my drift on that,’ he said....

“The trick for U.S. planners is how to calibrate military action this time so that it sends a clear deterrence message to Syria and Russia, without escalating the conflict....

“But such measured actions are harder when they’re preceded by presidential taunts. Trump tweeted on Sunday morning after the Douma attack: ‘President Putin, Russia and Iran are responsible for backing Animal Assad. Big price to pay.’  He cranked up the volume Wednesday morning, tweeting about firing missiles in retaliation: ‘Get ready Russia, because they will be coming, nice and new and ‘smart!’’

“Trump appeared to realize this diatribe was a mistake... Slowing the retaliatory reflex was welcome, partly because it gave Trump time to cool off after the FBI search of the premises of his personal lawyer, Michael Cohen – not the moment to be making decisions about war and peace.  This week’s delay should also reassure analysts, here and abroad, who feared that Mattis’ standing with Trump would be diminished after the firing of his friend Rex Tillerson as secretary of state.

“As with any use of military force, planners need to think carefully about ‘the day after.’  Would a U.S. strike trigger a widening conflict in a part of Syria where its leverage is limited? Would Russian President Vladimir Putin feel he must make his own show of toughness by matching Trump and moving up the escalatory ladder? And what would Trump do if this action, unlike the Syria reprisal of a year ago, failed to win applause?

“Trump, like President Barack Obama, is finding that it’s easier to talk about withdrawing from Middle East wars than to actually do it. When Trump takes military action in Syria, he owns the consequences.”

Editorial / Wall Street Journal

“Donald Trump treasures nothing more than unconstrained access to the world through Twitter. So you know the president is having a bad week when his tweets come back to haunt even him, as they have with Syria. The Syrian tweets were especially damaging – to him personally and his role as Commander in Chief of the U.S. military.

“Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and ‘smart!’  You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoy it!”

“After tweeting that the U.S. is planning missile strikes against Syria and its patron Russia, the twitterverse resurrected his past words mocking Barack Obama for ‘broadcasting when we are going to attack Syria.’ Mr. Trump has little use for consistency, but the contradiction is an acute embarrassment.

“By Thursday military analysts were saying that Mr. Trump’s premature public announcements of missile strikes had compromised the U.S. ability to execute a coordinated effective response to Syrian strongman Bashar Assad’s likely use of chemical weapons against civilians in Douma.  Amid this confusion, the president tweeted what for him was a mea culpa: ‘Never said when an attack on Syria would take place. Could be very soon or not so soon at all!’

“It is never easy to figure where Mr. Trump’s omnipresent persona connects with real policy, but Syria is the moment to make the effort. Beyond the Trump tweets lie harsh realities that need to be addressed. It’s true that Mr. Obama’s inaction dealt the Trump Presidency a tough hand in the Middle East, and that Mr. Trump struck the Assad forces last April with Tomahawk cruise missiles.  He also allowed the Pentagon to intensify its effort to erode Islamic State in Iraq and Syria.

“Since then, though, Mr. Trump has shown ambivalence toward the region, saying in Ohio recently that ‘We’ll be coming out of Syria, like, very soon.’  His ambivalence has produced unfortunate results. The U.S. has had no identifiable policy toward Syria in a year. Meanwhile, Russia and Iran have moved to consolidate a joint hegemony that would dominate Syria and Iraq and threaten Israel.

“Iran’s goal, beyond extending its political dominance from Tehran to the Mediterranean, is to use Syria as a military base to station an army of Hezbollah fighters backed by the Iranian Revolutionary Guard Corps. The target is Israel. The risk is a Middle East war that inevitably would draw in the U.S.

“Turkey, a NATO ally, has interpreted U.S. ambivalence as a pretext to settle old scores against Syria’s Kurds. That undermines our influence in the region and will erode hard-won gains against Islamic State, which is dispersed but survives.

“Surveying all this is Vladimir Putin, whose troops and irregular forces, supported by Iran, have enabled Assad to obliterate his opposition in Aleppo, Ghouta and now, with chemical weapons, Douma. This is another day at the office for the opportunistic Mr. Putin, who has obtained long-term leases with Syria on the naval base in Tartus and the air base at Hmeimim.

“Keeping Russia out of the Middle East was a signature U.S. achievement during the Cold War. Now Russia has platforms for threatening NATO’s southern flank, as it is already doing with active military operations across the Baltic and North Seas....

“The goal now, in an extremely difficult situation, should be for the U.S. to formulate a response that acts as a deterrent. The word ‘deterrent’ is key. Last year’s Tomahawk strike could have been a deterrent if it had been followed up with other measures. It was not....

“Mr. Trump needs to give his team and its allies time to shape a strategy the world will recognize as a sustained commitment to deterring Russian and Iranian aggression in the region and, yes, Assad’s ‘animal’ assaults on Syrian civilians. What is needed is a substantial degradation of the Syrian regime’s military capacity. That may well include calling Mr. Putin’s bluff on collateral Russian casualties.

“Meanwhile, let the Twitter account go silent on Syria. The next public event needs to be a display of effective American leadership.”

China: In a surprise move, Beijing announced on Thursday that it would hold live-fire drills in the Taiwan Strait next week – something that is both a message to Taipei and a show of geopolitical support for Russia during its time of friction with the United States, as reported by the South China Morning Post.

The announcement came after President Xi Jinping chaired a meeting of the Central Military Commission on the southern island of Hainan to inspect the biggest naval parade in the country’s history, a massive flexing of naval muscle, also aimed directly at the U.S.

The coming drills in the Taiwan Strait come as Trump threatens a strike against Syrian forces, and analysts see China supporting its strategic partner, Russia, at a sensitive moment.

The live-fire drill is expected to take place on April 18, making it the first naval exercise in the waters since September 2015, which occurred in the run-up to the last presidential election on the island, which was then won by Tsai Ing-wen, who still has yet to recognize the “1992 consensus,” which Beijing insists is the foundation for cross-strait dialogue.

Thursday’s naval parade involved China’s first aircraft carrier, the Liaoning, about 50 other warships and some 10,000 troops and nearly 80 aircraft.

Xi appeared on board the Liaoning for the first time, urging the troops to stay vigilant and be ready to defend China’s sovereignty and national interests.

Tuesday, the USS Theodore Roosevelt staged what it described as a routine training exercise on its way to the Philippines.

North Korea: Pyongyang directly confirmed its willingness to hold the unprecedented summit between President Trump and Kim Jong Un, and for the first time said it was prepared to discuss the denuclearization of the Korean Peninsula, according to U.S. officials, but at the same time, North Korea has not broken its public silence on the summit, which is still supposedly planned for May, but there have been stories this could be moved to June.  No venue has been selected

And before you go breaking out the ‘good stuff’ and celebrating North Korea’s talk of denuclearization, understand this would occur, if ever, only if the U.S. removed its troops from South Korea and withdrew its so-called nuclear umbrella of deterrence from South Korea and Japan. And no one knows what kind of timetable Kim Jong Un would even be calling for as well.  Plus you have verification arrangements that would have to be worked out. No doubt, Kim would be hiding some of his weapons....but I’m jumping way ahead of the actual discussions.

Apparently, the U.S. doesn’t want the summit to be held in South Korea, like in the demilitarized zone between the two Koreas, over fears it might invite Seoul to play too much of a mediator role.  Mongolia has been mentioned as a possible site.  [When you look at a map, and knowing Kim doesn’t want to fly, this is really the only possible option.  It sure isn’t going to be in China.  If I heard it was there, I’m fleeing to Canada without saying goodbye to loved ones.]

Russia, part II: The Russian Embassy in London said it would consider any secret resettlement of Sergei and Yulia Skripal, the former Russian double agent and his daughter who were poisoned last month, as an abduction of its citizens. 

The Embassy said on its website: “The world, while having no opportunity to interact with them, will have every reason to see this as an abduction of the two Russian nationals or at least as their isolation.”  You can stop laughing.

Ms. Skripal left the hospital after more than five weeks.  Last I saw, the father is recovering nicely.  Getting them to a secret and secure location will be one of the great tasks for British intelligence services in recent times.

Separately, the Russian financial markets were hit hard, with the ruble touching its weakest level since late 2016 at one point, owing to more U.S. sanctions, particularly against 17 senior government officials plus seven oligarchs and 12 companies they own or control, sparking an investor exodus.

But the surge in the oil price has minimized the fallout in terms of the Russian government and treasury.  Remember, the Kremlin’s budget is based on $40 oil and we sit today at $67-$72, depending on whether you are talking West Texas or Brent.

That said, the shares in companies of a holding group that manages the assets of tycoon Oleg Deripaska, plummeted as much as 50 percent after the levying of new sanctions on him and his companies.

Prime Minister Dmitry Medvedev instructed his cabinet to devise measures to support the companies in addition to drafting retaliatory measures against the United States.

Algeria: There was a huge national tragedy here this week with the crash of a military transport plane in a field outside Algiers, the capital.  At last word, 257 were killed, most of them military, the defense ministry said. There were a few survivors.  Some of the soldiers were involved in a border dispute with neighboring Western Sahara, in a territory also claimed by Morocco.

The plane was a Russian Ilyushin transport aircraft.

Latin America: Owing to the Syrian crisis, President Trump abruptly canceled his appearance at the Summit of the Americas this week, sending Vice President Pence instead. The timing is particularly bad.

Editorial / Washington Post

“Held eight times since 1994, the gathering is the most important in the Western hemisphere, and in the past it has given U.S. presidents a chance to exercise leadership. The White House had hoped to rally support for firmer action on the political and economic implosion of Venezuela. Now that effort will probably be stillborn – and Mr. Trump’s already poor image in Latin America will be further tarnished.

“Venezuela is not the only country where greater U.S. attention is needed. Peru, the host of the summit, just lost its relatively capable president, Pedro Pablo Kuczynski, who resigned while facing impeachment, nominally because of his connection to a continent-wide corruption scandal involving a Brazilian construction company.

“Brazil’s own political system, meanwhile, suffered another shock last week when a judge ordered former president Luiz Inacio Lula da Silva to begin serving a prison sentence even though he leads by a wide margin in polls for the next presidential election in October....

“(His) detention places Brazil’s liberal institutions in conflict with each other. Supporters say the courts have gutted the election of legitimacy by imprisoning the leading candidate, a leftist who served two terms between 2003 and 2011.  But many other Brazilians are cheering what they see as a victory for the rule of law and for a painful but needed campaign by judges against rampant political corruption....

“Brazilians, like people across Latin America, have been offended by Mr. Trump’s jibes at immigrants and his threats to break free-trade treaties. Polling by Gallup put his approval rating in the region at 16 percent. An appearance at the summit and some effort to support the causes of fighting corruption and preserving democracy could have helped. Instead, Mr. Trump has dealt another blow to U.S. standing in the hemisphere.”

Random Musings

--Presidential tracking polls...

Gallup: 41% approval for President Trump (highest in this one since May), 54% disapproval [April 8]
Rasmussen: 50% approval, 49% disapproval

--As long rumored, House Speaker Paul Ryan (R-Wis.) announced Wednesday he will retire at the end of his term, which is a highly unusual move for a sitting Speaker that further complicates Republicans’ hopes of holding the House.  The announcement also sets up a divisive House GOP leadership battle between Kevin McCarthy and Steve Scalise.

Ryan said he would stay in office until January and that the possibility of the Democrats taking over the House did not enter into his decision.  More importantly, the Speaker said, “My dad died when I was 16 – the age my daughter is. My kids aren’t getting any younger and if I stay, they’re only going to know me as a weekend dad.”

In this, Paul Ryan has been totally sincere over the years and his father’s early death is the reason why he is such a physical fitness freak.

One thing that will suffer as a result of Ryan’s announcement is fundraising. GOP donors will be wary, with Ryan’s move just the latest among Republican lawmakers. Since January 2017, 46 House Republicans have announced they were retiring or resigned outright, some to run for higher office, but scandal and quitting among iffy prospects at home has also factored in the decision-making. Ten committee chairmen are bowing out.

Just an hour after Ryan’s announcement, Rep. Dennis Ross (Fla.) said he was retiring at the end of the year, even though his seat was deemed safe.

But Ryan has become increasingly unpopular in his 2 ½ years as Speaker and he faced his most difficult reelection ever against an ironworker who has raised gobs of money from liberal donors.

And now there are growing calls within the Republican caucus for Ryan to step aside and allow a quicker transition to a new leader, though Ryan is insisting he would serve until the end of his term.

The Speaker has also always had a testy relationship with President Trump, and Trump may try to force Ryan to step aside, especially as he seems to get along well with both McCarthy and Scalise.

*Late Friday, Ryan endorsed McCarthy to be his successor, per a coming interview for NBC’s “Meet the Press,” but there is no timetable (soon or January?) and the Freedom Caucus’ Jim Jordan said today he’d like to run to head the party.  [I am not a fan of Rep. Jordan, who needs to put his freakin’ suit jacket on.  Some of us are tired of his macho man look.]

Michael Steel, a former top adviser to House Speaker John Boehner, told the Washington Post: “Speaker Ryan is an embodiment of a particular kind of optimistic, pro-growth, pro-free market inclusive conservatism. And that is a very different feel and tone of where the party is going under President Trump.”

Donors will now shift their focus to the Senate and retaining that. The House is gone.  Democrats need a net gain of 23 House seats to win the majority. Former GOP Speaker Newt Gingrich said last week: “If the elections were held next week, we’d be in deep trouble.”

Editorial / Wall Street Journal

“Paul Ryan’s decision not to run for re-election for Congress is a blow to Republicans, and his departure at age 48 will leave a particular void in the GOP’s growth and reform wing. But the lesson of his 20 years in Congress is that the Members who matter are those who change the public debate about policies of consequence.

“Mr. Ryan deserves credit for taking the job of Speaker that no one else wanted after John Boehner resigned in 2015. He knew the legislative grinder was likely to end his chances of becoming President, but he did it anyway.  His policy chops and listening skills helped rally the fractious GOP House into a governing majority rather than merely an opposition to Barack Obama. They developed the ‘Better Way’ reform platform in 2016, and in this Congress they’ve passed most of it through the House and much into law.

“The irony is that Mr. Ryan has become a target of the populist and Trumpian right though few in Congress have fought harder or longer for conservative reform.  He rose from the backbenches by promoting his ‘roadmap’ for tax and entitlement reform when the Tom DeLay Republicans preferred the status quo. First at the Budget Committee, then at Ways and Means, Mr. Ryan built a GOP  reform consensus that became the party’s agenda.

“His principal triumph is tax reform, a generational achievement that broke a bottleneck to U.S. business competitiveness and faster economic growth. Donald Trump’s presidential support was important, but tax reform would not have happened without Mr. Ryan’s years of detailed policy work and evangelism. The reason the New York Times and Washington Post loathe him is precisely because he takes ideas seriously and can persuade his colleagues. That makes him far more of a threat to the left than is any talk-radio host.

“Mr. Ryan failed on entitlement reform, though premium support for Medicare had a chance if Mitt Romney had won in 2012.  Mr. Trump has wanted to duck the entitlement problem, but Mr. Ryan still persuaded him to support ObamaCare repeal and Medicaid reform. Both passed the House only to fail in the Senate. But entitlement reform is inevitable given the fiscal realities, and Mr. Ryan’s ideas are still a roadmap for the future.

“The talk-show right won’t admit this because Mr. Ryan understands the occasional need to compromise and hasn’t embraced extreme anti-immigration positions. They have railed against Mr. Ryan as a totem of ‘the establishment,’ which was always more epithet than argument. Mr. Ryan knows that the point of politics is to win power to pass your agenda, not remain in feckless opposition to the supposedly unreformable entitlement state.

“On this score, Mr. Ryan also deserves credit for managing the Trump volcano. He criticized the candidate and later President Trump when appropriate for his often ugly and polarizing politics. But he has never fallen for the trap of reflexive, self-serving dismissals that win media cheers but accomplish nothing.

“Sixty-three million people voted for Mr. Trump, and Mr. Ryan believes that Republicans in Congress have an obligation to use the opportunity of their majorities to help the country. The victories on tax reform, deregulation, judicial nominations and military spending are a vindication of that strategy.”

Karl Rove / Wall Street Journal

“Paul Ryan’s announcement Wednesday that he will not seek re-election is bad news for Republicans, Congress and America’s political culture. Mr. Ryan says he’s confident Republicans will keep their House majority in the midterms, but his decision reflects a recognition that one of two outcomes is likely – neither of which is promising for GOP leadership.

“One is that Democrats take the House. After being his party’s vice presidential nominee and third in line to the presidency, a demotion to minority leader is unappealing, especially if the Democrats are more interested in resistance than constructive action.

“The other possibility is that Republicans end up with a diminished majority that makes governing more difficult. Even with the current 23-seat majority, the 25 or so Freedom Caucus members have the power to thwart the conference’s ambitions. If Republicans retain a razor-thin margin, Mr. Ryan would probably prefer someone else deal with the caucus’s threats to nix legislation that doesn’t meet its hard-line demands by voting with the Democrats.

“Mr. Ryan has worked tirelessly to put Republicans on the strongest possible footing for the midterms. Since becoming speaker he’s transferred $80 million from his campaign to the National Republican Congressional Committee and helped the Congressional Leadership Fund super PAC accumulate $25 million cash on hand. It’s now up to his potential successors – Majority Leader Kevin McCarthy, Majority Whip Steve Scalise and anyone else who aspires to leadership – to step up.

“Mr. Ryan leaves his party with not only money to spend but an example to follow. His tireless, years long advocacy for fundamental tax reform led to the passage of legislation that will create jobs and fatten paychecks, while incidentally helping vulnerable Republicans at the polls.  His work as Budget Committee chairman persuaded Republicans to embrace entitlement reform in their budget resolutions, charting a path to save the great safety nets of Social Security and Medicare from bankruptcy.  And he has been an eloquent evangelist for free-trade policies that level the global playing field and provide more opportunities for Americans to sell goods and services around the world, even as the politics of trade soured in both parties.

“Mr. Ryan will leave Congress with the respect of virtually every member of his caucus, to say nothing of Democrats who can’t help but like him despite their policy differences. No one else could have matched his performance at keeping House Republicans moving in a constructive direction over the last three years. That he did so while also deftly managing relations with this White House – not known for its maturity or predictability – is all the more impressive.”

The flipside of the above is encapsulated in the thoughts of Richard Cohen of the Washington Post.

“A thoroughly decent man, a conservative Republican in the once-traditional sense, he was as appalled by Trump as any American should be.  But just as certain evangelical Christian leaders subordinated their morality to their zeal to outlaw abortion, Ryan chose to remain speaker and get a tax bill rather than confront Trump. I understand. He got his tax bill, and so he moves off the stage as nothing more than an accountant.  He ducked the fight that really mattered.

“The excuse that Republicans offer to explain their silence about Trump is that their base supports him.  Opposition would mean a primary challenge, likely defeat and no improvement...

“But that is not the case with Ryan. He’s out.  He will face no opposition.  Why didn’t he unload on Trump while announcing his retirement from the House?  Why didn’t he say that Trump’s scapegoating of immigrants is abhorrent? Why didn’t he denounce Trump’s dishonest attacks on the press? Why didn’t he say something about Trump’s use of his personal lawyer to extract nondisclosure agreements from several women? Why didn’t he ask about the strange affinity Trump has for Vladimir Putin? Why?  Why?  Why?

“Ryan fades having already faded. His silence on the most important issue facing America is a gross dereliction of duty, but it secures his place in history: He has none.”

Personally, I like Paul Ryan a lot.

--Florida Gov. Rick Scott announced he would run for the Senate seat held by Democrat Bill Nelson, in what is likely to be one of the most competitive, and costly, in the nation.  Scott couldn’t seek re-election as governor because of term limits.

The GOP holds a 51-49 majority in the Senate, but as opposed to the dire situation in the House, Republicans could pick up a seat or two, including this one.

--Finally, on a lighter note, we had the case of the contestant on “Wheel of Fortune” who lost out on an easy $7,100 Monday after botching his pronunciation of the word “Flamenco.”

“Jonny” was facing a complete answer on the board reading: “Flamenco Dance Lessons.”

But rather than saying “flamenco,” the man said “flamingo.”  Host Pat Sajak buzzed him for a wrong answer, and Jonny was in a state of disbelief.

Jonny’s opponent, Ashley, then picked up the pieces and the $7,100.

---

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

God bless America.

---

Gold $1348
Oil $67.39...up $5.44 on the week

Returns for the week 4/9-4/13

Dow Jones  +1.8%  [24360]
S&P 500  +2.0%  [2656]
S&P MidCap +1.6%
Russell 2000  +2.4%
Nasdaq  +2.8%  [7106]

Returns for the period 1/1/18-4/13/18

Dow Jones  -1.5%
S&P 500  -0.7%
S&P MidCap  -0.9%
Russell 2000  +0.9%
Nasdaq  +2.9%

Bulls 42.2
Bears 18.6  [The prior week’s splits were 47.6 / 18.1]

Have a great week.  My Mets are 11-1!

Eleven-and-one!!!

Brian Trumbore