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10/01/2016

For the week 9/26-9/30

[Posted 11:30 PM ET, Friday]

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*If you are used to printing these out...this one is over 40 pages...just sayin’.

Edition 912

Washington and Wall Street

Let’s start off with a depressing topic, shall we?  No, not the choice us voters will have come Nov. 8, but rather the increasing odds some of us will experience a nuclear conflict in our lifetime.

Mark Helprin wrote an extensive piece in the Wall Street Journal last weekend on the looming potential for such an event.  Needless to say, if you know of Mr. Helprin’s past work it is sobering.  Just a few excerpts:

“Even should nuclear brinkmanship not result in Armageddon, it can lead to abject defeat and a complete reordering of the international system. The extraordinarily complicated and consequential management of American nuclear policy rests upon the shoulders of those we elevate to the highest office.  Unfortunately, President Obama’s transparent hostility to America’s foundational principles and defensive powers is coupled with a dim and faddish understanding of nuclear realities.  His successor will be no less ill-equipped....

“The gravest danger we face is fast-approaching nuclear instability.  Many believe it is possible safely to arrive at nuclear zero.  It is not.  Enough warheads to bring any country to its knees can fit in a space volumetrically equivalent to a Manhattan studio apartment.  Try to find that in the vastness of Russia, China, or Iran.  Even ICBMs and their transporter-erector-launchers can easily be concealed in warehouses, tunnels and caves.  Nuclear weapons age out, but, thanks to supercomputing, reliable replacements can be manufactured with only minor physical testing.  Unaccounted fissile material sloshing around the world can, with admitted difficulty, be fashioned into weapons. And when rogue states such as North Korea and Iran build their bombs, our response has been either impotence or a ticket to ride....

“While it is true that to begin with its nuclear arsenal was de minimis, in the past 15 years China has increased its land-based ICBMs by more than 300%, its sea-based by more than 400%.  Depending upon the configuration of its missiles, China can rain up to several hundred warheads upon the U.S.

“As we shrink our nuclear forces and fail to introduce new types, China is doing the opposite, increasing them numerically and forging ahead of us in various technologies (quantum communications, super computers, maneuverable hypersonic re-entry vehicles), some of which we have forsworn, such as road-mobile missiles, which in survivability and range put to shame our Minuteman IIIs.

“Because China’s nuclear weapons infrastructure is in part housed in 3,000 miles of tunnels opaque to American intelligence, we cannot know the exact velocity and extent of its buildup...Lulled to believe that nuclear catastrophe died with the Cold War, America is blind to rising dragons.

“And then we have Russia, which ignores limitations the Obama administration strives to exceed.  According to its own careless or defiant admissions, Russia cheats in virtually every area of nuclear weapons....

“Russia deploys about 150 more nuclear warheads than the U.S.  Intensively modernizing, it finds ways to augment its totals via undisguised cheating.  Bound by no numerical or qualitative limits, China speeds its strategic development.  To cripple U.S. retaliatory capability, an enemy would have to destroy only four or five submarines at sea, two sub bases, half a dozen bomber bases, and 450 missile silos.

“Russia has 49 attack submarines, China 65, with which to track and kill American nuclear missile subs under way.  Were either to build or cheat to 5,000 warheads and two thirds reached their targets, four warheads could strike each aim point, with 2,000 left to hold hostage American cities and industry....

“Russia dreams publicly of its former hold on Eastern Europe and cannot but see opportunity in a disintegrating European Union and faltering NATO.  China annexes the South China Sea and looks to South Korea, Japan and Australasia as future subordinates.  Given the degradation of U.S. and allied conventional forces previously able to hold such ambitions in check, critical confrontations are bound to occur....we may see nuclear brinkmanship (or worse) in which the United States – startled from sleep and suddenly disabused of the myth of sufficiency – might have to capitulate, allowing totalitarian dictatorships to dominate the world.

“Current trajectories point in exactly this direction, but in regard to such things Donald Trump hasn’t the foggiest, and, frankly, Hillary Clinton, like the president, doesn’t give a damn.

“The way to avoid such a tragedy is to bring China into a nuclear control regime or answer its refusal with our own proportional increases and modernization.  And to make sure that both our nuclear and conventional forces are strong, up-to-date, and survivable enough to deter the militant ambitions of the two great powers rising with daring vengeance from what they regard as the shame of their oppression.”

The Debate

Sorry, Donald Trump fans, but if you thought your candidate was prepared for Monday night and did a good job, well you aren’t going to like the bulk of what follows so you may want to flip down to “Street Bytes.”

I thought the debate all around was abysmal, and embarrassing, but how Trump missed one opening after another was almost startling.

Nothing of note on immigration, ObamaCare, Benghazi, the Clinton Foundation, the Supreme Court, the “deplorables”...you name the hot button topic and he failed to raise it.  Heck, until near the end, moderator Lester Holt just rolled the ball out there and let the two play, as was appropriate.

So four days after what were we talking about?  Miss Piggy.  Trump’s Tweetstorm early Friday morning was unsettling.

This column has always been about compiling the definitive running history of our times and you know on big events, as in the case of the debate, I cover the issue as extensively as possible, knowing I have other subjects to review as well.  The following is lengthy, but there is something for everyone.

Clinton presented Trump as unprepared for the debate, let alone the presidency, while saying, “I prepared to be president and that’s a good thing.”

Trump later responded: “Hillary has experience, but it’s bad experience.”

Trump claimed he had a “better temperament” than Clinton and accused her of not having the “stamina” to be president.

“Well, as soon as he travels to 112 countries and negotiates a peace deal, a ceasefire, a release of dissidents, an opening on new opportunities in nations around the world or even spends 11 hours testifying in front of a congressional committee, he can talk to me about stamina,” responded Clinton.  [I would have gone ballistic on her with that answer...but Trump didn’t...he didn’t seize another opening.]

Clinton said Trump had started his political career with a “racist lie” after he falsely suggested President Obama was born outside the United States.  “He has a long record of engaging in racist behavior,” she said.

Clinton then criticized Trump’s comments about women, adding: “This is a man who has called women pigs, slobs and dogs.”

Trump was asked about his refusal to release his tax returns, so Trump said he would indeed publish them, against his lawyers’ advice, if Clinton released 33,000 deleted emails from her private server.

Clinton said of Trump’s refusal to release the returns, “I think there may be a couple of reasons. First, maybe he’s not as rich as he says he is.  Second, maybe he’s not as charitable as he claims to be.  Or maybe he doesn’t want the American people...to know that he’s paid nothing in federal taxes.”

When Clinton said the only returns he had released showed that he paid no federal tax, Trump responded: “That makes me smart.”

Trump lashed out at trade with China and Mexico, saying the U.S. was being put at a disadvantage.  China, he said, is “using our country as a piggy bank.”

Clinton responded Trump’s economic plan is the “most extreme version” of standard Republican rhetoric.  “I call it trumped up trickle-down.”

Trump went after Clinton for her past support of NAFTA and the Trans-Pacific Partnership.  “You called it the gold standard of trade deals,” he said, in citing Clinton’s initial analysis of the TPP accord.

“Donald, I know you live in your own reality,” Clinton responded.

At one point, Clinton said, “I have a feeling that by the end of the evening I’m going to be blamed for everything.”

“Why not?” Trump shot back.  [His best line.]

Clinton said her use of a private email server was a “mistake,” not elaborating in the least.  Trump didn’t attack. 

Trump stumbled on the Iraq War and the now infamous Howard Stern interview in September 2002 when he said he supported going in.

Clinton had one of her better moments when she said Trump could be too easily provoked into a war involving nuclear weapons.

“A man who can be provoked by a tweet should not have his fingers anywhere near the nuclear codes,” she said.

Trump countered that when it came to nuclear weapons, he “would not do first strike” but he “can’t take anything off the table,” which is nonsensical.

Two of my learned friends wrote me as the debate was taking place.  Bob C., Naval Academy grad and pilot: “Wow! The lying scumbag who is wrong on all of the issues vs. the incoherent crazy person.”

Dr. W., a preemie baby doc: “God help this country.  Two sorry candidates from two completely out of touch parties.  Nevertheless, Trump was completely outmatched.  We cannot elect this man as much as I despise Hillary.  I can’t believe he actually graduated from college.”

Norm Ornstein, an analyst at the American Enterprise Institute, said: “I have never seen a more lopsided debate.  He was angry, rambling, fidgety and often simply incoherent.  His bar was to look even modestly like a president, in carriage and temperament, plus a very, very low bar on fundamental knowledge.  He failed on them all.”

Larry Sabato, a professor at the University of Virginia, agreed that Clinton was the “clear winner” but said the outcome might not matter.  “He is the change candidate and will automatically get the votes of tens of millions who hate Hillary Clinton, but perhaps this will stop Clinton’s drift downward in the polls.”

Editorial / Wall Street Journal

“The two most unpopular presidential candidates in modern history had their first debate Monday, and the best we can say is that they lived up to those expectations.  Hillary Clinton offered a relentless assault on Donald Trump’s business record and qualifications to be President, but she offered little reason to believe she would lift the country out of its economic and psychological funk.  Mr. Trump made the case for change, but in a blunderbuss fashion that will have voters wondering if he knows enough for the job.

“There’s little doubt that Mrs. Clinton won on debating points. She can master a briefing book, and from the first answer she dumped most of it on Mr. Trump.  The central argument of her campaign is to elect her because the New Yorker is ‘unfit’ to be President, and her strategy was to taunt him with attacks on his business record that always seem to drive him to distraction.

“And sure enough, Mr. Trump often took the bait, wasting time on details about his company’s history while barely going on offense against the Clinton Foundation.  He also couldn’t resist a long, defensive explanation of his opposition to the Iraq war and why he hasn’t released his tax returns.

“These columns warned Mr. Trump – and GOP voters – during the primaries that by not releasing his returns he was giving Democrats an opening to assert what he might be ‘hiding.’  Mrs. Clinton took full advantage, offering a list of imagined horribles and even suggesting he might have paid ‘zero’ taxes.

“On policy Mrs. Clinton rolled out her list of seemingly endless programs that amount to the agenda of the last eight years, only more so. She has a government solution to every social and economic anxiety, and if you like the current economy she is your candidate.

“That unhappy status quo remains Mr. Trump’s opening, yet he missed more chances than he hit.  Offered a lay-up opportunity at the start on the economy, he sounded a Donny-one-note on trade – as if cutting imports is the magic cure for 1% growth.  He eventually got around to touting his tax cut, albeit with few specifics, but he barely mentioned the burden of regulation....

“For all of Mr. Trump’s substantive weaknesses, the challenger did score points by portraying Mrs. Clinton as an architect of America’s current malaise. His taunt that she has been around ‘for 30 years’ strikes home. The central question in the election is coming down to whether an American majority that wants a change in direction is willing to take the risk on Mr. Trump to deliver it.  It’s still a question after Monday night.”

Editorial / Washington Post

“Monday night’s debate told the story of this year’s presidential race.  The Republican primary process failed, producing a nominee who cynically or ignorantly sells a warped view of reality, disqualifying himself with practically every overheated sentence.  The Democrats, meanwhile, nominated a flawed but knowledgeable, confident and even-tempered politician.

“Donald Trump seemed incapable of moving beyond his slogans which, as ever, were based on his bleak view of the United States.  Foreigners are ‘using our country as a piggy bank to rebuild China,’ he said.  ‘We have to stop our jobs from being stolen from us.’  He made little effort to respond to moderator Lester Holt’s point that the economy is growing and wages are, in fact, improving.  Nor did  he really answer Hilary Clinton’s point that the country has had to climb out of a deep economic ditch caused by a variety of forces unrelated to free-trade agreements....

“The contrast on transparency and character was also extreme.  Mr. Trump once again offered bogus excuses for refusing to release his tax returns.  Ms. Clinton, meanwhile, admitted she was wrong to use a private email server and offered no excuses.  Mr. Trump attempted to pin his racist ‘birther’ campaign on Ms. Clinton, even though, as Mr. Holt pointed out, Mr. Trump carried it on well after President Obama produced his birth certificate.  Mr. Trump claimed the better temperament even as he petulantly hectored and interrupted Ms. Clinton through most of the debate.

“None of this should have been a surprise to anyone who has paid attention to this presidential race.  When the debate turned to foreign policy, Mr. Trump spewed ignorance, claiming the rise of the Islamic State could have been prevented if ‘we had taken the oil’ and that Iran should have been obliged by the deal on its nuclear program to somehow rein in North Korea.

“ ‘I haven’t given lots of thought to NATO,’ Mr. Trump said, quoting himself from an earlier interview.  By the end of the evening he had made clear you could end that sentence with just about any matter of policy and be as accurate.”

Daniel Henninger / Wall Street Journal

“Before we open the envelope in the category of Best Candidate in an Abominable Election, let us understand what the two performers had to do Monday evening.

“Hillary Clinton’s primary goal in the debate was to get Donald Trump to restate what he’s said before about Muslims or Hispanics and his presumably misogynistic attitudes toward women.  The stuff that upsets people.  Her do-or-die goal was to cut down Mr. Trump among doubtful white upper-middle-class voters.  These are the battleground-state Americans who live in suburban Philadelphia, Cincinnati, and Columbus and in North Carolina, Colorado, Virginia and Wisconsin.  With the rest of the white vote locked up, these upper-middle-class Republicans and independents will make or break the Trump candidacy.

“Hillary needed either to convince them that Donald Trump is unfit or induce Mr. Trump to do it for her by ‘scaring’ these crucially important voters.

“Donald Trump needed to give these same people a ‘get out of Trump jail’ card – a reason to look past his flaws and just vote for him rather than the other three options available – her, a Libertarian, or stay home – all votes they really don’t want to cast.

“And the winner of the first abominable debate is?

“Trump. In what was – shifting metaphors – a photo finish.  It shouldn’t have been close.  If we know anything, it’s that this is a change election.  I couldn’t hear a single element of change in Hillary’s outpourings.  ‘Investments’ means familiar spending.  ISIS?  Drop more bombs.

“Did Mount Trump erupt?  Not quite.  She didn’t get under his skin, but she got on it – and he always has to scratch.  That said, it could be that his seething contentiousness matches the electorate’s disgust with the status quo.  This isn’t an election about details.  It’s broad brush.  Mr. Trump is  better at broad brush – if only he didn’t splatter so much on himself.”

Ed Rogers / Washington Post

“Donald J. Trump recently said that he needed to lose 20 pounds. Well, maybe if he would quit taking the bait every time it was offered, his dieting would be more effective.

“Throughout tonight’s debate, Hillary Clinton seemed overly rehearsed, as if she were reading straight from a script – but she stayed on topic and managed to come across as competent and deliberate and, surprisingly, didn’t face many direct challenges.  Hillary also seemed calm, cool and collected throughout.  Trump seemed restless, unfocused, uncomfortable and maybe a little nervous.  He careened from defensive tirades about his business dealings to non sequiturs that even included a reference to a ‘400-pound’ hacker.  Predictably, it appeared that Clinton had been preparing for this debate since high school and Trump hardly prepared at all.  Perhaps in the next debate, she’ll offer more than buzzwords and tired proposals, and he will understand the value in being able to recite some facts....

“The bottom line: I call this debate marginally for Hillary.  If you liked her before, you like her more now.  And if you had doubts about Trump, he did nothing to ease your concerns....He didn’t see the openings and he didn’t swing at the softballs that came his way.  He never used the word ‘change,’ he didn’t bore in on Hillary’s email scandal and he never got around to the Clinton Foundation and Hillary’s suspect integrity.  Trump was inarticulate and rarely hit the bull’s eye.  There were a lot of lost opportunities for Trump, but I don’t think Hillary changed many minds.

“If just about any of the 16 other Republicans who competed in the GOP primaries had been on that debate stage tonight, they would have wiped the floor with Hillary Clinton.  Trump’s ascendancy to the Republican nomination is still a mystery to me, but they have two more debates.  A lot could still happen.”

William McGurn / Wall Street Journal

“Mrs. Clinton looked cool and collected; she smiled; and though she often launched into full-wonk mode, mostly she avoided the hectoring tone we’ve all become accustomed to. For his part Mr. Trump was at times pushy and too defensive; he spoke well about how ill-served African-Americans have been by Democratic policies; and though his attacks on trade were almost completely mistaken they may nonetheless resonate with workers apprehensive about their future.

“But all this may miss each candidate’s real appeal.  Mrs. Clinton had her numbers and her programs and her zingers lined up.  Along the way, she invoked the great progressive god of fact-checking, a way of appealing to people who have no faith in the ability of ordinary Americans to think for themselves.

“Perhaps she did thump him.  But democracies can be unruly things, and Mr. Trump isn’t running on policy detail or finesse. He’s running on ‘Making America Great Again’ – and against Washington and political correctness.

“So whatever the pundits may say about this first encounter, we won’t know what it really means until a few days from now when the post-debate polls give us the verdict of the only people who matter here: the American voters.”

Jonathan Capehart / Washington Post

“What on earth was that?  For 90 minutes, we watched one candidate for president display the seriousness the office demands while the other did what was once unthinkable: show up unprepared for a globally televised job interview. The first presidential debate between reality-television star and wealthy builder Donald Trump and former Secretary of State Hillary Clinton was mind-blowing.  Trump brought the vaudeville shtick that worked for him in the primaries to the main stage and bombed.

“Trump’s performance was the rhetorical equivalent of hurling garbage on the lawn...

“If there was one undeniable truth spoken by Clinton at the debate, it came in response to Trump’s dig at her for ‘stay[ing] home’ last week.  ‘I think Donald just criticized me for preparing for this debate.  And, yes, I did,’ Clinton said.  ‘And you know what else I prepared for?  I prepared to be president.’  Kaboom.”

Kyle Smith / New York Post

“The ref not only made himself part of the game on Monday night, he ran up to the scrimmage line, then sacked the quarterback three times.

“In the early going, it looked like it was going to be an ideal, Jim Lehrer-style performance from Lester Holt... Lehrer was so boringly nonpartisan, so unwilling to play gotcha that he was always hotly in demand to moderate debates.  For the first half or so, Holt gave simple, broad, open-ended questions and let the candidates go at it.  He didn’t venture into live fact-checking, didn’t much quarrel with the nominees, didn’t ask persnickety questions.

“For the most part, Holt asked the kinds of basic questions that gave Hillary Clinton and Trump plenty of opportunities to repeat favored talking points: what would you do to pump some life into the job market?  How would you heal the race divide?  Are police biased against minorities?  What’s your policy on homegrown terrorist attacks?

“But in the last half of the show, Holt started going after Trump.  He got into an unfortunate bickering match with the Republican nominee over the latter’s (apparently offhand) support for the Iraq War in a 2002 Howard Stern interview.  It was perfectly reasonable to bring up the point, but the exchange became tiresome on both sides, with the two men talking past each other.  Holt would have been wiser to simply say, ‘In 2002, you told Howard Stern you supported the Iraq War.  Tonight you say you didn’t.  Can you explain?’  Arguing with Trump is Clinton’s job, not Holt’s.

“Trump’s birther argle-bargle is something the media have shown far too much interest in given its relative non-importance, but it was also fair of Holt to give Trump a chance to put the question to rest in front of a large audience.  Trump bungled the opportunity, but it was hardly an unfair topic to bring up given that questioning President Obama’s birthplace is how Trump became a national political figure in the first place, and given that Trump made a circus out of the matter just 10 days earlier....

“Holt’s questions were fair game, but it’s not the case that Clinton has nothing to be embarrassed about either... (Holt) cold have asked her whether she could be trusted about her health given that she apparently wasn’t going to tell the public she had pneumonia until she collapsed on 9/11 (and even then stonewalled for hours).”

Kimberley A. Strassel / Wall Street Journal

“Debates are about pressing an advantage, and Donald Trump’s biggest going into Monday night’s event was the issue of Hillary Clinton’s ethics.  Nearly two-thirds of the country views the former secretary of state as untrustworthy, the result of endless shenanigans from her email server, to her family foundation, to decades of other Clinton immorality.

“Yet in the entire exchange Monday, Mr. Trump barely mentioned the Clintons’ long history of scandal, and even then did so only as a retort.  Hillary had delivered a compelling critique of the billionaire’s failure to release his tax returns.  Mr. Trump’s response was to claim that he would make public his returns when Mrs. Clinton released the 33,000 emails that she deleted from her private server rather than turn over to the State Department.

“What about the pay-to-play allegations at the Clinton Foundation?  What about FBI Director James Comey’s declaration (in his press conference and in front of Congress) that Mrs. Clinton was ‘extremely careless’ with classified information, and that she lied about her server?  What about her and Bill Clinton’s extraordinary speech cash-outs, especially in light of her empty concern about income inequality? What about her mistruths about sniper fire in Bosnia or the Benghazi YouTube video?...

“(For) the most part, Mr. Trump allowed Mrs. Clinton to bait him into defending himself – on his financial leverage, his claims about where Barack Obama was born, his position on the Iraq war.  Perhaps Mr. Trump demurred deliberately, so as not to be seen attacking the nation’s first female presidential nominee.  It was a mistake.  Mrs. Clinton will pull no punches, and Mr. Trump squandered his best right hook.”

Kathleen Parker / Washington Post

“(Clinton) smiled through her contempt for Trump’s inane responses or nonresponses.  In the course of the evening, she seemed to get him to admit to not paying any federal taxes, which Trump appeared to confirm by saying, ‘That makes me smart.’  Moderator Lester Holt’s question about Trump’s birther crusade elicited not only a defense of his efforts but a declaration of pride that he, Trump, had forced President Obama to present his birth certificate.

“ ‘I think I did a good job,’ he said.

“This is false, as any serious news consumer knows. But these two examples illustrate two key components of Trump’s character – braggadocio and preening pride.  Translation: insecurity and weakness. He was proud of two things – paying no taxes and racist pandering – for which most people of conscience would feel shame.

“Sure, if you’re someone whose career is built on gaming the system, you might gloat about being the best gamer.  But is this who you want for president?”

John Podhoretz / New York Post

“Hillary Clinton was boring and exceptionally well-prepared. Donald Trump was exciting but embarrassingly undisciplined.  He began with his strongest argument – that the political class represented by her has failed us and it’s time to look to a successful dealmaker for leadership – and kept to it pretty well for the first 20 minutes.

“Then due to the vanity and laziness that led him to think he could wing the most important 95 minutes of his life, he lost the thread of his argument, he lost control of his temper and he lost the perspective necessary to correct these mistakes as he went.

“Methodically and carefully, Hillary Clinton took over.  Her purpose was to show she was rational and policy-driven, the kind of person who could be trusted to handle a careful and delicate job with prudence and sobriety – and that he was none of these things.

“And she succeeded.  By the end of the 95 minutes, Trump was reduced to a sputtering mess blathering about Rosie O’Donnell and about how he hasn’t yet said the mean things about Hillary that he is thinking.

“Most important, he set ticking time bombs for himself over the next six weeks.

“As she hammered him on his tax returns, he handed her an inestimable gift by basically saying he pays no federal taxes despite his billions – and moreover, that if he had done so, it would have been ‘squandered’ anyway.

“That’s not going to go away, nor is her suggestion that his refusal to release his returns is the result of his either not being as rich as he says or not being as charitable as he claims....

“His reply to Hillary’s recitation of the fact he’d begun his career settling a Justice Department lawsuit about racial discrimination in Trump housing was that there was ‘no finding of guilt,’ which is the sort of thing the villain said at the end of ‘L.A. Law’ and sounded no better in real life.

“Even when he could have taken her down, he was so incompetent he didn’t go for it.  A question about cybersecurity was the perfect opportunity to hammer Clinton on her outrageous mishandling of classified information.

“Instead, he went into a bizarre digression in which he alternately wondered whether his son Barron might grow up to become a hacker and defended Vladimir Putin from the accusation Russia had tapped into the Democratic National Committee’s emails (which the FBI says almost certainly happened).  That has to count as the biggest choke of his political life....

“His supporters should be furious with him, and so should the public in general.  By performing this incompetently, by refusing to prepare properly for this exchange, by learning enough to put meat on the bones of his populist case against Clinton, he displayed nothing but contempt for the people who have brought him this far – and for the American people who are going to make this momentous decision on Nov. 8.”

Michael Gerson / Washington Post

“Rhetorically, Trump drove a high-speed train filled with fireworks into a nuclear power plant.  He was self-absorbed, prickly, defensive, interrupting, baited by every charge yet unprepared to refute them.  During his share of a 90-minute debate, he was horribly out of his depth, incapable of stringing together a coherent three-sentence case. The postmodern quality of Trump’s appeal culminated in an unbalanced rant claiming, ‘I also have a much better temperament than she has’ – an assertion greeted by audience laughter.  And Trump concluded his performance by praising himself for his own grace and restraint, during an evening that showed him to be nasty, witless and deceptive. It should now be clear to Republicans: Vanity is his strategy.

“Trump’s defenders will charge his critics with elitism.  The great public, it is argued, gets Trump in a way that the commenting class does not.  But this claim is now fully exposed.  The expectation of rationality is not elitism.  Coherence is not elitism.  Knowledge is not elitism.  Honoring character is not elitism. And those who claim this are debasing themselves, their party and their country.”

Gerald F. Seib / Wall Street Journal

“It took but a few minutes into Monday night’s presidential debate for the two contenders to distill the essence of the case they are making for taking over the White House.  And they did so in no uncertain terms.

“Democrat Hillary Clinton portrayed herself as the woman with a plan, who has been around the block in Washington, who is ready to hit the rich and battle ‘trickle-down economics’ – and who, by the way, wasn’t going to be afraid to go after her opponent, who, she said, ‘has called women pigs, slobs and dogs.’

“Republican Donald Trump painted himself as the agent of change, whose opponent has spent years failing to fix the nation’s problems while he was building a business.  He proclaimed himself ready to rip up trade agreements that the ‘hack’ politicians love, and who would stand directly in the path of companies that want to move overseas.  His opponent, he said, has both a bad track record and bad judgment: ‘Hillary has experience, but it’s bad experience.’

“If presidential debates are supposed to illuminate differences and get candidates to engage directly and critically, this one did its job almost from the outset.  It was tense and engaging, and, in its closing minutes, turned nasty... Oddly, Mr. Trump missed some opportunities, failing to weigh in on his signature issue of cracking down on immigration and failing to take on Mrs. Clinton for calling some of his supporters ‘deplorable.’...

“But it was a struggle in which the two contenders did, in fact, play to their strengths – he to his ability to connect with voters on visceral terms, she on her ability to move smoothly from subject to subject with an air of authority.  They will not shrink from the fight in the two debates that remain.

“Did they win over the voters they need?  That’s much less clear.  Because they largely played true to form and expectations, it’s possible they didn’t change minds so much as confirm existing perceptions.

“If nothing else, though, the debate clarified the very real choice, and the contrast in style, substance and background that this election has produced.”

Thomas L. Friedman / New York Times

“My reaction to the Donald Trump-Hillary Clinton debate can be summarized with one word: ‘How?’

“How in the world do we put a man in the Oval Office who thinks NATO is a shopping mall where the tenants aren’t paying enough rent to the U.S. landlord?

“NATO is not a shopping mall; it is a strategic alliance that won the Cold War, keeps Europe a stable trading partner for U.S. companies and prevents every European country – particularly Germany – from getting their own nukes to counterbalance Russia, by sheltering them all under America’s nuclear umbrella.

“How do we put in the Oval Office a man who does not know enough ‘beef’ about key policies to finish a two-minute answer on any issue without the hamburger helper of bluster, insults and repetition?

“How do we put in the Oval Office a man who suggests that the recent spate of cyberattacks – which any senior U.S. intelligence official will tell you came without question from Russia – might not have come from Russia but could have been done by ‘somebody sitting on their bed that weighs 400 pounds’?

“How do we put in the Oval Office a man who boasts that he tries to pay zero federal taxes but then complains that our airports and roads are falling apart and there is not enough money for our veterans?....

“Trump promises change, but change that comes from someone who thinks people who pay taxes are suckers and who thinks he can show up before an audience of 100 million without preparation or real plans and talk about serious issues with no more sophistication than your crazy uncle – and expect to get away with it – is change the country can’t afford.

“Electing such a man would be insanity.”

Charles Krauthammer / Washington Post

“And now, less than six weeks from the election, what is the main event of  the day?  A fight between the Republican presidential nominee and a former Miss Universe, whom he had 20 years ago called Miss Piggy and other choice pejoratives.  Just a few weeks earlier, we were seized by a transient hysteria over a minor Hillary Clinton lung infection hyped to near-mortal status. The latest curiosity is Donald Trump’s 37 sniffles during the first presidential debate.  Dr. Howard Dean has suggested a possible cocaine addiction.

“In a man who doesn’t even drink coffee?  This campaign is sinking to somewhere between zany and totally insane.  Is there a bottom?

“Take the most striking – and overlooked – moment of Trump’s GOP convention speech. He actually promised that under him, ‘the crime and violence that today afflicts our nation will soon – and I mean very soon – come to an end.’

“Not ‘be reduced.’  End.

“Humanity has been at this since, oh, Hammurabi.*  But the audience didn’t laugh.  It applauded....

“In launching his African American outreach at a speech in Charlotte, Trump catalogued the horrors that he believes define black life in America today.  Then promised: ‘I will fix it.’

“How primitive have our politics become?  Fix what?  Family structure?  Social inheritance?  Self-destructive habits?  How?  He doesn’t say. He’ll win it.  Trust him, as he likes to say....

“His great weakness is his vanity. He is temperamentally incapable of allowing any attack on his person to go unavenged. He is particularly sensitive on the subject of his wealth.  So central to his self-image is his business acumen that in the debate he couldn’t resist the temptation to tout his cleverness on taxes.  To an audience of 86 million, he appeared to concede that he didn’t pay any.  ‘That makes me smart,’ he smugly interjected.

“Big mistake.  The next day, Clinton offered the obvious retort:  ‘If not paying taxes makes him smart, what does that make all the rest of us?’  Meanwhile, Trump has been going around telling Rust Belt workers, on whom his electoral college strategy hinges and who might still believe that billionaires do have some obligation to pay taxes, that ‘I am your voice.’

“When gaffes like this are committed, the candidate either doubles down (you might say that if you can legally pay nothing, why not, given how corrupt the tax code is) or simply denies he ever said anything of the sort.  Indeed, one of the more remarkable features of this campaign is how brazenly candidates deny having said things that have been captured on tape, such as Clinton denying she ever said the Trans-Pacific Partnership was the gold standard of trade deals.

“The only thing more amazing is how easily they get away with it.”

*I had to look this up; 1st Babylonian dynasty, 1792-1750 BC.

Holman W. Jenkins, Jr. / Wall Street Journal

“(Trump) is not a lifelong politician like Mrs. Clinton and it showed.  But he survived on stage. Notice, he also apparently made a strategic decision not to raise Bill Clinton’s infidelities and stuck to it.

“One of the least perceptive TV comments, I didn’t catch by whom, claimed Mr. Trump has proved himself incapable of taking advice or changing his approach.  Au contraire: He changes positions constantly, has constantly alternated between scripted and free-form in his style.

“He doesn’t know what he thinks about most issues (except trade) and yet has been content to bull ahead and sort it out later.

“Give him credit: His act does have other dimensions. The buildings he put his name on, some of which he built, are real. His numerous product lines are real. His TV show was a real hit.

“An Atlantic Monthly writer, in a now much-quoted felicity, once said that the ‘part of the 2016 story that will be hardest to explain after it’s all over’ is that ‘Trump did not deceive anyone.’  A formulation catching on lately advises taking Trump seriously, not literally.

“In the end this fall’s election, as Monday’s debate probably established, will resolve into very flawed outsider vs. very flawed insider – and will be decided by the American people in that vein.

“It won’t become – as the media and Democrats hoped going into Monday’s debate – ‘Hillary is the only option because Trump is unacceptable.’

“A final note: People who believe the truth is inherently valuable generally are not attracted to the political profession, or at least equipped to do well in it.  (Yes, there are exceptions.)  Yet a few of us were listening most closely to hear if Mrs. Clinton betrayed the slightest inkling that anything had gone wrong in Obama’s America.

“Lies are inevitable but the president’s worst lie (or hypocrisy as some prefer it) was his pretense that he cared about the unemployed, underemployed, and economically insecure in our struggling economy – when, in fact, his focus was on delivering the wish lists of Democratic interest groups seeking more regulation, more taxes, more subsidies, more government control over things in general.

“Somehow, some way, the next president will have to see a different path ahead or God help us.”

USA TODAY’s editorial board for the first time in its 34-year history, picked sides in a presidential election.

“Because every presidential race is different, we revisit our no-endorsement policy every four years.  We’ve never seen reason to alter our approach.  Until now.

“This year, the choice isn’t between two capable major party nominees who happen to have significant ideological differences.  This year, one of the candidates – Republican nominee Donald Trump – is, by unanimous consensus of the Editorial Board, unfit for the presidency.

“From the day he declared his candidacy 15 months ago through this week’s first presidential debate, Trump has demonstrated repeatedly that he lacks the temperament, knowledge, steadiness and honesty that America needs from its presidents.

“Whether through indifference or ignorance, Trump has betrayed fundamental commitments made by all presidents since the end of World War II.  These commitments include unwavering support for NATO allies, steadfast opposition to Russian aggression, and the absolute certainly that the United States will make good on its debts.  He has expressed troubling admiration for authoritarian leaders and scant regard for constitutional protections....

“With early voting already underway in several states and polls showing a close race, now is the time to spell out, in one place, the reasons Trump should not be president:

“He is erratic... A list prepared by NBC details 124 shifts by Trump on 20 major issues since shortly before he entered the race....

“He is ill-equipped to be commander in chief.  Trump’s foreign policy pronouncements typically range from uninformed to incoherent....

“He traffics in prejudice....

“His business career is checkered....

“He isn’t leveling with the American people.  Is Trump as rich as he says?  No one knows, in part because, alone among major party presidential candidates for the past four decades, he refuses to release his tax returns.  Nor do we know whether he has paid his fair share of taxes, or the extent of his foreign financial entanglements.

“He speaks recklessly....

“He has coarsened the national dialogue....Trump’s inability or unwillingness to ignore criticism raises the specter of a president who, like Richard Nixon, would create enemies’ lists and be consumed with getting even with his critics.

“He’s a serial liar.  Although polls show that Clinton is considered less honest and trustworthy than Trump, it’s not even a close contest.  Trump is in a league of his own when it comes to the quality and quantity of his misstatements.  When confronted with a falsehood, such as his assertion that he was always against the Iraq War, Trump’s reaction is to use the Big Lie technique of repeating it so often that people begin to believe it....

“Nor does this editorial represent unqualified support for Hillary Clinton, who has her own flaws (though hers are far less likely to threaten national security or lead to a constitutional crisis).  The Editorial Board does not have a consensus for a Clinton endorsement.

“Some of us look at her command of the issues, resilience and long record of public service...and believe she’d serve the nation ably as its president.

“Other board members have serious reservations about Clinton’s sense of entitlement, her lack of candor and her extreme carelessness in handling classified information.

“Where does that leave us?  Our bottom-line advice for voters is this: Stay true to your convictions.  That might mean a vote for Clinton, the most plausible alternative to keep Trump out of the White House.  Or it might mean a third-party candidate.  Or a write-in.  Or a focus on down-ballot candidates who will serve the nation honestly, try to heal its divisions, and work to solve its problems.

“Whatever you do, however, resist the siren song of a dangerous demagogue.  By all means vote, just not for Donald Trump.”

---

Turning to Wall Street, three quarters down, one to go, with the Dow Jones up 5% on the year and the S&P and Nasdaq up 6% thus far. 

On the economic front, the final revision for second-quarter GDP came in at 1.4%, annualized, so the last four quarters look like this.

Q2 2016...1.4 (ann.)
Q1 2016...0.8
Q4 2015...0.9
Q3 2015...2.0

[Stirring]

Consumption was up a solid 4.3% in Q2.

Looking ahead the Atlanta Fed’s GDPNow indicator for third-quarter GDP is down to 2.4%, from 3.8% on Aug. 5.

Separately, durable goods for August were unchanged, better than expected, while personal income for the month was 0.2%, in line, and consumption was unchanged, disappointing.  The core personal consumption expenditure index, which is the Fed’s preferred inflation barometer, ticked up to 1.7% from 1.6%, still short of the Fed’s 2% target.

The Chicago PMI for manufacturing was 54.2 (50 being the dividing line between growth and contraction), which beat expectations, while August new home sales were 609,000 on an annualized basis, the second-highest since 2008, after July’s reading, 659,000, was the best since Oct. 2007.

The S&P/Case-Shiller 20-city home price index for July was up 5% from a year earlier, vs. 5.1% in June.  Portland led the way, up 12.5%, with Seattle up 11.2%, but New York City advanced only 1.8%, with Washington, D.C. (metro area) up only 2.1%.

But now it’s earnings season and companies in the S&P 500 are expected to see a decline for a sixth consecutive quarter, according to FactSet; a 2.3% contraction from a year-earlier.

For Q3, the energy sector is once again forecast to take it on the chin, an eighth consecutive quarter of declines, and it does need to be noted that in four of the past five quarters, S&P 500 earnings would have been positive if the energy sector were stripped out, FactSet reports.

There is also possible good news in that revenue growth is forecast to return for the first time since the end of 2014, with nine of the 11 sectors projected to report year-over-year sales gains; consumer-discretionary leading the way.  [Corrie Driebusch / Wall Street Journal]

But the trailing P/E on the S&P is still a whopping 25 (as listed in Barron’s...some of you know that the reporting of P/Es in market stories is one of my major pet peeves...there often is no explanation of where they got the figure, and often when they do say whether it is ‘trailing’ or ‘forward,’ they are wrong).

The World Trade Organization said growth in global trade will fall below GDP growth for the first time in 15 years in 2016, with expected volume growth of 1.7% from an earlier estimate of 2.8%.  Global GDP is expected to expand 2.2%, so trade growth will fall below output for the first since 2001 and to its weakest pace since 2009.  The WTO also slashed next year’s estimate to between 1.8% and 3.1%, from an earlier forecast of 3.6%.

The outlook comes amid the backlash against ambitious trade deals being brokered by the U.S. and EU, while protectionism has become a dominant political issue here.

WTO director general Roberto Azevedo said the forecast was a “wake-up call”:

“It is particularly concerning in the context of growing anti-globalization sentiment.  We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system.”

Recently, IMF economist Maurice Obstfeld said: “Those who promote ‘getting tough’ with foreign trade partners through punitive tariffs should think carefully.  It may be emotionally gratifying; it may boost specific industries; the threat may even frighten trade partners into changing their policies; but, ultimately, if carried out, such policies cause wider economic damage at home,” he said.

Back in Washington, the House approved a bill to fund the federal government through December 9, averting a shutdown, as Congress rushed home for campaigning.  When it returns Nov. 14, it will then attempt to complete the rest of the budget negotiations for the 2017 fiscal year (which commences Oct. 1) in a lame duck session. 

The bill (continuing resolution), which did contain a full year of funding for the military and veterans programs, passed 342-85.  $1.1 billion for halting the spread of Zika was part of the package, along with flood relief for Louisiana, West Virginia and Maryland.  Also, a separate bill supplying Flint, Michigan with $170 million for its water issue was part of the process in gaining Democratic support to clear the CR.

Europe and Asia

Deutsche Bank, Germany’s largest, became a big story this week.  It hit the news earlier on the report the U.S. Justice Department had asked Deutsche (DB) to pay $14 billion* to settle allegations surrounding the financial crisis and the mis-selling of mortgage-backed bonds, but the story exploded anew on Thursday when some hedge-fund clients, concerned about their exposure to what was never considered a rock of stability, began to reduce it, pulling assets (namely derivatives holdings) and forcing DB executives to issue statements of reassurance.  For the hedge funds, it made sense simply from a risk-reward standpoint.  It was all about memories of Lehman Brothers, which collapsed when it couldn’t pay clients and counterparties as they ran out the door.

But Deutsche and Lehman aren’t the same.  DB has a highly diversified client base and liquid assets of nearly $250 billion (June 30), 12% of assets vs. Lehman’s 7.5% a month before its downfall. Plus Deutsche has access to the European Central Bank, whereas Lehman was refused extra credit by the U.S. Federal Reserve.

Yes, there are issues as to the quality of Deutsche’s assets, which was the issue with Lehman and the U.S. Fed, but, again, the ECB is a backstop. 

*The $14bn was a shocking figure compared to DB’s market value of about $17bn as of Thursday.  But the final penalty isn’t going to be anywhere near $14bn...or so some of us are guessing...and the rumors late Friday were that it could be $5.4bn instead, as reported by AFP.

Deutsche Bank has denied seeking assistance from the German government, plus German Chancellor Angela Merkel doesn’t want to have to rescue the bank ahead of the 2017 German elections. [Technically, the government can’t even do that under the constitution.]

Mohamed A. El-Erian / Bloomberg

“Shares of Deutsche Bank, Germany’s largest bank, have lost more than half their value in the last year, and have been subject to exceptional volatility. Its bonds have also had a rough ride.

“The decline is fueling lots of speculation about the adequacy of the bank’s capital cushion, its strategic positioning, the need to dispose of non-core units and its relations with the German government.  More generally, the bank’s struggles hold important lessons for investors in the European banking sector, as some institutions continue to struggle to overcome the legacy of the global financial crisis.

“Deutsche Bank is battling three simultaneous headwinds that also are roiling other financial institutions:

“—Ultra-low interest rates, including negative ones on a significant portion of European and Japanese government bonds, are undermining the ability of the bank to generate steady income from traditional intermediation activities.

“—A persistently sluggish economy is putting pressure on the creditworthiness of some of the banks’ borrowers.

“—Financial-market distortions, including interventions by central banks that were deemed improbable not so long ago, together with tighter regulation, have eroded the scope for revenue generation from capital market activities.

“These headwinds are not going to die down soon.  As a result, banks must have, and must be perceived to have, robust capital cushions to avoid the kind of rough treatment by markets that Deutsche Bank continues to experience.  This is particularly true of the European banking system, where, unlike its U.S. counterpart, comprehensive efforts to overcome past slippages were hampered at times by the urgent need to address a sovereign debt crisis that even threatened the integrity of the euro zone....

“Bank investors have also been reminded that legal issues remain, most recently by the $14 billion penalty claim against Deutsche Bank announced earlier this month by the U.S. Department of Justice. This disclosure, along with the cross-selling scandal at Wells Fargo, is a further setback for banks that are still struggling to regain the public’s trust and respect....

“Deutsche Bank may be an extreme case but its travails are indicative of a broader reality for the European banking sector as a whole.  Unlike their U.S. counterparts, some European institutions haven’t regained a sufficiently from post-crisis footing.  That means investors will need strong stomachs as they seek to differentiate among companies and opportunities in a sector that will inevitably remain vulnerable to bouts of unsettling market contagion, volatility shocks and reputational risk.”

Some economic news in the Eurozone...

A flash reading on Euro area inflation for September came in at 0.4%, annualized, up from 0.2% in August, according to Eurostat.  A year ago it was -0.1%.

Eurostat also released Euro area unemployment for August, 10.1%, unchanged from July and down from 10.7% a year ago; still the lowest rate since July 2011, but double that of the U.S.

Germany’s unemployment rate is 4.2% (the govt. measures it differently and pegs it at 6.1%, still a historic low), France 10.5% (up from 10.3% in July...not good for President Hollande), Italy 11.4%, Spain 19.5%, Greece 23.4% (June).

The youth jobless rates remain sky high in Italy, 38.8%, Spain 43.2%, and Greece 47.7% (June).

According to a group of economists in Germany (German Institute for Economic Research), growth this year is expected to be 1.9%, which would be the fastest pace since 2011.  GDP is expected to grow by 1.4% in 2017 and 1.6% in 2018.

Mario Draghi, in a closed-door hearing at the Bundestag, told German MPs on Thursday that the ECB’s extraordinary monetary policy measures had been good for the German economy.

“In Germany, exports are benefiting from the recovery in the euro area, unemployment is at its lowest level since reunification, people’s take-home pay is increasing noticeably, and venture capital is pouring into Berlin’s Silicon Valley.”  [Financial Times]

But there are still risks from Brexit.  Retail sales in the month of August, for example, were down 0.4% compared with July, but were still comfortably up 3.7% compared with August 2015.

Separately, Germany’s annual inflation rate hit 0.5% in September, a 16-month high and up from 0.3% in August.

As for the Euro bond market, the problems with Deutsche Bank had investors seeking safe haven assets, like German Bunds, with the yield on the 10-year down to -0.16% at one point, near the all-time low of -0.19%, before finishing the week at -0.12%.

Elsewhere, retail sales in Italy declined 0.3% in July compared to the previous month, and were 0.2% lower than the same month in 2015, not good. 

Italian Prime Minister Matteo Renzi said December 4 would be the date for the referendum on constitutional reform, as he has vowed he would resign in the event of defeat and right now, the polls give a slight edge to the ‘no’ camp.  Renzi had been seeking to push the date back to give himself more time to campaign and he’ll need it.

The reforms are the most sweeping since World War II.  They would sharply reduce the size of government and powers of the Senate in an attempt to make it easier to pass legislation.  But you can see if the reforms mean the loss of many legislators, and their staffs’, cushy jobs, you’d have major pushback.

In Spain, the leader of Catalonia (think Barcelona) has promised to hold an independence referendum in September 2017, saying the creation of a breakaway state from Spain was “irreversible.”

The Greek parliament approved a package of structural measures required to unlock another 2.8bn euro of bailout funding, including the establishment of an improved privatization program, a most sensitive issue for the Syriza-led government, which doesn’t want to complete the sale of certain state-owned companies, including water utilities, the electric utility PPC, the company that operates the Athens subway, and Elbo, a small arms manufacturer.  Workers of course fear they will lose their jobs and/or benefits.

On the issue of  Brexit, a survey by KPMG reveals that a majority of British chief executives are considering moving their headquarters or some of their operations outside the U.K., a full 3/4s of them.  Said the chairman of KPMG’s British operations, Simon Collins, “We hear it time and time again that business needs certainty.”

Like I’ve been saying, those who think the worst is already over when it comes to Brexit are nuts.  We haven’t even begun the process and the remaining members of the EU are in no mood to make it easy for Britain, at least a sizable number of them.  Politics will call the shots.

The KPMG survey tells you all you need to know.

---

Turning to Asia, China will be releasing a slew of data here at month and quarter end shortly, but for now, the private Caixin reading on manufacturing in September came in at 50.1 vs. 50.0 in August.

Meanwhile, the Bank of China raised a red flag on the country’s growing property bubble.

“A property bubble is the biggest risk for China’s economy,” Zhouo Jingtong, a senior economist at the bank said on Thursday.

Skyrocketing home prices would “exacerbate the wealth gap and economic woes,” he said.

“Property speculation becomes common practice and everyone is dreaming about windfall profits overnight...these are very dangerous.”

As I wrote last time, residential prices in major Chinese cities are rising at an annual pace of 30-40 percent this year.

Economist Ken Rogoff told the BBC a calamitous “hard landing” in China remains the greatest threat to the global economy.  “China is going through a big political revolution. And I think the economy is slowing down much more than the official figures show.”

In Japan, the unemployment rate for August inched up to 3.1% from 3.0% in July, which was the lowest level since 1995.

A preliminary reading on industrial production showed growth of 1.5% in August, month over month, but this is a volatile figure, with the annual pace up to 4.6%, which was better than expected and the fastest since March 2014.

But household spending fell 4.6% year on year in August, more than double what economists expected. Retail sales for the month also fell 2.1% yoy, the sixth straight month of declines.

The core consumer price index declined 0.5% in August from a year earlier.  Core consumer prices in Tokyo, available a month before the nationwide data, declined 0.5% in September year over year.

One more note from the region...South Korea’s manufacturing PMI for September was a lousy 47.6 vs. 48.6 in August.

Street Bytes

--Stocks advanced a third straight week, though the gains were miniscule, with the Dow Jones up 0.3% to 18308, the S&P 500 up 0.2% and Nasdaq up 0.1%.  Earnings should dominate the discussion (as well as the election) the next few weeks.

For the quarter, the S&P was up 3.3%, its best performance of the year.  The Dow rose 2.1% and Nasdaq soared 9.7%, its best quarter since 2013.

--U.S. Treasury Yields

6-mo. 0.43%  2-yr. 0.76%  10-yr. 1.59%  30-yr. 2.32%

--At an oil ministers meeting in Algiers this week, out of nowhere it was revealed OPEC reached an agreement to cut output by about 700,000 barrels a day, the first reduction in eight years, although the cuts will not be distributed evenly across the cartel, as, for example, Iran would be allowed to continue increasing production, though Riyadh wants Tehran to cap it at 3.6 million barrels per day, and Tehran wants it at 4.2 million.

But none of this is final until the formal OPEC meeting in November.  And even if they formalize a cut, execution is another matter.

Plus non-OPEC Russia is pumping out a post-Soviet record 11.1 million barrels and wants their production capped at this level.

So count me as highly skeptical...especially given our slow-growth, global environment.

One sidebar: OPEC hasn’t published individual targets for its members since October 2006, when the organization set a quota for Iran of 4.1mbd and one for Saudi Arabia of 9.1 million.  Riyadh is currently over 10 million, while Iran is being forced to accept a target below 4 million.

--Germany’s second-biggest lender, Commerzbank, announced it was planning to cut 9,600 jobs over the next four years and cease dividend payments for the first time.

--ING, the largest Netherlands lender, will be announcing thousands of job cuts on Monday, according to a Dutch newspaper.

--Wells Fargo CEO John Stumpf was on the hot seat again this week, this time in front of the House financial services committee.  [I was disgusted to see Democratic New York Congressman Gregory Meeks getting national news coverage for his rant against Stumpf; Meeks being one of the true corrupt dirtballs in the House today...a man who should be in jail.]

Stumpf earlier agreed to forfeit more than $40 million in pay as the bank tries to defuse the pressure arising from the scandal involving bogus accounts that has triggered lawsuits, investigations and a record $185 million penalty from regulators.  After an emergency board meeting, the board also said that Carrie Tolstedt, who stood down after a nine-year stint as the head of Wells’ retail division, would forfeit unvested equity awards worth $19 million.  Neither Tolstedt nor Stumpf will receive a bonus for 2016.

The state of California also weighed in, suspending all business ties with Wells for a year.  State Treasurer John Chiang said: “Wells Fargo’s fleecing of its customers by opening fraudulent accounts for the purpose of extracting millions in illegal fees demonstrates, at best, a reckless lack of institutional control and, at worst, a culture which actively promotes wanton greed.”

--Security experts are still weighing the damage of Yahoo’s massive breach.  Matt Blaze, a security researcher at the Univ. of Pennsylvania, said, “Data breaches on the scale of Yahoo are the security equivalent of ecological disasters.”

A big worry is a technique known as “credential stuffing,” where leaked username and password combinations are thrown at a series of websites in an effort to break in.  Software makes the trial-and-error process practically instantaneous.  Think finding a key at an apartment building and trying every door.  [AP]

--Och-Ziff Capital Management, a giant New York hedge fund, is paying a fine of $413 million as part of a deferred-prosecution agreement to settle charges it paid more than $100 million in bribes to government officials in Libya, Chad, Niger, Guinea and the Democratic Republic of Congo to secure national resources deals and other investments.  Founder Daniel Och, who is also CEO of Och-Ziff, agreed to pay $2.2 million to settle violations with the SEC.

The settlement is one of the biggest criminal penalties levied by the U.S. against a hedge fund firm, a huge blow for Och-Ziff as it tries to stem withdrawals from investors, including state pension funds, endowments and foundations.

These guys were dirtballs in their own right, dealing with the likes of Muammar Qaddafi and his family.

--Nike announced revenues in its recent quarter grew to $9.1 billion, up 8%, with “strong global demand” driving double-digit international growth and single digit in North America; higher than expectations.  Net income increased 6% to $1.2 billion.

But the shares fell as Nike’s forecast for worldwide orders for delivery through January 2017 called for a rise of 7%, the lowest in five quarters, as rivals Adidas and Under Armour chip away at Nike’s market share.  Future orders for the company’s biggest market, North America, are up only 1 percent, much lower than the 5% analysts were expecting.

--PepsiCo lifted its full-year earnings outlook for a second time this year after delivering fiscal third quarter results that topped expectations.  The world’s largest snack maker and second-largest beverage company said net revenue dipped 1.9%, but this was due to the strong dollar taking a bite out of the group’s overseas sales.  Net income, though, surged to $1.9 billion, handily beating the Street.

--Performance figures have been coming in for various endowments on a June 30 fiscal year, and Yale’s was up 3.4% to $25.4 billion, far better than the average among endowments reporting so far, which has been a loss of 2.7%.  Harvard reported a 2% decline to $35.7 billion.

Cornell University’s endowment posted an investment loss of 3.3%, the worst among Ivy schools reporting; the endowment now being worth $6.1 billion as of June 30.

Endowments are critical to university budgets, with Yale’s contributing $1.2 billion, or about 34% of the university’s fiscal 2017 budget.

--Global container volumes are on track for zero growth this year, the worst performance since 2009, which augurs further bankruptcies in the shipping industry.

“Freight rates...fell 20% in the benchmark Asia to Europe trade route this week compared with last week to $767 per customer,” as reported by Costas Paris of the Wall Street Journal.

“Rates have mostly stayed well below $1,000 since the start of the year and operators say anything below $1,400 is unsustainable.”

--The number of foreign tourists to Turkey in August fell 38%, the month after the failed coup.  Year over year declines in Turkish tourism have been in the double digits since February.

--Carnival Cruise Lines announced better than expected results for its third quarter, prompting it to raise its earnings guidance for the year.  Concerns over terrorist attacks in Europe and Zika have not impacted bookings for Mediterranean and Caribbean cruises as investors have feared.

Carnival is upbeat about booking and pricing trends for 2017.

But rival Norwegian Cruise Line lowered its 2017 targets after it saw a sharp drop off in demand from North American travelers for Mediterranean cruises.  Huh.

--The International Air Transport Association, the airline industry’s trade group, is forecasting record net profits of $39.4 billion for 2016, which isn’t too shabby.

By comparison, the airline industry reported $5 billion in combined profit in 2006, according to the IATA.

60% of the world’s airline profits are generated by U.S. carriers.  [Hugo Martin / Los Angeles Times]

--According to Broadway League, an industry group, tickets sales for the Broadway season to date are $6.5 million lower than they were at this time last year.  But, the 1.4% decline is off the biggest year in history.

“Hello, Dolly!” with Bette Midler doesn’t open until April 20, but it sold more than $9 million in tickets, Sept. 17 alone, a record for first-day sales.

--The first week’s ratings for the new television season indicate overall prime-time TV usage was off around 7% among the 18-to-34 age group compared with a year ago, based on Nielsen data, continuing a downward trend with the emergence of online video streaming and video on demand.

So they’re watching, just in different places.

CBS won premiere week, followed by NBC, ABC and Fox.

--If you are a follower of NBC News, have you noticed how reporter Jo Ling Kent is rocketing up the ranks?  Gee, do you think it’s partly because she is exotically beautiful?  I’m guessing when Savannah takes her break, we suddenly see a little Jo Ling in the studio.  I can also only imagine the discussion among the other reporters.  A lot of jealous campers.

--No CEO at one of the nation’s 100 largest companies had donated to Donald Trump as of August, compared with August 2012, when nearly a third had supported Mitt Romney, according to a Wall Street Journal analysis of campaign donations.

11 have backed Hillary Clinton, 89 staying on the sidelines.  66 sat out the 2012 election in terms of individual donations.

--Elon Musk unveiled his vision for sending humans to Mars and setting up colonies there in the next decade.  Each fully developed spacecraft likely would carry between 100 and 200 passengers, Musk said.

Well, I’d love to see this, but Musk can’t even make a production target for his cars so, whatever.

Musk is talking “hundreds of thousands of inhabitants on Mars” eventually.  NASA is taking more of a go slow approach and is targeting 2035 for the first manned mission.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: At a town hall meeting at a military base this week, CNN’s Jake Tapper asked President Obama, ‘Do you ever doubt a decision you made regarding Syria?’

Obama essentially replied, ‘There is not a scenario where we can stop a civil war.’

You know what my reply would have been had I been there.

Syrian government forces captured a rebel-held area on the edge of Aleppo last Saturday as the government’s new push, including massive airstrikes from Russian and Syrian warplanes, began, leaving nearly 2 million people in the city without running water, as cited by the U.N.  250,000 inside rebel-held areas face a humanitarian catastrophe as the remaining hospitals were destroyed.  The death toll from the escalation is in the hundreds and there is zero aid getting into the area, which already was nothing more than rubble, is reduced to dust.  These are war crimes being committed by both Russia and the Assad regime. 

The Kremlin on Thursday vowed to press on with its assault to recapture the rebel-held sector.

EU foreign affairs chief Federica Mogherini called the air strikes in Aleppo a “massacre.”

Russia and the Syrian government say they are targeting only militants.

U.S. Secretary of State John Kerry called for a halt to the flights.  But Kremlin spokesman Dmitry Peskov said, Russia would “continue the operation of its air force in support of the anti-terrorist activity of Syria’s armed forces.”  Peskov said Washington was to blame for the fighting, by failing to meet an obligation to separate “moderate” rebel fighters from terrorists.

The ferocity of the assault is now driving many of the Western-backed anti-Assad groups to cooperate more closely with jihadist fighters; as is the case in Aleppo.  Late Friday, a Russian newspaper was reporting that Moscow is sending more warplanes to the theater to ramp up the air campaign.

Editorial / The Economist

“Just when it appears that the war in Syria cannot get any worse, it does.  On September 19, Syrian and Russian planes struck a convoy about to deliver aid to besieged parts of Aleppo.  The attack wrecked the ceasefire brokered by America and Russia, and was followed by the worst bombardment that the ancient city has yet seen.  Reports speak of bunker-buster, incendiary and white phosphorous bombs raining down.

“Bashar al-Assad, Syria’s president, is destroying his country to cling to power.  And Vladimir Putin, the Russian president, is exporting the scorched-earth methods that he once used to terrify the Chechen capital, Grozny, into submission.  Such savagery will not halt jihadism, but stoke it.  And American inaction makes it all worse. The agony of Syria is the biggest moral stain on Barack Obama’s presidency. And the chaos rippling from Syria – where many now turn to al-Qaeda, not the West, for salvation – is his greatest geopolitical failure.

“Mr. Obama thinks that resolutely keeping out of the Syrian quagmire is cold, rational statesmanship. He may be ‘haunted’ by the atrocities, but is convinced there is nothing he can usefully do.  ‘Was there some move that is beyond what was being presented to me that maybe a Churchill could have seen, or an Eisenhower might have figured out?’ Mr. Obama mused in a recent interview with Vanity Fair.  Mr. Obama is right to think that the world’s problems cannot all be solved by American power, and that ill-considered intervention can make them worse, as when America invaded Iraq.  But Syria’s agony shows that the absence of America can be just as damaging.

“As America has pulled back, others have stepped in – geopolitics abhors a vacuum. Islamic State (IS) has taken over swathes of Syria and Iraq.  A new generation of jihadists has been inspired to fight in Syria or attack the West.  Turkey, rocked by Kurdish and jihadist violence (and a failed coup), has joined the fight in Syria.  Jordan and Lebanon, bursting with refugees, fear they will be sucked in.  The exodus of Syrians strengthens Europe’s xenophobic populists and endangers the European Union.  A belligerent Russia feels emboldened.

“By sending warplanes to Syria to prop up Mr. Assad, Mr. Putin has inflamed the struggle between Shia and Sunni Muslims.  Mr. Putin and Mr. Assad now seem determined to take control of ‘useful Syria’ – the line of cities from Damascus to Aleppo, and the territories to the west, forsaking the desert and the Euphrates valley – before a new American president takes office next year.  Hence the ferocity of the assault on east Aleppo, the last major rebel-held urban area.

“None of this is in America’s interest.  Being cool and calculating is not much use if everybody else thinks you are being weak.  Even if America cannot fix Syria, it could have helped limit the damage, alleviate suffering and reduce the appeal of jihadism. This newspaper has long advocated safe areas and no-fly zones to protect civilians.  The failure to strike Mr. Assad’s regime after he crossed the ‘red line’ on the use of chemical weapons damaged American credibility, as many around Mr. Obama admit. Now it is Russia that sets the rules of the game.  Western action that once carried little risk now brings the danger of a clash with Russia....

“As a Dutch-led inquiry into the destruction of flight MH17 over Ukraine in 2014 makes clear, the challenge of Russia is not only, and not mainly, in Syria. The West must keep talking to Mr. Putin, but resist his adventurism – starting with the maintenance of EU sanctions.  Mr. Putin is a bully, but not irrational. He will keep gambling for advantage for as long as he thinks the West is unwilling to act.  But he will, surely, retreat as soon as he feels it is serious about standing up to him.”

Editorial / Wall Street Journal

“Russian and Syrian governments continue to press their offensive in Aleppo... Samantha Power, the U.S. Ambassador to the United Nations, has denounced the assault as ‘barbarism’ and called out Russia at the Security Council for its chronic mendacity and refusal to take responsibility for its participation in the slaughter.

“Ms. Power knows something about barbarism and responsibility.  In 2001 she published a searing account in the Atlantic about the Clinton Administration’s failure to stop the 1994 genocide in Rwanda, in which as many as 800,000 Tutsis were killed over three months by their Hutu neighbors.

“Ms. Power spared no one in her depiction of the Administration’s ‘almost willful delusion’ about the killing, its diplomatic prevarications to avoid using the word ‘genocide,’ and its concern with how U.S. intervention would play in the midterm elections.  She was particularly tough on U.S. officials who ‘were firmly convinced that they were doing all they could – and, most important, all they should – in light of competing American interests and a highly circumscribed understanding of what was ‘possible’ for the United States to do.’....

“Fast forward to the present, and Ms. Power can sound like those officials she once scolded for thinking they were doing everything they could given the complexities of the situation.

“ ‘Well, Syria is a very complex picture,’ Ms. Power told CBS earlier this month.... ‘But the idea that we have not been doing quote anything in Syria seems absurd.  We’ve done everything short of waging war against the Assad regime and we are, I should note, having significant success against ISIL, on the ground.’

“Ms. Power’s list of achievements in Syria might seem grimly funny to the more than 10 million Syrians driven from their homes in the civil war and the families of its 400,000 dead, most killed by the Assad regime.  The starving residents of Aleppo and other besieged Syrian cities also know that until last week the Obama Administration was eager to team up with the Russians – going so far as to share critical battlefield intelligence – so they could jointly attack Islamic State targets, thereby further freeing the Assad regime to do its dirty work.  Another stab at U.S.-Russian cooperation hasn’t been ruled out.

“President Obama bears ultimate responsibility for doing so little to stop the five-year Guernica that is Syria, and we don’t know what Ms. Power’s private policy advice has been.  But in public she has become an echo of the officials she once denounced for justifying American inaction in the face of mass slaughter. The honorable decision would be to resign.”

Richard Cohen / Washington Post

“President Obama tells every interviewer that he’s anguished over Syria, but that is scant compensation to the victims, and it has not moved the Russians or the Syrian government to halt their bombing.  Secretary of State John F. Kerry, like some hapless suitor offering wilted flowers, has been appealing to Vladimir Putin’s wholly imaginary better angels.  Putin takes the flowers and then bombs some more.  Unlike Obama, he knows what he wants.  He wants to win.

“This is not Kerry’s failure. It is Obama’s. He takes overweening pride in being the anti-George W. Bush.  Obama is the president who did not get us into any nonessential wars of the Iraq variety.  The consequences for Syria have been dire – perhaps 500,000 dead, 7 million internal refugees, with millions more surging toward Europe like a tsunami of the desperate.

“European politics has been upended – Germany’s Angela Merkel is in trouble, Britain has bolted from the European Union, and Hungary and Poland are embracing their shameful pasts – but there is yet another casualty of this war, the once-universal perception that the United States would never abide the slaughter of innocents on this scale.  Yet, we have.  Obama has proclaimed doing nothing as doing something – lives saved, a quagmire avoided.  But doing nothing is not nothing.  It is a policy of its own, in this case allowing the creation of a true axis of evil: a gleeful, high-kicking chorus line of Russia, Iran and Bashar al-Assad’s Syria.  They stomp on everything in their path.

“Aleppo then is like Guernica, a place of carnage.  It’s also a symbol of American weakness.  The same Putin who mucks around in Syria has filched U.S. emails and barged into the U.S. election.  He had kept Crimea and a hunk of Ukraine and may decide tomorrow that the Baltics, once Soviet, need liberating from liberation. He long ago sized up Obama: all brain, no muscle.

“All over the world, U.S. power is dismissed. The Philippine president, a volcanic vulgarian, called the president a ‘son of a whore’ and, instead of doing an update of sending in the fleet, Obama canceled a meeting.  China constructs synthetic islands in the Pacific Ocean, claiming shipping lanes that no one should own, and every once in a while a U.S. warship cruises close – but not too close.  We pretend to have made a point.  The Chinese wave and continue building.  The North Koreans are developing a nuclear missile to reach Rodeo Drive, and God only knows what the Iranians are up to deep in their tunnels.

“Does all this stem from Uncle Sam’s bended knee in Syria?  Who knows?  But U.S. reluctance to act has almost certainly given others resolve.  There was never any need for the United States to put boots on the ground – that has been Obama’s straw man, a totally fatuous excuse for inaction.  A no-fly zone over Syria, just like the one George H.W. Bush imposed on Iraq to stop Saddam Hussein’s slaughter of the Kurds, would have saved countless lives.*  An Assad without an air force and his killer copters might now be Dr. Assad, the London eye doctor he once was.  The Russians would have likely stayed out of Syria, and the Iranians and their chums, Hizbullah, would still be minding their own business instead of propping up this revolting regime.

“The ‘Guernica’ mural once seen is not forgotten – the anguished faces, the twisted bodies, the hideous deformities of violent death.  Now we have the photo of the Syrian boy in an ambulance, iridescent red, powdered with the dust of gone buildings, staring vacantly at a world where, for him, there are no adults.  Once again, little is being done.  Once again, worse will follow.”

*For new readers, I spelled out in the summer of 2012...2012...how this was the solution, years before ISIS emerged.  Years before Russia was to get involved.  But for Obama, it was about the election.  Before he leaves office, he should be hauled before the Senate Foreign Relations Committee to explain his strategy in the country.  This will never happen, of course, but I won’t let anyone forget his culpability in the deaths of hundreds of thousands and the resultant disintegration of the political process in Europe for as long as I’m alive.

In Iraq, the United States is going to deploy around 600 more troops to train Iraqi forces for an offensive against the ISIS stronghold of Mosul.  The reinforcements were at the request of Iraqi Prime Minister Haider al-Abadi.

The U.S. currently has 4.565 troops in Iraq, providing extensive air support, training and advice.

On Tuesday, ISIS suicide bombers targeting shopping areas in Baghdad killed at least 17.

Editorial / Washington Post

“An assault by U.S.-backed Iraqi forces on Mosul, the largest stronghold of the Islamic State, is expected within weeks – far sooner than seemed likely a few months ago.  Unfortunately, the acceleration is not good news.  The government of Iraqi Prime Minister Haider al-Abadi is rushing the operation forward even though it lacks a strategy to secure and govern the multiethnic city of roughly 1 million people once the terrorists are driven out. It is recruiting sectarian militia forces that have a record of abusing civilians and seizing territory for themselves.  Plans for protecting refugees, who may number in the hundreds of thousands, are sketchy.

“In short, the Mosul offensive is setting the stage for a potentially catastrophic Day After problem.  Though the United States has painfully experienced what such poor preparation can lead to, in Baghdad in 2003 and Libya a decade later, it is pushing the Abadi government to move still faster.

“Military experts are more concerned about the aftermath than the fight itself.  Brig. Gen. William F. Mullen, who was deputy commander for U.S. operations in Iraq until June, predicted last week that Islamic State defenses in Mosul could collapse quickly.  ‘And then what?’ he asked at a forum at the Washington Institute for Near East Policy. The Iraqi government’s plan, he said, amounts to ‘chips will fall and we’ll sort it out when we get to that.’

“ ‘That’s not a good plan,’ Mr. Mullen said.  ‘This is going to be ugly.’”

Shiite militias will be going against Sunnis in Mosul.  Once Mosul falls, the various forces, including the Kurds that will be in on the fight, could turn against each other.  Turkey has threatened to defend ethnic Turks in the city.

Israel: Leaders from around the world were in Jerusalem on Friday to bid farewell to Shimon Peres, the former prime minister and president who spent seven decades in public life before he died of complications from a stroke at the age of 93.

President Obama, in attendance at the funeral service, said, “The last of the founding generation is now gone,” adding that the work was “in the hands of Israel’s next generation and its friends.”

Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas shook hands, after Netanyahu allowed Abbas’ to attend.  They have not formally met in six years, but this was a brief pause in their war of words.

In his eulogy, Netanyahu said: “Peace will not be achieved other than by permanently preserving our power.  But power is not an end in itself.  It is not the real power.  It’s a means to an end.  The goal is to ensure our national existence and coexistence.”

But there were no Arab heads of state in attendance, not even Egypt and Jordan, with whom Israel has peace treaties, though it seems both did send representatives.

Peres had a role in virtually every major moment in Israeli history since its independence in 1948.  A security hawk, he was instrumental in the development of Israel’s nuclear program and promoted the construction of the first settlements in the aftermath of the Arab-Israeli war of 1967.

But he is remembered mostly for being a man of peace and he was a key figure in the 1993 Oslo agreement. He shared the Nobel Peace Prize in 1994 with Prime Minister Yitzhak Rabin and Yasir Arafat.

The peace process laid out by Oslo accords, however, stalled out.

Russia: A Dutch-led investigation into Malaysia Airlines Flight 17, which was shot down over Ukraine in 2014, has concluded that the powerful surface-to-air missile system used to shoot the plane down was trucked in from Russia at the request of Russian-backed separatists and returned to Russia the same night.

The report confirmed what everyone has known...the Kremlin was involved, including in the cover-up.

The Netherlands conducted the investigation, which included prosecutors from Australia, Belgium, Malaysia and Ukraine, because it lost the most citizens of the 298 killed.

The report did not name individual culprits and stopped short of saying Russian soldiers were involved, but the investigators were clear afterwards that they would identify suspects, in preparation for bringing criminal indictments.

But even if they do, nothing will come of it.  It’s not like Russia is about to let its citizens be extradited (plus it’s illegal under their constitution).

China / South Korea / Japan: Tensions are rising between China and South Korea, and China and Japan, and it’s getting more than scary.  It’s also flying way under the radar.

Friday, Seoul announced the new site of a U.S.-built missile defense system (THAAD...Terminal High Altitude Area Defense system) that China is strongly opposed to.

An initial site was rejected by nearby residents, and the new one sits 680 meters above sea level – about 300m higher – and is farther away from residential areas.

The South Korean government is actually buying a golf course, owned by business conglomerate Lotte, for the purpose.

Seoul has insisted THAAD is purely to protect itself from North Korea’s missiles, but Beijing sees it as a danger to its national interests, allowing a U.S.-backed anti-missile system in its region.

Adding to the tension between the two, three Chinese fishermen were killed on Thursday after the South Korean coastguard threw flares and stun grenades as they boarded the boat for an inspection.  The Chinese crew locked the steering house and engine room, the officers threw the flares and sound bombs into the steering house after breaking the windows, and three were found dead inside the engine room when that was broken into.  [South China Morning Post]

As for the anti-missile system, China’s defense ministry said it will do what it has to do.

Then you have the Chinese air force’s unprecedented drills in the Western Pacific, which commenced last weekend, with military experts predicting more, even larger, exercises in the region in the future.

More than 40 aircraft were involved to counter U.S. interference in the South China Sea, and included simulated attacks on sea targets, with in-flight refueling.

The thing is, the aircraft, which included long-range bombers, flew over Japan’s Miyako Strait, though China says it was merely routine, as it was over the air defense identification zone (ADIZ) Beijing established in the East China Sea in 2013.

The drill was near Okinawa, so Japan scrambled fighter jets. 

Song Zhongping, a Beijing-based military expert, said the drill “aims to point to the U.S. naval base in Guam, which is the bridgehead for Washington to contain China in the region.” [SCMP]

Ah yes, Guam.  It’s going to be in the news more and more in the coming year or two. I’m on record as saying North Korea will target it.

But what Japan is concerned about, aside from the obvious defense implications of China’s increasingly aggressive posture in the region, is if the South China Sea, the cheapest, most direct way for Japan to receive its energy supplies from the Persian Gulf, is blockaded, it can crater Japan’s economy.  Nearly 60% of Japan’s oil and natural gas passes through the sea.  Corn and wheat from Australia and the Black Sea region as well.  Ergo, Japan is highly vulnerable as China turns the South China Sea into its own “lake,” as some say.  Establishing military bases on the artificial islands is a key to Beijing’s strategy to be able to choke off the Sea at a moment’s notice.

And it’s not as if China ever forgets the history of World War II and atrocities committed by the Japanese on its soil.

According to the Pew Research Center, 81% of Chinese hold unfavorable views about Japan, up from 70% a decade ago.  86% of Japanese hold unfavorable views of the Chinese, up from 71%.  [Steve Mollman / Defense One]

Separately, Beijing and Moscow just concluded a series of joint naval exercises in the South China Sea.

Meanwhile, President Xi Jinping is preparing for a key Central Committee meeting in late October that will set the agenda for next year’s 19th party congress, at which he is expected to define his political ambitions and the road map to succession at the party’s 20th congress five years later, in 2022 (Chinese leaders such as Xi serving 10 years).

Next year, five of the seven members of the Politburo Standing Committee – all but Xi and Premier Li Keqiang – step down after reaching the compulsory retirement age of 68.

You also have a 25-member Politburo, of which six retire, leaving 12 to compete for five vacancies on the Standing Committee.  [25-6-5=14...minus Xi and Li...sorry, had to work this out in my head first, he smiled.]

Philippines: Oh, that daffy, total wacko, President Rodrigo Duterte.  Thursday, in a speech to Philippine Marines, Duterte said upcoming U.S.-Philippine military exercises would be “the last” and ruled out any further joint patrols.  Why?  Because China doesn’t like them.

This is not good, boys and girls, even if Philippine Foreign Secretary Yasay declared Duterte never said such a thing.

Duterte’s ministers are like the cleanup brigade after a circus elephant act, constantly trying to set the record straight, mend fences, after their leader opens his mouth.

Tuesday, Duterte declared that U.S. forces in Mindanao “have to go...there are too many whites there.”

Philippine Defense Sec. Lorenzana later clarified the Americans were still welcome, and needed.

Then on Friday, Duterte compared his anti-drug campaign to the Holocaust, saying he would kill as many addicts as Hitler did Jews.

“Hitler massacred three million Jews as well as other minorities...there’s three million drug addicts.  I’d be happy to slaughter them,” he said.  [BBC News]

[At least six million Jews were exterminated.]

More than 3,000 have been killed in police operations or by vigilantes thus far in the Philippines.  Duterte has been accused of sanctioning death squads to kill criminals.

Needless to say Jewish groups were none too pleased.  One U.S. official of the Simon Wiesenthal Center, Rabbi Abraham Cooper, said, “Duterte owed the [Holocaust] victims an apology for his disgusting rhetoric.”

India / Pakistan: For the first time in years, India attacked terrorist camps across the border in Pakistan on Wednesday, in retaliation for the deadly strike against Indian soldiers earlier in September.  Heavy casualties were inflicted, according to Indian officials.

Pakistani Prime Minister Nawaz Sharif took to national television to announce Pakistan’s army is capable of defending its borders.  He said only two Pakistani soldiers had been killed, with the Pakistani army saying India had not carried out surgical strikes on three camps as it claimed.

Saudi Arabia: The White House blasted the Senate for overriding President Obama’s veto of legislation that would allow U.S. citizens to sue Saudi Arabia over the Sept. 11 terrorist attacks.

White House spokesman Josh Earnest said, “I would venture to say that this is the single most embarrassing thing that the United States Senate has done, possibly, since 1983,” when Ronald Reagan was president.

The vote was 97-1 and Earnest seized on comments made by Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.), who told reporters Judiciary Committee members didn’t pay much attention to the legislation until it came to the floor, suggesting senators didn’t want to break with 9/11 victims and their families.

Obama has insisted the law would undermine the concept of sovereign immunity, putting American diplomats, military service members and others at risk of legal action, assuming other countries now pass reciprocal laws.

Plus the U.S.-Saudi relationship today is testy, especially because of the Iran nuclear deal, and the Obama administration doesn’t want to anger the Saudis.

So, a day after the override, Republican leaders such as Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan both said they were open to discussions on changing the bill.

“We want to make sure the 9/11 victims and their families have their day in court,” Ryan told reporters.  “At the same time, I would like to think that there may be some work to be done to protect our service members overseas from any kind of legal ensnarements that occur, any kind of retribution.”

Colombia: The government and left-wing Farc rebels signed the historic agreement that formally brings to an end the 52-year civil war.

The rebel leader, Timoleon Jimenez (“Timochenko”), apologized to “all the victims of the conflict” and was greeted with applause at a ceremony in Cartagena.  The war killed 260,000 and left more than six million internally displaced.

President Juan Manuel Santos said: “Colombia celebrates, the planet celebrates because there is one less war in the world.

The Colombian people must still approve the deal in a referendum on Sunday, with polls indicating the people will.

Random Musings

--Presidential Polls....

On the eve of the debate, a Bloomberg Politics national poll of likely voters had Donald Trump leading Hillary Clinton 43% to 41%, with Gary Johnson at 8% and Jill Stein 4%.  Clinton had a 4-point advantage back in August in this one in a four-way race.

In a head-to-head contest, it is 46 each.  In August, Clinton led by 6 points.

Another pre-debate national poll, this one from ABC News/Washington Post, had Clinton at 46%, Trump 44%, Johnson 5%, Stein 1%.  In a two-way matchup, Clinton led Trump 49-47.  An August poll had Clinton up 8 points.

But a Fox News national poll released Friday has Clinton with a 43-40 lead, Johnson 8%, Stein 4%.  Two weeks ago, Clinton led by a point.

In CNN/ORC battleground state polls, in Colorado, likely voters break 42% for Trump, 41% for Clinton, 13% for Johnson and 3% for Stein.  Pennsylvania splits 45% for Clinton, 44% for Trump, 6% for Johnson and 3% for Stein.

[In Pennsylvania’s Senate race, Democrat Katie McGinty tops incumbent Republican Sen. Pat Toomey 49-46.]

In five key state polls from Public Policy Polling, post-debate, Clinton leads Trump in Virginia and Colorado by identical 46-40 margins, while she is ahead 45-39 in Pennsylvania, 45-43 in Florida and 44-42 in North Carolina, all four-way results.  [Head to head, add another point for Clinton, max.]

--Gary Johnson had, by his own admission, another “Aleppo moment” when on Wednesday at a MSNBC-hosted town hall in New Hampshire, Chris Matthews asked Johnson to name his favorite foreign leader and Johnson met that with a blank stare.

Matthews even said, “In any of one of the continents in any country, name one foreign leader,” prompting Johnson with a list of countries to help jog his memory...nothing.  Eventually, running mate William Weld bailed him out in naming Angela Merkel.

--Forbes magazine reduced Donald Trump’s net worth by $800 million to $3.7bn, saying the reduction was mainly due to a softening New York property market.

--Trump said he doesn’t think he was being treated fairly by former Miss Universe Alicia Machado, telling Bill O’Reilly, “She had a lot of difficulties and, you know, they wanted to fire her.  The company itself wanted to fire her.  I saved her job.”  He also said he spent less than five minutes speaking to her.

--Daniel Henninger / Wall Street Journal

“It’s past time that we all come to grips with the reality that the Trump candidacy has been carried forward to this unlikely moment by forces in the American population that transcend normal presidential politics.  These are essentially the same forces that carried the equally improbable Bernie Sanders to 22 primary victories....

“This week’s media meme – that Hillary Clinton wiped the floor with Mr. Trump – is undervaluing the realities of this unusual election.

“We have been through this exercise so many times with Donald Trump.  When in July last year he said of Sen. John McCain, ‘He’s not a war hero,’ I, like others, thought, he’s done.  You cannot run for president and say an American military man who was tortured in a North Vietnam prison camp is no hero.  Everyone, including the umpteen GOP candidates, thought Mr. Trump’s early primary surge would collapse.

“Of course the Trump contraption rattled forward, surviving one awful gaffe after another.  The meme then (as now) was that the Trump supporters were basically idiots – now known as the deplorables.  Well, it’s also true that you can pay a king’s ransom to watch the New York Yankees from the box seats with normal people or a lot less to sit in the upper deck with guys who will F-bomb your kids for nine innings.  They’re all cheering for the same team.  Welcome to America. Welcome to the Trump mosh pit.

“Let us turn, then, to who said what in the debate for some understanding of the Trump paradox: How can a candidate get this far by seeming to say so little that we normally expect of a president?

“The word ‘sound bite,’ a term of usage originating in television, is now viewed with derision.  Except for one thing: Sound bites work.  They convey one idea and stick that idea in the mind.  Recite, please, one memorable thing Hillary Clinton said in more than 90 minutes. OK, ‘trumped-up trickle down.’  Her debate was well-constructed, but so is a paint-by-numbers picture.

“At one point, Mrs. Clinton was talking about ‘investing in the middle class,’ and ‘making college debt-free’ and ‘broad-based inclusive growth.’

“Trump: ‘Typical politician. All talk, no action.  Sounds good, doesn’t work.  Never going to happen.  Our country is suffering because people like Secretary Clinton have made such bad decisions in terms of our jobs and in terms of what’s going on.’

“Without question much of the Trump side of the debate was a discontinuous morass.  But Donald Trump oozes contempt for the status quo. That visceral disdain offsets a lot of missteps and whatever Hillary’s fact-check drones are putting up on her website....

“One of these two is catching the mood of the country, and the other just isn’t.

“Are we demeaning a presidential election by saying it is reducible to sound bites?  I once thought so. Until it became clear that Donald Trump, like Bernie Sanders, was somehow detecting the complex tectonic shifts inside American politics.

“Some of these shifts are disturbing – blue-collar alienation, eroding civil order in some cities – but unlike his always-hedged opponent, Donald Trump slams into them.

“This sort of populism is exciting, but often limited.

“Bernie went down because he was too one-note.  Inequality wasn’t enough.  Donald Trump’s one-note is trade, but his overweighting of the issue could sink him.  Millions of the suburban voters he needs in battleground states have jobs connected to a strong global trading system.  They don’t want to vote for Hillary, but past some point, the ‘NAFTA’ rant may prove too much.

“So it’s back to the mosh pit. Yankee fans, from the boxes to the bleachers, love their team.  But if a guy underperforms or dogs it, they’ll boo him mercilessly.  Donald Trump survived Monday night. But one more outing like that and his phenomenal candidacy could get booed off the field.”

--David A. Fahrenthold / Washington Post

“Donald Trump’s charitable foundation – which has been sustained for years by donors outside the Trump family – has never obtained the certification that New York requires before charities can solicit money from the public, according to the state attorney general’s office.

“Under the laws in New York, where the Donald J. Trump Foundation is based, any charity that solicits more than $25,000 a year from the public must obtain a special kind of registration beforehand.  Charities as large as Trump’s must also submit to a rigorous annual audit that asks – among other things – whether the charity spent any money for the personal benefit of its officers.

“If New York Attorney General Eric Schneiderman (D) finds that Trump’s foundation raised money in violation of the law, he could order the charity to stop raising money immediately.  With a court’s permission, Schneiderman could also force Trump to return money that his foundation has already raised.”

--Editorial / Wall Street Journal

“No one has cultivated an image of public virtue better than FBI director James Comey, so he was in high dudgeon Wednesday when mere mortals like elected Members of Congress challenged his investigation of Hillary Clinton’s email violations as Secretary of State.

“ ‘You can call us wrong, but don’t call us weasels.  We are not weasels,’ Mr. Comey declared Wednesday at a House Judiciary Committee hearing.  Weasels or not, Mr. Comey did little to rebut suspicion that he handled the Clinton probe with tender loving political care.

“Recall that in July Mr. Comey held a remarkable press conference in which he announced that Mrs. Clinton shouldn’t be prosecuted for mishandling classified information.  But it isn’t his job to make prosecutorial decisions.  That’s the duty of Justice Department prosecutors.  Mr. Comey’s unprecedented declaration had the effect of letting Justice officials off the hook.

“Yet there was Mr. Comey on Wednesday passing the buck to the same Justice Department.  Republicans wanted to know how and why Clinton aides Cheryl Mills and Heather Samuelson had been granted immunity from prosecution.  Don’t ask Saint Jim.

“That was ‘a decision made by the Department of Justice’ and the FBI wasn’t ‘part of those discussions,’ he said.  Seriously? The FBI was willing to bug out of a decision on immunity that would be directly relevant to its ability to collect evidence?

“Mr. Comey also didn’t have a credible explanation for why immunity was necessary.  South Carolina Rep. Trey Gowdy noted that the lawyer for both women – Beth Wilkinson – stated that ‘The Justice Department assured us that they believed my clients did nothing wrong.’  So why did they need immunity?....

“Mr. Comey also ducked and covered on why Ms. Mills and Ms. Samuelson were allowed to represent Mrs. Clinton as her attorneys during her FBI interview.  He said the FBI had no control over a subject’s lawyers.  Yet as John Ratcliffe (R., Texas) dryly noted, he could think of no ‘reasonable’ prosecutor who would allow two witnesses who might prove ‘central to the prosecution’ to sit in on  a target’s interview.

“Far be it for us to call Mr. Comey a weasel, but his highly unusual methods in investigating Mrs. Clinton have tarnished the FBI and certainly knocked off his halo.”

--Texas Republican Sen. Ted Cruz is facing major backlash from all sides for his endorsement last Friday of Donald Trump, after he refused to do so at the Republican National Convention.  Some in Texas are urging House Homeland Security Chairman Michael McCaul to challenge Cruz in two years. 

On Saturday, Cruz, addressing a policy forum, denied he caved in to pressure from top Republicans nationally and in his home state, saying he would have faced an outcry no matter what.  He also said, “I have no intention of defending everything Donald Trump says or does,” when asked whether he thought Vladimir Putin was a better leader than Barack Obama.

--The prosecution’s star witness in the Bridgegate scandal, David Wildstein, claimed Gov. Chris Christie was told of the traffic jams at the George Washington Bridge in the midst of the gridlock in Fort Lee in September 2013, and laughed when he heard about it.

But Wildstein, who pleaded guilty to federal crimes associated with the scandal and is now a cooperating government witness, also said the chairman of the Port Authority of New York and New Jersey, David Samson, knew of the shutdowns.

Samson himself was later indicted and pleaded guilty to shaking down United Airlines to provide a scheduled direct daily flight from New Jersey to his winter home in South Carolina.

Ah yes, corruption makes the world go around.

--According to figures released by the FBI, murders in the U.S. jumped 10.8% in 2015, a sharp increase after a two-decade trend of falling crime across the country.  Over the past 20 years, the biggest one-year jump had been 3.7% in 2005.

In 2015, the number of all types of violent crime rose 3.9%, with the number of property crimes falling 2.6%.

The murder increase was concentrated in cities such as Cleveland, Baltimore and St. Louis, according to the FBI.

A report by the Major Cities Chiefs Association found that in the first half of 2016, murders rose in 29 of the nation’s biggest cities while they fell in 22 others, up 15% in those 51 compared with the same period the year before.  Chicago, for example, has seen a huge rise to 316 homicides in the first half of this year compared with 211 in the same period of 2015, while the murder rate has fallen in cities like Baltimore and Washington, D.C.

Nationally, last year the number of black Americans murdered was 7,039, compared with 5,854 whites, according to the data.

--It was amazing there was only one fatality in the Hoboken train disaster, but what a sad story it was.  You just never know.

--I have an extensive tribute to one of my heroes, Arnold Palmer, in my 9/29 edition of Bar Chat that I encourage you to peruse, but for this space I’ll give President Obama the last word.

“With his homemade swing and homespun charm, Arnold Palmer had swagger before we had a name for it.  From a humble start working at the local club in his beloved Latrobe, Pennsylvania, to superstardom as the face of golf around the globe, Arnold was the American Dream come to life.

“Along the way he racked up win after win – but it wasn’t his success that made him King. Arnold’s freewheeling, fearless approach to the game inspired a generation of golfers and, for the first time on TV, enthralled an audience across the world.  Sure, we liked that he won seven majors, but we loved that he went for it when he probably should have laid up.

“That spirit extended beyond the inks where he gave freely of himself and poured everything he had into everything he did: from building hospitals to personally responding to countless letters from his fans. And he did it all with a grin that hinted maybe he had one more shot up his sleeve.

“Today, Michelle and I stand with Arnie’s Army in saluting the King.”

RIP, Arnie.  You were both a Great American and sportsman.

---

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

God bless America.

---

Gold $1318
Oil $48.05...highest in six weeks

Returns for the week 9/26-9/30

Dow Jones  +0.3%  [18308]
S&P 500  +0.2% [2168]
S&P MidCap  +0.1%
Russell 2000  -0.2%
Nasdaq  +0.1%  [5312]

Returns for the period 1/1/16-9/30/16

Dow Jones  +5.1%
S&P 500  +6.1%
S&P MidCap  +11.0%
Russell 2000  +10.2%
Nasdaq  +6.1%

Bulls 45.2
Bears  23.1  [Source: Investors Intelligence]

Have a great week.  Let’s Go Mets!!!

Brian Trumbore



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Week in Review

10/01/2016

For the week 9/26-9/30

[Posted 11:30 PM ET, Friday]

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

*If you are used to printing these out...this one is over 40 pages...just sayin’.

Edition 912

Washington and Wall Street

Let’s start off with a depressing topic, shall we?  No, not the choice us voters will have come Nov. 8, but rather the increasing odds some of us will experience a nuclear conflict in our lifetime.

Mark Helprin wrote an extensive piece in the Wall Street Journal last weekend on the looming potential for such an event.  Needless to say, if you know of Mr. Helprin’s past work it is sobering.  Just a few excerpts:

“Even should nuclear brinkmanship not result in Armageddon, it can lead to abject defeat and a complete reordering of the international system. The extraordinarily complicated and consequential management of American nuclear policy rests upon the shoulders of those we elevate to the highest office.  Unfortunately, President Obama’s transparent hostility to America’s foundational principles and defensive powers is coupled with a dim and faddish understanding of nuclear realities.  His successor will be no less ill-equipped....

“The gravest danger we face is fast-approaching nuclear instability.  Many believe it is possible safely to arrive at nuclear zero.  It is not.  Enough warheads to bring any country to its knees can fit in a space volumetrically equivalent to a Manhattan studio apartment.  Try to find that in the vastness of Russia, China, or Iran.  Even ICBMs and their transporter-erector-launchers can easily be concealed in warehouses, tunnels and caves.  Nuclear weapons age out, but, thanks to supercomputing, reliable replacements can be manufactured with only minor physical testing.  Unaccounted fissile material sloshing around the world can, with admitted difficulty, be fashioned into weapons. And when rogue states such as North Korea and Iran build their bombs, our response has been either impotence or a ticket to ride....

“While it is true that to begin with its nuclear arsenal was de minimis, in the past 15 years China has increased its land-based ICBMs by more than 300%, its sea-based by more than 400%.  Depending upon the configuration of its missiles, China can rain up to several hundred warheads upon the U.S.

“As we shrink our nuclear forces and fail to introduce new types, China is doing the opposite, increasing them numerically and forging ahead of us in various technologies (quantum communications, super computers, maneuverable hypersonic re-entry vehicles), some of which we have forsworn, such as road-mobile missiles, which in survivability and range put to shame our Minuteman IIIs.

“Because China’s nuclear weapons infrastructure is in part housed in 3,000 miles of tunnels opaque to American intelligence, we cannot know the exact velocity and extent of its buildup...Lulled to believe that nuclear catastrophe died with the Cold War, America is blind to rising dragons.

“And then we have Russia, which ignores limitations the Obama administration strives to exceed.  According to its own careless or defiant admissions, Russia cheats in virtually every area of nuclear weapons....

“Russia deploys about 150 more nuclear warheads than the U.S.  Intensively modernizing, it finds ways to augment its totals via undisguised cheating.  Bound by no numerical or qualitative limits, China speeds its strategic development.  To cripple U.S. retaliatory capability, an enemy would have to destroy only four or five submarines at sea, two sub bases, half a dozen bomber bases, and 450 missile silos.

“Russia has 49 attack submarines, China 65, with which to track and kill American nuclear missile subs under way.  Were either to build or cheat to 5,000 warheads and two thirds reached their targets, four warheads could strike each aim point, with 2,000 left to hold hostage American cities and industry....

“Russia dreams publicly of its former hold on Eastern Europe and cannot but see opportunity in a disintegrating European Union and faltering NATO.  China annexes the South China Sea and looks to South Korea, Japan and Australasia as future subordinates.  Given the degradation of U.S. and allied conventional forces previously able to hold such ambitions in check, critical confrontations are bound to occur....we may see nuclear brinkmanship (or worse) in which the United States – startled from sleep and suddenly disabused of the myth of sufficiency – might have to capitulate, allowing totalitarian dictatorships to dominate the world.

“Current trajectories point in exactly this direction, but in regard to such things Donald Trump hasn’t the foggiest, and, frankly, Hillary Clinton, like the president, doesn’t give a damn.

“The way to avoid such a tragedy is to bring China into a nuclear control regime or answer its refusal with our own proportional increases and modernization.  And to make sure that both our nuclear and conventional forces are strong, up-to-date, and survivable enough to deter the militant ambitions of the two great powers rising with daring vengeance from what they regard as the shame of their oppression.”

The Debate

Sorry, Donald Trump fans, but if you thought your candidate was prepared for Monday night and did a good job, well you aren’t going to like the bulk of what follows so you may want to flip down to “Street Bytes.”

I thought the debate all around was abysmal, and embarrassing, but how Trump missed one opening after another was almost startling.

Nothing of note on immigration, ObamaCare, Benghazi, the Clinton Foundation, the Supreme Court, the “deplorables”...you name the hot button topic and he failed to raise it.  Heck, until near the end, moderator Lester Holt just rolled the ball out there and let the two play, as was appropriate.

So four days after what were we talking about?  Miss Piggy.  Trump’s Tweetstorm early Friday morning was unsettling.

This column has always been about compiling the definitive running history of our times and you know on big events, as in the case of the debate, I cover the issue as extensively as possible, knowing I have other subjects to review as well.  The following is lengthy, but there is something for everyone.

Clinton presented Trump as unprepared for the debate, let alone the presidency, while saying, “I prepared to be president and that’s a good thing.”

Trump later responded: “Hillary has experience, but it’s bad experience.”

Trump claimed he had a “better temperament” than Clinton and accused her of not having the “stamina” to be president.

“Well, as soon as he travels to 112 countries and negotiates a peace deal, a ceasefire, a release of dissidents, an opening on new opportunities in nations around the world or even spends 11 hours testifying in front of a congressional committee, he can talk to me about stamina,” responded Clinton.  [I would have gone ballistic on her with that answer...but Trump didn’t...he didn’t seize another opening.]

Clinton said Trump had started his political career with a “racist lie” after he falsely suggested President Obama was born outside the United States.  “He has a long record of engaging in racist behavior,” she said.

Clinton then criticized Trump’s comments about women, adding: “This is a man who has called women pigs, slobs and dogs.”

Trump was asked about his refusal to release his tax returns, so Trump said he would indeed publish them, against his lawyers’ advice, if Clinton released 33,000 deleted emails from her private server.

Clinton said of Trump’s refusal to release the returns, “I think there may be a couple of reasons. First, maybe he’s not as rich as he says he is.  Second, maybe he’s not as charitable as he claims to be.  Or maybe he doesn’t want the American people...to know that he’s paid nothing in federal taxes.”

When Clinton said the only returns he had released showed that he paid no federal tax, Trump responded: “That makes me smart.”

Trump lashed out at trade with China and Mexico, saying the U.S. was being put at a disadvantage.  China, he said, is “using our country as a piggy bank.”

Clinton responded Trump’s economic plan is the “most extreme version” of standard Republican rhetoric.  “I call it trumped up trickle-down.”

Trump went after Clinton for her past support of NAFTA and the Trans-Pacific Partnership.  “You called it the gold standard of trade deals,” he said, in citing Clinton’s initial analysis of the TPP accord.

“Donald, I know you live in your own reality,” Clinton responded.

At one point, Clinton said, “I have a feeling that by the end of the evening I’m going to be blamed for everything.”

“Why not?” Trump shot back.  [His best line.]

Clinton said her use of a private email server was a “mistake,” not elaborating in the least.  Trump didn’t attack. 

Trump stumbled on the Iraq War and the now infamous Howard Stern interview in September 2002 when he said he supported going in.

Clinton had one of her better moments when she said Trump could be too easily provoked into a war involving nuclear weapons.

“A man who can be provoked by a tweet should not have his fingers anywhere near the nuclear codes,” she said.

Trump countered that when it came to nuclear weapons, he “would not do first strike” but he “can’t take anything off the table,” which is nonsensical.

Two of my learned friends wrote me as the debate was taking place.  Bob C., Naval Academy grad and pilot: “Wow! The lying scumbag who is wrong on all of the issues vs. the incoherent crazy person.”

Dr. W., a preemie baby doc: “God help this country.  Two sorry candidates from two completely out of touch parties.  Nevertheless, Trump was completely outmatched.  We cannot elect this man as much as I despise Hillary.  I can’t believe he actually graduated from college.”

Norm Ornstein, an analyst at the American Enterprise Institute, said: “I have never seen a more lopsided debate.  He was angry, rambling, fidgety and often simply incoherent.  His bar was to look even modestly like a president, in carriage and temperament, plus a very, very low bar on fundamental knowledge.  He failed on them all.”

Larry Sabato, a professor at the University of Virginia, agreed that Clinton was the “clear winner” but said the outcome might not matter.  “He is the change candidate and will automatically get the votes of tens of millions who hate Hillary Clinton, but perhaps this will stop Clinton’s drift downward in the polls.”

Editorial / Wall Street Journal

“The two most unpopular presidential candidates in modern history had their first debate Monday, and the best we can say is that they lived up to those expectations.  Hillary Clinton offered a relentless assault on Donald Trump’s business record and qualifications to be President, but she offered little reason to believe she would lift the country out of its economic and psychological funk.  Mr. Trump made the case for change, but in a blunderbuss fashion that will have voters wondering if he knows enough for the job.

“There’s little doubt that Mrs. Clinton won on debating points. She can master a briefing book, and from the first answer she dumped most of it on Mr. Trump.  The central argument of her campaign is to elect her because the New Yorker is ‘unfit’ to be President, and her strategy was to taunt him with attacks on his business record that always seem to drive him to distraction.

“And sure enough, Mr. Trump often took the bait, wasting time on details about his company’s history while barely going on offense against the Clinton Foundation.  He also couldn’t resist a long, defensive explanation of his opposition to the Iraq war and why he hasn’t released his tax returns.

“These columns warned Mr. Trump – and GOP voters – during the primaries that by not releasing his returns he was giving Democrats an opening to assert what he might be ‘hiding.’  Mrs. Clinton took full advantage, offering a list of imagined horribles and even suggesting he might have paid ‘zero’ taxes.

“On policy Mrs. Clinton rolled out her list of seemingly endless programs that amount to the agenda of the last eight years, only more so. She has a government solution to every social and economic anxiety, and if you like the current economy she is your candidate.

“That unhappy status quo remains Mr. Trump’s opening, yet he missed more chances than he hit.  Offered a lay-up opportunity at the start on the economy, he sounded a Donny-one-note on trade – as if cutting imports is the magic cure for 1% growth.  He eventually got around to touting his tax cut, albeit with few specifics, but he barely mentioned the burden of regulation....

“For all of Mr. Trump’s substantive weaknesses, the challenger did score points by portraying Mrs. Clinton as an architect of America’s current malaise. His taunt that she has been around ‘for 30 years’ strikes home. The central question in the election is coming down to whether an American majority that wants a change in direction is willing to take the risk on Mr. Trump to deliver it.  It’s still a question after Monday night.”

Editorial / Washington Post

“Monday night’s debate told the story of this year’s presidential race.  The Republican primary process failed, producing a nominee who cynically or ignorantly sells a warped view of reality, disqualifying himself with practically every overheated sentence.  The Democrats, meanwhile, nominated a flawed but knowledgeable, confident and even-tempered politician.

“Donald Trump seemed incapable of moving beyond his slogans which, as ever, were based on his bleak view of the United States.  Foreigners are ‘using our country as a piggy bank to rebuild China,’ he said.  ‘We have to stop our jobs from being stolen from us.’  He made little effort to respond to moderator Lester Holt’s point that the economy is growing and wages are, in fact, improving.  Nor did  he really answer Hilary Clinton’s point that the country has had to climb out of a deep economic ditch caused by a variety of forces unrelated to free-trade agreements....

“The contrast on transparency and character was also extreme.  Mr. Trump once again offered bogus excuses for refusing to release his tax returns.  Ms. Clinton, meanwhile, admitted she was wrong to use a private email server and offered no excuses.  Mr. Trump attempted to pin his racist ‘birther’ campaign on Ms. Clinton, even though, as Mr. Holt pointed out, Mr. Trump carried it on well after President Obama produced his birth certificate.  Mr. Trump claimed the better temperament even as he petulantly hectored and interrupted Ms. Clinton through most of the debate.

“None of this should have been a surprise to anyone who has paid attention to this presidential race.  When the debate turned to foreign policy, Mr. Trump spewed ignorance, claiming the rise of the Islamic State could have been prevented if ‘we had taken the oil’ and that Iran should have been obliged by the deal on its nuclear program to somehow rein in North Korea.

“ ‘I haven’t given lots of thought to NATO,’ Mr. Trump said, quoting himself from an earlier interview.  By the end of the evening he had made clear you could end that sentence with just about any matter of policy and be as accurate.”

Daniel Henninger / Wall Street Journal

“Before we open the envelope in the category of Best Candidate in an Abominable Election, let us understand what the two performers had to do Monday evening.

“Hillary Clinton’s primary goal in the debate was to get Donald Trump to restate what he’s said before about Muslims or Hispanics and his presumably misogynistic attitudes toward women.  The stuff that upsets people.  Her do-or-die goal was to cut down Mr. Trump among doubtful white upper-middle-class voters.  These are the battleground-state Americans who live in suburban Philadelphia, Cincinnati, and Columbus and in North Carolina, Colorado, Virginia and Wisconsin.  With the rest of the white vote locked up, these upper-middle-class Republicans and independents will make or break the Trump candidacy.

“Hillary needed either to convince them that Donald Trump is unfit or induce Mr. Trump to do it for her by ‘scaring’ these crucially important voters.

“Donald Trump needed to give these same people a ‘get out of Trump jail’ card – a reason to look past his flaws and just vote for him rather than the other three options available – her, a Libertarian, or stay home – all votes they really don’t want to cast.

“And the winner of the first abominable debate is?

“Trump. In what was – shifting metaphors – a photo finish.  It shouldn’t have been close.  If we know anything, it’s that this is a change election.  I couldn’t hear a single element of change in Hillary’s outpourings.  ‘Investments’ means familiar spending.  ISIS?  Drop more bombs.

“Did Mount Trump erupt?  Not quite.  She didn’t get under his skin, but she got on it – and he always has to scratch.  That said, it could be that his seething contentiousness matches the electorate’s disgust with the status quo.  This isn’t an election about details.  It’s broad brush.  Mr. Trump is  better at broad brush – if only he didn’t splatter so much on himself.”

Ed Rogers / Washington Post

“Donald J. Trump recently said that he needed to lose 20 pounds. Well, maybe if he would quit taking the bait every time it was offered, his dieting would be more effective.

“Throughout tonight’s debate, Hillary Clinton seemed overly rehearsed, as if she were reading straight from a script – but she stayed on topic and managed to come across as competent and deliberate and, surprisingly, didn’t face many direct challenges.  Hillary also seemed calm, cool and collected throughout.  Trump seemed restless, unfocused, uncomfortable and maybe a little nervous.  He careened from defensive tirades about his business dealings to non sequiturs that even included a reference to a ‘400-pound’ hacker.  Predictably, it appeared that Clinton had been preparing for this debate since high school and Trump hardly prepared at all.  Perhaps in the next debate, she’ll offer more than buzzwords and tired proposals, and he will understand the value in being able to recite some facts....

“The bottom line: I call this debate marginally for Hillary.  If you liked her before, you like her more now.  And if you had doubts about Trump, he did nothing to ease your concerns....He didn’t see the openings and he didn’t swing at the softballs that came his way.  He never used the word ‘change,’ he didn’t bore in on Hillary’s email scandal and he never got around to the Clinton Foundation and Hillary’s suspect integrity.  Trump was inarticulate and rarely hit the bull’s eye.  There were a lot of lost opportunities for Trump, but I don’t think Hillary changed many minds.

“If just about any of the 16 other Republicans who competed in the GOP primaries had been on that debate stage tonight, they would have wiped the floor with Hillary Clinton.  Trump’s ascendancy to the Republican nomination is still a mystery to me, but they have two more debates.  A lot could still happen.”

William McGurn / Wall Street Journal

“Mrs. Clinton looked cool and collected; she smiled; and though she often launched into full-wonk mode, mostly she avoided the hectoring tone we’ve all become accustomed to. For his part Mr. Trump was at times pushy and too defensive; he spoke well about how ill-served African-Americans have been by Democratic policies; and though his attacks on trade were almost completely mistaken they may nonetheless resonate with workers apprehensive about their future.

“But all this may miss each candidate’s real appeal.  Mrs. Clinton had her numbers and her programs and her zingers lined up.  Along the way, she invoked the great progressive god of fact-checking, a way of appealing to people who have no faith in the ability of ordinary Americans to think for themselves.

“Perhaps she did thump him.  But democracies can be unruly things, and Mr. Trump isn’t running on policy detail or finesse. He’s running on ‘Making America Great Again’ – and against Washington and political correctness.

“So whatever the pundits may say about this first encounter, we won’t know what it really means until a few days from now when the post-debate polls give us the verdict of the only people who matter here: the American voters.”

Jonathan Capehart / Washington Post

“What on earth was that?  For 90 minutes, we watched one candidate for president display the seriousness the office demands while the other did what was once unthinkable: show up unprepared for a globally televised job interview. The first presidential debate between reality-television star and wealthy builder Donald Trump and former Secretary of State Hillary Clinton was mind-blowing.  Trump brought the vaudeville shtick that worked for him in the primaries to the main stage and bombed.

“Trump’s performance was the rhetorical equivalent of hurling garbage on the lawn...

“If there was one undeniable truth spoken by Clinton at the debate, it came in response to Trump’s dig at her for ‘stay[ing] home’ last week.  ‘I think Donald just criticized me for preparing for this debate.  And, yes, I did,’ Clinton said.  ‘And you know what else I prepared for?  I prepared to be president.’  Kaboom.”

Kyle Smith / New York Post

“The ref not only made himself part of the game on Monday night, he ran up to the scrimmage line, then sacked the quarterback three times.

“In the early going, it looked like it was going to be an ideal, Jim Lehrer-style performance from Lester Holt... Lehrer was so boringly nonpartisan, so unwilling to play gotcha that he was always hotly in demand to moderate debates.  For the first half or so, Holt gave simple, broad, open-ended questions and let the candidates go at it.  He didn’t venture into live fact-checking, didn’t much quarrel with the nominees, didn’t ask persnickety questions.

“For the most part, Holt asked the kinds of basic questions that gave Hillary Clinton and Trump plenty of opportunities to repeat favored talking points: what would you do to pump some life into the job market?  How would you heal the race divide?  Are police biased against minorities?  What’s your policy on homegrown terrorist attacks?

“But in the last half of the show, Holt started going after Trump.  He got into an unfortunate bickering match with the Republican nominee over the latter’s (apparently offhand) support for the Iraq War in a 2002 Howard Stern interview.  It was perfectly reasonable to bring up the point, but the exchange became tiresome on both sides, with the two men talking past each other.  Holt would have been wiser to simply say, ‘In 2002, you told Howard Stern you supported the Iraq War.  Tonight you say you didn’t.  Can you explain?’  Arguing with Trump is Clinton’s job, not Holt’s.

“Trump’s birther argle-bargle is something the media have shown far too much interest in given its relative non-importance, but it was also fair of Holt to give Trump a chance to put the question to rest in front of a large audience.  Trump bungled the opportunity, but it was hardly an unfair topic to bring up given that questioning President Obama’s birthplace is how Trump became a national political figure in the first place, and given that Trump made a circus out of the matter just 10 days earlier....

“Holt’s questions were fair game, but it’s not the case that Clinton has nothing to be embarrassed about either... (Holt) cold have asked her whether she could be trusted about her health given that she apparently wasn’t going to tell the public she had pneumonia until she collapsed on 9/11 (and even then stonewalled for hours).”

Kimberley A. Strassel / Wall Street Journal

“Debates are about pressing an advantage, and Donald Trump’s biggest going into Monday night’s event was the issue of Hillary Clinton’s ethics.  Nearly two-thirds of the country views the former secretary of state as untrustworthy, the result of endless shenanigans from her email server, to her family foundation, to decades of other Clinton immorality.

“Yet in the entire exchange Monday, Mr. Trump barely mentioned the Clintons’ long history of scandal, and even then did so only as a retort.  Hillary had delivered a compelling critique of the billionaire’s failure to release his tax returns.  Mr. Trump’s response was to claim that he would make public his returns when Mrs. Clinton released the 33,000 emails that she deleted from her private server rather than turn over to the State Department.

“What about the pay-to-play allegations at the Clinton Foundation?  What about FBI Director James Comey’s declaration (in his press conference and in front of Congress) that Mrs. Clinton was ‘extremely careless’ with classified information, and that she lied about her server?  What about her and Bill Clinton’s extraordinary speech cash-outs, especially in light of her empty concern about income inequality? What about her mistruths about sniper fire in Bosnia or the Benghazi YouTube video?...

“(For) the most part, Mr. Trump allowed Mrs. Clinton to bait him into defending himself – on his financial leverage, his claims about where Barack Obama was born, his position on the Iraq war.  Perhaps Mr. Trump demurred deliberately, so as not to be seen attacking the nation’s first female presidential nominee.  It was a mistake.  Mrs. Clinton will pull no punches, and Mr. Trump squandered his best right hook.”

Kathleen Parker / Washington Post

“(Clinton) smiled through her contempt for Trump’s inane responses or nonresponses.  In the course of the evening, she seemed to get him to admit to not paying any federal taxes, which Trump appeared to confirm by saying, ‘That makes me smart.’  Moderator Lester Holt’s question about Trump’s birther crusade elicited not only a defense of his efforts but a declaration of pride that he, Trump, had forced President Obama to present his birth certificate.

“ ‘I think I did a good job,’ he said.

“This is false, as any serious news consumer knows. But these two examples illustrate two key components of Trump’s character – braggadocio and preening pride.  Translation: insecurity and weakness. He was proud of two things – paying no taxes and racist pandering – for which most people of conscience would feel shame.

“Sure, if you’re someone whose career is built on gaming the system, you might gloat about being the best gamer.  But is this who you want for president?”

John Podhoretz / New York Post

“Hillary Clinton was boring and exceptionally well-prepared. Donald Trump was exciting but embarrassingly undisciplined.  He began with his strongest argument – that the political class represented by her has failed us and it’s time to look to a successful dealmaker for leadership – and kept to it pretty well for the first 20 minutes.

“Then due to the vanity and laziness that led him to think he could wing the most important 95 minutes of his life, he lost the thread of his argument, he lost control of his temper and he lost the perspective necessary to correct these mistakes as he went.

“Methodically and carefully, Hillary Clinton took over.  Her purpose was to show she was rational and policy-driven, the kind of person who could be trusted to handle a careful and delicate job with prudence and sobriety – and that he was none of these things.

“And she succeeded.  By the end of the 95 minutes, Trump was reduced to a sputtering mess blathering about Rosie O’Donnell and about how he hasn’t yet said the mean things about Hillary that he is thinking.

“Most important, he set ticking time bombs for himself over the next six weeks.

“As she hammered him on his tax returns, he handed her an inestimable gift by basically saying he pays no federal taxes despite his billions – and moreover, that if he had done so, it would have been ‘squandered’ anyway.

“That’s not going to go away, nor is her suggestion that his refusal to release his returns is the result of his either not being as rich as he says or not being as charitable as he claims....

“His reply to Hillary’s recitation of the fact he’d begun his career settling a Justice Department lawsuit about racial discrimination in Trump housing was that there was ‘no finding of guilt,’ which is the sort of thing the villain said at the end of ‘L.A. Law’ and sounded no better in real life.

“Even when he could have taken her down, he was so incompetent he didn’t go for it.  A question about cybersecurity was the perfect opportunity to hammer Clinton on her outrageous mishandling of classified information.

“Instead, he went into a bizarre digression in which he alternately wondered whether his son Barron might grow up to become a hacker and defended Vladimir Putin from the accusation Russia had tapped into the Democratic National Committee’s emails (which the FBI says almost certainly happened).  That has to count as the biggest choke of his political life....

“His supporters should be furious with him, and so should the public in general.  By performing this incompetently, by refusing to prepare properly for this exchange, by learning enough to put meat on the bones of his populist case against Clinton, he displayed nothing but contempt for the people who have brought him this far – and for the American people who are going to make this momentous decision on Nov. 8.”

Michael Gerson / Washington Post

“Rhetorically, Trump drove a high-speed train filled with fireworks into a nuclear power plant.  He was self-absorbed, prickly, defensive, interrupting, baited by every charge yet unprepared to refute them.  During his share of a 90-minute debate, he was horribly out of his depth, incapable of stringing together a coherent three-sentence case. The postmodern quality of Trump’s appeal culminated in an unbalanced rant claiming, ‘I also have a much better temperament than she has’ – an assertion greeted by audience laughter.  And Trump concluded his performance by praising himself for his own grace and restraint, during an evening that showed him to be nasty, witless and deceptive. It should now be clear to Republicans: Vanity is his strategy.

“Trump’s defenders will charge his critics with elitism.  The great public, it is argued, gets Trump in a way that the commenting class does not.  But this claim is now fully exposed.  The expectation of rationality is not elitism.  Coherence is not elitism.  Knowledge is not elitism.  Honoring character is not elitism. And those who claim this are debasing themselves, their party and their country.”

Gerald F. Seib / Wall Street Journal

“It took but a few minutes into Monday night’s presidential debate for the two contenders to distill the essence of the case they are making for taking over the White House.  And they did so in no uncertain terms.

“Democrat Hillary Clinton portrayed herself as the woman with a plan, who has been around the block in Washington, who is ready to hit the rich and battle ‘trickle-down economics’ – and who, by the way, wasn’t going to be afraid to go after her opponent, who, she said, ‘has called women pigs, slobs and dogs.’

“Republican Donald Trump painted himself as the agent of change, whose opponent has spent years failing to fix the nation’s problems while he was building a business.  He proclaimed himself ready to rip up trade agreements that the ‘hack’ politicians love, and who would stand directly in the path of companies that want to move overseas.  His opponent, he said, has both a bad track record and bad judgment: ‘Hillary has experience, but it’s bad experience.’

“If presidential debates are supposed to illuminate differences and get candidates to engage directly and critically, this one did its job almost from the outset.  It was tense and engaging, and, in its closing minutes, turned nasty... Oddly, Mr. Trump missed some opportunities, failing to weigh in on his signature issue of cracking down on immigration and failing to take on Mrs. Clinton for calling some of his supporters ‘deplorable.’...

“But it was a struggle in which the two contenders did, in fact, play to their strengths – he to his ability to connect with voters on visceral terms, she on her ability to move smoothly from subject to subject with an air of authority.  They will not shrink from the fight in the two debates that remain.

“Did they win over the voters they need?  That’s much less clear.  Because they largely played true to form and expectations, it’s possible they didn’t change minds so much as confirm existing perceptions.

“If nothing else, though, the debate clarified the very real choice, and the contrast in style, substance and background that this election has produced.”

Thomas L. Friedman / New York Times

“My reaction to the Donald Trump-Hillary Clinton debate can be summarized with one word: ‘How?’

“How in the world do we put a man in the Oval Office who thinks NATO is a shopping mall where the tenants aren’t paying enough rent to the U.S. landlord?

“NATO is not a shopping mall; it is a strategic alliance that won the Cold War, keeps Europe a stable trading partner for U.S. companies and prevents every European country – particularly Germany – from getting their own nukes to counterbalance Russia, by sheltering them all under America’s nuclear umbrella.

“How do we put in the Oval Office a man who does not know enough ‘beef’ about key policies to finish a two-minute answer on any issue without the hamburger helper of bluster, insults and repetition?

“How do we put in the Oval Office a man who suggests that the recent spate of cyberattacks – which any senior U.S. intelligence official will tell you came without question from Russia – might not have come from Russia but could have been done by ‘somebody sitting on their bed that weighs 400 pounds’?

“How do we put in the Oval Office a man who boasts that he tries to pay zero federal taxes but then complains that our airports and roads are falling apart and there is not enough money for our veterans?....

“Trump promises change, but change that comes from someone who thinks people who pay taxes are suckers and who thinks he can show up before an audience of 100 million without preparation or real plans and talk about serious issues with no more sophistication than your crazy uncle – and expect to get away with it – is change the country can’t afford.

“Electing such a man would be insanity.”

Charles Krauthammer / Washington Post

“And now, less than six weeks from the election, what is the main event of  the day?  A fight between the Republican presidential nominee and a former Miss Universe, whom he had 20 years ago called Miss Piggy and other choice pejoratives.  Just a few weeks earlier, we were seized by a transient hysteria over a minor Hillary Clinton lung infection hyped to near-mortal status. The latest curiosity is Donald Trump’s 37 sniffles during the first presidential debate.  Dr. Howard Dean has suggested a possible cocaine addiction.

“In a man who doesn’t even drink coffee?  This campaign is sinking to somewhere between zany and totally insane.  Is there a bottom?

“Take the most striking – and overlooked – moment of Trump’s GOP convention speech. He actually promised that under him, ‘the crime and violence that today afflicts our nation will soon – and I mean very soon – come to an end.’

“Not ‘be reduced.’  End.

“Humanity has been at this since, oh, Hammurabi.*  But the audience didn’t laugh.  It applauded....

“In launching his African American outreach at a speech in Charlotte, Trump catalogued the horrors that he believes define black life in America today.  Then promised: ‘I will fix it.’

“How primitive have our politics become?  Fix what?  Family structure?  Social inheritance?  Self-destructive habits?  How?  He doesn’t say. He’ll win it.  Trust him, as he likes to say....

“His great weakness is his vanity. He is temperamentally incapable of allowing any attack on his person to go unavenged. He is particularly sensitive on the subject of his wealth.  So central to his self-image is his business acumen that in the debate he couldn’t resist the temptation to tout his cleverness on taxes.  To an audience of 86 million, he appeared to concede that he didn’t pay any.  ‘That makes me smart,’ he smugly interjected.

“Big mistake.  The next day, Clinton offered the obvious retort:  ‘If not paying taxes makes him smart, what does that make all the rest of us?’  Meanwhile, Trump has been going around telling Rust Belt workers, on whom his electoral college strategy hinges and who might still believe that billionaires do have some obligation to pay taxes, that ‘I am your voice.’

“When gaffes like this are committed, the candidate either doubles down (you might say that if you can legally pay nothing, why not, given how corrupt the tax code is) or simply denies he ever said anything of the sort.  Indeed, one of the more remarkable features of this campaign is how brazenly candidates deny having said things that have been captured on tape, such as Clinton denying she ever said the Trans-Pacific Partnership was the gold standard of trade deals.

“The only thing more amazing is how easily they get away with it.”

*I had to look this up; 1st Babylonian dynasty, 1792-1750 BC.

Holman W. Jenkins, Jr. / Wall Street Journal

“(Trump) is not a lifelong politician like Mrs. Clinton and it showed.  But he survived on stage. Notice, he also apparently made a strategic decision not to raise Bill Clinton’s infidelities and stuck to it.

“One of the least perceptive TV comments, I didn’t catch by whom, claimed Mr. Trump has proved himself incapable of taking advice or changing his approach.  Au contraire: He changes positions constantly, has constantly alternated between scripted and free-form in his style.

“He doesn’t know what he thinks about most issues (except trade) and yet has been content to bull ahead and sort it out later.

“Give him credit: His act does have other dimensions. The buildings he put his name on, some of which he built, are real. His numerous product lines are real. His TV show was a real hit.

“An Atlantic Monthly writer, in a now much-quoted felicity, once said that the ‘part of the 2016 story that will be hardest to explain after it’s all over’ is that ‘Trump did not deceive anyone.’  A formulation catching on lately advises taking Trump seriously, not literally.

“In the end this fall’s election, as Monday’s debate probably established, will resolve into very flawed outsider vs. very flawed insider – and will be decided by the American people in that vein.

“It won’t become – as the media and Democrats hoped going into Monday’s debate – ‘Hillary is the only option because Trump is unacceptable.’

“A final note: People who believe the truth is inherently valuable generally are not attracted to the political profession, or at least equipped to do well in it.  (Yes, there are exceptions.)  Yet a few of us were listening most closely to hear if Mrs. Clinton betrayed the slightest inkling that anything had gone wrong in Obama’s America.

“Lies are inevitable but the president’s worst lie (or hypocrisy as some prefer it) was his pretense that he cared about the unemployed, underemployed, and economically insecure in our struggling economy – when, in fact, his focus was on delivering the wish lists of Democratic interest groups seeking more regulation, more taxes, more subsidies, more government control over things in general.

“Somehow, some way, the next president will have to see a different path ahead or God help us.”

USA TODAY’s editorial board for the first time in its 34-year history, picked sides in a presidential election.

“Because every presidential race is different, we revisit our no-endorsement policy every four years.  We’ve never seen reason to alter our approach.  Until now.

“This year, the choice isn’t between two capable major party nominees who happen to have significant ideological differences.  This year, one of the candidates – Republican nominee Donald Trump – is, by unanimous consensus of the Editorial Board, unfit for the presidency.

“From the day he declared his candidacy 15 months ago through this week’s first presidential debate, Trump has demonstrated repeatedly that he lacks the temperament, knowledge, steadiness and honesty that America needs from its presidents.

“Whether through indifference or ignorance, Trump has betrayed fundamental commitments made by all presidents since the end of World War II.  These commitments include unwavering support for NATO allies, steadfast opposition to Russian aggression, and the absolute certainly that the United States will make good on its debts.  He has expressed troubling admiration for authoritarian leaders and scant regard for constitutional protections....

“With early voting already underway in several states and polls showing a close race, now is the time to spell out, in one place, the reasons Trump should not be president:

“He is erratic... A list prepared by NBC details 124 shifts by Trump on 20 major issues since shortly before he entered the race....

“He is ill-equipped to be commander in chief.  Trump’s foreign policy pronouncements typically range from uninformed to incoherent....

“He traffics in prejudice....

“His business career is checkered....

“He isn’t leveling with the American people.  Is Trump as rich as he says?  No one knows, in part because, alone among major party presidential candidates for the past four decades, he refuses to release his tax returns.  Nor do we know whether he has paid his fair share of taxes, or the extent of his foreign financial entanglements.

“He speaks recklessly....

“He has coarsened the national dialogue....Trump’s inability or unwillingness to ignore criticism raises the specter of a president who, like Richard Nixon, would create enemies’ lists and be consumed with getting even with his critics.

“He’s a serial liar.  Although polls show that Clinton is considered less honest and trustworthy than Trump, it’s not even a close contest.  Trump is in a league of his own when it comes to the quality and quantity of his misstatements.  When confronted with a falsehood, such as his assertion that he was always against the Iraq War, Trump’s reaction is to use the Big Lie technique of repeating it so often that people begin to believe it....

“Nor does this editorial represent unqualified support for Hillary Clinton, who has her own flaws (though hers are far less likely to threaten national security or lead to a constitutional crisis).  The Editorial Board does not have a consensus for a Clinton endorsement.

“Some of us look at her command of the issues, resilience and long record of public service...and believe she’d serve the nation ably as its president.

“Other board members have serious reservations about Clinton’s sense of entitlement, her lack of candor and her extreme carelessness in handling classified information.

“Where does that leave us?  Our bottom-line advice for voters is this: Stay true to your convictions.  That might mean a vote for Clinton, the most plausible alternative to keep Trump out of the White House.  Or it might mean a third-party candidate.  Or a write-in.  Or a focus on down-ballot candidates who will serve the nation honestly, try to heal its divisions, and work to solve its problems.

“Whatever you do, however, resist the siren song of a dangerous demagogue.  By all means vote, just not for Donald Trump.”

---

Turning to Wall Street, three quarters down, one to go, with the Dow Jones up 5% on the year and the S&P and Nasdaq up 6% thus far. 

On the economic front, the final revision for second-quarter GDP came in at 1.4%, annualized, so the last four quarters look like this.

Q2 2016...1.4 (ann.)
Q1 2016...0.8
Q4 2015...0.9
Q3 2015...2.0

[Stirring]

Consumption was up a solid 4.3% in Q2.

Looking ahead the Atlanta Fed’s GDPNow indicator for third-quarter GDP is down to 2.4%, from 3.8% on Aug. 5.

Separately, durable goods for August were unchanged, better than expected, while personal income for the month was 0.2%, in line, and consumption was unchanged, disappointing.  The core personal consumption expenditure index, which is the Fed’s preferred inflation barometer, ticked up to 1.7% from 1.6%, still short of the Fed’s 2% target.

The Chicago PMI for manufacturing was 54.2 (50 being the dividing line between growth and contraction), which beat expectations, while August new home sales were 609,000 on an annualized basis, the second-highest since 2008, after July’s reading, 659,000, was the best since Oct. 2007.

The S&P/Case-Shiller 20-city home price index for July was up 5% from a year earlier, vs. 5.1% in June.  Portland led the way, up 12.5%, with Seattle up 11.2%, but New York City advanced only 1.8%, with Washington, D.C. (metro area) up only 2.1%.

But now it’s earnings season and companies in the S&P 500 are expected to see a decline for a sixth consecutive quarter, according to FactSet; a 2.3% contraction from a year-earlier.

For Q3, the energy sector is once again forecast to take it on the chin, an eighth consecutive quarter of declines, and it does need to be noted that in four of the past five quarters, S&P 500 earnings would have been positive if the energy sector were stripped out, FactSet reports.

There is also possible good news in that revenue growth is forecast to return for the first time since the end of 2014, with nine of the 11 sectors projected to report year-over-year sales gains; consumer-discretionary leading the way.  [Corrie Driebusch / Wall Street Journal]

But the trailing P/E on the S&P is still a whopping 25 (as listed in Barron’s...some of you know that the reporting of P/Es in market stories is one of my major pet peeves...there often is no explanation of where they got the figure, and often when they do say whether it is ‘trailing’ or ‘forward,’ they are wrong).

The World Trade Organization said growth in global trade will fall below GDP growth for the first time in 15 years in 2016, with expected volume growth of 1.7% from an earlier estimate of 2.8%.  Global GDP is expected to expand 2.2%, so trade growth will fall below output for the first since 2001 and to its weakest pace since 2009.  The WTO also slashed next year’s estimate to between 1.8% and 3.1%, from an earlier forecast of 3.6%.

The outlook comes amid the backlash against ambitious trade deals being brokered by the U.S. and EU, while protectionism has become a dominant political issue here.

WTO director general Roberto Azevedo said the forecast was a “wake-up call”:

“It is particularly concerning in the context of growing anti-globalization sentiment.  We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system.”

Recently, IMF economist Maurice Obstfeld said: “Those who promote ‘getting tough’ with foreign trade partners through punitive tariffs should think carefully.  It may be emotionally gratifying; it may boost specific industries; the threat may even frighten trade partners into changing their policies; but, ultimately, if carried out, such policies cause wider economic damage at home,” he said.

Back in Washington, the House approved a bill to fund the federal government through December 9, averting a shutdown, as Congress rushed home for campaigning.  When it returns Nov. 14, it will then attempt to complete the rest of the budget negotiations for the 2017 fiscal year (which commences Oct. 1) in a lame duck session. 

The bill (continuing resolution), which did contain a full year of funding for the military and veterans programs, passed 342-85.  $1.1 billion for halting the spread of Zika was part of the package, along with flood relief for Louisiana, West Virginia and Maryland.  Also, a separate bill supplying Flint, Michigan with $170 million for its water issue was part of the process in gaining Democratic support to clear the CR.

Europe and Asia

Deutsche Bank, Germany’s largest, became a big story this week.  It hit the news earlier on the report the U.S. Justice Department had asked Deutsche (DB) to pay $14 billion* to settle allegations surrounding the financial crisis and the mis-selling of mortgage-backed bonds, but the story exploded anew on Thursday when some hedge-fund clients, concerned about their exposure to what was never considered a rock of stability, began to reduce it, pulling assets (namely derivatives holdings) and forcing DB executives to issue statements of reassurance.  For the hedge funds, it made sense simply from a risk-reward standpoint.  It was all about memories of Lehman Brothers, which collapsed when it couldn’t pay clients and counterparties as they ran out the door.

But Deutsche and Lehman aren’t the same.  DB has a highly diversified client base and liquid assets of nearly $250 billion (June 30), 12% of assets vs. Lehman’s 7.5% a month before its downfall. Plus Deutsche has access to the European Central Bank, whereas Lehman was refused extra credit by the U.S. Federal Reserve.

Yes, there are issues as to the quality of Deutsche’s assets, which was the issue with Lehman and the U.S. Fed, but, again, the ECB is a backstop. 

*The $14bn was a shocking figure compared to DB’s market value of about $17bn as of Thursday.  But the final penalty isn’t going to be anywhere near $14bn...or so some of us are guessing...and the rumors late Friday were that it could be $5.4bn instead, as reported by AFP.

Deutsche Bank has denied seeking assistance from the German government, plus German Chancellor Angela Merkel doesn’t want to have to rescue the bank ahead of the 2017 German elections. [Technically, the government can’t even do that under the constitution.]

Mohamed A. El-Erian / Bloomberg

“Shares of Deutsche Bank, Germany’s largest bank, have lost more than half their value in the last year, and have been subject to exceptional volatility. Its bonds have also had a rough ride.

“The decline is fueling lots of speculation about the adequacy of the bank’s capital cushion, its strategic positioning, the need to dispose of non-core units and its relations with the German government.  More generally, the bank’s struggles hold important lessons for investors in the European banking sector, as some institutions continue to struggle to overcome the legacy of the global financial crisis.

“Deutsche Bank is battling three simultaneous headwinds that also are roiling other financial institutions:

“—Ultra-low interest rates, including negative ones on a significant portion of European and Japanese government bonds, are undermining the ability of the bank to generate steady income from traditional intermediation activities.

“—A persistently sluggish economy is putting pressure on the creditworthiness of some of the banks’ borrowers.

“—Financial-market distortions, including interventions by central banks that were deemed improbable not so long ago, together with tighter regulation, have eroded the scope for revenue generation from capital market activities.

“These headwinds are not going to die down soon.  As a result, banks must have, and must be perceived to have, robust capital cushions to avoid the kind of rough treatment by markets that Deutsche Bank continues to experience.  This is particularly true of the European banking system, where, unlike its U.S. counterpart, comprehensive efforts to overcome past slippages were hampered at times by the urgent need to address a sovereign debt crisis that even threatened the integrity of the euro zone....

“Bank investors have also been reminded that legal issues remain, most recently by the $14 billion penalty claim against Deutsche Bank announced earlier this month by the U.S. Department of Justice. This disclosure, along with the cross-selling scandal at Wells Fargo, is a further setback for banks that are still struggling to regain the public’s trust and respect....

“Deutsche Bank may be an extreme case but its travails are indicative of a broader reality for the European banking sector as a whole.  Unlike their U.S. counterparts, some European institutions haven’t regained a sufficiently from post-crisis footing.  That means investors will need strong stomachs as they seek to differentiate among companies and opportunities in a sector that will inevitably remain vulnerable to bouts of unsettling market contagion, volatility shocks and reputational risk.”

Some economic news in the Eurozone...

A flash reading on Euro area inflation for September came in at 0.4%, annualized, up from 0.2% in August, according to Eurostat.  A year ago it was -0.1%.

Eurostat also released Euro area unemployment for August, 10.1%, unchanged from July and down from 10.7% a year ago; still the lowest rate since July 2011, but double that of the U.S.

Germany’s unemployment rate is 4.2% (the govt. measures it differently and pegs it at 6.1%, still a historic low), France 10.5% (up from 10.3% in July...not good for President Hollande), Italy 11.4%, Spain 19.5%, Greece 23.4% (June).

The youth jobless rates remain sky high in Italy, 38.8%, Spain 43.2%, and Greece 47.7% (June).

According to a group of economists in Germany (German Institute for Economic Research), growth this year is expected to be 1.9%, which would be the fastest pace since 2011.  GDP is expected to grow by 1.4% in 2017 and 1.6% in 2018.

Mario Draghi, in a closed-door hearing at the Bundestag, told German MPs on Thursday that the ECB’s extraordinary monetary policy measures had been good for the German economy.

“In Germany, exports are benefiting from the recovery in the euro area, unemployment is at its lowest level since reunification, people’s take-home pay is increasing noticeably, and venture capital is pouring into Berlin’s Silicon Valley.”  [Financial Times]

But there are still risks from Brexit.  Retail sales in the month of August, for example, were down 0.4% compared with July, but were still comfortably up 3.7% compared with August 2015.

Separately, Germany’s annual inflation rate hit 0.5% in September, a 16-month high and up from 0.3% in August.

As for the Euro bond market, the problems with Deutsche Bank had investors seeking safe haven assets, like German Bunds, with the yield on the 10-year down to -0.16% at one point, near the all-time low of -0.19%, before finishing the week at -0.12%.

Elsewhere, retail sales in Italy declined 0.3% in July compared to the previous month, and were 0.2% lower than the same month in 2015, not good. 

Italian Prime Minister Matteo Renzi said December 4 would be the date for the referendum on constitutional reform, as he has vowed he would resign in the event of defeat and right now, the polls give a slight edge to the ‘no’ camp.  Renzi had been seeking to push the date back to give himself more time to campaign and he’ll need it.

The reforms are the most sweeping since World War II.  They would sharply reduce the size of government and powers of the Senate in an attempt to make it easier to pass legislation.  But you can see if the reforms mean the loss of many legislators, and their staffs’, cushy jobs, you’d have major pushback.

In Spain, the leader of Catalonia (think Barcelona) has promised to hold an independence referendum in September 2017, saying the creation of a breakaway state from Spain was “irreversible.”

The Greek parliament approved a package of structural measures required to unlock another 2.8bn euro of bailout funding, including the establishment of an improved privatization program, a most sensitive issue for the Syriza-led government, which doesn’t want to complete the sale of certain state-owned companies, including water utilities, the electric utility PPC, the company that operates the Athens subway, and Elbo, a small arms manufacturer.  Workers of course fear they will lose their jobs and/or benefits.

On the issue of  Brexit, a survey by KPMG reveals that a majority of British chief executives are considering moving their headquarters or some of their operations outside the U.K., a full 3/4s of them.  Said the chairman of KPMG’s British operations, Simon Collins, “We hear it time and time again that business needs certainty.”

Like I’ve been saying, those who think the worst is already over when it comes to Brexit are nuts.  We haven’t even begun the process and the remaining members of the EU are in no mood to make it easy for Britain, at least a sizable number of them.  Politics will call the shots.

The KPMG survey tells you all you need to know.

---

Turning to Asia, China will be releasing a slew of data here at month and quarter end shortly, but for now, the private Caixin reading on manufacturing in September came in at 50.1 vs. 50.0 in August.

Meanwhile, the Bank of China raised a red flag on the country’s growing property bubble.

“A property bubble is the biggest risk for China’s economy,” Zhouo Jingtong, a senior economist at the bank said on Thursday.

Skyrocketing home prices would “exacerbate the wealth gap and economic woes,” he said.

“Property speculation becomes common practice and everyone is dreaming about windfall profits overnight...these are very dangerous.”

As I wrote last time, residential prices in major Chinese cities are rising at an annual pace of 30-40 percent this year.

Economist Ken Rogoff told the BBC a calamitous “hard landing” in China remains the greatest threat to the global economy.  “China is going through a big political revolution. And I think the economy is slowing down much more than the official figures show.”

In Japan, the unemployment rate for August inched up to 3.1% from 3.0% in July, which was the lowest level since 1995.

A preliminary reading on industrial production showed growth of 1.5% in August, month over month, but this is a volatile figure, with the annual pace up to 4.6%, which was better than expected and the fastest since March 2014.

But household spending fell 4.6% year on year in August, more than double what economists expected. Retail sales for the month also fell 2.1% yoy, the sixth straight month of declines.

The core consumer price index declined 0.5% in August from a year earlier.  Core consumer prices in Tokyo, available a month before the nationwide data, declined 0.5% in September year over year.

One more note from the region...South Korea’s manufacturing PMI for September was a lousy 47.6 vs. 48.6 in August.

Street Bytes

--Stocks advanced a third straight week, though the gains were miniscule, with the Dow Jones up 0.3% to 18308, the S&P 500 up 0.2% and Nasdaq up 0.1%.  Earnings should dominate the discussion (as well as the election) the next few weeks.

For the quarter, the S&P was up 3.3%, its best performance of the year.  The Dow rose 2.1% and Nasdaq soared 9.7%, its best quarter since 2013.

--U.S. Treasury Yields

6-mo. 0.43%  2-yr. 0.76%  10-yr. 1.59%  30-yr. 2.32%

--At an oil ministers meeting in Algiers this week, out of nowhere it was revealed OPEC reached an agreement to cut output by about 700,000 barrels a day, the first reduction in eight years, although the cuts will not be distributed evenly across the cartel, as, for example, Iran would be allowed to continue increasing production, though Riyadh wants Tehran to cap it at 3.6 million barrels per day, and Tehran wants it at 4.2 million.

But none of this is final until the formal OPEC meeting in November.  And even if they formalize a cut, execution is another matter.

Plus non-OPEC Russia is pumping out a post-Soviet record 11.1 million barrels and wants their production capped at this level.

So count me as highly skeptical...especially given our slow-growth, global environment.

One sidebar: OPEC hasn’t published individual targets for its members since October 2006, when the organization set a quota for Iran of 4.1mbd and one for Saudi Arabia of 9.1 million.  Riyadh is currently over 10 million, while Iran is being forced to accept a target below 4 million.

--Germany’s second-biggest lender, Commerzbank, announced it was planning to cut 9,600 jobs over the next four years and cease dividend payments for the first time.

--ING, the largest Netherlands lender, will be announcing thousands of job cuts on Monday, according to a Dutch newspaper.

--Wells Fargo CEO John Stumpf was on the hot seat again this week, this time in front of the House financial services committee.  [I was disgusted to see Democratic New York Congressman Gregory Meeks getting national news coverage for his rant against Stumpf; Meeks being one of the true corrupt dirtballs in the House today...a man who should be in jail.]

Stumpf earlier agreed to forfeit more than $40 million in pay as the bank tries to defuse the pressure arising from the scandal involving bogus accounts that has triggered lawsuits, investigations and a record $185 million penalty from regulators.  After an emergency board meeting, the board also said that Carrie Tolstedt, who stood down after a nine-year stint as the head of Wells’ retail division, would forfeit unvested equity awards worth $19 million.  Neither Tolstedt nor Stumpf will receive a bonus for 2016.

The state of California also weighed in, suspending all business ties with Wells for a year.  State Treasurer John Chiang said: “Wells Fargo’s fleecing of its customers by opening fraudulent accounts for the purpose of extracting millions in illegal fees demonstrates, at best, a reckless lack of institutional control and, at worst, a culture which actively promotes wanton greed.”

--Security experts are still weighing the damage of Yahoo’s massive breach.  Matt Blaze, a security researcher at the Univ. of Pennsylvania, said, “Data breaches on the scale of Yahoo are the security equivalent of ecological disasters.”

A big worry is a technique known as “credential stuffing,” where leaked username and password combinations are thrown at a series of websites in an effort to break in.  Software makes the trial-and-error process practically instantaneous.  Think finding a key at an apartment building and trying every door.  [AP]

--Och-Ziff Capital Management, a giant New York hedge fund, is paying a fine of $413 million as part of a deferred-prosecution agreement to settle charges it paid more than $100 million in bribes to government officials in Libya, Chad, Niger, Guinea and the Democratic Republic of Congo to secure national resources deals and other investments.  Founder Daniel Och, who is also CEO of Och-Ziff, agreed to pay $2.2 million to settle violations with the SEC.

The settlement is one of the biggest criminal penalties levied by the U.S. against a hedge fund firm, a huge blow for Och-Ziff as it tries to stem withdrawals from investors, including state pension funds, endowments and foundations.

These guys were dirtballs in their own right, dealing with the likes of Muammar Qaddafi and his family.

--Nike announced revenues in its recent quarter grew to $9.1 billion, up 8%, with “strong global demand” driving double-digit international growth and single digit in North America; higher than expectations.  Net income increased 6% to $1.2 billion.

But the shares fell as Nike’s forecast for worldwide orders for delivery through January 2017 called for a rise of 7%, the lowest in five quarters, as rivals Adidas and Under Armour chip away at Nike’s market share.  Future orders for the company’s biggest market, North America, are up only 1 percent, much lower than the 5% analysts were expecting.

--PepsiCo lifted its full-year earnings outlook for a second time this year after delivering fiscal third quarter results that topped expectations.  The world’s largest snack maker and second-largest beverage company said net revenue dipped 1.9%, but this was due to the strong dollar taking a bite out of the group’s overseas sales.  Net income, though, surged to $1.9 billion, handily beating the Street.

--Performance figures have been coming in for various endowments on a June 30 fiscal year, and Yale’s was up 3.4% to $25.4 billion, far better than the average among endowments reporting so far, which has been a loss of 2.7%.  Harvard reported a 2% decline to $35.7 billion.

Cornell University’s endowment posted an investment loss of 3.3%, the worst among Ivy schools reporting; the endowment now being worth $6.1 billion as of June 30.

Endowments are critical to university budgets, with Yale’s contributing $1.2 billion, or about 34% of the university’s fiscal 2017 budget.

--Global container volumes are on track for zero growth this year, the worst performance since 2009, which augurs further bankruptcies in the shipping industry.

“Freight rates...fell 20% in the benchmark Asia to Europe trade route this week compared with last week to $767 per customer,” as reported by Costas Paris of the Wall Street Journal.

“Rates have mostly stayed well below $1,000 since the start of the year and operators say anything below $1,400 is unsustainable.”

--The number of foreign tourists to Turkey in August fell 38%, the month after the failed coup.  Year over year declines in Turkish tourism have been in the double digits since February.

--Carnival Cruise Lines announced better than expected results for its third quarter, prompting it to raise its earnings guidance for the year.  Concerns over terrorist attacks in Europe and Zika have not impacted bookings for Mediterranean and Caribbean cruises as investors have feared.

Carnival is upbeat about booking and pricing trends for 2017.

But rival Norwegian Cruise Line lowered its 2017 targets after it saw a sharp drop off in demand from North American travelers for Mediterranean cruises.  Huh.

--The International Air Transport Association, the airline industry’s trade group, is forecasting record net profits of $39.4 billion for 2016, which isn’t too shabby.

By comparison, the airline industry reported $5 billion in combined profit in 2006, according to the IATA.

60% of the world’s airline profits are generated by U.S. carriers.  [Hugo Martin / Los Angeles Times]

--According to Broadway League, an industry group, tickets sales for the Broadway season to date are $6.5 million lower than they were at this time last year.  But, the 1.4% decline is off the biggest year in history.

“Hello, Dolly!” with Bette Midler doesn’t open until April 20, but it sold more than $9 million in tickets, Sept. 17 alone, a record for first-day sales.

--The first week’s ratings for the new television season indicate overall prime-time TV usage was off around 7% among the 18-to-34 age group compared with a year ago, based on Nielsen data, continuing a downward trend with the emergence of online video streaming and video on demand.

So they’re watching, just in different places.

CBS won premiere week, followed by NBC, ABC and Fox.

--If you are a follower of NBC News, have you noticed how reporter Jo Ling Kent is rocketing up the ranks?  Gee, do you think it’s partly because she is exotically beautiful?  I’m guessing when Savannah takes her break, we suddenly see a little Jo Ling in the studio.  I can also only imagine the discussion among the other reporters.  A lot of jealous campers.

--No CEO at one of the nation’s 100 largest companies had donated to Donald Trump as of August, compared with August 2012, when nearly a third had supported Mitt Romney, according to a Wall Street Journal analysis of campaign donations.

11 have backed Hillary Clinton, 89 staying on the sidelines.  66 sat out the 2012 election in terms of individual donations.

--Elon Musk unveiled his vision for sending humans to Mars and setting up colonies there in the next decade.  Each fully developed spacecraft likely would carry between 100 and 200 passengers, Musk said.

Well, I’d love to see this, but Musk can’t even make a production target for his cars so, whatever.

Musk is talking “hundreds of thousands of inhabitants on Mars” eventually.  NASA is taking more of a go slow approach and is targeting 2035 for the first manned mission.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: At a town hall meeting at a military base this week, CNN’s Jake Tapper asked President Obama, ‘Do you ever doubt a decision you made regarding Syria?’

Obama essentially replied, ‘There is not a scenario where we can stop a civil war.’

You know what my reply would have been had I been there.

Syrian government forces captured a rebel-held area on the edge of Aleppo last Saturday as the government’s new push, including massive airstrikes from Russian and Syrian warplanes, began, leaving nearly 2 million people in the city without running water, as cited by the U.N.  250,000 inside rebel-held areas face a humanitarian catastrophe as the remaining hospitals were destroyed.  The death toll from the escalation is in the hundreds and there is zero aid getting into the area, which already was nothing more than rubble, is reduced to dust.  These are war crimes being committed by both Russia and the Assad regime. 

The Kremlin on Thursday vowed to press on with its assault to recapture the rebel-held sector.

EU foreign affairs chief Federica Mogherini called the air strikes in Aleppo a “massacre.”

Russia and the Syrian government say they are targeting only militants.

U.S. Secretary of State John Kerry called for a halt to the flights.  But Kremlin spokesman Dmitry Peskov said, Russia would “continue the operation of its air force in support of the anti-terrorist activity of Syria’s armed forces.”  Peskov said Washington was to blame for the fighting, by failing to meet an obligation to separate “moderate” rebel fighters from terrorists.

The ferocity of the assault is now driving many of the Western-backed anti-Assad groups to cooperate more closely with jihadist fighters; as is the case in Aleppo.  Late Friday, a Russian newspaper was reporting that Moscow is sending more warplanes to the theater to ramp up the air campaign.

Editorial / The Economist

“Just when it appears that the war in Syria cannot get any worse, it does.  On September 19, Syrian and Russian planes struck a convoy about to deliver aid to besieged parts of Aleppo.  The attack wrecked the ceasefire brokered by America and Russia, and was followed by the worst bombardment that the ancient city has yet seen.  Reports speak of bunker-buster, incendiary and white phosphorous bombs raining down.

“Bashar al-Assad, Syria’s president, is destroying his country to cling to power.  And Vladimir Putin, the Russian president, is exporting the scorched-earth methods that he once used to terrify the Chechen capital, Grozny, into submission.  Such savagery will not halt jihadism, but stoke it.  And American inaction makes it all worse. The agony of Syria is the biggest moral stain on Barack Obama’s presidency. And the chaos rippling from Syria – where many now turn to al-Qaeda, not the West, for salvation – is his greatest geopolitical failure.

“Mr. Obama thinks that resolutely keeping out of the Syrian quagmire is cold, rational statesmanship. He may be ‘haunted’ by the atrocities, but is convinced there is nothing he can usefully do.  ‘Was there some move that is beyond what was being presented to me that maybe a Churchill could have seen, or an Eisenhower might have figured out?’ Mr. Obama mused in a recent interview with Vanity Fair.  Mr. Obama is right to think that the world’s problems cannot all be solved by American power, and that ill-considered intervention can make them worse, as when America invaded Iraq.  But Syria’s agony shows that the absence of America can be just as damaging.

“As America has pulled back, others have stepped in – geopolitics abhors a vacuum. Islamic State (IS) has taken over swathes of Syria and Iraq.  A new generation of jihadists has been inspired to fight in Syria or attack the West.  Turkey, rocked by Kurdish and jihadist violence (and a failed coup), has joined the fight in Syria.  Jordan and Lebanon, bursting with refugees, fear they will be sucked in.  The exodus of Syrians strengthens Europe’s xenophobic populists and endangers the European Union.  A belligerent Russia feels emboldened.

“By sending warplanes to Syria to prop up Mr. Assad, Mr. Putin has inflamed the struggle between Shia and Sunni Muslims.  Mr. Putin and Mr. Assad now seem determined to take control of ‘useful Syria’ – the line of cities from Damascus to Aleppo, and the territories to the west, forsaking the desert and the Euphrates valley – before a new American president takes office next year.  Hence the ferocity of the assault on east Aleppo, the last major rebel-held urban area.

“None of this is in America’s interest.  Being cool and calculating is not much use if everybody else thinks you are being weak.  Even if America cannot fix Syria, it could have helped limit the damage, alleviate suffering and reduce the appeal of jihadism. This newspaper has long advocated safe areas and no-fly zones to protect civilians.  The failure to strike Mr. Assad’s regime after he crossed the ‘red line’ on the use of chemical weapons damaged American credibility, as many around Mr. Obama admit. Now it is Russia that sets the rules of the game.  Western action that once carried little risk now brings the danger of a clash with Russia....

“As a Dutch-led inquiry into the destruction of flight MH17 over Ukraine in 2014 makes clear, the challenge of Russia is not only, and not mainly, in Syria. The West must keep talking to Mr. Putin, but resist his adventurism – starting with the maintenance of EU sanctions.  Mr. Putin is a bully, but not irrational. He will keep gambling for advantage for as long as he thinks the West is unwilling to act.  But he will, surely, retreat as soon as he feels it is serious about standing up to him.”

Editorial / Wall Street Journal

“Russian and Syrian governments continue to press their offensive in Aleppo... Samantha Power, the U.S. Ambassador to the United Nations, has denounced the assault as ‘barbarism’ and called out Russia at the Security Council for its chronic mendacity and refusal to take responsibility for its participation in the slaughter.

“Ms. Power knows something about barbarism and responsibility.  In 2001 she published a searing account in the Atlantic about the Clinton Administration’s failure to stop the 1994 genocide in Rwanda, in which as many as 800,000 Tutsis were killed over three months by their Hutu neighbors.

“Ms. Power spared no one in her depiction of the Administration’s ‘almost willful delusion’ about the killing, its diplomatic prevarications to avoid using the word ‘genocide,’ and its concern with how U.S. intervention would play in the midterm elections.  She was particularly tough on U.S. officials who ‘were firmly convinced that they were doing all they could – and, most important, all they should – in light of competing American interests and a highly circumscribed understanding of what was ‘possible’ for the United States to do.’....

“Fast forward to the present, and Ms. Power can sound like those officials she once scolded for thinking they were doing everything they could given the complexities of the situation.

“ ‘Well, Syria is a very complex picture,’ Ms. Power told CBS earlier this month.... ‘But the idea that we have not been doing quote anything in Syria seems absurd.  We’ve done everything short of waging war against the Assad regime and we are, I should note, having significant success against ISIL, on the ground.’

“Ms. Power’s list of achievements in Syria might seem grimly funny to the more than 10 million Syrians driven from their homes in the civil war and the families of its 400,000 dead, most killed by the Assad regime.  The starving residents of Aleppo and other besieged Syrian cities also know that until last week the Obama Administration was eager to team up with the Russians – going so far as to share critical battlefield intelligence – so they could jointly attack Islamic State targets, thereby further freeing the Assad regime to do its dirty work.  Another stab at U.S.-Russian cooperation hasn’t been ruled out.

“President Obama bears ultimate responsibility for doing so little to stop the five-year Guernica that is Syria, and we don’t know what Ms. Power’s private policy advice has been.  But in public she has become an echo of the officials she once denounced for justifying American inaction in the face of mass slaughter. The honorable decision would be to resign.”

Richard Cohen / Washington Post

“President Obama tells every interviewer that he’s anguished over Syria, but that is scant compensation to the victims, and it has not moved the Russians or the Syrian government to halt their bombing.  Secretary of State John F. Kerry, like some hapless suitor offering wilted flowers, has been appealing to Vladimir Putin’s wholly imaginary better angels.  Putin takes the flowers and then bombs some more.  Unlike Obama, he knows what he wants.  He wants to win.

“This is not Kerry’s failure. It is Obama’s. He takes overweening pride in being the anti-George W. Bush.  Obama is the president who did not get us into any nonessential wars of the Iraq variety.  The consequences for Syria have been dire – perhaps 500,000 dead, 7 million internal refugees, with millions more surging toward Europe like a tsunami of the desperate.

“European politics has been upended – Germany’s Angela Merkel is in trouble, Britain has bolted from the European Union, and Hungary and Poland are embracing their shameful pasts – but there is yet another casualty of this war, the once-universal perception that the United States would never abide the slaughter of innocents on this scale.  Yet, we have.  Obama has proclaimed doing nothing as doing something – lives saved, a quagmire avoided.  But doing nothing is not nothing.  It is a policy of its own, in this case allowing the creation of a true axis of evil: a gleeful, high-kicking chorus line of Russia, Iran and Bashar al-Assad’s Syria.  They stomp on everything in their path.

“Aleppo then is like Guernica, a place of carnage.  It’s also a symbol of American weakness.  The same Putin who mucks around in Syria has filched U.S. emails and barged into the U.S. election.  He had kept Crimea and a hunk of Ukraine and may decide tomorrow that the Baltics, once Soviet, need liberating from liberation. He long ago sized up Obama: all brain, no muscle.

“All over the world, U.S. power is dismissed. The Philippine president, a volcanic vulgarian, called the president a ‘son of a whore’ and, instead of doing an update of sending in the fleet, Obama canceled a meeting.  China constructs synthetic islands in the Pacific Ocean, claiming shipping lanes that no one should own, and every once in a while a U.S. warship cruises close – but not too close.  We pretend to have made a point.  The Chinese wave and continue building.  The North Koreans are developing a nuclear missile to reach Rodeo Drive, and God only knows what the Iranians are up to deep in their tunnels.

“Does all this stem from Uncle Sam’s bended knee in Syria?  Who knows?  But U.S. reluctance to act has almost certainly given others resolve.  There was never any need for the United States to put boots on the ground – that has been Obama’s straw man, a totally fatuous excuse for inaction.  A no-fly zone over Syria, just like the one George H.W. Bush imposed on Iraq to stop Saddam Hussein’s slaughter of the Kurds, would have saved countless lives.*  An Assad without an air force and his killer copters might now be Dr. Assad, the London eye doctor he once was.  The Russians would have likely stayed out of Syria, and the Iranians and their chums, Hizbullah, would still be minding their own business instead of propping up this revolting regime.

“The ‘Guernica’ mural once seen is not forgotten – the anguished faces, the twisted bodies, the hideous deformities of violent death.  Now we have the photo of the Syrian boy in an ambulance, iridescent red, powdered with the dust of gone buildings, staring vacantly at a world where, for him, there are no adults.  Once again, little is being done.  Once again, worse will follow.”

*For new readers, I spelled out in the summer of 2012...2012...how this was the solution, years before ISIS emerged.  Years before Russia was to get involved.  But for Obama, it was about the election.  Before he leaves office, he should be hauled before the Senate Foreign Relations Committee to explain his strategy in the country.  This will never happen, of course, but I won’t let anyone forget his culpability in the deaths of hundreds of thousands and the resultant disintegration of the political process in Europe for as long as I’m alive.

In Iraq, the United States is going to deploy around 600 more troops to train Iraqi forces for an offensive against the ISIS stronghold of Mosul.  The reinforcements were at the request of Iraqi Prime Minister Haider al-Abadi.

The U.S. currently has 4.565 troops in Iraq, providing extensive air support, training and advice.

On Tuesday, ISIS suicide bombers targeting shopping areas in Baghdad killed at least 17.

Editorial / Washington Post

“An assault by U.S.-backed Iraqi forces on Mosul, the largest stronghold of the Islamic State, is expected within weeks – far sooner than seemed likely a few months ago.  Unfortunately, the acceleration is not good news.  The government of Iraqi Prime Minister Haider al-Abadi is rushing the operation forward even though it lacks a strategy to secure and govern the multiethnic city of roughly 1 million people once the terrorists are driven out. It is recruiting sectarian militia forces that have a record of abusing civilians and seizing territory for themselves.  Plans for protecting refugees, who may number in the hundreds of thousands, are sketchy.

“In short, the Mosul offensive is setting the stage for a potentially catastrophic Day After problem.  Though the United States has painfully experienced what such poor preparation can lead to, in Baghdad in 2003 and Libya a decade later, it is pushing the Abadi government to move still faster.

“Military experts are more concerned about the aftermath than the fight itself.  Brig. Gen. William F. Mullen, who was deputy commander for U.S. operations in Iraq until June, predicted last week that Islamic State defenses in Mosul could collapse quickly.  ‘And then what?’ he asked at a forum at the Washington Institute for Near East Policy. The Iraqi government’s plan, he said, amounts to ‘chips will fall and we’ll sort it out when we get to that.’

“ ‘That’s not a good plan,’ Mr. Mullen said.  ‘This is going to be ugly.’”

Shiite militias will be going against Sunnis in Mosul.  Once Mosul falls, the various forces, including the Kurds that will be in on the fight, could turn against each other.  Turkey has threatened to defend ethnic Turks in the city.

Israel: Leaders from around the world were in Jerusalem on Friday to bid farewell to Shimon Peres, the former prime minister and president who spent seven decades in public life before he died of complications from a stroke at the age of 93.

President Obama, in attendance at the funeral service, said, “The last of the founding generation is now gone,” adding that the work was “in the hands of Israel’s next generation and its friends.”

Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas shook hands, after Netanyahu allowed Abbas’ to attend.  They have not formally met in six years, but this was a brief pause in their war of words.

In his eulogy, Netanyahu said: “Peace will not be achieved other than by permanently preserving our power.  But power is not an end in itself.  It is not the real power.  It’s a means to an end.  The goal is to ensure our national existence and coexistence.”

But there were no Arab heads of state in attendance, not even Egypt and Jordan, with whom Israel has peace treaties, though it seems both did send representatives.

Peres had a role in virtually every major moment in Israeli history since its independence in 1948.  A security hawk, he was instrumental in the development of Israel’s nuclear program and promoted the construction of the first settlements in the aftermath of the Arab-Israeli war of 1967.

But he is remembered mostly for being a man of peace and he was a key figure in the 1993 Oslo agreement. He shared the Nobel Peace Prize in 1994 with Prime Minister Yitzhak Rabin and Yasir Arafat.

The peace process laid out by Oslo accords, however, stalled out.

Russia: A Dutch-led investigation into Malaysia Airlines Flight 17, which was shot down over Ukraine in 2014, has concluded that the powerful surface-to-air missile system used to shoot the plane down was trucked in from Russia at the request of Russian-backed separatists and returned to Russia the same night.

The report confirmed what everyone has known...the Kremlin was involved, including in the cover-up.

The Netherlands conducted the investigation, which included prosecutors from Australia, Belgium, Malaysia and Ukraine, because it lost the most citizens of the 298 killed.

The report did not name individual culprits and stopped short of saying Russian soldiers were involved, but the investigators were clear afterwards that they would identify suspects, in preparation for bringing criminal indictments.

But even if they do, nothing will come of it.  It’s not like Russia is about to let its citizens be extradited (plus it’s illegal under their constitution).

China / South Korea / Japan: Tensions are rising between China and South Korea, and China and Japan, and it’s getting more than scary.  It’s also flying way under the radar.

Friday, Seoul announced the new site of a U.S.-built missile defense system (THAAD...Terminal High Altitude Area Defense system) that China is strongly opposed to.

An initial site was rejected by nearby residents, and the new one sits 680 meters above sea level – about 300m higher – and is farther away from residential areas.

The South Korean government is actually buying a golf course, owned by business conglomerate Lotte, for the purpose.

Seoul has insisted THAAD is purely to protect itself from North Korea’s missiles, but Beijing sees it as a danger to its national interests, allowing a U.S.-backed anti-missile system in its region.

Adding to the tension between the two, three Chinese fishermen were killed on Thursday after the South Korean coastguard threw flares and stun grenades as they boarded the boat for an inspection.  The Chinese crew locked the steering house and engine room, the officers threw the flares and sound bombs into the steering house after breaking the windows, and three were found dead inside the engine room when that was broken into.  [South China Morning Post]

As for the anti-missile system, China’s defense ministry said it will do what it has to do.

Then you have the Chinese air force’s unprecedented drills in the Western Pacific, which commenced last weekend, with military experts predicting more, even larger, exercises in the region in the future.

More than 40 aircraft were involved to counter U.S. interference in the South China Sea, and included simulated attacks on sea targets, with in-flight refueling.

The thing is, the aircraft, which included long-range bombers, flew over Japan’s Miyako Strait, though China says it was merely routine, as it was over the air defense identification zone (ADIZ) Beijing established in the East China Sea in 2013.

The drill was near Okinawa, so Japan scrambled fighter jets. 

Song Zhongping, a Beijing-based military expert, said the drill “aims to point to the U.S. naval base in Guam, which is the bridgehead for Washington to contain China in the region.” [SCMP]

Ah yes, Guam.  It’s going to be in the news more and more in the coming year or two. I’m on record as saying North Korea will target it.

But what Japan is concerned about, aside from the obvious defense implications of China’s increasingly aggressive posture in the region, is if the South China Sea, the cheapest, most direct way for Japan to receive its energy supplies from the Persian Gulf, is blockaded, it can crater Japan’s economy.  Nearly 60% of Japan’s oil and natural gas passes through the sea.  Corn and wheat from Australia and the Black Sea region as well.  Ergo, Japan is highly vulnerable as China turns the South China Sea into its own “lake,” as some say.  Establishing military bases on the artificial islands is a key to Beijing’s strategy to be able to choke off the Sea at a moment’s notice.

And it’s not as if China ever forgets the history of World War II and atrocities committed by the Japanese on its soil.

According to the Pew Research Center, 81% of Chinese hold unfavorable views about Japan, up from 70% a decade ago.  86% of Japanese hold unfavorable views of the Chinese, up from 71%.  [Steve Mollman / Defense One]

Separately, Beijing and Moscow just concluded a series of joint naval exercises in the South China Sea.

Meanwhile, President Xi Jinping is preparing for a key Central Committee meeting in late October that will set the agenda for next year’s 19th party congress, at which he is expected to define his political ambitions and the road map to succession at the party’s 20th congress five years later, in 2022 (Chinese leaders such as Xi serving 10 years).

Next year, five of the seven members of the Politburo Standing Committee – all but Xi and Premier Li Keqiang – step down after reaching the compulsory retirement age of 68.

You also have a 25-member Politburo, of which six retire, leaving 12 to compete for five vacancies on the Standing Committee.  [25-6-5=14...minus Xi and Li...sorry, had to work this out in my head first, he smiled.]

Philippines: Oh, that daffy, total wacko, President Rodrigo Duterte.  Thursday, in a speech to Philippine Marines, Duterte said upcoming U.S.-Philippine military exercises would be “the last” and ruled out any further joint patrols.  Why?  Because China doesn’t like them.

This is not good, boys and girls, even if Philippine Foreign Secretary Yasay declared Duterte never said such a thing.

Duterte’s ministers are like the cleanup brigade after a circus elephant act, constantly trying to set the record straight, mend fences, after their leader opens his mouth.

Tuesday, Duterte declared that U.S. forces in Mindanao “have to go...there are too many whites there.”

Philippine Defense Sec. Lorenzana later clarified the Americans were still welcome, and needed.

Then on Friday, Duterte compared his anti-drug campaign to the Holocaust, saying he would kill as many addicts as Hitler did Jews.

“Hitler massacred three million Jews as well as other minorities...there’s three million drug addicts.  I’d be happy to slaughter them,” he said.  [BBC News]

[At least six million Jews were exterminated.]

More than 3,000 have been killed in police operations or by vigilantes thus far in the Philippines.  Duterte has been accused of sanctioning death squads to kill criminals.

Needless to say Jewish groups were none too pleased.  One U.S. official of the Simon Wiesenthal Center, Rabbi Abraham Cooper, said, “Duterte owed the [Holocaust] victims an apology for his disgusting rhetoric.”

India / Pakistan: For the first time in years, India attacked terrorist camps across the border in Pakistan on Wednesday, in retaliation for the deadly strike against Indian soldiers earlier in September.  Heavy casualties were inflicted, according to Indian officials.

Pakistani Prime Minister Nawaz Sharif took to national television to announce Pakistan’s army is capable of defending its borders.  He said only two Pakistani soldiers had been killed, with the Pakistani army saying India had not carried out surgical strikes on three camps as it claimed.

Saudi Arabia: The White House blasted the Senate for overriding President Obama’s veto of legislation that would allow U.S. citizens to sue Saudi Arabia over the Sept. 11 terrorist attacks.

White House spokesman Josh Earnest said, “I would venture to say that this is the single most embarrassing thing that the United States Senate has done, possibly, since 1983,” when Ronald Reagan was president.

The vote was 97-1 and Earnest seized on comments made by Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.), who told reporters Judiciary Committee members didn’t pay much attention to the legislation until it came to the floor, suggesting senators didn’t want to break with 9/11 victims and their families.

Obama has insisted the law would undermine the concept of sovereign immunity, putting American diplomats, military service members and others at risk of legal action, assuming other countries now pass reciprocal laws.

Plus the U.S.-Saudi relationship today is testy, especially because of the Iran nuclear deal, and the Obama administration doesn’t want to anger the Saudis.

So, a day after the override, Republican leaders such as Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan both said they were open to discussions on changing the bill.

“We want to make sure the 9/11 victims and their families have their day in court,” Ryan told reporters.  “At the same time, I would like to think that there may be some work to be done to protect our service members overseas from any kind of legal ensnarements that occur, any kind of retribution.”

Colombia: The government and left-wing Farc rebels signed the historic agreement that formally brings to an end the 52-year civil war.

The rebel leader, Timoleon Jimenez (“Timochenko”), apologized to “all the victims of the conflict” and was greeted with applause at a ceremony in Cartagena.  The war killed 260,000 and left more than six million internally displaced.

President Juan Manuel Santos said: “Colombia celebrates, the planet celebrates because there is one less war in the world.

The Colombian people must still approve the deal in a referendum on Sunday, with polls indicating the people will.

Random Musings

--Presidential Polls....

On the eve of the debate, a Bloomberg Politics national poll of likely voters had Donald Trump leading Hillary Clinton 43% to 41%, with Gary Johnson at 8% and Jill Stein 4%.  Clinton had a 4-point advantage back in August in this one in a four-way race.

In a head-to-head contest, it is 46 each.  In August, Clinton led by 6 points.

Another pre-debate national poll, this one from ABC News/Washington Post, had Clinton at 46%, Trump 44%, Johnson 5%, Stein 1%.  In a two-way matchup, Clinton led Trump 49-47.  An August poll had Clinton up 8 points.

But a Fox News national poll released Friday has Clinton with a 43-40 lead, Johnson 8%, Stein 4%.  Two weeks ago, Clinton led by a point.

In CNN/ORC battleground state polls, in Colorado, likely voters break 42% for Trump, 41% for Clinton, 13% for Johnson and 3% for Stein.  Pennsylvania splits 45% for Clinton, 44% for Trump, 6% for Johnson and 3% for Stein.

[In Pennsylvania’s Senate race, Democrat Katie McGinty tops incumbent Republican Sen. Pat Toomey 49-46.]

In five key state polls from Public Policy Polling, post-debate, Clinton leads Trump in Virginia and Colorado by identical 46-40 margins, while she is ahead 45-39 in Pennsylvania, 45-43 in Florida and 44-42 in North Carolina, all four-way results.  [Head to head, add another point for Clinton, max.]

--Gary Johnson had, by his own admission, another “Aleppo moment” when on Wednesday at a MSNBC-hosted town hall in New Hampshire, Chris Matthews asked Johnson to name his favorite foreign leader and Johnson met that with a blank stare.

Matthews even said, “In any of one of the continents in any country, name one foreign leader,” prompting Johnson with a list of countries to help jog his memory...nothing.  Eventually, running mate William Weld bailed him out in naming Angela Merkel.

--Forbes magazine reduced Donald Trump’s net worth by $800 million to $3.7bn, saying the reduction was mainly due to a softening New York property market.

--Trump said he doesn’t think he was being treated fairly by former Miss Universe Alicia Machado, telling Bill O’Reilly, “She had a lot of difficulties and, you know, they wanted to fire her.  The company itself wanted to fire her.  I saved her job.”  He also said he spent less than five minutes speaking to her.

--Daniel Henninger / Wall Street Journal

“It’s past time that we all come to grips with the reality that the Trump candidacy has been carried forward to this unlikely moment by forces in the American population that transcend normal presidential politics.  These are essentially the same forces that carried the equally improbable Bernie Sanders to 22 primary victories....

“This week’s media meme – that Hillary Clinton wiped the floor with Mr. Trump – is undervaluing the realities of this unusual election.

“We have been through this exercise so many times with Donald Trump.  When in July last year he said of Sen. John McCain, ‘He’s not a war hero,’ I, like others, thought, he’s done.  You cannot run for president and say an American military man who was tortured in a North Vietnam prison camp is no hero.  Everyone, including the umpteen GOP candidates, thought Mr. Trump’s early primary surge would collapse.

“Of course the Trump contraption rattled forward, surviving one awful gaffe after another.  The meme then (as now) was that the Trump supporters were basically idiots – now known as the deplorables.  Well, it’s also true that you can pay a king’s ransom to watch the New York Yankees from the box seats with normal people or a lot less to sit in the upper deck with guys who will F-bomb your kids for nine innings.  They’re all cheering for the same team.  Welcome to America. Welcome to the Trump mosh pit.

“Let us turn, then, to who said what in the debate for some understanding of the Trump paradox: How can a candidate get this far by seeming to say so little that we normally expect of a president?

“The word ‘sound bite,’ a term of usage originating in television, is now viewed with derision.  Except for one thing: Sound bites work.  They convey one idea and stick that idea in the mind.  Recite, please, one memorable thing Hillary Clinton said in more than 90 minutes. OK, ‘trumped-up trickle down.’  Her debate was well-constructed, but so is a paint-by-numbers picture.

“At one point, Mrs. Clinton was talking about ‘investing in the middle class,’ and ‘making college debt-free’ and ‘broad-based inclusive growth.’

“Trump: ‘Typical politician. All talk, no action.  Sounds good, doesn’t work.  Never going to happen.  Our country is suffering because people like Secretary Clinton have made such bad decisions in terms of our jobs and in terms of what’s going on.’

“Without question much of the Trump side of the debate was a discontinuous morass.  But Donald Trump oozes contempt for the status quo. That visceral disdain offsets a lot of missteps and whatever Hillary’s fact-check drones are putting up on her website....

“One of these two is catching the mood of the country, and the other just isn’t.

“Are we demeaning a presidential election by saying it is reducible to sound bites?  I once thought so. Until it became clear that Donald Trump, like Bernie Sanders, was somehow detecting the complex tectonic shifts inside American politics.

“Some of these shifts are disturbing – blue-collar alienation, eroding civil order in some cities – but unlike his always-hedged opponent, Donald Trump slams into them.

“This sort of populism is exciting, but often limited.

“Bernie went down because he was too one-note.  Inequality wasn’t enough.  Donald Trump’s one-note is trade, but his overweighting of the issue could sink him.  Millions of the suburban voters he needs in battleground states have jobs connected to a strong global trading system.  They don’t want to vote for Hillary, but past some point, the ‘NAFTA’ rant may prove too much.

“So it’s back to the mosh pit. Yankee fans, from the boxes to the bleachers, love their team.  But if a guy underperforms or dogs it, they’ll boo him mercilessly.  Donald Trump survived Monday night. But one more outing like that and his phenomenal candidacy could get booed off the field.”

--David A. Fahrenthold / Washington Post

“Donald Trump’s charitable foundation – which has been sustained for years by donors outside the Trump family – has never obtained the certification that New York requires before charities can solicit money from the public, according to the state attorney general’s office.

“Under the laws in New York, where the Donald J. Trump Foundation is based, any charity that solicits more than $25,000 a year from the public must obtain a special kind of registration beforehand.  Charities as large as Trump’s must also submit to a rigorous annual audit that asks – among other things – whether the charity spent any money for the personal benefit of its officers.

“If New York Attorney General Eric Schneiderman (D) finds that Trump’s foundation raised money in violation of the law, he could order the charity to stop raising money immediately.  With a court’s permission, Schneiderman could also force Trump to return money that his foundation has already raised.”

--Editorial / Wall Street Journal

“No one has cultivated an image of public virtue better than FBI director James Comey, so he was in high dudgeon Wednesday when mere mortals like elected Members of Congress challenged his investigation of Hillary Clinton’s email violations as Secretary of State.

“ ‘You can call us wrong, but don’t call us weasels.  We are not weasels,’ Mr. Comey declared Wednesday at a House Judiciary Committee hearing.  Weasels or not, Mr. Comey did little to rebut suspicion that he handled the Clinton probe with tender loving political care.

“Recall that in July Mr. Comey held a remarkable press conference in which he announced that Mrs. Clinton shouldn’t be prosecuted for mishandling classified information.  But it isn’t his job to make prosecutorial decisions.  That’s the duty of Justice Department prosecutors.  Mr. Comey’s unprecedented declaration had the effect of letting Justice officials off the hook.

“Yet there was Mr. Comey on Wednesday passing the buck to the same Justice Department.  Republicans wanted to know how and why Clinton aides Cheryl Mills and Heather Samuelson had been granted immunity from prosecution.  Don’t ask Saint Jim.

“That was ‘a decision made by the Department of Justice’ and the FBI wasn’t ‘part of those discussions,’ he said.  Seriously? The FBI was willing to bug out of a decision on immunity that would be directly relevant to its ability to collect evidence?

“Mr. Comey also didn’t have a credible explanation for why immunity was necessary.  South Carolina Rep. Trey Gowdy noted that the lawyer for both women – Beth Wilkinson – stated that ‘The Justice Department assured us that they believed my clients did nothing wrong.’  So why did they need immunity?....

“Mr. Comey also ducked and covered on why Ms. Mills and Ms. Samuelson were allowed to represent Mrs. Clinton as her attorneys during her FBI interview.  He said the FBI had no control over a subject’s lawyers.  Yet as John Ratcliffe (R., Texas) dryly noted, he could think of no ‘reasonable’ prosecutor who would allow two witnesses who might prove ‘central to the prosecution’ to sit in on  a target’s interview.

“Far be it for us to call Mr. Comey a weasel, but his highly unusual methods in investigating Mrs. Clinton have tarnished the FBI and certainly knocked off his halo.”

--Texas Republican Sen. Ted Cruz is facing major backlash from all sides for his endorsement last Friday of Donald Trump, after he refused to do so at the Republican National Convention.  Some in Texas are urging House Homeland Security Chairman Michael McCaul to challenge Cruz in two years. 

On Saturday, Cruz, addressing a policy forum, denied he caved in to pressure from top Republicans nationally and in his home state, saying he would have faced an outcry no matter what.  He also said, “I have no intention of defending everything Donald Trump says or does,” when asked whether he thought Vladimir Putin was a better leader than Barack Obama.

--The prosecution’s star witness in the Bridgegate scandal, David Wildstein, claimed Gov. Chris Christie was told of the traffic jams at the George Washington Bridge in the midst of the gridlock in Fort Lee in September 2013, and laughed when he heard about it.

But Wildstein, who pleaded guilty to federal crimes associated with the scandal and is now a cooperating government witness, also said the chairman of the Port Authority of New York and New Jersey, David Samson, knew of the shutdowns.

Samson himself was later indicted and pleaded guilty to shaking down United Airlines to provide a scheduled direct daily flight from New Jersey to his winter home in South Carolina.

Ah yes, corruption makes the world go around.

--According to figures released by the FBI, murders in the U.S. jumped 10.8% in 2015, a sharp increase after a two-decade trend of falling crime across the country.  Over the past 20 years, the biggest one-year jump had been 3.7% in 2005.

In 2015, the number of all types of violent crime rose 3.9%, with the number of property crimes falling 2.6%.

The murder increase was concentrated in cities such as Cleveland, Baltimore and St. Louis, according to the FBI.

A report by the Major Cities Chiefs Association found that in the first half of 2016, murders rose in 29 of the nation’s biggest cities while they fell in 22 others, up 15% in those 51 compared with the same period the year before.  Chicago, for example, has seen a huge rise to 316 homicides in the first half of this year compared with 211 in the same period of 2015, while the murder rate has fallen in cities like Baltimore and Washington, D.C.

Nationally, last year the number of black Americans murdered was 7,039, compared with 5,854 whites, according to the data.

--It was amazing there was only one fatality in the Hoboken train disaster, but what a sad story it was.  You just never know.

--I have an extensive tribute to one of my heroes, Arnold Palmer, in my 9/29 edition of Bar Chat that I encourage you to peruse, but for this space I’ll give President Obama the last word.

“With his homemade swing and homespun charm, Arnold Palmer had swagger before we had a name for it.  From a humble start working at the local club in his beloved Latrobe, Pennsylvania, to superstardom as the face of golf around the globe, Arnold was the American Dream come to life.

“Along the way he racked up win after win – but it wasn’t his success that made him King. Arnold’s freewheeling, fearless approach to the game inspired a generation of golfers and, for the first time on TV, enthralled an audience across the world.  Sure, we liked that he won seven majors, but we loved that he went for it when he probably should have laid up.

“That spirit extended beyond the inks where he gave freely of himself and poured everything he had into everything he did: from building hospitals to personally responding to countless letters from his fans. And he did it all with a grin that hinted maybe he had one more shot up his sleeve.

“Today, Michelle and I stand with Arnie’s Army in saluting the King.”

RIP, Arnie.  You were both a Great American and sportsman.

---

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

God bless America.

---

Gold $1318
Oil $48.05...highest in six weeks

Returns for the week 9/26-9/30

Dow Jones  +0.3%  [18308]
S&P 500  +0.2% [2168]
S&P MidCap  +0.1%
Russell 2000  -0.2%
Nasdaq  +0.1%  [5312]

Returns for the period 1/1/16-9/30/16

Dow Jones  +5.1%
S&P 500  +6.1%
S&P MidCap  +11.0%
Russell 2000  +10.2%
Nasdaq  +6.1%

Bulls 45.2
Bears  23.1  [Source: Investors Intelligence]

Have a great week.  Let’s Go Mets!!!

Brian Trumbore