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For the week 9/28-10/2
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Edition 860...for newbies, that’s 860 columns
Washington and Wall Street
Those thinking the Federal Reserve may opt to finally raise interest rates for the first time since 2006 when the Open Market Committee meets Oct. 27-28 will now have to wait until December (Dec. 15-16) as Friday’s jobs report for September was uniformly disappointing, making it easy for the Fed and Chair Janet Yellen to say, come month end, that they still need to see more data, as well as gauge the impact foreign market turmoil and the China slowdown could be having on both developed and emerging markets.
The U.S. economy added just 142,000 jobs in September, far below the 200,000 forecast, but this in and of itself wouldn’t necessarily be a game-changer. The problem was that August was revised down to 136,000 from 173,000, while July was revised down to 223,000 from 245,000, and the bottom line is the economy has added an average of 198,000 jobs per month this year, vs. a robust 260,000 average in 2014. Plus the three-month average is just 167,000.
Additionally, average hourly earnings were unchanged after a solid gain in August, while the labor force participation rate fell to 62.4% from 62.6%, the lowest since October 1977.
Yes, the overall unemployment rate remained steady at 5.1%, but we all know that’s more than a bit deceiving, however the good news is that U-6, the measurement of those who are underemployed, did decline to 10.0% from 10.3%, which is the lowest since May 2008.
But all in all, while not a disaster, the jobs numbers aren’t great and the Fed has an easy decision this time, recognizing that few are letting them off the hook for not hiking rates when they had the opportunity to do so in 2014.
This week, International Monetary Fund chief Christine Lagarde weighed in on the global picture and certainly gave the Fed more ammunition for holding off until December, when she suggested the IMF’s key concern is the status of emerging markets, which are being buffeted by the slowdown in China, leading to falling commodity prices, while concerns over an eventual Fed rate hike and the impact on the dollar are also hitting EM growth.
Lagarde said the world needed to undergo two key economic transitions: First, China’s less capital intensive growth model has led to lower commodity prices. Second, the shift to higher rates in the U.S.
“The prospect of rising interest rates in the United States and China’s slowdown are contributing to uncertainty and higher market volatility,” Ms. Lagarde said.
“There has been a sharp deceleration in the growth of global trade. And the rapid drop in commodity prices is posing problems for resource-based economies.”
Lagarde, while urging the Fed not to act quite yet, did say that when it eventually does, that reflects a stronger U.S. economy, but it’s a delicate balancing act. A rising dollar, for one, will lead to further capital outflows out of EM, “leading to corporate defaults – and a vicious cycle between corporates, banks and sovereigns,” she warned. [Financial Times]
Back to the U.S., there was a slew of other economic news. August personal income was up 0.3%, while consumption rose 0.4%, both solid and more or less in line with expectations. August construction spending was strong, up 0.7%, 13.7 year-over-year, the best annualized pace since March 2006, while August factory orders fell 1.7%, worse than forecast.
The S&P/Case-Shiller 20-city home price index for July rose 5% over year ago levels, with all 20 cities registering gains, led by San Francisco, up 10.4%, and Denver, up 10.3%.
But the manufacturing data, as was the case in the employment report, was not good. The Chicago PMI for September was 48.7 vs. expectations of 53, 50 being the dividing line between growth and contraction, while the national ISM manufacturing number last month was 50.2 vs. 51.1 in August. The 50.2 is the lowest reading since May 2013. So these last two items would certainly give the Fed pause.
On the other hand, U.S. auto sales, as described further below, were the strongest in years.
Turning to the stock market, we closed out the third quarter and it was the worst since Q3 of 2011, with the Dow Jones down 7.6%, the S&P 500 down 6.9%, and Nasdaq off 7.4%. [The pain was felt across the pond as well with the German DAX losing 11.7% in the third quarter.]
The major averages all hit correction territory in August (defined as a decline of 10%), with the S&P down 12.4% from its peak at its worst closing level, and the Dow off 14.4%. The correction was the first for stocks in four years.
But thanks to a rally on Friday, stocks at least finished up on the week and October starts out in positive territory. [I have a little piece on October market returns on my “Wall Street History” link.]
So now we enter another earnings season and the numbers will no doubt be sobering, with FactSet projecting profits on the S&P 500 will decline 4.9%.
Finally, you have the action on Capitol Hill. The Senate (78-20) and House (277-151) voted to fund the government (including Planned Parenthood and Ignorance) through Dec. 11, but this is now the drop-dead date and, already, there is great tension in the halls of Congress.
This is Speaker John Boehner’s last month and he has vowed, with nothing to lose, that he’ll go all out, working with Senate Majority Leader Mitch McConnell and President Obama, to come up with a comprehensive budget package that would fund the government through at least 2016.
But beforehand you have a contentious Highway Transportation Act, whose funding ends Oct. 31 (though it is expected to be extended through Dec. 11) and the debt limit.
Initially, it was thought the debt ceiling could be extended to December, putting everything on the line for the middle of that month, but now, Treasury Secretary Jack Lew says the debt limit needs to be raised on or around Nov. 5. This means that the new House speaker, presumed to be Kevin McCarthy, will have only been on the job a week, unless Boehner can work something out with the Senate beforehand.
The whole debate, aside from encompassing the above issues, will be about the current sequester cuts, and dispatching of some of same, but while Republicans want to increase defense spending, Democrats will demand that some of their pet domestic programs are funded back to pre-sequester levels in exchange for approving increases to the defense budget.
Recognizing that Congress really only works three days a week, and that you’ll have a lengthy Thanksgiving recess, Dec. 11 (and Nov. 5, for that matter), are just around the corner.
Batten down the hatches. It’s going to get stormier, and it won’t be helpful for the markets.
One other item. As will be discussed heavily below, investors ignore at their own peril what is transpiring in Syria. Vlad the Impaler is back on the move and this whole situation could get wildly out of control, very quickly.
Europe and Asia
There was a veritable plethora (channeling Howard Cosell) of economic news from the eurozone: The unemployment rate for the EA-19 was 11.0% in August, the same as in July, and versus 11.5% in Aug. 2014, so hardly any change over the past year.
Germany’s jobless rate was just 4.5%, as measured by Eurostats, though the government pegs it at 6.4%; France’s was 10.8%, up a tick from July; Italy’s was 11.9% (12.7% Aug. ’14), a 2 ½-year low; Spain’s was 22.2% (24.2% Aug. ’14), and Greece’s unemployment rate was 25.2% (June).
The youth jobless rates in Spain (48.8%), Greece (48.3%-June), and Italy (40.7%) are still sickeningly high.
Markit reported the final September PMI figures on manufacturing and the eurozone, overall, came in at 52.0 vs. 52.3 in August.
France was 50.6 (48.3 Aug.), Germany 52.3 (53.3 Aug.), Spain 51.7 (53.2 Aug.), a 21-month low, Italy 52.7 (53.8 Aug.) and Greece 43.3 (39.1 Aug.).
“Despite unprecedented central bank stimulus and substantial currency depreciation, the eurozone manufacturing sector is failing to achieve significant growth momentum and even risks stalling again.
“The manufacturing sector is likely to provide only a minor boost to the overall economy in the third quarter, restraining GDP growth to around 0.4%.”
Williamson added: “With prices charged by manufacturers falling at the fastest rate in seven months amid a rapid descent in input prices, deflation worries will intensify and put pressure on the ECB (European Central Bank) to act more aggressively (Ed. i.e., more QE, quantitative easing).”
Speaking of falling prices, Eurostats’ flash estimate on eurozone inflation for September came in at -0.1% on an annualized basis. Not good. Spain saw consumer prices fall 1.2% in Sept.
In non-euro U.K., the final look at second-quarter GDP was up 0.7%, though the full-year outlook has been revised down to 2.4% from 2.6%. Britain’s manufacturing PMI was just 51.5 (51.6 in August).
In the big election last weekend in Spain’s Catalonia region (which includes Barcelona), pro-independence parties won an absolute majority in the 135-seat regional parliament, 72 to be exact. But the alliance fell short of getting 50% of the vote.
The separatists say the victory gives them a clear path to form an independent Catalan state. The central government in Madrid has pledged no friggin’ way will this occur.
Supporters of independence, such as Catalan regional President Artus Mas, know the process would be complicated, but the goal is to get a legally-recognized referendum.
Spain has an important general election in just three months.
Meanwhile, regarding the migration crisis, coverage of it has been swamped by other issues, but the introduction of Russia into the Syrian theater will only hasten the departure of tens of thousands of more Syrians still there, for starters.
European Union leaders of the larger nations in the bloc are increasingly torqued off at those eastern European countries that have received substantial EU aid over the years, money contributed by the wealthier members, who now don’t want to take in their share of refugees. You can imagine Italian Prime Minister Matteo Renzi is none too pleased. Both his nation and Greece receive about 90% of the initial migrant inflows and it’s been an incredible burden on their national treasuries and social fabric.
Renzi said the other day, “If you think about single member states who won’t accept 300 people after all the euros [they have received from the EU] to save their countries, I think this is immoral.”
Greek Prime Minister Alexis Tsipras echoed Renzi’s remarks. “United Europe won when the wall fell in Berlin. (But) if now we build walls in Europe, this is not the Europe of our common future.”
But Hungarian Prime Minister Viktor Orban said in an interview with the Wall Street Journal: “I don’t like fences. Who likes fences? We’re not stupid.” But he pointed out the likes of France and Spain have constructed barriers for similar purposes in recent years. “That’s clear evidence of hypocrisy in European politics. Our wall is the number five wall.”
Germany, by the way, re-imposed border controls and curbed rail traffic from Austria in an effort to slow the influx of migrants. Attitudes in the Land of Merkel are changing rapidly. Conservatives in Bavaria, long-time supporters of the chancellor, have had enough with the influx and are blaming Merkel for her open-door policy. The global economic slowdown isn’t helping here and in other eurozone nations. Volkswagen’s crimes also couldn’t have come at a worse time. The national mood is souring.
Turning to Asia, the news out of China just isn’t getting any better. The government’s official PMI for manufacturing came in at 49.8 in September vs. 49.7 in August, while the Caixin final PMI was 47.2 vs. 47.3 the prior month, the lowest since March 2009. A final reading on services by Caixin was only 50.5.
Bottom line, both the government’s and Caixin’s data indicate manufacturers are continuing to shed jobs.
Chinese industrial profits fell 8.8% in August, year-over-year, according to the National Bureau of Statistics. Third-quarter GDP is slated to be released Oct. 19 and it could be a market mover.
Separately, the Shanghai Composite stock index fell a whopping 29% in Q3.
In Japan, the manufacturing PMI for September was 51.0 vs. 51.7 in August. Industrial production fell 0.5% in August after being down 0.6% in July, so that augurs recession. But household spending for August was up a solid 2.9% annualized.
Other key manufacturing PMIs for September in the region and elsewhere:
South Korea (49.2 vs. 47.9 Aug.), Taiwan (46.9 vs. 46.1), India (51.2 vs. 52.3...seven-month low), Russia (49.1 vs. 47.9), Brazil (47.0 vs. 45.8).
--Stocks broke a two-week losing streak on the heels of a big rally Friday, the Dow and S&P gaining 1.0% and Nasdaq 0.5%. Markets around the world were mixed.
--U.S. Treasury Yields
6-mo. 0.05% 2-yr. 0.58% 10-yr. 1.99% 30-yr. 2.83%
Bonds rallied at week’s end on, first, the poor manufacturing data, and second, the mediocre jobs report that makes it pretty clear the Fed won’t be acting in October. The yield on the 10-year fell back below 2.00% for the first time since August.
Eurobonds rallied as well during the week as the ECB clearly stepped up its bond-buying initiative, with the yield on the 10-year German bund falling to 0.54% from 0.65% the week before. Spain’s 10-year yield fell from 2.03% to 1.77% over the course of the week.
--In keeping with Christine Lagarde’s remarks, emerging markets will suffer a net outflow of capital in 2015 for the first time since the 1980s, according to the Institute of International Finance. Investor flows into EMs will come in at rates lower than those recorded in 2008 and 2009 at the height of the financial crisis, while outflows have been accelerating. [Financial Times]
--U.S. auto sales soared in September, with sales hitting an annualized rate of 18.17 million units in the month, the highest rate since July 2005, according to Autodata. Overall industry sales rose 16% compared with Sept. 2014.
Ford reported a 23% increase, General Motors’ sales rose 12%, Fiat Chrysler’s 14% (its 66th consecutive month of gains), Toyota’s 16%, Nissan’s 18%, Honda’s 13%, Hyundai’s 14%, Kia’s 23%, and Subaru’s surged 28%.
But the Volkswagen brand, amid all its issues, reported an increase of only 1%, when some were projecting a rise of 8%. A better barometer of the impact of the emissions scandal will be October, as the company cannot sell 4-cyolinder diesel cars until it can prove to regulators that it has removed the software that allowed vehicles to elude testing. [More below.]
Back to the industry overall, the 18.17 million annualized number compares with just 14.5 million as recently as 2012. SUV sales have been strong in no small part due to falling prices at the gas pump.
[AAA announced this week that the national average price of gas in September was $2.34 per gallon, $1.05 less than a year ago.]
Rising auto sales also mean the unions will be clamoring for a bigger share of the profits, after all their givebacks, at upcoming contract talks and I don’t blame them.
--Tesla Motors and CEO Elon Musk unveiled the Model X SUV the other day and, after two years of delays, Tesla has delivered only five of the vehicles, six if you count the one Musk has for himself. As the Los Angeles Times reported, “That’s sour news for Howard Ganz, who is Model X customer No. 2084. He put a ($5,000) deposit down almost three years ago.”
I saw Bob Lutz, legendary auto executive, on CNBC when the Model X was showcased and he just ripped the automaker. Tesla, after all, just bleeds cash and its actual deliveries are very small, let alone the valuation of the company is absurd. [A thought I have noted many a time...though Tesla is like Amazon...you ‘short’ it at your own risk.]
It’s also absurd that the fully loaded Model X goes for $132,000. How many of those are you going to sell? The stupid wing (DeLorean) doors aren’t a selling point.
But as Lutz also noted, electric cars are just stupid. [No, I’m not elaborating.]
--Apple Inc. sold a record 13 million iPhones during the debut weekend of its latest handsets, which measures up against the 10 million iPhone 6 and 6 Plus sold last year, though China wasn’t part of that initial release. The 13m was in line with expectations.
While Apple didn’t break down where the sales came from, it’s expected that about 2.5 million was out of China.
A better barometer for iPhone sales will come in January, when the company reports its holiday quarter. Last year, Apple sold 74.5 handsets during this period, generating $51.2 billion in revenue. [Bloomberg]
--So early in the week, it was reported Jack Dorsey, cofounder of Twitter who had stepped down in 2008, only to come back as interim CEO, would be named permanent chief executive. Dick Costolo had resigned in June and it’s taken Twitter this long to decide.
Dorsey is also supposed to continue to serve as CEO of mobile payments company Square. But nothing is really final as I go to post.
Meanwhile, Twitter is planning to increase the maximum length of tweets beyond the current 140 characters. The company has refused to comment on the report from Re/code, but as Adweek noted, “If it comes to fruition, the move would seem to open up the floodgates for customer service. Retailers and airlines would be able to have more complete conversations with patrons while quelling concerns, at least in theory, with fewer tweets.”
I don’t know how many characters Twitter is thinking of adding, but I have tweeted in my own account a few times that 150 would be perfect. That extra ten is all the difference in the world once you’ve learned the game.
--Mining and commodity trading giant Glencore had one wild first three days of the week. Monday the shares fell nearly 30 percent but by Thursday had recovered it all as the company assured investors it was “operationally and financially robust,” despite $30 billion in debt.
Copper prices have been sliding anew amid the slowdown in China and uncertainties over Swiss-based Glencore, which is one of the biggest players in the copper market.
When share prices bottomed on Monday, that meant the stock had fallen by more than 85% since the company went public in 2011.
--Back to VW...Edward Boshes, prof. of advertising at Boston Univ., from Adweek:
“This Volkswagen missed the boat. The chrome strip on the glove compartment is blemished and must be replaced. Chances are you wouldn’t have noticed it; inspector Kurt Kroner did.
“In 1960, Volkswagen ran what may have been its most famous ad ever: Lemon. The one-word headline described a 1961 Beetle that would never make it to a dealer. It had a mere blemish, enough for VW engineer Kurt Kroner to reject the vehicle and inspire Julian Koenig, the DDB copywriter partnered with legendary art director Helmut Krone, to pen the famous ad.
“The copy mentions 159 checkpoints and a willingness to say ‘no’ to cars that don’t cut it. It concludes with the argument that Volkswagens maintain their value better than other automobiles....
“That ad, along with the rest of DDB’s first VW campaign, launched the industry’s creative revolution. It changed advertising forever. It also introduced America to what would become one of the most loved and respected brands of all time: a brand that stood for quality, honesty, and a commitment to its customers; a brand – not a company or a product – worth many, many millions of dollars.
“As recently as 2014, VW carried a goodwill valuation of $23 billion on its balance sheet. While goodwill is an intangible asset (it represents the difference between a company’s hard assets – cash, plants and equipment, and inventory – and its market value, which is typically assessed when a company is sold), it’s an important one, for it suggests the value of the brand: all the thoughts, beliefs and expectations that come to mind when someone sees the logo or hears the name. Put another way, it’s a measurement of trust.
“If VW had no cars, no dealers, no factories, what would its name be worth? That’s goodwill.”
It will be interesting to see how much it is written down over the coming year or two.
--Wal-Mart Stores Inc. is reportedly planning significant cuts at its headquarters that could involve hundreds of workers, including senior managers.
CEO Doug McMillon has been looking to reduce costs while boosting investment in other areas, including higher wages for store employees.
Through the end of September, Wal-Mart shares had declined 24% vs. the 7% drop in the S&P 500.
--Luxury retailer Neiman Marcus said it would lay off 500 in preparation for its IPO. In the year ended Aug. 1, revenue gained a solid 5.3%, but same-store sales were up 3.9%, the worst performance in five years.
--ConAgra Foods Inc. will cut 1,500 office jobs and move its headquarters from Omaha to Chicago as part of an attempt to revive some of its old-line packaged-foods businesses.
The job cuts represent 30% of its global office staff.
ConAgra is the maker of Chef Boyardee canned pastas (yuck) and Healthy Choice frozen dinners (not awful).
--Chesapeake Energy Corp. is laying off 15% of its workforce as the U.S. shale driller is forced to cut costs to survive the existing price environment.
Chesapeake, based in Oklahoma City, has about 5,000 employees. The company said 560 of the cuts came out of the home office...this past Bloody Tuesday.
As painful as such moves are it is the only way to ensure survival in this industry.
--In a kind of shocking announcement, Royal Dutch Shell Plc said it would halt exploration in the U.S. Arctic after spending $7 billion on a well that failed to find any meaningful quantities of oil or gas.
“This is a clearly disappointing exploration outcome,” Marvin Odum, director of Shell’s Upstream America’s unit, said in a statement. Shell is ceasing further offshore activity in Alaska for the foreseeable future.
Initially, Europe’s largest company said reserves it was targeting in Alaska could be 10 times greater than the oil and gas produced in the North Sea. Shell is now going to plug and abandon what was known as the Burger J well in Alaska’s Chukchi Sea. [BBC News]
--The Baker Hughes weekly oil rig count showed a reduction in the U.S. of 26 to a total count of 614, or less than half of the 1,591 rigs in operation a year ago and well below the 1,609 all-time high count reached last October.
Natural gas rigs were down to 195, the lowest level in at least 28 years, Baker Hughes’ data going back to 1987.
Oil rallied on the news late Friday, but still finished the week lower than the previous Friday at $45.54.
--And Whole Foods is cutting around 1,500 jobs over the next eight weeks as it looks to lower prices to regain market share. The company said many of the cuts, representing less than 2% of the workforce, will come through attrition.
At the same time, Whole Foods said it had added more than 9,000 jobs in the past year.
Recently the New York City Department of Consumer Affairs said the company was overcharging customers in overstating the weight of some pre-packaged products, like chicken tenders.
--Dunkin’ Donuts warned on earnings and said it plans to close 100 locations, apparently those affiliated with the Speedway gas station chain. While this is just a fraction of the 3,100 sites in 30 countries and the U.S., the bad news is that sales rose only 1.1% in the recent quarter versus a 2% rise a year ago.
--According to a report from Forrester Research, purchases on smartphones and tablets will grow from $115 billion this year to $252 billion by 2020.
Wireless phones will generate 15% of e-commerce sales by 2020, while tablets will generate 33% in the same time frame.
--Gambling revenue in Macau fell 33% year-on-year in September, in line with forecasts but still near five-year lows.
September’s decline is the 16th monthly drop in a row, since President Xi Jinping launched his crackdown on corruption, which also targeted the illicit outflow of money from the country.
--I’m one of those who takes advantage of the 20% off coupons from Bed Bath & Beyond. I love the chain, but won’t go to it without a coupon in hand.
So I was reading a piece by Sarah Halzack in the Washington Post on the company and in its most recent quarter, revenue rose 1.7%, but profits fell 10%, “which company executives largely blamed on ‘an order of magnitude increase’ in expenses related to coupons.
“In other words, shopping with a coupon at Bed Bath & Beyond has begun to feel like a given instead of like a special treat, and that’s bad news for the chain’s bottom line.”
--Jimbo alerted me to a terrific offer. Chick-fil-A is opening its first New York City location this weekend and it is giving away a year’s worth of fried chicken sandwich meals to the first 100 customers who line up outside the store.
The first 300 in line will receive a ticket and be entered into a lottery style drawing where 100 then win gift cards good for one sandwich meal a week for a calendar year.
But it’s raining tonight and I’d need to go into Gotham and sleep on the sidewalk and I really need to get this column posted.
--Californians continue to do a good job in cutting back on water. Urban water use fell 27% in August compared with the same month in 2013, according to state regulators. The July decline was 31%, while June saw a 27% decrease. Gov. Jerry Brown ordered cities and towns across the state to slash consumption by 25%. [Matt Stevens / Los Angeles Times]
--Richard Rainwater, a well-known hedge-fund billionaire / deal maker, died from complications of a rare brain disease at the age of 71.
Rainwater is known for installing Michael Eisner at Walt Disney Co. as chief executive, and steering George W. Bush to buy a stake in the Texas Rangers, while helping multiply the Bass family fortune on top of building one of his own.
Rainwater was also known as being a cultivator of young talent; figures like Edward S. Lampert and Rick Scott, the latter former CEO of the Columbia/HCA hospital chain who is now governor of Florida.
Ahead of a meeting with President Obama in New York on Monday, Russian President Vladimir Putin labeled U.S. support for rebels in Syria as illegal, and mocked the program where we spent $500 million training a small rebel force. In his interview with “60 Minutes” and PBS’ Charlie Rose, Putin said Syrian President Bashar al-Assad commanded the only legitimate army fighting Islamic State militants in Syria and deserves support from countries combating terrorist groups.
As for President Obama, he scolded an “isolated” Putin in his UN General Assembly speech for annexing Crimea and other parts of Ukraine. “Imagine if, instead, Russia had engaged in true diplomacy,” said Obama. “That would be better for Ukraine, but also better for Russia, and better for the world.”
Oh brother. As Benny Avni wrote in an op-ed for the New York Post: “Imagine if Obama’s eloquence were backed by, say, American-led NATO. Would Putin so easily be able to eat up Ukraine and take over Syria? Not likely.”
Or as the Wall Street Journal’s Bret Stephens put it: “Barack Obama told the UN’s General Assembly he’s concerned that ‘dangerous currents risk pulling us back into a darker, more disordered world.’ It’s nice of the president to notice, just don’t expect him to do much about it.”
The next day after a brief summit between Obama and Putin, Russia launched airstrikes, not on ISIS, but on U.S. supported rebels.
A senior Russian lawmaker, Alexei Pushkov, head of the foreign affairs committee of Russia’s lower house of parliament, told France’s Europe 1 radio on Friday that Russian airstrikes in Syria will last for three to four months and will intensify.
Pushkov said more than 2,500 airstrikes by the U.S.-led coalition in Syria had failed to inflict significant damage on ISIS, but Russia’s campaign would be more intensive to achieve results.
Turkey added its voice to those calling on Russia to cease its attacks on the Syrian opposition and focus on fighting militants, expressing “deep concern” over Moscow’s actions.
In a joint statement with the U.S., Britain, France, Germany and Gulf Arab allies, Turkey said Russia’s actions constituted a “further escalation” of the conflict and would only fuel more extremism.
“We express our deep concern with regard to the Russian military build-up in Syria and especially the attacks by the Russian Air Force on Hama, Homs and Idlib since yesterday which led to civilian casualties and did not target Daesh (ISIS),” it said. [The Daily Star]
Vladimir Putin has denied the airstrikes are killing civilians. Facts are scores are being killed in the indiscriminate bombing.
At the same time, hundreds of Iranian troops have arrived in Syria to team with Hizbullah and Syrian government forces in a further sign the civil war is turning regional in scope.
“The Russian missile strikes in Syria come hard on the heels of Vladimir Putin’s speech to the UN General Assembly.
“In that speech, the Russian president made clear his country’s opposition to so-called ‘color revolutions’ and the need to continue the fight against terrorists of all stripes.
“In Mr. Putin’s view, ‘terrorists’ in the Syrian context means not just Islamic State of Iraq and the Levant (ISIL), but any anti-government forces.
“Yesterday, Russia appeared to target the area around Homs, which is not even considered to be an ISIL-held area.
“So Russia’s main objective is to shore up the Assad regime by providing the government with close air support.”
One monitoring group, the Britain-based Syrian Observatory for Human Rights, said Russian airstrikes struck strongholds of an American-backed rebel group, Tajamu Alezzah, in central Hama province.
In Washington, Sen. John McCain (R-Ariz.) told CNN he could “absolutely confirm” that airstrikes hit Western-backed groups such as the Free Syrian Army and other factions “armed and trained by the CIA.”
Gennady Zyuganov, a member of the Russian parliament, called such accusations “total rubbish.”
In Iran, a Foreign Ministry spokeswoman called Russia’s military role a step “toward resolving the current crisis” in Syria.
Friday, Russia did hit some ISIS targets near the group’s stronghold of Raqqa, though it’s not totally clear if the U.S. hit the targets instead.
“Russia hits Assad’s foes, angering U.S.”
“If it had the wit, the Obama administration would be not angered, but appropriately humiliated. President Obama has, once again, been totally outmaneuvered by Vladimir Putin. Two days earlier at the United Nations, Obama had welcomed the return, in force, of the Russian military to the Middle East – for the first time in decades – in order to help fight the Islamic State.
“The ruse was transparent from the beginning. Russia is not in Syria to fight the Islamic State. The Kremlin was sending fighter planes, air-to-air missiles and SA-22 anti-aircraft batteries. Against an Islamic State that has no air force, no planes, no helicopters?
“Russia then sent reconnaissance drones over Western Idlib and Hama, where there are no Islamic State fighters. Followed by bombing attacks on Homs and other opposition strongholds that had nothing to do with the Islamic State.
“Indeed, some of these bombed fighters were U.S. trained and equipped. Asked if we didn’t have an obligation to support our own allies on the ground, Defense Secretary Ashton Carter bumbled that Russia’s actions exposed its policy as self-contradictory.
“Carter made it sound as if the Russian offense was to have perpetrated an oxymoron, rather than a provocation – and a direct challenge to what’s left of the U.S. policy of supporting a moderate opposition.
“The whole point of Russian intervention is to maintain Assad in power. Putin has no interest in fighting the Islamic State. Indeed, the second round of Russian air attacks was on rival insurgents opposed to the Islamic State. The Islamic State is nothing but a pretense for Russian intervention. And Obama fell for it....
“Putin then showed his utter contempt for Obama by launching his air campaign against our erstwhile anti-Assad allies not 48 hours after meeting Obama. Which the U.S. found out about when a Russian general knocked on the door of the U.S. Embassy in Baghdad and delivered a brusque demarche announcing that the attack would begin within an hour and warning the U.S. to get out of the way.
“In his subsequent news conference, Carter averred that he found such Russian behavior ‘unprofessional.’
“Good grief. Russia, with its inferior military and hemorrhaging economy, had just eaten Carter’s lunch, seizing the initiative and exposing American powerlessness – and the secretary of defense deplores what? Russia’s lack of professional etiquette.
“A friend of ours quipped amid the Iraq debate of 2003 that the only thing Europeans dislike more than U.S. leadership is a world without it. Well, we are now living in such a world, and the result is the disorder and rising tide of war in the Middle East that even the Obama Administration can no longer dismiss. How do you like it?
“The epicenter of the chaos is the Syrian civil war now into its fifth year. President Obama justified his decision to steer clear of the conflict by pointing to a parade of horribles if the U.S. assisted the opposition of Bashar Assad. Every one of those horribles – and more – has come to pass in the wake of his retreat.
“Syria has become a ‘geopolitical Chernobyl,’ as former General David Petraeus recently put it. It was the breeding ground for Islamic State and is a new sanctuary for terrorism. It has nurtured a growing regional conflict between Shiite and Sunni Muslims, while unleashing the worst refugee crisis on Europe since World War II. And now it has become an arena for potential major power conflict as Vladimir Putin forms an alliance with Iran to make Russia the new Middle East power broker....
“For a limited deployment of 2,000 soldiers and some weapons, Mr. Putin is showing Russians their country has global influence again. He needn’t waste Russian blood because Hizbullah provides the cannon fodder. And he needn’t defeat Islamic State as long as he carves out an Alawite protectorate around Damascus and Syria’s coast. Mr. Assad needs Islamic State as an enemy for now because he can pose as the lesser evil. His goal – and the Kremlin’s – is to slowly win Western agreement that Mr. Assad is necessary for Syrian stability.
“Mr. Putin is also showing that Russia is an ally to be trusted, in contrast to an America that abandoned Iraq in 2011 and won’t fight ISIS with conviction. His alliance with Iran gives him leverage throughout the Middle East, and his Syria play may even give him leverage with Europe over Ukraine sanctions. Perhaps he’ll offer to limit the barrel bombs that have sent refugees fleeing in return for Europe easing sanctions. Some quagmire....
“After the 1961 Vienna Summit, Khrushchev famously concluded that Kennedy was weak and could be exploited. The Soviet leader followed by creating a crisis over Berlin and trying to send nuclear missiles to Cuba. The Obama Presidency has 16 months left. We haven’t seen the last American humiliation.”
“The first thing to understand about Vladimir Putin is that he’s not content just to win. He has to destroy his opponents, foreign or domestic.
“His deeds may be despicable and his manners far too crude for the Upper West Side, but the guy is a force of nature, a man who – by sheer strength of will – has used a broken country and its rusting military to change the world. Meanwhile, our astonished president sulks like a high-school girl stood up by her boyfriend (‘But Vladimir...you promised!’).
“Now we have reached the point where a Russian general can barge into a U.S. military office in the Middle East and order us to stop flying our aircraft over Syria. Oh, we’re still flying, for now – but you can bet that our flights are restricted and careful to the point of paralysis.
“You bet President Obama’s afraid of Putin. Physically, tangibly, change-the-diaper afraid....
“(Putin) sees a necessity in humiliating the United States. That’s business. And yet, despite Putin’s obviousness, the White House team and its acolytes publicly scratch their heads and other body parts, saying, ‘We’re not certain what the Russians intend.’
“In the short term, rescue the failing regime of Russia’s ally, Syria’s blood-drenched President Bashar al-Assad. And in doing so, eliminate all opposition groups except ISIS, leaving the United States, Europe and the world with the stark choice of ‘Assad or Islamic State?’
“In the mid-term, create a fait accompli, irreversible circumstances, on the ground in the Middle East (and in Ukraine) that will defeat the next U.S. president even before he takes office.
“Expect a lot more aggression and violence from Putin between now and Inauguration Day 2017. Obama’s delusional worldview – that of a narrow-shouldered, bleeding-heart undergraduate at a second-rate university – is a gift to Putin that keeps on giving. (In almost seven years in office, Obama still hasn’t grasped that words don’t stop bullets.)
“In the longer-term, Putin intends to re-establish Russia’s grandeur and glory from the apogee of the czars – and to go still further by dominating the Middle East and its energy resources....
“The White House response now? Spokesman Josh ‘Baghdad Bob’ Earnest tells us everything’s under control and we’re working things out. The new line is that Russia will only get bogged down in a quagmire, as the Soviets did in Afghanistan. Sorry, folks: Just because Obama’s incapable of learning doesn’t mean Putin is, too. And Putin’s forces won’t go into battle with lawyers looking over their shoulders, either....
“Never before has a U.S. presidential administration combined such naked cowardice, intellectual arrogance and willful blindness. We don’t have a president – we have a scared child covering his eyes at a horror movie.
Gen. Philip M. Breedlove, the supreme allied commander for Europe, gave a list of what he believed to be Russia’s aims in Syria in a speech this week.
“First of all, I think that Russia very much wants to be seen as an equal on the world stage,” he said. Next, Moscow “wants to take the world’s eyes away from what they’re doing in Ukraine.”
Its other goals include maintaining “warm-water ports and airfield capabilities in the eastern Mediterranean” [Ed. to me this is No. 1] and prolonging the Assad government.
“And then, after all that,” he said, “they will do some counter-ISIL work in order to legitimize their approach in Syria.” [New York Times]
“Perhaps the biggest obstacle is Mr. Obama himself. Right now his legacy will record not just sensible rapprochement with Iran and Cuba, but also the consolidation of a jihadist caliphate and countless boat-people. He may worry about the risks of American action and ‘owning’ the Syrian crisis. But the greater risk is standing aside and disowning the Middle East.”
“With its strategic ambitions held in check at home, the Islamic State of Iraq and the Levant (ISIS) is looking abroad to strengthen its caliphate.
“Keen to keep the coalition of nations fighting it on the back foot, and true to its pretensions of statehood, the group is shaping a careful foreign policy aimed at expanding its influence, securing new territory, destabilizing its neighbors and exporting terror to its far enemies, say western intelligence officials.
“Their assessment is a marked departure from the orthodox analysis of the group’s focus and has serious implications for counter-terrorism chiefs fearful of the group’s ability to plan and mount attacks in Europe and further afield.”
Iran: In his UN General Assembly speech, Israeli Prime Minister Benjamin Netanyahu launched a scathing attack on the international community’s acceptance of a nuclear deal with Iran, criticizing the UN’s “deafening silence” in the face of Iran’s threats against Israel.
“This deal does not make peace more likely. By fueling Iran’s aggression with billions in sanctions relief, it makes war more likely.”
At one point in the speech, he paused for around 45 seconds, “glaring in silence at the delegates to the General Assembly in an attempt to drive home the point about their silence over Iran’s actions.” [Ruth Pollard / Sydney Morning Herald]
“As leader of a country defending against Iran’s aggression,” Netanyahu said he took no comfort in the claim this deal blocks Iran’s path to nuclear weapons.
“Does anyone seriously believe that flooding this radical theocracy with weapons and cash will curb its appetite for aggression?
“When bad behavior is rewarded it only gets worse,” he added, while acknowledging the deal does place “several constraints on Iran’s nuclear program and rightly so.”
“I have long said that the greatest danger facing our world is the coupling of militant Islam with nuclear weapons,” he said, adding the world must make sure “Iran’s violations aren’t swept under the Persian rug.”
Meanwhile, Iran continues to seethe over the stampede in Mina during the Hajj that took over 700 lives, 464 of them Iranian. Supreme Leader Ayatollah Ali Khamenei said on Wednesday that Iran will give “harsh” and “tough” response to any disrespect to the Iranian pilgrims and that it was essential to form a fact-finding committee with involvement of Islamic countries to examine the tragedy.
Iranian officials have said Saudi Arabia is not doing enough to identify and transfer the bodies of the victims to Iran. The Iranian Foreign Ministry said Iran will not allow a single Iranian to be buried in Saudi Arabia.
For its part, Saudi King Salman ordered a safety review, but the grand mufti said the stampede was beyond human control.
Sheikh Abdul Aziz bin-Abdullah al-Sheikh was visited by the interior minister, Crown Prince Mohammed bin Nayef, and the mufti said: “As for the things that humans cannot control, you are not blamed for them. Fate and destiny are inevitable.”
Lastly, President Hassan Rohani, according to TIME, said that when Iranians chant, “Death to America,” they don’t mean they want to kill Americans; they just object to American policies.
Israel: Benjamin Netanyahu told the UN General Assembly in New York he would re-start negotiations with the Palestinians “immediately” and “without pre-conditions,” but that Palestinian President Mahmoud Abbas was not interested.
Abbas told the UN the PA no longer felt bound by agreements with Israel under the 1993 Oslo Accords, claiming Israel “continually violated” them, and that Israel refused to cease settlement activities or to release Palestinian prisoners as agreed to.
But Thursday, an Israeli couple was shot dead in an attack in the West Bank.
Back to Syria, Israel is very concerned with the build-up of Iranian forces there, near the border with Israel. It would be bad enough were Russian troops to enter the Golan Heights, but Iranian troops there would be a crisis.
Afghanistan: As I go to post, it is unclear if Afghan troops have recaptured the northern city of Kunduz, after the Taliban took it on Monday. Kunduz was the first city to be taken by the Taliban since the start of the Afghan war and marked a dark moment for U.S. policy and the Afghan people.
“At a news conference on Thursday, President Ashraf Ghani tried to prepare the public for further hardship in the wake of the Taliban’s exploits this week. While Ghani tried to reassure his people that Afghan special forces were making gains in Kunduz, he acknowledged fighting continues in 10 of Afghanistan’s 13 provinces.”
According to Amnesty International, the Taliban carried out mass murder, gang rapes and house-to-house searches for civilians suspected of working for government agencies and international aid organizations as part of the Kunduz campaign.
“Interviews with residents suggested that the Taliban’s assault on Kunduz has been ruthless.”
The U.S. confirmed American Special Operations troops and NATO military advisers had arrived in the area to assist in the counteroffensive.
9,800 U.S. troops remain in Afghanistan. [Mohammad Sharif and Tim Craig / Washington Post]
“The Taliban’s capture of the northern Afghan city of Kunduz is a catastrophic blow to the beleaguered government of President Ashraf Ghani, who has been in office for a year. But it has much wider implications for the region.
“It is a significant setback for the U.S. and NATO, who have spent much blood and money on trying to secure Afghanistan since 2001 but withdrew most of their forces this year despite clear warnings that the situation in the north was deteriorating....
“It will strengthen Mullah Akhtar Mohammed Mansour, the new Taliban leader, and help reunite the insurgents, who have been divided by factionalism since he was chosen last month. His rivals can now do little but agree to his leadership. Proposed peace talks between the Taliban and the Afghan government are put in jeopardy.
“But the greatest threat is to central Asia and western China. Kunduz borders both regions and could become a hub for central Asian militants who helped the Taliban conquer the city. Senior officials in central Asia say the insurgents and their allies pose the biggest risk to stability there....
“Kunduz will give the Taliban and their allies an ideal base from which to send fighters, explosives and money to destabilize China and central Asia. Russia, which has 7,000 troops stationed in southern Tajikistan, would become embroiled, along with China. The dangers of increased terrorism and a wider regional conflict will increase....
“The U.S. and NATO show little interest in retaining a presence in this volatile region. Russia and China have huge armies but are ill equipped to deal with terrorism and prolonged guerrilla war here. Yet all four big powers could co-operate militarily and diplomatically to help strengthen Afghanistan and secure central Asia. Unless much greater attention is paid to the region we can expect more Taliban conquests.”
Separately, there was a story in Agency France Presse that read: “ISIS is making inroads in Afghanistan, winning over a growing number of sympathizers and recruiting followers.”
ISIS is out to challenge the Taliban on its own turf, and Afghan security forces have told UN monitors that about 10% of the Taliban insurgency is comprised of ISIS sympathizers, which makes the Taliban, as is the case in Kunduz, even more brutal.
Lastly, six U.S. servicemen were among 14 victims of a C-130 cargo plane crash at Jalalabad Airfield in Afghanistan, early Friday. The cause is under investigation but there were no reports that would lead one to believe enemy fire was involved.
Yemen: The death toll from a suspected air strike on a wedding party on Monday rose to over 130, according to the United Nations.
Missiles hit two tents in a village near the Red Sea, where a man linked to the Houthi rebel movement was celebrating his marriage.
The Saudi-led coalition that has been bombing the rebels for six months denied responsibility.
The death toll in the war is now over 5,000, almost half of them civilians.
China: Edward Wong of the New York Times had a disturbing story on President Xi Jinping’s inner circle the other day. For example, Wang Huning was one of a handful of advisers at Xi’s side during his state visit to Washington and the 59-year-old, who once wrote a memoir on his six months in the United States back in 1988, “has become unapproachable and ignores invitations for conversations. American officials find it difficult to talk to him casually on the sidelines of international forums.
“They and other Western officials say that this icy remove is true not only of Mr. Wang, but also of other advisers with whom Mr. Xi travels, including Li Zhanshu, essentially Mr. Xi’s chief of staff, and Liu He, his top economic adviser.
“The problem presents a huge challenge for the United States and other nations. By some standards, Mr. Xi’s administration is the most secretive in 66 years of Communist rule.”
There is no Zhou Enlai, for example, the Chinese premier under Mao with whom Henry Kissinger secretly negotiated.
David Lampton, director of China Studies at the Johns Hopkins School of Advanced International Studies, said, “One of the problems we have in U.S.-China relations now is that we basically don’t know these people. I don’t think we have a very good understanding of who below Xi Jinping speaks for him.”
--Time doesn’t permit me to go into President Obama’s Friday press conference in any detail, but I did get a kick out of his statement that “our approval ratings (around the world) have gone up” since he took office. What freakin’ planet is he living on?!
The rest of his performance also made me sick to my stomach. I’ll pick apart the transcript next week.
--House Majority Leader, and supposedly future Speaker, Kevin McCarthy (R-Calif.) could not have been more of an idiot when he told Fox News host Sean Hannity (and CNN’s Jake Tapper): “Everybody thought Hillary Clinton was unbeatable, right? But we put together a Benghazi special committee, a select committee. What are her numbers today? Her numbers are dropping. Why? Because she’s un-trustable. But no one would have known any of that had happened had we not fought.”
The select committee’s chairman, Rep. Trey Gowdy (R-S.C.), has maintained that its work was a neutral examination of the Sept. 11, 2012, attacks, but there was McCarthy, boasting it was really about taking down Clinton.
Yes, the investigation led to the discovery of Clinton’s use of a private e-mail server, but Gowdy has made an honest effort to keep politics out of it as much as possible, given at the same time the lack of cooperation among some key officials.
Jason Chaffetz (R-Utah), a committee chairman and close friend of Gowdy’s, said Thursday that McCarthy’s comments were “just absolutely inappropriate. They should be withdrawn. Mr. McCarthy should apologize." [Philip Rucker and Robert Costa / Washington Post]
All McCarthy did was give ammo to not just Clinton, but Democrats overall. The numbskull handed her a gift. What a tool.
In a Suffolk University/USA TODAY national poll of likely voters, Donald Trump garners the most support among Republicans at 23%, followed by Ben Carson and Carly Fiorina at 13% each. Marco Rubio (9%) and Jeb Bush (8%) followed.
But Trump’s favorability was only 27%, lowest of the 10 candidates named in the poll, while 61% disapproved of him.
In a Wall Street Journal/NBC News national poll, Trump received 21% to Carson’s 20%, a dead heat. Fiorina and Rubio were tied at 11%, Bush 7%, John Kasich 6%, Ted Cruz 5%.
[As in the above Suffolk poll, Trump was viewed negatively by 58%, positively by 25%.]
On the Democratic side, Hillary Clinton was at 42%, 35% for Bernie Sanders, and 17% for Joe Biden.
In hypothetical matchups, however, while Clinton would beat Trump 49-39, she is statistically tied with Fiorina (Fiorina 45, Clinton 44), Carson (46 Carson, 45 Clinton), and Bush (44 Bush, 45 Clinton).
Biden, on the other hand, beats Bush by 8 (48-40), Fiorina by six (47-41), Carson by 8 (49-41), and Trump by 21 (56-35).
In a Pew Research Center national poll of Republican and Republican leaning likely primary voters, Trump receives 25%, Carson 16%, Rubio and Fiorina 8% each, Ted Cruz 6% and Bush 4%.
In a Quinnipiac University national poll, by a 53-41 margin, American voters oppose admitting 10,000 Syrian refugees to the U.S. over the next year. Voters say 58-36 the refugees would pose a threat to U.S. security.
President Obama’s approval rating is just 44% in the Quinnipiac survey. [9% of Republicans approve of the job Obama is doing, 90% disapprove. 84% of Democrats approve, 11% disapprove. I’m biting my tongue.]
Voters also disapprove of the job Republicans are doing in Congress, 76-16, while disapproval of the job Democrats are doing is 67-27.
--Hillary Clinton’s campaign announced Wednesday that it had raised $28 million in the third quarter, but Bernie Sanders brought in $26 million, which is most impressive, seeing as how Bernie’s money is comprised almost solely of small contributions.
Clinton has raised $75 million overall compared to Sanders’ $40 million. More importantly, he still has $25 million in the bank. Not sure what Hillary has.
Ben Carson raised more than $20 million in the past three months, increasing his total to $31 million since he launched his bid in May. Carson has 600,000 donations. $12m of Carson’s haul was in September alone.
--CNBC is hosting the next Republican debate, Oct. 28 at the University of Colorado, and Wednesday they released their criteria for who would appear in the big boy tussle.
Using only polls conducted by or in partnership with the major news networks and Bloomberg, and only ones released between Sept. 17 and Oct. 21, candidates need to average 1% to make either debate and 3% for the major one.
Lindsey Graham wouldn’t qualify at all at this point, which would be unfortunate. Rand Paul may not make the big stage.
--The Wall Street Journal reported that “about two months of emails from the start of Hillary Clinton’s tenure as secretary of state are missing, and federal officials haven’t been able to recover them....
“The missing emails raise more questions about her stewardship of official documents during her tenure and whether there is a complete record of the early diplomatic efforts of President Barack Obama’s administration.”
We also learned this week that Russian hackers were attempting numerous times to get into Hillary’s email account, though whether they were successful is not known (classic phishing expeditions), while the number of classified emails is up to 403.
--I was at a wedding last weekend and a former female executive who had worked under Carly Fiorina at Hewlett-Packard was less than flattering in her remembrances of her old boss. What kind of shocked me was Julie’s comment that Carly treated other women like garbage.
--Donald Trump ended his brief boycott of Fox News with an appearance on “The O’Reilly Factor,” where Bill, as is his wont, lectured Trump on what he should be saying on the campaign trail, because with Mr. Bill, it’s never about the guests, it’s all about him.
--This one is unbelievable. “Scores of U.S. Secret Service employees improperly accessed the decade-old unsuccessful job application of (Congressman Jason Chaffetz, R-Utah) who was investigating scandals inside the agency, a new government report said Wednesday.” [Associated Press]
An assistant director set out to embarrass Chaffetz, chairman of the House oversight committee. The report by the Homeland Security Department’s inspector general, John Roth, said the employees’ actions could represent criminal violations under the U.S. Privacy Act.
Homeland Security Secretary Jeh Johnson personally apologized to Chaffetz on Wednesday, though Johnson hasn’t disclosed if any employees have been disciplined yet.
Secret Service Director Joe Clancy also apologized for “this wholly avoidable and embarrassing misconduct.”
As the Associated Press noted: “Employees accessed Chaffetz’s 2003 application for a Secret Service job starting 18 minutes after the start of a congressional hearing in March about the latest scandal involving drunken behavior by senior agents. Some forwarded the information to others. At least 45 employees viewed the file.”
The information was quickly published by The Daily Beast website.
The Assistant Director/Dirtball, Ed Lowery, wrote in an email to another assistant director at the time, “Some information that he might find embarrassing needs to get out. Just to be fair.”
Lowery should not only lose his job and go to jail for a year, without parole, but he shouldn’t be allowed to hold a government job of any kind ever again.
The inspector general said that under U.S. law and Secret Service rules, employees were required to report such behavior to supervisors. The investigation found that only one of 18 supervisors or members of the agency’s senior executive service who know Chaffetz’s job application had been improperly accessed informed Director Clancy, who we were told initially knew nothing of what was going on.
But at week’s end Clancy alerted investigators he had revised his account. He said he now remembers being told by a top deputy, a week before the information was published, that the agency had rejected Chaffetz for a job as an agent. He claims he had forgotten about it until now.
--According to a Credit Suisse report on globalization, the United States is the world’s undisputed leader in terms of military strength. Russia ranks second, narrowly ahead of China. Japan and India round out the top five.
“Our analysis reveals the military superiority of the United States in conventional war capabilities compared to its close rivals. Its fleet of 13,900 aircraft, 920 attack helicopters, 20 aircraft carriers and 72 submarines far outweighs the military might of any of its close rivals and so does its defense spending worth USD 610bn in 2014, which is far more than the combined military expenditures of the next nine countries in our index.
“In reality, in today’s nuclear era, conventional forces are not the only indicator of military strength. Russia and the United States account for more than 90% of global inventories of nuclear weapons according to data provided by Stockholm International Peace Research Institute’s Yearbook 2015.” [Lucinda Shen / Defense One]
--A good friend of mine from my PIMCO days, Newt S., said the other day that watching Obama and Kerry increasing the risk of nuclear conflict by their actions makes him wonder if either read (or saw the film) “On the Beach.” The movie is among my favorites of all time, though it is more than a bit depressing.
--Morton Kondracke and Fred Barnes co-wrote an op-ed in the Wall Street Journal this week on the late Jack Kemp. For some of us Republicans/Conservatives of a certain age, this was truly a great man. As the Journal editorialized upon his death in 2009, he was “among the most important Congressmen in U.S. history,” but he just couldn’t break through when it came to presidential politics.
But oh how we could use a leader like him today. A true compassionate conservative. Or as Barnes and Kondracke put it:
“What Republicans need today, following the Kemp model, is big ideas, not demagoguery. They ought to be debating the best way to restore growth, prosperity and hope – what voters care about most – not insulting one another over appearances and poll standings....
“He was the polar opposite of Donald Trump, while sharing Mr. Trump’s high energy. Kemp never disparaged opponents, even when they deserved it – as Bill Clinton did on political ethics in 1996, when Kemp ran for vice president and refused to be Bob Dole’s attack dog.
“Many Republicans thought he was too fixated on the plight of the poor. What he advocated was a war on poverty by conservative means: education choice, and lower taxes and fewer regulations to attract investment to blighted neighborhoods. He wanted welfare policies to be, as he said, ‘a trampoline, not a trap.’ But most of all, he demonstrated that he cared about the poor. Some 2016 candidates do, too. More should.
“Kemp thought that the GOP should, and could, once again be the ‘party of Lincoln.’ Being pro-civil rights was only part of it. It was famously said that Kemp, as a football player, had showered with more African-Americans than most Republicans had ever met. But Kemp also shared Lincoln’s other big idea, that the essence of America was the ‘right to rise’ – for everybody – through talent and effort....
“The Republican Party and the country do need another Jack Kemp. The GOP debates and primaries ought to be about finding one.”
--Kathleen Parker / Washington Post...on Pope Francis’ visit.
“Long his admirer, I love his kindness, his gentle ways and his genuine affection for the poor and downtrodden. I love his openness, his call for tolerance and inclusivity, his appeal to our better angels. He makes me happy.
“I also love the Golden Rule, which was Francis’ resounding message to the Congress. ‘Do unto others as you would have then do unto you.’ It’s a simple sentiment that pretty well sums up the practices of Christianity. All of the doctrinal debate and theological parsing of Scripture can be reduced to these 11 words.
“The brilliance of Francis’ address to America’s leadership and to el pueblo – the people – was his nuanced approach to our most divisive challenges – immigration, climate change, the sanctity of life. Careful not to preach, he encouraged thinking of a highest order.
“Without naming abortion, he said we should protect human life at all its stages. Applying the Golden Rule, would we want to have been aborted, we asked ourselves? The answer lies in the question, which can be asked only of the living....
“(Pope Francis) spoke not of policies but of fundamental Christian as well as universal truths. Those on either side of the political spectrum who sought validation for their own positions might have found them in his words, but they will have looked too hard....
“Most of us can’t dwell in this holy realm in our daily lives, but we can easily remember the Golden Rule, which is a decent start to any day. In this spirit, fine: May Donald Trump have a good hair day.
“Aspirin can double the life expectancy of patients with some of the most common cancers, a study has found.
“Men and women with a range of cancers who took the anti-inflammatory pain killer experienced a ‘significant’ survival benefit compared with those who did not.
“Researchers analyzed data from nearly 14,000 patients in the Netherlands, around half of whom were in the habit of taking aspirin.
“Over a four-year follow-up period, those using the drug after diagnosis were twice as likely to be alive. Overall, across all types of cancers studied, 28 percent of patients survived at least five years. Those who were using aspirin were twice as likely to be alive.”
As a leader of the study, Dr. Marine Frouws, from Leiden University in the Netherlands, said:
“Through studying the characteristics of tumors in patients where aspirin was beneficial, we should be able to identify patients who could profit from such treatment in the future.
“Given that aspirin is a cheap, off-patent drug with relatively few side-effects, this will have a great impact on healthcare systems as well as patients.”
--Michael Powell of the New York Times had a fun interview with former player and New York Mets announcer Keith Hernandez. Hernandez loves his history (he knows a ton about the Civil War, for example), and Keith recalled a time former President Richard Nixon visited the Mets locker room.
“The photograph is on a bureau (in Hernandez’ home): the former president in a suit and tie and Keith naked from the waist up. They shared lunches. Nixon wanted to talk about the stars of the ’86 team – Lenny Dykstra, Mookie Wilson, Dwight Gooden. One day Mr. Hernandez blurted out: ‘Mr. President, all we do is talk baseball. Could we talk politics?’
“ ‘He went on for 45 minutes about Russia and China.’”
--Finally, what a cool story about the discovery of liquid water on the surface of present-day Mars, according to a study of images from a high-resolution camera on NASA’s Mars Reconnaissance Orbiter.
“In a paper published in the journal Nature Geoscience, Dr. (Alfred S.) McEwen and other scientists identified waterlogged molecules – salts of a type known as perchlorates – in readings from orbit.
“ ‘That’s a direct detection of water in the form of hydration of salts,’ Dr. McEwen said. ‘There pretty much has to have been liquid water recently present to produce the hydrated salt.’
“By ‘recently,’ Dr. McEwen said he meant ‘days, something of that order.’”
Of course the discovery was made all the easier when the camera picked up a bottle of “Martian Water” on the ground, which has scientists scratching their heads because such an item cannot be produced by mere protozoa.
NASA will not send probes (and rovers) to areas where there might be water for fear of contaminating the areas with “microbial hitchhikers from Earth,” as reported by the New York Times.
Pray for the men and women of our armed forces...and all the fallen.
And we pray for the victims of the UCC massacre in Roseburg, Oregon.
Gold closed at $1138
Returns for the week 9/28-10/2
Dow Jones +1.0% 
S&P 500 +1.0% 
S&P MidCap -0.2%
Russell 2000 -0.8%
Nasdaq +0.5% 
Returns for the period 1/1/15-10/2/15
Dow Jones -7.6%
S&P 500 -5.2%
S&P MidCap -4.6%
Russell 2000 -7.5%
Bulls 24.7 [lowest since Oct. ’08...22.4]
Bears 35.1 [Source: Investors Intelligence]
Dr. Bortrum posted a new column. More on Mars, plus microbiomes.
Have a great week. Special thanks to Jim D., Richard H., and Dr. B. for their support.