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12/03/2016

For the week 11/28-12/2

[Posted Friday 10:30 p.m. ET]

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Edition 921

Washington, Wall Street and the Trump Transition

President-elect Donald Trump took a victory lap this week, touring a Carrier plant in Indianapolis where he and Vice President-elect Mike Pence saved 1,100 jobs from moving to Mexico.

But Trump was also his usual tweeting self, hardly acting presidential, and now we’ve learned late today that he placed a call to Taiwan’s President Tsai Ing-wen, a break with nearly four decades of diplomatic practice in a move that will infuriate China.

Trump is believed to be the first president or president-elect to speak directly to a Taiwanese leader since 1979.  While I personally am a big supporter of the island, and believe the United States should be more vocal on the matter, this was a huge mistake.

Ironically, I’ve been writing something you haven’t seen anywhere else for months...that China could invade Taiwan, sooner than later, because Tsai has been uncooperative since taking office.

What Donald Trump did could actually precipitate such an action.

No doubt this will be a big topic the coming week, but for now we move on to some of Trump’s latest efforts at forming a Cabinet.

Retired Marine Gen. James Mattis, who served in Iraq and Afghanistan and is known as “Mad Dog,” has been named defense secretary.  Gen. Mattis has been an outspoken critic of the Obama administration’s Middle East policy, particularly on Iran (though he does not believe in tearing up the existing nuclear agreement with Tehran).

He has referred to Iran as “the single most enduring threat to stability and peace in the Middle East.”

Mattis was an immensely popular leader among his men, and over the past year I have noted some surveys in Army Times that had many in the military hoping he would run for president as a third-party candidate.

The retired Marine Corps officer led an assault battalion during the first Gulf War in 1991 and commanded a task force into southern Afghanistan in 2001.

He also took part in the invasion of Iraq in 2003 and played a key role in the battle for Fallujah a year later.  In other words, he has ‘walked the walk.’

Gen. Mattis retired in 2013 so he will need a congressional waiver to assume the Defense post, because there is a law a retired officer must be out of uniform for at least seven years before he or she can head the Pentagon.  He would be the first former ranking general to assume the post since George Marshall in 1950-51.  This was a terrific choice, especially given the dangers we face.

Steve Mnuchin, a former Goldman Sachs executive and movie producer who served as Trump’s campaign finance director, was tabbed to be the next Treasury secretary.  I don’t mind he’s a Goldman alum, I just wish Trump had selected more of a heavyweight; such as past Treasury secretaries’ Robert Rubin and Hank Pualson, both also from Goldman.

Mnuchin will face a rough go of it in his confirmation hearing for his experience with a collapsed mortgage lender in 2009, which he snapped up and made a mini-fortune on, IndyMac, which was sold to CIT Group for $3.4bn last year.  This is not a good pick.

Trump selected Georgia Rep. Tom Price, a leading critic of President Obama’s healthcare law, to head the Department of Health and Human Services.  If confirmed, Price will play a central role in efforts to repeal and replace ObamaCare.

Trump has already said he favors keeping provisions that allow young people to stay on their parents’ policies, and he wants to retain provisions preventing insurance companies from denying coverage to those with pre-existing conditions, so it’s not going to be repeal and replace in actuality.  But changes need to be made.

Price, 62, is a six-term congressman and orthopedic surgeon.  I like this one.

Wilbur Ross, 80, was selected to be Commerce secretary.  The billionaire made a lot of his estimated $2.9bn net worth in buying up distressed properties, companies and banks.   He has been highly critical of U.S. trade deals and called for the U.S. to withdraw from the yet-to-be-ratified Trans-Pacific Partnership and to renegotiate the North American Free Trade Agreement.

“There’s trade, there’s sensible trade and there’s dumb trade. We’ve been doing a lot of dumb trade.”

Regarding TPP, Ross said in a CNBC interview: “The trouble with regional trade agreements is you get picked apart by the first country, then you negotiate with the second country and get picked apart, and then go with the third one and get picked apart again.”  I like Ross’ selection.

Elaine Chao, Republican Senate Majority Leader Mitch McConnell’s wife, was chosen to be the next secretary of transportation, an important post given Trump’s plan to spend billions rebuilding the nation’s infrastructure.  She was labor secretary during the entire eight years of the George W. Bush administration.  A solid pick, and an underrated position.

Still to come, secretary of State.

As to the Carrier move....

Editorial / Wall Street Journal

“A giant flaw in President Obama’s economic policy has been the politicized allocation of capital, from green energy to housing.  Donald Trump suffers from a similar industrial-policy temptation, as we’ve seen this week with his arm-twisting of Carrier to change its decision to move a plant to Mexico from Indiana....

“Everyone – even the Obama White House – is hailing the move as a great political victory, and in the short term it is for those Indianapolis workers, who make more than $20 an hour on average.  But as U.S. auto workers have learned the hard way, real job security depends on the profitability of the business.  Carrier wanted to move the production line to Mexico to stay competitive in the market for gas furnaces. If the extra costs of staying in Indianapolis erode that business, those workers will lose their jobs eventually in any case....

“(But the) company is also betting that Mr. Trump will fulfill his promise for tax and regulatory reform to make U.S. manufacturing more competitive.  (Parent company United Technologies) does about 61% of its sales outside the U.S., and it has some $6 billion in cash overseas that would be taxed at a 35% rate if they brought the money home today.  Carrier currently pays a 28% effective tax rate, so a tax reform that cut the corporate rate to 20% and only taxed earnings in the country where they are earned would more than make up for the Indianapolis concession....

“(UTC’s) exports are worth $10 billion a year, mostly in aerospace products, which support some 40,000 American jobs.

“A mercantilist Trump trade policy that jeopardized those exports would throw far more Americans out of work than the relatively low-paying jobs he’s preserved for now in Indianapolis.  Mr. Trump’s Carrier squeeze might even cost more U.S. jobs if it makes CEOs more reluctant to build plants in the U.S. because it would be politically difficult to close them.

“Mr. Trump has now muscled his way into at least two corporate decisions about where and how to do business. But who would you rather have making a decision about where to make furnaces or cars?  A company whose profitability depends on making good decisions, or a branding executive turned politician who wants to claim political credit?

“The larger point is that America won’t become more prosperous by forcing companies to make noneconomic investments.  A nation gets rich when individuals and business are allowed to take risks as they see fit in a competitive economy.  Politicians are rotten investors. Mr. Trump would help the economy, and his Presidency, far more if he focuses on getting the pro-growth parts of his agenda through Congress.”

Separately, our new president is going to be overwhelmed on the foreign policy front, so it would behoove him not to shoot himself in the foot before he even takes office.

Charles Krauthammer / Washington Post

“Twenty-five years ago – December 1991 – communism died, the Cold War ended and the Soviet Union disappeared. It was the largest breakup of an empire in modern history and not a shot was fired. It was an event of biblical proportions that my generation thought it would never live to see....

“That dawn marked the ultimate triumph of the liberal democratic idea.  It promised an era of Western dominance led by a preeminent America, the world’s last remaining superpower.

“And so it was for a decade as the community of democracies expanded, first into Eastern Europe and former Soviet colonies.  The U.S. was so dominant that when, on Dec. 31, 1999, it gave up one of the most prized geostrategic assets on the globe – the Panama Canal – no one even noticed.

“That era is over. The autocracies are back and rising; democracy is on the defensive; the U.S. is in retreat.  Look no further than Aleppo.  A Western-backed resistance to a local tyrant – he backed by a resurgent Russia, an expanding Iran and an array of proxy Shiite militias – is on the brink of annihilation. Russia drops bombs; America issues statements.

“What better symbol for the end of that heady liberal-democratic historical moment. The West is turning inward and going home, leaving the field to the rising authoritarians – Russia, China and Iran.  In France, the conservative party’s newly nominated presidential contender is a fashionably conservative populist and soft on Vladimir Putin.  As are several of the newer Eastern Europe democracies – Hungary, Bulgaria, even Poland – themselves showing authoritarian tendencies.

“And even as Europe tires of the sanctions imposed on Russia for its rape of Ukraine, President Obama’s much-touted ‘isolation’ of Russia has ignominiously dissolved, as our secretary of state repeatedly goes cap in hand to Russia to beg for mercy in Syria.

“The European Union, the largest democratic club on Earth, could itself soon break up as Brexit-like movements spread across the continent.  At the same time, its members dash with unseemly haste to reopen economic ties with a tyrannical and aggressive Iran.

“As for China, the other great challenger to the post-Cold War order, the administration’s ‘pivot’ has turned into an abject failure. The Philippines openly defected to the Chinese side. Malaysia then followed. And the rest of our Asian allies are beginning to hedge their bets. When the president of China addressed the Pacific Rim countries in Peru last month, he suggested that China was prepared to pick up the pieces of the Trans-Pacific Partnership, now abandoned by both political parties in the United States.

“The West’s retreat began with Obama, who reacted to (perceived) post-9/11 overreach by abandoning Iraq, offering appeasement (‘reset’) to Russia and accommodating Iran. In 2009, he refused even rhetorical support to the popular revolt against the rule of the ayatollahs.

“Donald Trump wants to continue the pullback, though for entirely different reasons. Obama ordered retreat because he’s always felt the U.S. was not good enough for the world, too flawed to have earned the moral right to be the world hegemon.  Trump would follow suit, disdaining allies and avoiding conflict, because the world is not good enough for us – undeserving, ungrateful, parasitic foreigners living safely under our protection and off our sacrifices.  Time to look after our own American interests....

‘Repose presupposes a fantasy world in which stability is self-sustaining without the United States. It is not. We would incur not respite but chaos.

“A quarter-century later, we face the same temptation, but this time under more challenging circumstances.  Worldwide jihadism has been added to the fight, and we enjoy nothing like the dominance we exercised over conventional adversaries during our 1990s holiday from history.

“We may choose repose, but we won’t get it.”

Wall Street

Lots of data this week, both here and abroad.  Third-quarter GDP was revised up to 3.2% from 2.9%, so the last four quarters now look like this:

Q4 2015...0.9% (ann.)
Q1 2016...0.8%
Q2 2016...1.4%
Q3 2016...3.2%

Overall, still an average annualized rate of just 1.5%-1.6%, but the trend in some of the other data is heading in the right direction too.

October personal income came in better than expected, 0.6%, which is strong, while consumption was a little light, 0.3%.  October construction spending was more or less in line, 0.5% (3.4% year over year).

But the Chicago purchasing managers’ index was 57.6 for November, best of the year, while the November ISM manufacturing figure was a better than expected 53.2.

A report from S&P/Case-Shiller on home prices for September is now 0.1% above the July 2006 peak, though adjusted for inflation still 16% below, with home prices in the 20-city index up 5.5% over the past year. 

And then you had Friday’s labor report for November, with nonfarm payrolls up 178,000, basically in line, and the unemployment rate down to 4.6%, the lowest reading since Aug. 2007 (though largely because many dropped out of the labor force).

Average hourly earnings, though, surprisingly ticked down 0.1% and are up 2.5% year over year, down from October’s 2.8%, and the labor participation rate is 62.7.  U6, the underemployment rate, is down to 9.3%, the lowest level since April 2008. This figure averaged 8.3% in the two years before the recession.

Separately this week, the Commerce Department reported that corporate profits in the third quarter were up a solid 5.2%.

Add it all up and if there was any doubt the Federal Reserve was raising interest rates on Dec. 13-14, this week’s numbers dispelled such a notion.

Not that the above had anything whatsoever to do with the happy talk perpetrated by the incoming Trump administration and an expected greatly expansive fiscal and monetary policy, with lower taxes a major priority, which would lead to stronger growth, and higher inflation.  To some extent the animal spirits appear to have returned, though I hasten to add the S&P 500 is up only 2.4% since Trump was elected.  Feels like a lot more, doesn’t it?

More importantly, many analysts, such as those at Deutsche Bank’s Global Strategy Group, are reassessing their outlooks for future growth, with DB hiking its estimate for U.S. GDP to 2.3% in 2017 from 1.7%, while raising their outlook for 2018 from 1.9% to 3.5%.

The thing is, it’s all just talk right now, though optimists point to a Republican controlled Congress for reassurance that some of Donald Trump’s policy goals, particularly on infrastructure spending (where there is bipartisan support), and regulatory reform, where much of it can be accomplished with the stroke of a pen, will be achieved quickly.

One thing is for sure.  My talk all this year that we would have an inflation scare has come to fruition, with the yield on the 10-year Treasury in November jumping 56 basis points, 0.56%, the biggest jump since 2009, on the fear the Federal Reserve will be raising rates a couple of times next year, on top of December’s move, due to stronger growth accompanied by rising prices.  As I’ve been saying, they’ll get caught with their pants down, such as with this week’s big move in oil.

Europe and Asia

Before we get to some of the important political issues, lots of data from the eurozone.

A flash reading on November inflation for the EA-19 came in at an annualized rate of 0.6%, above October’s 0.5% and the 0.1% ann. pace of a year earlier.

Producer prices in October rose 0.8% for the month, twice expectations (good), but are still down 0.4% year over year.

The eurozone’s unemployment rate for October came in at 9.8%, the lowest since July 2009 (though still twice that of the U.S.), with 7.2% being the low back in March 2008.  [The peak was 12.1% early 2013.]

Germany’s jobless rate, according to Eurostats, was 4.1%, France’s 9.7%, Italy’s 11.6% (though same as a year ago), Spain’s 19.2% and Greece’s 23.4% (Aug.).

The youth unemployment rate remains too high in Greece, 46.5% (Aug.), Spain 43.6%, and Italy 36.4%.

On the manufacturing front, the PMI for the eurozone was 53.7 in November vs. 53.5 in October (50 being the dividing line between growth and contraction), as reported by IHS Markit.

Germany was 54.3 (Nov.) vs. 55.0 (Oct.), France 51.7 vs. 51.8, Italy 52.2 vs. 50.9, Spain 54.5 vs. 53.3, and Greece 48.3 vs. 48.6.

Chris Williamson, Chief Economist / IHS Markit:

“Eurozone manufacturers are enjoying the best improvement in business conditions for almost three years, as the benefits of a weaker currency and strengthening demand helped firms brush off political worries.

“The November survey provided firm evidence that the weaker euro is providing a meaningful stimulus to manufacturing, leading to greater import substitution and higher exports.  New export orders for manufactured goods rose at the fastest rate since February 2014.

“For a region suffering double-digit unemployment, there was also good news on the jobs front.  The rate of factory job creation held close to October’s five-and-a-half-year high as firms boosted operating capacity in line with stronger demand....

“While the ECB looks poised to extend its quantitative easing program at its December meeting, the upturn in growth and inflationary pressures will further fuel talk of whether we could see the ECB start tapering its asset purchases next year.”

Eurobits....

--Greek markets have been rallying, including the bond market, on expectations creditors may finally ease the country’s debt burden at a Dec. 5 meeting of euro-area finance ministers.  But the IMF still hasn’t made up its mind whether it will be on board, as the fund continues to doubt the viability of Greece’s medium-term fiscal targets. Without the IMF, Germany and the Netherlands won’t support debt relief.  [Nearly half of Greek bank loans are now considered to be non-performing.]

The yield on the Greek 10-year bond has fallen from 8.28% to 6.38% over the last six weeks in anticipation of a deal.

--Spain’s economy will grow by 2.4% in 2018 and 2019, according to the government on Friday, citing its latest economic forecasts 2016 to 2019.  Unemployment would fall to 13.8% by 2019.  GDP is expected to rise 3.2% this year and 2.5% next year.

--Germany reported October retail sales rose 2.4% over September, but are down 1.0% year over year.

As for the Italian referendum Sunday on constitutional reform, first off, I thought “60 Minutes” did a balanced story on the pros and cons.  No doubt Italy’s election process and bureaucracy need shaken up, but Prime Minister Matteo Renzi, through his proposals, certainly looks a little power hungry and that attitude, at least to me, shined through in his interview last Sunday.

The polls show Renzi going down to defeat and the European Central Bank said it is prepared to buy government bonds to stabilize any resulting market turmoil, especially assuming Renzi keeps his word and resigns with a ‘No’ vote.

I’ve said enough on the topic.  We now await the result to see if the populist movement across Europe will score a big victory.  In a worst-case scenario, a new government in Italy would push for a referendum on continuing membership in the eurozone, which wouldn’t be good, let alone for a banking system already in crisis.

And there is a big vote on Sunday in Austria, a re-vote of last spring’s presidential election, where Nobert Hofer of the right-wing Freedom Party could emerge victorious.  While the post is largely ceremonial, it would make him the first far-right head of state in post-World War II Europe.  He has been running neck-and-neck with a 72-year-old former economics professor and ex-leader of the Greens (sic) party, Alexander Van der Bellen.

Meanwhile, in France, President Francois Hollande announced he wouldn’t stand for re-election in May, which came as a shock, not because what guy would run with a 4% approval rating, but rather just two days before, Hollande was acting as if he would throw his hat in the ring.

So at least this clears the way for his struggling Socialists to field a more competitive candidate, probably reformist Prime Minister Manuel Valls, who said days earlier he was preparing a possible run in the Socialist primary.

Hollande said in an address to the people: “Today I am aware of the risk of not being able to unite” people behind my candidacy.

Last Sunday in the Republican party runoff, Francois Fillon garnered 67% of the votes cast vs. just 33% for his challenger, Alain Juppe, both former prime ministers.  The polls had this one right.

So Fillon’s startling run continues as Republican (center-right) supporters opted for a candidate who pledges painful economic reforms, a shrunken state and who unabashedly embraces traditional values.

A Republican lawmaker, Philippe Goujon, said in an interview with the Financial Times that Fillon “brings together the liberals, nationalists, Gaullists, the authoritarian right.  (He) will pull in voters from (Marine Le Pen’s) National Front.  Look at his margin of victory – it’s a tidal wave.”

For her part, Le Pen has been exceedingly quiet, not having launched her campaign as yet; shrewdly surveying the scene, looking for openings (muses moi).  Her big pitch will be that Fillon represents more of the same, he having an extensive track record in what she’ll label a failed system.  “He was part of the problem all these years!” she’ll cry.  “Viva le France!”  [Having been to two of her big May Day addresses, I write with some authority.]

But assuming Fillon and Le Pen survive the first round of voting next April, two weeks later in May, early polls have Fillon absolutely trouncing Le Pen, like 71-20 according to Odoxa, with Fillon winning mainstream voters from both the left and right.

Editorial / The Economist

“In some ways, Mr. Fillon is a flawed candidate. Prime minister for five years under Mr. Sarkozy, the 62-year-old can claim to represent neither novelty nor renewal, and is defenseless before Ms. Le Pen’s charge that the same faces always govern France. The son of a notary, he has the tweedy look of a country squire, and a Catholic-hued social conservatism to match.  Although Mr. Fillon does not propose to change the law, he voted against gay marriage (and is privately against abortion). His family values chime with the country’s strong anti-gay marriage constituency, but make him toxic for the left.  Were Mr. Fillon to face Ms. Le Pen in the second round next May, many on the left could abstain.

“Mr. Fillon could provoke a similar revolt against his economic policy, too.  In order to free the economy and encourage job creation, he has drawn up a liberal program, vowing to curb the unions; shrink the labor code from over 3,000 pages to just 150; end the 35-hour week; and trim the public sector, which accounts for a hefty 57% of GDP, by cutting 500,000 civil-service jobs.  ‘I like being compared to Madame Thatcher,’ he declares.  Thatcherism is usually a term of insult in France.

“This may be what the French economy needs.  But it is not a clear vote-winner. It cuts against France’s lingering distrust of free markets and reverence for the state, as well as the tide of anti-globalization sentiment.  It will make Mr. Fillon an easy target for irate trade unions and fearful civil servants.  One Socialist deputy calls his policy ‘violent and dangerous.’  It will also encourage Ms. Le Pen to use her protectionist politics to court the working-class vote, particularly in the French rustbelt of the north and east. Already the preferred candidate among working-class voters, she has begun to warn that Mr. Fillon is out to ‘destroy’ the French social safety-net.

“Yet in deepest Fillon country the political dynamics look somewhat different.  ‘People here say that they know things have to change, and that it will be difficult,’ argues Jean-Carles (sic) Grelier, the center-right mayor in La Ferte-Bernard: ‘They are fed up with sold dreams, and then being disappointed.’  Locals in the café talk about Mr. Fillon’s ‘common sense’ and ‘honesty.’....

“(Fillon) is trying to incarnate the leader who restored France’s national pride, affirmed its independence, and earned its respect, and whose image he kept on his bedroom wall as a child: Charles de Gaulle.  In La Ferte-Bernard, the reference resonates. The last French president to visit the town was de Gaulle in 1965; the only other political leader to do so since was Mr. Fillon.  Polls suggest it may be what the French want: he now tops voting in the first round, and beats Ms. Le Pen in the second. Yet the FN leader is quietly waiting her turn, and has scarcely begun her campaign.  She is not defeated yet.”

On the Brexit front, UK Prime Minister Theresa May repeated her wish to have the mutual rights of UK and EU citizens concluded as soon as possible, before the official start of Brexit talks (or soon thereafter), which just isn’t happening, according to officials in Brussels.

Angela Merkel has joined in a chorus of EU leaders who have taken a tough line on the subject; the German chancellor saying there would be no side deals before Britain starts formal talks.

At the same time, Bank of England Governor Mark Carney joined the camp against a quickie divorce from the European Union, telling bankers he thought there should be a “buffer” to give companies time to adjust to the UK leaving the bloc, with a transition period of two years where Britain would remain in the single market once it’s left the EU, allowing firms to continue using current trading rules.

But while businesses and banks would love such an arrangement, Brexit campaigners fear moves such as Carney’s are a delaying tactic; this as former Prime Ministers Tony Blair and John Major independently said there is a case for a second referendum.

Yes, a lot of folks in Britain are getting cold feet in a big way.

Separately, Prime Minister May and Donald Trump discussed the importance of more NATO members meeting the minimum defense spending target in a phone call this week, agreeing to meet each other at the “earliest possible opportunity.”

May’s office stressed she wants to establish a “regular dialog” between her and Trump.

Turning to Asia....

China’s official PMI on manufacturing for November came in at 51.7 vs. 51.2 in October, the best since July 2014, while the services reading was a solid 54.7 vs. 54.0, the best since June 2014.  The private Caixin reading on manufacturing was 50.9 vs. 51.2, still the second-highest in two years.

China’s industrial sector profits rose 9.8% in October, according to the National Bureau of Statistics, and are up 8.6% the first ten months of the year.

In Japan, the November manufacturing PMI was 51.3 vs. 51.4, with most economists pegging GDP in the 2% range, while household consumption continues to lag, -0.4% year over year in October, but an improvement from September’s -2.1% pace.

Retail sales, though, rose a solid 2.5% month on month in October, the best since May 2014, down 0.1% year on year, though better than the -1.7% pace in September.

Other manufacturing PMIs in the region....

Taiwan was 54.7 (Nov.) vs. 52.7 (Oct.); South Korea 48.0 vs. 48.0 (ugh); India 52.3 vs. 54.4; Russia 53.6 vs. 52.4, a 68-month high.

Street Bytes

--The Dow Jones extended its winning streak to four, barely, up 0.1% on the week to 19170, but the S&P 500 lost 1% and Nasdaq 2.7%.

--U.S. Treasury Yields

6-mo. 0.61%  2-yr. 1.10%  10-yr. 2.38%  30-yr. 3.06%

Thursday the 10-year hit 2.45%, the highest in 17 months.

--OPEC, after much hand-wringing the past few months, agreed to cut production to 32.5 million barrels per day from about 33.8mbd in an effort to stabilize prices and the day of the announcement, Wednesday, the price of West Texas Intermediate rose about $5 and finished the week up 12.4% to $51.68.

Iraq agreed to cut output to 4.35mbpd.  But Iran is allowed to raise output to 3.8 million barrels a day as it recovers from sanctions.  Saudi Arabia, which raised production to a record this year, will reduce output by 486,000 barrels a day to 10.058 million.  The United Arab Emirates and Kuwait are each reducing by between 130,000 and 140,000 barrels a day, while non-OPEC member Russia agreed to cut output by 300,000bpd, half of a 600,000 reduction by all non-OPEC producers.

OPEC next meets on May 25, at which point it intends to extend the cuts for another six months.

But it’s all about compliance, which has never been OPEC’s strong suit, plus if oil stays above $50, U.S. shale production will ramp up anew.

--Black Friday and Cyber Monday are largely things of the past.  Plus it’s hard figuring out which figures are real and which are just total guesstimates by the folks who forecast these things.

For now, RetailNext says Thursday-Friday brick-and-mortar store sales fell 5%, though the National Retail Federation still projects overall holiday sales to rise a solid 3.6% and I’ll stick with that.

Online sales for Thanksgiving and Black Friday were up 18%, according to Adobe Digital Index and up a similar amount on Cyber Monday, with net sales at basically the same level for both periods.

--The deal struck by President-elect Trump and Carrier / United Technologies includes up to $7 million in state tax credits and retraining aid over 10 years.  Carrier said in a statement on Wednesday that more than 1,000 jobs would stay in Indiana as a result of the deal, with some of the $7 million in credits contingent on Carrier making a planned $16m further investment in the Indianapolis plant.

And it needs to be pointed out that parent United Technologies earned 10 percent of its revenues, or $5.6bn, from sales to the U.S. government last year.

But the main thing for now, aside from the workers being saved, is Carrier’s public-relations nightmare is over.

--According to a survey by the nonprofit Kaiser Family Foundation, just a quarter of Americans say they want to scrap ObamaCare, down from nearly a third in October.

Nearly half say they want the law expanded or implemented as is.  For example more than 8 in 10 Americans say they like provisions in the law that eliminate out-of-pocket costs for many preventive services such as cancer screenings and that allow young adults to remain on their parents’ health plans until they are 26.

So many of the law’s specific provisions remain popular, though the incoming Trump administration knows this, while 81% of people who voted for Trump hold an unfavorable view of ObamaCare, according to the Kaiser poll.

--Southern California home prices jumped in October, with the six-county region’s median price rising 6.9% from a year earlier to $465,000 according to CoreLogic.  In the Los Angeles metro region, which includes Orange County, prices in September jumped 5.9% and are now 7.8% below their bubble peak, Case-Shiller data show.

--U.S. auto sales for November rose 3.7% compared with a year ago, giving the industry a chance to match or exceed its 2015 full-year record of 17.47 million vehicles sold.  According to Kelley Blue Book, if December is just flat, it will be another record.

GM’s overall sales rose 10.2%, including an 8% increase in retail units, which are more profitable than fleet sales.   Ford’s rose 5.1%.  Fiat Chrysler’s sales fell 14.3%, though the company cited an effort to cut sales to rental car companies.

Toyota Motor’s posted a sales increase of 4.3%, Nissan’s were up 7.5% and Honda’s rose 6.5% vs. year ago levels.  Volkswagen’s namesake brand posted a 24.2% increase as it gets past its emissions issue.

--Consumer Reports trashed Tesla’s Model X as a “flawed” vehicle, blasting its “complexity, compromised functionality and dismal first-year reliability.”

“(Beyond) the brag-worth magic [Ed. of the “falcon-wing” doors], the all-wheel-drive Model X 90D largely disappoints.”

It does have “warp-speed thrust,” hitting 60 mph in just 4.9 seconds, which is of little value in areas where the speed limit is 35.

--Starbucks Corp.’s Howard Schultz, in a somewhat surprising move, said he was stepping down as chief executive so he can devote all of his time to a new strategic initiative of opening high-end coffee shops for the 45-year-old company. Schultz, 63, is handing over the reins to President and Chief Operating Officer Kevin Johnson, who joined the board of the company eight years ago before joining the executive team two years ago.

Schultz will remain chairman and said he has no plans to step away from the company.  But everyone and their mother know he’s running for president in 2020.

--Shares in Tiffany & Co. rose sharply on Tuesday following a return to positive worldwide sales for the first time in eight quarters, though same-store sales declined 2% for the just-completed one as the company continues to have troubles at its flagship store on Fifth Avenue in New York, next to Trump Tower, which isn’t helping.

Worldwide sales, however, ticked up 1%, helped by growth in Japan and China, and were better than Wall Street’s expectations.

--Ukraine reported an outbreak of a highly contagious bird flu virus among backyard birds in the southern part of the country, the World Organization for Animal Health said on Wednesday.  The birds showed a positive result for highly pathogenic H5 avian influenza.

H5N8 has been found among wild birds and farms across Europe, Asia and the Middle East.

190,000 ducks have been culled in the Netherlands as authorities try to prevent the spread of bird flu across northern Europe.  This was the H5N8 strain.

While most avian influenza is not deadly to humans, the H5N1 virus killed hundreds back in the early 2000s.  You just never know when one of these viruses will mutate, which is inevitable.

--GoPro, the manufacturer of the wearable camera, announced it was eliminating 200 jobs to cut costs.  That’s about 15 percent of the workforce.

--Bad news for “Jersey Boys,” which is closing after a decade in New York soon but continuing elsewhere.  Its writers, director and producers have been found liable for copyright infringement by a federal jury in Nevada.

The case involves an unpublished autobiography of band member Tommy DeVito.

Daniel M. Mayeda, co-counsel for the defendants, said the musical is based on factual material drawn from interviews with multiple band members, in addition to articles and a previous book proposal.

“You can own historical events,” he said.  “A lot of things that are similar are facts, names and characteristics of personalities.”

The autobiography in question was ghostwritten by the late Rex Woodard, whose widow attempted to publish it after the success of “Jersey Boys” when it opened in 2005.

Boy, I don’t know about this judgement, though Woodard’s widow sued DeVito when she discovered he had registered the copyright without reflecting his deal with her husband.    10% of the show’s success has been ruled to be attributable to infringement.  [Pia Catton / Wall Street Journal]

-- “Hamilton” grossed a record $3.3 million for the week ended Sunday, according to data provided by the Broadway League, with the top ticket price reaching nearly $1,000.  The average paid admission was $303.21.  [Pia Catton / Wall Street Journal]

--Lufthansa’s rolling pilots’ strike has been a real pain in the butt, with 1,700 flights canceled on Tuesday and Wednesday.  The pilots have been giving notice as to what days they are walking out as their long-running pay dispute continues.

--Gambling revenue in Macau rose for a fourth straight month in November, amid an influx of high rollers, fueling hope the industry’s long slump is coming to an end.

Gross gambling revenue last month rose 14.4% year over year to $2.35 billion, according to Macau’s Gaming Inspection and Coordination Bureau.

Macau has been suffering for two years due to China’s anticorruption drive that kept VIP gamblers from the city.

--Brazil’s manufacturing PMI in November was a putrid 46.2 vs. 46.3 in October; Canada’s was 51.5 vs. 51.1.

--We note the passing of Jim Delligatti, who back in the mid-1960s owned a McDonald’s franchise in the Pittsburgh area and believed the menu needed some jazzing up.  The result?  He came up with the Big Mac.

As reported by the Wall Street Journal’s James R. Hagerty:

“He came up with the idea for the Big Mac in 1965 and first served it at his Uniontown, Pa., McDonald’s outlet in 1967.  The hamburger features two beef patties, a mildly tangy sauce, lettuce, cheese, pickles and onions slathered over a soft sesame-seed bun sliced into three layers.  The original price was 45 cents, compared with an average of about $5 today.  McDonald’s put the Big Mac on its national menu in 1968.”

To this day it’s still the best fast-food burger around, in the humble estimation of your editor.

Delligatti did acknowledge that his idea was in response to double-decker burgers that were being served among the competition.  “This wasn’t like discovering the lightbulb,” he told the Los Angeles Times in 1993.

Now I find this unbelievable.  According to a top franchisee memo to other operators in July, “only one in five millennials has tried a Big Mac.”

Delligatti didn’t receive royalties on Big Mac sales.  “All I got was a plaque,” he once said.

-- “Today” host Matt Lauer signed an extension that will take him well into 2018, reportedly for at least two more years at $20 million per.  “Today” has been on a ratings roll, beating “GMA” with adults in the coveted 25-to-54-year-old demographic for 63 of the past 64 weeks. 

--Carlsberg is undertaking a major relaunch of its brand, playing up its Danish roots as it seeks to differentiate itself from mainstream lagers.

We’re talking new bottles featuring the Danish cross that will be signed ‘Kobenhavn – Danish for Copenhagen.  But the beer will remain brewed in Northampton, England.

--We note the passing of long-time Wall Streeter Jack Rivkin, 76.  Rivkin held senior posts at Smith Barney, Neuberger Berman and Altegris, a fund manager in La Jolla, Calif., but perhaps is best known for his time as head of investment research at Shearson Lehman Brothers Inc. in the late 1980s, where he took the team from 15th to first in four years, according to the Institutional Investor rankings.

Rivkin was a fixture on the business channels and I loved his “no-jerk” hiring policy, shunning people who were rude or arrogant.

--Finally Milt Moss died. He was 93.  Moss was the comic actor who delivered one of advertising’s most famous catchphrases, “I can’t believe I ate that whole thing” in a memorable commercial for Alka-Seltzer in 1972.

Moss was a nightclub comedian and master of ceremonies who opened for performers like Robert Goulet and appeared on television with Milton Berle, Merv Griffin and Johnny Carson.

But it was the Alka-Seltzer commercial that struck a chord with viewers and in 1977 it was admitted to the advertising Hall of Fame.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: The situation in the key battlegrounds of Mosul (Iraq) and Aleppo (Syria) could not be worse.  Both are true catastrophes.

Rebel fighters in Aleppo, after suffering a series of defeats at the hands of Syrian President Bashar al-Assad’s army (backed by Russia, Iran and Hizbullah), put up a fierce resistance Friday in a key battered district, where as Agence France Presse put it, “a government offensive has left bodies in the streets and sparked a global outcry.”

Tens of thousands of residents from the opposition-held east have fled.  More than 300 civilians, including dozens of children, have been killed in east Aleppo since the government began its offensive on Nov. 15, according to the Syrian Observatory for Human Rights.  Retaliatory rocket fire by the rebels on government-held western areas of the city has killed 55 civilians, the Observatory said.

The U.N. warned this week that the eastern part of Aleppo could become “a giant graveyard.”  Russia has proposed setting up humanitarian corridors to bring in aid and evacuate the severely wounded but little along these lines has been achieved.

The loss of east Aleppo – a rebel stronghold since 2012 – would be the biggest blow to Syria’s opposition in more than five years.

The French U.N. ambassador, Francois Delattre, said this week, “France and its partners cannot remain silent in the face of what could be one of the biggest massacres of a civilian population since World War II.”

A spokesman for Russia’s defense ministry said: “Half of the territory in parts of eastern Aleppo occupied by militants in recent years has been completely freed...

“Our Western counterparts are showing surprising blindness when it is time to assess the real situation in Aleppo.”  [Irish Independent]

Oh brother.

At week’s end Syrian rebel leaders were apparently in secret talks with Russia to end the fighting the city.  To give you a sense of Washington’s irrelevance, the U.S. is not involved.

Lastly, the Kremlin is waiting for an explanation from Turkish authorities after President Recep Erdogan stated on Tuesday that the aim of Turkey’s military operation in Syria is to overthrow Syrian President Assad.

“This is a very serious statement that generally diverges from previous ones, and a statement that differs significantly from our understanding of the situation,” Kremlin spokesman Dmitry Peskov told reporters; Russia seeing the Assad government and its armed forces as the only legitimate government within Syria.

Meanwhile, in Iraq, last weekend parliament voted to accord full legal status to government-sanctioned Shiite militias as a “back-up and reserve” force for the military and police and empower them to “deter” security and terror threats facing the country.

But this was promptly rejected by Sunni Arab lawmakers who said it was evidence of what they called the “dictatorship” of the country’s Shiite majority.

The Shiite militias number more than 100,000.  Many of the groups in this number fought American troops in major street battles during the U.S. military presence in Iraq between 2003 and 2011.

It’s true the militias played an important role in checking ISIS’ advance on Baghdad and the Shiite Shrine cities of Samarra and Karbala in the summer of 2014, but the Sunnis and rights groups have long accused the militiamen of extrajudicial killings, abuse and theft of property in areas where they drove out ISIS.

The militias are working with Iraqi security forces in the battle for Mosul and Reuters reported this week that nearly 1,000 ISIS fighters have been killed, but there is no doubt the fighting has slowed.  There haven’t been any recent figures on the number of Iraqi casualties in what is now a six-week battle.

Progress has been difficult as the Iraqis move into more heavily populated areas where ISIS is using the residents as human shields.

More than one million residents remain in Mosul and the city has become more of a hellhole after a water line was bombed, the U.N. warning on Wednesday that up to 500,000 civilians face a “catastrophic” drinking water shortage.  These same people are already struggling to feed themselves day to day.  Lisa Grande, U.N. humanitarian coordinator in Iraq, said “The impact on children, women and families will be catastrophic.”

Back to the issue of the Sunnis, as Liz Sly writes in the Washington Post:

“No religious or ethnic group was left unscathed by the Islamic State’s sweep through Iraq and Syria.  Shiites, Kurds, Christians and the tiny Yazidi minority have all been victims of a campaign of atrocities, and they now are fighting and dying in the battles to defeat the militants.

“But the vast majority of the territory overrun by the Islamic State was historically populated by Sunni Arabs, adherents of the branch of Islam that the group claims to champion and whose interests the militants profess to represent. The vast majority of the 4.2 million Iraqis who have been displaced from their homes by the Islamic State’s war are Sunnis.  And as the offensives get underway to capture Mosul, Iraq’s biggest Sunni city, and Raqqa, the group’s self-proclaimed capital in Syria, more Sunni towns and villages are being demolished, and more Sunni livelihoods are being destroyed....

“The dangers are clear, analysts and Iraqis say.  Sunnis are at risk of becoming a dispossessed and resentful underclass in lands they once ruled, creating fertile conditions for a repeat of the cycle of marginalization and radicalization that gave rise to the Islamic State in the first place.”

And as I go to post, Reuters has a story that as Iraqi forces are clearing neighborhoods in the outskirts of Mosul, they are spray-painting Shiite graffiti on buildings, such as “We answer your call, O Hussein!”, a traditional battle cry of the Shiites, expressing loyalty to the 7th century martyred hero of their sect.

While this is meant to be an expression of victory for all Iraqis, for the predominantly Sunni residents of Mosul, it only signals more violence to come.

Iran: CIA Director John Brennan warned President-elect Trump that ending the Iran nuclear deal would be “disastrous” and “the height of folly.”

In a BBC interview, Brennan said, “First of all for one administration to tear up an agreement that a previous administration made would be unprecedented.”

He said such a move would risk strengthening hardliners in Iran and risk other states pursuing nuclear weapons in response to a renewed Iranian effort.

With Gen. Mattis in the administration, Brennan needn’t worry.  I said long ago, when the deal was being negotiated, that it was too late.  Iran is on a distinct path to a bomb and the other parties to the accord are off and running, pursuing their commercial interests with the mullahs.

At this point you need a more concerted effort on the inspections front.

Brennan also advised the new president to be wary of Russia’s promises, blaming Moscow for much of the suffering in Syria.

Israel: In a most worrisome development, ISIS is in the southern Golan Heights, and this week, for the first time openly, a force from a local ISIS branch engaged an IDF force.

The incident began Sunday morning with an ambush force from the Golani Brigade’s reconnaissance battalion east of the Golan border fence, which was spotted by forces on the other side, who started firing.  No one was wounded and the “ambush force” never should have been discovered. 

So an Israeli drone was called into the area and struck the vehicle in which the men were fleeing, killing four members of ISIS.

But while there was a successful conclusion, this is a turning point after 5 ½ years of Syria’s civil war.  Rebel groups have taken almost complete control of the area near the border.

Separately, Israeli jets struck an arms convoy and Hizbullah storehouses in Syria on Wednesday.

As to why Syrian anti-aircraft units, loosely coordinating with Russia, have failed to shoot down Israeli planes, it seems apparent that Israeli Prime Minister Benjamin Netanyahu, in a series of meetings with Vladimir Putin, has worked out a deal.  The Russian radar systems that have been deployed in Syria, after all, have a range sufficient to see any Israeli jet taking off from practically anywhere.  But of course Hizbullah is part of the Russian-Iranian alliance to save Assad.  It’s complicated.

One theory is that Russia will ignore Israel’s attacks inside Syria as long as they are rare. Netanyahu, for now, has convinced Putin that the rocket threat Hizbullah poses to Israel (over 120,000 in their arsenal) is real.

Libya: The situation here is far from stable.  Clashes continued on Friday between two heavily-armed militias in the capital Tripoli in the worst outbreak of violence there in two years.  Tripoli has been held hostage by various militias since Moammar Gaddafi’s ouster in 2011.

Russia: A subdued President Vladimir Putin delivered his annual address to the nation on Thursday, calling for cooperation with the incoming Trump administration.  He also lamented that around the world, “even in the most seemingly affluent countries and stable regions, more and more fractures and conflicts on political, ethnic, religious and social grounds are rising.”

Of course who is playing a major role in such instability?  As reported by the New York Times, German foreign intelligence chief, Bruno Kahl, warned in an interview published on Tuesday that Russia, seeking to create “political uncertainty,” was bombarding his country with disinformation before elections next year.

Putin didn’t mention Trump by name but said he wanted to work with the incoming administration “to normalize and begin to develop bilateral relations on an equal and mutually beneficial basis.”

Putin also made clear that Russia demanded to be treated as a global power, not the “regional power” that President Obama described it as in 2014, infuriating Moscow.

Referring to efforts to prevent the spread of nuclear weapons, Putin said, “We have a joint responsibility for the provision of international security and stability, for the strengthening of anti-proliferation regimes.”

Trump has suggested more countries should acquire nuclear weapons so that they can defend themselves without Washington’s help.

Putin also warned against any attempt by Washington to disrupt what he called the balance of nuclear firepower between the two countries.

“I would like to emphasize that attempts to break strategic parity are extremely dangerous and can lead to a global catastrophe,” Putin said.

What does Vladimir Putin want from the new Trump administration?  Simon Saradzhyan, who heads the Russian Matters project at Harvard’s Belfer Center, told the Los Angeles Times’ Laura King: Putin “wants the U.S. to treat Russia as an equal partner, in spite of the obvious disparity in factors like the economy and conventional military strength and the technology gap.  He wants the same thing he essentially wanted from Obama: that the U.S. acknowledge that Russia is a great power that must have a say in all important decisions that affect the regions that surround it.”

“Resets” with both Obama and in a different respect the George W. Bush administration both turned tense.

Editorial / Washington Post

“Russian meddling in Western democracies is often portrayed as malicious but soft-boiled, centered on cyberattacks, propaganda operations and financial help for pro-Moscow politicians.  So it’s worth calling attention to a couple of recent episodes in Eastern Europe that were of an entirely different character.  In NATO member Hungary, Russian agents have been fingered for training with a neo-Nazi militia; in the tiny Balkan state of Montenegro, which is on the verge of joining the transatlantic alliance, Moscow is accused of plotting a violent coup.

“The evidence in both cases is incomplete but compelling. In Hungary, the story began with a gunfight in late October between police and the leader of the National Front movement, an extremist group that identifies with Hungarian fascists of the 1930s.  Police subsequently raided a number of properties connected to the group and discovered large stockpiles of weapons, according to a report in the Financial Times.  Hungary’s national security committee reported that Russian diplomats and men dressed in Russian military intelligence uniforms had openly engaged in paramilitary training exercises with members of the group....

“In short, the regime of Vladimir Putin appears to have been intimately involved with an armed movement dedicated to restoring fascism in Hungary....

“An even more audacious operation was underway in Montenegro, if authorities there and in neighboring Serbia are right.  They say Russian agents attempted to foment a coup on Oct. 16, when parliamentary elections were being held.  The idea was that armed men would seize the parliament building and assassinate then-Prime Minister Milo Djukanovic, who has led his country’s bid for NATO membership. Some 20 Serbians and Montenegrins were arrested for participating in the plot.  One, a notorious Serbian mercenary, has told authorities of visiting Moscow to discuss the coup and receiving $200,000 to carry it out, according to a report in the New York Times....

“Russian intelligence services have been known for meddling in foreign countries since the time of the czars.  But veteran analysts say such bold attempts to sow chaos in countries linked to NATO are virtually unprecedented.  They reflect a regime that has given free rein to its covert operatives, on the calculation that there will be little or no pushback from a weak and divided West.  Until that theory is proved wrong, expect more trouble from Moscow’s agents.”

On a different issue, as reported by the Moscow Times, Russia will finish 2016 with just 18 launches of space rockets, compared to China’s 19 and America’s 20, which would be the first time Russia ever trailed the Chinese in annual launches.

To make matters worse, Russian rockets are becoming uncharacteristically undependable. Witness an episode on Thursday, when an unmanned cargo ship headed to the International Space Station was destroyed about six minutes after liftoff from Kazakhstan.  The loss of the Progress capsule, which carried more than 2 ½ tons of food and supplies, occurred at an altitude of 118 miles.  No cause was given.

Ukraine: Officials here said they have commenced testing of medium-range missiles in drills on Black Sea territorial waters despite alleged threats by Russia to shoot them down and retaliate against launching pads.

A Russian foreign ministry spokesperson said: “It looks very much like a provocation to again show off a victim that should evoke sympathy now from new officials and the new establishment and thus extend and prolong the patronage, including from the United States.”

South Korea: Events here are moving at lightspeed. Last Saturday, hundreds of thousands rallied in Seoul demanding President Park Geun-hye step down amidst the sweeping corruption investigation into her office, and Park’s allowing a friend, Choi Soon-sil, to manipulate power from behind the scenes.  The crowd by Sunday then grew to a reported 1.5 million.

Park then offered to step down as president, asking parliament to come up with a plan to ensure stable regime change.  But her proposal was rejected as a ploy to delay her impeachment.

Park has 15 months left in her single five-year term, but if she were to be impeached or resign, an election would be held in 60 days.

At last word, impeachment proceedings are to commence Dec. 9.  If parliament votes in favor of impeachment, presidential power will be transferred to the country’s prime minister while the matter goes to the constitutional court.  The court then has 180 days to rule on the legality of the motion.  If upheld, Park would be forced to step down and would lose her immunity against prosecution.

North Korea: Related to the above...Editorial / Wall Street Journal

“The Korean peninsula is always dangerous, but the next few months are especially so. An erratic, nuclear-armed North still covets prosperous South Korea, which is enduring a presidential impeachment crisis even as the U.S. is in a political transition. This is a moment for some supportive bipartisan U.S. diplomacy....

“The danger is that this could be a moment when the North’s regime thinks it can take advantage.  Dictator Kim Jong Un is unpredictable at the best of times.  But he and his military could misinterpret the noise of democratic debate and accountability in the South as a sign of weakness. Perhaps he might use the next round of U.S.-South Korean joint military exercises scheduled for February as an excuse for an attack or land grab.

“The isolated North may also mistake the U.S. political transition as an opening.  In glib campaign moments this year, Donald Trump suggested that South Korea and Japan ought to be able to defend themselves and U.S. forces might come home....

“A public statement from the presidential transition, perhaps in league with the Obama administration, is in order.  The U.S. also needs to convey to China that any attempt to exploit the current moment would mean the end of the regime in the North and unification to the Chinese border.”

China: The central government has embarked on a major effort to stem capital outflow by curbing mainland China’s outbound investment.  As reported by the South China Morning Post:

“Tighter control of outbound investment is likely to put an end to a trophy asset shopping spree by well-connected companies such as Anbang Insurance and Dalian Wanda, with Beijing ready to cut the supply of foreign exchange for such deals.

“Shanghai’s municipal foreign exchange authority has told bank managers in the city that all overseas payments under the capital account bigger than $5 million would have to be submitted to Beijing for special clearance before proceeding, the sources said.

“While the move did not necessarily mean all such deals would be vetoed, the regulatory procedures that would have to be navigated before completing them would take much longer, the sources said.”

Separately, tensions between Beijing and Singapore have been rising following the impoundment of nine Singaporean infantry fighting vehicles transiting through Hong Kong.  The vehicles were being sent to Singapore from southern Taiwan, after a military exercise there.

China has long opposed all forms of military cooperation between other countries and Taiwan, which it has always reserved the right to reunite with the mainland by force if necessary.  I’ve argued this could be sooner than later.

The militaries of Taiwan and Singapore, though, have long trained together, much to Beijing’s irritation.

Pakistan: President-elect Trump had his first phone call with Prime Minister Nawaz Sharif and let’s just say perhaps it was a bit too breezy.  The Pakistani government, in what has been described as a breach of protocol, released a rough transcript of Trump’s remarks and Trump told Sharif that he was “a terrific guy” who made him feel as though “I’m talking to a person I have known for long.”  He described Pakistanis as “one of the most intelligent people” and Sharif invited Trump to visit his country, wherein the president-elect replied that he would “love to come to a fantastic country, fantastic place of fantastic people.”

Trump also offered to Sharif “to play any role you want me to play to address and find solutions to the country’s problems,” which is being interpreted by some in India as an offer for the United States to mediate the Kashmir issue.

The former Pakistani ambassador to Washington, Husain Haqqani, said his government’s decision to release a rough transcript demonstrated how easily Pakistani leaders misread signals from their American counterparts.

“Pakistan is one country where knowing history and details matters most,” Haqqani said, “and where the U.S. cannot afford to give wrong signals, given the history of misunderstandings.”  [New York Times]

Colombia: Congress passed an amended peace accord with the country’s largest rebel group, FARC, on Wednesday, two months after voters rejected an earlier version of the deal in a national referendum.

While passage is a victory for President Juan Manuel Santos and signals the end of the continent’s longest-running civil conflict, opponents want the deal submitted to another national plebiscite.

Cuba: Two hours after I posted last Friday night, we learned of the passing of Fidel Castro.  Some of the following I wanted down for the record.

Statement by President Obama

At this time of Fidel Castro’s passing, we extend a hand of friendship to the Cuban people.  We know that this moment fills Cubans – in Cuba and the United States – with powerful emotions, recalling the countless ways in which Fidel Castro altered the course of individual lives, families, and of the Cuban nation.  History will record and judge the enormous impact of this singular figure on the people and world around him.

For nearly six decades, the relationship between the United States and Cuba was marked by discord and profound political disagreements.  During my presidency, we have worked hard to put the past behind us, pursuing a future in which the relationship between our two countries is defined not by our differences but by the many things that we share as neighbors and friends – bonds of family, culture, commerce, and common humanity.  This engagement includes the contributions of Cuban Americans, who have done so much for our country and who care deeply about their loved ones in Cuba.

Today, we offer condolences to Fidel Castro’s family, and our thoughts and prayers are with the Cuban people.  In the days ahead, they will recall the past and also look to the future.  As they do, the Cuban people must know that they have a friend and partner in the United States of America.

---

Appearing on NBC’s “Meet the Press,” Florida Republican Sen. Marco Rubio said he thinks President-elect Donald Trump will make rolling back concessions to the Castro regime a top priority during his presidency.

“All of the concessions that Barack Obama has granted the Castro regime were done through executive order, which means the next president can reverse them,” Trump said during a Miami rally in September.  “And that I will do, unless the Castro regime meets our demands – not my demands, our demands.”

Rubio on Sunday called Castro’s death a “historical” and “psychological” milestone for many people.

But he noted that “from a practical standpoint, Cuba today is governed exactly the same way as it was 48 hours ago.”

Rubio said he wants to look at all the changes that were made regarding the relationship between the U.S. and Cuba.

“Our goal is not to punish.  Our goal is to figure out what can we do, through U.S. policy, to, number one, look out for the national interest of the United States,” he said.

“And number two, to help create an environment where we are creating the potential for a transition to democratic order in Cuba at some point in the near future.”

Rubio offered that he never said he is against “all changes to Cuba policy.”

“I’m just against unilateral changes from which we get nothing in return for our country or for the freedom or liberty of the Cuban people,” he said.

Appearing Sunday on ABC’s “This Week,” Republican Sen. Ted Cruz of Texas said he doubts there will be a new chapter in the relationship between the U.S. and Cuba because President Obama’s policies have strengthened the regime in Havana.

“Unfortunately, the policies of the Obama administration have made that less likely.  What the Obama administration has done is strengthen Raul Castro.”

Cruz, who is of Cuban descent, referenced a conversation with his father about the death of Fidel.

“He shrugged and said Raul’s been in charge for years, that (the) system has gotten stronger. And what Obama has done is funneled billions of dollars to Raul Castro, which is being used to oppress dissidents.

“And for a man who has tortured and murdered and oppressed, for so many, it is thankful that he is no longer with us,” Cruz said.

“I very much hope” Obama does not attend Castro’s funeral, he added.

President-elect Donald Trump:

“Today, the world marks the passing of a brutal dictator who oppressed his own people for nearly six decades.  Fidel Castrol’s legacy is one of firing squads, theft, unimaginable suffering, poverty and the denial of fundamental human rights,” Trump said in a statement.

“While Cuba remains a totalitarian island, it is my hope that today marks a move away from the horrors endured for too long, and toward a future in which the wonderful Cuban people finally live in the freedom they so richly deserve,” he added.

Castro’s death was announced early Saturday by his brother Raul.

“It is with great pain I come to inform our country, friends of our America, and the world that today, Nov. 25, 2016 at 10:29 p.m., the commander in chief of the Cuban Revolution, Fidel Castro Ruz, died.”

[Sources: whitehouse.gov; The Hill]

Canadian Prime Minister Justin Trudeau wanted the world to know how fond he was of Castro, thus proving that this pretty boy is hardly ready for prime time.

“Fidel Castro was a larger than life leader who served his people for almost half a century,” Trudeau said in the statement, which was issued while he attended a summit meeting in Madagascar.  He described Castro as “Cuba’s longest serving President.”

“While a controversial figure, both Mr. Castro’s supporters and detractors recognized his tremendous dedication and love for the Cuban people who had a deep and lasting affection for ‘el Comandante.’” Trudeau added that Castro was “a legendary revolutionary and orator” whose death had brought him “deep sorrow.”

“I know my father [Ed. former prime minister Pierre Trudeau, who was basically a socialist] was very proud to call him a friend, and I had the opportunity to meet Fidel when my father passed away.  It was also a real honor to meet his three sons and his brother President Raul Castro during my recent visit to Cuba.”

Senator Marco Rubio called Justin Trudeau’s remarks “shameful and embarrassing.”  Senator Ted Cruz said Trudeau’s statement was “disgraceful” and accused him of “slobbering adulation.”

Several members of Canada’s opposition Conservative Party condemned their prime minister.  Kellie Leitch, who is running for the party’s leadership, criticized Trudeau for his “fawning characterization” of Castro.  Maxime Bernier, another leading Conservative, called Trudeau’s praise “repugnant” and rebuked him for suggesting that the Cuban leader’s decades in power had amounted to a form of public service.

Robert Torricelli (former New Jersey congressman and senator) / NJ.com

“The death of Cuban dictator Fidel Castro raises once again the issue of the American embargo. It’s a controversial law that for five decades has been more misunderstood and misrepresented than anything I’ve experienced in public life.

“I authored the law strengthening the U.S. embargo under President George H.W. Bush when I was in Congress, so a little perspective is in order as we ponder Castro’s passing and what  he meant to U.S.-Cuba relations.

“Among my first memories as a child growing up in Franklin Lakes were of the U.S. and the USSR teetering on the brink of nuclear war. Only recently have we learned just how close we came to global destruction.  Poor communication required the Kremlin to give launch authority to local Soviet commanders. Castro urged a Soviet nuclear attack if American forces landed on his shores.  We now know that those weapons were operational.  This was Fidel Castro.

“I met him in the spring of 1990 in his sprawling home by Havana Harbor. What I imagined to be an exchange of pleasantries quickly became a rambling four-hour conversation. It was a tour de force. I doubted that I’d ever see him again and I thought that I had nothing to lose.

“I dove right in:

Did you kill JFK? ‘ Not in my interest,’ Castro said.  President Johnson was worse for Cuba, he said.

And how did you know that the landing would be at the Bay of Pigs?  ‘U.S. spy planes had been flying over it for days,’ he said.

Did you always intend to create a Communist government?  ‘I never heard of the term’ applied to the Revolution, he said.  President Nixon, Castro told me, walked out of the Harlem Hotel where they had a pleasant conversation and told the press that ‘I was a Communist.’

“Hours before our conversation, I had met political prisoners who had been incarcerated for three decades.  One noted that the day of my visit was the first time the steel panels had been removed from his jailhouse windows, allowing him to see the sun. This was Fidel Castro.

“As Cuban’s all over the world celebrate the death of this infamous dictator, we pray that today’s news is a beginning to real change in the captive island because the people of Cuba are still not free.

“Cuba had become more than an island prison. Basic freedoms were denied and generations were lost in abject poverty. A land – rich from farming and fishing – with a strong and entrepreneurial people had been diminished to importing food, while filling the streets with unemployed youth and teenage prostitutes. This was Fidel Castro.

“No amount of poverty was enough to thwart Castro’s ambitions.  Throughout the 1980s he continued to fund revolutions in Africa and Latin America.  Thousands died from his armaments in Marxist insurrections while his island starved.  This was Fidel Castro.”

Others....

French President Francois Hollande said Castro “incarnated the Cuban revolution” in its “hopes” and its “disillusionments.”

Former London mayor Ken Livingstone, speaking to the BBC, said Castro was an “absolute giant of the 20th century,” and blamed the U.S. for the restrictions on civil liberties under his leadership.

He said: “I’m sure they will, over time, move towards something like a traditional west European democracy.  It could have happened a lot earlier if you hadn’t had, the entire time, a blockade by America, attempts to overthrow the regime, eight assassination attempts authorized by American presidents.”

Livingston continued, “of course Fidel did things that were wrong,” adding: “Initially he wasn’t very good on lesbian and gay rights, but the key things that mattered was that people had a good education, good healthcare and wealth was evenly distributed.

“He was not living as a billionaire laundering money off into a Panamanian bank account or anything like that, he was good for the people.”

Livingston is totally nuts.

Editorial / Washington Post

“In contrast to his long lie of violence, both verbal and physical, Fidel Castro’s demise at 90 was apparently, peaceful.  Cuba’s communist dictator from 1959 until illness obliged him to hand control to his brother Raul in 2006, Mr. Castro did not so much die as fade away. It was an unlikely conclusion to a turbulent career that Mr. Castro’s many enemies, including successive U.S. administrations, might gladly have ended more abruptly many years ago.

“Mr. Castro’s legacy is a 57-year-old ‘revolution’ that once punched above its weight in world affairs, especially in Latin America, but in more recent years became a decrepit museum piece of Soviet-style totalitarianism.  Over Fidel’s objections, Raul Castro has tried to adapt and preserve the regime, including through an opening to the United States.  Too eagerly reciprocated by President Obama, that initiative has brought in more U.S. dollars and tourists but no relief from stifling and frequently violent repression of speech, assembly and other basic human rights.

“Fidel’s Cuba boasted a previously unknown degree of sovereign separation from the United States. Under his rule, too, Cuban public health and literacy indicators were significantly better than those of many other Latin American states (though that was also true pre-revolution).

“For those ‘achievements,’ however, the Cuban people paid a terrible price – far higher than they could have expected when Mr. Castro roared into Havana, promising to restore political freedoms lost under the U.S.-backed dictatorship that he ousted. Though counterproductive to his ostensibly humane social policies, Mr. Castro’s political repression reached an extreme that would have made his predecessor, Fulgencio Batista, blush.

“It began with mass summary executions of Batista officials and soon progressed to internment of thousands of gay men and lesbians; systematic, block-by-block surveillance of the entire citizenry; repeated purges, complete with show trials and executions, of the ruling party; and punishment for dissident artists, writers and journalists. Mr. Castro’s regime learned from the totalitarian patron he chose to offset the U.S. adversary – the Soviet Union, whose nuclear missiles he welcomes, bringing the world to the brink of Armageddon.  Mr. Castro sponsored violent subversive movements in half a dozen Latin America countries and even in his dotage helped steer Venezuela to economic and political catastrophe through his patronage of Hugo Chavez.”

George F. Will / Washington Post

“With the end of Fidel Castro’s nasty life Friday, we can hope, if not reasonably expect, to have seen the last of charismatic totalitarians worshipped by political pilgrims from open societies. Experience suggests there will always be tyranny tourists in flight from what they consider the boring banality of bourgeois society and eager for the excitement of sojourns in ‘progressive’ despotisms that they are free to admire and then leave.

“During the 1930s, there were many apologists for Joseph Stalin’s brutalities, for which he committed in the name of building a workers’ paradise fit for an improved humanity. The apologists complacently said, ‘You can’t make an omelet without breaking eggs.’ To which George Orwell acidly replied: ‘Where’s the omelet?’ With Castro, the problem was lemonade.

“Soon after Castro seized power in 1959, Jean-Paul Sartre, the French intellectual whose Stalinist politics were as grotesque as his philosophy was opaque, left Les Deux Magots café in Paris to visit Cuba. During a drive, he and Castro stopped at a roadside stand.  They were served warm lemonade, which Castro heatedly said ‘reveals a lack of revolutionary consciousness.’ The waitress shrugged, saying the refrigerator was broken. Castro ‘growled’ (Sartre’s approving description): ‘Tell your people in charge that if they don’t take care of their problems, they will have problems with me.’ Sartre swooned:

“ ‘This was the first time I understood – still quite vaguely – what I called ‘direct democracy.’  Between the waitress and Castro, an immediate secret understanding was established. She let it be seen by her tone, her smiles, by a shrug of the shoulders, that she was without illusion.  And the prime minister...in expressing himself before her without circumlocution, calmly invited her to join the rebellion.’....

“U.S. flings at ‘regime change’ in distant lands have had, to say no more, uneven results, but the most spectacular futility has been 90 miles from Florida.  Castro was the object of various and sometimes unhinged U.S. attempts to remove him.  After the Bay of Pigs debacle, the Kennedy administration doubled down with Operation Mongoose, which included hairbrained assassination plots and a plan skeptics called ‘elimination by illumination’ – having a U.S. submarine surface in Havana harbor and fire star shells into the night sky to convince Catholic Cubans that the Second Coming had come, causing them to rebel against Castro the anti-Christ.  Nevertheless, Castro ruled Cuba during 11 U.S. presidencies and longer than the Soviet Union ruled Eastern Europe.

“Socialism is bountiful only of slogans, and a Castro favorite was ‘socialism or death.’  The latter came to him decades after the former had made Cuba into a gray museum for a dead utopianism.”

Editorial / Wall Street Journal

“Fidel Castro’s legacy of 57 years in power is best understood by the fates of two groups of his countrymen – those who remained in Cuba and suffered impoverishment and dictatorship, and those who were lucky or brave enough to flee to America to make their way in freedom. No progressive nostalgia after his death Friday at age 90 should disguise this murderous and tragic record.

“Castro took power on New Year’s Day in 1959 serenaded by the Western media for toppling dictator Fulgencio Batista and promising democracy.  He soon revealed that his goal was to impose Communist rule. He exiled clergy, took over Catholic schools and expropriated businesses.  Firing squads and dungeons eliminated rivals and dissenters.

“The terror produced a mass exodus.  An April 1961 attempt by the CIA and a small force of expatriate Cubans to overthrow Castro was crushed at the Bay of Pigs in a fiasco for the Kennedy Administration.  Castro aligned himself with the Soviet Union, and their 1962 attempt to establish a Soviet missile base on Cuba nearly led to nuclear war. The crisis was averted after President Kennedy sent warships to intercept the missiles, but the Soviets extracted a U.S. promise not to invade Cuba again.

“The Cuba that Castro inherited was developing but relatively prosperous. It  ranked third in Latin America in doctors and dentists and daily calorie consumption per capita.  Its infant-mortality rate was the lowest in the region and the 13th lowest in the world.  Cubans were among the most literate Latins and had a vibrant civic life with private professional, commercial, religious and charitable organizations.

“Castro destroyed all that.  He ruined agriculture by imposing collective farms, making Cuba dependent first on the Soviets and later on oil from Hugo Chavez’s Venezuela. In the past half century Cuba’s export growth has been less than Haiti’s, and now even doctors are scarce because so many are sent abroad to earn foreign currency.  Hospitals lack sheets and aspirin. The average monthly income is $20 and government food rations are inadequate....

“The hope of millions of Cubans, exiled and still on the island, has been that Fidel’s death might finally lead to change, but unwinding nearly six decades of Castro rule will be difficult. The illusions of Communism have given way to a military state that still arrests and beats women on their way to church.  China and Russia both allow more economic freedom. The regime fears that easing up on dissent, entrepreneurship or even access to the internet would lead to its inevitable demise.

“Castro’s Cuba exists today as a reminder of the worst of the 20th century when dictators invoked socialist ideals to hammer human beings into nails for the state.  Too many Western fellow-travelers indulged its fantasies as long as they didn’t have to live there.  Perhaps the influence of Cuba’s exiles will be able, over time, to reseed the message of liberty on the island.  But freedom starts by seeing clearly the human suffering that Fidel Castro wrought.”

Finally, last Sunday I flipped on “Meet the Press,” only because “Face the Nation” was covering a topic I wasn’t interested in, and among those on the panel were Danielle Pletka of the American Enterprise Institute, and Helene Cooper of the New York Times.

Moderator Chuck Todd asked Danielle Pletka if anything will change in Cuba.

Pletka: I don’t think anything is going to change because as Marco Rubio said rightly, Fidel hasn’t been in charge. Raul is in charge. The transfer happened a decade ago.  The problem is not – was not Fidel.  It was the system that he put in place all these many decades ago. And that’s what we need to focus on.  We need to focus not on the end of the Castros, not the name. And then to that system which lives off of the back of Cuban people, oppresses them, threatens us, and interferes in the region.

Chuck Todd: And I think the question is, obviously, is of what President Obama has done gets left in by Donald Trump.  But before we go away from President Obama, his statement yesterday got a lot of people upset because of what it didn’t say. Let me put it up, here’s what he said on Castro.  ‘We know that this moment fills Cubans, in Cuba and in the United States, with powerful emotions, recalling the countless ways in which Fidel Castro altered the course of individual lives, families, and of the Cuban nation.  History will record and judge the enormous impact of this singular figure on the people and world around him.’  I have to say, Helene Cooper, it’s the most positive statement I’ve ever heard a President of the United States put out on Fidel Castro. Why was it so positive?

Cooper: Well, first of all, I think I disagree with you guys on the – you present a very, and Marco Rubio just did that, America-centric view of Cuba. Which is Castro as the, you know, Satanic demon that the United States, and in many ways he has been, but I think what President Obama’s statement reflects is that nobody in the rest of the world sort of agrees with you. The Castro that I grew up knowing as a child growing up in Liberia was a Castro who fought the South African apartheid regime that the United States was propping up.  It was Castro that sent Cuban soldiers into Angola and helped to bring down apartheid in South Africa. So there is a lot of ambivalences when you look at Fidel Castro that’s usually not reflected here and I think what President Obama’s statement was doing was reflecting that.....

Pletka: But that still ignores the fact.  Okay, you may like what Castro did in South Africa, I don’t.  But you can’t forget that he did this all on the backs of the Cuban people. This was an absolute dictatorship that crushed this island beneath their jackbooted heel. Summarily shot people for disagreeing with the Castros.  For 50 years, they have been – they murdered their political opponents and supported groups like Hizbullah, Iran, Medoro, and before that, Chavez, the FARC and others.  Let’s not forget who he is to America.

Cooper: Again, this is a very America-centric view of Castro.

Pletka: I’m American.  [Source: nbcnews.com]

You can’t make this stuff up.  Needless to say, if I saw Ms. Cooper at a holiday party, I wouldn’t go out of my way to talk to her. 

The above is typical of the ideological divide in America, and it is only going to get worse, because the dangers we will be facing in the short- to intermediate-term will require tough actions and nearly half the country will protest them.

But to Ms. Pletka, you are my hero!!!

Random Musings

--According to a survey of Americans by Harvard University’s Center for American Political Studies and the National Research Group, 64 percent said Donald Trump will be either very or somewhat effective in fulfilling his campaign promises, not only on immigration but also to invest in the nation’s infrastructure, to cut taxes and to repeal ObamaCare.

78 percent approve of his infrastructure promise, and 53 percent think he’ll keep it.

But only 46 percent of respondents approve of the idea to repeal and replace President Obama’s signature healthcare law.

--House Democratic Leader Nancy Pelosi (Calif.) beat back the challenge to her leadership, defeating Rep. Tim Ryan (D-Ohio) by a 134-63 vote in a closed-door ballot prompted by Trump’s ascension to the White House.

So the message sent is that while there is a growing appetite for change in the party’s leadership, the top three all in their mid-70s as I pointed out the other week, Ryan and his cohorts still don’t have nearly the support to loosen Pelosi’s grip on her liberal supporters.

Rep. Ryan said the party has alienated middle-class Rust Belt workers, who flocked to Trump and aided vulnerable down-ballot Republicans.  In a statement after his defeat, Ryan said:

“I ran for Leader because I believe strongly in the promise of the Democratic Party, but November taught us that changes were necessary.  Our party’s losses showed our Caucus that we needed to have a serious conversation about our path forward and open the door for new reforms and voices in Democratic Leadership.

“Democrats must adopt a progressive economic message that focuses on large, direct infrastructure investments, affordable health care, portable pensions, and public-private investments that promote advanced manufacturing.  Hopelessness is a product of economic and social adversity.  This is why Democrats must always be the party of aspiration and inclusion.”

--Green Party presidential nominee Jill Stein’s call for a recount in Wisconsin despite winning just 1 percent of the vote is receiving heavy publicity for her efforts, and by tapping into Clinton angst over Trump’s win, she’s building up a fundraising machine she didn’t have before.  And the Green Party can claim it is fighting for the progressive spirit of Democrats.

This week Stein said in an interview on Fox Business Network that she is the voice for the “frustrated, cynical and disappointed voters” who were “disgusted by the process of this election.”

By Monday, the campaign to fund recounts in Wisconsin, Michigan and Pennsylvania had raised $6.5 million just since Nov. 23 from 137,000 donors – far more than the $3 million she raised in the general election, according to The Hill.

But the chairman of the Libertarian Party, Nicolas Sarwark, said Stein’s fundraising effort will be seen for what it is, a scam, because it won’t lead to any fundamental changes.  Stein also runs the risk of being seen to be too in line with the Democratic Party.

--Michigan’s vote was finally certified, all 16 electoral votes to Donald Trump as he beat Hillary Clinton by 10,704 votes.  He is the first Republican to carry Michigan since 1988.

So the final, official, tally is 306 Trump, 232 Clinton.

--GOP Rep. Darrell Issa of California was declared the winner Monday in the final House race deemed too close to call, thus securing a ninth term.

So it’s 239 seats for the GOP in the House, vs. 194 for the Democrats, with two House races in Louisiana to be decided in a run-off next month.

--California Gov. Jerry Brown nominated Democratic Congressman Xavier Becerra to be the state’s next attorney general, succeeding Kamala Harris, who was elected to the Senate last month.

Becerra formerly was deputy attorney general.  He was also a rising star in the House Democratic Caucus and had Hillary Clinton won, likely would have been among her Cabinet picks.

--Massachusetts Sen. Elizabeth Warren (D) is trying to get her colleagues to take a hard line against Donald Trump, but many vulnerable Democrats, as I mentioned the other week, up for reelection in 2018 in states that Trump won easily, have signaled a willingness to work with the president-elect.

Warren is exhorting her fellow Democrats to “show some spine” and not “roll over” to drug companies and not “compromise with racism” by supporting Sen. Jeff Session’s (R-Ala.) nomination to serve as attorney general.

I’m waiting for Session’s confirmation hearing to unload on those who think he’s a racist.  He’s not.

Democratic centrist Rep. Gerald Connolly of Virginia is representative of those in the party who wish Warren would chill out.

“Elizabeth Warren does not represent the whole Democratic Party; she represents a very important wing of the party. But there are others of us who have a more pro-business [view], not a cave-in-to-Wall-Street thing,” said Connolly.  “We don’t necessarily have that kind of ideological agenda.”

But Warren, and Sen. Bernie Sanders, aren’t about to back down.  Warren is seen as the Senate’s next liberal lion, a title last held by Sen. Edward Kennedy.  [The Hill]

--John Podhoretz / New York Post

“At this rate, nearly everybody who follows politics or writes about politics or thinks about politics is soon either going to be curled up in a ball in the corner, or in a mental institution, or feeling as though at any moment he or she might be felled by a heart attack. Donald Trump is driving them – us – insane.

“On Monday, Trump got mad at CNN’s Jeff Zeleny and retweeted a 16-year-old’s denunciation along with the words ‘bad reporter.’  On Tuesday, the president-elect declared on Twitter that people who burn the American flag should lose their citizenship or be sent to jail.

“The responses to these 140-character spasms ranged from incredulousness to fear to anger to disbelief.  The next president, calling out a reporter by name and quoting a teenager to do it?  The next president, advocating the removal of citizenship from a native-born American?  Why, even the late Nino Scalia said flag-burning was constitutional!  Free speech is under attack!  Fascism is upon us!

“A debate has broken out in the press corps: Do we ignore Trump’s tweets or do we go hard at them? Do we fact-check them? Is he using them to distract us from more serious problems?

“By engaging with them are we just playing his game, or is it our responsibility to let the public know what the president-elect is thinking and feeling even as we try to inform the public that the issues are more complicated than he’s making them seem?

“It’s not even December. Of 2016.  Fellas, we have another 50-odd days before Trump is even sworn in....

“We assume politicians know their words are being carefully studied and that they issue those words with care so they aren’t inadvertently misunderstood.  We want to understand what our leaders are up to. We want to categorize their actions.  We want to use that understanding to deepen our sense of where we are and where we’re going.

“But we’re missing one profound thing about Trump, and we keep missing it, and we will continue to miss it: Trump is not a politician.  He doesn’t think of a himself as a politician, and he doesn’t act like a politician, and we’re all desperately trying to fit him into our understanding of what he’s supposed to be....

“But what if there’s no strategy?  What if there’s no organizing principle?  What if Trump has no plan?  That seems the likeliest interpretation of his tweeting and even the bizarre rigmarole surrounding his consideration of Mitt Romney to be secretary of state.

“He improvised his way to the presidency, he’s improvising his way through the transition and it’s likely he’ll continue to improvise as president.”

--Trump, in blasting Hillary Clinton’s campaign team for backing Jill Stein’s recount in Wisconsin, tweeted: “So much time and money will be spent – same result! Sad.”  Then, hours later: “In addition to winning the Electoral College in a landslide, I won the popular vote if you deduct the millions of people who voted illegally.”

There is zero evidence of this and even Newt Gingrich admonished Trump. 

--Tensions between the Trump and Clinton teams boiled over Thursday night at a Harvard Institute of Politics’ quadrennial Campaign Managers Conference. 

“If providing a platform for white supremacists makes me a brilliant tactician, I am proud to have lost,” fumed Clinton communications director Jennifer Palmieri, who traded jabs with Kellyanne Conway, Trump’s campaign manager.

“I would rather lose than win the way you guys did,” Palmeiri said, noting Stephen Bannon was an alleged racist.

Conway fired back, “Do you think I ran a campaign where white supremacists had a platform?”

Palmeiri replied: “You did, Kellyanne.  You did.”

“Do you think you could have just had a decent message for white, working-class voters?” Conway asked.  “How about, it’s Hillary Clinton, she doesn’t connect with people?  How about, they have nothing in common with her?  How about, she doesn’t have an economic message?”  [New York Post]

--It appears the plane carrying Brazil’s Chapecoense football team and 21 journalists that crashed outside Medellin ran out of fuel.  There had been earlier reports the aircraft was at the tip of its range, which warrants prosecution at multiple levels if true.

But I have to note what one of the six survivors said, flight technician Erwin Tumiri, who is alive because he followed safety instructions, while other panicked.

“Many stood up and started shouting,” he said. “I put the suitcases between my legs and assumed the brace position.”  He was just shaken and bruised.

One of the six, goalkeeper Jackson Follmann, had his right leg amputated.

--Chicago passed the 700 murder mark on Wednesday for the first time since there were 704 in 1998.  There were 761 in 1997.

--This North Dakota pipeline protest is threatening to totally ruin the Obama administration’s final weeks.  You can see how it could turn explosive.

--Good news...weather forecasters say the northern Sierra Nevada mountain range had the wettest first two months of the “water year” since 1984.  Between October and November, measuring stations received an average of 18 inches of rain.

--Our heartfelt thanks go out to Ohio State police officer Alan Horujko, 28, who took out terrorist Abdul Razak Ali Artan during the incident at the university in Columbus on Monday that left 11 injured.  Artan appears to have been self-radicalized by ISIS propaganda.

--God bless Dolly Parton.  Her Dollywood Foundation will donate $1,000 a month to “all of those families who lost their homes in the fires” for six months, the organization announced Wednesday night.  Parton wrote, “I have always believed that charity begins at home.”

Our thoughts and prayers go out to those in eastern Tennessee impacted by this tragedy, including the families of the 13 victims identified thus far.

---

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

God bless America.

---

Gold $1179
Oil $51.68...highest weekly close since July 2015

Returns for the week 11/28-12/2

Dow Jones  +0.1%  [19170]
S&P 500  -1.0%  [2191]
S&P MidCap  -1.0%
Russell 2000  -2.5%
Nasdaq   -2.7%  [5255]

Returns for the period 1/1/16-12/2/16

Dow Jones  +10.0%
S&P 500  +7.2%
S&P MidCap  +16.2%
Russell 2000  +15.7%
Nasdaq  +5.0%

Bulls 56.3
Bears 22.3 [Source: Investors Intelligence]

Have a great week. 

Dr. Bortrum posted a new column.

*Next time I will be posting an abbreviated review, as I’ll be down in Kiawah, South Carolina for my annual half-marathon (and other activities), which is going to be an unmitigated disaster, seeing as I’ve been sick this week, haven’t been able to do my last long runs, and I wasn’t in any kind of shape to begin with. 

Brian Trumbore



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Week in Review

12/03/2016

For the week 11/28-12/2

[Posted Friday 10:30 p.m. ET]

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

Edition 921

Washington, Wall Street and the Trump Transition

President-elect Donald Trump took a victory lap this week, touring a Carrier plant in Indianapolis where he and Vice President-elect Mike Pence saved 1,100 jobs from moving to Mexico.

But Trump was also his usual tweeting self, hardly acting presidential, and now we’ve learned late today that he placed a call to Taiwan’s President Tsai Ing-wen, a break with nearly four decades of diplomatic practice in a move that will infuriate China.

Trump is believed to be the first president or president-elect to speak directly to a Taiwanese leader since 1979.  While I personally am a big supporter of the island, and believe the United States should be more vocal on the matter, this was a huge mistake.

Ironically, I’ve been writing something you haven’t seen anywhere else for months...that China could invade Taiwan, sooner than later, because Tsai has been uncooperative since taking office.

What Donald Trump did could actually precipitate such an action.

No doubt this will be a big topic the coming week, but for now we move on to some of Trump’s latest efforts at forming a Cabinet.

Retired Marine Gen. James Mattis, who served in Iraq and Afghanistan and is known as “Mad Dog,” has been named defense secretary.  Gen. Mattis has been an outspoken critic of the Obama administration’s Middle East policy, particularly on Iran (though he does not believe in tearing up the existing nuclear agreement with Tehran).

He has referred to Iran as “the single most enduring threat to stability and peace in the Middle East.”

Mattis was an immensely popular leader among his men, and over the past year I have noted some surveys in Army Times that had many in the military hoping he would run for president as a third-party candidate.

The retired Marine Corps officer led an assault battalion during the first Gulf War in 1991 and commanded a task force into southern Afghanistan in 2001.

He also took part in the invasion of Iraq in 2003 and played a key role in the battle for Fallujah a year later.  In other words, he has ‘walked the walk.’

Gen. Mattis retired in 2013 so he will need a congressional waiver to assume the Defense post, because there is a law a retired officer must be out of uniform for at least seven years before he or she can head the Pentagon.  He would be the first former ranking general to assume the post since George Marshall in 1950-51.  This was a terrific choice, especially given the dangers we face.

Steve Mnuchin, a former Goldman Sachs executive and movie producer who served as Trump’s campaign finance director, was tabbed to be the next Treasury secretary.  I don’t mind he’s a Goldman alum, I just wish Trump had selected more of a heavyweight; such as past Treasury secretaries’ Robert Rubin and Hank Pualson, both also from Goldman.

Mnuchin will face a rough go of it in his confirmation hearing for his experience with a collapsed mortgage lender in 2009, which he snapped up and made a mini-fortune on, IndyMac, which was sold to CIT Group for $3.4bn last year.  This is not a good pick.

Trump selected Georgia Rep. Tom Price, a leading critic of President Obama’s healthcare law, to head the Department of Health and Human Services.  If confirmed, Price will play a central role in efforts to repeal and replace ObamaCare.

Trump has already said he favors keeping provisions that allow young people to stay on their parents’ policies, and he wants to retain provisions preventing insurance companies from denying coverage to those with pre-existing conditions, so it’s not going to be repeal and replace in actuality.  But changes need to be made.

Price, 62, is a six-term congressman and orthopedic surgeon.  I like this one.

Wilbur Ross, 80, was selected to be Commerce secretary.  The billionaire made a lot of his estimated $2.9bn net worth in buying up distressed properties, companies and banks.   He has been highly critical of U.S. trade deals and called for the U.S. to withdraw from the yet-to-be-ratified Trans-Pacific Partnership and to renegotiate the North American Free Trade Agreement.

“There’s trade, there’s sensible trade and there’s dumb trade. We’ve been doing a lot of dumb trade.”

Regarding TPP, Ross said in a CNBC interview: “The trouble with regional trade agreements is you get picked apart by the first country, then you negotiate with the second country and get picked apart, and then go with the third one and get picked apart again.”  I like Ross’ selection.

Elaine Chao, Republican Senate Majority Leader Mitch McConnell’s wife, was chosen to be the next secretary of transportation, an important post given Trump’s plan to spend billions rebuilding the nation’s infrastructure.  She was labor secretary during the entire eight years of the George W. Bush administration.  A solid pick, and an underrated position.

Still to come, secretary of State.

As to the Carrier move....

Editorial / Wall Street Journal

“A giant flaw in President Obama’s economic policy has been the politicized allocation of capital, from green energy to housing.  Donald Trump suffers from a similar industrial-policy temptation, as we’ve seen this week with his arm-twisting of Carrier to change its decision to move a plant to Mexico from Indiana....

“Everyone – even the Obama White House – is hailing the move as a great political victory, and in the short term it is for those Indianapolis workers, who make more than $20 an hour on average.  But as U.S. auto workers have learned the hard way, real job security depends on the profitability of the business.  Carrier wanted to move the production line to Mexico to stay competitive in the market for gas furnaces. If the extra costs of staying in Indianapolis erode that business, those workers will lose their jobs eventually in any case....

“(But the) company is also betting that Mr. Trump will fulfill his promise for tax and regulatory reform to make U.S. manufacturing more competitive.  (Parent company United Technologies) does about 61% of its sales outside the U.S., and it has some $6 billion in cash overseas that would be taxed at a 35% rate if they brought the money home today.  Carrier currently pays a 28% effective tax rate, so a tax reform that cut the corporate rate to 20% and only taxed earnings in the country where they are earned would more than make up for the Indianapolis concession....

“(UTC’s) exports are worth $10 billion a year, mostly in aerospace products, which support some 40,000 American jobs.

“A mercantilist Trump trade policy that jeopardized those exports would throw far more Americans out of work than the relatively low-paying jobs he’s preserved for now in Indianapolis.  Mr. Trump’s Carrier squeeze might even cost more U.S. jobs if it makes CEOs more reluctant to build plants in the U.S. because it would be politically difficult to close them.

“Mr. Trump has now muscled his way into at least two corporate decisions about where and how to do business. But who would you rather have making a decision about where to make furnaces or cars?  A company whose profitability depends on making good decisions, or a branding executive turned politician who wants to claim political credit?

“The larger point is that America won’t become more prosperous by forcing companies to make noneconomic investments.  A nation gets rich when individuals and business are allowed to take risks as they see fit in a competitive economy.  Politicians are rotten investors. Mr. Trump would help the economy, and his Presidency, far more if he focuses on getting the pro-growth parts of his agenda through Congress.”

Separately, our new president is going to be overwhelmed on the foreign policy front, so it would behoove him not to shoot himself in the foot before he even takes office.

Charles Krauthammer / Washington Post

“Twenty-five years ago – December 1991 – communism died, the Cold War ended and the Soviet Union disappeared. It was the largest breakup of an empire in modern history and not a shot was fired. It was an event of biblical proportions that my generation thought it would never live to see....

“That dawn marked the ultimate triumph of the liberal democratic idea.  It promised an era of Western dominance led by a preeminent America, the world’s last remaining superpower.

“And so it was for a decade as the community of democracies expanded, first into Eastern Europe and former Soviet colonies.  The U.S. was so dominant that when, on Dec. 31, 1999, it gave up one of the most prized geostrategic assets on the globe – the Panama Canal – no one even noticed.

“That era is over. The autocracies are back and rising; democracy is on the defensive; the U.S. is in retreat.  Look no further than Aleppo.  A Western-backed resistance to a local tyrant – he backed by a resurgent Russia, an expanding Iran and an array of proxy Shiite militias – is on the brink of annihilation. Russia drops bombs; America issues statements.

“What better symbol for the end of that heady liberal-democratic historical moment. The West is turning inward and going home, leaving the field to the rising authoritarians – Russia, China and Iran.  In France, the conservative party’s newly nominated presidential contender is a fashionably conservative populist and soft on Vladimir Putin.  As are several of the newer Eastern Europe democracies – Hungary, Bulgaria, even Poland – themselves showing authoritarian tendencies.

“And even as Europe tires of the sanctions imposed on Russia for its rape of Ukraine, President Obama’s much-touted ‘isolation’ of Russia has ignominiously dissolved, as our secretary of state repeatedly goes cap in hand to Russia to beg for mercy in Syria.

“The European Union, the largest democratic club on Earth, could itself soon break up as Brexit-like movements spread across the continent.  At the same time, its members dash with unseemly haste to reopen economic ties with a tyrannical and aggressive Iran.

“As for China, the other great challenger to the post-Cold War order, the administration’s ‘pivot’ has turned into an abject failure. The Philippines openly defected to the Chinese side. Malaysia then followed. And the rest of our Asian allies are beginning to hedge their bets. When the president of China addressed the Pacific Rim countries in Peru last month, he suggested that China was prepared to pick up the pieces of the Trans-Pacific Partnership, now abandoned by both political parties in the United States.

“The West’s retreat began with Obama, who reacted to (perceived) post-9/11 overreach by abandoning Iraq, offering appeasement (‘reset’) to Russia and accommodating Iran. In 2009, he refused even rhetorical support to the popular revolt against the rule of the ayatollahs.

“Donald Trump wants to continue the pullback, though for entirely different reasons. Obama ordered retreat because he’s always felt the U.S. was not good enough for the world, too flawed to have earned the moral right to be the world hegemon.  Trump would follow suit, disdaining allies and avoiding conflict, because the world is not good enough for us – undeserving, ungrateful, parasitic foreigners living safely under our protection and off our sacrifices.  Time to look after our own American interests....

‘Repose presupposes a fantasy world in which stability is self-sustaining without the United States. It is not. We would incur not respite but chaos.

“A quarter-century later, we face the same temptation, but this time under more challenging circumstances.  Worldwide jihadism has been added to the fight, and we enjoy nothing like the dominance we exercised over conventional adversaries during our 1990s holiday from history.

“We may choose repose, but we won’t get it.”

Wall Street

Lots of data this week, both here and abroad.  Third-quarter GDP was revised up to 3.2% from 2.9%, so the last four quarters now look like this:

Q4 2015...0.9% (ann.)
Q1 2016...0.8%
Q2 2016...1.4%
Q3 2016...3.2%

Overall, still an average annualized rate of just 1.5%-1.6%, but the trend in some of the other data is heading in the right direction too.

October personal income came in better than expected, 0.6%, which is strong, while consumption was a little light, 0.3%.  October construction spending was more or less in line, 0.5% (3.4% year over year).

But the Chicago purchasing managers’ index was 57.6 for November, best of the year, while the November ISM manufacturing figure was a better than expected 53.2.

A report from S&P/Case-Shiller on home prices for September is now 0.1% above the July 2006 peak, though adjusted for inflation still 16% below, with home prices in the 20-city index up 5.5% over the past year. 

And then you had Friday’s labor report for November, with nonfarm payrolls up 178,000, basically in line, and the unemployment rate down to 4.6%, the lowest reading since Aug. 2007 (though largely because many dropped out of the labor force).

Average hourly earnings, though, surprisingly ticked down 0.1% and are up 2.5% year over year, down from October’s 2.8%, and the labor participation rate is 62.7.  U6, the underemployment rate, is down to 9.3%, the lowest level since April 2008. This figure averaged 8.3% in the two years before the recession.

Separately this week, the Commerce Department reported that corporate profits in the third quarter were up a solid 5.2%.

Add it all up and if there was any doubt the Federal Reserve was raising interest rates on Dec. 13-14, this week’s numbers dispelled such a notion.

Not that the above had anything whatsoever to do with the happy talk perpetrated by the incoming Trump administration and an expected greatly expansive fiscal and monetary policy, with lower taxes a major priority, which would lead to stronger growth, and higher inflation.  To some extent the animal spirits appear to have returned, though I hasten to add the S&P 500 is up only 2.4% since Trump was elected.  Feels like a lot more, doesn’t it?

More importantly, many analysts, such as those at Deutsche Bank’s Global Strategy Group, are reassessing their outlooks for future growth, with DB hiking its estimate for U.S. GDP to 2.3% in 2017 from 1.7%, while raising their outlook for 2018 from 1.9% to 3.5%.

The thing is, it’s all just talk right now, though optimists point to a Republican controlled Congress for reassurance that some of Donald Trump’s policy goals, particularly on infrastructure spending (where there is bipartisan support), and regulatory reform, where much of it can be accomplished with the stroke of a pen, will be achieved quickly.

One thing is for sure.  My talk all this year that we would have an inflation scare has come to fruition, with the yield on the 10-year Treasury in November jumping 56 basis points, 0.56%, the biggest jump since 2009, on the fear the Federal Reserve will be raising rates a couple of times next year, on top of December’s move, due to stronger growth accompanied by rising prices.  As I’ve been saying, they’ll get caught with their pants down, such as with this week’s big move in oil.

Europe and Asia

Before we get to some of the important political issues, lots of data from the eurozone.

A flash reading on November inflation for the EA-19 came in at an annualized rate of 0.6%, above October’s 0.5% and the 0.1% ann. pace of a year earlier.

Producer prices in October rose 0.8% for the month, twice expectations (good), but are still down 0.4% year over year.

The eurozone’s unemployment rate for October came in at 9.8%, the lowest since July 2009 (though still twice that of the U.S.), with 7.2% being the low back in March 2008.  [The peak was 12.1% early 2013.]

Germany’s jobless rate, according to Eurostats, was 4.1%, France’s 9.7%, Italy’s 11.6% (though same as a year ago), Spain’s 19.2% and Greece’s 23.4% (Aug.).

The youth unemployment rate remains too high in Greece, 46.5% (Aug.), Spain 43.6%, and Italy 36.4%.

On the manufacturing front, the PMI for the eurozone was 53.7 in November vs. 53.5 in October (50 being the dividing line between growth and contraction), as reported by IHS Markit.

Germany was 54.3 (Nov.) vs. 55.0 (Oct.), France 51.7 vs. 51.8, Italy 52.2 vs. 50.9, Spain 54.5 vs. 53.3, and Greece 48.3 vs. 48.6.

Chris Williamson, Chief Economist / IHS Markit:

“Eurozone manufacturers are enjoying the best improvement in business conditions for almost three years, as the benefits of a weaker currency and strengthening demand helped firms brush off political worries.

“The November survey provided firm evidence that the weaker euro is providing a meaningful stimulus to manufacturing, leading to greater import substitution and higher exports.  New export orders for manufactured goods rose at the fastest rate since February 2014.

“For a region suffering double-digit unemployment, there was also good news on the jobs front.  The rate of factory job creation held close to October’s five-and-a-half-year high as firms boosted operating capacity in line with stronger demand....

“While the ECB looks poised to extend its quantitative easing program at its December meeting, the upturn in growth and inflationary pressures will further fuel talk of whether we could see the ECB start tapering its asset purchases next year.”

Eurobits....

--Greek markets have been rallying, including the bond market, on expectations creditors may finally ease the country’s debt burden at a Dec. 5 meeting of euro-area finance ministers.  But the IMF still hasn’t made up its mind whether it will be on board, as the fund continues to doubt the viability of Greece’s medium-term fiscal targets. Without the IMF, Germany and the Netherlands won’t support debt relief.  [Nearly half of Greek bank loans are now considered to be non-performing.]

The yield on the Greek 10-year bond has fallen from 8.28% to 6.38% over the last six weeks in anticipation of a deal.

--Spain’s economy will grow by 2.4% in 2018 and 2019, according to the government on Friday, citing its latest economic forecasts 2016 to 2019.  Unemployment would fall to 13.8% by 2019.  GDP is expected to rise 3.2% this year and 2.5% next year.

--Germany reported October retail sales rose 2.4% over September, but are down 1.0% year over year.

As for the Italian referendum Sunday on constitutional reform, first off, I thought “60 Minutes” did a balanced story on the pros and cons.  No doubt Italy’s election process and bureaucracy need shaken up, but Prime Minister Matteo Renzi, through his proposals, certainly looks a little power hungry and that attitude, at least to me, shined through in his interview last Sunday.

The polls show Renzi going down to defeat and the European Central Bank said it is prepared to buy government bonds to stabilize any resulting market turmoil, especially assuming Renzi keeps his word and resigns with a ‘No’ vote.

I’ve said enough on the topic.  We now await the result to see if the populist movement across Europe will score a big victory.  In a worst-case scenario, a new government in Italy would push for a referendum on continuing membership in the eurozone, which wouldn’t be good, let alone for a banking system already in crisis.

And there is a big vote on Sunday in Austria, a re-vote of last spring’s presidential election, where Nobert Hofer of the right-wing Freedom Party could emerge victorious.  While the post is largely ceremonial, it would make him the first far-right head of state in post-World War II Europe.  He has been running neck-and-neck with a 72-year-old former economics professor and ex-leader of the Greens (sic) party, Alexander Van der Bellen.

Meanwhile, in France, President Francois Hollande announced he wouldn’t stand for re-election in May, which came as a shock, not because what guy would run with a 4% approval rating, but rather just two days before, Hollande was acting as if he would throw his hat in the ring.

So at least this clears the way for his struggling Socialists to field a more competitive candidate, probably reformist Prime Minister Manuel Valls, who said days earlier he was preparing a possible run in the Socialist primary.

Hollande said in an address to the people: “Today I am aware of the risk of not being able to unite” people behind my candidacy.

Last Sunday in the Republican party runoff, Francois Fillon garnered 67% of the votes cast vs. just 33% for his challenger, Alain Juppe, both former prime ministers.  The polls had this one right.

So Fillon’s startling run continues as Republican (center-right) supporters opted for a candidate who pledges painful economic reforms, a shrunken state and who unabashedly embraces traditional values.

A Republican lawmaker, Philippe Goujon, said in an interview with the Financial Times that Fillon “brings together the liberals, nationalists, Gaullists, the authoritarian right.  (He) will pull in voters from (Marine Le Pen’s) National Front.  Look at his margin of victory – it’s a tidal wave.”

For her part, Le Pen has been exceedingly quiet, not having launched her campaign as yet; shrewdly surveying the scene, looking for openings (muses moi).  Her big pitch will be that Fillon represents more of the same, he having an extensive track record in what she’ll label a failed system.  “He was part of the problem all these years!” she’ll cry.  “Viva le France!”  [Having been to two of her big May Day addresses, I write with some authority.]

But assuming Fillon and Le Pen survive the first round of voting next April, two weeks later in May, early polls have Fillon absolutely trouncing Le Pen, like 71-20 according to Odoxa, with Fillon winning mainstream voters from both the left and right.

Editorial / The Economist

“In some ways, Mr. Fillon is a flawed candidate. Prime minister for five years under Mr. Sarkozy, the 62-year-old can claim to represent neither novelty nor renewal, and is defenseless before Ms. Le Pen’s charge that the same faces always govern France. The son of a notary, he has the tweedy look of a country squire, and a Catholic-hued social conservatism to match.  Although Mr. Fillon does not propose to change the law, he voted against gay marriage (and is privately against abortion). His family values chime with the country’s strong anti-gay marriage constituency, but make him toxic for the left.  Were Mr. Fillon to face Ms. Le Pen in the second round next May, many on the left could abstain.

“Mr. Fillon could provoke a similar revolt against his economic policy, too.  In order to free the economy and encourage job creation, he has drawn up a liberal program, vowing to curb the unions; shrink the labor code from over 3,000 pages to just 150; end the 35-hour week; and trim the public sector, which accounts for a hefty 57% of GDP, by cutting 500,000 civil-service jobs.  ‘I like being compared to Madame Thatcher,’ he declares.  Thatcherism is usually a term of insult in France.

“This may be what the French economy needs.  But it is not a clear vote-winner. It cuts against France’s lingering distrust of free markets and reverence for the state, as well as the tide of anti-globalization sentiment.  It will make Mr. Fillon an easy target for irate trade unions and fearful civil servants.  One Socialist deputy calls his policy ‘violent and dangerous.’  It will also encourage Ms. Le Pen to use her protectionist politics to court the working-class vote, particularly in the French rustbelt of the north and east. Already the preferred candidate among working-class voters, she has begun to warn that Mr. Fillon is out to ‘destroy’ the French social safety-net.

“Yet in deepest Fillon country the political dynamics look somewhat different.  ‘People here say that they know things have to change, and that it will be difficult,’ argues Jean-Carles (sic) Grelier, the center-right mayor in La Ferte-Bernard: ‘They are fed up with sold dreams, and then being disappointed.’  Locals in the café talk about Mr. Fillon’s ‘common sense’ and ‘honesty.’....

“(Fillon) is trying to incarnate the leader who restored France’s national pride, affirmed its independence, and earned its respect, and whose image he kept on his bedroom wall as a child: Charles de Gaulle.  In La Ferte-Bernard, the reference resonates. The last French president to visit the town was de Gaulle in 1965; the only other political leader to do so since was Mr. Fillon.  Polls suggest it may be what the French want: he now tops voting in the first round, and beats Ms. Le Pen in the second. Yet the FN leader is quietly waiting her turn, and has scarcely begun her campaign.  She is not defeated yet.”

On the Brexit front, UK Prime Minister Theresa May repeated her wish to have the mutual rights of UK and EU citizens concluded as soon as possible, before the official start of Brexit talks (or soon thereafter), which just isn’t happening, according to officials in Brussels.

Angela Merkel has joined in a chorus of EU leaders who have taken a tough line on the subject; the German chancellor saying there would be no side deals before Britain starts formal talks.

At the same time, Bank of England Governor Mark Carney joined the camp against a quickie divorce from the European Union, telling bankers he thought there should be a “buffer” to give companies time to adjust to the UK leaving the bloc, with a transition period of two years where Britain would remain in the single market once it’s left the EU, allowing firms to continue using current trading rules.

But while businesses and banks would love such an arrangement, Brexit campaigners fear moves such as Carney’s are a delaying tactic; this as former Prime Ministers Tony Blair and John Major independently said there is a case for a second referendum.

Yes, a lot of folks in Britain are getting cold feet in a big way.

Separately, Prime Minister May and Donald Trump discussed the importance of more NATO members meeting the minimum defense spending target in a phone call this week, agreeing to meet each other at the “earliest possible opportunity.”

May’s office stressed she wants to establish a “regular dialog” between her and Trump.

Turning to Asia....

China’s official PMI on manufacturing for November came in at 51.7 vs. 51.2 in October, the best since July 2014, while the services reading was a solid 54.7 vs. 54.0, the best since June 2014.  The private Caixin reading on manufacturing was 50.9 vs. 51.2, still the second-highest in two years.

China’s industrial sector profits rose 9.8% in October, according to the National Bureau of Statistics, and are up 8.6% the first ten months of the year.

In Japan, the November manufacturing PMI was 51.3 vs. 51.4, with most economists pegging GDP in the 2% range, while household consumption continues to lag, -0.4% year over year in October, but an improvement from September’s -2.1% pace.

Retail sales, though, rose a solid 2.5% month on month in October, the best since May 2014, down 0.1% year on year, though better than the -1.7% pace in September.

Other manufacturing PMIs in the region....

Taiwan was 54.7 (Nov.) vs. 52.7 (Oct.); South Korea 48.0 vs. 48.0 (ugh); India 52.3 vs. 54.4; Russia 53.6 vs. 52.4, a 68-month high.

Street Bytes

--The Dow Jones extended its winning streak to four, barely, up 0.1% on the week to 19170, but the S&P 500 lost 1% and Nasdaq 2.7%.

--U.S. Treasury Yields

6-mo. 0.61%  2-yr. 1.10%  10-yr. 2.38%  30-yr. 3.06%

Thursday the 10-year hit 2.45%, the highest in 17 months.

--OPEC, after much hand-wringing the past few months, agreed to cut production to 32.5 million barrels per day from about 33.8mbd in an effort to stabilize prices and the day of the announcement, Wednesday, the price of West Texas Intermediate rose about $5 and finished the week up 12.4% to $51.68.

Iraq agreed to cut output to 4.35mbpd.  But Iran is allowed to raise output to 3.8 million barrels a day as it recovers from sanctions.  Saudi Arabia, which raised production to a record this year, will reduce output by 486,000 barrels a day to 10.058 million.  The United Arab Emirates and Kuwait are each reducing by between 130,000 and 140,000 barrels a day, while non-OPEC member Russia agreed to cut output by 300,000bpd, half of a 600,000 reduction by all non-OPEC producers.

OPEC next meets on May 25, at which point it intends to extend the cuts for another six months.

But it’s all about compliance, which has never been OPEC’s strong suit, plus if oil stays above $50, U.S. shale production will ramp up anew.

--Black Friday and Cyber Monday are largely things of the past.  Plus it’s hard figuring out which figures are real and which are just total guesstimates by the folks who forecast these things.

For now, RetailNext says Thursday-Friday brick-and-mortar store sales fell 5%, though the National Retail Federation still projects overall holiday sales to rise a solid 3.6% and I’ll stick with that.

Online sales for Thanksgiving and Black Friday were up 18%, according to Adobe Digital Index and up a similar amount on Cyber Monday, with net sales at basically the same level for both periods.

--The deal struck by President-elect Trump and Carrier / United Technologies includes up to $7 million in state tax credits and retraining aid over 10 years.  Carrier said in a statement on Wednesday that more than 1,000 jobs would stay in Indiana as a result of the deal, with some of the $7 million in credits contingent on Carrier making a planned $16m further investment in the Indianapolis plant.

And it needs to be pointed out that parent United Technologies earned 10 percent of its revenues, or $5.6bn, from sales to the U.S. government last year.

But the main thing for now, aside from the workers being saved, is Carrier’s public-relations nightmare is over.

--According to a survey by the nonprofit Kaiser Family Foundation, just a quarter of Americans say they want to scrap ObamaCare, down from nearly a third in October.

Nearly half say they want the law expanded or implemented as is.  For example more than 8 in 10 Americans say they like provisions in the law that eliminate out-of-pocket costs for many preventive services such as cancer screenings and that allow young adults to remain on their parents’ health plans until they are 26.

So many of the law’s specific provisions remain popular, though the incoming Trump administration knows this, while 81% of people who voted for Trump hold an unfavorable view of ObamaCare, according to the Kaiser poll.

--Southern California home prices jumped in October, with the six-county region’s median price rising 6.9% from a year earlier to $465,000 according to CoreLogic.  In the Los Angeles metro region, which includes Orange County, prices in September jumped 5.9% and are now 7.8% below their bubble peak, Case-Shiller data show.

--U.S. auto sales for November rose 3.7% compared with a year ago, giving the industry a chance to match or exceed its 2015 full-year record of 17.47 million vehicles sold.  According to Kelley Blue Book, if December is just flat, it will be another record.

GM’s overall sales rose 10.2%, including an 8% increase in retail units, which are more profitable than fleet sales.   Ford’s rose 5.1%.  Fiat Chrysler’s sales fell 14.3%, though the company cited an effort to cut sales to rental car companies.

Toyota Motor’s posted a sales increase of 4.3%, Nissan’s were up 7.5% and Honda’s rose 6.5% vs. year ago levels.  Volkswagen’s namesake brand posted a 24.2% increase as it gets past its emissions issue.

--Consumer Reports trashed Tesla’s Model X as a “flawed” vehicle, blasting its “complexity, compromised functionality and dismal first-year reliability.”

“(Beyond) the brag-worth magic [Ed. of the “falcon-wing” doors], the all-wheel-drive Model X 90D largely disappoints.”

It does have “warp-speed thrust,” hitting 60 mph in just 4.9 seconds, which is of little value in areas where the speed limit is 35.

--Starbucks Corp.’s Howard Schultz, in a somewhat surprising move, said he was stepping down as chief executive so he can devote all of his time to a new strategic initiative of opening high-end coffee shops for the 45-year-old company. Schultz, 63, is handing over the reins to President and Chief Operating Officer Kevin Johnson, who joined the board of the company eight years ago before joining the executive team two years ago.

Schultz will remain chairman and said he has no plans to step away from the company.  But everyone and their mother know he’s running for president in 2020.

--Shares in Tiffany & Co. rose sharply on Tuesday following a return to positive worldwide sales for the first time in eight quarters, though same-store sales declined 2% for the just-completed one as the company continues to have troubles at its flagship store on Fifth Avenue in New York, next to Trump Tower, which isn’t helping.

Worldwide sales, however, ticked up 1%, helped by growth in Japan and China, and were better than Wall Street’s expectations.

--Ukraine reported an outbreak of a highly contagious bird flu virus among backyard birds in the southern part of the country, the World Organization for Animal Health said on Wednesday.  The birds showed a positive result for highly pathogenic H5 avian influenza.

H5N8 has been found among wild birds and farms across Europe, Asia and the Middle East.

190,000 ducks have been culled in the Netherlands as authorities try to prevent the spread of bird flu across northern Europe.  This was the H5N8 strain.

While most avian influenza is not deadly to humans, the H5N1 virus killed hundreds back in the early 2000s.  You just never know when one of these viruses will mutate, which is inevitable.

--GoPro, the manufacturer of the wearable camera, announced it was eliminating 200 jobs to cut costs.  That’s about 15 percent of the workforce.

--Bad news for “Jersey Boys,” which is closing after a decade in New York soon but continuing elsewhere.  Its writers, director and producers have been found liable for copyright infringement by a federal jury in Nevada.

The case involves an unpublished autobiography of band member Tommy DeVito.

Daniel M. Mayeda, co-counsel for the defendants, said the musical is based on factual material drawn from interviews with multiple band members, in addition to articles and a previous book proposal.

“You can own historical events,” he said.  “A lot of things that are similar are facts, names and characteristics of personalities.”

The autobiography in question was ghostwritten by the late Rex Woodard, whose widow attempted to publish it after the success of “Jersey Boys” when it opened in 2005.

Boy, I don’t know about this judgement, though Woodard’s widow sued DeVito when she discovered he had registered the copyright without reflecting his deal with her husband.    10% of the show’s success has been ruled to be attributable to infringement.  [Pia Catton / Wall Street Journal]

-- “Hamilton” grossed a record $3.3 million for the week ended Sunday, according to data provided by the Broadway League, with the top ticket price reaching nearly $1,000.  The average paid admission was $303.21.  [Pia Catton / Wall Street Journal]

--Lufthansa’s rolling pilots’ strike has been a real pain in the butt, with 1,700 flights canceled on Tuesday and Wednesday.  The pilots have been giving notice as to what days they are walking out as their long-running pay dispute continues.

--Gambling revenue in Macau rose for a fourth straight month in November, amid an influx of high rollers, fueling hope the industry’s long slump is coming to an end.

Gross gambling revenue last month rose 14.4% year over year to $2.35 billion, according to Macau’s Gaming Inspection and Coordination Bureau.

Macau has been suffering for two years due to China’s anticorruption drive that kept VIP gamblers from the city.

--Brazil’s manufacturing PMI in November was a putrid 46.2 vs. 46.3 in October; Canada’s was 51.5 vs. 51.1.

--We note the passing of Jim Delligatti, who back in the mid-1960s owned a McDonald’s franchise in the Pittsburgh area and believed the menu needed some jazzing up.  The result?  He came up with the Big Mac.

As reported by the Wall Street Journal’s James R. Hagerty:

“He came up with the idea for the Big Mac in 1965 and first served it at his Uniontown, Pa., McDonald’s outlet in 1967.  The hamburger features two beef patties, a mildly tangy sauce, lettuce, cheese, pickles and onions slathered over a soft sesame-seed bun sliced into three layers.  The original price was 45 cents, compared with an average of about $5 today.  McDonald’s put the Big Mac on its national menu in 1968.”

To this day it’s still the best fast-food burger around, in the humble estimation of your editor.

Delligatti did acknowledge that his idea was in response to double-decker burgers that were being served among the competition.  “This wasn’t like discovering the lightbulb,” he told the Los Angeles Times in 1993.

Now I find this unbelievable.  According to a top franchisee memo to other operators in July, “only one in five millennials has tried a Big Mac.”

Delligatti didn’t receive royalties on Big Mac sales.  “All I got was a plaque,” he once said.

-- “Today” host Matt Lauer signed an extension that will take him well into 2018, reportedly for at least two more years at $20 million per.  “Today” has been on a ratings roll, beating “GMA” with adults in the coveted 25-to-54-year-old demographic for 63 of the past 64 weeks. 

--Carlsberg is undertaking a major relaunch of its brand, playing up its Danish roots as it seeks to differentiate itself from mainstream lagers.

We’re talking new bottles featuring the Danish cross that will be signed ‘Kobenhavn – Danish for Copenhagen.  But the beer will remain brewed in Northampton, England.

--We note the passing of long-time Wall Streeter Jack Rivkin, 76.  Rivkin held senior posts at Smith Barney, Neuberger Berman and Altegris, a fund manager in La Jolla, Calif., but perhaps is best known for his time as head of investment research at Shearson Lehman Brothers Inc. in the late 1980s, where he took the team from 15th to first in four years, according to the Institutional Investor rankings.

Rivkin was a fixture on the business channels and I loved his “no-jerk” hiring policy, shunning people who were rude or arrogant.

--Finally Milt Moss died. He was 93.  Moss was the comic actor who delivered one of advertising’s most famous catchphrases, “I can’t believe I ate that whole thing” in a memorable commercial for Alka-Seltzer in 1972.

Moss was a nightclub comedian and master of ceremonies who opened for performers like Robert Goulet and appeared on television with Milton Berle, Merv Griffin and Johnny Carson.

But it was the Alka-Seltzer commercial that struck a chord with viewers and in 1977 it was admitted to the advertising Hall of Fame.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: The situation in the key battlegrounds of Mosul (Iraq) and Aleppo (Syria) could not be worse.  Both are true catastrophes.

Rebel fighters in Aleppo, after suffering a series of defeats at the hands of Syrian President Bashar al-Assad’s army (backed by Russia, Iran and Hizbullah), put up a fierce resistance Friday in a key battered district, where as Agence France Presse put it, “a government offensive has left bodies in the streets and sparked a global outcry.”

Tens of thousands of residents from the opposition-held east have fled.  More than 300 civilians, including dozens of children, have been killed in east Aleppo since the government began its offensive on Nov. 15, according to the Syrian Observatory for Human Rights.  Retaliatory rocket fire by the rebels on government-held western areas of the city has killed 55 civilians, the Observatory said.

The U.N. warned this week that the eastern part of Aleppo could become “a giant graveyard.”  Russia has proposed setting up humanitarian corridors to bring in aid and evacuate the severely wounded but little along these lines has been achieved.

The loss of east Aleppo – a rebel stronghold since 2012 – would be the biggest blow to Syria’s opposition in more than five years.

The French U.N. ambassador, Francois Delattre, said this week, “France and its partners cannot remain silent in the face of what could be one of the biggest massacres of a civilian population since World War II.”

A spokesman for Russia’s defense ministry said: “Half of the territory in parts of eastern Aleppo occupied by militants in recent years has been completely freed...

“Our Western counterparts are showing surprising blindness when it is time to assess the real situation in Aleppo.”  [Irish Independent]

Oh brother.

At week’s end Syrian rebel leaders were apparently in secret talks with Russia to end the fighting the city.  To give you a sense of Washington’s irrelevance, the U.S. is not involved.

Lastly, the Kremlin is waiting for an explanation from Turkish authorities after President Recep Erdogan stated on Tuesday that the aim of Turkey’s military operation in Syria is to overthrow Syrian President Assad.

“This is a very serious statement that generally diverges from previous ones, and a statement that differs significantly from our understanding of the situation,” Kremlin spokesman Dmitry Peskov told reporters; Russia seeing the Assad government and its armed forces as the only legitimate government within Syria.

Meanwhile, in Iraq, last weekend parliament voted to accord full legal status to government-sanctioned Shiite militias as a “back-up and reserve” force for the military and police and empower them to “deter” security and terror threats facing the country.

But this was promptly rejected by Sunni Arab lawmakers who said it was evidence of what they called the “dictatorship” of the country’s Shiite majority.

The Shiite militias number more than 100,000.  Many of the groups in this number fought American troops in major street battles during the U.S. military presence in Iraq between 2003 and 2011.

It’s true the militias played an important role in checking ISIS’ advance on Baghdad and the Shiite Shrine cities of Samarra and Karbala in the summer of 2014, but the Sunnis and rights groups have long accused the militiamen of extrajudicial killings, abuse and theft of property in areas where they drove out ISIS.

The militias are working with Iraqi security forces in the battle for Mosul and Reuters reported this week that nearly 1,000 ISIS fighters have been killed, but there is no doubt the fighting has slowed.  There haven’t been any recent figures on the number of Iraqi casualties in what is now a six-week battle.

Progress has been difficult as the Iraqis move into more heavily populated areas where ISIS is using the residents as human shields.

More than one million residents remain in Mosul and the city has become more of a hellhole after a water line was bombed, the U.N. warning on Wednesday that up to 500,000 civilians face a “catastrophic” drinking water shortage.  These same people are already struggling to feed themselves day to day.  Lisa Grande, U.N. humanitarian coordinator in Iraq, said “The impact on children, women and families will be catastrophic.”

Back to the issue of the Sunnis, as Liz Sly writes in the Washington Post:

“No religious or ethnic group was left unscathed by the Islamic State’s sweep through Iraq and Syria.  Shiites, Kurds, Christians and the tiny Yazidi minority have all been victims of a campaign of atrocities, and they now are fighting and dying in the battles to defeat the militants.

“But the vast majority of the territory overrun by the Islamic State was historically populated by Sunni Arabs, adherents of the branch of Islam that the group claims to champion and whose interests the militants profess to represent. The vast majority of the 4.2 million Iraqis who have been displaced from their homes by the Islamic State’s war are Sunnis.  And as the offensives get underway to capture Mosul, Iraq’s biggest Sunni city, and Raqqa, the group’s self-proclaimed capital in Syria, more Sunni towns and villages are being demolished, and more Sunni livelihoods are being destroyed....

“The dangers are clear, analysts and Iraqis say.  Sunnis are at risk of becoming a dispossessed and resentful underclass in lands they once ruled, creating fertile conditions for a repeat of the cycle of marginalization and radicalization that gave rise to the Islamic State in the first place.”

And as I go to post, Reuters has a story that as Iraqi forces are clearing neighborhoods in the outskirts of Mosul, they are spray-painting Shiite graffiti on buildings, such as “We answer your call, O Hussein!”, a traditional battle cry of the Shiites, expressing loyalty to the 7th century martyred hero of their sect.

While this is meant to be an expression of victory for all Iraqis, for the predominantly Sunni residents of Mosul, it only signals more violence to come.

Iran: CIA Director John Brennan warned President-elect Trump that ending the Iran nuclear deal would be “disastrous” and “the height of folly.”

In a BBC interview, Brennan said, “First of all for one administration to tear up an agreement that a previous administration made would be unprecedented.”

He said such a move would risk strengthening hardliners in Iran and risk other states pursuing nuclear weapons in response to a renewed Iranian effort.

With Gen. Mattis in the administration, Brennan needn’t worry.  I said long ago, when the deal was being negotiated, that it was too late.  Iran is on a distinct path to a bomb and the other parties to the accord are off and running, pursuing their commercial interests with the mullahs.

At this point you need a more concerted effort on the inspections front.

Brennan also advised the new president to be wary of Russia’s promises, blaming Moscow for much of the suffering in Syria.

Israel: In a most worrisome development, ISIS is in the southern Golan Heights, and this week, for the first time openly, a force from a local ISIS branch engaged an IDF force.

The incident began Sunday morning with an ambush force from the Golani Brigade’s reconnaissance battalion east of the Golan border fence, which was spotted by forces on the other side, who started firing.  No one was wounded and the “ambush force” never should have been discovered. 

So an Israeli drone was called into the area and struck the vehicle in which the men were fleeing, killing four members of ISIS.

But while there was a successful conclusion, this is a turning point after 5 ½ years of Syria’s civil war.  Rebel groups have taken almost complete control of the area near the border.

Separately, Israeli jets struck an arms convoy and Hizbullah storehouses in Syria on Wednesday.

As to why Syrian anti-aircraft units, loosely coordinating with Russia, have failed to shoot down Israeli planes, it seems apparent that Israeli Prime Minister Benjamin Netanyahu, in a series of meetings with Vladimir Putin, has worked out a deal.  The Russian radar systems that have been deployed in Syria, after all, have a range sufficient to see any Israeli jet taking off from practically anywhere.  But of course Hizbullah is part of the Russian-Iranian alliance to save Assad.  It’s complicated.

One theory is that Russia will ignore Israel’s attacks inside Syria as long as they are rare. Netanyahu, for now, has convinced Putin that the rocket threat Hizbullah poses to Israel (over 120,000 in their arsenal) is real.

Libya: The situation here is far from stable.  Clashes continued on Friday between two heavily-armed militias in the capital Tripoli in the worst outbreak of violence there in two years.  Tripoli has been held hostage by various militias since Moammar Gaddafi’s ouster in 2011.

Russia: A subdued President Vladimir Putin delivered his annual address to the nation on Thursday, calling for cooperation with the incoming Trump administration.  He also lamented that around the world, “even in the most seemingly affluent countries and stable regions, more and more fractures and conflicts on political, ethnic, religious and social grounds are rising.”

Of course who is playing a major role in such instability?  As reported by the New York Times, German foreign intelligence chief, Bruno Kahl, warned in an interview published on Tuesday that Russia, seeking to create “political uncertainty,” was bombarding his country with disinformation before elections next year.

Putin didn’t mention Trump by name but said he wanted to work with the incoming administration “to normalize and begin to develop bilateral relations on an equal and mutually beneficial basis.”

Putin also made clear that Russia demanded to be treated as a global power, not the “regional power” that President Obama described it as in 2014, infuriating Moscow.

Referring to efforts to prevent the spread of nuclear weapons, Putin said, “We have a joint responsibility for the provision of international security and stability, for the strengthening of anti-proliferation regimes.”

Trump has suggested more countries should acquire nuclear weapons so that they can defend themselves without Washington’s help.

Putin also warned against any attempt by Washington to disrupt what he called the balance of nuclear firepower between the two countries.

“I would like to emphasize that attempts to break strategic parity are extremely dangerous and can lead to a global catastrophe,” Putin said.

What does Vladimir Putin want from the new Trump administration?  Simon Saradzhyan, who heads the Russian Matters project at Harvard’s Belfer Center, told the Los Angeles Times’ Laura King: Putin “wants the U.S. to treat Russia as an equal partner, in spite of the obvious disparity in factors like the economy and conventional military strength and the technology gap.  He wants the same thing he essentially wanted from Obama: that the U.S. acknowledge that Russia is a great power that must have a say in all important decisions that affect the regions that surround it.”

“Resets” with both Obama and in a different respect the George W. Bush administration both turned tense.

Editorial / Washington Post

“Russian meddling in Western democracies is often portrayed as malicious but soft-boiled, centered on cyberattacks, propaganda operations and financial help for pro-Moscow politicians.  So it’s worth calling attention to a couple of recent episodes in Eastern Europe that were of an entirely different character.  In NATO member Hungary, Russian agents have been fingered for training with a neo-Nazi militia; in the tiny Balkan state of Montenegro, which is on the verge of joining the transatlantic alliance, Moscow is accused of plotting a violent coup.

“The evidence in both cases is incomplete but compelling. In Hungary, the story began with a gunfight in late October between police and the leader of the National Front movement, an extremist group that identifies with Hungarian fascists of the 1930s.  Police subsequently raided a number of properties connected to the group and discovered large stockpiles of weapons, according to a report in the Financial Times.  Hungary’s national security committee reported that Russian diplomats and men dressed in Russian military intelligence uniforms had openly engaged in paramilitary training exercises with members of the group....

“In short, the regime of Vladimir Putin appears to have been intimately involved with an armed movement dedicated to restoring fascism in Hungary....

“An even more audacious operation was underway in Montenegro, if authorities there and in neighboring Serbia are right.  They say Russian agents attempted to foment a coup on Oct. 16, when parliamentary elections were being held.  The idea was that armed men would seize the parliament building and assassinate then-Prime Minister Milo Djukanovic, who has led his country’s bid for NATO membership. Some 20 Serbians and Montenegrins were arrested for participating in the plot.  One, a notorious Serbian mercenary, has told authorities of visiting Moscow to discuss the coup and receiving $200,000 to carry it out, according to a report in the New York Times....

“Russian intelligence services have been known for meddling in foreign countries since the time of the czars.  But veteran analysts say such bold attempts to sow chaos in countries linked to NATO are virtually unprecedented.  They reflect a regime that has given free rein to its covert operatives, on the calculation that there will be little or no pushback from a weak and divided West.  Until that theory is proved wrong, expect more trouble from Moscow’s agents.”

On a different issue, as reported by the Moscow Times, Russia will finish 2016 with just 18 launches of space rockets, compared to China’s 19 and America’s 20, which would be the first time Russia ever trailed the Chinese in annual launches.

To make matters worse, Russian rockets are becoming uncharacteristically undependable. Witness an episode on Thursday, when an unmanned cargo ship headed to the International Space Station was destroyed about six minutes after liftoff from Kazakhstan.  The loss of the Progress capsule, which carried more than 2 ½ tons of food and supplies, occurred at an altitude of 118 miles.  No cause was given.

Ukraine: Officials here said they have commenced testing of medium-range missiles in drills on Black Sea territorial waters despite alleged threats by Russia to shoot them down and retaliate against launching pads.

A Russian foreign ministry spokesperson said: “It looks very much like a provocation to again show off a victim that should evoke sympathy now from new officials and the new establishment and thus extend and prolong the patronage, including from the United States.”

South Korea: Events here are moving at lightspeed. Last Saturday, hundreds of thousands rallied in Seoul demanding President Park Geun-hye step down amidst the sweeping corruption investigation into her office, and Park’s allowing a friend, Choi Soon-sil, to manipulate power from behind the scenes.  The crowd by Sunday then grew to a reported 1.5 million.

Park then offered to step down as president, asking parliament to come up with a plan to ensure stable regime change.  But her proposal was rejected as a ploy to delay her impeachment.

Park has 15 months left in her single five-year term, but if she were to be impeached or resign, an election would be held in 60 days.

At last word, impeachment proceedings are to commence Dec. 9.  If parliament votes in favor of impeachment, presidential power will be transferred to the country’s prime minister while the matter goes to the constitutional court.  The court then has 180 days to rule on the legality of the motion.  If upheld, Park would be forced to step down and would lose her immunity against prosecution.

North Korea: Related to the above...Editorial / Wall Street Journal

“The Korean peninsula is always dangerous, but the next few months are especially so. An erratic, nuclear-armed North still covets prosperous South Korea, which is enduring a presidential impeachment crisis even as the U.S. is in a political transition. This is a moment for some supportive bipartisan U.S. diplomacy....

“The danger is that this could be a moment when the North’s regime thinks it can take advantage.  Dictator Kim Jong Un is unpredictable at the best of times.  But he and his military could misinterpret the noise of democratic debate and accountability in the South as a sign of weakness. Perhaps he might use the next round of U.S.-South Korean joint military exercises scheduled for February as an excuse for an attack or land grab.

“The isolated North may also mistake the U.S. political transition as an opening.  In glib campaign moments this year, Donald Trump suggested that South Korea and Japan ought to be able to defend themselves and U.S. forces might come home....

“A public statement from the presidential transition, perhaps in league with the Obama administration, is in order.  The U.S. also needs to convey to China that any attempt to exploit the current moment would mean the end of the regime in the North and unification to the Chinese border.”

China: The central government has embarked on a major effort to stem capital outflow by curbing mainland China’s outbound investment.  As reported by the South China Morning Post:

“Tighter control of outbound investment is likely to put an end to a trophy asset shopping spree by well-connected companies such as Anbang Insurance and Dalian Wanda, with Beijing ready to cut the supply of foreign exchange for such deals.

“Shanghai’s municipal foreign exchange authority has told bank managers in the city that all overseas payments under the capital account bigger than $5 million would have to be submitted to Beijing for special clearance before proceeding, the sources said.

“While the move did not necessarily mean all such deals would be vetoed, the regulatory procedures that would have to be navigated before completing them would take much longer, the sources said.”

Separately, tensions between Beijing and Singapore have been rising following the impoundment of nine Singaporean infantry fighting vehicles transiting through Hong Kong.  The vehicles were being sent to Singapore from southern Taiwan, after a military exercise there.

China has long opposed all forms of military cooperation between other countries and Taiwan, which it has always reserved the right to reunite with the mainland by force if necessary.  I’ve argued this could be sooner than later.

The militaries of Taiwan and Singapore, though, have long trained together, much to Beijing’s irritation.

Pakistan: President-elect Trump had his first phone call with Prime Minister Nawaz Sharif and let’s just say perhaps it was a bit too breezy.  The Pakistani government, in what has been described as a breach of protocol, released a rough transcript of Trump’s remarks and Trump told Sharif that he was “a terrific guy” who made him feel as though “I’m talking to a person I have known for long.”  He described Pakistanis as “one of the most intelligent people” and Sharif invited Trump to visit his country, wherein the president-elect replied that he would “love to come to a fantastic country, fantastic place of fantastic people.”

Trump also offered to Sharif “to play any role you want me to play to address and find solutions to the country’s problems,” which is being interpreted by some in India as an offer for the United States to mediate the Kashmir issue.

The former Pakistani ambassador to Washington, Husain Haqqani, said his government’s decision to release a rough transcript demonstrated how easily Pakistani leaders misread signals from their American counterparts.

“Pakistan is one country where knowing history and details matters most,” Haqqani said, “and where the U.S. cannot afford to give wrong signals, given the history of misunderstandings.”  [New York Times]

Colombia: Congress passed an amended peace accord with the country’s largest rebel group, FARC, on Wednesday, two months after voters rejected an earlier version of the deal in a national referendum.

While passage is a victory for President Juan Manuel Santos and signals the end of the continent’s longest-running civil conflict, opponents want the deal submitted to another national plebiscite.

Cuba: Two hours after I posted last Friday night, we learned of the passing of Fidel Castro.  Some of the following I wanted down for the record.

Statement by President Obama

At this time of Fidel Castro’s passing, we extend a hand of friendship to the Cuban people.  We know that this moment fills Cubans – in Cuba and the United States – with powerful emotions, recalling the countless ways in which Fidel Castro altered the course of individual lives, families, and of the Cuban nation.  History will record and judge the enormous impact of this singular figure on the people and world around him.

For nearly six decades, the relationship between the United States and Cuba was marked by discord and profound political disagreements.  During my presidency, we have worked hard to put the past behind us, pursuing a future in which the relationship between our two countries is defined not by our differences but by the many things that we share as neighbors and friends – bonds of family, culture, commerce, and common humanity.  This engagement includes the contributions of Cuban Americans, who have done so much for our country and who care deeply about their loved ones in Cuba.

Today, we offer condolences to Fidel Castro’s family, and our thoughts and prayers are with the Cuban people.  In the days ahead, they will recall the past and also look to the future.  As they do, the Cuban people must know that they have a friend and partner in the United States of America.

---

Appearing on NBC’s “Meet the Press,” Florida Republican Sen. Marco Rubio said he thinks President-elect Donald Trump will make rolling back concessions to the Castro regime a top priority during his presidency.

“All of the concessions that Barack Obama has granted the Castro regime were done through executive order, which means the next president can reverse them,” Trump said during a Miami rally in September.  “And that I will do, unless the Castro regime meets our demands – not my demands, our demands.”

Rubio on Sunday called Castro’s death a “historical” and “psychological” milestone for many people.

But he noted that “from a practical standpoint, Cuba today is governed exactly the same way as it was 48 hours ago.”

Rubio said he wants to look at all the changes that were made regarding the relationship between the U.S. and Cuba.

“Our goal is not to punish.  Our goal is to figure out what can we do, through U.S. policy, to, number one, look out for the national interest of the United States,” he said.

“And number two, to help create an environment where we are creating the potential for a transition to democratic order in Cuba at some point in the near future.”

Rubio offered that he never said he is against “all changes to Cuba policy.”

“I’m just against unilateral changes from which we get nothing in return for our country or for the freedom or liberty of the Cuban people,” he said.

Appearing Sunday on ABC’s “This Week,” Republican Sen. Ted Cruz of Texas said he doubts there will be a new chapter in the relationship between the U.S. and Cuba because President Obama’s policies have strengthened the regime in Havana.

“Unfortunately, the policies of the Obama administration have made that less likely.  What the Obama administration has done is strengthen Raul Castro.”

Cruz, who is of Cuban descent, referenced a conversation with his father about the death of Fidel.

“He shrugged and said Raul’s been in charge for years, that (the) system has gotten stronger. And what Obama has done is funneled billions of dollars to Raul Castro, which is being used to oppress dissidents.

“And for a man who has tortured and murdered and oppressed, for so many, it is thankful that he is no longer with us,” Cruz said.

“I very much hope” Obama does not attend Castro’s funeral, he added.

President-elect Donald Trump:

“Today, the world marks the passing of a brutal dictator who oppressed his own people for nearly six decades.  Fidel Castrol’s legacy is one of firing squads, theft, unimaginable suffering, poverty and the denial of fundamental human rights,” Trump said in a statement.

“While Cuba remains a totalitarian island, it is my hope that today marks a move away from the horrors endured for too long, and toward a future in which the wonderful Cuban people finally live in the freedom they so richly deserve,” he added.

Castro’s death was announced early Saturday by his brother Raul.

“It is with great pain I come to inform our country, friends of our America, and the world that today, Nov. 25, 2016 at 10:29 p.m., the commander in chief of the Cuban Revolution, Fidel Castro Ruz, died.”

[Sources: whitehouse.gov; The Hill]

Canadian Prime Minister Justin Trudeau wanted the world to know how fond he was of Castro, thus proving that this pretty boy is hardly ready for prime time.

“Fidel Castro was a larger than life leader who served his people for almost half a century,” Trudeau said in the statement, which was issued while he attended a summit meeting in Madagascar.  He described Castro as “Cuba’s longest serving President.”

“While a controversial figure, both Mr. Castro’s supporters and detractors recognized his tremendous dedication and love for the Cuban people who had a deep and lasting affection for ‘el Comandante.’” Trudeau added that Castro was “a legendary revolutionary and orator” whose death had brought him “deep sorrow.”

“I know my father [Ed. former prime minister Pierre Trudeau, who was basically a socialist] was very proud to call him a friend, and I had the opportunity to meet Fidel when my father passed away.  It was also a real honor to meet his three sons and his brother President Raul Castro during my recent visit to Cuba.”

Senator Marco Rubio called Justin Trudeau’s remarks “shameful and embarrassing.”  Senator Ted Cruz said Trudeau’s statement was “disgraceful” and accused him of “slobbering adulation.”

Several members of Canada’s opposition Conservative Party condemned their prime minister.  Kellie Leitch, who is running for the party’s leadership, criticized Trudeau for his “fawning characterization” of Castro.  Maxime Bernier, another leading Conservative, called Trudeau’s praise “repugnant” and rebuked him for suggesting that the Cuban leader’s decades in power had amounted to a form of public service.

Robert Torricelli (former New Jersey congressman and senator) / NJ.com

“The death of Cuban dictator Fidel Castro raises once again the issue of the American embargo. It’s a controversial law that for five decades has been more misunderstood and misrepresented than anything I’ve experienced in public life.

“I authored the law strengthening the U.S. embargo under President George H.W. Bush when I was in Congress, so a little perspective is in order as we ponder Castro’s passing and what  he meant to U.S.-Cuba relations.

“Among my first memories as a child growing up in Franklin Lakes were of the U.S. and the USSR teetering on the brink of nuclear war. Only recently have we learned just how close we came to global destruction.  Poor communication required the Kremlin to give launch authority to local Soviet commanders. Castro urged a Soviet nuclear attack if American forces landed on his shores.  We now know that those weapons were operational.  This was Fidel Castro.

“I met him in the spring of 1990 in his sprawling home by Havana Harbor. What I imagined to be an exchange of pleasantries quickly became a rambling four-hour conversation. It was a tour de force. I doubted that I’d ever see him again and I thought that I had nothing to lose.

“I dove right in:

Did you kill JFK? ‘ Not in my interest,’ Castro said.  President Johnson was worse for Cuba, he said.

And how did you know that the landing would be at the Bay of Pigs?  ‘U.S. spy planes had been flying over it for days,’ he said.

Did you always intend to create a Communist government?  ‘I never heard of the term’ applied to the Revolution, he said.  President Nixon, Castro told me, walked out of the Harlem Hotel where they had a pleasant conversation and told the press that ‘I was a Communist.’

“Hours before our conversation, I had met political prisoners who had been incarcerated for three decades.  One noted that the day of my visit was the first time the steel panels had been removed from his jailhouse windows, allowing him to see the sun. This was Fidel Castro.

“As Cuban’s all over the world celebrate the death of this infamous dictator, we pray that today’s news is a beginning to real change in the captive island because the people of Cuba are still not free.

“Cuba had become more than an island prison. Basic freedoms were denied and generations were lost in abject poverty. A land – rich from farming and fishing – with a strong and entrepreneurial people had been diminished to importing food, while filling the streets with unemployed youth and teenage prostitutes. This was Fidel Castro.

“No amount of poverty was enough to thwart Castro’s ambitions.  Throughout the 1980s he continued to fund revolutions in Africa and Latin America.  Thousands died from his armaments in Marxist insurrections while his island starved.  This was Fidel Castro.”

Others....

French President Francois Hollande said Castro “incarnated the Cuban revolution” in its “hopes” and its “disillusionments.”

Former London mayor Ken Livingstone, speaking to the BBC, said Castro was an “absolute giant of the 20th century,” and blamed the U.S. for the restrictions on civil liberties under his leadership.

He said: “I’m sure they will, over time, move towards something like a traditional west European democracy.  It could have happened a lot earlier if you hadn’t had, the entire time, a blockade by America, attempts to overthrow the regime, eight assassination attempts authorized by American presidents.”

Livingston continued, “of course Fidel did things that were wrong,” adding: “Initially he wasn’t very good on lesbian and gay rights, but the key things that mattered was that people had a good education, good healthcare and wealth was evenly distributed.

“He was not living as a billionaire laundering money off into a Panamanian bank account or anything like that, he was good for the people.”

Livingston is totally nuts.

Editorial / Washington Post

“In contrast to his long lie of violence, both verbal and physical, Fidel Castro’s demise at 90 was apparently, peaceful.  Cuba’s communist dictator from 1959 until illness obliged him to hand control to his brother Raul in 2006, Mr. Castro did not so much die as fade away. It was an unlikely conclusion to a turbulent career that Mr. Castro’s many enemies, including successive U.S. administrations, might gladly have ended more abruptly many years ago.

“Mr. Castro’s legacy is a 57-year-old ‘revolution’ that once punched above its weight in world affairs, especially in Latin America, but in more recent years became a decrepit museum piece of Soviet-style totalitarianism.  Over Fidel’s objections, Raul Castro has tried to adapt and preserve the regime, including through an opening to the United States.  Too eagerly reciprocated by President Obama, that initiative has brought in more U.S. dollars and tourists but no relief from stifling and frequently violent repression of speech, assembly and other basic human rights.

“Fidel’s Cuba boasted a previously unknown degree of sovereign separation from the United States. Under his rule, too, Cuban public health and literacy indicators were significantly better than those of many other Latin American states (though that was also true pre-revolution).

“For those ‘achievements,’ however, the Cuban people paid a terrible price – far higher than they could have expected when Mr. Castro roared into Havana, promising to restore political freedoms lost under the U.S.-backed dictatorship that he ousted. Though counterproductive to his ostensibly humane social policies, Mr. Castro’s political repression reached an extreme that would have made his predecessor, Fulgencio Batista, blush.

“It began with mass summary executions of Batista officials and soon progressed to internment of thousands of gay men and lesbians; systematic, block-by-block surveillance of the entire citizenry; repeated purges, complete with show trials and executions, of the ruling party; and punishment for dissident artists, writers and journalists. Mr. Castro’s regime learned from the totalitarian patron he chose to offset the U.S. adversary – the Soviet Union, whose nuclear missiles he welcomes, bringing the world to the brink of Armageddon.  Mr. Castro sponsored violent subversive movements in half a dozen Latin America countries and even in his dotage helped steer Venezuela to economic and political catastrophe through his patronage of Hugo Chavez.”

George F. Will / Washington Post

“With the end of Fidel Castro’s nasty life Friday, we can hope, if not reasonably expect, to have seen the last of charismatic totalitarians worshipped by political pilgrims from open societies. Experience suggests there will always be tyranny tourists in flight from what they consider the boring banality of bourgeois society and eager for the excitement of sojourns in ‘progressive’ despotisms that they are free to admire and then leave.

“During the 1930s, there were many apologists for Joseph Stalin’s brutalities, for which he committed in the name of building a workers’ paradise fit for an improved humanity. The apologists complacently said, ‘You can’t make an omelet without breaking eggs.’ To which George Orwell acidly replied: ‘Where’s the omelet?’ With Castro, the problem was lemonade.

“Soon after Castro seized power in 1959, Jean-Paul Sartre, the French intellectual whose Stalinist politics were as grotesque as his philosophy was opaque, left Les Deux Magots café in Paris to visit Cuba. During a drive, he and Castro stopped at a roadside stand.  They were served warm lemonade, which Castro heatedly said ‘reveals a lack of revolutionary consciousness.’ The waitress shrugged, saying the refrigerator was broken. Castro ‘growled’ (Sartre’s approving description): ‘Tell your people in charge that if they don’t take care of their problems, they will have problems with me.’ Sartre swooned:

“ ‘This was the first time I understood – still quite vaguely – what I called ‘direct democracy.’  Between the waitress and Castro, an immediate secret understanding was established. She let it be seen by her tone, her smiles, by a shrug of the shoulders, that she was without illusion.  And the prime minister...in expressing himself before her without circumlocution, calmly invited her to join the rebellion.’....

“U.S. flings at ‘regime change’ in distant lands have had, to say no more, uneven results, but the most spectacular futility has been 90 miles from Florida.  Castro was the object of various and sometimes unhinged U.S. attempts to remove him.  After the Bay of Pigs debacle, the Kennedy administration doubled down with Operation Mongoose, which included hairbrained assassination plots and a plan skeptics called ‘elimination by illumination’ – having a U.S. submarine surface in Havana harbor and fire star shells into the night sky to convince Catholic Cubans that the Second Coming had come, causing them to rebel against Castro the anti-Christ.  Nevertheless, Castro ruled Cuba during 11 U.S. presidencies and longer than the Soviet Union ruled Eastern Europe.

“Socialism is bountiful only of slogans, and a Castro favorite was ‘socialism or death.’  The latter came to him decades after the former had made Cuba into a gray museum for a dead utopianism.”

Editorial / Wall Street Journal

“Fidel Castro’s legacy of 57 years in power is best understood by the fates of two groups of his countrymen – those who remained in Cuba and suffered impoverishment and dictatorship, and those who were lucky or brave enough to flee to America to make their way in freedom. No progressive nostalgia after his death Friday at age 90 should disguise this murderous and tragic record.

“Castro took power on New Year’s Day in 1959 serenaded by the Western media for toppling dictator Fulgencio Batista and promising democracy.  He soon revealed that his goal was to impose Communist rule. He exiled clergy, took over Catholic schools and expropriated businesses.  Firing squads and dungeons eliminated rivals and dissenters.

“The terror produced a mass exodus.  An April 1961 attempt by the CIA and a small force of expatriate Cubans to overthrow Castro was crushed at the Bay of Pigs in a fiasco for the Kennedy Administration.  Castro aligned himself with the Soviet Union, and their 1962 attempt to establish a Soviet missile base on Cuba nearly led to nuclear war. The crisis was averted after President Kennedy sent warships to intercept the missiles, but the Soviets extracted a U.S. promise not to invade Cuba again.

“The Cuba that Castro inherited was developing but relatively prosperous. It  ranked third in Latin America in doctors and dentists and daily calorie consumption per capita.  Its infant-mortality rate was the lowest in the region and the 13th lowest in the world.  Cubans were among the most literate Latins and had a vibrant civic life with private professional, commercial, religious and charitable organizations.

“Castro destroyed all that.  He ruined agriculture by imposing collective farms, making Cuba dependent first on the Soviets and later on oil from Hugo Chavez’s Venezuela. In the past half century Cuba’s export growth has been less than Haiti’s, and now even doctors are scarce because so many are sent abroad to earn foreign currency.  Hospitals lack sheets and aspirin. The average monthly income is $20 and government food rations are inadequate....

“The hope of millions of Cubans, exiled and still on the island, has been that Fidel’s death might finally lead to change, but unwinding nearly six decades of Castro rule will be difficult. The illusions of Communism have given way to a military state that still arrests and beats women on their way to church.  China and Russia both allow more economic freedom. The regime fears that easing up on dissent, entrepreneurship or even access to the internet would lead to its inevitable demise.

“Castro’s Cuba exists today as a reminder of the worst of the 20th century when dictators invoked socialist ideals to hammer human beings into nails for the state.  Too many Western fellow-travelers indulged its fantasies as long as they didn’t have to live there.  Perhaps the influence of Cuba’s exiles will be able, over time, to reseed the message of liberty on the island.  But freedom starts by seeing clearly the human suffering that Fidel Castro wrought.”

Finally, last Sunday I flipped on “Meet the Press,” only because “Face the Nation” was covering a topic I wasn’t interested in, and among those on the panel were Danielle Pletka of the American Enterprise Institute, and Helene Cooper of the New York Times.

Moderator Chuck Todd asked Danielle Pletka if anything will change in Cuba.

Pletka: I don’t think anything is going to change because as Marco Rubio said rightly, Fidel hasn’t been in charge. Raul is in charge. The transfer happened a decade ago.  The problem is not – was not Fidel.  It was the system that he put in place all these many decades ago. And that’s what we need to focus on.  We need to focus not on the end of the Castros, not the name. And then to that system which lives off of the back of Cuban people, oppresses them, threatens us, and interferes in the region.

Chuck Todd: And I think the question is, obviously, is of what President Obama has done gets left in by Donald Trump.  But before we go away from President Obama, his statement yesterday got a lot of people upset because of what it didn’t say. Let me put it up, here’s what he said on Castro.  ‘We know that this moment fills Cubans, in Cuba and in the United States, with powerful emotions, recalling the countless ways in which Fidel Castro altered the course of individual lives, families, and of the Cuban nation.  History will record and judge the enormous impact of this singular figure on the people and world around him.’  I have to say, Helene Cooper, it’s the most positive statement I’ve ever heard a President of the United States put out on Fidel Castro. Why was it so positive?

Cooper: Well, first of all, I think I disagree with you guys on the – you present a very, and Marco Rubio just did that, America-centric view of Cuba. Which is Castro as the, you know, Satanic demon that the United States, and in many ways he has been, but I think what President Obama’s statement reflects is that nobody in the rest of the world sort of agrees with you. The Castro that I grew up knowing as a child growing up in Liberia was a Castro who fought the South African apartheid regime that the United States was propping up.  It was Castro that sent Cuban soldiers into Angola and helped to bring down apartheid in South Africa. So there is a lot of ambivalences when you look at Fidel Castro that’s usually not reflected here and I think what President Obama’s statement was doing was reflecting that.....

Pletka: But that still ignores the fact.  Okay, you may like what Castro did in South Africa, I don’t.  But you can’t forget that he did this all on the backs of the Cuban people. This was an absolute dictatorship that crushed this island beneath their jackbooted heel. Summarily shot people for disagreeing with the Castros.  For 50 years, they have been – they murdered their political opponents and supported groups like Hizbullah, Iran, Medoro, and before that, Chavez, the FARC and others.  Let’s not forget who he is to America.

Cooper: Again, this is a very America-centric view of Castro.

Pletka: I’m American.  [Source: nbcnews.com]

You can’t make this stuff up.  Needless to say, if I saw Ms. Cooper at a holiday party, I wouldn’t go out of my way to talk to her. 

The above is typical of the ideological divide in America, and it is only going to get worse, because the dangers we will be facing in the short- to intermediate-term will require tough actions and nearly half the country will protest them.

But to Ms. Pletka, you are my hero!!!

Random Musings

--According to a survey of Americans by Harvard University’s Center for American Political Studies and the National Research Group, 64 percent said Donald Trump will be either very or somewhat effective in fulfilling his campaign promises, not only on immigration but also to invest in the nation’s infrastructure, to cut taxes and to repeal ObamaCare.

78 percent approve of his infrastructure promise, and 53 percent think he’ll keep it.

But only 46 percent of respondents approve of the idea to repeal and replace President Obama’s signature healthcare law.

--House Democratic Leader Nancy Pelosi (Calif.) beat back the challenge to her leadership, defeating Rep. Tim Ryan (D-Ohio) by a 134-63 vote in a closed-door ballot prompted by Trump’s ascension to the White House.

So the message sent is that while there is a growing appetite for change in the party’s leadership, the top three all in their mid-70s as I pointed out the other week, Ryan and his cohorts still don’t have nearly the support to loosen Pelosi’s grip on her liberal supporters.

Rep. Ryan said the party has alienated middle-class Rust Belt workers, who flocked to Trump and aided vulnerable down-ballot Republicans.  In a statement after his defeat, Ryan said:

“I ran for Leader because I believe strongly in the promise of the Democratic Party, but November taught us that changes were necessary.  Our party’s losses showed our Caucus that we needed to have a serious conversation about our path forward and open the door for new reforms and voices in Democratic Leadership.

“Democrats must adopt a progressive economic message that focuses on large, direct infrastructure investments, affordable health care, portable pensions, and public-private investments that promote advanced manufacturing.  Hopelessness is a product of economic and social adversity.  This is why Democrats must always be the party of aspiration and inclusion.”

--Green Party presidential nominee Jill Stein’s call for a recount in Wisconsin despite winning just 1 percent of the vote is receiving heavy publicity for her efforts, and by tapping into Clinton angst over Trump’s win, she’s building up a fundraising machine she didn’t have before.  And the Green Party can claim it is fighting for the progressive spirit of Democrats.

This week Stein said in an interview on Fox Business Network that she is the voice for the “frustrated, cynical and disappointed voters” who were “disgusted by the process of this election.”

By Monday, the campaign to fund recounts in Wisconsin, Michigan and Pennsylvania had raised $6.5 million just since Nov. 23 from 137,000 donors – far more than the $3 million she raised in the general election, according to The Hill.

But the chairman of the Libertarian Party, Nicolas Sarwark, said Stein’s fundraising effort will be seen for what it is, a scam, because it won’t lead to any fundamental changes.  Stein also runs the risk of being seen to be too in line with the Democratic Party.

--Michigan’s vote was finally certified, all 16 electoral votes to Donald Trump as he beat Hillary Clinton by 10,704 votes.  He is the first Republican to carry Michigan since 1988.

So the final, official, tally is 306 Trump, 232 Clinton.

--GOP Rep. Darrell Issa of California was declared the winner Monday in the final House race deemed too close to call, thus securing a ninth term.

So it’s 239 seats for the GOP in the House, vs. 194 for the Democrats, with two House races in Louisiana to be decided in a run-off next month.

--California Gov. Jerry Brown nominated Democratic Congressman Xavier Becerra to be the state’s next attorney general, succeeding Kamala Harris, who was elected to the Senate last month.

Becerra formerly was deputy attorney general.  He was also a rising star in the House Democratic Caucus and had Hillary Clinton won, likely would have been among her Cabinet picks.

--Massachusetts Sen. Elizabeth Warren (D) is trying to get her colleagues to take a hard line against Donald Trump, but many vulnerable Democrats, as I mentioned the other week, up for reelection in 2018 in states that Trump won easily, have signaled a willingness to work with the president-elect.

Warren is exhorting her fellow Democrats to “show some spine” and not “roll over” to drug companies and not “compromise with racism” by supporting Sen. Jeff Session’s (R-Ala.) nomination to serve as attorney general.

I’m waiting for Session’s confirmation hearing to unload on those who think he’s a racist.  He’s not.

Democratic centrist Rep. Gerald Connolly of Virginia is representative of those in the party who wish Warren would chill out.

“Elizabeth Warren does not represent the whole Democratic Party; she represents a very important wing of the party. But there are others of us who have a more pro-business [view], not a cave-in-to-Wall-Street thing,” said Connolly.  “We don’t necessarily have that kind of ideological agenda.”

But Warren, and Sen. Bernie Sanders, aren’t about to back down.  Warren is seen as the Senate’s next liberal lion, a title last held by Sen. Edward Kennedy.  [The Hill]

--John Podhoretz / New York Post

“At this rate, nearly everybody who follows politics or writes about politics or thinks about politics is soon either going to be curled up in a ball in the corner, or in a mental institution, or feeling as though at any moment he or she might be felled by a heart attack. Donald Trump is driving them – us – insane.

“On Monday, Trump got mad at CNN’s Jeff Zeleny and retweeted a 16-year-old’s denunciation along with the words ‘bad reporter.’  On Tuesday, the president-elect declared on Twitter that people who burn the American flag should lose their citizenship or be sent to jail.

“The responses to these 140-character spasms ranged from incredulousness to fear to anger to disbelief.  The next president, calling out a reporter by name and quoting a teenager to do it?  The next president, advocating the removal of citizenship from a native-born American?  Why, even the late Nino Scalia said flag-burning was constitutional!  Free speech is under attack!  Fascism is upon us!

“A debate has broken out in the press corps: Do we ignore Trump’s tweets or do we go hard at them? Do we fact-check them? Is he using them to distract us from more serious problems?

“By engaging with them are we just playing his game, or is it our responsibility to let the public know what the president-elect is thinking and feeling even as we try to inform the public that the issues are more complicated than he’s making them seem?

“It’s not even December. Of 2016.  Fellas, we have another 50-odd days before Trump is even sworn in....

“We assume politicians know their words are being carefully studied and that they issue those words with care so they aren’t inadvertently misunderstood.  We want to understand what our leaders are up to. We want to categorize their actions.  We want to use that understanding to deepen our sense of where we are and where we’re going.

“But we’re missing one profound thing about Trump, and we keep missing it, and we will continue to miss it: Trump is not a politician.  He doesn’t think of a himself as a politician, and he doesn’t act like a politician, and we’re all desperately trying to fit him into our understanding of what he’s supposed to be....

“But what if there’s no strategy?  What if there’s no organizing principle?  What if Trump has no plan?  That seems the likeliest interpretation of his tweeting and even the bizarre rigmarole surrounding his consideration of Mitt Romney to be secretary of state.

“He improvised his way to the presidency, he’s improvising his way through the transition and it’s likely he’ll continue to improvise as president.”

--Trump, in blasting Hillary Clinton’s campaign team for backing Jill Stein’s recount in Wisconsin, tweeted: “So much time and money will be spent – same result! Sad.”  Then, hours later: “In addition to winning the Electoral College in a landslide, I won the popular vote if you deduct the millions of people who voted illegally.”

There is zero evidence of this and even Newt Gingrich admonished Trump. 

--Tensions between the Trump and Clinton teams boiled over Thursday night at a Harvard Institute of Politics’ quadrennial Campaign Managers Conference. 

“If providing a platform for white supremacists makes me a brilliant tactician, I am proud to have lost,” fumed Clinton communications director Jennifer Palmieri, who traded jabs with Kellyanne Conway, Trump’s campaign manager.

“I would rather lose than win the way you guys did,” Palmeiri said, noting Stephen Bannon was an alleged racist.

Conway fired back, “Do you think I ran a campaign where white supremacists had a platform?”

Palmeiri replied: “You did, Kellyanne.  You did.”

“Do you think you could have just had a decent message for white, working-class voters?” Conway asked.  “How about, it’s Hillary Clinton, she doesn’t connect with people?  How about, they have nothing in common with her?  How about, she doesn’t have an economic message?”  [New York Post]

--It appears the plane carrying Brazil’s Chapecoense football team and 21 journalists that crashed outside Medellin ran out of fuel.  There had been earlier reports the aircraft was at the tip of its range, which warrants prosecution at multiple levels if true.

But I have to note what one of the six survivors said, flight technician Erwin Tumiri, who is alive because he followed safety instructions, while other panicked.

“Many stood up and started shouting,” he said. “I put the suitcases between my legs and assumed the brace position.”  He was just shaken and bruised.

One of the six, goalkeeper Jackson Follmann, had his right leg amputated.

--Chicago passed the 700 murder mark on Wednesday for the first time since there were 704 in 1998.  There were 761 in 1997.

--This North Dakota pipeline protest is threatening to totally ruin the Obama administration’s final weeks.  You can see how it could turn explosive.

--Good news...weather forecasters say the northern Sierra Nevada mountain range had the wettest first two months of the “water year” since 1984.  Between October and November, measuring stations received an average of 18 inches of rain.

--Our heartfelt thanks go out to Ohio State police officer Alan Horujko, 28, who took out terrorist Abdul Razak Ali Artan during the incident at the university in Columbus on Monday that left 11 injured.  Artan appears to have been self-radicalized by ISIS propaganda.

--God bless Dolly Parton.  Her Dollywood Foundation will donate $1,000 a month to “all of those families who lost their homes in the fires” for six months, the organization announced Wednesday night.  Parton wrote, “I have always believed that charity begins at home.”

Our thoughts and prayers go out to those in eastern Tennessee impacted by this tragedy, including the families of the 13 victims identified thus far.

---

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

God bless America.

---

Gold $1179
Oil $51.68...highest weekly close since July 2015

Returns for the week 11/28-12/2

Dow Jones  +0.1%  [19170]
S&P 500  -1.0%  [2191]
S&P MidCap  -1.0%
Russell 2000  -2.5%
Nasdaq   -2.7%  [5255]

Returns for the period 1/1/16-12/2/16

Dow Jones  +10.0%
S&P 500  +7.2%
S&P MidCap  +16.2%
Russell 2000  +15.7%
Nasdaq  +5.0%

Bulls 56.3
Bears 22.3 [Source: Investors Intelligence]

Have a great week. 

Dr. Bortrum posted a new column.

*Next time I will be posting an abbreviated review, as I’ll be down in Kiawah, South Carolina for my annual half-marathon (and other activities), which is going to be an unmitigated disaster, seeing as I’ve been sick this week, haven’t been able to do my last long runs, and I wasn’t in any kind of shape to begin with. 

Brian Trumbore