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06/17/2017

For the week 6/12-6/16

[Posted 11:59 PM ET, Friday]

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Edition 949

Gun Shots and Turmoil in Washington

While I grew up in Summit, N.J., and have been back here the last 7 years or so, I really identify more with neighboring New Providence, where I lived for 16 years and where I have most of my connections.    

So Wednesday was Flag Day and the New Providence American Legion each year has a moving ceremony to commemorate the occasion, including the burning of retired flags, with the local Boy Scouts participating. I don’t go every year but I made a note to go this time, especially because a friend is back as mayor, after being forced to sit a term, having served two consecutively before then.

But Wednesday morning we were all jarred by the story out of Alexandria, Va., and the shooting of Congressman Steve Scalise, and others, and somehow the Flag Day ceremony that evening took on a lot more meaning.

As the Commander of the local American Legion chapter left out the politics of the moment (as did the mayor in his speech), you couldn’t help but notice the massive pile of flags to be retired and honored...far more than any other year anyone remembers, and they’ve been doing this now 20 years.

The Commander said he was encouraged.  Clearly more people are displaying their flags these days and I do note it myself driving around.  That’s healthy, in these otherwise unhealthy times.

But I was shocked looking back how in all the commentary and news accounts I saw that day that no one mentioned the irony of the actual day we were commemorating.  Geezuz, you’d think someone along the way would have at least looked at their Day Planner.

Oh, I forgot.  Most folks just keep their calendar on their phone.  I imagine most of those didn’t cite the occasion.

You could say yet another example of how increasingly disconnected we have become, even while we think we are more connected.

John Podhoretz has some thoughts below I totally concur with.  Forget the sentiments of coming together in Washington.  That’s already fraying.  We’ll be right back to viciously attacking each other.  I see it in my emails more than ever each day.

Remember, I watch and read all sides to give you as balanced a review as I can, while not forgetting that I do have my own biases.

But I loathe social media.  Really.  I participate for business reasons, largely, and from time to time I enjoy seeing the postings of an old friend on Facebook.  Otherwise, I could easily do without it.  [I’m also finding myself going onto Facebook less and less.]

For now, we’re still America...the greatest nation on Earth.  But there’s more reason than just North Korea to sleep with one eye open these days.  Our nation is increasingly volatile, spewing hate at each other like a cobra.  It’s not good, but it’s only going to get worse and heaven help us if we have a true crisis dropped on our heads. 

---

The man who shot Congressman Scalise and the others was James Hodgkinson, 66, who died from wounds sustained in the shootout with the heroic Capitol Hill police.

Social media activity and letters to the editor showed a man who blamed Republicans for all the country’s ills going back to the Great Depression.

He was a member of a Facebook group “Terminate the Republican Party.”  In a letter published in the Belleville (Ill.) News-Democrat in the summer of 2012, he wrote: “I have never said ‘life sucks,’ only the policies of the Republicans.”

Thank God Congressman Scalise, because of his senior position, was entitled to a security detail and they were at the ballfield, or else as all are in agreement, it would have been a massacre.  And I’m thankful the man was gunned down.  None of us need to see that face ever again. 

[I was sickened by an interview with one of the guy’s friends, who looked just like him.  “I want everyone to know he wasn’t evil.”  And, “He doesn’t stand down.”  What do you mean? asked the reporter.  “He’s been in a few bar fights.”  I wanted to reach through the television set and, you know....]

President Trump:

“Everyone on that field is a public servant.  We may have our differences, but we do well in times like these to remember everyone who serves in our nation’s capital because they all love our country.

“We can all agree that we are blessed to be Americans. We are strongest when we are unified and when we work for the common good....

“Congressman Scalise is a friend...He’s a patriot, and he’s a fighter.  He will recover from this assault, and Steve, I want you to know, you have the prayers, not only of the entire city behind you, but of the entire nation.”

House Speaker Paul Ryan:

“We are all horrified by this dreadful attack on our friends and on our colleagues and those who serve and protect this capital.  We are all praying for those who were attacked and for their families.  And we are united.  We are united in our shock, we are united in our anguish. An attack on one of us is an attack on all of us.”

The Congressional baseball game was played Thursday, a tradition dating back to 1909, celebrated as a thriving bastion of bipartisanship, especially in these hyper-partisan times.

But within hours you had Iowa Republican Rep. Steve King saying he would “put some of this at the feet of Barack Obama,” and former House Speaker Newt Gingrich blaming “an increasing intensity of hostility on the left,” and House Democratic leader Nancy Pelosi: “I don’t even want to go into the President of the United States.  But in terms of some of the language that he has used.”

---

On the Sunday news shows you had some of the following:

Sen. Lindsey Graham (R-S.C.) said Trump could be the first commander in chief “to go down” over ongoing chaos in his administration, including his Twitter habit.

“You may be the first president in history to go down because you can’t stop inappropriately talking about an investigation that if you just were quiet, would clear you,” Graham said on CBS’ “Face the Nation.”

Graham added that while Trump’s conversations with former FBI Director Comey were inappropriate, they do not constitute obstruction of justice.

Sen. Mike Lee (R-Utah) said on ABC’s “This Week” that he doesn’t believe Comey would lie under oath.

“Nonetheless, I’m not wild about the fact that he had these memos leaked, leaked specifically with the intent of prompting the appointment of a special counsel.”

Former U.S. Attorney Preet Bharara said he thinks there is evidence to start an obstruction of justice case against Trump.

“I think there’s absolutely evidence to begin a case – I think it’s very important for all sorts of armchair speculators in the law to be clear that no one knows right now whether there is a provable case of obstruction,” he said on “This Week.”

But of course Bharara was fired by Trump, so draw your own conclusions.

A new Huffington Post/YouGov poll found 46% of Americans polled say Comey is more honest and trustworthy than the president.  26% found Trump more trustworthy.

Attorney General Jeff Sessions,  appearing before the Senate Intelligence Committee, denied having undisclosed meetings with Russian officials at a Washington, D.C. hotel and refused to answer questions about his private conversations with the president.

He vowed to defend his honor “against scurrilous and false allegations.”

The tone of Sessions’ appearance was sharply partisan.

So the White House remained under siege amid reports President Trump was under scrutiny by special counsel Robert Mueller over whether he did obstruct justice, ditto adviser Jared Kushner, while Vice President Pence acknowledged he had hired a private lawyer to handle any fallout from the investigations.

Specifically, according to multiple reports/leaks, Mueller is expanding his probe into whether the president fired ex-FBI director Jim Comey as part of a broader effort to alter the FBI’s investigation into alleged Russian meddling in the 2016 election and whether Trump associates colluded with Moscow.

Trump issued a series of tweets, noted below, after just a day earlier calling for more civility, letting loose on his favorite target again, as well, Hillary Clinton, wondering why he was under scrutiny while his “crooked” Democratic opponent escaped prosecution.

The White House staff, namely the press secretary and deputy press secretary, are now referring any questions on the investigations to Trump’s personal lawyer.

For his part, President Trump on Friday conceded he was “being investigated” for firing “by the man who told me to fire the FBI Director.”

It’s pretty clear the president was referring to Deputy Attorney General Rod Rosenstein. 

Also this week, Director of National Intelligence Daniel Coats spent more than three hours in a closed session with the Senate Intelligence Committee, days after he refused to answer their questions in an open session about his conversations with Trump regarding the Russia investigation.

Coats is a big key to this whole thing, owing to his longstanding relationships with some senators given his past service in the chamber.

Opinion....

Editorial / New York Post

“President Trump was predictably quick to lash out after reports that Special Counsel Robert Mueller has expanded his election-meddling probe to include possible obstruction of justice by the president.

“ ‘You are witnessing the single greatest WITCH HUNT in American political history – led by some very bad and conflicted people!’ Trump tweeted early Thursday.

“We understand his frustration, but such overheated reactions aren’t helping him, not politically and certainly not legally.

“Some see the leaks about the widening investigation – and Mueller’s plans to interview top intelligence officials whom Trump allegedly asked to press the FBI to back off its probe of ex-National Security Adviser Mike Flynn – as intended as a response to reports that Trump was thinking of firing the special counsel.

“That’s just one of the dangers of meddling with a process that should be firmly grounded in the law – but which is increasingly turning on partisan politics.

“And which threatens to move far away from its original focus: alleged collusion between the Trump campaign and Russia, for which no real evidence has been offered.

“The sad fact is, nearly all the political holes the president now finds himself in are ones he dug himself, via tweets and other impromptu public statements.  Trump needs to resist being baited into over-reacting to every rough turn of the news cycle – and in ways that do nothing but feed the frenzy, to Democrats’ plain glee.

“That said, Mueller’s first priority should be getting a handle on any leaks (if they’re coming from his team) and stopping them....

“Politics has derailed and delegitimized too many special-counsel probes. The nation needs Mueller to resolve this matter quickly – and fairly.”

John Podhoretz / New York Post

“The first five months of the year have certainly felt like a time of political disorder in the United States, a disorder that some have welcomed as the cost of changing the country’s direction and others have found enervating and frightening.

“It’s been bad, but not 1968-level bad.

“But then came Wednesday’s ghastly shooting spree at the congressional Republican baseball practice.

“This was a planned act of political slaughter to make what appears to be an ideological point – the first such major event since the assassin’s spree that began with JFK in 1963, reached an apogee in 1968, and came to an end with the nearly successful attempt on Ronald Reagan in 1981.

“Will this prove to have been a lone event?  Or is it the beginning of another long hot summer my (7-year-old) son will remember forever – the herald of a new kind of chaos with a signature frighteningly reminiscent of 1968?

“Even the fact that I can ask this question, and that I’d wager you are not immediately scoffing at it, suggests we may be at the precipice.

“We all know the kindling is there. The baseball-field shooter was a consumer of far-left anti-Republican media; it would only take one consumer of media on the other side to seek to equalize the suffering to ignite a national powder keg.

“I don’t want to invoke all the clichés of the past decade but you know them all – we’re a divided nation, we’re all living in our own bubbles, we don’t even accept the same facts and we hate each other.

“The problem is these clichés are largely true.”

As David French has written in National Review, Podhoretz writes, “we are not headed toward civil war but we appear to be heading for a divorce along red/blue, right/left lines, and that the grounds for divorce seem to be utter incompatibility....

“But divorces can turn destructive and emotionally violent as the parties seek to take vengeance on each other rather than find a pleasant but distant way to be apart....

“The United States is in a time of great danger. It is not my son’s happy boyhood memories that are at stake.  It is his future, and all of ours.”

David Satter / Wall Street Journal

“As U.S. politicians plunge into the hall of mirrors that is Russian intelligence, they are assuming that Russians think as they do – a perfect way to misunderstand Moscow’s real intentions.

“Portions of the ‘resistance’ to President Trump are convinced he colluded with Russia to win the 2016 election. But the known facts do not support a Russia-Trump plot to defeat Hillary Clinton. Russia’s actions are consistent instead with an attempt to turn Americans against each other and sow distrust between the president and the American intelligence services.

“For Russians, the difference between Mr. Trump and Mrs. Clinton simply was not that significant. Mr. Trump made naïve and uninformed remarks during the campaign. But Mrs. Clinton, as secretary of state, showed no grasp of Russian realities. She launched the ‘reset’ policy after the murders of Alexander Litvinenko, a former Russian intelligence agent who had been granted asylum in Britain, and Anna Politkovskaya, Russia’s leading investigative journalist.  In both cases, the regime of Vladimir Putin was directly implicated....

“(Russian) intelligence also acted to sabotage Mr. Trump.  The “Trump dossier,” full of unverified sexual and political allegations, was published in January by BuzzFeed, despite having all the hallmarks of Russian spy agency ‘creativity.’ The dossier was prepared by Christopher Steele, a former British intelligence officer.  It employed standard Russian techniques of disinformation and manipulation. The dossier depicts Mr. Putin as dedicated to ‘Nineteenth Century ‘Great Power’ politics,’ determined to prosecute ‘oligarchs’ and ‘motivated by fear and hatred of Hillary Clinton.’

“After the publication of the Trump dossier, Mr. Steele went into hiding, supposedly in fear for his life.  On March 15, however, Michael Morell, the former acting CIA director, told NBC that Mr. Steele had paid the Russian intelligence sources who provided the information and never met with them directly.  In other words, his sources were not only working for pay.  Furthermore, Mr. Steele had no way to judge the veracity of their claims.

“The payments are likely to have been high. So who provided the money? An April Vanity Fair article determined that the research that became the dossier was originally funded by a ‘Never Trump’ Republican.  After Mr. Trump sewed up the GOP nomination, however, ‘Democratic donors’ kept the effort alive.  Perhaps the time has come to expand the investigation into Russia’s meddling to include Mrs. Clinton’s campaign as well.

“Investigating the role of Russian disinformation in the 2016 election requires understanding the layers of deception in which Russian intelligence specialize. This won’t be possible if Mr. Trump and his adversaries are more determined to destroy each other than to face the Russian threat. Americans must understand that the Putin regime wants to paralyze the U.S., but would rather have Americans do it with their own hands.”

Wall Street

The Federal Reserve hiked its key funds rate a third time in six months on Wednesday, as the board points to low unemployment and rising consumer confidence. The benchmark rose a quarter-point to between 1 and 1.25 percent, the highest since September 2008.

In an accompanying statement, the Federal Open Market Committee said it expects the economy to “expand at a moderate pace,” and for inflation to pick up to about 2 percent by next year.

“The labor market has continued to strengthen,” the Fed adding that economic growth “has been rising moderately so far this year,” without mentioning the first quarter sucked.

Importantly, the Fed also said it expects to start selling off some of its Treasury and agency bond holdings this year, the first time since it started buying up debt to stabilize the economy following the 2008 financial crisis.

Starting this year, the Fed will start selling $6 billion in Treasury bonds, and $4 billion in agency bonds a month, with investors surprised at the specificity in the Fed’s statement.  This will gradually accelerate by $10 billion every three months, until it’s selling $50 billion a month altogether – assuming the economy performs as the Fed expects it to.

The Fed has a balance sheet of $4.5 trillion in assets and it’s expected to gradually sell it down to pre-crisis levels, when it had less than $1 trillion.

But the Fed’s pronouncements came as the recent data pointed to very low inflation, while retail sales fell to a six-month low. The Fed is talking of one more rate hike this year but some are beginning to have their doubts.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, was the only member of the FOMC to vote against the rate hike, Kashkari arguing that economic conditions are not strong enough to justify raising the benchmark rate.

And then on Friday, Dallas Fed President Robert Kaplan conceded the decision to raise rates was a tough one. Although in the end he supported it.

Bill Gross / Janus Henderson Investors

“(Asset) prices and their growth rates are ultimately dependent on the real economy and, the real economy’s growth rate is stunted by secular forces which monetary and even future fiscal policies seem unable to reverse.  In fact, as I have mentioned many times...monetary policy now a negative influence in terms of future economic growth. Zombie corporations are being kept alive as opposed to destroyed as with the Schumpeterian/Darwinian ‘survival of the fittest’ capitalism of the 20th century. Standard business models forming capitalism’s foundation, such as insurance companies, pension funds, and banking, are threatened by the low yields that have in turn, produced high asset prices. These sectors, in fact, have long-term maturities and durations of their liabilities, and their assets have not risen enough to cover prior guarantees, so we see Puerto Rico, Detroit, and perhaps Illinois in future years defaulting in one way or the other on their promises to constituents.  Faulty finance-based capitalism supported by the increasingly destructive monetary policy begins to erode, not support the real economy.

“My point in all of this is that making money with money is an inherently acceptable ingredient in historical capitalistic models, but ultimately it must then be channeled into the real economy to keep the cycle going. Capitalism’s arteries are now clogged or even blocked by secular forces which when combined with low-negative yielding ‘safe’ assets promises to stunt U.S. and global growth far below historical norms.”

Separately, in a shocking development, Amazon.com Inc. announced Friday morning it was buying Whole Foods Market Inc. for about $13.7 billion at a price of $42 a share, Whole Foods having closed at $33 the day before.

This is Amazon’s largest acquisition and gives it a network of more than 460 stores that could serve as beachheads for in-store pickup and its distribution network.

Supermarket stocks, and related retailers that sell groceries such as Wal-Mart and Target, cratered on the announcement.  As one asset manager, Phil Bak, told Reuters, “There is really no limit to how far (Amazon) can take Whole Foods. What Amazon has proven time and again is that they know how to connect the buying experience with what resonates with customers and with what customers will appreciate and want to continue to return to. Again, we see Amazon leading, and other supermarkets following.  How they plan to implement technology in the buying experience remains to be seen.”

Let your imagination run wild with this one.  I thought Jim Cramer of CNBC had some super points Friday morning on the announcement, including the idea that Amazon could start looking at Sears locations, or similar sites, to convert to warehouses and distribution centers.

Amazon is expected to use the Whole Foods stores to promote private-label products, and items such as Echo, while boosting Prime membership.

And if you wanted an example of the impact of the Amazon move internationally, you had that of U.K. food giant Tesco, the nation’s biggest retailer, which Friday before the Amazon announcement had reported its strongest quarterly sales growth in seven years, but the shares ended down 5% on the day as investors fretted over the implications of Amazon’s move into traditional retailing.

Tesco’s same-store sales in the U.K. rose 2.3% in the quarter, very solid.

Bottom line, Amazon is looking to dominate every part of a consumer’s shopping experience.

Europe and Asia

Just a little economic news for the eurozone....

Inflation in the EA19 was 1.4% annualized in May, down from 1.9% in April.  In May 2016 the rate was -0.1%.  [Eurostat]

European car sales bounced back in May after falling in April, amid a brightening political landscape in France and overall economic outlook.

Sales, or ‘registrations’ as they are called here, rose 7.7% to 1.43 million vehicles last month after declining 6.8% in April, according to the European Automobile Manufacturers’ Association. Demand was led by Fiat models and Mercedes-Benz vehicles like the revamped E-Class sedan.

German car sales jumped 13% in May, with sales in France up 8.9% and 8.2% in Italy.

But they fell 8.5% in the U.K., owing to Brexit uncertainty and a new vehicle-excise tax that took effect in April.

Auto sales are still expected to slow the balance of the year, rising 2.9% for 2017, compared with a 4.3% gain through the first five months, according to one analyst.

Eurobits....

In the French elections, President Emmanuel Macron’s year-old centrist party, La Republique en Marche (Republic on the Move) and its MoDem ally are now set to win up to 445 seats in the 577-seat National Assembly in Sunday’s second-round of parliamentary voting.

In last Sunday’s first round, Macron’s LREM and MoDem won 32.3% of the vote, to the center-right Republicans’ 21.5%, while the far-right National Front took 13.2%, followed by the far-left La France Insoumise (France Unbowed) at 11%.

The Socialists, previously the ruling party, and their allies won just 9.5%.  Zut alors!

Turnout was down sharply to 48.7%, compared with 57.2% in the first round in 2012, and it seems this was due in part to the feeling Macron was going to romp so why bother.

With a few exceptions where there could be a third candidate, the top two vote getters now square off Sunday.

Should Macron end up with well over 400 seats, it will be the biggest majority in the Assembly since 1993, offering the 39-year-old president the power to push through his reform agenda over the next five years and no one else will be to blame but him if it fails.

Macron’s big plan centers around simplifying France’s labor code and reaching agreement with the unions on reworking the country’s byzantine labor rules.

The president wants individual companies to negotiate wages rather than being bound by industry-wide agreements.

But the unions have historically wanted job protection, first and foremost.

As for Marine Le Pen’s National Front, the 13.2% vote for its candidates compares with 13.6% in 2012, hardly the stuff of growth.  The FN is now expected to end up with only 1 to 5 seats out of 577.

A big problem was the turnout.  Around 57% of those who voted for Le Pen in the presidential election stayed home for the primary battle, according to pollster Ipsos Opra-Steria. The abstention rate among Macron voters was 38%.

What a comedown from the high expectations of just this past January.  Marine Le Pen herself said, “This clearly marks a pause in a very, very strong progression.”  Her 33.9% in the presidential runoff also fell far short of the 40% she had been polling.

Le Pen knows she needs to rebrand the party, change the name...do a lot of things. She also needs to rethink her anti-euro stance, which clearly hurt her.  It’s just not a popular stance in France.

But the only figure who could challenge Marine for party leadership is her niece, Marion Marechal Le Pen, and she quit the party shortly after the presidential loss, saying she wanted to spend time with her family.  Marion, though, will be back.  Let’s just say she is rather photogenic, guys...and with this statement I need to quickly move on.....

In Britain, Prime Minister Theresa May has survived another week, telling her party that she was sorry for the mess she created with the prior week’s election and promising to clean it up.

Mrs. May told lawmakers from her Conservative Party that she takes full responsibility and will stay on only for as long as she’s wanted.  She also said she is willing to rethink her approach to Brexit.

May pledged to consult the party more over policy and said she will seek a national consensus on Brexit in an effort to heal the divisions over the best approach to leaving the European Union.

May said, “I’m the person who got us into this mess and I’m the one who will get us out of it,” she told lawmakers.

The prime minister, though, still needs to complete a deal with Ireland’s Democratic Unionists and their 10 seats to get legislation through the House of Commons.

Friday night, the DUP said it hoped to conclude negotiations with the Conservatives as quickly as possible, though it may wait on Wednesday’s speech by May on her legislative agenda, what’s called the “Queen’s Speech.”

David Shipley / Bloomberg

“U.K. Prime Minister Theresa May’s election gamble has failed disastrously. The consequences are dire for her party and government, and could be equally bad for her country’s relationship with Europe.

“May had hoped to increase her Conservative majority in Parliament, and instead has seen it wiped out. The Tories are the largest party in the House of commons and with the support of Northern Ireland’s Democratic Unionists intend to form a government.  Directing policy and passing legislation, however, will be vastly harder than before.

“This would be a serious problem under any circumstances, as Britain’s previous experience with hung Parliaments suggests. But these aren’t just any circumstances. Brexit talks were due to start in 10 days.  May’s effort to prepare for that challenge has left her plans, such as they were, in shreds. The immediate prospect is great political disorder and maximum economic uncertainty.

“Such is the humiliation of this setback that May might soon choose – or be forced – to resign. This offers no relief. The task of finding a new leader would only add to the chaos, and there’s no obvious successor capable of uniting the party.  But if she hangs on, the question of it and when she goes will linger. Her authority is irretrievably diminished.”

I’ve been warning since last summer’s referendum that Brexit is going to be chaos.  Now even more so.

Britain desperately needs a respite from terrorism, and yet this week we had a different story, the tower fire, one of the worst I can recall in my lifetime.  The official death toll is 30 as I go to post but heading higher.  It is beyond comprehension how that building met safety codes, and that no one seemed to know after the renovation that some of the materials used were so flammable...and that there was not one unified alarm system!

That’s where you depend on government, whether it is in London, New York, or Santiago, and in this instance, government failed horribly.

In the building I’ve been living in for years now, we had our fire alarms tested today, as we do at least once a year.  That’s an example of good government and safety codes being followed.

Lastly, on this topic, Anne Applebaum, in her Washington Post opinion piece on the British election, concluded with this:

“It’s funny – but it’s also tragic, for (Prime Minister) May could have played all of this differently.  When she took over last year, she could have recognized Brexit for the constitutional and political crisis that it has turned out to be. She could have called for national unity to deal with this divisive issue. She could have appealed across party lines, or asked people what outcome they preferred, or sought compromise.  Instead she stuck to her formula – ‘Hard Brexit,’ tough-sounding language, ‘it’s all about immigration.’ She kept her base – and lost everyone else.”

I had to note Ms. Applebaum’s take because there is a lesson contained therein for Republicans and the president. Sure, he seems to be retaining his base.  But the elephants will go down in flames in 2018 unless there is a change in tone among some of the party leaders, including at the top...and soon.  People’s attitudes don’t just change on a dime.

As for the Greek debt crisis, euro-area finance ministers met in Luxembourg to seek to reach a deal on ways to ease Greece’s debt load, and Greece avoided another potential brush with bankruptcy after striking a deal with European creditors to tide it over the rest of 2017, while details are ironed out in 2018 for real debt relief.

The 19-country eurozone agreed to clear the release of $9.5 billion in aid so that Greece can meet its humongous debt payments due in July that have been hanging over it like a thunderhead the entire year.

The Greek government agreed to further reforms to obtain the money, while the so-called Eurogroup, led by Jeroen Dijsselbloem, made clear it is ready to discuss real debt relief at the conclusion of the current bailout program next year.

“Overall, I think this is a major step forward,” said Dijsselbloem.  “We are now going into the last year of the financial support program for Greece; we will prepare an exit strategy going forward to enable Greece to stand on its own feet again over the course of the next year.”

What this means is that I hopefully won’t be addressing this topic for about another year as well, thus saving both paper and ink.

In the run-up to the German elections...

German President Frank-Walter Steinmeier said any Russian interference in his country’s election would weaken already strained ties between the two.  No doubt there will be massive cyberattacks ahead of the Sept. 24 vote.

--Finland’s three-party governing coalition collapsed after the country’s prime minister and senior coalition partner ruled out continued cooperation with the right-wing True Finns party.

Prime Minister Juha Sipilia said negotiations with the True Finns were “over” after it appointed an ultra-nationalist as its new leader last weekend.

Jussi Halla-aho Islam to paedophilia and wants to leave the EU.

In Asia, auto sales in China fell a second straight month, 2.6% you in May amid weak demand following a rise in the sales tax.  [Chinese Assoc. of Automobile Manufacturers]

Street Bytes

--Stocks finished mixed a second consecutive week as the Dow and S&P 500 diverged from the Nasdaq, registering slight gains while Nasdaq tumbled.

The Dow Jones is at an all-time high, 21384, up 0.5%, while the S&P is 7 points shy of its high, up just 0.1% to 2433.  Nasdaq fell 0.9% to 6151 as some high-profile tech leaders continued to slump.

--U.S. Treasury Yields

6-mo. 1.13%  2-yr. 1.31%  10-yr. 2.15%  30-yr. 2.78%

On the inflation front, for May, producer prices were unchanged, +0.3% ex-food and energy.  Year-over-year, the PPI was -0.1%, +2.1% on core.

Consumer prices came in -0.1% for last month, 0.1% ex-food and energy, while yoy, the CPI rose 1.9%, 1.7% on core.

Despite the Fed’s latest rate hike, the long end of the curve continues to rally (yields falling) due to the low inflation expectations.

China’s holdings of U.S. Treasuries rose for a third straight month in April, reaching the highest level since October 2016 at $1.09 trillion.  Last year had marked the largest cut to China’s treasury holdings on record, as Beijing sought to support its currency and manage capital flight by intervening in foreign exchange markets.

Japan cut its holding by $12.4tn in April to $1.11tn.

--The latest forecast from the International Energy Agency concludes oil demand should outpace supply in the second half of this year but excess inventories will persist well into 2018, and that creates a problem for those who are bullish on the energy sector.  Oil prices continued to crater this week as announced producer production cuts are being offset by increasing supply from the likes of the U.S., where shale oil production is forecast to grow by 780,000 barrels a day next year, after a projected increase of 430,000 b/d in 2017.  “Such is the dynamism of this extraordinary, very diverse industry that it is possible growth will be faster,” the IEA said.

Inventories are currently 292m barrels above the target set by OPEC and Russia.

--General Electric Chairman and CEO Jeff Immelt announced he was retiring after a 16-year tenure that you have to call a huge disappointment.  55-year-old John Flannery, a GE veteran who currently leads the company’s healthcare division, is taking the helm.  Among other positions at the company he was head of the India division.

Replacing legendary CEO Jack Welch, Immelt had to navigate the financial crisis, ultimately shedding much of its lending business, while selling off its media assets, including NBC, as well as plastics, appliances, industrial solutions and consumer finance.  GE bolstered its renewable energy, oilfield services and life sciences, among other areas.

Under Immelt, the company got increasingly global and today, about 60% of its revenue comes from foreign markets, up from 40% when he joined.

Jack Brennan, lead independent director on GE’s board, said in a statement: “Jeff has positioned the company incredibly well for the future. He executed a massive portfolio transformation and navigated the company through economic cycles and business disruptions.  Today, GE is a high-tech industrial company with a bright future.”

Shareholders have not been rewarded during Immelt’s time as CEO, with the stock falling 27%.  The share price was at $39.66 when he became CEO back on Sept. 7, 2001, and it was $28.94 on June 12, when the announcement of his departure was made.

Immelt will remain as chairman through Dec. 31, after relinquishing the CEO post Aug. 1.

--The Wall Street Journal’s Gregory Zuckerman and Laurence Fletcher reported that some of the biggest quant funds have been suffering mightily this year, underperforming their benchmarks by wide margins; funds offered by the likes of Two Sigma Investments and AHL Dimension (Man Group).

“Overall, quant funds, which use sophisticated statistical models often developed by Ph.D.’s rather than human research and intuition to find attractive trades, rose 1.44% this year, through May, according to data-tracker HFR. That compares with a gain of 8.7% for the S&P 500 index and a rise of 5.7% for the Vanguard Balanced Index Fund, which invests 60% in stocks and 40% in bonds, highlighting how far quant hedge funds are lagging behind more traditional investments.”

But so far the weakness hasn’t stunted investor interest.

--This is big.  McDonald’s announced on Friday it will no longer sponsor the Olympics, which it has been part of since 1976.

The company had signed on to sponsor the Games through 2020, but with today’s announcement, the IOC said McDonald’s will end its presence after the 2018 Winter Olympics in PyeongChang, South Korea.

It seems the fast-food giant just has other priorities these days.

But McDonald’s will miss out on some prime advertising opportunities, like the time Usain Bolt said he consumed more than 1,000 McNuggets during the Beijing Olympics.

“At first I ate a box of 20 for lunch, then another for dinner,” Bolt wrote in his 2013 book “Faster Than Lightning.”  “The next day I had two boxes for breakfast, one for lunch and then another couple in the evening.”

Recently, Budweiser also ended its three-decade sponsorship of Team USA.                                       

--Nike Inc. said on Thursday it would cut about 2 percent, or 1,400 jobs, out of its global workforce as part of an effort to streamline its structure, including bringing down its business segments to four from six.

--Uber’s co-founder and CEO Travis Kalanick is taking a leave of absence following a months-long investigation into allegations of pervasive sexual harassment inside the ride-hailing company.

In an email sent to staff Tuesday, Kalanick said he had to take responsibility for the turmoil at Uber and that he was taking the leave to grieve for his mother, who died in a boating accident last month.

“Recent events have brought home for me that people are more important than work, and that I need to take some time off from the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team,” he wrote.

Uber hired former Attorney Gen. Eric Holder’s law firm to conduct the investigation into the company’s workplace culture and the release of his recommendations coincided with Kalanick’s leave of absence.

Meanwhile, Uber director David Bonderman resigned from the company’s board following a remark he made during an Uber staff meeting Tuesday that was widely seen as offensive to women, various reports had it.  Ironically, the comment came during a discussion of how the company was going to transform itself following the Holder probe.

Uber board member Arianna Huffington spoke to employees about the importance of adding more women to the board.

“There’s a lot of data that shows when there’s one woman on the board, it’s much more likely that there will be a second woman on the board,” she said.

In response, Bonderman is reported to have said: “Actually, what it shows is that it’s much more likely to be more talking.”

Bonderman, in an email to Uber staff, apologized, calling his comment “inappropriate.”

Earlier, as part of Sunday’s marathon board meeting, the company hinted Nestle SA executive Wan Ling Martello was joining the board, making her the second female voting board member next to Huffington.

Gee, working at Uber is just a real barrel of monkeys, as your editor dates himself with that reference.

But wait...there’s more!  Emil Michael, Uber’s chief business officer, announced he was leaving in an email Monday.  Actually, his last day was the day before and he gave no reason for his departure.  He was said to be Kalanick’s closest confidant, and also seemingly an a-hole.  Back in 2014, he described a plan to BuzzFeed for spending millions to investigate journalists critical of Uber, though then he condemned the comments.

--J. Crew continued to bleed red ink during the fiscal first quarter, with the apparel retailer reporting a sharp jump in net losses amid an unrelenting sales decline.

The company on Monday said same-store sales  were down for the 11th straight quarter, a whopping 9% in the three months to end of April.  This is awful. 

80 percent of company sales come from its J. Crew stores, and here sales fell even more, 11%.

The younger sister brand, Madewell, did continue to shine with a 10% jump in like-for-like sales – but hardly enough to offset the issues at J. Crew.

The company previously announced long-time CEO Mickey Drexler was departing the company.

--Sears Holdings is cutting 400 corporate jobs and an unknown number of other positions as it seeks to stabilize its finances after some catastrophic errors under the leadership, using the term loosely, of CEO Eddie Lampert. The cuts are part of the company’s announced $1.25 billion cost-cutting plan unveiled earlier this year.

Tuesday, Sears said it has achieved nearly $1 billion of this goal.

--Thinking of buying a Sharp TV in the U.S.?  Think again.  Sharp Corp. sued China’s Hisense Electric Co., which licensed the Sharp brand for televisions sold in the U.S., accusing Hisense of putting the Sharp name on poor-quality TVs and then deceptively advertising them.

Hisense rejected the allegations and said it’s making a high-quality product.

Sharp has been trying to retrieve the use of its own name when selling in one of the world’s largest markets.  In 2015, Sharp signed a deal with Hisense giving it the rights to sell in the U.S. through 2020.  Sharp was in financial distress at the time and looking to raise cash.

Last year, Taiwan’s giant Foxconn Technology Group, aka Hon Hai Precision Industry Co., took a controlling stake in Sharp and it is seeking to reinvigorate the brand.

--Kroger Co., the No. 1 supermarket operator in the U.S. by store count, cut its full-year earnings forecast, citing higher product costs than previously expected.  Kroger said talks with labor unions would be “challenging” as it aims to maintain “competitive cost structures.”

Kroger CEO Rodney McMullen said in a statement that, “Customers tell us they want to...provide meals to their families at prices that enable them to stretch their budgets.  We are committed to providing that experience, and we will not lose on price.”

Which means lower margins/earnings.  It’s all about Wal-Mart, Lidl and Aldi...and now Amazon/Whole Foods.

Kroger’s same-store sales fell 0.2% in the first quarter ended May 20.

--The jobless rate in Australia fell to a four-year low in May, 5.5%.

--Switzerland’s Nestle, the world’s largest food and drinks company, announced on Thursday it is getting out of the U.S. confectionary business, putting brands such as Butterfinger and Baby Ruth bars up for sale.  Nestle said it was making the move after failing to increase market share and boost profitability, as it faces fierce competition from Hershey and Mondelez.

The decision does not affect Nestle’s Kitkat, a global product that is made in the U.S. under license by Hershey.  Hershey could now buy the Nestle products.

The Nestle’s unit could be worth as much as $3 billion, with the company saying it only represents about 3% of its total U.S. sales.

Personally, I’m a Baby Ruth guy and can’t stand Butterfinger, not that I’ve had either in 40 years.

Nope, when I’m fixin’ for some sweets these days, it’s frozen Funny Bones for the kid.

In terms of U.S. candy sales, Hershey edges Mars in market share, 25.9% to 25.2%, with Mondelez at 5.6%.  Nestle was just 2.9%.

Nestle’s U.S. sales are primarily from DiGiorno pizza (not bad), Haagen-Dazs, Gerber and Lean Cuisine.

--Japan’s Takata Corp., facing bankruptcy over the biggest automotive recall in history, will stop making airbags when the global recall is completed, under a plan it will be giving to regulators as early as next week when it files in U.S. and Japanese courts to help it cope with its liabilities, before restructuring.

--NJ Transit disclosed that only 46% of its trains during the morning rush hour in May reached New York within six minutes of their scheduled arrival time – the industry standard for punctuality. This compares with 70% in April, and the big July/August Amtrak project at Penn Station has yet to start...destined to be a nightmare.

--Shares in Snap dropped on Thursday to touch its IPO price of $17 amid continuing concerns over the business model.  [They closed Friday at $17.65.]

Snap, parent of Snapchat, went public in March and while the shares surged to $26 on their first day and $29.40 after, investors have had growing doubts about the company’s ability to evolve into a full-fledged public outfit.

Last month Snap reported its first earnings as a public company and they showed slowing revenue and user growth that fell short of the Street’s expectations.

Snap faces growing competition from Facebook, with its Instagram photo-sharing service.

The performance of the Snap IPO, though, is highly important for other companies, the so-called “unicorns” that have been waiting to go public but now, at least in the short-term, have to recognize they wouldn’t have as good a reception as once thought.

--After nearly five years at the helm, Yahoo CEO Marissa Mayer exited the scene Tuesday following completion of the Verizon acquisition of Yahoo.

Mayer, in a Tumblr post titled “Nostalgia, Gratitude & Optimism,” said, “Looking back on my time at Yahoo, we have confronted seemingly insurmountable business challenges, along with many surprise twists and turns.”  Mayer said Yahoo had successfully navigated those hurdles “and mountains in ways that have not only made Yahoo a better company, but also made all of us far stronger.”

Oh brother.  Mayer is going to end up landing $186 million in total compensation – far beyond the golden parachute $23 million Yahoo said she would receive – according to securities fillings.

Under Mayer, the company’s shares did soar 254%, far outpacing the Nasdaq Composite’s gain of 112% during this time, but the company’s net ad revenue is projected to decline to $3 billion this year from $3.32 billion in 2015, according to eMarketer.

And Yahoo was hit by two massive hack attacks, while failing to keep up with the changes in mobile and social media, plus Mayer unwisely spent $1.1 billion on social media site Tumblr.

Stock price aside, it’s a decidedly mixed legacy, but now it’s all on Verizon.

--39 journalists at HuffPost were laid off Wednesday as part of the above Verizon acquisition of Yahoo Inc., part of an expected 15% staff reduction across Yahoo and Verizon-owned AOL.

Verizon is counting on the combination of the two, operating as a single business unit called Oath, to build a third alternative to a digital advertising market currently dominated by Google and Facebook.

Oath properties include HuffPost, Yahoo Sports, AOL.com, Tumblr, Yahoo Finance and Yahoo Mail.

[The remaining Yahoo assets, primarily consisting of stakes of Alibaba and Yahoo Japan, will take on a new name, Altaba.]

--Time Inc. said on Tuesday it is eliminating 300 positions, or 4 percent of its workforce, through layoffs and buyouts.  The company publishes Time, Sports Illustrated and Fortune, among others.

--Fox News is shelving two mottos, “Fair and Balanced” and “We Report, You Decide.”

“Fair and Balanced” has long been the rallying cry for Fox News fans.

In a statement the network said, “The shift has nothing to do with programming or editorial decisions.”  Instead it was dropped because of its close association with founder Roger Ailes, fired last August.

The new motto / marketing tool is “Most Watched, Most Trusted.”

--Megyn Kelly’s career at NBC is already in jeopardy.  There have been crisis meetings at the network over the start to her Sunday program, which has garnered surprisingly poor ratings the first two weeks, and then this week Kelly chose to feature an interview with conspiracy theorist Alex Jones, the king of fake news.

Jones, the host of “InfoWars” and peddler of the notion that the Sandy Hook massacre was a hoax, said Monday he wants NBC News to pull his pre-taped interview with Kelly – a “rigged” report full of “fake news,” he said.

“They’re scared of what we’re covering,” Jones wrote on his rant-filled website, claiming the NBC piece was edited to misrepresent him.  “They’re scared of what we’re doing.”

But if you think he was outraged, imagine the reaction of Sandy Hook families, who blasted Kelly for featuring Jones on her NBC platform – timed to run on Father’s Day, no less.

Kelly refused to back down, saying it was her job to “shine a light” on newsmakers.

But the New York Post reported that insiders told the paper that staff “were in panicked meetings all day on Monday.  ‘It’s a s--- show.  No one wants to withstand a whole week of criticism over this. There are a number of people who want to pull the interview.’”

Others at NBC are saying the network needs the controversy to shake up their Sunday night and bring in new viewers.

Kelly addressed the backlash on Tuesday. “I find Alex Jones’ suggestion that Sandy Hook was ‘a hoax’ as personally revolting as every other rational person does.  It left me, and many other Americans, asking the very question that prompted this interview: How does Jones, who traffics in these outrageous conspiracy theories, have the respect of the president of the United States and a growing audience of millions?”

Well, the above was all prior to Thursday, when we learned Kelly was overhauling the Jones feature, inviting Sandy Hook families on the program and editing her interview with Jones to be tougher on him.

The New York Post’s Emily Smith reported that Kelly called the Sandy Hook families, as producers scrambled to find a way out without canceling the episode.

Jones is now fuming, explaining he spent 13 hours with Kelly, but now believing producers will pick the parts that make him look bad, to prove to Kelly’s critics that she is a serious journalist.

Late Friday, the NBC affiliate in Connecticut said it would not air Kelly’s show.

--Tom Cruise’s “The Mummy” opened last weekend and it was swamped by “Wonder Woman,” taking in just $32.2 million in the U.S. and Canada, while “Wonder Woman” did $57.2 million in its second weekend after a surprising $100m+ opening.  It’s now grossed over $200m domestically and $230m overseas.

But “The Mummy” did open to a strong $52.2 million in China and $17.8m in South Korea, both records for Cruise flicks.

Personally, not having been to a movie since “Mutiny on the Bounty,” 1962 version, the mummy character doesn’t cause me sleepless nights.  I have nightmares over Godzilla and Mothra.

Foreign Affairs

Iraq/Syria: I have to admit I have seen a ton of stories over the past year on the supposed death of Islamic State leader Abu Bakr al-Baghdadi and I have refused to relay them because the facts were virtually non-existent.  So often in the past, our own military has declared certain terror leaders have died in an airstrike, only for the figure to re-emerge six months later.  Often it’s a matter of trying to identify bodies that are in pieces.

But on Friday, Russia’s Defense Ministry said it was checking information relating to a May 28 Russian airstrike near ISIS’ de facto capital of Raqqa that targeted a meeting of ISIS leaders.

“According to the information which is now being checked via various channels, Islamic State leader Abu Bakr al-Baghdadi, who was eliminated by the air strike, was also present at the meeting,” RIA news agency quoted the ministry as saying.  I have my doubts on this one as well.

Meanwhile, in the battle for Raqqa, ISIS militants have become increasingly desperate in the face of heavy air strikes.  Many of the fighters are reportedly trying to pass themselves off as civilians to escape detection and killing anyone who tries to flee, witnesses have said. The United Nations has reported that the air campaign killed at least 300 civilians in the city.

In Iraq, Iraqi forces repelled a major counter-attack by ISIS fighters Wednesday in a district of the Old City of Mosul, their last remaining enclave.

According to Reuters, dozens of ISIS fighters were killed, many of whom were wearing suicide vests.  Throughout the months-long battle there has been little on Iraqi casualties.

Separately, hundreds, as many as 750, were sickened by food poisoning at a refugee camp for those fleeing Mosul, with at least one death reported.

The food was prepared in a restaurant in Irbil and brought to the camp by a Qatari charity.

The camp is one of 13 built by the UN to receive the people fleeing Mosul.

Israel: Hamas warned of an “explosion” in the Gaza Strip after Israel’s security cabinet decided last weekend to cut the amount of electricity the country provides to Gaza by 40%.

The 2 million people in the Hamas-controlled Strip will now have only two to three hours of power a day, down from four they have been living on recently.

The drop is actually part of the Palestinian Authority’s push to pressure Hamas to rescind its control of Gaza, which Hamas has ruled since a bloody coup in 2007.  The PA made a request of Israel and it complied.

Israeli Defense Minister Avigdor Liberman blamed Hamas for the crisis, saying it had spent tax money on the tunnels, rather than developing the Strip.  He is obviously right.

Gaza residents should also now realize that Israel has no connection to the current crisis, Liberman said.

But there are opposing voices in Israel. Yesh Atid party head Yair Lapid spoke against the Cabinet decision.

“I don’t think anyone is worried that Gaza will turn into a Garden of Eden if it has running water and more than six hours of electricity a day,” Lapid said.  There should be a way to target Hamas without harming civilians, he added.  [Jerusalem Post]

Afghanistan: The Pentagon is going to be sending 4,000 additional troops to the country, a move that could be announced as early as next week.

This follows President Trump giving Defense Secretary Jim Mattis authority to set troop levels, with top commanders in the field saying the U.S. doesn’t have enough forces, currently at 8,400, to help Afghanistan’s army against a resurgent Taliban insurgency.

Earlier in the week, three U.S. soldiers were killed during an attack in eastern Afghanistan. An Afghan soldier opened fire on them. The attacker was killed by other soldiers at the scene.  The Taliban immediately claimed responsibility.

Turkey: Several thousand protesters marched in the capital Ankara on Thursday to demonstrate against the 25-year prison sentence handed down to an opposition lawmaker on spying charges.

Enis Berberoglu, of the main opposition Republican People’s Party (CHP) was sentenced Wednesday on charges of giving an opposition newspaper a video purporting to show Turkey’s intelligence agency transporting weapons into Syria.

The leader of the CHP, 68-year-old Kemal Kilicdaroglu, has vowed to march 265 miles from Ankara to the Istanbul jail where Berberoglu is being detained, calling the court decision lawless and politically motivated.

This is interesting.  President Erdogan no doubt thought he had crushed most of the opposition through his actions after last year’s failed coup, including jailing more than 50,000, while sacking or suspending 150,000 from their jobs.

According to the Turkish journalists union, Turkey has imprisoned 160 of them, and it shut down 130 media outlets immediately after the coup.

Saudi Arabia: The following is despicable.

Editorial / New York Post

“It wasn’t so much unsportsmanlike conduct as sheer barbarism: On Wednesday, the Saudi Arabian men’s national soccer team refused to observe a moment of silence for the victims of the London Bridge terrorists.

“Hosting the World Cup qualifying match was Australia, which lost two nationals in the attack.  In their honor, the Socceroos wrapped their arms around each other and stood together in a line...while the Saudis kept warming up, earning well-deserved boos from the Adelaide Oval crowd.

“A spokesperson for Football Federation Australia says the Saudi team was told of the coming one-minute silence but refused, citing cultural differences.

“Sorry: Respecting your host’s needs, particularly in time of sorrow, is universal to human culture.

“And stomping on the sensitivities of the victims of Islamist terror is especially grotesque for the national team of a country that funds so much extremism.

“Plus, another Saudi club, Al-Ahli, observed a moment of silence last December for Brazilian players killed in a plane crash.

“The Saudi Football Federation’s president issued an apology: The ‘players did not intend disrespect to the memories of the victims nor to cause upset.’ Right.

“Anyway, justice was served: Australia beat the Saudis 3-2.”

As to the Trump administration’s new policy toward Saudi Arabia and support for the kingdom in its diplomatic battle with Qatar, Daniel Benjamin and Steven Simon, in an op-ed for the Wall Street Journal:

“Mr. Trump’s uncritical embrace of the Saudis will worsen another major problem. The U.S. is already too closely tied to the Saudi quagmire in Yemen, an unsuccessful intervention in a civil war that has caused widespread suffering and chaos. The Saudi escalation helped to create conditions in which al Qaeda’s Yemeni affiliate, probably the most capable of all al Qaeda branches, has grown dramatically.

“The Saudis have made a Vietnam-like blunder, seeing Yemen’s Houthi rebels as stalking horses for Iran rather than acknowledging that internal political jockeying has been the main driver of the Yemeni conflict.  Iran has supplied the Houthis with some arms, but mostly to tie down Saudi forces; the U.S. has given the Saudis weapons and intelligence.  Instead of plunging further in, we should be persuading the Saudis to cut their losses....

“The Iranians are the source of many evils in the Middle East but hardly all of them. There are few governments in the region for the U.S. to admire or support uncritically – and that definitely includes the Saudis, despite the assiduous courting of Mr. Trump by the young Saudi deputy crown prince, Mohammed bin Salman.

“As the clash with our longtime partner Qatar shows, things in the Middle East can fall apart fast.  That hardly means that the U.S. should be evenhanded between Iran and Saudi Arabia: We have a 70-year partnership with the Saudis and will continue to need their oil, intelligence cooperation and financial investments. But Mr. Trump should insist on a policy that puts American interests first.”

Russia: Hundreds were arrested across Russia Monday in nationwide “anti-corruption” demonstrations organized by opposition leader Alexei Navalny.  The protests coincided with “Russia Day,” a national holiday.

Several thousand attended in Moscow, despite the fact it wasn’t a sanctioned demonstration.

Navalny, an unofficial candidate for president, was detained as he left his home to go to the rally.

Navalny told his supporters the day before on his YouTube channel, “We have our constitutional right to gather peacefully with political demands.”

The vast majority of the demonstrators were young people, Navalny’s prime base.

It’s not known if Moscow will allow Navalny to run against Putin next year.

The U.S. Senate voted 97-2 to approve measures that toughen existing sanctions on Moscow, targeting companies that support Russian “energy export pipelines.”

The legislation was an amendment to a bill that approved new sanctions targeting Iran’s ballistic missile development and support for terrorism.  [This passed 98-2.]

Sen. John McCain (R-Ariz.) said: “The United States needs to send a strong message to Vladimir Putin and any other aggressor that we will not tolerate attacks on our democracy. There’s no greater threat to our freedoms than attacks on our ability to choose our own leaders free from foreign interference.”

The White House issued a statement in response saying existing sanctions against Russia are already effective.

Germany and Austria, for starters, are upset at the U.S. actions because it upsets the prior consensus on Russian sanctions orchestrated by Chancellor Merkel that had excluded the export pipelines because they involved key German interests.

In a statement issued by Sigmar Gabriel, German foreign minister, and Austrian Chancellor Christian Kern, the two said: “Europe’s energy supply is a matter for Europe, not the United States of America.”

The Russia sanctions outline opposition to Nord Stream 2, a pipeline that would double capacity for Gazprom, the Kremlin-controlled gas monopoly, to supply gas to Europe under the Baltic Sea.  But the likes of Shell and OMV, European energy companies, are financing the pipeline.

For his part, President Putin criticized the sanctions approved by the Senate, saying, “It is, of course, evidence of the continuing domestic political battle in the States,” he said during his annual marathon radio call-in show.

Putin compared ex-FBI director Comey with Edward Snowden.

“If [Mr. Comey] faces any persecution because (of leaking details of his meetings with the president to the media), we are ready to offer him, as well, political asylum in Russia,” Vlad the Impaler said.

Meanwhile, among the other things that President Putin talked about in his annual, marathon radio call-in show:

--He sees opposition street protests as a healthy part of democracy, but said they should not be used as a provocation.  “They (the opposition) should stop exploiting and propose solutions.  Those people who propose solutions are the ones who deserve attention and should have the right to conduct a dialogue with the authorities. We will act in that way,” said Putin.

--Putin said regarding relations with the United States: “I know the mood of our people, we don’t see America as our enemy.  Moreover, twice in history, when especially hard times fell on us, we joined our efforts and we were allies in two world wars.”

Opinion....

Editorial / Wall Street Journal

“Whatever you think about Donald Trump’s relationship with Russia, the controversy has achieved one positive result. On Wednesday, the Senate voted 97-2 to strengthen sanctions on Vladimir Putin’s regime, a rare moment of bipartisan agreement these days.

“The amendment to an Iran sanctions bill would require congressional approval before President Trump lifts current sanctions on Russian entities.  It broadens the field of potential sanctions targets to include those involved in human-rights abuses or doing business with Russian intelligence and defense industries, among others.  It also expands the range of Russian industries that could be subject to sanctions.

“The Administration objected to the proposal, but what did Mr. Trump expect?  Ordinarily we’d agree with Secretary of State Rex Tillerson, who warned a House committee this week not to limit the President’s ‘flexibility to adjust sanctions to meet the needs of what is always an evolving diplomatic situation.’ The Constitution intends for the executive to have broad discretion on foreign policy.

“But it’s hard to fault Congress for being skeptical. Though there’s no evidence of campaign ‘collusion’ with Russia, Mr. Trump has been oddly solicitous of Mr. Putin. Congress is sending a useful message that Mr. Trump has little running room to negotiate unless the Russian changes his behavior.

“Mr. Putin is giving American leaders plenty of reasons to act. Russians have spread misinformation and used computer hacks to disrupt elections in France, Germany and the U.S. Russia still occupies Ukrainian territory in Crimea; frequently violates the Minsk cease-fire agreements the Obama Administration helped negotiate for eastern Ukraine, and is propping up Bashar Assad in Syria.

“U.S. sanctions are also a message of support for the thousands of Russians protesting against corruption this week in the streets of major cities. The protests were inspired by opposition leader Alexei Navalny, who was sentenced this week to 30 days in jail for organizing a rally in Moscow.  In a sign of how worried the Kremlin is, up to 1,700 protesters may have been arrested and courts are sentencing some to weeks in prison....

“The (best choice for President Trump) would be to sign the bill, enforce the sanctions vigorously, and work with Congress to forge a bipartisan approach to Russia. That would help the President rebut fears that he can’t be trusted on Russia, while telling Mr. Putin that rogue behavior won’t be rewarded.”

Lastly, the Baltic states are already expressing concern for war games this autumn that Russia holds jointly with Belarus every four years, a massive exercise expected this time to involve more than 100,000 troops around the borders of Lithuania, Latvia and Estonia.  This year’s is to be called Zapad, or “West” 2017.

This will be the first such exercise since Russia annexed Crimea in 2014.

With more units in the area, you have the increasing chance for an accident or deliberate provocation.

But it seems some Baltic officials are most concerned that Russia may leave troops in Belarus after the exercise.  Regardless, Defense Secretary Mattis said such a large buildup is “simply destabilizing” while visiting Lithuania last month.

North Korea: U.S. Secretary of State Tillerson signaled on Wednesday that China’s cooperation on pressing North Korea over its nuclear program was “uneven.”

U.S. student Otto Warmbier was freed from jail in North Korea, as we were told the 22-year-old student from the University of Virginia was heading home.  But when he arrived, we learned he had been in a coma since shortly after his trial in March 2016.  His parents said they learned of his medical condition only a week ago.

North Korea said the boy had fallen into a coma after contracting botulism and being given a sleeping pill.  Doctors at Cincinnati Medical Center said there were no signs of botulism.

Warmbier was arrested for trying to steal a poster with a propaganda slogan from his hotel in Pyongyang and sentenced to 15 years of hard labor.

Thursday, his father said his son was ”brutalized and terrorized” while in custody and doctors described his condition as basically being in a vegetative state.

Fred Warmbier said: “There is no excuse for any civilized nation to have kept his condition secret, and denied him top-notch medical care for so long.”

Warmbier also blamed the Obama administration for its inaction.

China: The head of giant Anbang Insurance Group, buyers of the Waldorf Astoria hotel in New York three years ago, Wu Xiaohui, was detained by police as part of China’s ongoing crackdown on corruption.

Mr. Wu has not been publicly accused of any wrongdoing and Anbang said on its website that he was temporarily unable to fulfill his duties as chairman for “personal reasons.”

Sometimes China detains such figures for a few days then releases them.

Anbang has been notably aggressive in its corporate moves and has drawn tens of billions of dollars from Chinese investors, making it vulnerable at a time when Beijing is looking to limit potential financial explosions.  It has also been aggressive on the political front, courting the likes of Jared Kushner.

Anbang is supposed to be an insurance company but it has veered into other areas and some in Beijing are clearly concerned.  Just who is backing the group is also unclear, Mr. Wu said to live modestly.  Anbang has been unable to explain just how it finances some of its large foreign deals without converting renminbi into foreign currencies.

On a different issue, environmental inspectors in China have found that nearly 70% of the businesses they examined failed to meet environmental standards for controlling air pollution, as reported by Xinhua, the state news agency.

China’s leadership has vowed to crack down on polluters, but the factories continue to operate in a reckless and hazardous way, contaminating the air, water and soil.

The worst offenders are the coal-burning steel factories in Hebei, the province surrounding Beijing.

Lastly, Taiwan was upset that Panama’s government said it had broken diplomatic ties with Taiwan as it established formal relations with China.  In a statement, the Panamanian government said it recognized there was “only one China in the world” and that Taiwan formed an inalienable part of Chinese territory.  “The Panamanian government is today breaking its ‘diplomatic ties’ with Taiwan, and pledges to end all relations or official contact with Taiwan,” the statement read.

Only 20 countries maintain diplomatic ties with Taiwan instead of Beijing, as China has intensified its economic investment in Panama – home of the critical Panama Canal, of course.

But Taiwan said the following day that it would need to rethink its relations with the mainland in the wake of the Panama decision.

“The move by the Beijing authorities is not only wrong but also affects the current situation, turning the peaceful development of cross-strait relations into confrontation.  For this, the government will reappraise the situation of the ties across the Taiwan Strait,” said Joseph Wu, secretary general of the presidential office.

The decision by Panama ended 105 years of formal relations between it and the Republic of China, the official name Taiwan uses for itself.

Taiwan’s foreign minister, David Lee, hit out at Beijing’s “checkbook diplomacy” in its attempts to woo away Taiwan’s allies.

Philippines: 13 marines were killed in fierce fighting with Muslim militants who have laid siege to southern Marawi city for nearly a month in the biggest single-day loss for government forces, the military reported last weekend.

The government earlier said that the unrest in Marawi had left 20 civilians, 134 militants and 39 government troops dead.  Hundreds of thousands have been displaced, parts of the city having been reduced to rubble by government airstrikes.

Philippine President Rodrigo Duterte has declared martial law in the Mindanao region, the southern third of the Philippines and home to a decades-long Muslim separatist rebellion.

U.S. special forces have been helping the Philippine army quell the siege by Islamic State-linked groups, but the U.S. aid is mostly in the form of surveillance.  Supposedly, no boots on the ground, as a Philippine military spokesman confirmed.

Cuba: President Trump announced some moves on Friday to re-institute restrictions on travel to Cuba and U.S. business dealings with entities tied to the Cuban military and intelligence services.  Trump said in a speech in Miami that he signed a presidential directive to roll back parts of Obama’s historic opening to the Communist-ruled country, calling Obama’s initiative “terrible and misguided.”

But the changes are really minimal, though symbolic, and do not broadly affect the re-establishment of basic diplomatic relations with Cuba, including renewed embassies in the respective country’s capitals.

An administration statement reads: “The new policy centers on the belief that the oppressed Cuban people – rather than the oppressive Castro regime’s military and its subsidiaries – should benefit from American engagement with the island.”

Republican Sen. Marco Rubio (Fla.) worked with the administration on the changes and he wrote on Twitter: “Economic practices that benefit the Cuban military at the expense of the Cuban people will soon be coming to an end.”

Friday night, the Cuban government denounced Trump’s new measures as a “setback” in U.S.-Cuban relations and said they would not weaken the revolution.

Random Musings

--Presidential approval polls. Rasmussen: Trump 50% approval. Gallup: 38%.

--A U.S. Navy destroyer collided with a Philippine merchant vessel off the coast of Japan early Saturday, with the commander having to be evacuated due to injury, while 7 sailors are missing. The damage to the destroyer appeared heavy, just in looking at the first limited pictures.  How this happened is not known as yet, but it was 2:30 a.m. local time.

--President Trump’s selection of Christopher Wray to be the new FBI director seems like a solid choice and the fact he recently defended Chris Christie in the Bridgegate scandal should be irrelevant.

--Recently Sen. John McCain was blasted for his performance at the Senate Intelligence Committee’s hearing with fired FBI director Jim Comey, but as the Washington Post’s Paul Kane pointed out, McCain has logged in more than 75,000 miles to more than 15 countries this year and had just come back from a long trip to the Asia Pacific and, yes, this can have an impact.

Around the Memorial Day holiday, for example, during Congress’ break, McCain went to Australia, Vietnam and Singapore, speaking to our allies and addressing various security conferences.

And, yes, he has been highly critical of President Trump’s behavior toward our longstanding allies.

Republican Sen. John Barrasso (Wy.), a frequent travel companion, said world leaders “want to hear what he has to say.  He is a reassuring figure around the world.”

McCain has become a revered figure in Vietnam after being held captive there for 5 ½ years.

“As a face of Congress around the world, he would be the prime minister of Congress,” Barrasso said.

But hopefully the 80-year-old senator has been getting some quality sleep.

--Boy, that was a weird scene at Monday’s Cabinet meeting – the first President Trump had held with everyone on board, with everyone saying how great it was to be serving The Donald

“It’s an honor to be able to serve you,” said Attorney General Sessions.

“I am privileged to be here,” said Labor Secretary Alexander Acosta.  “Deeply honored.”

“What an incredible honor it is to lead the Department of Health and Human Services at this pivotal time under your leadership,” said Tom Price.  “I can’t thank you enough for the privileges you’ve given me and the leadership that you’ve shown.”

Eegads.  I thought Minority Leader Schumer’s parody video in response was pretty humorous.  Schumer tweeted in launching the clip, “GREAT meeting today with the best staff in the history of the world!!!”

If you didn’t think that was clever (and you’ve seen it), you really need to lighten up.

--Lt. Gov. Ralph Northam won the Democratic nomination for governor of Virginia Tuesday in a wider than expected margin, but Republican Ed Gillespie, a favorite of mine who I noted had supposedly been running a terrific campaign, won by only two points over Corey A. Stewart, a Donald Trump acolyte, for that party’s nomination.

Stewart afterwards refused to concede and said he wouldn’t support Gillespie, who he derided as “Establishment Ed.”

“There is one word you will never hear from me, and that’s unity,” Stewart told supporters after.  “We’ve been backing down too long.  We’ve been backing down too long in defense of our culture, and our heritage and our country.”

Let me just go off track for a second and say one thing.  Note to Stewart and his supporters, and those of Establishment Ed and Ralph Northam.

Until any of you decide to tackle entitlements, you’re all full of merde.

Virginia and New Jersey are the only gubernatorial races in ’17 and as you’ll see below, New Jersey’s isn’t a race in the least, but Virginia should be quite telling in terms of the 2018 mid-terms.

--So in the Garden State, Democrat Phil Murphy is far ahead of Republican rival Kim Guadagno in the race to replace outgoing Gov. Christie, according to a Quinnipiac University survey released Wednesday.

I told you after the primaries in my state, June 6, that Murphy would kick Guadagno’s butt and this poll has it at 55-26!  Yup, that’s a spanking. Granted, most New Jersey voters really don’t know who either is yet.

Guadagno has been Christie’s lieutenant governor for nearly either years, an association 54% of the poll’s respondents viewed negatively.

Meanwhile, Christie’s approval rating dropped to the lowest level of any U.S. governor surveyed in more than 20 years by Quinnipiac.  Only 15% of voters in my state approve of his job performance.  Heck 58% of Republicans disapprove. 

--In a new NBC 4 New York/Marist Poll, New York Gov. Andrew Cuomo has strong support for his re-election bid in 2018, crushing potential Republican candidates such as Donald Trump Jr. by more than 30 points.  The governor’s overall approval rating, 43%, is the highest in two years.

But, at the same time, 51% do not want him to run for president, which is kind of interesting.  44% also believe Sen. Kirsten Gillibrand should not pursue a presidential bid, and 67% do not want Hillary Clinton to run again.

Sen. Chuck Schumer’s approval rating has dropped from 53% to 47%, since he became minority leader; his lowest rating since 2010.

--As of Tuesday, there had already been 160 homicides in Baltimore this year, a record level.  Six were killed in four separate incidents late Monday night / early Tuesday.

Police Commissioner Kevin Dunne announced a weeklong deployment initiative to put more officers on the street, with all patrol officers and detectives required to work 12-hour shifts.

Davis called the latest spate of violence “unconscionable,” and said he joined community members in being “pissed off” about it.  [Kevin Rector / Baltimore Sun]

--I haven’t seen the new head of the Archdiocese of Newark, Cardinal Joseph W. Tobin, but he evidently is shaking things up.  Recently, he hosted 100 gay and lesbian Catholics and their families at the Cathedral Basilica of the Sacred Heart in Newark, telling the group arrayed before him, “I am Joseph, your brother. I am your brother, as a disciple of Jesus.  I am your brother, as a sinner who finds mercy with the Lord.”

In an interview with the New York Times before the Mass last month, he said, “These are people that have not felt welcome in other places.  My prayer for them is that they do. Today in the Catholic Church, we read a passage that says you have to be able to give a reason for your hope.  And I’m praying that this pilgrimage for them, and really for the whole church, is a reason for hope.”

It was four years ago that Pope Francis signaled the changes that have shaken the Catholic world with his comment about gay priests seeking the Lord: “Who am I to judge?”

But it remains very complicated as Vatican instructions renewed last year said there are not to be gay priests and Catholic bishops in America have strongly opposed same-sex marriage.

Men like Cardinal Tobin, though, are examples of the impact of Pope Francis.

As a Catholic, I couldn’t help but put the preceding out there. 

I will just add Cardinal Tobin’s further comments in the interview on his controversial move, saying to combine his welcome with a criticism would not have been a full welcome at all.

“That sounds a little backhanded to me,” he said. “It was appropriate to welcome people to come and pray and call them who they were. And later on, we can talk.”

Tobin admitted that after the Mass “he had received a fair amount of visceral hate mail from fellow Catholics.  Someone was even organizing a letter-writing campaign to call on other bishops to correct him.

“ ‘And there’s a lot to correct in me, without a doubt,” Cardinal Tobin said.  ‘But not for welcoming people.  No.’”

--Finally, Mark R. just attended Rotary International’s Convention in Atlanta and he wanted me to praise Bill Gates, specifically as an example for those who say the top 1% doesn’t pay their fair share.  Gates spoke at the Convention and committed to matching the Rotary’s $50 million for each of the next three years on a two for one basis, making his pledge equal to $300 million...this on top of the over $500 million he has given in the last five years, Rotary’s primary project being the ending of Polio throughout the world...which is in sight.

Yes, as Ronald Reagan would have said, ‘Not bad, not bad at all.’

---

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

---

Gold $1255
Oil $44.68...down a fourth straight week

Returns for the week 6/12-6/16

Dow Jones  +0.5%  [21384]
S&P 500  +0.1%  [2433]
S&P MidCap  -0.2%
Russell 2000  -1.1%
Nasdaq  -0.9%  [6151]

Returns for the period 1/1/17-6/16/17

Dow Jones  +8.2%
S&P 500  +8.7%
S&P MidCap  +5.6%
Russell 2000  +3.7%
Nasdaq  +14.3%

Bulls 50.0
Bears 18.6 [Source: Investors Intelligence]

Have a great week.

Happy Father’s Day!

Brian Trumbore



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Week in Review

06/17/2017

For the week 6/12-6/16

[Posted 11:59 PM ET, Friday]

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 949

Gun Shots and Turmoil in Washington

While I grew up in Summit, N.J., and have been back here the last 7 years or so, I really identify more with neighboring New Providence, where I lived for 16 years and where I have most of my connections.    

So Wednesday was Flag Day and the New Providence American Legion each year has a moving ceremony to commemorate the occasion, including the burning of retired flags, with the local Boy Scouts participating. I don’t go every year but I made a note to go this time, especially because a friend is back as mayor, after being forced to sit a term, having served two consecutively before then.

But Wednesday morning we were all jarred by the story out of Alexandria, Va., and the shooting of Congressman Steve Scalise, and others, and somehow the Flag Day ceremony that evening took on a lot more meaning.

As the Commander of the local American Legion chapter left out the politics of the moment (as did the mayor in his speech), you couldn’t help but notice the massive pile of flags to be retired and honored...far more than any other year anyone remembers, and they’ve been doing this now 20 years.

The Commander said he was encouraged.  Clearly more people are displaying their flags these days and I do note it myself driving around.  That’s healthy, in these otherwise unhealthy times.

But I was shocked looking back how in all the commentary and news accounts I saw that day that no one mentioned the irony of the actual day we were commemorating.  Geezuz, you’d think someone along the way would have at least looked at their Day Planner.

Oh, I forgot.  Most folks just keep their calendar on their phone.  I imagine most of those didn’t cite the occasion.

You could say yet another example of how increasingly disconnected we have become, even while we think we are more connected.

John Podhoretz has some thoughts below I totally concur with.  Forget the sentiments of coming together in Washington.  That’s already fraying.  We’ll be right back to viciously attacking each other.  I see it in my emails more than ever each day.

Remember, I watch and read all sides to give you as balanced a review as I can, while not forgetting that I do have my own biases.

But I loathe social media.  Really.  I participate for business reasons, largely, and from time to time I enjoy seeing the postings of an old friend on Facebook.  Otherwise, I could easily do without it.  [I’m also finding myself going onto Facebook less and less.]

For now, we’re still America...the greatest nation on Earth.  But there’s more reason than just North Korea to sleep with one eye open these days.  Our nation is increasingly volatile, spewing hate at each other like a cobra.  It’s not good, but it’s only going to get worse and heaven help us if we have a true crisis dropped on our heads. 

---

The man who shot Congressman Scalise and the others was James Hodgkinson, 66, who died from wounds sustained in the shootout with the heroic Capitol Hill police.

Social media activity and letters to the editor showed a man who blamed Republicans for all the country’s ills going back to the Great Depression.

He was a member of a Facebook group “Terminate the Republican Party.”  In a letter published in the Belleville (Ill.) News-Democrat in the summer of 2012, he wrote: “I have never said ‘life sucks,’ only the policies of the Republicans.”

Thank God Congressman Scalise, because of his senior position, was entitled to a security detail and they were at the ballfield, or else as all are in agreement, it would have been a massacre.  And I’m thankful the man was gunned down.  None of us need to see that face ever again. 

[I was sickened by an interview with one of the guy’s friends, who looked just like him.  “I want everyone to know he wasn’t evil.”  And, “He doesn’t stand down.”  What do you mean? asked the reporter.  “He’s been in a few bar fights.”  I wanted to reach through the television set and, you know....]

President Trump:

“Everyone on that field is a public servant.  We may have our differences, but we do well in times like these to remember everyone who serves in our nation’s capital because they all love our country.

“We can all agree that we are blessed to be Americans. We are strongest when we are unified and when we work for the common good....

“Congressman Scalise is a friend...He’s a patriot, and he’s a fighter.  He will recover from this assault, and Steve, I want you to know, you have the prayers, not only of the entire city behind you, but of the entire nation.”

House Speaker Paul Ryan:

“We are all horrified by this dreadful attack on our friends and on our colleagues and those who serve and protect this capital.  We are all praying for those who were attacked and for their families.  And we are united.  We are united in our shock, we are united in our anguish. An attack on one of us is an attack on all of us.”

The Congressional baseball game was played Thursday, a tradition dating back to 1909, celebrated as a thriving bastion of bipartisanship, especially in these hyper-partisan times.

But within hours you had Iowa Republican Rep. Steve King saying he would “put some of this at the feet of Barack Obama,” and former House Speaker Newt Gingrich blaming “an increasing intensity of hostility on the left,” and House Democratic leader Nancy Pelosi: “I don’t even want to go into the President of the United States.  But in terms of some of the language that he has used.”

---

On the Sunday news shows you had some of the following:

Sen. Lindsey Graham (R-S.C.) said Trump could be the first commander in chief “to go down” over ongoing chaos in his administration, including his Twitter habit.

“You may be the first president in history to go down because you can’t stop inappropriately talking about an investigation that if you just were quiet, would clear you,” Graham said on CBS’ “Face the Nation.”

Graham added that while Trump’s conversations with former FBI Director Comey were inappropriate, they do not constitute obstruction of justice.

Sen. Mike Lee (R-Utah) said on ABC’s “This Week” that he doesn’t believe Comey would lie under oath.

“Nonetheless, I’m not wild about the fact that he had these memos leaked, leaked specifically with the intent of prompting the appointment of a special counsel.”

Former U.S. Attorney Preet Bharara said he thinks there is evidence to start an obstruction of justice case against Trump.

“I think there’s absolutely evidence to begin a case – I think it’s very important for all sorts of armchair speculators in the law to be clear that no one knows right now whether there is a provable case of obstruction,” he said on “This Week.”

But of course Bharara was fired by Trump, so draw your own conclusions.

A new Huffington Post/YouGov poll found 46% of Americans polled say Comey is more honest and trustworthy than the president.  26% found Trump more trustworthy.

Attorney General Jeff Sessions,  appearing before the Senate Intelligence Committee, denied having undisclosed meetings with Russian officials at a Washington, D.C. hotel and refused to answer questions about his private conversations with the president.

He vowed to defend his honor “against scurrilous and false allegations.”

The tone of Sessions’ appearance was sharply partisan.

So the White House remained under siege amid reports President Trump was under scrutiny by special counsel Robert Mueller over whether he did obstruct justice, ditto adviser Jared Kushner, while Vice President Pence acknowledged he had hired a private lawyer to handle any fallout from the investigations.

Specifically, according to multiple reports/leaks, Mueller is expanding his probe into whether the president fired ex-FBI director Jim Comey as part of a broader effort to alter the FBI’s investigation into alleged Russian meddling in the 2016 election and whether Trump associates colluded with Moscow.

Trump issued a series of tweets, noted below, after just a day earlier calling for more civility, letting loose on his favorite target again, as well, Hillary Clinton, wondering why he was under scrutiny while his “crooked” Democratic opponent escaped prosecution.

The White House staff, namely the press secretary and deputy press secretary, are now referring any questions on the investigations to Trump’s personal lawyer.

For his part, President Trump on Friday conceded he was “being investigated” for firing “by the man who told me to fire the FBI Director.”

It’s pretty clear the president was referring to Deputy Attorney General Rod Rosenstein. 

Also this week, Director of National Intelligence Daniel Coats spent more than three hours in a closed session with the Senate Intelligence Committee, days after he refused to answer their questions in an open session about his conversations with Trump regarding the Russia investigation.

Coats is a big key to this whole thing, owing to his longstanding relationships with some senators given his past service in the chamber.

Opinion....

Editorial / New York Post

“President Trump was predictably quick to lash out after reports that Special Counsel Robert Mueller has expanded his election-meddling probe to include possible obstruction of justice by the president.

“ ‘You are witnessing the single greatest WITCH HUNT in American political history – led by some very bad and conflicted people!’ Trump tweeted early Thursday.

“We understand his frustration, but such overheated reactions aren’t helping him, not politically and certainly not legally.

“Some see the leaks about the widening investigation – and Mueller’s plans to interview top intelligence officials whom Trump allegedly asked to press the FBI to back off its probe of ex-National Security Adviser Mike Flynn – as intended as a response to reports that Trump was thinking of firing the special counsel.

“That’s just one of the dangers of meddling with a process that should be firmly grounded in the law – but which is increasingly turning on partisan politics.

“And which threatens to move far away from its original focus: alleged collusion between the Trump campaign and Russia, for which no real evidence has been offered.

“The sad fact is, nearly all the political holes the president now finds himself in are ones he dug himself, via tweets and other impromptu public statements.  Trump needs to resist being baited into over-reacting to every rough turn of the news cycle – and in ways that do nothing but feed the frenzy, to Democrats’ plain glee.

“That said, Mueller’s first priority should be getting a handle on any leaks (if they’re coming from his team) and stopping them....

“Politics has derailed and delegitimized too many special-counsel probes. The nation needs Mueller to resolve this matter quickly – and fairly.”

John Podhoretz / New York Post

“The first five months of the year have certainly felt like a time of political disorder in the United States, a disorder that some have welcomed as the cost of changing the country’s direction and others have found enervating and frightening.

“It’s been bad, but not 1968-level bad.

“But then came Wednesday’s ghastly shooting spree at the congressional Republican baseball practice.

“This was a planned act of political slaughter to make what appears to be an ideological point – the first such major event since the assassin’s spree that began with JFK in 1963, reached an apogee in 1968, and came to an end with the nearly successful attempt on Ronald Reagan in 1981.

“Will this prove to have been a lone event?  Or is it the beginning of another long hot summer my (7-year-old) son will remember forever – the herald of a new kind of chaos with a signature frighteningly reminiscent of 1968?

“Even the fact that I can ask this question, and that I’d wager you are not immediately scoffing at it, suggests we may be at the precipice.

“We all know the kindling is there. The baseball-field shooter was a consumer of far-left anti-Republican media; it would only take one consumer of media on the other side to seek to equalize the suffering to ignite a national powder keg.

“I don’t want to invoke all the clichés of the past decade but you know them all – we’re a divided nation, we’re all living in our own bubbles, we don’t even accept the same facts and we hate each other.

“The problem is these clichés are largely true.”

As David French has written in National Review, Podhoretz writes, “we are not headed toward civil war but we appear to be heading for a divorce along red/blue, right/left lines, and that the grounds for divorce seem to be utter incompatibility....

“But divorces can turn destructive and emotionally violent as the parties seek to take vengeance on each other rather than find a pleasant but distant way to be apart....

“The United States is in a time of great danger. It is not my son’s happy boyhood memories that are at stake.  It is his future, and all of ours.”

David Satter / Wall Street Journal

“As U.S. politicians plunge into the hall of mirrors that is Russian intelligence, they are assuming that Russians think as they do – a perfect way to misunderstand Moscow’s real intentions.

“Portions of the ‘resistance’ to President Trump are convinced he colluded with Russia to win the 2016 election. But the known facts do not support a Russia-Trump plot to defeat Hillary Clinton. Russia’s actions are consistent instead with an attempt to turn Americans against each other and sow distrust between the president and the American intelligence services.

“For Russians, the difference between Mr. Trump and Mrs. Clinton simply was not that significant. Mr. Trump made naïve and uninformed remarks during the campaign. But Mrs. Clinton, as secretary of state, showed no grasp of Russian realities. She launched the ‘reset’ policy after the murders of Alexander Litvinenko, a former Russian intelligence agent who had been granted asylum in Britain, and Anna Politkovskaya, Russia’s leading investigative journalist.  In both cases, the regime of Vladimir Putin was directly implicated....

“(Russian) intelligence also acted to sabotage Mr. Trump.  The “Trump dossier,” full of unverified sexual and political allegations, was published in January by BuzzFeed, despite having all the hallmarks of Russian spy agency ‘creativity.’ The dossier was prepared by Christopher Steele, a former British intelligence officer.  It employed standard Russian techniques of disinformation and manipulation. The dossier depicts Mr. Putin as dedicated to ‘Nineteenth Century ‘Great Power’ politics,’ determined to prosecute ‘oligarchs’ and ‘motivated by fear and hatred of Hillary Clinton.’

“After the publication of the Trump dossier, Mr. Steele went into hiding, supposedly in fear for his life.  On March 15, however, Michael Morell, the former acting CIA director, told NBC that Mr. Steele had paid the Russian intelligence sources who provided the information and never met with them directly.  In other words, his sources were not only working for pay.  Furthermore, Mr. Steele had no way to judge the veracity of their claims.

“The payments are likely to have been high. So who provided the money? An April Vanity Fair article determined that the research that became the dossier was originally funded by a ‘Never Trump’ Republican.  After Mr. Trump sewed up the GOP nomination, however, ‘Democratic donors’ kept the effort alive.  Perhaps the time has come to expand the investigation into Russia’s meddling to include Mrs. Clinton’s campaign as well.

“Investigating the role of Russian disinformation in the 2016 election requires understanding the layers of deception in which Russian intelligence specialize. This won’t be possible if Mr. Trump and his adversaries are more determined to destroy each other than to face the Russian threat. Americans must understand that the Putin regime wants to paralyze the U.S., but would rather have Americans do it with their own hands.”

Wall Street

The Federal Reserve hiked its key funds rate a third time in six months on Wednesday, as the board points to low unemployment and rising consumer confidence. The benchmark rose a quarter-point to between 1 and 1.25 percent, the highest since September 2008.

In an accompanying statement, the Federal Open Market Committee said it expects the economy to “expand at a moderate pace,” and for inflation to pick up to about 2 percent by next year.

“The labor market has continued to strengthen,” the Fed adding that economic growth “has been rising moderately so far this year,” without mentioning the first quarter sucked.

Importantly, the Fed also said it expects to start selling off some of its Treasury and agency bond holdings this year, the first time since it started buying up debt to stabilize the economy following the 2008 financial crisis.

Starting this year, the Fed will start selling $6 billion in Treasury bonds, and $4 billion in agency bonds a month, with investors surprised at the specificity in the Fed’s statement.  This will gradually accelerate by $10 billion every three months, until it’s selling $50 billion a month altogether – assuming the economy performs as the Fed expects it to.

The Fed has a balance sheet of $4.5 trillion in assets and it’s expected to gradually sell it down to pre-crisis levels, when it had less than $1 trillion.

But the Fed’s pronouncements came as the recent data pointed to very low inflation, while retail sales fell to a six-month low. The Fed is talking of one more rate hike this year but some are beginning to have their doubts.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, was the only member of the FOMC to vote against the rate hike, Kashkari arguing that economic conditions are not strong enough to justify raising the benchmark rate.

And then on Friday, Dallas Fed President Robert Kaplan conceded the decision to raise rates was a tough one. Although in the end he supported it.

Bill Gross / Janus Henderson Investors

“(Asset) prices and their growth rates are ultimately dependent on the real economy and, the real economy’s growth rate is stunted by secular forces which monetary and even future fiscal policies seem unable to reverse.  In fact, as I have mentioned many times...monetary policy now a negative influence in terms of future economic growth. Zombie corporations are being kept alive as opposed to destroyed as with the Schumpeterian/Darwinian ‘survival of the fittest’ capitalism of the 20th century. Standard business models forming capitalism’s foundation, such as insurance companies, pension funds, and banking, are threatened by the low yields that have in turn, produced high asset prices. These sectors, in fact, have long-term maturities and durations of their liabilities, and their assets have not risen enough to cover prior guarantees, so we see Puerto Rico, Detroit, and perhaps Illinois in future years defaulting in one way or the other on their promises to constituents.  Faulty finance-based capitalism supported by the increasingly destructive monetary policy begins to erode, not support the real economy.

“My point in all of this is that making money with money is an inherently acceptable ingredient in historical capitalistic models, but ultimately it must then be channeled into the real economy to keep the cycle going. Capitalism’s arteries are now clogged or even blocked by secular forces which when combined with low-negative yielding ‘safe’ assets promises to stunt U.S. and global growth far below historical norms.”

Separately, in a shocking development, Amazon.com Inc. announced Friday morning it was buying Whole Foods Market Inc. for about $13.7 billion at a price of $42 a share, Whole Foods having closed at $33 the day before.

This is Amazon’s largest acquisition and gives it a network of more than 460 stores that could serve as beachheads for in-store pickup and its distribution network.

Supermarket stocks, and related retailers that sell groceries such as Wal-Mart and Target, cratered on the announcement.  As one asset manager, Phil Bak, told Reuters, “There is really no limit to how far (Amazon) can take Whole Foods. What Amazon has proven time and again is that they know how to connect the buying experience with what resonates with customers and with what customers will appreciate and want to continue to return to. Again, we see Amazon leading, and other supermarkets following.  How they plan to implement technology in the buying experience remains to be seen.”

Let your imagination run wild with this one.  I thought Jim Cramer of CNBC had some super points Friday morning on the announcement, including the idea that Amazon could start looking at Sears locations, or similar sites, to convert to warehouses and distribution centers.

Amazon is expected to use the Whole Foods stores to promote private-label products, and items such as Echo, while boosting Prime membership.

And if you wanted an example of the impact of the Amazon move internationally, you had that of U.K. food giant Tesco, the nation’s biggest retailer, which Friday before the Amazon announcement had reported its strongest quarterly sales growth in seven years, but the shares ended down 5% on the day as investors fretted over the implications of Amazon’s move into traditional retailing.

Tesco’s same-store sales in the U.K. rose 2.3% in the quarter, very solid.

Bottom line, Amazon is looking to dominate every part of a consumer’s shopping experience.

Europe and Asia

Just a little economic news for the eurozone....

Inflation in the EA19 was 1.4% annualized in May, down from 1.9% in April.  In May 2016 the rate was -0.1%.  [Eurostat]

European car sales bounced back in May after falling in April, amid a brightening political landscape in France and overall economic outlook.

Sales, or ‘registrations’ as they are called here, rose 7.7% to 1.43 million vehicles last month after declining 6.8% in April, according to the European Automobile Manufacturers’ Association. Demand was led by Fiat models and Mercedes-Benz vehicles like the revamped E-Class sedan.

German car sales jumped 13% in May, with sales in France up 8.9% and 8.2% in Italy.

But they fell 8.5% in the U.K., owing to Brexit uncertainty and a new vehicle-excise tax that took effect in April.

Auto sales are still expected to slow the balance of the year, rising 2.9% for 2017, compared with a 4.3% gain through the first five months, according to one analyst.

Eurobits....

In the French elections, President Emmanuel Macron’s year-old centrist party, La Republique en Marche (Republic on the Move) and its MoDem ally are now set to win up to 445 seats in the 577-seat National Assembly in Sunday’s second-round of parliamentary voting.

In last Sunday’s first round, Macron’s LREM and MoDem won 32.3% of the vote, to the center-right Republicans’ 21.5%, while the far-right National Front took 13.2%, followed by the far-left La France Insoumise (France Unbowed) at 11%.

The Socialists, previously the ruling party, and their allies won just 9.5%.  Zut alors!

Turnout was down sharply to 48.7%, compared with 57.2% in the first round in 2012, and it seems this was due in part to the feeling Macron was going to romp so why bother.

With a few exceptions where there could be a third candidate, the top two vote getters now square off Sunday.

Should Macron end up with well over 400 seats, it will be the biggest majority in the Assembly since 1993, offering the 39-year-old president the power to push through his reform agenda over the next five years and no one else will be to blame but him if it fails.

Macron’s big plan centers around simplifying France’s labor code and reaching agreement with the unions on reworking the country’s byzantine labor rules.

The president wants individual companies to negotiate wages rather than being bound by industry-wide agreements.

But the unions have historically wanted job protection, first and foremost.

As for Marine Le Pen’s National Front, the 13.2% vote for its candidates compares with 13.6% in 2012, hardly the stuff of growth.  The FN is now expected to end up with only 1 to 5 seats out of 577.

A big problem was the turnout.  Around 57% of those who voted for Le Pen in the presidential election stayed home for the primary battle, according to pollster Ipsos Opra-Steria. The abstention rate among Macron voters was 38%.

What a comedown from the high expectations of just this past January.  Marine Le Pen herself said, “This clearly marks a pause in a very, very strong progression.”  Her 33.9% in the presidential runoff also fell far short of the 40% she had been polling.

Le Pen knows she needs to rebrand the party, change the name...do a lot of things. She also needs to rethink her anti-euro stance, which clearly hurt her.  It’s just not a popular stance in France.

But the only figure who could challenge Marine for party leadership is her niece, Marion Marechal Le Pen, and she quit the party shortly after the presidential loss, saying she wanted to spend time with her family.  Marion, though, will be back.  Let’s just say she is rather photogenic, guys...and with this statement I need to quickly move on.....

In Britain, Prime Minister Theresa May has survived another week, telling her party that she was sorry for the mess she created with the prior week’s election and promising to clean it up.

Mrs. May told lawmakers from her Conservative Party that she takes full responsibility and will stay on only for as long as she’s wanted.  She also said she is willing to rethink her approach to Brexit.

May pledged to consult the party more over policy and said she will seek a national consensus on Brexit in an effort to heal the divisions over the best approach to leaving the European Union.

May said, “I’m the person who got us into this mess and I’m the one who will get us out of it,” she told lawmakers.

The prime minister, though, still needs to complete a deal with Ireland’s Democratic Unionists and their 10 seats to get legislation through the House of Commons.

Friday night, the DUP said it hoped to conclude negotiations with the Conservatives as quickly as possible, though it may wait on Wednesday’s speech by May on her legislative agenda, what’s called the “Queen’s Speech.”

David Shipley / Bloomberg

“U.K. Prime Minister Theresa May’s election gamble has failed disastrously. The consequences are dire for her party and government, and could be equally bad for her country’s relationship with Europe.

“May had hoped to increase her Conservative majority in Parliament, and instead has seen it wiped out. The Tories are the largest party in the House of commons and with the support of Northern Ireland’s Democratic Unionists intend to form a government.  Directing policy and passing legislation, however, will be vastly harder than before.

“This would be a serious problem under any circumstances, as Britain’s previous experience with hung Parliaments suggests. But these aren’t just any circumstances. Brexit talks were due to start in 10 days.  May’s effort to prepare for that challenge has left her plans, such as they were, in shreds. The immediate prospect is great political disorder and maximum economic uncertainty.

“Such is the humiliation of this setback that May might soon choose – or be forced – to resign. This offers no relief. The task of finding a new leader would only add to the chaos, and there’s no obvious successor capable of uniting the party.  But if she hangs on, the question of it and when she goes will linger. Her authority is irretrievably diminished.”

I’ve been warning since last summer’s referendum that Brexit is going to be chaos.  Now even more so.

Britain desperately needs a respite from terrorism, and yet this week we had a different story, the tower fire, one of the worst I can recall in my lifetime.  The official death toll is 30 as I go to post but heading higher.  It is beyond comprehension how that building met safety codes, and that no one seemed to know after the renovation that some of the materials used were so flammable...and that there was not one unified alarm system!

That’s where you depend on government, whether it is in London, New York, or Santiago, and in this instance, government failed horribly.

In the building I’ve been living in for years now, we had our fire alarms tested today, as we do at least once a year.  That’s an example of good government and safety codes being followed.

Lastly, on this topic, Anne Applebaum, in her Washington Post opinion piece on the British election, concluded with this:

“It’s funny – but it’s also tragic, for (Prime Minister) May could have played all of this differently.  When she took over last year, she could have recognized Brexit for the constitutional and political crisis that it has turned out to be. She could have called for national unity to deal with this divisive issue. She could have appealed across party lines, or asked people what outcome they preferred, or sought compromise.  Instead she stuck to her formula – ‘Hard Brexit,’ tough-sounding language, ‘it’s all about immigration.’ She kept her base – and lost everyone else.”

I had to note Ms. Applebaum’s take because there is a lesson contained therein for Republicans and the president. Sure, he seems to be retaining his base.  But the elephants will go down in flames in 2018 unless there is a change in tone among some of the party leaders, including at the top...and soon.  People’s attitudes don’t just change on a dime.

As for the Greek debt crisis, euro-area finance ministers met in Luxembourg to seek to reach a deal on ways to ease Greece’s debt load, and Greece avoided another potential brush with bankruptcy after striking a deal with European creditors to tide it over the rest of 2017, while details are ironed out in 2018 for real debt relief.

The 19-country eurozone agreed to clear the release of $9.5 billion in aid so that Greece can meet its humongous debt payments due in July that have been hanging over it like a thunderhead the entire year.

The Greek government agreed to further reforms to obtain the money, while the so-called Eurogroup, led by Jeroen Dijsselbloem, made clear it is ready to discuss real debt relief at the conclusion of the current bailout program next year.

“Overall, I think this is a major step forward,” said Dijsselbloem.  “We are now going into the last year of the financial support program for Greece; we will prepare an exit strategy going forward to enable Greece to stand on its own feet again over the course of the next year.”

What this means is that I hopefully won’t be addressing this topic for about another year as well, thus saving both paper and ink.

In the run-up to the German elections...

German President Frank-Walter Steinmeier said any Russian interference in his country’s election would weaken already strained ties between the two.  No doubt there will be massive cyberattacks ahead of the Sept. 24 vote.

--Finland’s three-party governing coalition collapsed after the country’s prime minister and senior coalition partner ruled out continued cooperation with the right-wing True Finns party.

Prime Minister Juha Sipilia said negotiations with the True Finns were “over” after it appointed an ultra-nationalist as its new leader last weekend.

Jussi Halla-aho Islam to paedophilia and wants to leave the EU.

In Asia, auto sales in China fell a second straight month, 2.6% you in May amid weak demand following a rise in the sales tax.  [Chinese Assoc. of Automobile Manufacturers]

Street Bytes

--Stocks finished mixed a second consecutive week as the Dow and S&P 500 diverged from the Nasdaq, registering slight gains while Nasdaq tumbled.

The Dow Jones is at an all-time high, 21384, up 0.5%, while the S&P is 7 points shy of its high, up just 0.1% to 2433.  Nasdaq fell 0.9% to 6151 as some high-profile tech leaders continued to slump.

--U.S. Treasury Yields

6-mo. 1.13%  2-yr. 1.31%  10-yr. 2.15%  30-yr. 2.78%

On the inflation front, for May, producer prices were unchanged, +0.3% ex-food and energy.  Year-over-year, the PPI was -0.1%, +2.1% on core.

Consumer prices came in -0.1% for last month, 0.1% ex-food and energy, while yoy, the CPI rose 1.9%, 1.7% on core.

Despite the Fed’s latest rate hike, the long end of the curve continues to rally (yields falling) due to the low inflation expectations.

China’s holdings of U.S. Treasuries rose for a third straight month in April, reaching the highest level since October 2016 at $1.09 trillion.  Last year had marked the largest cut to China’s treasury holdings on record, as Beijing sought to support its currency and manage capital flight by intervening in foreign exchange markets.

Japan cut its holding by $12.4tn in April to $1.11tn.

--The latest forecast from the International Energy Agency concludes oil demand should outpace supply in the second half of this year but excess inventories will persist well into 2018, and that creates a problem for those who are bullish on the energy sector.  Oil prices continued to crater this week as announced producer production cuts are being offset by increasing supply from the likes of the U.S., where shale oil production is forecast to grow by 780,000 barrels a day next year, after a projected increase of 430,000 b/d in 2017.  “Such is the dynamism of this extraordinary, very diverse industry that it is possible growth will be faster,” the IEA said.

Inventories are currently 292m barrels above the target set by OPEC and Russia.

--General Electric Chairman and CEO Jeff Immelt announced he was retiring after a 16-year tenure that you have to call a huge disappointment.  55-year-old John Flannery, a GE veteran who currently leads the company’s healthcare division, is taking the helm.  Among other positions at the company he was head of the India division.

Replacing legendary CEO Jack Welch, Immelt had to navigate the financial crisis, ultimately shedding much of its lending business, while selling off its media assets, including NBC, as well as plastics, appliances, industrial solutions and consumer finance.  GE bolstered its renewable energy, oilfield services and life sciences, among other areas.

Under Immelt, the company got increasingly global and today, about 60% of its revenue comes from foreign markets, up from 40% when he joined.

Jack Brennan, lead independent director on GE’s board, said in a statement: “Jeff has positioned the company incredibly well for the future. He executed a massive portfolio transformation and navigated the company through economic cycles and business disruptions.  Today, GE is a high-tech industrial company with a bright future.”

Shareholders have not been rewarded during Immelt’s time as CEO, with the stock falling 27%.  The share price was at $39.66 when he became CEO back on Sept. 7, 2001, and it was $28.94 on June 12, when the announcement of his departure was made.

Immelt will remain as chairman through Dec. 31, after relinquishing the CEO post Aug. 1.

--The Wall Street Journal’s Gregory Zuckerman and Laurence Fletcher reported that some of the biggest quant funds have been suffering mightily this year, underperforming their benchmarks by wide margins; funds offered by the likes of Two Sigma Investments and AHL Dimension (Man Group).

“Overall, quant funds, which use sophisticated statistical models often developed by Ph.D.’s rather than human research and intuition to find attractive trades, rose 1.44% this year, through May, according to data-tracker HFR. That compares with a gain of 8.7% for the S&P 500 index and a rise of 5.7% for the Vanguard Balanced Index Fund, which invests 60% in stocks and 40% in bonds, highlighting how far quant hedge funds are lagging behind more traditional investments.”

But so far the weakness hasn’t stunted investor interest.

--This is big.  McDonald’s announced on Friday it will no longer sponsor the Olympics, which it has been part of since 1976.

The company had signed on to sponsor the Games through 2020, but with today’s announcement, the IOC said McDonald’s will end its presence after the 2018 Winter Olympics in PyeongChang, South Korea.

It seems the fast-food giant just has other priorities these days.

But McDonald’s will miss out on some prime advertising opportunities, like the time Usain Bolt said he consumed more than 1,000 McNuggets during the Beijing Olympics.

“At first I ate a box of 20 for lunch, then another for dinner,” Bolt wrote in his 2013 book “Faster Than Lightning.”  “The next day I had two boxes for breakfast, one for lunch and then another couple in the evening.”

Recently, Budweiser also ended its three-decade sponsorship of Team USA.                                       

--Nike Inc. said on Thursday it would cut about 2 percent, or 1,400 jobs, out of its global workforce as part of an effort to streamline its structure, including bringing down its business segments to four from six.

--Uber’s co-founder and CEO Travis Kalanick is taking a leave of absence following a months-long investigation into allegations of pervasive sexual harassment inside the ride-hailing company.

In an email sent to staff Tuesday, Kalanick said he had to take responsibility for the turmoil at Uber and that he was taking the leave to grieve for his mother, who died in a boating accident last month.

“Recent events have brought home for me that people are more important than work, and that I need to take some time off from the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team,” he wrote.

Uber hired former Attorney Gen. Eric Holder’s law firm to conduct the investigation into the company’s workplace culture and the release of his recommendations coincided with Kalanick’s leave of absence.

Meanwhile, Uber director David Bonderman resigned from the company’s board following a remark he made during an Uber staff meeting Tuesday that was widely seen as offensive to women, various reports had it.  Ironically, the comment came during a discussion of how the company was going to transform itself following the Holder probe.

Uber board member Arianna Huffington spoke to employees about the importance of adding more women to the board.

“There’s a lot of data that shows when there’s one woman on the board, it’s much more likely that there will be a second woman on the board,” she said.

In response, Bonderman is reported to have said: “Actually, what it shows is that it’s much more likely to be more talking.”

Bonderman, in an email to Uber staff, apologized, calling his comment “inappropriate.”

Earlier, as part of Sunday’s marathon board meeting, the company hinted Nestle SA executive Wan Ling Martello was joining the board, making her the second female voting board member next to Huffington.

Gee, working at Uber is just a real barrel of monkeys, as your editor dates himself with that reference.

But wait...there’s more!  Emil Michael, Uber’s chief business officer, announced he was leaving in an email Monday.  Actually, his last day was the day before and he gave no reason for his departure.  He was said to be Kalanick’s closest confidant, and also seemingly an a-hole.  Back in 2014, he described a plan to BuzzFeed for spending millions to investigate journalists critical of Uber, though then he condemned the comments.

--J. Crew continued to bleed red ink during the fiscal first quarter, with the apparel retailer reporting a sharp jump in net losses amid an unrelenting sales decline.

The company on Monday said same-store sales  were down for the 11th straight quarter, a whopping 9% in the three months to end of April.  This is awful. 

80 percent of company sales come from its J. Crew stores, and here sales fell even more, 11%.

The younger sister brand, Madewell, did continue to shine with a 10% jump in like-for-like sales – but hardly enough to offset the issues at J. Crew.

The company previously announced long-time CEO Mickey Drexler was departing the company.

--Sears Holdings is cutting 400 corporate jobs and an unknown number of other positions as it seeks to stabilize its finances after some catastrophic errors under the leadership, using the term loosely, of CEO Eddie Lampert. The cuts are part of the company’s announced $1.25 billion cost-cutting plan unveiled earlier this year.

Tuesday, Sears said it has achieved nearly $1 billion of this goal.

--Thinking of buying a Sharp TV in the U.S.?  Think again.  Sharp Corp. sued China’s Hisense Electric Co., which licensed the Sharp brand for televisions sold in the U.S., accusing Hisense of putting the Sharp name on poor-quality TVs and then deceptively advertising them.

Hisense rejected the allegations and said it’s making a high-quality product.

Sharp has been trying to retrieve the use of its own name when selling in one of the world’s largest markets.  In 2015, Sharp signed a deal with Hisense giving it the rights to sell in the U.S. through 2020.  Sharp was in financial distress at the time and looking to raise cash.

Last year, Taiwan’s giant Foxconn Technology Group, aka Hon Hai Precision Industry Co., took a controlling stake in Sharp and it is seeking to reinvigorate the brand.

--Kroger Co., the No. 1 supermarket operator in the U.S. by store count, cut its full-year earnings forecast, citing higher product costs than previously expected.  Kroger said talks with labor unions would be “challenging” as it aims to maintain “competitive cost structures.”

Kroger CEO Rodney McMullen said in a statement that, “Customers tell us they want to...provide meals to their families at prices that enable them to stretch their budgets.  We are committed to providing that experience, and we will not lose on price.”

Which means lower margins/earnings.  It’s all about Wal-Mart, Lidl and Aldi...and now Amazon/Whole Foods.

Kroger’s same-store sales fell 0.2% in the first quarter ended May 20.

--The jobless rate in Australia fell to a four-year low in May, 5.5%.

--Switzerland’s Nestle, the world’s largest food and drinks company, announced on Thursday it is getting out of the U.S. confectionary business, putting brands such as Butterfinger and Baby Ruth bars up for sale.  Nestle said it was making the move after failing to increase market share and boost profitability, as it faces fierce competition from Hershey and Mondelez.

The decision does not affect Nestle’s Kitkat, a global product that is made in the U.S. under license by Hershey.  Hershey could now buy the Nestle products.

The Nestle’s unit could be worth as much as $3 billion, with the company saying it only represents about 3% of its total U.S. sales.

Personally, I’m a Baby Ruth guy and can’t stand Butterfinger, not that I’ve had either in 40 years.

Nope, when I’m fixin’ for some sweets these days, it’s frozen Funny Bones for the kid.

In terms of U.S. candy sales, Hershey edges Mars in market share, 25.9% to 25.2%, with Mondelez at 5.6%.  Nestle was just 2.9%.

Nestle’s U.S. sales are primarily from DiGiorno pizza (not bad), Haagen-Dazs, Gerber and Lean Cuisine.

--Japan’s Takata Corp., facing bankruptcy over the biggest automotive recall in history, will stop making airbags when the global recall is completed, under a plan it will be giving to regulators as early as next week when it files in U.S. and Japanese courts to help it cope with its liabilities, before restructuring.

--NJ Transit disclosed that only 46% of its trains during the morning rush hour in May reached New York within six minutes of their scheduled arrival time – the industry standard for punctuality. This compares with 70% in April, and the big July/August Amtrak project at Penn Station has yet to start...destined to be a nightmare.

--Shares in Snap dropped on Thursday to touch its IPO price of $17 amid continuing concerns over the business model.  [They closed Friday at $17.65.]

Snap, parent of Snapchat, went public in March and while the shares surged to $26 on their first day and $29.40 after, investors have had growing doubts about the company’s ability to evolve into a full-fledged public outfit.

Last month Snap reported its first earnings as a public company and they showed slowing revenue and user growth that fell short of the Street’s expectations.

Snap faces growing competition from Facebook, with its Instagram photo-sharing service.

The performance of the Snap IPO, though, is highly important for other companies, the so-called “unicorns” that have been waiting to go public but now, at least in the short-term, have to recognize they wouldn’t have as good a reception as once thought.

--After nearly five years at the helm, Yahoo CEO Marissa Mayer exited the scene Tuesday following completion of the Verizon acquisition of Yahoo.

Mayer, in a Tumblr post titled “Nostalgia, Gratitude & Optimism,” said, “Looking back on my time at Yahoo, we have confronted seemingly insurmountable business challenges, along with many surprise twists and turns.”  Mayer said Yahoo had successfully navigated those hurdles “and mountains in ways that have not only made Yahoo a better company, but also made all of us far stronger.”

Oh brother.  Mayer is going to end up landing $186 million in total compensation – far beyond the golden parachute $23 million Yahoo said she would receive – according to securities fillings.

Under Mayer, the company’s shares did soar 254%, far outpacing the Nasdaq Composite’s gain of 112% during this time, but the company’s net ad revenue is projected to decline to $3 billion this year from $3.32 billion in 2015, according to eMarketer.

And Yahoo was hit by two massive hack attacks, while failing to keep up with the changes in mobile and social media, plus Mayer unwisely spent $1.1 billion on social media site Tumblr.

Stock price aside, it’s a decidedly mixed legacy, but now it’s all on Verizon.

--39 journalists at HuffPost were laid off Wednesday as part of the above Verizon acquisition of Yahoo Inc., part of an expected 15% staff reduction across Yahoo and Verizon-owned AOL.

Verizon is counting on the combination of the two, operating as a single business unit called Oath, to build a third alternative to a digital advertising market currently dominated by Google and Facebook.

Oath properties include HuffPost, Yahoo Sports, AOL.com, Tumblr, Yahoo Finance and Yahoo Mail.

[The remaining Yahoo assets, primarily consisting of stakes of Alibaba and Yahoo Japan, will take on a new name, Altaba.]

--Time Inc. said on Tuesday it is eliminating 300 positions, or 4 percent of its workforce, through layoffs and buyouts.  The company publishes Time, Sports Illustrated and Fortune, among others.

--Fox News is shelving two mottos, “Fair and Balanced” and “We Report, You Decide.”

“Fair and Balanced” has long been the rallying cry for Fox News fans.

In a statement the network said, “The shift has nothing to do with programming or editorial decisions.”  Instead it was dropped because of its close association with founder Roger Ailes, fired last August.

The new motto / marketing tool is “Most Watched, Most Trusted.”

--Megyn Kelly’s career at NBC is already in jeopardy.  There have been crisis meetings at the network over the start to her Sunday program, which has garnered surprisingly poor ratings the first two weeks, and then this week Kelly chose to feature an interview with conspiracy theorist Alex Jones, the king of fake news.

Jones, the host of “InfoWars” and peddler of the notion that the Sandy Hook massacre was a hoax, said Monday he wants NBC News to pull his pre-taped interview with Kelly – a “rigged” report full of “fake news,” he said.

“They’re scared of what we’re covering,” Jones wrote on his rant-filled website, claiming the NBC piece was edited to misrepresent him.  “They’re scared of what we’re doing.”

But if you think he was outraged, imagine the reaction of Sandy Hook families, who blasted Kelly for featuring Jones on her NBC platform – timed to run on Father’s Day, no less.

Kelly refused to back down, saying it was her job to “shine a light” on newsmakers.

But the New York Post reported that insiders told the paper that staff “were in panicked meetings all day on Monday.  ‘It’s a s--- show.  No one wants to withstand a whole week of criticism over this. There are a number of people who want to pull the interview.’”

Others at NBC are saying the network needs the controversy to shake up their Sunday night and bring in new viewers.

Kelly addressed the backlash on Tuesday. “I find Alex Jones’ suggestion that Sandy Hook was ‘a hoax’ as personally revolting as every other rational person does.  It left me, and many other Americans, asking the very question that prompted this interview: How does Jones, who traffics in these outrageous conspiracy theories, have the respect of the president of the United States and a growing audience of millions?”

Well, the above was all prior to Thursday, when we learned Kelly was overhauling the Jones feature, inviting Sandy Hook families on the program and editing her interview with Jones to be tougher on him.

The New York Post’s Emily Smith reported that Kelly called the Sandy Hook families, as producers scrambled to find a way out without canceling the episode.

Jones is now fuming, explaining he spent 13 hours with Kelly, but now believing producers will pick the parts that make him look bad, to prove to Kelly’s critics that she is a serious journalist.

Late Friday, the NBC affiliate in Connecticut said it would not air Kelly’s show.

--Tom Cruise’s “The Mummy” opened last weekend and it was swamped by “Wonder Woman,” taking in just $32.2 million in the U.S. and Canada, while “Wonder Woman” did $57.2 million in its second weekend after a surprising $100m+ opening.  It’s now grossed over $200m domestically and $230m overseas.

But “The Mummy” did open to a strong $52.2 million in China and $17.8m in South Korea, both records for Cruise flicks.

Personally, not having been to a movie since “Mutiny on the Bounty,” 1962 version, the mummy character doesn’t cause me sleepless nights.  I have nightmares over Godzilla and Mothra.

Foreign Affairs

Iraq/Syria: I have to admit I have seen a ton of stories over the past year on the supposed death of Islamic State leader Abu Bakr al-Baghdadi and I have refused to relay them because the facts were virtually non-existent.  So often in the past, our own military has declared certain terror leaders have died in an airstrike, only for the figure to re-emerge six months later.  Often it’s a matter of trying to identify bodies that are in pieces.

But on Friday, Russia’s Defense Ministry said it was checking information relating to a May 28 Russian airstrike near ISIS’ de facto capital of Raqqa that targeted a meeting of ISIS leaders.

“According to the information which is now being checked via various channels, Islamic State leader Abu Bakr al-Baghdadi, who was eliminated by the air strike, was also present at the meeting,” RIA news agency quoted the ministry as saying.  I have my doubts on this one as well.

Meanwhile, in the battle for Raqqa, ISIS militants have become increasingly desperate in the face of heavy air strikes.  Many of the fighters are reportedly trying to pass themselves off as civilians to escape detection and killing anyone who tries to flee, witnesses have said. The United Nations has reported that the air campaign killed at least 300 civilians in the city.

In Iraq, Iraqi forces repelled a major counter-attack by ISIS fighters Wednesday in a district of the Old City of Mosul, their last remaining enclave.

According to Reuters, dozens of ISIS fighters were killed, many of whom were wearing suicide vests.  Throughout the months-long battle there has been little on Iraqi casualties.

Separately, hundreds, as many as 750, were sickened by food poisoning at a refugee camp for those fleeing Mosul, with at least one death reported.

The food was prepared in a restaurant in Irbil and brought to the camp by a Qatari charity.

The camp is one of 13 built by the UN to receive the people fleeing Mosul.

Israel: Hamas warned of an “explosion” in the Gaza Strip after Israel’s security cabinet decided last weekend to cut the amount of electricity the country provides to Gaza by 40%.

The 2 million people in the Hamas-controlled Strip will now have only two to three hours of power a day, down from four they have been living on recently.

The drop is actually part of the Palestinian Authority’s push to pressure Hamas to rescind its control of Gaza, which Hamas has ruled since a bloody coup in 2007.  The PA made a request of Israel and it complied.

Israeli Defense Minister Avigdor Liberman blamed Hamas for the crisis, saying it had spent tax money on the tunnels, rather than developing the Strip.  He is obviously right.

Gaza residents should also now realize that Israel has no connection to the current crisis, Liberman said.

But there are opposing voices in Israel. Yesh Atid party head Yair Lapid spoke against the Cabinet decision.

“I don’t think anyone is worried that Gaza will turn into a Garden of Eden if it has running water and more than six hours of electricity a day,” Lapid said.  There should be a way to target Hamas without harming civilians, he added.  [Jerusalem Post]

Afghanistan: The Pentagon is going to be sending 4,000 additional troops to the country, a move that could be announced as early as next week.

This follows President Trump giving Defense Secretary Jim Mattis authority to set troop levels, with top commanders in the field saying the U.S. doesn’t have enough forces, currently at 8,400, to help Afghanistan’s army against a resurgent Taliban insurgency.

Earlier in the week, three U.S. soldiers were killed during an attack in eastern Afghanistan. An Afghan soldier opened fire on them. The attacker was killed by other soldiers at the scene.  The Taliban immediately claimed responsibility.

Turkey: Several thousand protesters marched in the capital Ankara on Thursday to demonstrate against the 25-year prison sentence handed down to an opposition lawmaker on spying charges.

Enis Berberoglu, of the main opposition Republican People’s Party (CHP) was sentenced Wednesday on charges of giving an opposition newspaper a video purporting to show Turkey’s intelligence agency transporting weapons into Syria.

The leader of the CHP, 68-year-old Kemal Kilicdaroglu, has vowed to march 265 miles from Ankara to the Istanbul jail where Berberoglu is being detained, calling the court decision lawless and politically motivated.

This is interesting.  President Erdogan no doubt thought he had crushed most of the opposition through his actions after last year’s failed coup, including jailing more than 50,000, while sacking or suspending 150,000 from their jobs.

According to the Turkish journalists union, Turkey has imprisoned 160 of them, and it shut down 130 media outlets immediately after the coup.

Saudi Arabia: The following is despicable.

Editorial / New York Post

“It wasn’t so much unsportsmanlike conduct as sheer barbarism: On Wednesday, the Saudi Arabian men’s national soccer team refused to observe a moment of silence for the victims of the London Bridge terrorists.

“Hosting the World Cup qualifying match was Australia, which lost two nationals in the attack.  In their honor, the Socceroos wrapped their arms around each other and stood together in a line...while the Saudis kept warming up, earning well-deserved boos from the Adelaide Oval crowd.

“A spokesperson for Football Federation Australia says the Saudi team was told of the coming one-minute silence but refused, citing cultural differences.

“Sorry: Respecting your host’s needs, particularly in time of sorrow, is universal to human culture.

“And stomping on the sensitivities of the victims of Islamist terror is especially grotesque for the national team of a country that funds so much extremism.

“Plus, another Saudi club, Al-Ahli, observed a moment of silence last December for Brazilian players killed in a plane crash.

“The Saudi Football Federation’s president issued an apology: The ‘players did not intend disrespect to the memories of the victims nor to cause upset.’ Right.

“Anyway, justice was served: Australia beat the Saudis 3-2.”

As to the Trump administration’s new policy toward Saudi Arabia and support for the kingdom in its diplomatic battle with Qatar, Daniel Benjamin and Steven Simon, in an op-ed for the Wall Street Journal:

“Mr. Trump’s uncritical embrace of the Saudis will worsen another major problem. The U.S. is already too closely tied to the Saudi quagmire in Yemen, an unsuccessful intervention in a civil war that has caused widespread suffering and chaos. The Saudi escalation helped to create conditions in which al Qaeda’s Yemeni affiliate, probably the most capable of all al Qaeda branches, has grown dramatically.

“The Saudis have made a Vietnam-like blunder, seeing Yemen’s Houthi rebels as stalking horses for Iran rather than acknowledging that internal political jockeying has been the main driver of the Yemeni conflict.  Iran has supplied the Houthis with some arms, but mostly to tie down Saudi forces; the U.S. has given the Saudis weapons and intelligence.  Instead of plunging further in, we should be persuading the Saudis to cut their losses....

“The Iranians are the source of many evils in the Middle East but hardly all of them. There are few governments in the region for the U.S. to admire or support uncritically – and that definitely includes the Saudis, despite the assiduous courting of Mr. Trump by the young Saudi deputy crown prince, Mohammed bin Salman.

“As the clash with our longtime partner Qatar shows, things in the Middle East can fall apart fast.  That hardly means that the U.S. should be evenhanded between Iran and Saudi Arabia: We have a 70-year partnership with the Saudis and will continue to need their oil, intelligence cooperation and financial investments. But Mr. Trump should insist on a policy that puts American interests first.”

Russia: Hundreds were arrested across Russia Monday in nationwide “anti-corruption” demonstrations organized by opposition leader Alexei Navalny.  The protests coincided with “Russia Day,” a national holiday.

Several thousand attended in Moscow, despite the fact it wasn’t a sanctioned demonstration.

Navalny, an unofficial candidate for president, was detained as he left his home to go to the rally.

Navalny told his supporters the day before on his YouTube channel, “We have our constitutional right to gather peacefully with political demands.”

The vast majority of the demonstrators were young people, Navalny’s prime base.

It’s not known if Moscow will allow Navalny to run against Putin next year.

The U.S. Senate voted 97-2 to approve measures that toughen existing sanctions on Moscow, targeting companies that support Russian “energy export pipelines.”

The legislation was an amendment to a bill that approved new sanctions targeting Iran’s ballistic missile development and support for terrorism.  [This passed 98-2.]

Sen. John McCain (R-Ariz.) said: “The United States needs to send a strong message to Vladimir Putin and any other aggressor that we will not tolerate attacks on our democracy. There’s no greater threat to our freedoms than attacks on our ability to choose our own leaders free from foreign interference.”

The White House issued a statement in response saying existing sanctions against Russia are already effective.

Germany and Austria, for starters, are upset at the U.S. actions because it upsets the prior consensus on Russian sanctions orchestrated by Chancellor Merkel that had excluded the export pipelines because they involved key German interests.

In a statement issued by Sigmar Gabriel, German foreign minister, and Austrian Chancellor Christian Kern, the two said: “Europe’s energy supply is a matter for Europe, not the United States of America.”

The Russia sanctions outline opposition to Nord Stream 2, a pipeline that would double capacity for Gazprom, the Kremlin-controlled gas monopoly, to supply gas to Europe under the Baltic Sea.  But the likes of Shell and OMV, European energy companies, are financing the pipeline.

For his part, President Putin criticized the sanctions approved by the Senate, saying, “It is, of course, evidence of the continuing domestic political battle in the States,” he said during his annual marathon radio call-in show.

Putin compared ex-FBI director Comey with Edward Snowden.

“If [Mr. Comey] faces any persecution because (of leaking details of his meetings with the president to the media), we are ready to offer him, as well, political asylum in Russia,” Vlad the Impaler said.

Meanwhile, among the other things that President Putin talked about in his annual, marathon radio call-in show:

--He sees opposition street protests as a healthy part of democracy, but said they should not be used as a provocation.  “They (the opposition) should stop exploiting and propose solutions.  Those people who propose solutions are the ones who deserve attention and should have the right to conduct a dialogue with the authorities. We will act in that way,” said Putin.

--Putin said regarding relations with the United States: “I know the mood of our people, we don’t see America as our enemy.  Moreover, twice in history, when especially hard times fell on us, we joined our efforts and we were allies in two world wars.”

Opinion....

Editorial / Wall Street Journal

“Whatever you think about Donald Trump’s relationship with Russia, the controversy has achieved one positive result. On Wednesday, the Senate voted 97-2 to strengthen sanctions on Vladimir Putin’s regime, a rare moment of bipartisan agreement these days.

“The amendment to an Iran sanctions bill would require congressional approval before President Trump lifts current sanctions on Russian entities.  It broadens the field of potential sanctions targets to include those involved in human-rights abuses or doing business with Russian intelligence and defense industries, among others.  It also expands the range of Russian industries that could be subject to sanctions.

“The Administration objected to the proposal, but what did Mr. Trump expect?  Ordinarily we’d agree with Secretary of State Rex Tillerson, who warned a House committee this week not to limit the President’s ‘flexibility to adjust sanctions to meet the needs of what is always an evolving diplomatic situation.’ The Constitution intends for the executive to have broad discretion on foreign policy.

“But it’s hard to fault Congress for being skeptical. Though there’s no evidence of campaign ‘collusion’ with Russia, Mr. Trump has been oddly solicitous of Mr. Putin. Congress is sending a useful message that Mr. Trump has little running room to negotiate unless the Russian changes his behavior.

“Mr. Putin is giving American leaders plenty of reasons to act. Russians have spread misinformation and used computer hacks to disrupt elections in France, Germany and the U.S. Russia still occupies Ukrainian territory in Crimea; frequently violates the Minsk cease-fire agreements the Obama Administration helped negotiate for eastern Ukraine, and is propping up Bashar Assad in Syria.

“U.S. sanctions are also a message of support for the thousands of Russians protesting against corruption this week in the streets of major cities. The protests were inspired by opposition leader Alexei Navalny, who was sentenced this week to 30 days in jail for organizing a rally in Moscow.  In a sign of how worried the Kremlin is, up to 1,700 protesters may have been arrested and courts are sentencing some to weeks in prison....

“The (best choice for President Trump) would be to sign the bill, enforce the sanctions vigorously, and work with Congress to forge a bipartisan approach to Russia. That would help the President rebut fears that he can’t be trusted on Russia, while telling Mr. Putin that rogue behavior won’t be rewarded.”

Lastly, the Baltic states are already expressing concern for war games this autumn that Russia holds jointly with Belarus every four years, a massive exercise expected this time to involve more than 100,000 troops around the borders of Lithuania, Latvia and Estonia.  This year’s is to be called Zapad, or “West” 2017.

This will be the first such exercise since Russia annexed Crimea in 2014.

With more units in the area, you have the increasing chance for an accident or deliberate provocation.

But it seems some Baltic officials are most concerned that Russia may leave troops in Belarus after the exercise.  Regardless, Defense Secretary Mattis said such a large buildup is “simply destabilizing” while visiting Lithuania last month.

North Korea: U.S. Secretary of State Tillerson signaled on Wednesday that China’s cooperation on pressing North Korea over its nuclear program was “uneven.”

U.S. student Otto Warmbier was freed from jail in North Korea, as we were told the 22-year-old student from the University of Virginia was heading home.  But when he arrived, we learned he had been in a coma since shortly after his trial in March 2016.  His parents said they learned of his medical condition only a week ago.

North Korea said the boy had fallen into a coma after contracting botulism and being given a sleeping pill.  Doctors at Cincinnati Medical Center said there were no signs of botulism.

Warmbier was arrested for trying to steal a poster with a propaganda slogan from his hotel in Pyongyang and sentenced to 15 years of hard labor.

Thursday, his father said his son was ”brutalized and terrorized” while in custody and doctors described his condition as basically being in a vegetative state.

Fred Warmbier said: “There is no excuse for any civilized nation to have kept his condition secret, and denied him top-notch medical care for so long.”

Warmbier also blamed the Obama administration for its inaction.

China: The head of giant Anbang Insurance Group, buyers of the Waldorf Astoria hotel in New York three years ago, Wu Xiaohui, was detained by police as part of China’s ongoing crackdown on corruption.

Mr. Wu has not been publicly accused of any wrongdoing and Anbang said on its website that he was temporarily unable to fulfill his duties as chairman for “personal reasons.”

Sometimes China detains such figures for a few days then releases them.

Anbang has been notably aggressive in its corporate moves and has drawn tens of billions of dollars from Chinese investors, making it vulnerable at a time when Beijing is looking to limit potential financial explosions.  It has also been aggressive on the political front, courting the likes of Jared Kushner.

Anbang is supposed to be an insurance company but it has veered into other areas and some in Beijing are clearly concerned.  Just who is backing the group is also unclear, Mr. Wu said to live modestly.  Anbang has been unable to explain just how it finances some of its large foreign deals without converting renminbi into foreign currencies.

On a different issue, environmental inspectors in China have found that nearly 70% of the businesses they examined failed to meet environmental standards for controlling air pollution, as reported by Xinhua, the state news agency.

China’s leadership has vowed to crack down on polluters, but the factories continue to operate in a reckless and hazardous way, contaminating the air, water and soil.

The worst offenders are the coal-burning steel factories in Hebei, the province surrounding Beijing.

Lastly, Taiwan was upset that Panama’s government said it had broken diplomatic ties with Taiwan as it established formal relations with China.  In a statement, the Panamanian government said it recognized there was “only one China in the world” and that Taiwan formed an inalienable part of Chinese territory.  “The Panamanian government is today breaking its ‘diplomatic ties’ with Taiwan, and pledges to end all relations or official contact with Taiwan,” the statement read.

Only 20 countries maintain diplomatic ties with Taiwan instead of Beijing, as China has intensified its economic investment in Panama – home of the critical Panama Canal, of course.

But Taiwan said the following day that it would need to rethink its relations with the mainland in the wake of the Panama decision.

“The move by the Beijing authorities is not only wrong but also affects the current situation, turning the peaceful development of cross-strait relations into confrontation.  For this, the government will reappraise the situation of the ties across the Taiwan Strait,” said Joseph Wu, secretary general of the presidential office.

The decision by Panama ended 105 years of formal relations between it and the Republic of China, the official name Taiwan uses for itself.

Taiwan’s foreign minister, David Lee, hit out at Beijing’s “checkbook diplomacy” in its attempts to woo away Taiwan’s allies.

Philippines: 13 marines were killed in fierce fighting with Muslim militants who have laid siege to southern Marawi city for nearly a month in the biggest single-day loss for government forces, the military reported last weekend.

The government earlier said that the unrest in Marawi had left 20 civilians, 134 militants and 39 government troops dead.  Hundreds of thousands have been displaced, parts of the city having been reduced to rubble by government airstrikes.

Philippine President Rodrigo Duterte has declared martial law in the Mindanao region, the southern third of the Philippines and home to a decades-long Muslim separatist rebellion.

U.S. special forces have been helping the Philippine army quell the siege by Islamic State-linked groups, but the U.S. aid is mostly in the form of surveillance.  Supposedly, no boots on the ground, as a Philippine military spokesman confirmed.

Cuba: President Trump announced some moves on Friday to re-institute restrictions on travel to Cuba and U.S. business dealings with entities tied to the Cuban military and intelligence services.  Trump said in a speech in Miami that he signed a presidential directive to roll back parts of Obama’s historic opening to the Communist-ruled country, calling Obama’s initiative “terrible and misguided.”

But the changes are really minimal, though symbolic, and do not broadly affect the re-establishment of basic diplomatic relations with Cuba, including renewed embassies in the respective country’s capitals.

An administration statement reads: “The new policy centers on the belief that the oppressed Cuban people – rather than the oppressive Castro regime’s military and its subsidiaries – should benefit from American engagement with the island.”

Republican Sen. Marco Rubio (Fla.) worked with the administration on the changes and he wrote on Twitter: “Economic practices that benefit the Cuban military at the expense of the Cuban people will soon be coming to an end.”

Friday night, the Cuban government denounced Trump’s new measures as a “setback” in U.S.-Cuban relations and said they would not weaken the revolution.

Random Musings

--Presidential approval polls. Rasmussen: Trump 50% approval. Gallup: 38%.

--A U.S. Navy destroyer collided with a Philippine merchant vessel off the coast of Japan early Saturday, with the commander having to be evacuated due to injury, while 7 sailors are missing. The damage to the destroyer appeared heavy, just in looking at the first limited pictures.  How this happened is not known as yet, but it was 2:30 a.m. local time.

--President Trump’s selection of Christopher Wray to be the new FBI director seems like a solid choice and the fact he recently defended Chris Christie in the Bridgegate scandal should be irrelevant.

--Recently Sen. John McCain was blasted for his performance at the Senate Intelligence Committee’s hearing with fired FBI director Jim Comey, but as the Washington Post’s Paul Kane pointed out, McCain has logged in more than 75,000 miles to more than 15 countries this year and had just come back from a long trip to the Asia Pacific and, yes, this can have an impact.

Around the Memorial Day holiday, for example, during Congress’ break, McCain went to Australia, Vietnam and Singapore, speaking to our allies and addressing various security conferences.

And, yes, he has been highly critical of President Trump’s behavior toward our longstanding allies.

Republican Sen. John Barrasso (Wy.), a frequent travel companion, said world leaders “want to hear what he has to say.  He is a reassuring figure around the world.”

McCain has become a revered figure in Vietnam after being held captive there for 5 ½ years.

“As a face of Congress around the world, he would be the prime minister of Congress,” Barrasso said.

But hopefully the 80-year-old senator has been getting some quality sleep.

--Boy, that was a weird scene at Monday’s Cabinet meeting – the first President Trump had held with everyone on board, with everyone saying how great it was to be serving The Donald

“It’s an honor to be able to serve you,” said Attorney General Sessions.

“I am privileged to be here,” said Labor Secretary Alexander Acosta.  “Deeply honored.”

“What an incredible honor it is to lead the Department of Health and Human Services at this pivotal time under your leadership,” said Tom Price.  “I can’t thank you enough for the privileges you’ve given me and the leadership that you’ve shown.”

Eegads.  I thought Minority Leader Schumer’s parody video in response was pretty humorous.  Schumer tweeted in launching the clip, “GREAT meeting today with the best staff in the history of the world!!!”

If you didn’t think that was clever (and you’ve seen it), you really need to lighten up.

--Lt. Gov. Ralph Northam won the Democratic nomination for governor of Virginia Tuesday in a wider than expected margin, but Republican Ed Gillespie, a favorite of mine who I noted had supposedly been running a terrific campaign, won by only two points over Corey A. Stewart, a Donald Trump acolyte, for that party’s nomination.

Stewart afterwards refused to concede and said he wouldn’t support Gillespie, who he derided as “Establishment Ed.”

“There is one word you will never hear from me, and that’s unity,” Stewart told supporters after.  “We’ve been backing down too long.  We’ve been backing down too long in defense of our culture, and our heritage and our country.”

Let me just go off track for a second and say one thing.  Note to Stewart and his supporters, and those of Establishment Ed and Ralph Northam.

Until any of you decide to tackle entitlements, you’re all full of merde.

Virginia and New Jersey are the only gubernatorial races in ’17 and as you’ll see below, New Jersey’s isn’t a race in the least, but Virginia should be quite telling in terms of the 2018 mid-terms.

--So in the Garden State, Democrat Phil Murphy is far ahead of Republican rival Kim Guadagno in the race to replace outgoing Gov. Christie, according to a Quinnipiac University survey released Wednesday.

I told you after the primaries in my state, June 6, that Murphy would kick Guadagno’s butt and this poll has it at 55-26!  Yup, that’s a spanking. Granted, most New Jersey voters really don’t know who either is yet.

Guadagno has been Christie’s lieutenant governor for nearly either years, an association 54% of the poll’s respondents viewed negatively.

Meanwhile, Christie’s approval rating dropped to the lowest level of any U.S. governor surveyed in more than 20 years by Quinnipiac.  Only 15% of voters in my state approve of his job performance.  Heck 58% of Republicans disapprove. 

--In a new NBC 4 New York/Marist Poll, New York Gov. Andrew Cuomo has strong support for his re-election bid in 2018, crushing potential Republican candidates such as Donald Trump Jr. by more than 30 points.  The governor’s overall approval rating, 43%, is the highest in two years.

But, at the same time, 51% do not want him to run for president, which is kind of interesting.  44% also believe Sen. Kirsten Gillibrand should not pursue a presidential bid, and 67% do not want Hillary Clinton to run again.

Sen. Chuck Schumer’s approval rating has dropped from 53% to 47%, since he became minority leader; his lowest rating since 2010.

--As of Tuesday, there had already been 160 homicides in Baltimore this year, a record level.  Six were killed in four separate incidents late Monday night / early Tuesday.

Police Commissioner Kevin Dunne announced a weeklong deployment initiative to put more officers on the street, with all patrol officers and detectives required to work 12-hour shifts.

Davis called the latest spate of violence “unconscionable,” and said he joined community members in being “pissed off” about it.  [Kevin Rector / Baltimore Sun]

--I haven’t seen the new head of the Archdiocese of Newark, Cardinal Joseph W. Tobin, but he evidently is shaking things up.  Recently, he hosted 100 gay and lesbian Catholics and their families at the Cathedral Basilica of the Sacred Heart in Newark, telling the group arrayed before him, “I am Joseph, your brother. I am your brother, as a disciple of Jesus.  I am your brother, as a sinner who finds mercy with the Lord.”

In an interview with the New York Times before the Mass last month, he said, “These are people that have not felt welcome in other places.  My prayer for them is that they do. Today in the Catholic Church, we read a passage that says you have to be able to give a reason for your hope.  And I’m praying that this pilgrimage for them, and really for the whole church, is a reason for hope.”

It was four years ago that Pope Francis signaled the changes that have shaken the Catholic world with his comment about gay priests seeking the Lord: “Who am I to judge?”

But it remains very complicated as Vatican instructions renewed last year said there are not to be gay priests and Catholic bishops in America have strongly opposed same-sex marriage.

Men like Cardinal Tobin, though, are examples of the impact of Pope Francis.

As a Catholic, I couldn’t help but put the preceding out there. 

I will just add Cardinal Tobin’s further comments in the interview on his controversial move, saying to combine his welcome with a criticism would not have been a full welcome at all.

“That sounds a little backhanded to me,” he said. “It was appropriate to welcome people to come and pray and call them who they were. And later on, we can talk.”

Tobin admitted that after the Mass “he had received a fair amount of visceral hate mail from fellow Catholics.  Someone was even organizing a letter-writing campaign to call on other bishops to correct him.

“ ‘And there’s a lot to correct in me, without a doubt,” Cardinal Tobin said.  ‘But not for welcoming people.  No.’”

--Finally, Mark R. just attended Rotary International’s Convention in Atlanta and he wanted me to praise Bill Gates, specifically as an example for those who say the top 1% doesn’t pay their fair share.  Gates spoke at the Convention and committed to matching the Rotary’s $50 million for each of the next three years on a two for one basis, making his pledge equal to $300 million...this on top of the over $500 million he has given in the last five years, Rotary’s primary project being the ending of Polio throughout the world...which is in sight.

Yes, as Ronald Reagan would have said, ‘Not bad, not bad at all.’

---

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

---

Gold $1255
Oil $44.68...down a fourth straight week

Returns for the week 6/12-6/16

Dow Jones  +0.5%  [21384]
S&P 500  +0.1%  [2433]
S&P MidCap  -0.2%
Russell 2000  -1.1%
Nasdaq  -0.9%  [6151]

Returns for the period 1/1/17-6/16/17

Dow Jones  +8.2%
S&P 500  +8.7%
S&P MidCap  +5.6%
Russell 2000  +3.7%
Nasdaq  +14.3%

Bulls 50.0
Bears 18.6 [Source: Investors Intelligence]

Have a great week.

Happy Father’s Day!

Brian Trumbore