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04/22/2017

For the week 4/17-4/21

[Posted 11:00 PM ET, Friday]

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Edition 941

You know what I’ve been saying. America can weather any domestic difficulties, but our democracy will be tested sorely with any kind of foreign crisis resulting in a major new military conflict.  There is virtually zero trust in our institutions these days, with a president more interested in cutting trade deals with China in exchange for its assistance in dealing with North Korea, rather than real diplomacy.

The Trump administration is all over the place, at least in its messaging.  I know...Trump likes to be unpredictable.  But I wish he would just focus on North Korea, full time, rather than launching a new broadside against Iran when his State Department doesn’t seem like it’s close to finishing the review discussed at the start of the Trump presidency.

The Korean Peninsula is a tinderbox.  Stay focused, Mr. President.  Please, for the sake of all of us.

“It’s hard to figure out exactly what the strategic view of this is,” Jon Alterman, a global security expert at the Center for Strategic and International Studies told The Hill.

“What does he think the uses of American power are? What does he think the limits of American power are? What does he think needs to be prioritized? What is he willing to defer or not do?  It’s hard to think of any issue on which you couldn’t make a range of predictions.”

Most of us are relying on Defense Secretary James Mattis and National Security Adviser H.R. McMaster to do the right thing, seeing as Trump seems to have given them virtually full authority.  But it’s the president who needs to be able to articulate a broad vision to the American people and to date Trump hasn’t come close to doing so.

And then you have the following fiasco, which disturbed me as much as anything in recent years.

Simon Denyer and Emily Rauhala / Washington Post

“As tensions mounted on the Korean Peninsula, Adm. Harry Harris made a dramatic announcement: An aircraft carrier had been ordered to sail north from Singapore on April 8 toward the Western Pacific.

“A spokesman for the U.S. Pacific Command, which Harris heads, linked the deployment directly to the ‘number one threat in the region,’ North Korea, and its ‘reckless, irresponsible and destabilizing program of missile tests and pursuit of a nuclear weapons capability.’  Defense Secretary Jim Mattis told reporters on April 11 that the Carl Vinson was ‘on her way up there.’ Asked about the deployment in an interview with Fox Business Network that aired April 12, President Trump said: ‘We are sending an armada, very powerful.’”

Well, you saw the frenzied media response after these reports.  But then we learned this wasn’t exactly the truth.

Editorial / Wall Street Journal

“One of the odder stories this week is the Carmen Sandiego search for a U.S. aircraft carrier that was supposedly heading toward the Korean Peninsula.  The White House is chalking up the confusion to a miscommunication, but President Trump’s hyperbole about deploying U.S. military force didn’t help.

“Earlier this month Adm. Harry Harris, head of U.S. Pacific Command, announced that the USS Carl Vinson strike group would cancel planned port visits to Australia and head north from Singapore to the Western Pacific.  President Trump told Fox News last week that he was ‘sending an armada’ as a powerful warning to North Korea, and White House Press Secretary Sean Spicer defended the move in the briefing room.

“Then the U.S. Navy released photos of the Vinson sailing through the Sunda Strait in Indonesia, and now we learn that the ships moved south to participate in joint exercises with the Australian navy.  The military has since suggested the plan was always to do a short stint with the Aussies before steaming north.  The USS Vinson is now hanging a U-turn and will arrive in the Western Pacific in the coming weeks.  On Wednesday Defense Secretary Jim Mattis said the U.S. is doing ‘exactly what we said we were going to do.’”

This was outrageous.  Of course Pyongyang had a field day, and President Trump lost a ton of respect in South Korea.  Presidential candidate Hong Joon-pyo said in an interview with the Journal’s Jonathan Cheng: “What [Mr. Trump] said was very important for the national security of South Korea. If that was a lie, then during Trump’s term, South Korea will not trust whatever Trump says.”

The Global Times, a Chinese Communist Party mouthpiece, dubbed the incident a “scandal” that “sours Trump’s authority.”

As the Journal put it, if the misinformation was intentional on the part of the administration, “this isn’t D-Day, and allies might wonder the next time the President trumpets an arriving ‘armada.’”

This was a dangerous moment.  A defense official admitted “We communicated this badly.  We, the department, communicated this badly.”

Wall Street

On the economic data front, March housing starts came in less than expected, down 6.8% on the month, but existing home sales for the month were up 4.4% month on month, to an annualized pace of 5.71 million, the best pace since Feb. 2007.  The median home price was up 3.6% for the month to $236,400, up 6.8% year on year.

Separately, March industrial production was up 0.5%, as projected, in March.

In an interview with the Financial Times the other day, Treasury Secretary Steven Mnuchin conceded the administration’s timetable for tax reform has slipped after the healthcare debacle.  The target once talked about, to get tax reform through Congress before August was “highly aggressive to not realistic at this point.”

While the secretary insisted he still expected the tax system to be reformed in 2017, confidence is waning as Trump embarks on a new push to overhaul healthcare first.

In the same interview, Mnuchin rejected fears the administration would embark on a new round of currency wars over the strength of the dollar, following Trump’s remarks he favored a weak greenback.

Mnuchin: “The president was making a factual comment about the strength of the dollar in the short term...There’s a big difference between talk and action.”

But then in an interview with Reuters on Friday in the Oval Office, President Trump said he would unveil a tax plan next week that includes “massive” tax cuts for individuals and businesses, but he can’t do this without a plan to repeal and replace ObamaCare, which has to be able to pass the House (for starters), so Republicans can tout the savings from ObamaCare as part of their tax reform plan by the stated original target date of August, before Congress goes on recess.

But Republicans in the House have thrown cold water on hopes for a vote next week on a revised ObamaCare repeal-and-replace bill.

There is movement between the House Freedom Caucus and another Republican wing, the centrist Tuesday group, but there is no actual legislation yet, so a vote before Trump’s 100th day in office (another target) doesn’t seem likely; at least something that can get 216 votes in the House.  Then Trump late Friday afternoon in passing said repeal-and-replace doesn’t have to happen next week.  This is a mess.

Europe and Asia

Before I get to this weekend’s key vote in France, some economic news.

Markit reported its flash composite readings for the eurozone in April, with all three figures at a 72-month high.

The comp. reading was 56.7 (50 being the dividing line between growth and contraction), with manufacturing at 56.8 and services at a strong 56.2.

As you know, the flash readings also break out projections for Germany and France, and in the former the manufacturing PMI was 58.2, while services were 54.7, both near 6-year highs.

In France, the flash April manufacturing figure was 55.1 vs. 53.3 in March, a 72-month high, while services came in at 57.7, a 71-mo. high.

Separately, Eurostat confirmed its own flash reading of inflation for March, 1.5% vs. 2.0% in February.  The European Central Bank is forecasting inflation of 1.7% for all of 2017, below the ECB’s 2.0% target, so the ECB feels as if there is no pressure to cut back on its quantitative easing program, at least through year end, aside from previously announced slight cuts in bond-buying beginning in May thru December.

Inflation in key Germany was also 1.5% in March vs. a worrisome 2.2% in February.

Chris Williamson, Chief Economist, IHS Markit:

“The eurozone economy has enjoyed a strong start to the second quarter. The April flash PMI is running at a level consistent with 0.7% GDP growth, up from 0.6% in the first quarter.  Such strong growth, if sustained, will inevitably lead to upward revisions to economists’ 2017 forecasts.

“Robust rates of expansion are being seen in both manufacturing and services, the former clearly benefiting from the weak euro, which has helped drive export sales growth to a six-year high.

“Rising employment is also benefiting the service sector....

“France’s elections pose the highest near-term risk to the outlook, but in the lead-up to the vote the business mood has clearly been buoyant.”

The IMF hiked its estimate on GDP for this year in the U.K. to 2.0% from 1.5%.*  But retail sales, as announced by the Office for National Statistics, fell 1.4% in the first quarter, the biggest quarterly decline since Q1 2010, as inflation has hit household consumption, which is the major source of growth in the economy, with wages not outpacing the rate of growth in retail prices.

For the month of March alone, retail sales rose 1.7% year on year, but this was down from February’s 3.7% pace.

*To show you how the IMF’s projections have gone for the U.K., GDP, before the EU referendum last year, was forecast to grow 2.2% in 2017.  Then, after the shocking vote result, the IMF cut its 2017 forecast to 1.3% in July, and then to 1.1% in October.

But the U.K. proved far more resilient than expected in the second half of 2016.

British equities, though, had their worst week since November after Tuesday’s surprise election call.

French Election: The first round of voting in the presidential election is Sunday, and the polls have been stable all week.  One on Sunday had it 23% Emmanuel Macron, 23% Marine Le Pen, 19% Francois Fillon, and 19% Lean-Luc Melenchon.  [After a post-debate surge from the final debate two weeks ago, Melenchon has stabilized.]

As the week progressed, a Cevipof poll on Wednesday had it Macron 23%, Le Pen 22.5%, Fillon 19.5%, Melenchon 19%, with Macron winning a run-off over Le Pen 65-35.

A Thursday Ifop survey had Macron at 24.5%, Le Pen 22.5%, Fillon 19.5%, and Melenchon 18.5%, Macron winning a second round 61-39.

An Ipsos survey released Friday had it Macron 24%, Le Pen 22%, and Fillon and Melenchon at 19 apiece.

But all of these were pre-Thursday night surveys of voters, including the last one.  They are all also within the margin of error.

Security had returned as an issue after the recent arrest of two men in Marseille suspected of plotting an imminent attack to disrupt the election, with three of the four candidates being warned by French intelligence officials.

And then on Thursday night, on the world-famous Champs-Elysees in central Paris, a gunman claiming allegiance to Islamic State (from a note left behind...the organization then claiming responsibility), opened fire on police sitting in a stopped police ‘bus’, with one policeman killed, two wounded, and the gunman killed.  Had the gunman, who was carrying a Kalashnikov, not been stopped by a hero policeman, the carnage could have been much worse.

But as of my posting, I have yet to see any definitive word on whether there are other suspects.  There does seem to be at least one more, possibly two.  Apparently a man suspected of possible links turned himself in to Belgian police.

The terror attack occurred as the presidential candidates were going through back-to-back television appearances to sell their campaigns.  Some of them later clashed over whether official campaigning, which had just one more day to run, should be brought to a full stop, but as you would expect, far-right Le Pen seized on the incident.  “I don’t want us to get used to Islamist terrorism,” she told France 2.  “We have to stop being naïve.  We can’t leave our children a country that is not able to defend them.”

The 39-year-old gunman was known to police and had been flagged as a potential Islamist radical.  He had served a prison sentence for a previous attack on police.

Should there be a run-off between Le Pen and Macron*, you can be sure Russia will be using fake news against Macron in a big way, as he’s been highly critical of the Kremlin.

Russia, among others, was heavily involved in efforts to derail the recent Dutch election as well, and German authorities have seen evidence of interference in its upcoming September vote.

Prior to Thursday night’s attack, Marine Le Pen said she would suspend all legal immigration to France.  At a rally in Paris, Le Pen said “I would decide on a moratorium on all legal immigration to stop this frenzy, this uncontrolled situation that is dragging us down.”

After that, she said, France would introduce “much more drastic, more reasonable, more humane, more manageable rules” on immigration.

Friday, in the aftermath of the attack, Le Pen said France should immediately reinstate border checks and expel foreigners who are on the watch lists of intelligence services.

*If Le Pen is in a run-off at all, next week I’ll provide you with firsthand insight into the potential May Day fireworks.  The second round of voting is May 7.

Editorial / Wall Street Journal

“Whatever the immediate effect of Thursday’s shooting in the heart of Paris, there is no avoiding the blunt reality at the heart of France’s momentous election, which is the general sense among the population that the nation’s elites – in politics and the French media – have become disconnected from the realities of the nation’s problems.  It will be a pity if one shooting tips Sunday’s results, but it would be no surprise.”

--A follow-up to last week’s story of an attack on a Borussia Dortmund soccer team bus ahead of a Champions League match in Dortmund.  German police arrested a 28-year-old man who is suspected of carrying out the attack (which injured one player and a policeman) for financial reasons.

The man was speculating in the football club’s shares.  Prosecutors say he has no extremist background.

On the day of the attack, the suspect bought put options on the stock, in a bet the shares would then fall.

Brexit: British Prime Minister Theresa May called a snap general election for June 8, in order to, as Mrs. May put it, provide more certainty and stability following last year’s referendum and for the negotiations lying ahead.

May said: “The country is coming together but Westminster is not.”

So the prime minister needed two-thirds of MPs in the House of Commons on Wednesday to approve the plan and they granted such approval handily, like by a whopping 522 to 13.

Mrs. May said opposition parties were playing games and that this risked a successful Brexit.

“So we need a general election and we need one now. We have at this moment a one-off chance to get this done while the European Union agrees on its negotiating position and before the detailed talks begin.

“I have only recently and reluctantly come to this conclusion. Since I became prime minister I’ve said there should be no election until 2020, but now I have concluded that the only way to guarantee certainty and security for the years ahead is to hold this election and seek your support for the decisions we must take.”  [BBC News]

An April 18 BBC Poll of Polls had May’s Conservatives at 43% and Labour at 25% [UKIP 11%, Liberal Democrats 10%]

May is hoping to achieve a larger majority than she currently has, just 17 seats.

Labour Party leader Jeremy Corbyn welcomed the prime minister’s decision, saying it would “give the British people the chance to vote for a government that will put the interests of the majority first.”

Needless to say Scotland’s First Minister Nicola Sturgeon, who is calling for another referendum on leaving the U.K., accused Mrs. May of seeing “a chance to move the U.K. to the right, force through a hard Brexit and impose deeper cuts.”

Sturgeon also warned that Mrs. May had miscalculated.  “If the SNP (Scottish National Party) wins this election in Scotland and the Tories (Conservatives) don’t, then Theresa May’s attempt to block our mandate to give the people of Scotland a choice over their own future when the time is right will crumble to dust.”

So we’re off and running on an intense 7-week campaign.

Meanwhile, Jean-Claude Juncker, president of the European Commission, believes that “real” Brexit talks will only start after the British snap vote on June 8, but this really isn’t a delay because negotiations were not going to begin until June anyway as the leaders of the remaining 27 EU countries are meeting April 29 to agree to the bloc’s negotiating stance, and then a text needs to be translated in legal form by the EU commission in May.

For its part, German Foreign Minister Sigmar Gabriel said he hoped early elections called by Mrs. May would bring more “clarity and accountability” in its negotiations to leave the EU.

Eurobits....

--Greece met a key bailout target on Friday in reporting that its primary budget surplus, which excludes debt service, was 3.9 percent of GDP, beating the 0.5 percent of GDP target set by its creditors as part of ongoing talks over its rescue terms and new loans needed by July, when it faces a spike in its debt repayments.

But Greece still faces further painful austerity measures in coming years and the government needs relief.  The budget surplus relies on increased taxation and that hurts the economy and public sentiment.

--Tourism in Paris, which had plunged after a series of terrorist attacks in 2015, has recovered strongly, with the French National Institute of Statistics and Economic Studies reporting this week that visitor numbers at the end of 2016 equaled those from the end of 2014.  Then in January, the number checking into Paris hotels reached a 10-year high, a 6.4 percent increase from the same month three years earlier. [Milan Schreuer / New York Times]

But...this was before Thursday.

--The head of Germany’s rightwing populist Alternative for Germany, AfD, Frauke Petry, said she will not head the party’s campaign come national elections in September.

Some say this is a big blow, but the AfD was already suffering in popularity (8% in a recent poll vs. 14% in September), especially as the refugee crisis has eased...for now.

The AfD has also been hurt by the rise of Martin Schulz, the new leader of the Social Democrats, who is seen as the viable alternative to Chancellor Merkel.

Ms. Petry was upset at the direction of the AfD and it being hijacked by hardliners instead of trying to broaden the party’s base.

Turning to Asia....

China’s National Bureau of Statistics released first-quarter GDP and it was 6.9%, well above the 6.5% full-year target as recently announced by Premier Li Keqiang. 

Fixed-asset investment rose 9.2% year-on-year in the quarter, vs. 8.1% last year, while exports in March rose 16.4%, yoy, retail sales last month were up 10.9%, and industrial output rose 7.6% in March, all better than expected.

77% of the growth in the quarter came from consumption, while this figure was 64.6% last year, according to the NBS.  This is encouraging.

But with steel production in the news this week, China’s production of iron ore in March, 72 million tons, nearly matched the total of U.S. output for all of 2016. China provides half of the world’s steel.  [More below.]

Meanwhile, new housing prices in March for China’s 70-city index rose 11.3% from a year earlier, as reported by the National Bureau of Statistics, which is less than the peak of 12.6% in November and a fourth straight month of headline deceleration.

In Beijing, prices grew 20.6% year on year, down from 24.1% in February.  It will be interesting to see what kind of growth in prices we’re talking about a year from now.

In Japan, March imports rose 15.8% year on year, with exports up 12%, both blowing away analyst expectations.  Exports to China rose a strong 16.4%.

The latest Reuters poll of business sentiment here, which mirrors that of the Tankan survey, showed manufacturing sentiment was the most upbeat since the 2008 financial crisis.

Street Bytes

--Stocks broke a two-week losing streak with the Dow Jones adding 0.5% to 20547, while the S&P 500 gained 0.9% and Nasdaq 1.8%.  Nasdaq hit a new closing high of 5916 before closing at 5910 today.  Early earnings reports have generally been solid.

--U.S. Treasury Yields

6-mo. 0.91%  2-yr. 1.18%  10-yr. 2.25%  30-yr. 2.90%

Treasuries were unchanged on the week.  The Fed meets May 2-3, then June 13-14.  More on this next time.

--President Trump declared a war of sorts on foreign steel, but surprisingly added Canada’s name to the list of usual suspects as he went off script in signing an executive order aimed at the likes of China and Japan and their dumping of steel.  But he threw this in on Canada.

“What they’ve done to our dairy farm workers is a disgrace.  We can’t let Canada or anybody else take advantage and do what they did to our workers and to our farmers.”

But back to steel, Trump is doing something in different in citing national security concerns when talking about steel, rather than the usual criteria for whether imports are damaging the United States.

Shares in U.S. steel companies rallied, even as a Citi report showed the U.S. makes up just 2 percent of China’s steel exports.

--The International Monetary Fund, in its latest update on global growth upped their number for 2017 to 3.5% from 3.4%.

--The Energy Information Administration reported inventories of U.S. crude fell by 1.03m barrels in the week to April 14 and at 532.3m barrels, crude stocks have come off record highs.

But stocks of gasoline unexpectedly rose by 1.5m barrels, compared with estimates for a significant drop, and for this reason, along with general concerns over demand, oil prices fell over $3.00 on the week to $49.63.  So much for the three-week rally.

--Exxon Mobil Corp. applied to the Treasury Department for a waiver from U.S. sanctions on Russia in a bid to resume its joint venture with state oil giant Rosneft. Exxon has been seeking permission to drill with Rosneft in several areas impacted by sanctions and after recent CEO Rex Tillerson assumed his position as head of the State Department, Exxon renewed a push for approval of a waiver in March, sources told the Wall Street Journal.

But then on Friday, the Treasury Department announced it would not grant Exxon it’s request for the waiver.

Congress was no doubt preparing to scrutinize the request, especially as some members are seeking to intensify sanctions on Russia in response to the allegations of interference with elections last year, let alone the ongoing probes into any potential ties between the Trump administration and the Kremlin.

Tillerson, while CEO at Exxon, formed a close relationship with Rosneft CEO Igor Sechin, who falls under the sanctions and is a close ally of Vladimir Putin.

The sanctions, which followed Russia’s annexation of Crimea in 2014, effectively sidelined a landmark exploration deal Exxon had signed under Tillerson with Rosneft in 2012, which granted Exxon access to explore in Russia’s Arctic waters, as well as opportunities in Siberia and portions of the Black Sea.

--IBM shares fell 5% on the heels of its posting a 20th straight quarter of sales declines, down 3% in the first quarter year-on-year to $18.2bn, missing analyst estimates of a slighter decline.  Gross profit margin also fell to 42.8 percent from 46.5 percent.

CEO Ginni Rometty has been an utter failure as the company’s forward-looking “strategic imperatives,” like cloud, and Watson, while showing a revenue gain of 12% in the quarter, are hardly growing at a speed to make up for the continuing deterioration in IBM’s core legacy business of technology consulting and business hardware and software.

IBM has been too late to the game in many respects and has succeeded in just one area, financial engineering.

--Morgan Stanley announced a 70 percent rise in net income that handily beat the Street’s forecasts.  The bank’s fixed-income and commodities unit delivered net revenues of $1.7bn during the quarter, almost double that of the year before.  Investment banking also kicked butt from underwriting of both equity and bond issues to a combined $921 million.

Overall revenue was $9.75bn, far ahead of expectations.

--But Goldman Sachs shares fell sharply as it missed the Street’s estimates on both earnings and revenue, with revenue from M&A advisory, where Goldman is top dog, falling by 2% from a year earlier.  While this isn’t a huge drop, it’s important given its position and importance to the bank overall.  Goldman also said its backlog of investment-banking business decreased from end of last year, with the bank citing “legislative difficulty” for President Trump’s agenda.

Revenues from Goldman’s core debt-trading business were essentially flat, at $1.69bn.  [Recall, at Citigroup, their fixed-income business rose 19%, while at Bank of America, it was up 29%.]

Goldman partially blamed the lack of volatility, particularly in foreign-exchange and commodities during the period, for its disappointing trading performance.

Others say former president Gary Cohn’s departure for the Trump administration was a bigger blow to Goldman than first thought.  Veteran bank analyst Dick Bove said, “I think maybe Gary Cohn was the brains behind Goldman.”

--Speaking of Bank of America, it reported that investment banking fees rose from $1.2bn to $1.6bn, on top of its trading success.

--BlackRock’s assets under management topped $5.4 trillion at the end of the first quarter, owing to surging sales of its iShares exchange traded funds.  Earnings were up by one-third compared to the first three months of 2016, though revenues, at $2.82bn, were up 8 percent but below expectations. 

CEO Larry Fink, noting that iShares products accounted for $64bn of a total $80bn in net inflows, said it is no longer just passive investors who are using ETFs these days: Both retail and institutional investors are using ETFs as building blocks for their portfolios.

--General Electric on Friday reported an adjusted profit of 21 cents per share in the first quarter, ahead of the Street’s estimate of 17 cents.  Revenue of $27.66bn in the period also beat forecasts, but the stock still fell and has dropped about 5 percent this year, vs. a 5% gain for the S&P 500.

The concern arose over some of GE’s industrial businesses and its cash outflow.

GE countered that industrial organic revenue, which is from continuing businesses, rose a strong 7% in the quarter.  CEO Jeff Immelt noted a 10 percent rise in quarterly orders and said the world economy was “an attractive environment for GE.  “We see global growth accelerating, while the U.S. continues to improve.”

--Fellow industrial Honeywell beat on earnings and revenues today, with solid results from all divisions, according to the company, and the shares rallied 3% today in response.

--Amidst its recent PR problems, United Continental Holdings Inc. (UAL) reported first-quarter profit of $96 million, topping the Street’s expectations.  Revenue also beat, up roughly 3%.

On a call with analysts, CEO Oscar Munoz vowed “to put our customers at the center of everything we do.  We are dedicated to setting the standard for customer service among U.S. airlines.”

--Related to United’s issues, Delta is letting employees offer customers almost $10,000 in compensation to give up seats on overbooked flights, in its attempt to avoid a United-like situation.

Delta’s gate agents can offer up to $2,000, up from a previous maximum of $800, and supervisors can offer up to $9,950, up from $1,350.

United has changed its own requirements, making employees seeking a seat on a plane to book it at least an hour before departure.

The airline also announced that CEO Oscar Munoz won’t be promoted to chairman as originally planned.

--Activist investor Elliott Management engineered the ouster of Arconic CEO Klaus Kleinfeld amid a proxy fight.  I don’t have time to get into some of the details but Kleinfeld appears to have royally screwed up, including threatening Elliott Management leader, $billionaire investor Paul Singer.

Arconic was previously part of Alcoa Inc., with Kleinfeld serving as CEO since 2008 and overseeing the split into two standalone companies.

--Tesla shares fell only slightly on Thursday after the electric automaker issued a voluntary recall for 53,000 Model S and Model X vehicles built between February and October 2016.

Tesla said in an email to clients that it discovered a “potential manufacturing issue with electric parking brakes” that “could prevent the brake from releasing.”

--Netflix will reach 100 million subscribers this weekend, the company said, though it reported slower-than-expected subscriber growth in the first quarter.

The company added 4.95m members in the first three months, fewer than the 5.2m it had forecast.

Part of the reason for the slower growth was the latest installment of House of Cards, normally introduced in the first quarter, was pushed into the second.

Netflix’ revenue of $2.63bn for Q1 vs. $1.96bn a year ago, was in line with analysts’ expectations.

On a totally unrelated television issue, I watch zero dramas or comedies, but I loved “24: Legacy,” which wrapped up this week, and I’m looking forward to a new season of “Silicon Valley” on HBO, starting Sunday.

But of course it’s really all about the upcoming season of “Game of Thrones,” which starts July 16.  Don’t bother me during that hour. [I then lie awake all night, trying to figure it out...that’s the downside.  ‘GoT’ does tend to make your brain hurt.]

--Dutch brewer Heineken reported sluggish volume growth in the first quarter despite continued high demand from the Asia Pacific, where volumes grew 5.4%.  They fell 0.4% in Africa, the Middle East and eastern Europe year-on-year, and were down 0.7% in the Americas.

--Subway announced for the first time it had a net reduction in shops in America last year, as the U.S. store count fell 1.3% to 26,774 from 27,103 in 2015.  U.S. sales declined 1% last year. International sales grew 3.7%.

The company said it is undergoing a transformation “that includes introducing new and improved products, creating an even greater customer experience.”

--Mattel said Thursday that gross sales of its Barbie brand dropped 13% in the first quarter from a year ago to $123.4m – the second consecutive quarter of falling sales. Barbie was introduced in 1959 at the New York toy fair.  She has aged well thanks to plastic surgery.

--Sony raised its forecast for operating income in the 2017 financial year as it expects improvement in almost all of the Japanese conglomerate’s business units.

But it seems the optimism on the bottom line is largely due to lower than anticipated amortization and costs in some segments, and not exactly greater sales.

Ergo, when I saw the headline I’m like, ‘Great.’  Then upon further review I thought, ‘Just IBM-like financial engineering.’

--Erin Durkin / New York Daily News: “New York City and the state stand to lose $120 million in tax money from an expected dip in foreign tourism blamed on President Trump, officials said Thursday.

“The city’s tourism agency predicted earlier this year that the number of international visitors would drop by 300,000 in 2017, the first slump in seven years – reversing a previous projection that the number would grow by 3%....

“The dip will translate into $600 million less spending in the city – (though) since the agency had previously projected an increase of 400,000 foreign travelers, spending could be $1.4 billion less than once expected.”

Aside from the ongoing fallout from Trump’s original travel ban, several Middle Eastern airlines have already reported measurable drops in bookings to the United States because of the ban on carrying large electronic devices onto planes.  “Emirates Airlines announced Wednesday it was reducing flights to five American cities because of weakened demand, though New York was not one of them.”  [Erin Durkin]

--Here’s something scary.  Stephen Nessen of WNYC (and Crain’s New York Business) reported that “On any given day, there are five Amtrak officers per shift to patrol all of Penn Station [New York City] – the busiest commuter hub in the country, with 650,000 commuters a day.”

An Amtrak union leader said that because of budget cuts, this is all the staffing they’ve been allowed.

Now there are National Guard and NYPD officers also present at Penn Station, but “all agencies defer to Amtrak to take the lead in an emergency situation.”

And Amtrak doesn’t have the communications resources to coordinate activities with the other agencies that would be involved in, say, a terrorist attack....including the MTA, NYPD, fire department, National Guard, etc.

--Squaw Valley CEO Andy Wirth said there is a chance that Northern California skiers and snowboarders could see the slopes open beyond Fourth of July...like keeping things open through the summer and fall because there’s so much snow.

As of Monday, the Sierra snowpack is 85 percent above average.  Squaw Valley has seen 705 inches of total snowfall, including 20 the past week (as of Monday).  It seems all of the Lake Tahoe ski resorts have crossed the 700-inch level.

--Facebook said it’s not going to punish employees who take time off to join pro-immigrant protests on May 1.

Separately, Facebook CEO Mark Zuckerberg said, “Our hearts go out to the family and friends of Robert Godwin Sr.,” the man killed by the Facebook killer in Cleveland; one of the truly most despicable acts in recent memory.

But Facebook deserves heavy criticism as the company had to acknowledge it had taken more than two hours to remove the clips after the first video was posted, despite it having received complaints in the interim.

Cleveland police chief, Calvin Williams, said, “This is something that should not have been shared around the world.  Period.”

Defenders of Facebook say that its emphasis on artificial intelligence holds the key to shortening the time required to flag and remove offensive material.

--And, finally, Bill O’Reilly is out at Fox News.  He had been off the air since April 12 and was scheduled to return from a vacation to Italy Monday, but he couldn’t survive another internal Fox investigation into a wave of sexual harassment suits and allegations of abusive behavior going back to 2002, which culminated in a recent New York Times story that Fox and O’Reilly shelled out $13 million in settlements against women who had made accusations against him.  Advertisers fled the program and despite having the highest ratings in cable news for 15 years running, it’s curtains for Mr. Bill, who will be replaced by Tucker Carlson in the 8:00 slot.

[The Fox show “The Five” will fill Tucker Carlson’s current 9:00 position, while a new program hosted by Eric Bolling will be at 5:00.]

Fox issued a statement: “After a thorough and careful review of the allegations, the Company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel.”

In a letter to staff Wednesday, Rupert Murdoch and his sons, James and Lachlan, the top three executives at 21st Century Fox, praised O’Reilly as “one of the most accomplished TV personalities in the history of cable news.  His success, by any measure, is indisputable.”

The letter also said the decision “follows an extensive review done in collaboration with outside counsel.”

“Lastly, and most importantly, we want to underscore our consistent commitment to fostering a work environment built on the values of trust and respect,” the Murdochs added.

O’Reilly, from Italy, released a statement saying “it is tremendously disheartening that we part ways due to completely unfounded claims.”

“But that is the unfortunate reality many of us in the public eye must live with today,” he said.  “I will always look back on my time at Fox with great pride in the unprecedented success we achieved and with my deepest gratitude to all my dedicated viewers.  I wish only the best for Fox News Channel.”

O’Reilly’s show made about $178 million in advertising revenue in 2015.

Ultimately, the decision to oust O’Reilly was up to the Murdoch family, and it reached a crisis level when the law firm Paul, Weiss investigated a claim that Mr. Bill reneged on offering a paid contributor’s job to Wendy Walsh, a frequent guest on his program, after she spurned his advances at a dinner meeting in 2013.

Executive Chairman Rupert Murdoch supported O’Reilly’s return but his sons, Chief Executive James and Chief Operating Officer Lachlan, wanted O’Reilly out, with some reports having James and Lachlan’s wives as having a major influence as well.

Importantly, 21st Century Fox has also been trying to win regulatory approval in the U.K. to acquire the portion of British TV giant Sky PLC that it doesn’t already own, and critics of the deal have seized on the sexual-harassment scandal and overall corporate culture as a reason not to grant approval.

O’Reilly is leaving Fox with a payout of up to $25 million, the equivalent of one year of his salary, according to multiple reports.

Lastly, I do have to say this.  A real to O’Reilly’s ouster, at least in terms of the pressure the Murdochs felt the last few weeks, was the accusation raised by Wendy Walsh, who has alleged O’Reilly propositioned her in a Los Angeles hotel in 2013, then retaliated against her when she rebuffed him.

Walsh is a Los Angeles radio personality and author who offers relationship advice and her allegation was unknown to Fox News until she raised it for the first time in an interview with the New York Times.

Walsh alleges she was dropped as a regular guest on “The Factor” and O’Reilly reneged on a promise to help her secure a paying position as Fox News commentator after she turned down the hotel invite.

It seems the facts, though, include that O’Reilly helped plug Walsh’s book, “The 30-Day Love Detox,” hugely valuable given O’Reilly’s audience.  He brought it up in four different segments after it was published and secured an appearance on the “The View” for Walsh in which she was able to promote the book.

She also wrote to one of O’Reilly’s producers at the time, after the reported propositioning, writing in an email, “Please, please, pretty please, can we do a segment on my book on the 25th???,” according to the Washington Post.

Later, in another email to O’Reilly’s assistant, seven months after the hotel meeting, she wrote, “Specifically, please convey to ‘the boss’ [O’Reilly] that I am deeply grateful for his professional kindness.  His media power is immeasurable and his call to [“The View’s” executive producer] really launched my book tour on a high note.  Can’t thank him enough.”  [Paul Farhi / Washington Post]

Just needed to lay this out there for the record.  Otherwise, I really don’t give a damn.

Foreign Affairs

North Korea: State media warned the United States of a “super-mighty preemptive strike” after Secretary of State Rex Tillerson said the U.S. was looking at ways to bring pressure to bear on North Korea over its nuclear program.  Earlier this week, Vice President Mike Pence, on a tour of Asian allies, said repeatedly an “era of strategic patience” with North Korea is over.

The official newspaper of the North’s ruling Workers’ Party, had said:

“In the case of our super-mighty preemptive strike being launched, it will completely and immediately wipe out not only U.S. imperialists’ invasion forces in South Korea and its surrounding areas but the U.S. mainland and reduce them to ashes.”

During a visit to London Thursday, Speaker Paul Ryan said the military option must be part of the pressure brought to bear.  “Allowing this dictator to have that kind of power is not something that civilized nations can allow to happen.”

U.S. and South Korean air forces have been conducting an annual training exercise.

Charles Krauthammer / Washington Post

“The crisis with North Korea may appear trumped up.  It’s not.

“Given that Pyongyang has had nuclear weapons and ballistic missiles for more than a decade, why the panic now?  Because North Korea is headed for a nuclear breakout.  The regime has openly declared that it is racing to develop an intercontinental ballistic missile that can reach the United States – and thus destroy an American city at a Kim Jong Un push of a button.

“The North Koreans are not bluffing.  They’ve made significant progress with solid-fuel rockets, which are more quickly deployable and thus more easily hidden and less subject to detection and preemption. 

“At the same time, Pyongyang has been steadily adding to its supply of nuclear weapons.  Today it has an estimated 10 to 16. By 2020, it could very well have a hundred.  (For context: The British are thought to have about 200.)

“Hence the crisis.  We simply cannot concede to Kim Jong Un the capacity to annihilate American cities.

“Some will argue for deterrence. If it held off the Russians and the Chinese for all these years, why not the North Koreans?  First, because deterrence, even with a rational adversary like the old Soviet Union, is never a sure thing.  We came pretty close to nuclear war in October 1962.

“And second, because North Korea’s regime is bizarre in the extreme, a hermit kingdom run by a weird, utterly ruthless and highly erratic god-king.  You can’t count on Caligula.  The regime is savage and cultlike; its people, robotic.  Karen Elliott House once noted that while Saddam Hussein’s Iraq was a prison, North Korea was an ant colony. Ant colonies do not have good checks and balances....

“For years, the Chinese made gestures, but never did anything remotely decisive. They have their reasons.  It’s not just that they fear a massive influx of refugees if the Kim regime disintegrates.  It’s also that Pyongyang is a perpetual thorn in the side of the Americans, whereas regime collapse brings South Korea (and thus America) right up to the Yalu River....

“(But while China doesn’t) mind tension...they don’t want war. And the risk of war is rising.  They know that the ICBM threat is totally unacceptable to the Americans. And that the current administration appears particularly committed to enforcing his undeclared red line.

“Chinese interests are being significantly damaged by the erection of regional missile defenses to counteract North Korea’s nukes....

“For China to do nothing risks the return of the American tactical nukes in South Korea, withdrawn in 1991.

“If the crisis deepens, the possibility arises of South Korea and, more importantly, Japan going nuclear themselves. The latter is the ultimate Chinese nightmare....

“There are deals to be made. They may have to be underpinned by demonstrations of American resolve. A preemptive attack on North Korea’s nuclear facilities and missile sites would be too dangerous, as it would almost surely precipitate an invasion of South Korea with untold millions of casualties.  We might, however, try to shoot down a North Korean missile in mid-flight to demonstrate both our capacity to defend ourselves and the futility of a North Korean missile force that can be neutralized technologically.

“The Korea crisis is real and growing. But we are not helpless. We have choices. We have assets.  It’s time to deploy them.”

Editorial / The Economist

“North Korea can be as confusing as it is alarming.  It is a hereditary Marxist monarchy. It has the world’s youngest supreme leader and also its oldest. The reigning tyrant, Kim Jong Un, is in his 30s; and his grandfather, Kim Il Sung, is the ‘eternal president’ despite having died in 1994.  To celebrate grandpa Kim’s birthday on April 15th, his grandson ordered warplanes to fly past in a formation spelling out his age: 105.  He also ordered a gigantic parade, with goose-stepping soldiers and missiles on trucks.  A male-voice choir belted out ‘Peace is guaranteed by our arms,’ even as the regime threatens to rain nuclear destruction on its enemies and is building a missile designed to reach the continental United States....

“Wanting to do something quickly is emotionally appealing.  North Korea is a vile, blood-drenched dictatorship where any hint of disloyalty is punishable by gulag or death. Mr. Kim has children imprisoned for their parents’ thought-crimes and his own relatives murdered on a whim. The prospect of such a man threatening Los Angeles is harrowing.  Yet a pre-emptive strike on North Korea would be reckless beyond belief. Its nuclear devices are hidden, possibly deep underground.  Its missiles are dispersed on mobile launchers.  Tokyo is just across the Sea of Japan.  Seoul, the capital of peaceful, capitalist South Korea, is only a few miles from the border.  Northern artillery and conventional missiles could devastate it; a conflict could rapidly turn nuclear and kill millions.

“Mr. Trump cannot possibly want to start a war. His military actions in Syria and Afghanistan suggest that he is more cautious than his bluster makes him sound. But even creating the impression that he might strike first is dangerous.  If Mr. Kim were to believe that an American attack is imminent, he might order his own pre-emptive nuclear attack, with disastrous consequences.  So Mr. Trump should cool his rhetoric immediately.

“For all his eccentricities, Mr. Kim is behaving rationally. He watched Muammar Qaddafi of Libya give up his nuclear program in return for better relations with the West – and end up dead. He sees his nuclear arsenal as a guarantee that his regime, and he, will survive.  (Though it would be suicidal for him to use it.)  Mr. Trump can do little to change his mind. Economic sanctions that harm his people will not spoil his lunch. Cyber-attacks, which may account for the failure of some recent missile launches, can slow but not stop him. America can solve the Korean conundrum only with China’s help.”

One more. As for Kim Jong-Un’s massive military parade last Saturday, some experts claimed there were dummy missiles mixed in, but many on display were new to these same folks, and as arms expert Jeffrey Lewis said, “They could go to all the trouble of manufacturing a perfect copy, but if you’re doing that, it’s just as easy to make the real missile.”

Needless to say, we don’t have good intelligence in this regard, but of most concern is if some of the new missiles are “solid-fuel” based, that’s “scary.”

Sunday, North Korea attempted to launch a new missile from its east coast, but U.S. Pacific Command said the device apparently “blew up almost instantly,” according to Cmdr. Dave Benham. The type of missile was unknown, though suspected of being of the medium-range variety.

Today, China insisted it was upholding its policy against North Korean coal imports, with a Foreign Ministry spokesman, Lu Kang, saying China was “seriously enforcing” the provisions of the ban, this as there were more reports that North Korean ships were in and around a leading Chinese port.

Reuters had reported on April 11 that several North Korean cargo ships, most fully laden, were heading home after China’s customs department issued its order not to allow the shipments.

Reuters also reported there were North Korean ships in Tangshan port today, but it wasn’t known what they were carrying.

As for South Korea, with a special presidential election May 9 to determine the successor to ex-President Park Geun-hye, prosecutors indicted her on charges that could send her to jail for life.

The government also announced Friday it was on heightened alert ahead of another important anniversary in North Korea, Tuesday’s 85th anniversary of the foundation of its Korean People’s Army.

There were also some stories on Friday that Russia was moving military hardware towards North Korea in its Far East.

Turkey: Sunday’s referendum here gave President Recep Tayyip Erdogan sweeping new powers over the NATO member-state.  But the tight result charged up the opposition, with 51.4 percent of the result for the ‘Yes’ camp, and 48.6 percent for the ‘No’ side.  Turnover was apparently 85 percent.  Turkey then extended the state of emergency that has been in place since July’s failed coup for another three months.

The opposition immediately pointed to voter fraud, and President Erdogan dismissed the complaints, saying the vote had finally put an end to debate over the powerful presidency he has long sought.  In light of the fact the referendum was held under a state of emergency, and campaigning and media coverage was decidedly one sided, the opposition’s performance was quite impressive.

But the opposition was particularly incensed by a last-minute move by the Supreme Election Board (YSK) to accept ballot documents in envelopes without an official stamp, which seems outrageous.

Erdogan told his supporters that Turkey had no intention of paying any attention to the report of fraud.  Prime Minister Binali Yildirim told his ruling party in Ankara on Tuesday that “everyone has to respect the result, including the main opposition party.”

The new system of government would dispense with the prime minister’s post and centralize the entire executive bureaucracy under the president, giving Erdogan direct power to appoint ministers.  Erdogan will also have the power to intervene in the judiciary.  The next presidential and parliamentary elections will be held on November 3, 2019

Erdogan reaffirmed he would now seek to reinstate capital punishment – a move that automatically ends Turkey’s EU bid.

Wednesday, the ruling AKP Party set out plans for Erdogan to gradually resume leadership of the party.

But Erdogan would not officially become party leader until a party congress in 2018, so the changes are not happening immediately.

Turkey’s electoral authority on Wednesday rejected appeals to annul the referendum result, but the main opposition CHP party said it would maintain its legal challenge.

Separately, President Erdogan said he would be meeting with President Trump in Washington on May 16-17.

Trump called Erdogan immediately after the vote to congratulate him, while European leaders were loath to do so.  German Chancellor Merkel warned that the “tight referendum result shows how deeply divided Turkish society is and that means a big responsibility for the Turkish leadership and for President Erdogan personally.”

Austrian Foreign Minister Sebastian Kurz said the referendum result was a “clear signal against the European Union.”  The “fiction” of Turkey’s bid to join the bloc must be ended, Mr. Kurz said.

David Gardner / Financial Times

“Recep Tayyip Erdogan did not get the clear and clamorous endorsement he was expecting in Sunday’s narrow victory for constitutional changes that hand him unbridled power, greater than any ruler of Turkey since Mustafa Kemal Ataturk, the father of the republic whom this neo-sultan aims to eclipse.

“President Erdogan and his neo-Islamist Justice and Development party (AKP) held all the cards. Since the failure last July of a coup involving a shadowy rival Islamist group, he has ruled by decree under a state of emergency. His government controls the streets, monopolizes the airwaves and regularly interdicts social media.  Since the abortive putsch, he has closed 180 media outlets, seized scores of businesses, purged 130,000 civil servants and jailed more than 40,000, from the army to academia.

“Yet after 10 straight victories at the polls since 2002, he won by little more than a percentage point. The opposition cried foul as the margin between the Yes and No camps narrowed late on Sunday.  ‘In general, the referendum did not live up to Council of Europe standards,’ said observers from this watchdog of constitutional probity, pointing out how the government-controlled election authorities abruptly changed the rules for valid ballots, ‘undermining an important safeguard and contradicting the law.’  This is not how one-sided contests are supposed to end.

“After 15 years of Mr. Erdogan’s tightening grip, first as prime minister and now as president, almost half the population said a resounding No to one-man rule.  The president’s heartland of unconditional support in Anatolia held firm. But he lost the great cities – Istanbul, Ankara, Izmir – and the Aegean and Mediterranean coast, along with the mainly Kurdish southeast and east, ravaged by the reigniting of war with the proscribed Kurdistan Workers’ party (PKK).

“Half of Turkey rejected changes that will give the president control over parliament, the judiciary and all government ministries, and keep Mr. Erdogan in power for life.  To describe this new order as a move from a parliamentary system to an ‘executive presidency’ sounds like the sanitized result of a multiple choice question. What Turks now face is not a French or U.S.-style presidency but something like Vladimir Putin’s Kremlin rule – and half the country knows this well.”

Editorial / Washington Post

“Recep Tayyip Erdogan’s ugly win in Sunday’s referendum on a new, authoritarian constitution for Turkey creates big problems for the country’s secular democratic forces and for Turkey’s Western allies – but also for Mr. Erdogan himself.  His victory was not convincing, as he had hoped, but narrow, contested and tainted by the finding of a European observer mission that the pre-election campaign was not free or fair. Turkey’s three biggest cities voted against the would-be strongman.  The country is not united behind him, but polarized – a political reality that even an empowered ruler will ignore at his peril.  To be sure, the Turkish president sounded defiant in the wake of his victory, dismissing Western critics for their ‘crusader mentality’ and hinting that he would embrace harsh new measures, such as reinstituting the death penalty – something that would surely rupture Turkey’s relations with the European Union leaders. As it is, Mr. Erdogan’s government has purged some 130,000 people from their jobs and jailed more than 45,000 since a failed military coup last summer. The new constitution, which will take full effect in 2019, could allow him to remain president until at least 2029, with only weak parliamentary checks and a judiciary he could shape with his own appointments.

“Turkey, however, has not yet reached the state of Egypt or Russia, where elections are grossly rigged and most opposition has been crushed....Preliminary results showed 48.7 percent of the country voted against the constitution despite a one-sided campaign in which opposition voices were suppressed.  A controversial decision by election authorities to accept ballots that lacked official stamps may have saved Mr. Erdogan from defeat, but at the price of further undermining his legitimacy....

“All of this poses a dilemma for the United States and other NATO nations, which badly need Turkey as an anchor of the alliance on the borders of the Middle East but cannot easily countenance its drift toward dictatorship....In the near term, Western leaders cannot afford to break with Mr. Erdogan, but they must do their best to push him toward ending his domestic repression.  The millions of Turks who still seek to preserve democracy and civil liberties will need allies, too.”

Editorial / Wall Street Journal

“Sunday’s referendum to expand his presidential powers didn’t go as Turkey’s Recep Tayyip Erdogan had planned.  The Islamist strongman had hoped for a rousing endorsement, but he won narrowly amid voting irregularities that will taint his victory. The result leaves Turkish society even more polarized and may produce more instability....

“The country’s election board made a last-minute decision to accept ballots that didn’t bear official stamps normally required to validate ballots.  The secular Republican People’s Party said that move and other verification problems cast doubt on the validity of some 2.5 million ballots....

“Barring a Turkish Spring uprising, Mr. Erdogan will consolidate even more power in the office of the president....

“All of this will complicate Turkey’s relations with the West, as Mr. Erdogan advances his Vladimir Putin-like control. The U.S. will have to work with its NATO ally.  But without more evidence the U.S. should resist demands to extradite Fethullah Gulen, the Pennsylvania-based imam Mr. Erdogan accuses of masterminding the summer putsch.  Mr. Erdogan has staged his own internal coup by abusing the levers of democracy to create an Islamist authoritarian state.”

Syria: Sarin or a similar banned toxin was used in an attack in Syria’s Idlib province on April that killed nearly 90 people, according to the Organization for the Prohibition of Chemical Weapons’ Director General Ahmet Uzumcu, who said his group’s test results “indicate that sarin or a sarin like substance was used.”  The findings support those of earlier testing by Turkish and British laboratories, and then at week’s end, French officials said they have evidence Bashar al-Assad used sarin.

The Syrian Observatory for Human Rights said two airstrikes by the U.S.-led coalition fighting ISIS killed 20 civilians in Syria’s eastern Deir Ezzor province, while a suspected Russian airstrike Tuesday on a town in the rebel-controlled province of Idlib killed 10 civilians.

But last Saturday, a car bomb ripped through buses evacuating residents from a besieged town in northern Syria, killing over 100.  There was no immediate claim of responsibility for the attack – which came amid a border deal between rebel- and government-held areas to evacuate some 30,000 Syrians across four towns.

Among the dead apparently were rebel fighters from the area.  The scene was horrific, as described by the White Helmets rescue group, many of the victims being children.

Russia’s Defense Ministry confirmed that Major Sergei Bordov was killed in Syria, as Russian news agencies  had been reporting, during an attack by militants on a garrison.

Iraq: Fighting continues, house-to-house in the Old City of Mosul, as the battle to capture ISIS’ de facto capital in Iraq extends to a seventh month.  Severely malnourished babies have been reaching government-held areas, with drones being used extensively to try to isolate the militants who are dug in the middle of civilians, according to the Iraqi military.

It is estimated 400,000 civilians are still trapped in neighborhoods under ISIS control.  The militants are also reportedly employing suicide motorbike attacks.

According to aid organizations, the fighting has killed several thousand among both civilians and fighters thus far.

Iran: The government has a vetting body for presidential candidates and President Hassan Rouhani and hardline rival Ebrahim Raisi were approved to run in May’s election, while former President Mahmoud Ahmadinejad was disqualified, after Supreme Leader Ayatollah Ali Khamenei told him not to enter the race but Ahmadinejad filed his paperwork anyway.  Major no-no.  You don’t publicly snub the Supreme Leader, sports fans.

A poll by Toronto-based company IranPoll had troubling news for President Rouhani as 54 percent said he’s “somewhat likely” or “very likely” to lose the election, citing the fact the nuclear deal he championed has not improved the economy and living standards of the average Iranian, a criticism echoed by Ayatollah Khamenei, who has final say on all state matters.

Meanwhile, Sec. of State Tillerson accused Iran of “alarming ongoing provocations” aimed at destabilizing the Middle East and undermining America’s interests.

“An unchecked Iran has the potential to travel the same path as North Korea and to take the world along with it,” Tillerson said.

The U.S. admits that Tehran is complying with the 2015 nuclear agreement, as Iran has denied accusations by the West that it was ever trying to develop nuclear weapons.

But while Tillerson said the administration is conducting its Iran review, the U.S. is looking not just at Tehran’s compliance with the above but also its actions throughout the Middle East.

Tillerson accused Iran of undermining U.S. interests in Lebanon, Syria, Iraq and Yemen.

“A comprehensive Iran policy requires we address all of the threats posed by Iran, and it is clear there are many,” he said.

The secretary of state is required to inform Congress of Iran’s technical compliance of the nuke agreement in exchange for the lifting of sanctions, but in his spoken remarks, Tillerson only spoke of Iran’s bad behavior.

And whereas President Obama wanted to separate the nuclear deal from the other issues, Tillerson said this is a flawed approach and that his department’s review would look at all threats posed by Iran.

Michael Oren / Wall Street Journal

“The U.S. has signed agreements with three rogue regimes strictly limiting their unconventional military capacities.  Two of those regimes – Syria and North Korea – brazenly violated the agreements, provoking game-changing responses from President Trump.  But the third agreement – with Iran – is so inherently flawed that Tehran doesn’t even have to break it.  Honoring it will be enough to endanger millions of lives....

“Like the frameworks with North Korea and Syria, the Joint Comprehensive Plan of Action of 2015 assumed that Iran would fulfill its obligations and open its facilities to inspectors. The JCPOA assumed that Iran would moderate its behavior and join the international community. Yet unlike its North Korean and Syrian allies, Iran was the largest state sponsor of terror and openly vowed to destroy another state – Israel.  Unlike them, Iran systematically lied about its unconventional weapons program for 30 years. And unlike Damascus and Pyongyang, which are permanently barred from acquiring weapons of mass destruction, Tehran can look forward to building them swiftly and legitimately in the late 2020s, once the JCPOA expires.

“This, for Israel and our neighboring Sunni states, is the appalling flaw of the JCPOA. The regime most committed to our destruction has been granted a free pass to develop military nuclear capabilities.  Iran could follow the Syrian and North Korean examples and cheat. Or, while enjoying hundreds of billions of dollars in sanctions relief, it can adhere to the agreement and deactivate parts of its nuclear facilities rather than dismantle them.  It can develop new technologies for producing atomic bombs while testing intercontinental ballistic missiles. It can continue massacring Syrians, Iraqis and Yemenis, and bankrolling Hamas and Hizbullah.  The JCPOA enables Iran to do all that merely by complying.”

Afghanistan: U.S. troops are still battling ISIS near the site where the massive bomb was dropped in eastern Afghanistan last week.  Casualty figures from the MOAB are impossible to verify, but both the U.S. and Afghanistan are confident no civilians were killed. ISIS continues to broadcast in the region that they didn’t lose any fighters.  Afghanistan has said over 90 were killed.

But then we learned on Friday of a devastating Taliban attack on Afghan soldiers, where dozens of Afghans were killed or wounded when Taliban gunmen, wearing Afghan army uniforms, got past checkpoints and attacked a military base.  While details are sketchy*, a U.S. army official in Washington told reporters the toll was more than 50 killed and wounded. This occurred at a major headquarters in northern Afghanistan often used by foreign military advisers. Germany, for one, has some advisers at this base but at last word, none were killed.

The NATO command in Kabul called the attack “murderous and reprehensible.”  [Abdul Matin / Reuters]

*A late report as I go to post has 50 Afghan soldiers killed.  The attack was partly at a mosque next to the base before the Taliban went inside.

Russia: We knew this a few weeks ago, but the Trump honeymoon here is officially over, as reported by Alexey Kovalev and Matthew Bodner of the Moscow Times.

For example, even though the United States and Russia are not far apart on the issue of Kim Jong-un’s nuclear weapons ambitions:

“Last weekend, the most watched news show on Russian television aired a brazen love letter to North Korea.

“(On ‘Vesti Nedeli,’ the show’s host, Dmitry) Kiselyov opened with a short introduction composed entirely of absurd understatements.  North Korea, he said, has ‘a peculiar social structure based on strong centralization’ and ‘an imposing public sector.’

“Next, the show featured a report from North Korea’s capital, Pyongyang, where the correspondent showered Kim Jong-un and his military with praise.  ‘Pyongyang,’ the reporter said, ‘is a city of skyscrapers.’  She then described bright, spacious apartment buildings, and sun-drenched streets, filled with smiling people going about their business.  The country, she proclaimed, finds itself in a ‘new era of openness.’”

Kiselyov also said that while Pyongyang does some saber rattling, both the United States’ Tomahawks and North Korea’s missiles are dangerous, “but at least Kim is more predictable,” as Kovalev and Bodner wrote.

Earlier this year, Kiselyov was effusive in his praise of Donald Trump.

Separately, the Supreme Court formally banned Jehovah’s Witnesses on Thursday, labeling the group an extremist organization.  The group is now forced to dissolve and there are some 175,000 adherents in the country.

Venezuela: The death toll in weeklong protests against the government of President Nicolas Maduro reached at least 14 by Friday night, including 10 at the scene of a looting (8 apparently were executed as the area was booby-trapped in some fashion).

Thursday, General Motors announced it was pulling out of the country after authorities seized its plant, and expropriated some of its assets (read automobiles). 

This means 2,700 workers are out of a job, and GM will not be picking up any severance-like benefits due the workers. GM had operated in the country since 1948. The automaker said it would sue Venezuela in international court, though these judgements have rarely resulted in any kind of asset recovery.

Yet another incredibly stupid move by Maduro, who claims his opponents are colluding with U.S. authorities to overthrow him.

Venezuela’s economy contracted by 18 percent last year, with triple-digit inflation and shortages of everything from toilet paper to basic food stuffs.

As I’ve been writing for years, Maduro needs to be taken out and order restored.  Yes, a military coup, with free elections guaranteed two years after and help from the United States in getting basic services back up and running.

Random Musing

--A new Pew Research survey out Monday finds that Americans increasingly feel it’s Democrats who better represent their views on a number of key issues.

Voters feel that Democrats are better at handling foreign policy, 49%-36%.  Last year, Republicans held that advantage, 46%-38%.

And despite President Trump’s emphasis on a tough immigration stance, 50% of those surveyed feel Democrats will handle the issue better than Republicans.  Just 39% believe Republicans can.

Republicans do continue to have a big advantage on the issue of terrorism, 48%-36%.

Speaker Paul Ryan’s job approval rating is just 29%.  President Trump’s approval rating in this survey is 39%.  [The Gallup tracking poll has Trump’s approval rating at 43%.  Rasmussen is 49%.]

--Rep. Jason Chaffetz (R-Utah) suddenly announced on Wednesday that he would not seek reelection in 2018.

“After long consultation with my family and prayerful consideration, I have decided I will not be a candidate for any office in 2018,” the House Oversight Committee chairman wrote on Facebook.

Sen. Orrin Hatch’s Utah seat is up in 2018, while Utah Gov. Gary Herbert’s is up in 2020.  After reading a bunch of articles, I think Chaffetz is sincere in not going for Hatch’s seat, but would be interested in a gubernatorial run.

Then, Thursday, Chaffetz suddenly said he may step down before his term ends, like maybe by the fall.  So this would mean another special election.

Chaffetz is in his second term serving as House Oversight Committee chairman and he played a key role in the investigation into Hillary Clinton’s use of a private email server.  But he has resisted probing President Trump on conflicts of interest concerning Trump’s business interests.

--While Chaffetz’ House seat is supposed to be secure, even though a potential Democratic challenger in 2018 has raised gobs of money thus far, Republicans are scrambling big time over an Atlanta-area House seat now headed to a run-off...30-year-old former Democratic congressional aide Jon Ossoff, in his first run for public office, against Republican Karen Handel, a former Georgia secretary of State, in a June 20 faceoff. 

Ossof failed to eliminate the need for a second round this Tuesday when he barely missed out on a majority in a crowded field, 48.1%, with Handel the leading Republican vote getter at 19.8%.

The seat was held by Trump’s new Health and Human Services secretary, Tom Price, and has been in Republican hands since the 1970s.

Trump carried the district by less than 2 percent, while Price won his race by more than 20 points.

Ossoff has received a boatload of support from out of state interests, headed by the Democratic Party machinery.

--Vermont Sen. Bernie Sanders (I) is the country’s most popular active politicians, according to a new survey out of Harvard-Harris, provided exclusively to The Hill.  Sanders is viewed favorably by 57 percent of registered voters, the only one of 16 Trump administration officials or congressional leaders viewed favorably by a majority of those polled.

58 percent of women view Sanders favorably, 55 percent of men.  Sanders, who would be 79 on Election Day in 2020, hasn’t ruled out another bid.

Interestingly, Democratic Sen. Elizabeth Warren (Mass.) receives just a 38 percent favorable rating, 32 percent unfavorable.

--China approved three trademarks for various Ivanka Trump brands, the same day she and husband Jared Kushner were having dinner with Chinese President Xi Jinping in Mar-a-Lago, as first reported by the Associated Press.

That day the Chinese government gave a provisional OK to trademarks that provide Ivanka monopoly rights to sell jewelry, bags and spa services in China.

While Ivanka took a leave from her company to take an unpaid position as adviser to President Trump, her business continues to expand overseas.  And despite being pulled from stores like Nordstrom and TJ Maxx, her company’s sales soared in January and February.

Ivanka’s attorney, Jamie Gorelick, insists Ivanka and Jared are staying away from issues that create conflicts but are under no obligations to remove themselves from talks involving broad foreign policy matters like China.

--A New York Times investigation into Carter Page looked into the FBI’s own interest in him, once he became a foreign policy adviser to the Trump campaign last year, after which he gave a Russia-friendly speech at a Moscow institute last July.  But the Times report seems to show that “Mr. Page’s relationship with Mr. Trump appears to have been fleeting.  According to former Trump campaign officials, the two men have never met, though Mr. Page has said he attended some meetings where Mr. Trump was present.”

“Mr. Page’s role in the Trump campaign appears to have been minimal.  Papers he wrote on energy policy languished unread. Former campaign officials play down his significance almost to the vanishing point, saying Mr. Page had no ID badge, desk or email address from the campaign.

“ ‘If the Russians were attempting to collude with him, they were attempting to collude with someone who had no influence on the Trump campaign,” said Roger Stone, long-time adviser to Trump.  “I think he’s a self-promoter – not that there’s anything wrong with that.”

For his part, Page has denied that there was ever any possibility of his being recruited to spy for Russia.

--I wrote of New York Gov. Andrew Cuomo’s “first-in-nation tuition-free college for the middle class” scholarship program last time, and how it wasn’t anywhere near being free, and now that everyone has really examined it, even the New York Times editorial board has ripped Cuomo’s plan, the Excelsior Scholarship, for students from families making up to $125,000 a year who attend the State University of New York or the City University of New York.

“We are not the only ones to notice that Mr. Cuomo didn’t seem to think his new scholarship through...This was not the product of extensive earnings or long study; there was no sense that it emerged because public-policy or higher-education experts – never mind students! – had told the governor, let’s examine what is keeping young New Yorkers out of college, and figure out how to get them in and keep them there.

“So it’s not clear whether this would needlessly harm private colleges and universities by stealing students, as some officials have complained, or place damaging financial strains on the SUNY and CUNY systems, which have been starved of funds for years.

“It’s not even clear how ‘outrageously ambitious’ the program is. By one legislative estimate, it will reach only about 32,000 students. The program’s strict income limits leave a lot of people out. It is not for part-time students, a huge portion of the community-college population. Students have to earn 30 credits a year to participate. It’s not for poor families, who are expected to use the state’s Tuition Assistance Program or Pell grants or other aid to cover tuition.  And even though the cost of room and board and books is what’s keeping many poor students out of college, the Excelsior Scholarship covers none of that....

“Having established his first-in-the-nation, champion-of-the-middle-class cred, Mr. Cuomo is now free to let others sort out the perplexing details while he moves on.”

David Brooks / New York Times

“Cuomo could have done many things to improve New York’s higher ed system. He could have poured all available money into the Tuition Assistance Program, which is directed at poorer students. He could have spent more to help students become academically ready for college, which is the biggest barrier to graduation. He could have done more to help students pay room and board expenses. He could have massively improved overstretched mental health services. He could have massively improved career counseling.

“But in 2016 Bernie Sanders made a big splash on the campaign trail with a plan to make college ‘free.’ So Cuomo proposed and on Wednesday signed legislation to make tuition free at New York public colleges for anybody coming from a family making no more than $100,000 a year, with the cap rising to $125,000 in 2019.

“If he runs for president, this will be an outstanding talking point.  Unfortunately, the law will hurt actual New Yorkers.

“First, the law is regressive.  It does nothing to help students from families earning less than $50,000 a year.  Their tuition is already covered by other programs.  But it does pay for tuition for New Yorkers who make double the state’s median income. The higher up the income scale you go, until the ceiling, the more you benefit.

“Second, it doesn’t make a dent in reducing the non-tuition fees, like living expenses, textbooks and travel, which for many students are far more onerous than tuition.

“Third, it doesn’t cover students who don’t go to school full time and don’t complete in four years.  In 2017 this is the vast, vast majority of all students, especially poorer students....

“Cuomo’s law (also) threatens to destroy some of New York’s private colleges. Cuomo could have championed a Pell-like program that subsidizes attendance at any accredited school. Instead, he pays for tuition only at state schools.

“This means that suddenly the state’s 150 private colleges have to compete with ‘free.’  Many of these schools are already struggling to survive. If upper-middle-class students are drawn away to public colleges, privates ones may close. That hurts the state’s educational diversity, it destroys jobs and it hurts the state.

“These private colleges tend to have smaller classes, they tend to do a better job of graduating their students and they tend to spend heavily to subsidize poorer students.....

“Finally, the law will hurt its recipients’ future earnings. Students who receive free tuition for four years have to remain in New York State for four years after graduating, or pay the money back. This means they won’t be able to seize out-of-state opportunities during the crucial years  when their career track is being formed.  They’ll be trapped in a state with one really expensive city, and other regions where good jobs are scarce.

“This is a really counterproductive law. We’re all focused on Trump, but one of the reasons Trump was elected was that many of the people who try to use government to do good just haven’t thought things through.”

--Arkansas put a 51-year-old convicted murderer to death Thursday, the first of eight executions officials there plan to carry out by month’s end, before the expiration of the state’s lethal injection drugs.  The execution of Ledell Lee was the first in the state since 2005, but there will be constant court actions before the others are carried out.

--Another tragedy for the New York City Fire Department, as FF William Tolley, 42, of Ladder 135 Engine 286, fell five stories from a bucket while battling a blaze on Thursday. 

Editorial / New York Post

“There are few words beyond consolation to offer William Tolley’s family, friends and colleagues at this time, save this:

“Like the 1,146 FDNY heroes before him who gave their lives to protect this city, he had one thought – service over self. RIP.”

--Historian David McCullough has a new book, “The American Spirit,” a collection of speeches that he’s given over the past few decades, where he calls on his readers to see history “as an aid to navigation in such troubled, uncertain times.”

In an interview with the Wall Street Journal’s Alexandra Wolfe, “Mr. McCullough laments the fact that students today don’t seem to be as interested in history as he was in his youth.”

“I think in some ways I knew more American history when I finished grade school than many college students know today,” he says.  “And that’s not their fault – that’s our fault.”  History, he adds, is “often boiled down to statistics and dates and quotations that make it extremely boring.”  The key to generating interest, he says, is for professors and teachers to frame history as stories about people.

McCullough also appeared Sunday on “Face the Nation” with John Dickerson.  Among McCullough’s statements:

“We are not doing very well, or not doing as well as we should, in raising our oncoming generations with an appreciation of the story of their country.

“I don’t think there is any aspect of education that matters more to effective leadership than a knowledge of what went before us. The most effective presidents we have had, for example, have all been avid readers, students of history....

“History is not about people who lived in the past.  Nobody ever lived in the past. They lived in the present.  It was their present, not ours.  And they didn’t walk around in their 18th century clothes, saying, aren’t we picturesque, and what do you think people will make of us because we dress this way?

“If you read into the life of someone like George Washington or Martin Luther King or Margaret Chase Smith in the Congress, you draw not just guidance from that, but inspiration.

“And the one quality that is prevalent in so many of our best, most important leaders, our most inspiring examples, is, they do not quit, perseverance....

“I think we are living in what is clearly a dangerous time, not just because of international tensions and clouds hanging over, but because we are sort of groping with how to repair an engine that we don’t know how to even take apart....

“(But) we have also had times that have been more unsettling, more worrisome, more painful, more costly than what we are going through now.

“And we think this is just so bleak and unpromising, because we really don’t know what we have been through before and how we came through it.

“I like to tell people about the influenza epidemic 1918-’19; 500,000 Americans died in that epidemic.  If that were happening today, in proportion to our population, it would be 1.5 million people would die in less than a year.

“But they got through it, just as we got through the Civil War, which was the most catastrophic experience of our story.  We got through the Depression, two World Wars.

“I mean, Churchill said it wonderfully.  He said, we haven’t journeyed this far because we are made of sugar candy.”

Dickerson: Final question: Is there an American character, and, if so, what is it?

“At best, honesty, courage, strength of character, and faith in our way of life, belief that what those predecessors of ours, those pilgrims, those pioneers, worked so hard to attain is something that we are obligated to know about, and also not just to sustain, but to improve.

“Make yourself useful. Don’t boast about yourself. Don’t get too full of yourself. Be kind.  Be modest.

“In the White House, on the mantelpiece in the state dining room, there is a quotation carved into the marble from a letter written by John Adams to Abigail his first night as president in the White House.

“And he wrote the letter, in which he said, ‘May none but honest and wise men ever rule under this roof.’

“It is still there.  Kennedy had it carved into the marble. Roosevelt carved it first in wood, and then Truman preserved it when he was president, and they were redoing the White House.

“But I think what is best about that line is that he puts honesty first.  ‘May none but honest and wise men ever rule under this roof.’

“And I think that is one thing that we Americans really want, is honesty, not just in a president, but in everybody we live with, work with and have a good time with.” [cbsnews.com]

---

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

God bless America.

---

Gold $1286
Oil $49.63

Returns for the week 4/17-4/21

Dow Jones  +0.5%  [20547]
S&P 500  +0.9%  [2348]
S&P MidCap  +2.2%
Russell 2000  +2.6%
Nasdaq   +1.8%  [5910]

Returns for the period 1/1/17-4/21/17

Dow Jones  +4.0%
S&P 500  +4.9%
S&P MidCap  +3.4%
Russell 2000  +1.7%
Nasdaq  +9.8%

Bulls 51.9
Bears 18.3  [Source: Investors Intelligence]

Have a great week.  Happy Earth Day!  It all started with the greatest president for the environment, period, Richard Nixon.  And it’s not even close.

Brian Trumbore



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Week in Review

04/22/2017

For the week 4/17-4/21

[Posted 11:00 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 941

You know what I’ve been saying. America can weather any domestic difficulties, but our democracy will be tested sorely with any kind of foreign crisis resulting in a major new military conflict.  There is virtually zero trust in our institutions these days, with a president more interested in cutting trade deals with China in exchange for its assistance in dealing with North Korea, rather than real diplomacy.

The Trump administration is all over the place, at least in its messaging.  I know...Trump likes to be unpredictable.  But I wish he would just focus on North Korea, full time, rather than launching a new broadside against Iran when his State Department doesn’t seem like it’s close to finishing the review discussed at the start of the Trump presidency.

The Korean Peninsula is a tinderbox.  Stay focused, Mr. President.  Please, for the sake of all of us.

“It’s hard to figure out exactly what the strategic view of this is,” Jon Alterman, a global security expert at the Center for Strategic and International Studies told The Hill.

“What does he think the uses of American power are? What does he think the limits of American power are? What does he think needs to be prioritized? What is he willing to defer or not do?  It’s hard to think of any issue on which you couldn’t make a range of predictions.”

Most of us are relying on Defense Secretary James Mattis and National Security Adviser H.R. McMaster to do the right thing, seeing as Trump seems to have given them virtually full authority.  But it’s the president who needs to be able to articulate a broad vision to the American people and to date Trump hasn’t come close to doing so.

And then you have the following fiasco, which disturbed me as much as anything in recent years.

Simon Denyer and Emily Rauhala / Washington Post

“As tensions mounted on the Korean Peninsula, Adm. Harry Harris made a dramatic announcement: An aircraft carrier had been ordered to sail north from Singapore on April 8 toward the Western Pacific.

“A spokesman for the U.S. Pacific Command, which Harris heads, linked the deployment directly to the ‘number one threat in the region,’ North Korea, and its ‘reckless, irresponsible and destabilizing program of missile tests and pursuit of a nuclear weapons capability.’  Defense Secretary Jim Mattis told reporters on April 11 that the Carl Vinson was ‘on her way up there.’ Asked about the deployment in an interview with Fox Business Network that aired April 12, President Trump said: ‘We are sending an armada, very powerful.’”

Well, you saw the frenzied media response after these reports.  But then we learned this wasn’t exactly the truth.

Editorial / Wall Street Journal

“One of the odder stories this week is the Carmen Sandiego search for a U.S. aircraft carrier that was supposedly heading toward the Korean Peninsula.  The White House is chalking up the confusion to a miscommunication, but President Trump’s hyperbole about deploying U.S. military force didn’t help.

“Earlier this month Adm. Harry Harris, head of U.S. Pacific Command, announced that the USS Carl Vinson strike group would cancel planned port visits to Australia and head north from Singapore to the Western Pacific.  President Trump told Fox News last week that he was ‘sending an armada’ as a powerful warning to North Korea, and White House Press Secretary Sean Spicer defended the move in the briefing room.

“Then the U.S. Navy released photos of the Vinson sailing through the Sunda Strait in Indonesia, and now we learn that the ships moved south to participate in joint exercises with the Australian navy.  The military has since suggested the plan was always to do a short stint with the Aussies before steaming north.  The USS Vinson is now hanging a U-turn and will arrive in the Western Pacific in the coming weeks.  On Wednesday Defense Secretary Jim Mattis said the U.S. is doing ‘exactly what we said we were going to do.’”

This was outrageous.  Of course Pyongyang had a field day, and President Trump lost a ton of respect in South Korea.  Presidential candidate Hong Joon-pyo said in an interview with the Journal’s Jonathan Cheng: “What [Mr. Trump] said was very important for the national security of South Korea. If that was a lie, then during Trump’s term, South Korea will not trust whatever Trump says.”

The Global Times, a Chinese Communist Party mouthpiece, dubbed the incident a “scandal” that “sours Trump’s authority.”

As the Journal put it, if the misinformation was intentional on the part of the administration, “this isn’t D-Day, and allies might wonder the next time the President trumpets an arriving ‘armada.’”

This was a dangerous moment.  A defense official admitted “We communicated this badly.  We, the department, communicated this badly.”

Wall Street

On the economic data front, March housing starts came in less than expected, down 6.8% on the month, but existing home sales for the month were up 4.4% month on month, to an annualized pace of 5.71 million, the best pace since Feb. 2007.  The median home price was up 3.6% for the month to $236,400, up 6.8% year on year.

Separately, March industrial production was up 0.5%, as projected, in March.

In an interview with the Financial Times the other day, Treasury Secretary Steven Mnuchin conceded the administration’s timetable for tax reform has slipped after the healthcare debacle.  The target once talked about, to get tax reform through Congress before August was “highly aggressive to not realistic at this point.”

While the secretary insisted he still expected the tax system to be reformed in 2017, confidence is waning as Trump embarks on a new push to overhaul healthcare first.

In the same interview, Mnuchin rejected fears the administration would embark on a new round of currency wars over the strength of the dollar, following Trump’s remarks he favored a weak greenback.

Mnuchin: “The president was making a factual comment about the strength of the dollar in the short term...There’s a big difference between talk and action.”

But then in an interview with Reuters on Friday in the Oval Office, President Trump said he would unveil a tax plan next week that includes “massive” tax cuts for individuals and businesses, but he can’t do this without a plan to repeal and replace ObamaCare, which has to be able to pass the House (for starters), so Republicans can tout the savings from ObamaCare as part of their tax reform plan by the stated original target date of August, before Congress goes on recess.

But Republicans in the House have thrown cold water on hopes for a vote next week on a revised ObamaCare repeal-and-replace bill.

There is movement between the House Freedom Caucus and another Republican wing, the centrist Tuesday group, but there is no actual legislation yet, so a vote before Trump’s 100th day in office (another target) doesn’t seem likely; at least something that can get 216 votes in the House.  Then Trump late Friday afternoon in passing said repeal-and-replace doesn’t have to happen next week.  This is a mess.

Europe and Asia

Before I get to this weekend’s key vote in France, some economic news.

Markit reported its flash composite readings for the eurozone in April, with all three figures at a 72-month high.

The comp. reading was 56.7 (50 being the dividing line between growth and contraction), with manufacturing at 56.8 and services at a strong 56.2.

As you know, the flash readings also break out projections for Germany and France, and in the former the manufacturing PMI was 58.2, while services were 54.7, both near 6-year highs.

In France, the flash April manufacturing figure was 55.1 vs. 53.3 in March, a 72-month high, while services came in at 57.7, a 71-mo. high.

Separately, Eurostat confirmed its own flash reading of inflation for March, 1.5% vs. 2.0% in February.  The European Central Bank is forecasting inflation of 1.7% for all of 2017, below the ECB’s 2.0% target, so the ECB feels as if there is no pressure to cut back on its quantitative easing program, at least through year end, aside from previously announced slight cuts in bond-buying beginning in May thru December.

Inflation in key Germany was also 1.5% in March vs. a worrisome 2.2% in February.

Chris Williamson, Chief Economist, IHS Markit:

“The eurozone economy has enjoyed a strong start to the second quarter. The April flash PMI is running at a level consistent with 0.7% GDP growth, up from 0.6% in the first quarter.  Such strong growth, if sustained, will inevitably lead to upward revisions to economists’ 2017 forecasts.

“Robust rates of expansion are being seen in both manufacturing and services, the former clearly benefiting from the weak euro, which has helped drive export sales growth to a six-year high.

“Rising employment is also benefiting the service sector....

“France’s elections pose the highest near-term risk to the outlook, but in the lead-up to the vote the business mood has clearly been buoyant.”

The IMF hiked its estimate on GDP for this year in the U.K. to 2.0% from 1.5%.*  But retail sales, as announced by the Office for National Statistics, fell 1.4% in the first quarter, the biggest quarterly decline since Q1 2010, as inflation has hit household consumption, which is the major source of growth in the economy, with wages not outpacing the rate of growth in retail prices.

For the month of March alone, retail sales rose 1.7% year on year, but this was down from February’s 3.7% pace.

*To show you how the IMF’s projections have gone for the U.K., GDP, before the EU referendum last year, was forecast to grow 2.2% in 2017.  Then, after the shocking vote result, the IMF cut its 2017 forecast to 1.3% in July, and then to 1.1% in October.

But the U.K. proved far more resilient than expected in the second half of 2016.

British equities, though, had their worst week since November after Tuesday’s surprise election call.

French Election: The first round of voting in the presidential election is Sunday, and the polls have been stable all week.  One on Sunday had it 23% Emmanuel Macron, 23% Marine Le Pen, 19% Francois Fillon, and 19% Lean-Luc Melenchon.  [After a post-debate surge from the final debate two weeks ago, Melenchon has stabilized.]

As the week progressed, a Cevipof poll on Wednesday had it Macron 23%, Le Pen 22.5%, Fillon 19.5%, Melenchon 19%, with Macron winning a run-off over Le Pen 65-35.

A Thursday Ifop survey had Macron at 24.5%, Le Pen 22.5%, Fillon 19.5%, and Melenchon 18.5%, Macron winning a second round 61-39.

An Ipsos survey released Friday had it Macron 24%, Le Pen 22%, and Fillon and Melenchon at 19 apiece.

But all of these were pre-Thursday night surveys of voters, including the last one.  They are all also within the margin of error.

Security had returned as an issue after the recent arrest of two men in Marseille suspected of plotting an imminent attack to disrupt the election, with three of the four candidates being warned by French intelligence officials.

And then on Thursday night, on the world-famous Champs-Elysees in central Paris, a gunman claiming allegiance to Islamic State (from a note left behind...the organization then claiming responsibility), opened fire on police sitting in a stopped police ‘bus’, with one policeman killed, two wounded, and the gunman killed.  Had the gunman, who was carrying a Kalashnikov, not been stopped by a hero policeman, the carnage could have been much worse.

But as of my posting, I have yet to see any definitive word on whether there are other suspects.  There does seem to be at least one more, possibly two.  Apparently a man suspected of possible links turned himself in to Belgian police.

The terror attack occurred as the presidential candidates were going through back-to-back television appearances to sell their campaigns.  Some of them later clashed over whether official campaigning, which had just one more day to run, should be brought to a full stop, but as you would expect, far-right Le Pen seized on the incident.  “I don’t want us to get used to Islamist terrorism,” she told France 2.  “We have to stop being naïve.  We can’t leave our children a country that is not able to defend them.”

The 39-year-old gunman was known to police and had been flagged as a potential Islamist radical.  He had served a prison sentence for a previous attack on police.

Should there be a run-off between Le Pen and Macron*, you can be sure Russia will be using fake news against Macron in a big way, as he’s been highly critical of the Kremlin.

Russia, among others, was heavily involved in efforts to derail the recent Dutch election as well, and German authorities have seen evidence of interference in its upcoming September vote.

Prior to Thursday night’s attack, Marine Le Pen said she would suspend all legal immigration to France.  At a rally in Paris, Le Pen said “I would decide on a moratorium on all legal immigration to stop this frenzy, this uncontrolled situation that is dragging us down.”

After that, she said, France would introduce “much more drastic, more reasonable, more humane, more manageable rules” on immigration.

Friday, in the aftermath of the attack, Le Pen said France should immediately reinstate border checks and expel foreigners who are on the watch lists of intelligence services.

*If Le Pen is in a run-off at all, next week I’ll provide you with firsthand insight into the potential May Day fireworks.  The second round of voting is May 7.

Editorial / Wall Street Journal

“Whatever the immediate effect of Thursday’s shooting in the heart of Paris, there is no avoiding the blunt reality at the heart of France’s momentous election, which is the general sense among the population that the nation’s elites – in politics and the French media – have become disconnected from the realities of the nation’s problems.  It will be a pity if one shooting tips Sunday’s results, but it would be no surprise.”

--A follow-up to last week’s story of an attack on a Borussia Dortmund soccer team bus ahead of a Champions League match in Dortmund.  German police arrested a 28-year-old man who is suspected of carrying out the attack (which injured one player and a policeman) for financial reasons.

The man was speculating in the football club’s shares.  Prosecutors say he has no extremist background.

On the day of the attack, the suspect bought put options on the stock, in a bet the shares would then fall.

Brexit: British Prime Minister Theresa May called a snap general election for June 8, in order to, as Mrs. May put it, provide more certainty and stability following last year’s referendum and for the negotiations lying ahead.

May said: “The country is coming together but Westminster is not.”

So the prime minister needed two-thirds of MPs in the House of Commons on Wednesday to approve the plan and they granted such approval handily, like by a whopping 522 to 13.

Mrs. May said opposition parties were playing games and that this risked a successful Brexit.

“So we need a general election and we need one now. We have at this moment a one-off chance to get this done while the European Union agrees on its negotiating position and before the detailed talks begin.

“I have only recently and reluctantly come to this conclusion. Since I became prime minister I’ve said there should be no election until 2020, but now I have concluded that the only way to guarantee certainty and security for the years ahead is to hold this election and seek your support for the decisions we must take.”  [BBC News]

An April 18 BBC Poll of Polls had May’s Conservatives at 43% and Labour at 25% [UKIP 11%, Liberal Democrats 10%]

May is hoping to achieve a larger majority than she currently has, just 17 seats.

Labour Party leader Jeremy Corbyn welcomed the prime minister’s decision, saying it would “give the British people the chance to vote for a government that will put the interests of the majority first.”

Needless to say Scotland’s First Minister Nicola Sturgeon, who is calling for another referendum on leaving the U.K., accused Mrs. May of seeing “a chance to move the U.K. to the right, force through a hard Brexit and impose deeper cuts.”

Sturgeon also warned that Mrs. May had miscalculated.  “If the SNP (Scottish National Party) wins this election in Scotland and the Tories (Conservatives) don’t, then Theresa May’s attempt to block our mandate to give the people of Scotland a choice over their own future when the time is right will crumble to dust.”

So we’re off and running on an intense 7-week campaign.

Meanwhile, Jean-Claude Juncker, president of the European Commission, believes that “real” Brexit talks will only start after the British snap vote on June 8, but this really isn’t a delay because negotiations were not going to begin until June anyway as the leaders of the remaining 27 EU countries are meeting April 29 to agree to the bloc’s negotiating stance, and then a text needs to be translated in legal form by the EU commission in May.

For its part, German Foreign Minister Sigmar Gabriel said he hoped early elections called by Mrs. May would bring more “clarity and accountability” in its negotiations to leave the EU.

Eurobits....

--Greece met a key bailout target on Friday in reporting that its primary budget surplus, which excludes debt service, was 3.9 percent of GDP, beating the 0.5 percent of GDP target set by its creditors as part of ongoing talks over its rescue terms and new loans needed by July, when it faces a spike in its debt repayments.

But Greece still faces further painful austerity measures in coming years and the government needs relief.  The budget surplus relies on increased taxation and that hurts the economy and public sentiment.

--Tourism in Paris, which had plunged after a series of terrorist attacks in 2015, has recovered strongly, with the French National Institute of Statistics and Economic Studies reporting this week that visitor numbers at the end of 2016 equaled those from the end of 2014.  Then in January, the number checking into Paris hotels reached a 10-year high, a 6.4 percent increase from the same month three years earlier. [Milan Schreuer / New York Times]

But...this was before Thursday.

--The head of Germany’s rightwing populist Alternative for Germany, AfD, Frauke Petry, said she will not head the party’s campaign come national elections in September.

Some say this is a big blow, but the AfD was already suffering in popularity (8% in a recent poll vs. 14% in September), especially as the refugee crisis has eased...for now.

The AfD has also been hurt by the rise of Martin Schulz, the new leader of the Social Democrats, who is seen as the viable alternative to Chancellor Merkel.

Ms. Petry was upset at the direction of the AfD and it being hijacked by hardliners instead of trying to broaden the party’s base.

Turning to Asia....

China’s National Bureau of Statistics released first-quarter GDP and it was 6.9%, well above the 6.5% full-year target as recently announced by Premier Li Keqiang. 

Fixed-asset investment rose 9.2% year-on-year in the quarter, vs. 8.1% last year, while exports in March rose 16.4%, yoy, retail sales last month were up 10.9%, and industrial output rose 7.6% in March, all better than expected.

77% of the growth in the quarter came from consumption, while this figure was 64.6% last year, according to the NBS.  This is encouraging.

But with steel production in the news this week, China’s production of iron ore in March, 72 million tons, nearly matched the total of U.S. output for all of 2016. China provides half of the world’s steel.  [More below.]

Meanwhile, new housing prices in March for China’s 70-city index rose 11.3% from a year earlier, as reported by the National Bureau of Statistics, which is less than the peak of 12.6% in November and a fourth straight month of headline deceleration.

In Beijing, prices grew 20.6% year on year, down from 24.1% in February.  It will be interesting to see what kind of growth in prices we’re talking about a year from now.

In Japan, March imports rose 15.8% year on year, with exports up 12%, both blowing away analyst expectations.  Exports to China rose a strong 16.4%.

The latest Reuters poll of business sentiment here, which mirrors that of the Tankan survey, showed manufacturing sentiment was the most upbeat since the 2008 financial crisis.

Street Bytes

--Stocks broke a two-week losing streak with the Dow Jones adding 0.5% to 20547, while the S&P 500 gained 0.9% and Nasdaq 1.8%.  Nasdaq hit a new closing high of 5916 before closing at 5910 today.  Early earnings reports have generally been solid.

--U.S. Treasury Yields

6-mo. 0.91%  2-yr. 1.18%  10-yr. 2.25%  30-yr. 2.90%

Treasuries were unchanged on the week.  The Fed meets May 2-3, then June 13-14.  More on this next time.

--President Trump declared a war of sorts on foreign steel, but surprisingly added Canada’s name to the list of usual suspects as he went off script in signing an executive order aimed at the likes of China and Japan and their dumping of steel.  But he threw this in on Canada.

“What they’ve done to our dairy farm workers is a disgrace.  We can’t let Canada or anybody else take advantage and do what they did to our workers and to our farmers.”

But back to steel, Trump is doing something in different in citing national security concerns when talking about steel, rather than the usual criteria for whether imports are damaging the United States.

Shares in U.S. steel companies rallied, even as a Citi report showed the U.S. makes up just 2 percent of China’s steel exports.

--The International Monetary Fund, in its latest update on global growth upped their number for 2017 to 3.5% from 3.4%.

--The Energy Information Administration reported inventories of U.S. crude fell by 1.03m barrels in the week to April 14 and at 532.3m barrels, crude stocks have come off record highs.

But stocks of gasoline unexpectedly rose by 1.5m barrels, compared with estimates for a significant drop, and for this reason, along with general concerns over demand, oil prices fell over $3.00 on the week to $49.63.  So much for the three-week rally.

--Exxon Mobil Corp. applied to the Treasury Department for a waiver from U.S. sanctions on Russia in a bid to resume its joint venture with state oil giant Rosneft. Exxon has been seeking permission to drill with Rosneft in several areas impacted by sanctions and after recent CEO Rex Tillerson assumed his position as head of the State Department, Exxon renewed a push for approval of a waiver in March, sources told the Wall Street Journal.

But then on Friday, the Treasury Department announced it would not grant Exxon it’s request for the waiver.

Congress was no doubt preparing to scrutinize the request, especially as some members are seeking to intensify sanctions on Russia in response to the allegations of interference with elections last year, let alone the ongoing probes into any potential ties between the Trump administration and the Kremlin.

Tillerson, while CEO at Exxon, formed a close relationship with Rosneft CEO Igor Sechin, who falls under the sanctions and is a close ally of Vladimir Putin.

The sanctions, which followed Russia’s annexation of Crimea in 2014, effectively sidelined a landmark exploration deal Exxon had signed under Tillerson with Rosneft in 2012, which granted Exxon access to explore in Russia’s Arctic waters, as well as opportunities in Siberia and portions of the Black Sea.

--IBM shares fell 5% on the heels of its posting a 20th straight quarter of sales declines, down 3% in the first quarter year-on-year to $18.2bn, missing analyst estimates of a slighter decline.  Gross profit margin also fell to 42.8 percent from 46.5 percent.

CEO Ginni Rometty has been an utter failure as the company’s forward-looking “strategic imperatives,” like cloud, and Watson, while showing a revenue gain of 12% in the quarter, are hardly growing at a speed to make up for the continuing deterioration in IBM’s core legacy business of technology consulting and business hardware and software.

IBM has been too late to the game in many respects and has succeeded in just one area, financial engineering.

--Morgan Stanley announced a 70 percent rise in net income that handily beat the Street’s forecasts.  The bank’s fixed-income and commodities unit delivered net revenues of $1.7bn during the quarter, almost double that of the year before.  Investment banking also kicked butt from underwriting of both equity and bond issues to a combined $921 million.

Overall revenue was $9.75bn, far ahead of expectations.

--But Goldman Sachs shares fell sharply as it missed the Street’s estimates on both earnings and revenue, with revenue from M&A advisory, where Goldman is top dog, falling by 2% from a year earlier.  While this isn’t a huge drop, it’s important given its position and importance to the bank overall.  Goldman also said its backlog of investment-banking business decreased from end of last year, with the bank citing “legislative difficulty” for President Trump’s agenda.

Revenues from Goldman’s core debt-trading business were essentially flat, at $1.69bn.  [Recall, at Citigroup, their fixed-income business rose 19%, while at Bank of America, it was up 29%.]

Goldman partially blamed the lack of volatility, particularly in foreign-exchange and commodities during the period, for its disappointing trading performance.

Others say former president Gary Cohn’s departure for the Trump administration was a bigger blow to Goldman than first thought.  Veteran bank analyst Dick Bove said, “I think maybe Gary Cohn was the brains behind Goldman.”

--Speaking of Bank of America, it reported that investment banking fees rose from $1.2bn to $1.6bn, on top of its trading success.

--BlackRock’s assets under management topped $5.4 trillion at the end of the first quarter, owing to surging sales of its iShares exchange traded funds.  Earnings were up by one-third compared to the first three months of 2016, though revenues, at $2.82bn, were up 8 percent but below expectations. 

CEO Larry Fink, noting that iShares products accounted for $64bn of a total $80bn in net inflows, said it is no longer just passive investors who are using ETFs these days: Both retail and institutional investors are using ETFs as building blocks for their portfolios.

--General Electric on Friday reported an adjusted profit of 21 cents per share in the first quarter, ahead of the Street’s estimate of 17 cents.  Revenue of $27.66bn in the period also beat forecasts, but the stock still fell and has dropped about 5 percent this year, vs. a 5% gain for the S&P 500.

The concern arose over some of GE’s industrial businesses and its cash outflow.

GE countered that industrial organic revenue, which is from continuing businesses, rose a strong 7% in the quarter.  CEO Jeff Immelt noted a 10 percent rise in quarterly orders and said the world economy was “an attractive environment for GE.  “We see global growth accelerating, while the U.S. continues to improve.”

--Fellow industrial Honeywell beat on earnings and revenues today, with solid results from all divisions, according to the company, and the shares rallied 3% today in response.

--Amidst its recent PR problems, United Continental Holdings Inc. (UAL) reported first-quarter profit of $96 million, topping the Street’s expectations.  Revenue also beat, up roughly 3%.

On a call with analysts, CEO Oscar Munoz vowed “to put our customers at the center of everything we do.  We are dedicated to setting the standard for customer service among U.S. airlines.”

--Related to United’s issues, Delta is letting employees offer customers almost $10,000 in compensation to give up seats on overbooked flights, in its attempt to avoid a United-like situation.

Delta’s gate agents can offer up to $2,000, up from a previous maximum of $800, and supervisors can offer up to $9,950, up from $1,350.

United has changed its own requirements, making employees seeking a seat on a plane to book it at least an hour before departure.

The airline also announced that CEO Oscar Munoz won’t be promoted to chairman as originally planned.

--Activist investor Elliott Management engineered the ouster of Arconic CEO Klaus Kleinfeld amid a proxy fight.  I don’t have time to get into some of the details but Kleinfeld appears to have royally screwed up, including threatening Elliott Management leader, $billionaire investor Paul Singer.

Arconic was previously part of Alcoa Inc., with Kleinfeld serving as CEO since 2008 and overseeing the split into two standalone companies.

--Tesla shares fell only slightly on Thursday after the electric automaker issued a voluntary recall for 53,000 Model S and Model X vehicles built between February and October 2016.

Tesla said in an email to clients that it discovered a “potential manufacturing issue with electric parking brakes” that “could prevent the brake from releasing.”

--Netflix will reach 100 million subscribers this weekend, the company said, though it reported slower-than-expected subscriber growth in the first quarter.

The company added 4.95m members in the first three months, fewer than the 5.2m it had forecast.

Part of the reason for the slower growth was the latest installment of House of Cards, normally introduced in the first quarter, was pushed into the second.

Netflix’ revenue of $2.63bn for Q1 vs. $1.96bn a year ago, was in line with analysts’ expectations.

On a totally unrelated television issue, I watch zero dramas or comedies, but I loved “24: Legacy,” which wrapped up this week, and I’m looking forward to a new season of “Silicon Valley” on HBO, starting Sunday.

But of course it’s really all about the upcoming season of “Game of Thrones,” which starts July 16.  Don’t bother me during that hour. [I then lie awake all night, trying to figure it out...that’s the downside.  ‘GoT’ does tend to make your brain hurt.]

--Dutch brewer Heineken reported sluggish volume growth in the first quarter despite continued high demand from the Asia Pacific, where volumes grew 5.4%.  They fell 0.4% in Africa, the Middle East and eastern Europe year-on-year, and were down 0.7% in the Americas.

--Subway announced for the first time it had a net reduction in shops in America last year, as the U.S. store count fell 1.3% to 26,774 from 27,103 in 2015.  U.S. sales declined 1% last year. International sales grew 3.7%.

The company said it is undergoing a transformation “that includes introducing new and improved products, creating an even greater customer experience.”

--Mattel said Thursday that gross sales of its Barbie brand dropped 13% in the first quarter from a year ago to $123.4m – the second consecutive quarter of falling sales. Barbie was introduced in 1959 at the New York toy fair.  She has aged well thanks to plastic surgery.

--Sony raised its forecast for operating income in the 2017 financial year as it expects improvement in almost all of the Japanese conglomerate’s business units.

But it seems the optimism on the bottom line is largely due to lower than anticipated amortization and costs in some segments, and not exactly greater sales.

Ergo, when I saw the headline I’m like, ‘Great.’  Then upon further review I thought, ‘Just IBM-like financial engineering.’

--Erin Durkin / New York Daily News: “New York City and the state stand to lose $120 million in tax money from an expected dip in foreign tourism blamed on President Trump, officials said Thursday.

“The city’s tourism agency predicted earlier this year that the number of international visitors would drop by 300,000 in 2017, the first slump in seven years – reversing a previous projection that the number would grow by 3%....

“The dip will translate into $600 million less spending in the city – (though) since the agency had previously projected an increase of 400,000 foreign travelers, spending could be $1.4 billion less than once expected.”

Aside from the ongoing fallout from Trump’s original travel ban, several Middle Eastern airlines have already reported measurable drops in bookings to the United States because of the ban on carrying large electronic devices onto planes.  “Emirates Airlines announced Wednesday it was reducing flights to five American cities because of weakened demand, though New York was not one of them.”  [Erin Durkin]

--Here’s something scary.  Stephen Nessen of WNYC (and Crain’s New York Business) reported that “On any given day, there are five Amtrak officers per shift to patrol all of Penn Station [New York City] – the busiest commuter hub in the country, with 650,000 commuters a day.”

An Amtrak union leader said that because of budget cuts, this is all the staffing they’ve been allowed.

Now there are National Guard and NYPD officers also present at Penn Station, but “all agencies defer to Amtrak to take the lead in an emergency situation.”

And Amtrak doesn’t have the communications resources to coordinate activities with the other agencies that would be involved in, say, a terrorist attack....including the MTA, NYPD, fire department, National Guard, etc.

--Squaw Valley CEO Andy Wirth said there is a chance that Northern California skiers and snowboarders could see the slopes open beyond Fourth of July...like keeping things open through the summer and fall because there’s so much snow.

As of Monday, the Sierra snowpack is 85 percent above average.  Squaw Valley has seen 705 inches of total snowfall, including 20 the past week (as of Monday).  It seems all of the Lake Tahoe ski resorts have crossed the 700-inch level.

--Facebook said it’s not going to punish employees who take time off to join pro-immigrant protests on May 1.

Separately, Facebook CEO Mark Zuckerberg said, “Our hearts go out to the family and friends of Robert Godwin Sr.,” the man killed by the Facebook killer in Cleveland; one of the truly most despicable acts in recent memory.

But Facebook deserves heavy criticism as the company had to acknowledge it had taken more than two hours to remove the clips after the first video was posted, despite it having received complaints in the interim.

Cleveland police chief, Calvin Williams, said, “This is something that should not have been shared around the world.  Period.”

Defenders of Facebook say that its emphasis on artificial intelligence holds the key to shortening the time required to flag and remove offensive material.

--And, finally, Bill O’Reilly is out at Fox News.  He had been off the air since April 12 and was scheduled to return from a vacation to Italy Monday, but he couldn’t survive another internal Fox investigation into a wave of sexual harassment suits and allegations of abusive behavior going back to 2002, which culminated in a recent New York Times story that Fox and O’Reilly shelled out $13 million in settlements against women who had made accusations against him.  Advertisers fled the program and despite having the highest ratings in cable news for 15 years running, it’s curtains for Mr. Bill, who will be replaced by Tucker Carlson in the 8:00 slot.

[The Fox show “The Five” will fill Tucker Carlson’s current 9:00 position, while a new program hosted by Eric Bolling will be at 5:00.]

Fox issued a statement: “After a thorough and careful review of the allegations, the Company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel.”

In a letter to staff Wednesday, Rupert Murdoch and his sons, James and Lachlan, the top three executives at 21st Century Fox, praised O’Reilly as “one of the most accomplished TV personalities in the history of cable news.  His success, by any measure, is indisputable.”

The letter also said the decision “follows an extensive review done in collaboration with outside counsel.”

“Lastly, and most importantly, we want to underscore our consistent commitment to fostering a work environment built on the values of trust and respect,” the Murdochs added.

O’Reilly, from Italy, released a statement saying “it is tremendously disheartening that we part ways due to completely unfounded claims.”

“But that is the unfortunate reality many of us in the public eye must live with today,” he said.  “I will always look back on my time at Fox with great pride in the unprecedented success we achieved and with my deepest gratitude to all my dedicated viewers.  I wish only the best for Fox News Channel.”

O’Reilly’s show made about $178 million in advertising revenue in 2015.

Ultimately, the decision to oust O’Reilly was up to the Murdoch family, and it reached a crisis level when the law firm Paul, Weiss investigated a claim that Mr. Bill reneged on offering a paid contributor’s job to Wendy Walsh, a frequent guest on his program, after she spurned his advances at a dinner meeting in 2013.

Executive Chairman Rupert Murdoch supported O’Reilly’s return but his sons, Chief Executive James and Chief Operating Officer Lachlan, wanted O’Reilly out, with some reports having James and Lachlan’s wives as having a major influence as well.

Importantly, 21st Century Fox has also been trying to win regulatory approval in the U.K. to acquire the portion of British TV giant Sky PLC that it doesn’t already own, and critics of the deal have seized on the sexual-harassment scandal and overall corporate culture as a reason not to grant approval.

O’Reilly is leaving Fox with a payout of up to $25 million, the equivalent of one year of his salary, according to multiple reports.

Lastly, I do have to say this.  A real to O’Reilly’s ouster, at least in terms of the pressure the Murdochs felt the last few weeks, was the accusation raised by Wendy Walsh, who has alleged O’Reilly propositioned her in a Los Angeles hotel in 2013, then retaliated against her when she rebuffed him.

Walsh is a Los Angeles radio personality and author who offers relationship advice and her allegation was unknown to Fox News until she raised it for the first time in an interview with the New York Times.

Walsh alleges she was dropped as a regular guest on “The Factor” and O’Reilly reneged on a promise to help her secure a paying position as Fox News commentator after she turned down the hotel invite.

It seems the facts, though, include that O’Reilly helped plug Walsh’s book, “The 30-Day Love Detox,” hugely valuable given O’Reilly’s audience.  He brought it up in four different segments after it was published and secured an appearance on the “The View” for Walsh in which she was able to promote the book.

She also wrote to one of O’Reilly’s producers at the time, after the reported propositioning, writing in an email, “Please, please, pretty please, can we do a segment on my book on the 25th???,” according to the Washington Post.

Later, in another email to O’Reilly’s assistant, seven months after the hotel meeting, she wrote, “Specifically, please convey to ‘the boss’ [O’Reilly] that I am deeply grateful for his professional kindness.  His media power is immeasurable and his call to [“The View’s” executive producer] really launched my book tour on a high note.  Can’t thank him enough.”  [Paul Farhi / Washington Post]

Just needed to lay this out there for the record.  Otherwise, I really don’t give a damn.

Foreign Affairs

North Korea: State media warned the United States of a “super-mighty preemptive strike” after Secretary of State Rex Tillerson said the U.S. was looking at ways to bring pressure to bear on North Korea over its nuclear program.  Earlier this week, Vice President Mike Pence, on a tour of Asian allies, said repeatedly an “era of strategic patience” with North Korea is over.

The official newspaper of the North’s ruling Workers’ Party, had said:

“In the case of our super-mighty preemptive strike being launched, it will completely and immediately wipe out not only U.S. imperialists’ invasion forces in South Korea and its surrounding areas but the U.S. mainland and reduce them to ashes.”

During a visit to London Thursday, Speaker Paul Ryan said the military option must be part of the pressure brought to bear.  “Allowing this dictator to have that kind of power is not something that civilized nations can allow to happen.”

U.S. and South Korean air forces have been conducting an annual training exercise.

Charles Krauthammer / Washington Post

“The crisis with North Korea may appear trumped up.  It’s not.

“Given that Pyongyang has had nuclear weapons and ballistic missiles for more than a decade, why the panic now?  Because North Korea is headed for a nuclear breakout.  The regime has openly declared that it is racing to develop an intercontinental ballistic missile that can reach the United States – and thus destroy an American city at a Kim Jong Un push of a button.

“The North Koreans are not bluffing.  They’ve made significant progress with solid-fuel rockets, which are more quickly deployable and thus more easily hidden and less subject to detection and preemption. 

“At the same time, Pyongyang has been steadily adding to its supply of nuclear weapons.  Today it has an estimated 10 to 16. By 2020, it could very well have a hundred.  (For context: The British are thought to have about 200.)

“Hence the crisis.  We simply cannot concede to Kim Jong Un the capacity to annihilate American cities.

“Some will argue for deterrence. If it held off the Russians and the Chinese for all these years, why not the North Koreans?  First, because deterrence, even with a rational adversary like the old Soviet Union, is never a sure thing.  We came pretty close to nuclear war in October 1962.

“And second, because North Korea’s regime is bizarre in the extreme, a hermit kingdom run by a weird, utterly ruthless and highly erratic god-king.  You can’t count on Caligula.  The regime is savage and cultlike; its people, robotic.  Karen Elliott House once noted that while Saddam Hussein’s Iraq was a prison, North Korea was an ant colony. Ant colonies do not have good checks and balances....

“For years, the Chinese made gestures, but never did anything remotely decisive. They have their reasons.  It’s not just that they fear a massive influx of refugees if the Kim regime disintegrates.  It’s also that Pyongyang is a perpetual thorn in the side of the Americans, whereas regime collapse brings South Korea (and thus America) right up to the Yalu River....

“(But while China doesn’t) mind tension...they don’t want war. And the risk of war is rising.  They know that the ICBM threat is totally unacceptable to the Americans. And that the current administration appears particularly committed to enforcing his undeclared red line.

“Chinese interests are being significantly damaged by the erection of regional missile defenses to counteract North Korea’s nukes....

“For China to do nothing risks the return of the American tactical nukes in South Korea, withdrawn in 1991.

“If the crisis deepens, the possibility arises of South Korea and, more importantly, Japan going nuclear themselves. The latter is the ultimate Chinese nightmare....

“There are deals to be made. They may have to be underpinned by demonstrations of American resolve. A preemptive attack on North Korea’s nuclear facilities and missile sites would be too dangerous, as it would almost surely precipitate an invasion of South Korea with untold millions of casualties.  We might, however, try to shoot down a North Korean missile in mid-flight to demonstrate both our capacity to defend ourselves and the futility of a North Korean missile force that can be neutralized technologically.

“The Korea crisis is real and growing. But we are not helpless. We have choices. We have assets.  It’s time to deploy them.”

Editorial / The Economist

“North Korea can be as confusing as it is alarming.  It is a hereditary Marxist monarchy. It has the world’s youngest supreme leader and also its oldest. The reigning tyrant, Kim Jong Un, is in his 30s; and his grandfather, Kim Il Sung, is the ‘eternal president’ despite having died in 1994.  To celebrate grandpa Kim’s birthday on April 15th, his grandson ordered warplanes to fly past in a formation spelling out his age: 105.  He also ordered a gigantic parade, with goose-stepping soldiers and missiles on trucks.  A male-voice choir belted out ‘Peace is guaranteed by our arms,’ even as the regime threatens to rain nuclear destruction on its enemies and is building a missile designed to reach the continental United States....

“Wanting to do something quickly is emotionally appealing.  North Korea is a vile, blood-drenched dictatorship where any hint of disloyalty is punishable by gulag or death. Mr. Kim has children imprisoned for their parents’ thought-crimes and his own relatives murdered on a whim. The prospect of such a man threatening Los Angeles is harrowing.  Yet a pre-emptive strike on North Korea would be reckless beyond belief. Its nuclear devices are hidden, possibly deep underground.  Its missiles are dispersed on mobile launchers.  Tokyo is just across the Sea of Japan.  Seoul, the capital of peaceful, capitalist South Korea, is only a few miles from the border.  Northern artillery and conventional missiles could devastate it; a conflict could rapidly turn nuclear and kill millions.

“Mr. Trump cannot possibly want to start a war. His military actions in Syria and Afghanistan suggest that he is more cautious than his bluster makes him sound. But even creating the impression that he might strike first is dangerous.  If Mr. Kim were to believe that an American attack is imminent, he might order his own pre-emptive nuclear attack, with disastrous consequences.  So Mr. Trump should cool his rhetoric immediately.

“For all his eccentricities, Mr. Kim is behaving rationally. He watched Muammar Qaddafi of Libya give up his nuclear program in return for better relations with the West – and end up dead. He sees his nuclear arsenal as a guarantee that his regime, and he, will survive.  (Though it would be suicidal for him to use it.)  Mr. Trump can do little to change his mind. Economic sanctions that harm his people will not spoil his lunch. Cyber-attacks, which may account for the failure of some recent missile launches, can slow but not stop him. America can solve the Korean conundrum only with China’s help.”

One more. As for Kim Jong-Un’s massive military parade last Saturday, some experts claimed there were dummy missiles mixed in, but many on display were new to these same folks, and as arms expert Jeffrey Lewis said, “They could go to all the trouble of manufacturing a perfect copy, but if you’re doing that, it’s just as easy to make the real missile.”

Needless to say, we don’t have good intelligence in this regard, but of most concern is if some of the new missiles are “solid-fuel” based, that’s “scary.”

Sunday, North Korea attempted to launch a new missile from its east coast, but U.S. Pacific Command said the device apparently “blew up almost instantly,” according to Cmdr. Dave Benham. The type of missile was unknown, though suspected of being of the medium-range variety.

Today, China insisted it was upholding its policy against North Korean coal imports, with a Foreign Ministry spokesman, Lu Kang, saying China was “seriously enforcing” the provisions of the ban, this as there were more reports that North Korean ships were in and around a leading Chinese port.

Reuters had reported on April 11 that several North Korean cargo ships, most fully laden, were heading home after China’s customs department issued its order not to allow the shipments.

Reuters also reported there were North Korean ships in Tangshan port today, but it wasn’t known what they were carrying.

As for South Korea, with a special presidential election May 9 to determine the successor to ex-President Park Geun-hye, prosecutors indicted her on charges that could send her to jail for life.

The government also announced Friday it was on heightened alert ahead of another important anniversary in North Korea, Tuesday’s 85th anniversary of the foundation of its Korean People’s Army.

There were also some stories on Friday that Russia was moving military hardware towards North Korea in its Far East.

Turkey: Sunday’s referendum here gave President Recep Tayyip Erdogan sweeping new powers over the NATO member-state.  But the tight result charged up the opposition, with 51.4 percent of the result for the ‘Yes’ camp, and 48.6 percent for the ‘No’ side.  Turnover was apparently 85 percent.  Turkey then extended the state of emergency that has been in place since July’s failed coup for another three months.

The opposition immediately pointed to voter fraud, and President Erdogan dismissed the complaints, saying the vote had finally put an end to debate over the powerful presidency he has long sought.  In light of the fact the referendum was held under a state of emergency, and campaigning and media coverage was decidedly one sided, the opposition’s performance was quite impressive.

But the opposition was particularly incensed by a last-minute move by the Supreme Election Board (YSK) to accept ballot documents in envelopes without an official stamp, which seems outrageous.

Erdogan told his supporters that Turkey had no intention of paying any attention to the report of fraud.  Prime Minister Binali Yildirim told his ruling party in Ankara on Tuesday that “everyone has to respect the result, including the main opposition party.”

The new system of government would dispense with the prime minister’s post and centralize the entire executive bureaucracy under the president, giving Erdogan direct power to appoint ministers.  Erdogan will also have the power to intervene in the judiciary.  The next presidential and parliamentary elections will be held on November 3, 2019

Erdogan reaffirmed he would now seek to reinstate capital punishment – a move that automatically ends Turkey’s EU bid.

Wednesday, the ruling AKP Party set out plans for Erdogan to gradually resume leadership of the party.

But Erdogan would not officially become party leader until a party congress in 2018, so the changes are not happening immediately.

Turkey’s electoral authority on Wednesday rejected appeals to annul the referendum result, but the main opposition CHP party said it would maintain its legal challenge.

Separately, President Erdogan said he would be meeting with President Trump in Washington on May 16-17.

Trump called Erdogan immediately after the vote to congratulate him, while European leaders were loath to do so.  German Chancellor Merkel warned that the “tight referendum result shows how deeply divided Turkish society is and that means a big responsibility for the Turkish leadership and for President Erdogan personally.”

Austrian Foreign Minister Sebastian Kurz said the referendum result was a “clear signal against the European Union.”  The “fiction” of Turkey’s bid to join the bloc must be ended, Mr. Kurz said.

David Gardner / Financial Times

“Recep Tayyip Erdogan did not get the clear and clamorous endorsement he was expecting in Sunday’s narrow victory for constitutional changes that hand him unbridled power, greater than any ruler of Turkey since Mustafa Kemal Ataturk, the father of the republic whom this neo-sultan aims to eclipse.

“President Erdogan and his neo-Islamist Justice and Development party (AKP) held all the cards. Since the failure last July of a coup involving a shadowy rival Islamist group, he has ruled by decree under a state of emergency. His government controls the streets, monopolizes the airwaves and regularly interdicts social media.  Since the abortive putsch, he has closed 180 media outlets, seized scores of businesses, purged 130,000 civil servants and jailed more than 40,000, from the army to academia.

“Yet after 10 straight victories at the polls since 2002, he won by little more than a percentage point. The opposition cried foul as the margin between the Yes and No camps narrowed late on Sunday.  ‘In general, the referendum did not live up to Council of Europe standards,’ said observers from this watchdog of constitutional probity, pointing out how the government-controlled election authorities abruptly changed the rules for valid ballots, ‘undermining an important safeguard and contradicting the law.’  This is not how one-sided contests are supposed to end.

“After 15 years of Mr. Erdogan’s tightening grip, first as prime minister and now as president, almost half the population said a resounding No to one-man rule.  The president’s heartland of unconditional support in Anatolia held firm. But he lost the great cities – Istanbul, Ankara, Izmir – and the Aegean and Mediterranean coast, along with the mainly Kurdish southeast and east, ravaged by the reigniting of war with the proscribed Kurdistan Workers’ party (PKK).

“Half of Turkey rejected changes that will give the president control over parliament, the judiciary and all government ministries, and keep Mr. Erdogan in power for life.  To describe this new order as a move from a parliamentary system to an ‘executive presidency’ sounds like the sanitized result of a multiple choice question. What Turks now face is not a French or U.S.-style presidency but something like Vladimir Putin’s Kremlin rule – and half the country knows this well.”

Editorial / Washington Post

“Recep Tayyip Erdogan’s ugly win in Sunday’s referendum on a new, authoritarian constitution for Turkey creates big problems for the country’s secular democratic forces and for Turkey’s Western allies – but also for Mr. Erdogan himself.  His victory was not convincing, as he had hoped, but narrow, contested and tainted by the finding of a European observer mission that the pre-election campaign was not free or fair. Turkey’s three biggest cities voted against the would-be strongman.  The country is not united behind him, but polarized – a political reality that even an empowered ruler will ignore at his peril.  To be sure, the Turkish president sounded defiant in the wake of his victory, dismissing Western critics for their ‘crusader mentality’ and hinting that he would embrace harsh new measures, such as reinstituting the death penalty – something that would surely rupture Turkey’s relations with the European Union leaders. As it is, Mr. Erdogan’s government has purged some 130,000 people from their jobs and jailed more than 45,000 since a failed military coup last summer. The new constitution, which will take full effect in 2019, could allow him to remain president until at least 2029, with only weak parliamentary checks and a judiciary he could shape with his own appointments.

“Turkey, however, has not yet reached the state of Egypt or Russia, where elections are grossly rigged and most opposition has been crushed....Preliminary results showed 48.7 percent of the country voted against the constitution despite a one-sided campaign in which opposition voices were suppressed.  A controversial decision by election authorities to accept ballots that lacked official stamps may have saved Mr. Erdogan from defeat, but at the price of further undermining his legitimacy....

“All of this poses a dilemma for the United States and other NATO nations, which badly need Turkey as an anchor of the alliance on the borders of the Middle East but cannot easily countenance its drift toward dictatorship....In the near term, Western leaders cannot afford to break with Mr. Erdogan, but they must do their best to push him toward ending his domestic repression.  The millions of Turks who still seek to preserve democracy and civil liberties will need allies, too.”

Editorial / Wall Street Journal

“Sunday’s referendum to expand his presidential powers didn’t go as Turkey’s Recep Tayyip Erdogan had planned.  The Islamist strongman had hoped for a rousing endorsement, but he won narrowly amid voting irregularities that will taint his victory. The result leaves Turkish society even more polarized and may produce more instability....

“The country’s election board made a last-minute decision to accept ballots that didn’t bear official stamps normally required to validate ballots.  The secular Republican People’s Party said that move and other verification problems cast doubt on the validity of some 2.5 million ballots....

“Barring a Turkish Spring uprising, Mr. Erdogan will consolidate even more power in the office of the president....

“All of this will complicate Turkey’s relations with the West, as Mr. Erdogan advances his Vladimir Putin-like control. The U.S. will have to work with its NATO ally.  But without more evidence the U.S. should resist demands to extradite Fethullah Gulen, the Pennsylvania-based imam Mr. Erdogan accuses of masterminding the summer putsch.  Mr. Erdogan has staged his own internal coup by abusing the levers of democracy to create an Islamist authoritarian state.”

Syria: Sarin or a similar banned toxin was used in an attack in Syria’s Idlib province on April that killed nearly 90 people, according to the Organization for the Prohibition of Chemical Weapons’ Director General Ahmet Uzumcu, who said his group’s test results “indicate that sarin or a sarin like substance was used.”  The findings support those of earlier testing by Turkish and British laboratories, and then at week’s end, French officials said they have evidence Bashar al-Assad used sarin.

The Syrian Observatory for Human Rights said two airstrikes by the U.S.-led coalition fighting ISIS killed 20 civilians in Syria’s eastern Deir Ezzor province, while a suspected Russian airstrike Tuesday on a town in the rebel-controlled province of Idlib killed 10 civilians.

But last Saturday, a car bomb ripped through buses evacuating residents from a besieged town in northern Syria, killing over 100.  There was no immediate claim of responsibility for the attack – which came amid a border deal between rebel- and government-held areas to evacuate some 30,000 Syrians across four towns.

Among the dead apparently were rebel fighters from the area.  The scene was horrific, as described by the White Helmets rescue group, many of the victims being children.

Russia’s Defense Ministry confirmed that Major Sergei Bordov was killed in Syria, as Russian news agencies  had been reporting, during an attack by militants on a garrison.

Iraq: Fighting continues, house-to-house in the Old City of Mosul, as the battle to capture ISIS’ de facto capital in Iraq extends to a seventh month.  Severely malnourished babies have been reaching government-held areas, with drones being used extensively to try to isolate the militants who are dug in the middle of civilians, according to the Iraqi military.

It is estimated 400,000 civilians are still trapped in neighborhoods under ISIS control.  The militants are also reportedly employing suicide motorbike attacks.

According to aid organizations, the fighting has killed several thousand among both civilians and fighters thus far.

Iran: The government has a vetting body for presidential candidates and President Hassan Rouhani and hardline rival Ebrahim Raisi were approved to run in May’s election, while former President Mahmoud Ahmadinejad was disqualified, after Supreme Leader Ayatollah Ali Khamenei told him not to enter the race but Ahmadinejad filed his paperwork anyway.  Major no-no.  You don’t publicly snub the Supreme Leader, sports fans.

A poll by Toronto-based company IranPoll had troubling news for President Rouhani as 54 percent said he’s “somewhat likely” or “very likely” to lose the election, citing the fact the nuclear deal he championed has not improved the economy and living standards of the average Iranian, a criticism echoed by Ayatollah Khamenei, who has final say on all state matters.

Meanwhile, Sec. of State Tillerson accused Iran of “alarming ongoing provocations” aimed at destabilizing the Middle East and undermining America’s interests.

“An unchecked Iran has the potential to travel the same path as North Korea and to take the world along with it,” Tillerson said.

The U.S. admits that Tehran is complying with the 2015 nuclear agreement, as Iran has denied accusations by the West that it was ever trying to develop nuclear weapons.

But while Tillerson said the administration is conducting its Iran review, the U.S. is looking not just at Tehran’s compliance with the above but also its actions throughout the Middle East.

Tillerson accused Iran of undermining U.S. interests in Lebanon, Syria, Iraq and Yemen.

“A comprehensive Iran policy requires we address all of the threats posed by Iran, and it is clear there are many,” he said.

The secretary of state is required to inform Congress of Iran’s technical compliance of the nuke agreement in exchange for the lifting of sanctions, but in his spoken remarks, Tillerson only spoke of Iran’s bad behavior.

And whereas President Obama wanted to separate the nuclear deal from the other issues, Tillerson said this is a flawed approach and that his department’s review would look at all threats posed by Iran.

Michael Oren / Wall Street Journal

“The U.S. has signed agreements with three rogue regimes strictly limiting their unconventional military capacities.  Two of those regimes – Syria and North Korea – brazenly violated the agreements, provoking game-changing responses from President Trump.  But the third agreement – with Iran – is so inherently flawed that Tehran doesn’t even have to break it.  Honoring it will be enough to endanger millions of lives....

“Like the frameworks with North Korea and Syria, the Joint Comprehensive Plan of Action of 2015 assumed that Iran would fulfill its obligations and open its facilities to inspectors. The JCPOA assumed that Iran would moderate its behavior and join the international community. Yet unlike its North Korean and Syrian allies, Iran was the largest state sponsor of terror and openly vowed to destroy another state – Israel.  Unlike them, Iran systematically lied about its unconventional weapons program for 30 years. And unlike Damascus and Pyongyang, which are permanently barred from acquiring weapons of mass destruction, Tehran can look forward to building them swiftly and legitimately in the late 2020s, once the JCPOA expires.

“This, for Israel and our neighboring Sunni states, is the appalling flaw of the JCPOA. The regime most committed to our destruction has been granted a free pass to develop military nuclear capabilities.  Iran could follow the Syrian and North Korean examples and cheat. Or, while enjoying hundreds of billions of dollars in sanctions relief, it can adhere to the agreement and deactivate parts of its nuclear facilities rather than dismantle them.  It can develop new technologies for producing atomic bombs while testing intercontinental ballistic missiles. It can continue massacring Syrians, Iraqis and Yemenis, and bankrolling Hamas and Hizbullah.  The JCPOA enables Iran to do all that merely by complying.”

Afghanistan: U.S. troops are still battling ISIS near the site where the massive bomb was dropped in eastern Afghanistan last week.  Casualty figures from the MOAB are impossible to verify, but both the U.S. and Afghanistan are confident no civilians were killed. ISIS continues to broadcast in the region that they didn’t lose any fighters.  Afghanistan has said over 90 were killed.

But then we learned on Friday of a devastating Taliban attack on Afghan soldiers, where dozens of Afghans were killed or wounded when Taliban gunmen, wearing Afghan army uniforms, got past checkpoints and attacked a military base.  While details are sketchy*, a U.S. army official in Washington told reporters the toll was more than 50 killed and wounded. This occurred at a major headquarters in northern Afghanistan often used by foreign military advisers. Germany, for one, has some advisers at this base but at last word, none were killed.

The NATO command in Kabul called the attack “murderous and reprehensible.”  [Abdul Matin / Reuters]

*A late report as I go to post has 50 Afghan soldiers killed.  The attack was partly at a mosque next to the base before the Taliban went inside.

Russia: We knew this a few weeks ago, but the Trump honeymoon here is officially over, as reported by Alexey Kovalev and Matthew Bodner of the Moscow Times.

For example, even though the United States and Russia are not far apart on the issue of Kim Jong-un’s nuclear weapons ambitions:

“Last weekend, the most watched news show on Russian television aired a brazen love letter to North Korea.

“(On ‘Vesti Nedeli,’ the show’s host, Dmitry) Kiselyov opened with a short introduction composed entirely of absurd understatements.  North Korea, he said, has ‘a peculiar social structure based on strong centralization’ and ‘an imposing public sector.’

“Next, the show featured a report from North Korea’s capital, Pyongyang, where the correspondent showered Kim Jong-un and his military with praise.  ‘Pyongyang,’ the reporter said, ‘is a city of skyscrapers.’  She then described bright, spacious apartment buildings, and sun-drenched streets, filled with smiling people going about their business.  The country, she proclaimed, finds itself in a ‘new era of openness.’”

Kiselyov also said that while Pyongyang does some saber rattling, both the United States’ Tomahawks and North Korea’s missiles are dangerous, “but at least Kim is more predictable,” as Kovalev and Bodner wrote.

Earlier this year, Kiselyov was effusive in his praise of Donald Trump.

Separately, the Supreme Court formally banned Jehovah’s Witnesses on Thursday, labeling the group an extremist organization.  The group is now forced to dissolve and there are some 175,000 adherents in the country.

Venezuela: The death toll in weeklong protests against the government of President Nicolas Maduro reached at least 14 by Friday night, including 10 at the scene of a looting (8 apparently were executed as the area was booby-trapped in some fashion).

Thursday, General Motors announced it was pulling out of the country after authorities seized its plant, and expropriated some of its assets (read automobiles). 

This means 2,700 workers are out of a job, and GM will not be picking up any severance-like benefits due the workers. GM had operated in the country since 1948. The automaker said it would sue Venezuela in international court, though these judgements have rarely resulted in any kind of asset recovery.

Yet another incredibly stupid move by Maduro, who claims his opponents are colluding with U.S. authorities to overthrow him.

Venezuela’s economy contracted by 18 percent last year, with triple-digit inflation and shortages of everything from toilet paper to basic food stuffs.

As I’ve been writing for years, Maduro needs to be taken out and order restored.  Yes, a military coup, with free elections guaranteed two years after and help from the United States in getting basic services back up and running.

Random Musing

--A new Pew Research survey out Monday finds that Americans increasingly feel it’s Democrats who better represent their views on a number of key issues.

Voters feel that Democrats are better at handling foreign policy, 49%-36%.  Last year, Republicans held that advantage, 46%-38%.

And despite President Trump’s emphasis on a tough immigration stance, 50% of those surveyed feel Democrats will handle the issue better than Republicans.  Just 39% believe Republicans can.

Republicans do continue to have a big advantage on the issue of terrorism, 48%-36%.

Speaker Paul Ryan’s job approval rating is just 29%.  President Trump’s approval rating in this survey is 39%.  [The Gallup tracking poll has Trump’s approval rating at 43%.  Rasmussen is 49%.]

--Rep. Jason Chaffetz (R-Utah) suddenly announced on Wednesday that he would not seek reelection in 2018.

“After long consultation with my family and prayerful consideration, I have decided I will not be a candidate for any office in 2018,” the House Oversight Committee chairman wrote on Facebook.

Sen. Orrin Hatch’s Utah seat is up in 2018, while Utah Gov. Gary Herbert’s is up in 2020.  After reading a bunch of articles, I think Chaffetz is sincere in not going for Hatch’s seat, but would be interested in a gubernatorial run.

Then, Thursday, Chaffetz suddenly said he may step down before his term ends, like maybe by the fall.  So this would mean another special election.

Chaffetz is in his second term serving as House Oversight Committee chairman and he played a key role in the investigation into Hillary Clinton’s use of a private email server.  But he has resisted probing President Trump on conflicts of interest concerning Trump’s business interests.

--While Chaffetz’ House seat is supposed to be secure, even though a potential Democratic challenger in 2018 has raised gobs of money thus far, Republicans are scrambling big time over an Atlanta-area House seat now headed to a run-off...30-year-old former Democratic congressional aide Jon Ossoff, in his first run for public office, against Republican Karen Handel, a former Georgia secretary of State, in a June 20 faceoff. 

Ossof failed to eliminate the need for a second round this Tuesday when he barely missed out on a majority in a crowded field, 48.1%, with Handel the leading Republican vote getter at 19.8%.

The seat was held by Trump’s new Health and Human Services secretary, Tom Price, and has been in Republican hands since the 1970s.

Trump carried the district by less than 2 percent, while Price won his race by more than 20 points.

Ossoff has received a boatload of support from out of state interests, headed by the Democratic Party machinery.

--Vermont Sen. Bernie Sanders (I) is the country’s most popular active politicians, according to a new survey out of Harvard-Harris, provided exclusively to The Hill.  Sanders is viewed favorably by 57 percent of registered voters, the only one of 16 Trump administration officials or congressional leaders viewed favorably by a majority of those polled.

58 percent of women view Sanders favorably, 55 percent of men.  Sanders, who would be 79 on Election Day in 2020, hasn’t ruled out another bid.

Interestingly, Democratic Sen. Elizabeth Warren (Mass.) receives just a 38 percent favorable rating, 32 percent unfavorable.

--China approved three trademarks for various Ivanka Trump brands, the same day she and husband Jared Kushner were having dinner with Chinese President Xi Jinping in Mar-a-Lago, as first reported by the Associated Press.

That day the Chinese government gave a provisional OK to trademarks that provide Ivanka monopoly rights to sell jewelry, bags and spa services in China.

While Ivanka took a leave from her company to take an unpaid position as adviser to President Trump, her business continues to expand overseas.  And despite being pulled from stores like Nordstrom and TJ Maxx, her company’s sales soared in January and February.

Ivanka’s attorney, Jamie Gorelick, insists Ivanka and Jared are staying away from issues that create conflicts but are under no obligations to remove themselves from talks involving broad foreign policy matters like China.

--A New York Times investigation into Carter Page looked into the FBI’s own interest in him, once he became a foreign policy adviser to the Trump campaign last year, after which he gave a Russia-friendly speech at a Moscow institute last July.  But the Times report seems to show that “Mr. Page’s relationship with Mr. Trump appears to have been fleeting.  According to former Trump campaign officials, the two men have never met, though Mr. Page has said he attended some meetings where Mr. Trump was present.”

“Mr. Page’s role in the Trump campaign appears to have been minimal.  Papers he wrote on energy policy languished unread. Former campaign officials play down his significance almost to the vanishing point, saying Mr. Page had no ID badge, desk or email address from the campaign.

“ ‘If the Russians were attempting to collude with him, they were attempting to collude with someone who had no influence on the Trump campaign,” said Roger Stone, long-time adviser to Trump.  “I think he’s a self-promoter – not that there’s anything wrong with that.”

For his part, Page has denied that there was ever any possibility of his being recruited to spy for Russia.

--I wrote of New York Gov. Andrew Cuomo’s “first-in-nation tuition-free college for the middle class” scholarship program last time, and how it wasn’t anywhere near being free, and now that everyone has really examined it, even the New York Times editorial board has ripped Cuomo’s plan, the Excelsior Scholarship, for students from families making up to $125,000 a year who attend the State University of New York or the City University of New York.

“We are not the only ones to notice that Mr. Cuomo didn’t seem to think his new scholarship through...This was not the product of extensive earnings or long study; there was no sense that it emerged because public-policy or higher-education experts – never mind students! – had told the governor, let’s examine what is keeping young New Yorkers out of college, and figure out how to get them in and keep them there.

“So it’s not clear whether this would needlessly harm private colleges and universities by stealing students, as some officials have complained, or place damaging financial strains on the SUNY and CUNY systems, which have been starved of funds for years.

“It’s not even clear how ‘outrageously ambitious’ the program is. By one legislative estimate, it will reach only about 32,000 students. The program’s strict income limits leave a lot of people out. It is not for part-time students, a huge portion of the community-college population. Students have to earn 30 credits a year to participate. It’s not for poor families, who are expected to use the state’s Tuition Assistance Program or Pell grants or other aid to cover tuition.  And even though the cost of room and board and books is what’s keeping many poor students out of college, the Excelsior Scholarship covers none of that....

“Having established his first-in-the-nation, champion-of-the-middle-class cred, Mr. Cuomo is now free to let others sort out the perplexing details while he moves on.”

David Brooks / New York Times

“Cuomo could have done many things to improve New York’s higher ed system. He could have poured all available money into the Tuition Assistance Program, which is directed at poorer students. He could have spent more to help students become academically ready for college, which is the biggest barrier to graduation. He could have done more to help students pay room and board expenses. He could have massively improved overstretched mental health services. He could have massively improved career counseling.

“But in 2016 Bernie Sanders made a big splash on the campaign trail with a plan to make college ‘free.’ So Cuomo proposed and on Wednesday signed legislation to make tuition free at New York public colleges for anybody coming from a family making no more than $100,000 a year, with the cap rising to $125,000 in 2019.

“If he runs for president, this will be an outstanding talking point.  Unfortunately, the law will hurt actual New Yorkers.

“First, the law is regressive.  It does nothing to help students from families earning less than $50,000 a year.  Their tuition is already covered by other programs.  But it does pay for tuition for New Yorkers who make double the state’s median income. The higher up the income scale you go, until the ceiling, the more you benefit.

“Second, it doesn’t make a dent in reducing the non-tuition fees, like living expenses, textbooks and travel, which for many students are far more onerous than tuition.

“Third, it doesn’t cover students who don’t go to school full time and don’t complete in four years.  In 2017 this is the vast, vast majority of all students, especially poorer students....

“Cuomo’s law (also) threatens to destroy some of New York’s private colleges. Cuomo could have championed a Pell-like program that subsidizes attendance at any accredited school. Instead, he pays for tuition only at state schools.

“This means that suddenly the state’s 150 private colleges have to compete with ‘free.’  Many of these schools are already struggling to survive. If upper-middle-class students are drawn away to public colleges, privates ones may close. That hurts the state’s educational diversity, it destroys jobs and it hurts the state.

“These private colleges tend to have smaller classes, they tend to do a better job of graduating their students and they tend to spend heavily to subsidize poorer students.....

“Finally, the law will hurt its recipients’ future earnings. Students who receive free tuition for four years have to remain in New York State for four years after graduating, or pay the money back. This means they won’t be able to seize out-of-state opportunities during the crucial years  when their career track is being formed.  They’ll be trapped in a state with one really expensive city, and other regions where good jobs are scarce.

“This is a really counterproductive law. We’re all focused on Trump, but one of the reasons Trump was elected was that many of the people who try to use government to do good just haven’t thought things through.”

--Arkansas put a 51-year-old convicted murderer to death Thursday, the first of eight executions officials there plan to carry out by month’s end, before the expiration of the state’s lethal injection drugs.  The execution of Ledell Lee was the first in the state since 2005, but there will be constant court actions before the others are carried out.

--Another tragedy for the New York City Fire Department, as FF William Tolley, 42, of Ladder 135 Engine 286, fell five stories from a bucket while battling a blaze on Thursday. 

Editorial / New York Post

“There are few words beyond consolation to offer William Tolley’s family, friends and colleagues at this time, save this:

“Like the 1,146 FDNY heroes before him who gave their lives to protect this city, he had one thought – service over self. RIP.”

--Historian David McCullough has a new book, “The American Spirit,” a collection of speeches that he’s given over the past few decades, where he calls on his readers to see history “as an aid to navigation in such troubled, uncertain times.”

In an interview with the Wall Street Journal’s Alexandra Wolfe, “Mr. McCullough laments the fact that students today don’t seem to be as interested in history as he was in his youth.”

“I think in some ways I knew more American history when I finished grade school than many college students know today,” he says.  “And that’s not their fault – that’s our fault.”  History, he adds, is “often boiled down to statistics and dates and quotations that make it extremely boring.”  The key to generating interest, he says, is for professors and teachers to frame history as stories about people.

McCullough also appeared Sunday on “Face the Nation” with John Dickerson.  Among McCullough’s statements:

“We are not doing very well, or not doing as well as we should, in raising our oncoming generations with an appreciation of the story of their country.

“I don’t think there is any aspect of education that matters more to effective leadership than a knowledge of what went before us. The most effective presidents we have had, for example, have all been avid readers, students of history....

“History is not about people who lived in the past.  Nobody ever lived in the past. They lived in the present.  It was their present, not ours.  And they didn’t walk around in their 18th century clothes, saying, aren’t we picturesque, and what do you think people will make of us because we dress this way?

“If you read into the life of someone like George Washington or Martin Luther King or Margaret Chase Smith in the Congress, you draw not just guidance from that, but inspiration.

“And the one quality that is prevalent in so many of our best, most important leaders, our most inspiring examples, is, they do not quit, perseverance....

“I think we are living in what is clearly a dangerous time, not just because of international tensions and clouds hanging over, but because we are sort of groping with how to repair an engine that we don’t know how to even take apart....

“(But) we have also had times that have been more unsettling, more worrisome, more painful, more costly than what we are going through now.

“And we think this is just so bleak and unpromising, because we really don’t know what we have been through before and how we came through it.

“I like to tell people about the influenza epidemic 1918-’19; 500,000 Americans died in that epidemic.  If that were happening today, in proportion to our population, it would be 1.5 million people would die in less than a year.

“But they got through it, just as we got through the Civil War, which was the most catastrophic experience of our story.  We got through the Depression, two World Wars.

“I mean, Churchill said it wonderfully.  He said, we haven’t journeyed this far because we are made of sugar candy.”

Dickerson: Final question: Is there an American character, and, if so, what is it?

“At best, honesty, courage, strength of character, and faith in our way of life, belief that what those predecessors of ours, those pilgrims, those pioneers, worked so hard to attain is something that we are obligated to know about, and also not just to sustain, but to improve.

“Make yourself useful. Don’t boast about yourself. Don’t get too full of yourself. Be kind.  Be modest.

“In the White House, on the mantelpiece in the state dining room, there is a quotation carved into the marble from a letter written by John Adams to Abigail his first night as president in the White House.

“And he wrote the letter, in which he said, ‘May none but honest and wise men ever rule under this roof.’

“It is still there.  Kennedy had it carved into the marble. Roosevelt carved it first in wood, and then Truman preserved it when he was president, and they were redoing the White House.

“But I think what is best about that line is that he puts honesty first.  ‘May none but honest and wise men ever rule under this roof.’

“And I think that is one thing that we Americans really want, is honesty, not just in a president, but in everybody we live with, work with and have a good time with.” [cbsnews.com]

---

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

God bless America.

---

Gold $1286
Oil $49.63

Returns for the week 4/17-4/21

Dow Jones  +0.5%  [20547]
S&P 500  +0.9%  [2348]
S&P MidCap  +2.2%
Russell 2000  +2.6%
Nasdaq   +1.8%  [5910]

Returns for the period 1/1/17-4/21/17

Dow Jones  +4.0%
S&P 500  +4.9%
S&P MidCap  +3.4%
Russell 2000  +1.7%
Nasdaq  +9.8%

Bulls 51.9
Bears 18.3  [Source: Investors Intelligence]

Have a great week.  Happy Earth Day!  It all started with the greatest president for the environment, period, Richard Nixon.  And it’s not even close.

Brian Trumbore