Week in Review

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Week in Review

03/11/2017

For the week 3/6-3/10

[Posted 11:00 PM ET, Friday]

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Edition 935

Trump World, Wiretaps, AHCA, Immigration and more....

Yes, when it comes to our president, one must always wait 24 hours, or as Charles Krauthammer said, you have to learn to judge this presidency day by day.

Reminder, the following is a running history...opinion from all sides.

Saturday....

We awoke Saturday morning to a tweetstorm from Donald Trump, commencing at 6:35 a.m.

Terrible! Just found out that Obama had my “wires tapped” in Trump Tower just before the victory.  Nothing found. This is McCarthyism!

Is it legal for a sitting President to be “wire tapping” a race for president prior to an election? Turned down by court earlier. A NEW LOW!

I’d bet a good lawyer could make a great case out of the fact that President Obama was tapping my phones in October, just prior to Election!

How low has President Obama gone to tapp my phones during the very sacred election process. This is Nixon/Watergate. Bad (or sick) guy!

It was a startling allegation, presented without evidence.  Former deputy national security adviser Ben Rhodes denied Trump’s claims.  “No President can order a wiretap,” Rhodes wrote on Twitter.  “Those restrictions were put in place to protect citizens from people like you.”

The president relied on a Breibart News piece, Friday, for his information about the alleged wiretap, Breitbart having picked up on a commentary by radio host Mark Levin on Thursday.

But neither Breitbart nor Levin cited independent reporting to back up their assertions.

Republican Senator Ben Sasse of Nebraska said in a statement: “If it was  with a legal FISA court order, then an application for surveillance exists that the court found credible. The president should ask that this full application regarding surveillance of foreign operatives be made available.”

The U.S. is “in the midst of a civilization-warping crisis of public trust, and the president’s allegations today demand the through and dispassionate attention of serious patriots,” Sasse said.

Representative Adam Schiff, the ranking Democrat on the House Intelligence committee, said Trump had “no evidence” to support his “spectacularly reckless” claims.

House Minority Leader Nancy Pelosi reiterated her calls for an independent investigation into the Trump campaign’s ties to Russia.  “The Deflector-in-Chief is at it again,” she tweeted.

During a town hall meeting in Clemson, South Carolina, Republican Senator Lindsey Graham said an independent commission may be needed to fully uncover Russia’s role in the election and possible ties to Trump.

Referring to the tweets, Graham said that if the claims are true it could be a sign that a court approved such a move because of concerns that the Trump campaign was colluding with Russia.  “I would be very worried if in fact the Obama administration was able to obtain a warrant lawfully about Trump campaign activity with a foreign government,” he said.

Sunday....

Press secretary Sean Spicer: “Reports concerning potentially politically motivated investigations immediately ahead of the 2016 election are very troubling.

“President Donald J. Trump is requesting that as part of their investigation into Russian activity, the congressional intelligence committees exercise their oversight authority to determine whether executive branch investigative powers were abused in 2016.

“Neither the White House nor the President will comment further until such oversight is conducted.”

The “Russian activity” is a reference to the U.S. intelligence community’s finding in January that Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the presidential race.

The FBI and various congressional committees are continuing to investigate Russian influence, but Trump’s claim of Watergate-style abuse of power isn’t based on intelligence, but rather “reports.”

Deputy press secretary Sarah Huckabee Sanders, in a disastrous performance, went on ABC’s “This Week,” where she reiterated the White House’s call for an investigation and cited news organizations that “reported on the potential of this having had happened.”

So Spicer and Huckabee weren’t saying Trump’s statements were accurate, rather, they might be, without providing any evidence.

Sanders: “Everybody acts like President Trump is the one that came up with this idea and just threw it out there. There are multiple news outlets that have reported this.”

“Look,” said Sanders, “I think he’s going off of information that he’s seen that has led him to believe that this is a very real potential. And if it is, this is the greatest overreach and the greatest abuse of power that I think we have ever seen and a huge attack on democracy itself. And the American people have a right to know if this took place.”

But the five news reports cited did not support Trump’s claims that “President Obama was tapping my phones in October.”

The president has no role in the FBI’s decision to seek a warrant or the Foreign Intelligence Surveillance Court’s (FISA) approval for one.

James Clapper, the former director of national intelligence under Obama, appeared on NBC’s “Meet the Press” and denied a FISA court warrant was issued to monitor Trump Tower.

“For the part of the national security apparatus that I oversaw as DNI, there was no such wiretap activity mounted against the president, the president-elect at the time, or as a candidate, or against his campaign,” Clapper said.

Clapper added he would not have known whether the FBI had a court order for surveillance, and he was not aware of one.

An Obama spokesman, Kevin Lewis, called Trump’s allegation “simply false” in a statement on Twitter.

“A cardinal rule of the Obama Administration was that no White House official ever interfered with any independent investigation led by the Department of Justice.  As part of that practice, neither President Obama nor any White House official ever ordered surveillance on any U.S. citizen.”

It was reported that FBI Director James Comey requested the Justice Department issue a public statement that President Obama did not order a wiretap at Trump Tower, but they declined to do so.  Sarah Huckabee Sanders said on “This Week,” when asked whether Trump accepted Comey’s denial, said, “I don’t think he does.”

Senate Minority Leader Charles Schumer on “Meet the Press” said Obama has “flatly denied that he has done this, and either way, the president’s in trouble. If he falsely spread this kind of misinformation, that is so wrong.  It’s beneath the dignity of the presidency.  It is something that really hurts people’s view of government.”

“On the other hand, if it’s true, it’s even worse for the president,” Schumer continued, “because that means that a federal judge, independently elected, has found probable cause that the president, or people on his staff, have probable cause to have broken the law or to have interacted with a foreign agent.”

Republican Senator Tom Cotton (Ark.) said on “Fox News Sunday” that the Senate Intelligence Committee will review all issues regarding Russia’s meddling into the election.

“We’ve already begun an inquiry on the Intelligence Committee into Russia’s efforts to undermine confidence in our political system last year and our interests all around the world,” he said.

Cotton, when asked if he had seen any allegations that the Obama administration wire tapped Trump Tower, said, “I’ve seen no evidence of the allegations we’ve seen in the media. That doesn’t mean that none of these things happened.  It simply means I haven’t seen that yet...I would not want to speculate about media reports based on anonymous sources.”

Republican Senator Marco Rubio (Fla.) also said he had never heard of claims made by Trump.  “I’ve never heard that before. And I have no evidence, or no one’s ever presented anything to me, that indicates anything like that....But again, the president put that out there, and now the White House will have to answer as to exactly what he was referring to.”

Former Attorney General Michael Mukasey, appearing on “This Week,” however, said Trump is likely correct that there was surveillance on Trump Tower for intelligence purposes, but incorrect in accusing former President Obama of ordering the wiretapping.

Mukasey said if there were a wiretap on Trump Tower, it would mean that there was suspicion someone had been acting as a Russian agent “for whatever purpose.  Not necessarily the election, but for some purpose.”

Karen Tumulty / Washington Post

“Donald Trump’s presidency has veered onto a road with no centerlines or guardrails.

“The president’s accusation Saturday that his predecessor, Barack Obama, had tapped his phone ‘during the very sacred election process’ escalated on Sunday into the White House’s call for a congressional investigation of that evidence-free claim.

“The audacious tactic was a familiar one for Trump, who has little regard for norms and conventions. When he wants to change a subject, he often does it by touching a match to the dry tinder of a sketchy conspiracy theory....

“His tweets may have been an effort to distract from revelations that his aides and associates had contact with Russian officials during the election and transition, as well as to deflect criticism onto Obama.

“But instead, the president has invited more scrutiny to the larger controversy over Russian interference. The issue shows no signs of fading.”

Editorial / New York Post

“President Trump’s claim that his predecessor bugged Trump Tower during the election has sent the media into fits, wondering where on earth he could’ve gotten such an idea. But it’s all-too-obvious why Trump would be suspicious....

“The anti-Trump press was apoplectic, calling the claim ‘unsupported.’ And it’s true that Trump didn’t detail any evidence to back up the charge.

“But let’s face it: From the day Trump won election, his foes have waged a by-any-means-necessary campaign to overturn the results.

“Officials (likely Obama-era holdovers) have broken the law and leaked what they hoped would be damaging info. Groups tied to Obama have stirred up angry protests against Trump and other Republicans.

“The New York Times reported Obama’s staff purposely spread information throughout the administration that could hurt Trump, though they said the goal was to make sure the info wasn’t buried.

“Critics say Trump’s wiretap claim is baseless, but what is truly lacking in solid evidence is the claim that there was some sort of collusion between Trump and his aides and Russian officials to hijack the election. Yet that’s all Trump’s foes (and much of the press) want to talk about.

“Remember, too: Team Obama has a record of abusing power for political gain, as when the IRS targeted conservative groups.”

Editorial / Wall Street Journal

“What the country desperately needs are some grown-ups to intervene, discover the facts, and then lay them out to the American people.  This should include contacts between the Russians and the Trump campaign as well as any efforts during the Obama Administration to monitor Trump advisers.

“The latter is important no matter the provenance of Mr. Trump’s Twitter rampage.  We’ve been writing for weeks that the circumstances of the leaks against former National Security Adviser Michael Flynn suggested that U.S. intelligence was listening to his conversations with the Russian ambassador. Was there an order to do so from the U.S. Foreign Intelligence Surveillance Court, and what was the justification?

“That question has become more urgent as we’ve learned the extent of the Obama Administration’s efforts to share raw intelligence about the Trump campaign far and wide. In January the White House changed its rules to let the National Security Agency share this intelligence with other agencies without private protections. The timing is suspicious to say the least.

“The worst option for investigating all this is to appoint a special counsel in the Justice Department. The country doesn’t need another Inspector Javert spending months in secret looking for someone to indict. The country needs to know what happened.

“The second worst idea is a joint House-Senate special committee. That would have to start from scratch and you can bet it would be filled with partisans. Senate Minority Leader Chuck Schumer – who may eventually call for everyone in the Trump Administration to resign – would use it as a political weapon....

“(The) better immediate options are the House and Senate intelligence committees that have been investigating Russia’s election meddling for months. These may be the last two committees in Congress that operate in bipartisan fashion, at least most of the time....

“Political collusion with a foreign power and the abuse of intelligence collection to smear an opponent threaten the integrity of democratic institutions.  Let’s hope the intelligence committees rise above their putative party leaders and tell America what really happened.”

Editorial / New York Daily News

“If members of Trump’s campaign team were indeed subject to surveillance, there is no conceivable world in which the monitoring was ordered up by Obama himself. It would, rather, have been an outgrowth of national security investigations by federal agencies into Trump associates’ potential collusion with Russia.

“According to credible reports, the Justice Department sought a foreign surveillance warrant in June to intercept communications from two Russian banks suspected of facilitating donations to the Trump campaign – meaning, to pursue real evidence of illegality by foreigners.

“These reports claim the judge rejected the warrant and a narrower version was sought in July, and that a new judge then granted the order in October.

“Under none of these circumstances would Obama himself have ordered a tap; extensive post-Watergate controls prevent that from happening.

“Professional investigators in the executive branch request a warrant; an independent judge, serving a seven-year term, must then approve it. Foreign surveillance warrants are triggered by probable cause that a particular individual committed a serious crime or acted as an agent of a foreign power.

“And tapping a political candidate for political purposes is expressly forbidden.

“A President of the United States should know all this.  If he doesn’t, he has dozens of people ready, willing and paid to educate him.

“Trump took a leap, spitting lethal poison to score political points.

“The best case scenario for this bout of presidential paranoia: Trump is irresponsible, ill-informed and more than a little unstable, or perhaps so cynical he is willfully distorting the truth to make explosive claims. We leave the worst case scenario for another day.”

Monday....

President Trump issued an updated travel ban aimed at addressing the legal issues that have consumed the administration.

The revised executive order prohibits people from six Muslim-majority countries from entering the United States for 90 days and halts U.S. refugee resettlement for 120 days, and is far more likely than the old one to stand up in court.

Iraq was dropped from the list of banned countries.  The policy also isn’t taking effect until March 16, which is giving customs agents, travelers, airlines and airports more than a week to prepare.

In addressing the ruling from a federal appeals court, legal permanent residents and those who already have a valid visa are exempt, whereas before, families were being separated, green-card holders were stranded abroad and foreign scholars and students with valid visas in the U.S. were afraid to leave the country.

Jonathan Turley, a constitutional law professor at George Washington University Law School, told The Hill, “This is a much improved draft. This order takes the edges off.”

Another key change is that the ban removes an indefinite restriction on the admission of Syrian refugees and instead just halts all refugee admissions to the U.S. for four months.

Language was also stripped out that gave a preference to religious minorities – such as Christians – once refugee resettlement resumes, which fueled critics who labeled the first executive order a Muslim ban.

Trump signed the revised order behind closed doors and made no public statement of his own, sending out Secretary of State Tillerson, Attorney General Sessions, and DHS Secretary Kelly instead to make statements with no questions.  Reporters and lawmakers were briefed separately, though, and DHS officials didn’t admit any fault in the first order during the congressional briefing.

Senate Minority Leader Charles Schumer said: “Delaying (the announcement from the initial Jan. 27 order) so the president could bask in the aftermath of his joint address is all the proof Americans need to know that this has absolutely nothing to do with national security.”

Iraq was taken off the list at the behest of Defense Secretary James Mattis and National Security Adviser H.R. McMaster, both being veterans of the two wars in Iraq, who argued to keep Iraq on would hinder joint efforts by the U.S. and Iraqi forces to combat ISIS.

But there is no proof Iraq has improved its vetting process, which, we were told, was the original reason for the 7-nation ban, not only because they were a threat in who they might send over to the U.S., but that the vetting was poor.

Bottom line, this has been a disaster from the beginning.  If the administration was trying to prevent “bad dudes” from rushing into the country, the opposite occurred, if true to begin with.  What a farce.  Utter incompetence from the president on down.

Editorial / Wall Street Journal

“President Trump signed a revised version of his immigration executive order on Monday, and the larger question remains whether a travel ban is really needed. But at least this time the White House seems to have thought it through and tried to avoid the obvious legal traps....

“The tighter, cleaned-up order reduces the number of countries to six, with an honorable and necessary exception for Iraq, a U.S. ally and the point of the spear in the war on Islamic State.  The order also now exempts permanent residents with green cards and those holding a visa when the order was signed, which wasn’t made clear in the old order....

“The order also does a better job justifying the ban or, rather, does the job for the first time. The Immigration and Nationalist Act of 1952 gives the President discretion to prevent the entry of ‘any aliens or any class of aliens’ he determines undermine national security, but government lawyers couldn’t explain in court why the detained foreigners were a threat or why they should be denied due process....

“Mr. Trump would have been better served by withdrawing the order and trusting his Department of Homeland Security to protect the U.S. from dangerous aliens case-by-case.  The legal and constitutional danger is that willful courts like the Ninth Circuit will again intrude on core presidential powers over foreign affairs once the inevitable legal challenges come to the new order.

“Still, Mr. Trump rarely admits he makes mistakes. The implicit concessions in the new order are a good sign if they mean that going forward he and his White House staff can learn from their rough start.”

Back to the wiretap controversy....

White House counselor Kellyanne Conway said on “Fox & Friends” that Trump’s claims should be taken seriously.  “He is the president of the United States.  He has information and intelligence that the rest of us do not.”

Later Monday, Sean Spicer said that “there’s no question that something happened.”  Spicer reiterated, “There’s been enough reporting that strongly suggests that something occurred,” again without citing examples.

CNN reported Comey was “incredulous” when he first heard of Trump’s claim.

Sen. John McCain called for Trump to release any evidence he has: “I think the president of the United States, if he has any information that would indicate that his predecessor wiretapped Trump Tower, then he should come forward with that information.  The American people deserve it,” he said.

Monday night, Republicans released their replacement bill for repealing the Affordable Care Act after months of negotiation. The legislation would scrap the mandated coverage in ObamaCare in favor of tax incentives to coax people to purchase health care.  But the bill maintains many of the ACA’s mandates and basic benefits, including prohibiting insurers from denying policies for pre-existing conditions or capping benefits in a year or a lifetime. 

Conservative critics cried, “This is not the ObamaCare repeal bill we’ve been waiting for. It is a missed opportunity and a step in the wrong direction,” said Utah Republican Sen. Mike Lee, who was joined by conservative groups such as the Club for Growth, Heritage Action for America and Charles G. and David H. Koch’s Americans for Prosperity in denouncing the plan.  Sen. Lee added, “We promised the American people we would drain the swamp and end business as usual in Washington.  This bill does not do that.”

Another opponent, Republican Sen. Rand Paul (Ky.) said, “The House leadership ObamaCare Lite plan has many problems.  We should be stopping mandates, taxes and entitlements not keeping them.”

A CNN/ORC poll released Monday revealed Americans remain sharply divided on ObamaCare.  50% oppose removing the requirement to obtain coverage or pay a penalty, while 48% favor it.

87% support maintaining ObamaCare’s protections for those with pre-existing conditions, while 61% are opposed to a replacement bill that would curb funding for the expansion of the Medicaid program implemented under the ACA.

Shifting tax credits from an income-based system to one that’s driven by age, another idea incorporated in the new proposal, also divides the public, with 46% in favor and 50% opposed.  A new provision mentioned by President Trump, to allow insurers to sell coverage in any state regardless of where they are licensed generates greater support, with 66% in favor and 31% opposed.

Overall, 59% say the White House and Republicans in Congress should only repeal parts of the bill when they are able to replace them, up four points from 55% in January. 

And broadly speaking, 46% are in favor of ObamaCare, 49% opposed.  Considering the quality of care they receive, 78% are satisfied, down from 82% in March 2009.  Satisfaction with insurance coverage has dipped from 73% to 68% in that time.

53% express dissatisfaction with the price they pay for healthcare, up from 48% in 2009.

The bill as presented by the Republican leadership Monday is not what will emerge in its final form and I’m not going to go into endless detail as the negotiating process commences.  We’ll end up with what we end up with!  [I also trust Speaker Ryan et al to do the right thing, given ObamaCare is in a death spiral.]

But for now, I’ll refer to Anna Wilde Mathews’ Q&A in the Wall Street Journal.

“The bill would immediately end the penalties enforcing the mandate for most people to have health insurance.  To offset that and encourage people to buy health insurance even when they are healthy, the bill contains a penalty for consumers who go 63 days or more continuously without coverage. They may pay a 30% higher premium when they do choose to buy a plan....

“The House outline would give insurers greater freedom to peg premiums to the age of the enrollee, which will make plans cheaper for young enrollees but more expensive for older ones....

“The House proposal replaces the ACA’s subsidies with refundable tax credits that would be tied to age, with people under 30 eligible for a credit of $2,000 a year, increasing to $4,000 for those over 60.  The size of a tax credit would grow with the size of a family, but would be capped at $14,000....

“Under the House proposal, individual health plans would still be required to include 10 ‘essential health benefits’ laid out in the ACA, including maternity care, prescription drugs and mental-health coverage....

“For most people with employer coverage, the House proposal would mean few changes... Plans will still include children up to the age of 26....

“The proposal wouldn’t kill the ACA’s exchanges where people can obtain insurance, but consumers wouldn’t have to use them to get the new federal tax credits that help pay for individual coverage.”

Editorial / Wall Street Journal

“The do-or-die moment for the Trump Administration and the GOP Congress arrived on Monday, as House Republicans rolled out their ObamaCare repeal-and-replace bill. The question now is whether they can deliver on their reform promises and govern to improve the lives of American voters....

“Not only does the bill repair the failures of the Affordable Care Act, it starts to correct many of the government-created dysfunctions that have bedeviled U.S. health care for decades....

“The House bill is a center-right compromise that works off a status quo that has accumulated for years, and its architects know they can’t design a healthcare system de novo.  The bill has flaws that come from accommodating what the votes in Congress will allow.  Still, if this passes, it will be a major achievement, and real progress.

“Though the individual insurance market dominates the debate, the House’s Medicaid reform might be more important.  This safety-net program originally meant for poor women, children and the disabled has morphed into general insurance for working-age, able-bodied adults above the poverty level, despite its low-quality care and price controls.

“The House would convert Medicaid’s funding formula from the open-ended entitlement into block grants to states.  The amount would be determined by per capita enrollment and grow with medial inflation. States would thus have a reason to set priorities and retarget Medicaid on the truly needy....

“The House transition lasts three years, until 2020, which underscores one of the downsides of using the budget ‘reconciliation’ process.  This procedure allows legislation to pass with merely 51 Senate votes but it comes with arcane rules and limitations such as reducing the deficit.  Delaying some reforms is one side effect, and the GOP Governors who could take the most advantage of more flexibility might not be around in 2020....

“Confusion abounds over the bill’s handling of pre-existing conditions.  ObamaCare limits how far premiums can vary among people with different health risks. The House would allow premiums to differ closer to the true cost of care while repealing the individual mandate to buy coverage or else pay a penalty. To encourage continuous coverage, insurers could assess a 30% penalty for those who wait to sign up.

“Critics claim this change will tank the insurance markets, but the GOP bet is that if insurers are allowed to sell lower-cost products that people want to buy, people will buy them without a mandate.  By loosening rules that standardize coverage and extending financial help to consumers, the goal is to stand up a more vibrant market with more choices than ObamaCare permits.

“President Trump said Tuesday he is ‘proud’ to support the House bill and hopes it passes quickly.  His leadership will be critical, especially as strife grows on the right about the allegedly insufficient conservative purity of the House plan.

“These critics say they want outright repeal first, and then maybe Congress can pass a replacement someday.  But Mr. Trump ran on ‘repeal and replace’ and House Republicans united around the ‘Better Way’ plan. They promised real solutions to ObamaCare’s problems.

“Repeal-only can’t pass the Senate in any case, because Senate Republicans – with good reason – don’t want to accelerate ObamaCare’s collapse or throw millions off the Medicaid rolls. Voters tend to punish parties that disrupt their insurance.  Just ask Democrats.

“In other words, the House bill is the only health-care show in town.  If conservatives join Democrats to defeat the measure, the result will be to preserve ObamaCare as is – and probably torpedo the rest of the GOP agenda including tax reform. Good luck running for re-election in 2018 with a record of failure....

“Republicans have a limited window for repeal and replace, and this is a once-in-a-lifetime opportunity. Democrats understand this, even if some conservatives don’t.”

Jason Chaffetz, the chairman of the House Oversight and Government Reform Committee, brushed off a suggestion that it could lead to less coverage for low-income Americans.

“Americans have choices, and they have got to make a choice,” he said.  “So maybe rather than getting that iPhone they just love, maybe they should invest in their own healthcare.”

Tuesday....

Senate Minority Leader Chuck Schumer: “TrumpCare doesn’t replace the Affordable Care Act, it forces millions of Americans to pay more for less care.”

In the House, with no Democrats expected to vote to pass the bill and four Republican seats vacant, Republicans can afford to lose no more than 21 members of their own party.

Separately, Trump made another gaffe as he renewed his attacks on President Obama by accusing him of “another terrible decision” over releasing prisoners from Guantanamo Bay.

The president said 122 “vicious” Guantanamo inmates had returned to the battlefield, “released by the Obama administration,” when in fact only nine of the 122 were released under Obama, according to a report back in September by the director of national intelligence. That vast majority were released instead by George W. Bush.

Trump also tweeted: “Don’t let the FAKE NEWS tell you that there is big infighting in the Trump Admin. We are getting along great, and getting major things done!”

On the issue of the wiretaps, White House spokesman Sean Spicer said Tuesday the president has yet to speak to him about it.  Spicer said the “smartest way” to address this is for Congress to extend its current investigations to include this issue, he said.

Spicer, when pressed about wiretapping at the daily news briefing, said the president has “absolutely” no regrets about making the explosive claims.

“The House and Senate intelligence committee have the staff and the capabilities and the processes in place to look at this in a way that’s objective, and that’s where it should be done.”

Spicer added the media should let the Senate and House intelligence committees “do their job” and “then report back to the American people.”

And on contacts between Trump surrogates and Russia, former Trump national security adviser Carter Page told USA TODAY that the Trump campaign had given its permission for his controversial speech in Moscow in July 2016, as long as he acted as a private citizen and not a representative of the campaign.  Page didn’t name the person who granted the permission.

For months after, Trump officials tried to distance the campaign from Page after the speech at the New Economic School in Moscow, which drew intense scrutiny because he called aspects of U.S. foreign policy “hypocritical” and sharply criticized America’s sanctions against Russia.

Then Trump campaign manager Corey Lewandowski, when asked by USA TODAY if he was the man who granted Page permission for the Moscow speech, said “he has never had a conversation with Page and has never met him.  However, he said he was unsure whether he had communicated with Page by email.”  [USA TODAY]

It’s a long story, but Lewandowski is flat-out lying, as USA TODAY notes an audio recording of a March 21, 2016 editorial board meeting at The Washington Post, which has Trump asking Lewandowski, who was also present, to hand him a list of national security advisers he was announcing and Trump announced Page’s name as being one of those on the list.

Bret Stephens / Wall Street Journal

“We are now in the seventh week of Donald Trump’s presidency, and if fair-minded detractors and fans of his administration can agree on anything, it’s that this is not going well.  Mr. Trump isn’t simply failing on terms set by his opponents, which is a given for most presidents.  He is failing on his supporters’ terms, too.  Making America Great Again was not supposed to be a belly-flop into the cloudy pond of Mr. Trump’s psyche.

“Last weekend brought the latest self-inflicted wound via Mr. Trump’s early-morning tweet that Barack Obama ‘had my ‘wires tapped’ in Trump Tower’ just before the election.  For good measure, the president added that his predecessor’s behavior was reminiscent of Joe McCarthy and Richard Nixon.

“It turns out that the origin of this claim was an election-eve report from Louise Mensch of Heat Street that the FBI had obtained a secret warrant to investigate the Trump Organization’s suspected links to two Russian banks. Yet Ms. Mensch and other journalists never reported that there had been an actual wiretap. Mr. Obama has flatly denied ordering any such wiretap, and FBI Director Jim Comey has asked the Justice Department publicly to reject the president’s allegations.

“Maybe Mr. Comey and Mr. Obama are lying.  Maybe Ms. Mensch doesn’t understand what she herself reported. Maybe the source of Mr. Trump’s information isn’t merely another neuralgic radio monologue from Mark Levin or a recap in Breitbart News, but his own reliable presidential intelligence.

“Or, maybe, an intemperate and verbally incontinent 70-year-old man, prone to believing dubious conspiracy theories, just let fly on Twitter at 6:35 a.m., to hell with the consequences.  And now the entire machinery of government must once again get in gear to contain the political fallout.  If such episodes occurred once or twice in a presidential term, they might not matter much. But the president’s supporters ought at least to ask themselves how much of his political capital has now been squandered on spiteful fusillades intended to settle pointless scores.  How goes that ‘major investigation’ into alleged voter fraud that Mr. Trump promised only a few weeks ago?  How many wavering supporters did the president win over last month by accusing half the press corps of being ‘an enemy of the American people’?

“Repeat these convulsions at the current rate of two or three a month, and the result could be a Seinfeld presidency – a show about nothing, only this time devoid of wit and sweetness.

“Except for this: No presidency is ever about nothing. And the something that the Trump administration is fast becoming about is its own paranoia, incompetence and recklessness, all playing out in vertigo-inducing ways.  The president of the United States has now publicly denounced his predecessor as a ‘bad (or sick) guy!’  Mr. Obama will shrug it off, but what happens when someone just as prickly as Mr. Trump – Xi Jinping for instance, or Kim Jong Un – takes the next asinine tweet seriously?

“That’s a scary thought, but the scarier one is Mr. Trump’s methodical corruption of the presidency – or, more accurately, the concept of the presidency. In his new biography of Washington, John Rhodehamel eloquently describes the founding fathers’ ‘deliberate creation of the public character that gave him the moral authority to lead the quarrelsome collection of former colonies into sturdy nationhood.’

“That moral authority is now being dissipated at a rate unparalleled in recent history, except perhaps during the Watergate scandal....

“Republicans and conservative pundits keep pretending that Mr. Trump’s eruptions are a sideshow, and that they will still be able to get  on with repealing ObamaCare, cutting taxes, and so on.  Let’s hope so.  But if there’s one thing we’ve learned about this president, it’s that he didn’t come to the White House to be the instrument of Paul Ryan’s agenda.  If there’s another thing we’ve learned, it’s that Mr. Trump hasn’t the slightest intention of changing his ways, even if he had the ability to do so.”

Edward Luce / Financial Times

“On Tuesday Mr. Trump tweeted that 122 Guantanamo Bay prisoners who had been released by Mr. Obama were back on the battlefield. It was wildly inaccurate.  Of the 714 former Guantanamo prisoners who have been transferred, 121 are fighting again – all but eight of whom were released by George W. Bush.  None of this can be laughed off.  Millions of Americans believe such stories. More will come.

“The question is where it will lead. Mr. Obama has remained silent. It would be better if he kept his powder dry.  At some point, Mr. Trump will provoke a genuine constitutional emergency. It could be in response to an actual terrorist attack or to a fake one. Or it could come about as a result of Mr. Trump’s escalating battle with the ‘deep state’ of intelligence agencies and bureaucrats whom he alleges are working with Mr. Obama to destroy his presidency.

“Whatever the trigger, it will come.  At that point, Mr. Obama should combine with all living former presidents, including George Bushes junior and senior, Bill Clinton and Jimmy Carter, to defend America’s constitutional liberties.  It will be all the more powerful if each has kept his counsel until that point.

“Against that, however, is the growing demand from the left that Mr. Obama spearhead opposition to Mr. Trump. This is assisted by the fact that the Democratic party has no obvious leader – or generation of new leaders waiting in the wings. Some of the party’s sorry condition is clearly on Mr. Obama’s conscience. He left office with the Democratic party in its worst state since the 1920s. In addition to losing control of both chambers of Congress, the Democrats today have 16 governorships, compared with 28 when Mr. Obama was elected and six states where it controls both chambers plus the governorship versus 17 when he came to office....

“Even if Mr. Obama resists such demands, Mr. Trump will keep pulling him back into the arena. In the weeks before Mr. Trump took office, Mr. Obama bent over backwards to welcome his successor.  In a fleeting moment of gratitude, Mr. Trump said: ‘I don’t know if he’ll admit it, but he [Obama] likes me.’  Mr. Trump would have been closer to the truth if he had declared what is really gnawing at him. Mr. Obama won twice with a clear majority, whereas Mr. Trump lost the popular vote. He can never forgive him for that.”

And then we had another WikiLeaks dump, this one of documents and files claiming the CIA had ways to hack into many popular consumer products, including Apple’s mobile operating system used on iPhones.  As the Wall Street Journal’s Paul Sonne reported: “One particular hacking tool appears to remain on an iPhone even after it has been rebooted, which would make it particularly valuable to an intruder.”

The documents show the CIA’s ability to bypass the encryption of popular messenger applications, including WhatsApp and Signal, by hacking the smartphones they run on and collecting audio and message traffic before the applications encrypt the user’s texts.

WikiLeaks touted its trove as exceeding in scale and significance the collection of Edward Snowden.

Wednesday....

The war of words over the GOP’s ObamaCare replacement bill rapidly worsened, with Democrats branding the legislation “TrumpCare.”  Sen. Charles Schumer, in a five-minute speech on the Senate floor, used the term “TrumpCare” 15 times.

“TrumpCare will make healthcare in America worse in almost every way and likely leave more Americans uninsured,” Schumer said.  “With respect to women, TrumpCare would send us back to the dark ages.”

The White House is steering clear of putting the president’s stamp on the legislation. Health And Human Services Secretary Tom Price said he prefers to call it “patient care.”  Kellyanne Conay insisted the law should go by its official name – the American Health Care Act.

Principal supporters of the bill like Rep. Greg Walden (R-Ore.) are using the name AHCA.

As The Hill reported, during a debate over the use of the term ObamaCare on the House Floor in 2011, Florida Democratic Rep. Debbie Wasserman Schultz argued the phrase should be a violation of House rules because “it is meant as a disparaging reference to the president of the United States.”

On a far different issue, President Trump said he was “extremely concerned” about the stunning security breach involving WikiLeaks and secret documents about the CIA’s cyber-snooping tools.  It also emerged that the CIA learned late last year that its hacking operations had been compromised, but didn’t know the material would be made public until nearly 9,000 pages emerged Tuesday on WikiLeaks’ web site.

The CIA, while refusing to address the information’s authenticity, noted in a statement it is “legally prohibited from conducting electronic surveillance targeting individuals here at home, including our fellow Americans, and CIA does not do so.”

A CIA spokesperson told the BBC on Wednesday: “The American public should be deeply troubled by any WikiLeaks disclosure designed to damage the intelligence community’s ability to protect America against terrorists and other adversaries.  Such disclosures not only jeopardize U.S. personnel and operations, but also equip our adversaries with tools and information to do us harm.”

Ex-CIA director Michael Hayden told the BBC: “If what I have read is true, then this seems to be an incredibly damaging leak in terms of the tactics, techniques, procedures and tools that were used by the Central Intelligence Agency to conduct legitimate foreign intelligence.  In other words, it’s made my country and my country’s friends less safe.”

Government sources told Reuters that investigators were focusing on CIA contractors as the likely source of the documents.

Germany said federal prosecutors were looking “very carefully” at the WikiLeaks material, which purportedly shows the CIA has used the U.S. consulate in Frankfurt to launch hacking attacks.

Editorial / Washington Post

“The first thing to say about the archive of cyberhacking tools stolen from the CIA and released by WikiLeaks is that they are not instruments of mass surveillance, but means for spying on individual phones, computers and televisions. There is no evidence they have been used against Americans or otherwise improperly; if there were, we can be sure that WikiLeaks, whose core mission is not transparency but undermining U.S. national security, would have trumpeted it.  It follows that the targets of the hacking methods, and the prime beneficiaries of their release, will be Islamic State terrorists, North Korean bombmakers, Iranian, Chinese and Russian spies, and other U.S. adversaries.

“WikiLeaks claims it obtained the 8,761 documents and files it released Tuesday from a former U.S. government employee or contractor. But given the organization’s close ties with Russia’s intelligence services, a link established by the U.S. intelligence community’s investigation into the hacking of the Democratic National Committee, it won’t be a surprise if Moscow again turns out to be the source of the leak.  The Kremlin surely will be celebrating the prospect of CIA spying operations around the world going dark, and it could have dictated WikiLeaks’ faux pious call for ‘a public debate’ about the agency’s powers and external supervision.

“In addition to losing valuable surveillance tools, the CIA will now be subjected – as the leakers intended – to disruptive controversy and unreasonable demands for greater ‘cooperation’ with technology companies.  Adherents to the theory that a ‘deep state’ is attempting to undermine the Trump administration will seize on the revelation that the CIA arsenal included the tools and languages of other countries – proof, it will be said, that the DNC hack was a CIA ‘false flag’ operation after all.  [Ed. See Sean Hannity and others of his ilk.]

“Civil libertarians are insisting that U.S. government hackers inform phone- and computer-makers of vulnerabilities, rather than using them for their own vital work.  But defending the integrity of devices is the job of the companies, not the CIA.  As The Post’s Ellen Nakashima reported, U.S. agencies already submit all software vulnerabilities they discover to a governmental review that determines whether they should be disclosed. And do the privacy zealots suppose that the Russian FSB will also inform Apple and Google of the ‘zero-day’ hacks it has developed? They are, in effect, advocating unilateral U.S. disarmament in cyberspace....

“One thing the (CIA) must not do, though, is stop trying to develop a qualitative technological edge over U.S. adversaries, including the means to surveil them.”

Editorial / Wall Street Journal

“Tuesday’s WikiLeaks dump of a major chunk of what it claims is the CIA’s ‘hacking arsenal’ ought to be an eye-opener for anyone still laboring under the delusion that WikiLeaks’ Julian Assange or former National Security Agency contractor Edward Snowden are not out to weaken the United States. This leak of CIA documents appears to disclose for America’s enemies a key advantage against the asymmetric threats of this new century: better technology that provides better intelligence....

“The leaks also expose other areas of CIA interest such as an agency effort to hack into the control panels of cars and trucks.  Another tool exposed by the leaks turned Samsung Smart TVs into microphones that could then relay conversations back to the CIA even when the owner believed the set was off.

“The losses from this exposure are incalculable.  These tools represent millions of dollars of investment and man-hours.  Many will now be rendered moot as terrorists or foreign agents abandon traceable habits.  Merely because America’s enemies are barbaric – think al Qaeda or Islamic State – does not mean they are stupid.  One reason it took so long to hunt down Osama bin Laden is because he took pains to establish a sophisticated communications system to evade U.S. intelligence tracking....

“Some on the political left and right want to treat Messrs. Snowden and Assange as heroes of transparency and privacy. But there is no evidence that U.S. spooks are engaging in illegal spying on Americans. The CIA’s spying tools are for targeting suspected terrorists and foreign agents. As for WikiLeaks, note how it never seems to disclose Chinese or Russian secrets.  The country they loathe and want to bring low is America.”

Lastly, it was revealed Wednesday that the number of  immigrants caught by Border Patrol agents as they attempt to cross the Southwest border has plunged dramatically, dropping 40% since President Trump took office and signed sweeping executive orders to enforce immigration laws; the figure courtesy of U.S. Customs and Border Protection.

Normally, Border Patrol agents see a 10% to 20% surge of people making the journey in February. The Trump administration deserves to take an early victory lap on this one.

Thursday....

The Republican drive to repeal the Affordable Care Act advanced as two House committees approved broad legislation to undo the law and replace it with a new plan, as both the House Energy and Commerce and the House Ways and Means Committees approved the measure on party-line votes.  The House Budget Committee must give its approval to the measure next week before a final House vote the week of March 20 that Speaker Paul Ryan is seeking.

But Democrats said the bill would rip health insurance from millions of Americans and increase costs for others.

Influential groups representing hospitals and nurses came out against the bill, joining doctors and AARP to warn that it would lead to a rise in the uninsured.  The American Medical Association also rejected it.

Angry conservatives say the bill leaves too much of the Affordable Care Act in place. It’s an uphill climb for Ryan and Donald Trump.

Press secretary Sean Spicer pushed back against the criticism.

“We would love to have every group on board, but every single deal we heard about getting through [in –ObamaCare]...over and over again, it was one deal after the other, to buy votes to get it through the Senate,’ he said, in response to questions about criticism from the AMA and AARP.

“If you want to line up how many special interests that got paid off last time versus now, they’ll probably win, hands down,” he added.  “This isn’t about how many special interests in Washington we can get paid off, it’s about making sure that patients get the best deal that lowers prices.”

Trump met with conservative critics amid the backlash, signaling a willingness to negotiate the AHCA’s details, while lawmakers on both sides are saying they need to see the nonpartisan Congressional Budget Office estimate of how the bill will affect the federal deficit and the number of insured Americans. The report could be released Monday.

Paul Ryan gave a 23-minute PowerPoint presentation on the cable news channels.

Editorial / Chicago Tribune

“Democrats...said the plan would force millions of Americans to pay more for less care. That strikes us as a premature judgment: This plan has so many moving parts that bold predictions are little more than conjecture.  The Democrats want to defend their president’s signature legislation. They know that, fairly or not, millions of Americans are nervous about the prospects of losing health insurance.

“But as noted, the alternative to the Republican plan is not to preserve ObamaCare as enacted in 2010. The health coverage scheme that law established is collapsing.

“As the debate continues, many Americans will compare their current coverage and subsidies and decide for themselves if they would be better or worse off under the Republican plan. Let’s see whether insurers say this plan would let them craft policies that people want and can afford.

“For years Republicans have told voters that, given the chance, they would replace ObamaCare with a more affordable, less onerous system. Their opening bid moves in that direction. Let the tussle to improve and pass it begin.”

On the WikiLeaks front, Julian Assange presented himself as a defender of the United States’ top technology companies from overreaching, double-dealing American spies.  Assange also reemphasized the first nearly 9,000 pages were just the first installment in a far larger collection, which will show how the intelligence agencies have found flaws in the most popular products of the internet age.  As reported by the New York Times, Assange said: “But instead of alerting the companies so they could plug the security holes, the agency exploited the weaknesses to carry out cyberspying around the world.”

So Assange said he was offering to share leaked computer code that WikiLeaks has not yet published with Apple, Google and other tech companies to help them fix the flaws described in the leaked CIA document.

“We have decided to work with them to give them some exclusive access to the additional technical details we have, so that fixes can be developed and pushed out so people can be secured,” Assange said in a video news conference.

Microsoft, for one, suggesting in a statement that it did not want to be seen as collaborating with WikiLeaks, declared that its “preferred method for anyone with knowledge of security issues, including the CIA or WikiLeaks, is to submit details to us at secure@microsoft.com.”  All the tech giants have said the CIA was exploiting old versions of their software and would be blocked by recent updates.

The CIA issued a statement that read in part: “As we’ve said previously, Julian Assange is not exactly a bastion of truth and integrity. Despite the efforts of Assange and his ilk, CIA continues to aggressively collect foreign intelligence overseas to protect America from terrorists, hostile nation states and other adversaries.”

Separately, Democratic attorneys general in four states (Washington, New York, Oregon and Massachusetts) announced they will try to block the Trump administration’s revised executive order on travel in court, pushing for the temporary restraining order that halted the first order to remain intact.

Friday....

President Trump continued to work on congressional Republicans who are not supportive of the AHCA, at least in its current form.

Trump also demanded letters of resignation from 46 U.S. attorneys, holdovers from the Obama administration, but one of them was top Manhattan prosecutor Preet Bharara, who previously said that back in November, Trump had asked him to stay on and he had agreed to do so.  It’s true that Bharara once worked for Sen. Charles Schumer, an increasing critic of Trump’s, but Bharara has done an outstanding job and is currently probing New York Mayor Bill de Blasio and has investigated a close aide of Gov. Andrew Cuomo.  As I go to post, it’s not known if Trump really knew what he was doing on this one.

We also learned today that Trump apparently was not aware that ousted national security adviser Michael Flynn earned more than $500,000 representing the interests of Turkey’s government during the campaign.  Flynn filed paperwork retroactively to “eliminate any potential doubt” about the propriety of his actions, his lawyer wrote the Justice Department.

Sean Spicer, when asked today whether Trump was informed of the arrangement, said “No.”

Flynn would have had to register as an agent of a foreign government and the Associated Press reported that Trump’s transition team was told Flynn would have to do so for his work on behalf of a firm owned by a Turkish businessman with close ties to his country’s government.

Meanwhile, you know my chief concern regarding President Trump is on the foreign policy front.

David Ignatius / Washington Post

“Rex Tillerson is off to an agonizingly slow start as secretary of state. That matters, because if Tillerson doesn’t develop a stronger voice, control of foreign policy is likely to move increasingly toward Stephen K. Bannon, the insurgent populist who is chief White House strategist.

“Tillerson’s State Department has been in idle gear these past two months.  He doesn’t have a deputy or other top aides. His spokesman can’t give guidance on key issues, because decisions haven’t yet been made.  Tillerson didn’t attend important meetings with foreign leaders.  As a former chief executive of ExxonMobil, Tillerson is accustomed to a world where a visible display of power is unnecessary, corporate planning is meticulous and office politics are suppressed.  But this is Washington.

“ ‘I am an engineer by training, I seek to understand the facts,’ Tillerson said at his confirmation hearing. That sounds reassuring, but it doesn’t fit the glitzy, backstabbing capital that spawned the television series ‘House of Cards.’

“ ‘He may pay some cost up front for not meeting Washington expectations,’ notes Stephen Hadley, national security adviser for President George W. Bush and a Tillerson supporter.  ‘The short-term buzz was that he’s out of the loop, but Tillerson is playing for the long game.’....

“The dilemma for Tillerson, the methodical engineer, is how to connect with the mercurial tweeter in chief.  A fascinating example was Tillerson’s conversation with the president just before Trump placed a telephone call to Turkish President Recep Tayyip Erdogan.  Tillerson tried to explain the tricky Kurdish problem in detail, but that wasn’t what engaged Trump, according to one well-informed source.

“The president interjected with an explanation of why Erdogan had survived an attempted military coup last summer: ‘You know what saved him?  Facebook and social media.’  It was a revealing, and probably accurate, presidential insight.

“Trump’s business pragmatism may be the best hope for a coherent foreign policy that avoids Bannon’s often-proclaimed goal of challenging globalization and the international order.  A telling example came when Tillerson and (Jared) Kushner advised the president last month that Chinese President Xi Jinping would not talk on the phone until Trump clarified that he supported the long-standing one-China policy. Trump is said to have responded: ‘So clarify.’

“Tillerson and (Defense Sec.) Mattis can be the nexus for sound international strategy, working with Lt. Gen. H.R. McMaster, the new national security adviser. As was said of Hillary Clinton and Robert Gates when they were secretaries of state and defense, respectively, this would be the ‘Adult Swim’ group, checking a noisy, chaotic, ideological White House.

“But first Tillerson must get in the pool and start making some waves.”

Richard Haass / Washington Post

“President Harry S. Truman once predicted that his successor, Dwight Eisenhower, would have a rough time in the White House.  ‘He’ll sit here, and he’ll say, ‘Do this! Do that!’  And nothing will happen.  Poor Ike – it won’t be a bit like the Army.  He’ll find it very frustrating.’  What Truman was getting at is that all presidents bring to the Oval Office an outlook shaped by their unique personal and professional experiences – and that these experiences can become something of a liability if a president assumes that what worked in one context will automatically translate into another.

“President Trump is no exception.  He brings to the White House a lifetime in business and real estate, much of which is described in his book ‘The Art of the Deal.’  The potential problem for Trump is that a businessman in a field such as real estate has the luxury of approaching deals in isolation.  One can choose not to work with the same seller or buyer again. By contrast, a president has to work with members of Congress and foreign leaders repeatedly over the course of years. Governing is  about the relationships much more than it is about transactions.

“All of which suggests that Trump may want to reform some of his ways. He is picking a good many fights in a job where it is smart to bank goodwill.  President George H.W. Bush frequently picked up the phone and called leaders around the world. Telephone diplomacy was a good way of staying current, but even more it was a good way to develop trust. That way, when Bush needed to ask for something – as he did after Saddam Hussein’s 1990 invasion of Kuwait – he was much more likely to get it....

“It is important not to threaten or bluff unless you mean it. The biggest error of Barack Obama’s presidency arguably occurred after he warned Syria’s President Bashar al-Assad that he would face dire consequences if he used chemical weapons. But when Assad crossed this red line – repeatedly – he paid no direct price.  The result emboldened him, sapped his opponents’ confidence and raised questions worldwide about whether Washington could be taken at its word.  Allies everywhere questioned whether the United States would be there for them in a crunch.

“Similar considerations argue for fidelity to the truth.  Trump suggests that, in real estate, a little hyperbole – what he describes as ‘truthful hyperbole’ – never hurts. It will, however, hurt him in his current job.  The day will come when this president will need others to take him at his word in justifying a particular response to a threat that cannot be proven beyond all doubt.  Alliance ties, as well as the ability to deter foes, will depend on it.  The bottom line is clear: There is little or no place for exaggeration in the Oval Office, much less for alternative facts.

“It is essential, too, to understand who has more at stake before laying down a challenge. Trump blundered early on when he threatened to abandon the one-China policy.  He wrongly judged that he could derive leverage; predictably, though, there was no give in China’s position on an issue its leaders judge as existential.  As a result, it was Trump who was forced to back down if he wanted Chinese cooperation on other issues, such as doing something about North Korea’s nuclear and missile programs.

“Like it or not, politics and geopolitics alike are all about the art of relationships.”

Wall Street

Friday saw the February jobs report and it came in stronger than expected, an increase of 235,000 jobs, 50,000 more than forecast, with the unemployment rate at 4.7% and average hourly earnings up 0.2%, 2.8% year-over-year.  [The underemployment rate, U6, is down to 9.2%.]

Earlier in the week, jobs data from payroll processor ADP telegraphed Friday’s numbers when it showed private employers had added 298,000 jobs in February, the biggest one-month gain since April 2014, handily beating Wall Street expectations of a 187,000 rise.

So the jobs data is the final piece of the puzzle when it comes to the Federal Reserve hiking interest rates this week when they gather March 14-15.  The key is going to be in the accompanying statement and whether Chair Yellen and Co. offer up any clues as to whether the Fed plans on hiking 2, or 3, more times the rest of the year, 3 for all of 2017 having been forecast back in December.

The two acknowledged “bond kings,” Jeffrey Gundlach of DoubleLine and Bill Gross of Janus Capital, are both warning of trouble ahead.

Gross says the credit market, including the U.S. debt level, is way overleveraged, ditto much of the rest of the world, particularly China, but these are long term issues.  In the here and now, Gross has been targeting 2.60% on the 10-year Treasury, saying a weekly or monthly close above that level will signal the start of a bear market in bonds after a decades-long bull market in same.

Gundlach warns the market appears to have changed its tone with regard to the Federal Reserve.

“The Fed had been following the market, as we’ve talked about in the past [about] how many times the Fed would have to capitulate because they would say they were going to raise rates and the market would basically laugh in their face in disbelief,” Gundlach said in a webcast late Tuesday.

“But that has changed, because the data has changed, because nominal GDP has been upgraded, because inflation is at or above 2% by many measures, because the unemployment rate has been below 5% for now several quarters.  So there’s no more excuses for why the Fed shouldn’t be raising interest rates.”

The mood on the Street changed two weeks ago when various once dovish Fed governors started making hawkish comments even before Fed Chair Janet Yellen said a March rate hike was likely appropriate.

“It’s almost ‘old school’ now,” said Gundlach, “as long as the data stays where it is.”

Separately, the Organization for Economic Cooperation and Development, which represents the developed world, now expects global growth of 3.3% this year, up from 3% in 2016, but it says this is still not strong enough to withstand risks from increased trade barriers, overblown stock markets or potential currency volatility.  This pace (which includes the emerging markets) is still short of its average in the two decades before the financial crisis because of weak investment and productivity gains.

Though not named in its latest report, some of the concerns are related to the policies of President Trump’s administration, including his threats to impose tariffs on nations he deems to have an unfair advantage, and this is my concern as well, but he hasn’t done so, yet, and that’s important.

The OECD also said there’s a “disconnect” between equity valuations and the outlook for the real economy, with market performance influenced by the anticipation of a Trump stimulus package.

And there is the political risk in Europe, with voters in more than 70 percent of the euro-area economy going to the polls this year (assuming an election in Italy, to go along with the ones in the Netherlands, France and Germany). 

“Falling trust in national governments and lower confidence by voters in the political systems of many countries can make it more difficult for governments to pursue and sustain the policy agenda required to achieve strong and inclusive growth,” the OECD said.

Thursday represented the eighth anniversary of the current bull market, with the Dow Jones ending the day at 20858, while the S&P 500, at 2364, was up 250% since the March 9, 2009 low, when it bottomed in the depths of the financial crisis, a closing figure of 676 for the S&P that day.  [Intraday it hit a devilish 666.]

Europe and Asia

Eurozone GDP rose 0.4% in the fourth quarter of 2016, 1.7% compared with the fourth quarter of 2015, as measured by Eurostat. GDP in the EA19 also grew 0.4% in the third quarter.

German GDP year-on-year in Q4 was 1.8%; France 1.2%; Spain 3.0%, Italy 1.0% and Greece -1.1%.

The European Central Bank kept rates and its stimulus program on hold, sticking to its “forward guidance” that interest rates will remain low beyond the end of the current asset-purchase program in December. But Mario Draghi acknowledged that the upbeat economic outlook meant it was less likely that rates will have to be cut, and that there’s no longer a “sense of urgency” in monetary policy.

Draghi said: “Given the fact that we can’t yet say that we are there with a self-sustaining inflation rate,” the Governing Council “preferred to keep this option in the language,” referring to the by-now standard commitment to keep interest rates “at present or lower levels for an extended period of time.”

Quantitative easing is being pared down to 60 billion euros a month of bond buying from April and the current schedule has it ending in December.  So now investors are debating the sequence in which the ECB will normalize monetary policy.

Draghi evaded a question about whether or not the central bank can increase rates before the end of QE, though he seemed to leave the item open, which semi-roiled the euro bond market, the German 10-year Bund finishing with a yield of 0.48%, up from 0.18% two weeks earlier; a huge percentage move.

While inflation reached 2% last month in the eurozone, the ECB’s target, Draghi says there is no real evidence it can be sustained and he points to a core rate, ex-food and energy, that remains below 1%.

“We haven’t seen any yet significant development on the wages front, and that is the key point,” Draghi said.  “We are more optimistic about the growth forecast, we have to see how these improved prospects, as far as growth is concerned, translate into higher headline inflation.”

Draghi doesn’t want to move prematurely and thus choke off the recovery.

Eurobits....

--Trump administration trade adviser Peter Navarro said on Monday the $65 billion U.S. trade deficit with Germany was “one of the most difficult” trade issues, and bilateral discussions were needed to reduce it outside of European Union restrictions.  Navarro said that Germany has used the argument that the EU dictates its trade policy and that it does not control the values of the euro.  Navarro said “candid discussions” were needed.  No doubt this will be a topic of discussion with German Chancellor Merkel when she arrives in Washington next week.

*But late Friday, the Financial Times ran a story that started out: “A civil war has broken out within the White House over trade, leading to what one official called ‘a fiery meeting’ in the Oval Office pitting economic nationalists close to Donald Trump against pro-trade moderates from Wall Street.

“According to more than half a dozen people inside the White House or dealing with it, the bitter fight has set a hardline group including senior adviser Steve Bannon and Trump trade adviser Peter Navarro against a faction led by Gary Cohn, the former Goldman Sachs executive who leads Mr. Trump’s National Economic Council....

“The officials and people dealing with the White House said Mr. Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Mr. Trump appeared to side with the economic nationalists, one official said.”

C’mon, Gary Cohn!  [Navarro has not endeared himself with Republicans in Congress, according to the FT.]

--As reported by Duncan Robinson of the Financial Times: “EU member states are not obliged to give visas to those people intending to seek asylum in their country after the EU’s top court decided not to change the bloc’s refugee policy.

“The European Court of Justice ruled that Belgium was within its rights to refuse visas to a family of potential Syrian asylum seekers who said that they were at risk of torture and inhumane treatment.”

You see, the Syrian family applied for a short-term visa at the Belgian embassy in Lebanon.  Thus, in essence, to allow this would be to move the EU’s borders to European embassies abroad. 

Ergo, you have to get to Belgium, or Germany, for example, to start the process and critics of the court say it leaves refugees in the hands of traffickers and at risk of drowning in unsafe vessels.

It’s about the growing anti-immigrant sentiment across Europe and governments are no longer just leaving the door open.

--Next Wednesday, March 15, is Europe’s first big vote of 2017, the Netherlands parliamentary elections, with five parties now vying for first place in the final polling.  The far-right Freedom Party, led by Geert Wilders, would get 25 seats in the 150-seat parliament, down from 29 seats a week ago, with the ruling Liberals under Prime Minister Mark Rutte at 24 seats, down one.  The Christian Democrats and Democrats have each been gaining, and stand at 21 and 17 seats, respectively. The Greens are also at 17.

But as I’ve been noting, none of the other parties will sit in a government with the anti-EU, anti-Muslim Freedom Party should they get first crack at forming a government by finishing first, so I really don’t believe this vote is anywhere near as meaningful as some at this late stage are making it out to be. 

The real issue is that the government, regardless, will be so fractured, there seems little chance it will be effective, thus you could easily see another election in fairly short order, say two years.

What would really shake things up is if the Freedom Party pulls off a huge upset, say 30 or more seats, which would indeed send a strong message to the rest of Europe.  But as Wilders’ lead has been shrinking consistently since the start of the year, I don’t see this*.  [He was leading by 12 seats Jan. 1.]

*One pollster, GfK, concludes that with so many people knowing the Freedom Party can’t be part of a government, why vote for them?

“A protest vote for a party that is not going to govern makes little sense,” GfK said.

The Netherlands economy is also not exactly a basket case.  The EU projects GDP growth of 2% in 2017 and the unemployment rate is expected to fall to 5.2% over the coming year or so.

In the French presidential election, Alain Juppe surprisingly announced he would not replace embattled candidate Francois Fillon as the choice of the center-right, putting to an end intense party maneuvering by the French Republicans to get the 71-year-old former prime minister to replace Fillon.  Fillon has vowed to stay in the race despite being placed under formal investigation – a step short of being charged – for claims he employed his wife and children in fictitious jobs as his aides.  At this stage, about six weeks from the vote, it seems a near certainty he is now in for the duration.  [Friday, Juppe formally threw his support to Fillon in an attempt to unite the party.  It could help.]

National Front (FN) candidate Marine Le Pen and centrist Emmanuel Macron are essentially tied at 26% in most polls, though a Cevipof survey, which is said to be the most definitive because of its large sample size, has Le Pen winning the first round of voting, April 23, 27%-23%, but still getting trounced in a run-off with Macron.

A Harris interactive poll from today has Le Pen at 26, Macron 25 and Fillon 20, with Macron winning the run-off 65-35.  [Friday night, an IFOP poll has Le Pen at 26%, Macron 25.5%, and Fillon 19.5%, with Macron beating Le Pen in round two, 60-40.]

But some surveys have put Le Pen’s run-off total as high as 45%. That’s too close for comfort to many.

Among the young, 18-24 year olds, Le Pen is by far the most popular at 39%, according to an IFOP poll.  That compares with 21% for Macron and 9% Fillon.  Le Pen also polls well with manual workers (49%) and with rural inhabitants (32%). She has little support among those living in big cities.

But the IFOP survey also shows 38% of Fillon’s voters would vote for Le Pen in the second round – potentially handing her 2m votes, which is far better than any other election for the FN since 2002, when the party burst on the scene, with Marine’s father Jean-Marie in a run-off, though then he received only 18%.  [He got into the run-off with just 17% in a highly-fractured first round.]

Here’s the bottom line.  The National Front has made big strides and it just needs to be said, because it’s reality, that a major terrorist attack in France by April 23, or between April 23 and the run-off, May 7, could impact the vote in a big way.

On the Brexit front, Prime Minister Theresa May has been trying to beat down a rebellion in her ruling Conservative Party as the formal process for pulling Britain out of the European Union is weeks away.

The premier fired government adviser Michael Heseltine after he led a 13-strong revolt in the House of Lords, helping to inflict a second Brexit-bill defeat on Ms. May in a vote on Tuesday.  The unelected upper chamber (read a-holes) rewrote May’s draft law to guarantee Parliament a “meaningful vote” on the outcome of exit talks, potentially vetoing any final agreement, as well as preventing the premier from walking away without a deal.

The bill now returns to the House of Commons for a vote probably next week, and May’s Brexit team believes it will be able to delete the changes.

Heseltine, who has served in government in various capacities for years, said “the future of this country is inextricably interwoven with our European friends.” [Bloomberg]

This is similar to the U.S. Congress and Republicans being able to afford only a few defections on items like repealing ObamaCare.  Prime Minister May’s Conservatives have a slim 17-vote majority in the House of Commons.

If Commons voted to approve the bill by middle of next week, May could pull the trigger on Article 50 right then and start the negotiating process, though her pledge is to notify the EU by March 31.

Meanwhile, Deutsche Bank AG is forecasting that Central London office values will probably fall as much as 20% this year as the economy slows and investors are deterred by uncertainty in the looming Brexit negotiations.

“The anticipated economic slowdown, in light of rising inflation impacting private consumption, will likely have a material impact on real estate occupier and investment demand throughout the remainder of this year,” wrote research head Simon Wallace.  “Furthermore, the future relationship between the U.K. and the European Union remains uncertain, weighing on business sentiment, particularly now that access to the single market is now in doubt.”

I have already written, and will continue to write, similar sentiments for the next two years, I imagine.

Meanwhile, one of the chief Brexit negotiators at the European Parliament, Guy Verhofstadt, said British citizens should be allowed to keep the benefits of EU membership, such as freedom to travel and voting in European elections.

The former prime minister of Belgium said Brexit had been a “tragedy” for people in the U.K. and EU.  Verhofstadt said he had received more than 1,000 letters from U.K. citizens who did not want to lose their relationship with “European civilization.”

But now he has to convince European leaders to agree on the rights.  He also warned the European Parliament will have veto powers to reject any deal brokered between the U.K. and the European Commission.

Lastly, EU and International Monetary Fund negotiators said they will continue talks with Greece next week in a bid to broker a deal on reforms that Greece must undertake in order to unlock further bailout funds.

An IMF spokesman said “important progress” has been made in recent talks. Recall, the IMF isn’t a full player in the 86bn euro bailout and it’s felt it needs to be to avert a crisis in July when Greece faces a 7bn debt repayment.

Negotiations aren’t being made easier by news Greece’s GDP fell 1.2% in the fourth quarter, far worse than expected, down 0.1% for all of 2016.  [The -1.1% figure I have above is year-on-year...different.]

It was Greece’s worst quarter since summer 2015. The Greek economy has now lost a full 25% of output since 2007...depression...and negotiators have to be skeptical when presenting targets and formulating debt relief measures.

Turning to Asia....China’s rubber-stamp National People’s Congress wrapped up its annual session, with Premier Li Keqiang setting the government’s growth target for 2017, 6.5%, vs. the 6.5% to 7% range he gave last year, the economy then growing 6.7% for 2016...how conveeenient! So look for China growth to be, oh, 6.5% in 2017!

Li did say China will push forward with reform of state-owned firms and assets this year.  Ownership reforms at more than 100 central government-run enterprises will be completed by year-end as part of efforts to use private capital to reinvigorate the lumbering state sector, state media reported.

China is also looking to shutter more ‘zombie’ enterprises...inefficient firms with surplus capacity.

The National Development and Reform Commission said in a report last weekend that coal-fired power plants with capacity of more than 50 million kilowatts would be shut or construction stopped, while China also cuts steel capacity and coal output this year.

Fixed-asset investment (roads, bridges, airports...) will rise 9% in 2017, down from last year’s target of 10.5%.

“As overcapacity is cut, we must provide assistance to laid-off workers,” Li said.

On the topic of the country’s pollution problems, nay, crisis, Li pledged to “work harder” to address the issue exacerbated by heavy industry, at which point everyone in the audience muffled “Bulls—t.”

“We will make our skies blue again,” he said.

Actually, if he doesn’t, at some point the people will storm the offices of Xi and Li and behead them.  [Half-kidding...there could easily be a tipping point one day.]

So now the stage is set for the Chinese Communist Party Congress later this year, and it’s then that President Xi Jinping is probably going to ask for more than just five more years, while announcing big changes in the party’s top leadership, including, potentially, someone to replace Li.

Separately, China reported its foreign-exchange reserves rose in February to back over $3 trillion, a sign curbs on outflows are working.

February imports soared 38.1% on higher commodity prices and rising domestic demand, but figures for January and February are always skewed by the Lunar New Year holiday.

Exports unexpectedly fell 1.3% year-on-year.

One item on Japan...Fourth-quarter GDP was revised up to 1.2% annualized from 1.0%, according to the Cabinet Office.

Street Bytes

--The Dow Jones had its four-week winning streak end this week, down 0.5% to 20902, while the S&P 500 (-0.4%) and Nasdaq (-0.15%) saw their respective six-week winning streaks ended as well. 

The markets got off to a sloppy start in no small part due to Trump’s twitter outburst against Obama, and if you don’t believe that, you don’t know Wall Street.  As the week went on, though, it didn’t help that energy stocks were tumbling with the falling price of crude.

Next week it’s about the Fed.

--U.S. Treasury Yields

6-mo. 0.88%  2-yr. 1.35%  10-yr. 2.57%  30-yr. 3.16%

All about the reaction of the 10-year to this coming week’s Fed action.

--Oil prices cratered to their lowest levels since December, $48.39, and their lowest weekly close since end of November after the U.S. Energy Information Administration reported a ninth consecutive rise in crude inventories.  The data came as Saudi Arabia’s energy minister Khalid Al Falih said a deal among OPEC and key non-OPEC producers to cut supply and lower stockpiles was not making as quick an impact as initially anticipated, with the agreement only helping to revive the U.S. shale industry.

Separately, a report from the International Energy Agency warns that drastic cuts in the oil industry following the crash that sent prices from $115 in 2014 to below $30 early last year forced international energy companies to curb investment by a quarter in 2015, and a similar amount last year. This will expose the industry to a shortfall in supply that by 2020 could lead to a new surge in prices.

While some are predicting a continuous slide in oil consumption over the coming years, as governments push for more efficiency, cleaner fuel usage and electric cars, the IEA cautioned in its five-year outlook: “We see no such peak in sight.”

Supplies would appear to be adequate for now, but then the IEA said the oil market faces a shortage, unless many big projects are given the green light soon.

A big part of the equation will be the pace of global growth, including increased air travel.

Related to the above, Royal Dutch Shell PLC announced it is selling nearly all of its Canadian oil-sands developments in deals worth $7.25 billion, as the British-Dutch producer continues with its plans to sell off $30 billion of assets by next year to help pay down debt and streamline the company, following its $50bn acquisition of BG Group PLC in 2016.

By selling the oil-sands assets, Shell is emphasizing its shift toward deep-water projects, as well as the fast-growing liquefied natural gas market.

CEO Ben van Beurden said in an interview, “We want to have a large petrochemical portfolio.  Over time we want to be a world-class new energies player.  There’s only so many things you can aspire to be at scale and put money into.”  [Wall Street Journal]

Recently, Exxon Mobil Corp. said some of its planned production in the oil sands had become unprofitable at current prices, and it removed about 3.3 billion barrels of oil from its stated reserves as a result.

Net-net, Canada’s oil output isn’t expected to fall as projects already being built will be completed and add new barrels, but about 2.5mbd have been canceled or delayed, according to Arc Financial.

Tough new environmental rules are also chilling investment.

--U.S. household net worth climbed to a record $92.8 trillion in the fourth quarter of 2016, owing to the end-of-year rally in the stock market and the steady climb in home prices, which added more than $2 trillion of wealth to household balance sheets.

U.S. households lost nearly $13tn during the 2007-09 recession.  But since the first quarter of 2009, wealth has soared by $38 trillion, with both stocks and home values recovering bigly from their lows.

--Major electronics manufacturers were scrambling to minimize the fallout from the WikiLeaks disclosures on hacking tools. Samsung, whose smart TVs can reportedly be hijacked and made to look like they’re not turned on, said: “We are aware of the report in question and are urgently looking into the matter.”

Apple said it believed many of the issues had already been “patched” in its latest software update.

The leaks also claimed that the CIA had created malware to target PCs running Microsoft’s Windows operating system.  “We are aware of the report and are looking into it,” a spokesman for the company said.

And Google said it was looking into claims that CIA was able to “penetrate, infest and control” Android phones.

--Chinese telecommunications giant ZTE agreed to plead guilty to criminal charges of violating U.S. sanctions on North Korea and Iran and to pay $1.2 billion in fines in the largest-ever penalty of its kind.

The move comes after more than a year of negotiations between the company and the U.S. government, this after a five-year investigation.  As reported by the Financial Times: “(The) talks accelerated after U.S. officials, acting on a tip, seized the laptop of a ZTE lawyer as her husband tried to leave the U.S., resulting in a trove of documents that laid bare what U.S. officials called a brazen and unprecedented conspiracy to get around U.S. sanctions.”

I did get a kick out of how the Trump administration took credit this week, even though the investigation commenced in the prior regime.

--Home Depot said it is aiming to hire more than 80,000 for the spring time rush; from cashiers to freight handlers to customer service representatives.  The company said about half of its seasonal employees stay on permanently.

Home Depot’s hiring spree stands in sharp contrast to other retailers, such as American Apparel and Macy’s, which are laying off thousands.

--President Trump sent shares in pharmaceutical stocks down again when he tweeted about drug pricing and how he would lower medicine costs for Americans.  Trump tweeted he’s working on a “new system where there will be competition in the drug industry.” This came a morning after House Republicans unveiled their long-awaited repeal and replace legislation.

But the U.S., unlike many countries in the world, doesn’t directly regulate medicine prices.  And there is already competition between branded drugs and generic drugs, which face intense pricing wars among themselves.

--Nine years after insurance giant American International Group was on the verge of total collapse at the height of the financial crisis, the latest CEO, Peter D. Hancock, said he would resign after shareholders lost faith in his 2 1/2-year effort to turn the company around.

Hancock’s resignation followed a quarterly loss of $3.04 billion that surprised Wall Street.  He is the fifth CEO since Maurice R. Greenberg was forced out in 2005

--Shares of Staples fell 5% after the company missed on both earnings and revenue, with sales dropping 3% from the same period last year.  It was the 16th consecutive quarter of sales decline.

The net loss swelled to $952 million in the three months to end of January, compared to a net profit of $86m in the prior-year period.  The bulk of the losses came from $766m in goodwill impairment it booked from the sale of its European operations.

Comp-store sales fell 1%.

--Electronics retailer RadioShack has filed bankruptcy a second time in two years and will close 187 more stores this month, about 9% of its 1,943 locations.

After the last bankruptcy in 2015, General Wireless, a joint venture of hedge fund Standard General and Sprint, acquired it and has run 1,518 stores. General Wireless said it has started the store closure process and is also closing the RadioShack portion of the 360 stores that it shares with Sprint.

About 1,850 of RadioShack’s 5,900 employees are expected to be affected by the moves.

As in the case of Staples, which I shop at three or four times a month, I love RadioShack and hope the one in Madison, N.J. doesn’t close!

--ESPN is reducing staff again as the sports network continues to be hurt by cable cutters, with subscribers down to 88.4 million last December.  It had topped 100 million in February 2011.  At the same time, ESPN is paying massive rights fees, such as more than $3 billion annually to broadcast the NFL and NBA.  Parent company Disney apparently told the network to cut $100 million from the 2016 budget and $250 million in 2017.

--Sales of Ivanka Trump’s brand soared online last month, according to Lyst, a fashion search engine that links shoppers with more than 12,000 retailers and designers.  This is despite a boycott and a decision by Nordstrom to stop carrying the brand.

Trump’s brand was in 11th place based on the number of items sold, which was up 346%.

--Snap Inc. closed its first full week at $22.07 a share, down from the previous Friday’s intraday high of $29.44, which was its second day of trading, following the IPO at $17.

--Brazil’s GDP contracted for the eighth straight quarter in the three months to December, shrinking 0.9% from the previous quarter, worse than expected.  For the full year, GDP was down 3.6%, following a 3.8% drop in 2015.

--The Transportation Security Administration said its agents seized 3,391 firearms at the nation’s airports last year, a 28% increase from 2015, or an average of nine firearms a day.

But the TSA set a record on Feb. 23, when agents at various airports uncovered 21 firearms in a single day, as reported by Hugo Martin of the Los Angeles Times.  All but one were loaded.

--Back to airline demand, Irish low-cost carrier Ryanair said its traffic rose a robust 10% in February to 8.2 million passengers.

--Canada’s jobless rate in February dropped from 6.8% to 6.6%.

--What a looming disaster, NBC’s $12-$15 million contract for Megyn Kelly, whose show in the 9 or 10 a.m. time slot in front of a live studio audience is set to debut in September.  A source told the New York Post that Megyn is tired of doing tough news, and she “has more to offer. She wants to help people the way Oprah did, and do something more positive.”  Sorry, the woman is grossly overrated, witness the ratings success of her successor at Fox, Tucker Carlson.

Meanwhile, the Post also reported this week that Savannah Guthrie was rushed back four days early from maternity leave because of collapsing ratings at “Today.”

-- We note the passing of Joseph W. Rogers, a founder of Waffle House, the restaurant chain with the no-frills menu and round-the-clock hours.  He was 97.

Joe Rogers Jr., who succeeded his father as CEO in the late 1970s and remains chairman, said the elder Rogers died after having dinner with his wife of 74 years, Ruth.

Rogers and an Atlanta neighbor, Tom Forkner, founded the restaurant in 1955.  Rogers was a senior officer at a restaurant chain, Toddle House, and Forkner was in real estate. The two wanted to own a restaurant in their neighborhood.

For a while, Rogers stayed as an executive at Toddle House, but in 1961, he devoted himself to Waffle House full time and by the late 1970s, Rogers and Forkner had expanded the chain to about 400 restaurants. Today there are nearly 1,900, primarily in the Southeast and best known for outstanding customer service.

Waffle House is privately owned and the country’s 47th largest restaurant chain.

Foreign Affairs

Iraq/Syria/ISIS/Turkey/Russia: In Syria, on Thursday, a spokesman for the U.S.-led coalition against ISIS said additional U.S. forces had been deployed there to accelerate the defeat of ISIS in its Syrian base of operations at Raqqa, but that the additional 400 or so will not have a frontline role and would be there for a short time. The deployment is on top of an existing 500 already in Syria.  [It would seem these are mostly artillery units.]

The Syrian Democratic Forces (SDF) and the Syrian Arab Coalition, have been partnering with the U.S. in the war against ISIS and progress is being made in encircling the city, but a full assault appears to be weeks off.

And then there’s the role of Turkey, with the U.S. saying it wants them to have one.  But the SDF  is an alliance of militias including the Kurdish YGP, which Turkey considers a terrorist group.

Lt. Gen. Stephen Townsend, the Baghdad-based U.S. commander of the anti-Islamic State coalition, told reporters on Wednesday that there was “zero evidence” the YGP was a threat to Turkey.  In exasperation, Townsend called on all anti-Islamic State forces in northern Syria to stop fighting among themselves and concentrate on the best way to beat the militants.

And then you have the complications with having the Syrian Army in the fight, which thus far is deterring advances by Turkish forces. Plus U.S. forces are increasingly coming in contact with Syrian, Russian and Turkish military in the general northern Syria territory, all with the same apparent objective, eject ISIS, but the Turks want the Kurds booted too.

This is going to get messy, similar to a mini-version of the end of World War II...think Berlin.

There are signs some of the ISIS leadership has been fleeing Raqqa to carry on the fight from other sanctuaries in both Syria and Iraq.  But this does not mean the battle to take the city will be easy, with an estimated 3,000 to 4,000 fighters remaining.  A Pentagon briefing this week revealed the U.S. estimates ISIS has about 15,000 fighters total in Iraq and Syria combined.

In Iraq, U.S. officials believe the leader of Islamic State, Abu Bakr al-Baghdadi, has left operational commanders behind in Mosul with diehard followers in the battle of Mosul, while he has fled into the desert, focusing mainly on his survival.  U.S. and Iraqi intelligence say that an absence of communication from the group’s leadership and the loss of territory in Mosul suggested he had left the area.  Officials believes he lives among sympathetic civilians in familiar desert villages.

Progress is being made in the battle, with an estimated 2,500 ISIS fighters remaining in the western part of Mosul as well as neighboring Tal Afar.

Meanwhile, a twin ISIS suicide bombing north of Baghdad killed at least 20 people, an attack on a wedding party near Tikrit

Separately, there has been a nasty war of words between Turkey and Germany.  German Chancellor Angela Merkel told Turkey to stop using Nazi references in an escalating row between the NATO allies over the cancellation of Turkish ministers’ rallies in Germany, only to have Turkey’s foreign minister utter the same comparison.

Turkey has been fuming that some German authorities, citing security concerns, have canceled the rallies geared to getting out the vote in Turkey’s upcoming controversial referendum on constitutional reforms, which would grant Turkish President Erdogan additional sweeping powers.

At the same time, Berlin is furious with the Turks over the arrest of a German-Turkish journalist in Istanbul on terrorism charges and has repeatedly called for his release.

Speaking in the Bundestag on Thursday, Merkel said she was saddened by the deep differences which were dividing the allies but that while she would try to bridge them, Nazi comparisons were unjustifiable and “so misplaced that you can’t seriously comment on them.”

“These comparisons of Germany with Nazism must stop. They are unworthy of the close ties between Germany and Turkey and of our peoples.”  [Reuters]

Last Sunday, President Erdogan described the cancellations as “fascist actions” reminiscent of the Nazi era.

“The Germans aren’t letting our friends [ministers] talk...Well Germany, you’re no democracy, you’re not even close. Your actions are no different from what the Nazis used to do.  You’re giving us lessons on democracy, then you’re stopping a Turkish minister from speaking?”

Merkel warned that the roughly 3 million people with Turkish ties living in Germany were part of German society, but she warned that domestic conflicts should not spill over into her country.

It’s all about the actions taken by Erdogan since the failed July coup, his crackdown on suspected coup supporters, and ongoing crackdown on the media and free society in general.  The president wants to ensure there is no dissent then in large Turkish populations in other countries, that they don’t in essence become large bases of opposition. So he demands the right to have his people come in and rally the, say, 3 million Turks to his authoritarian cause.  [1.5 million of which I’ve read can vote.]

The Council of Europe warned this week that Turkey, under Erdogan, was taking a “dangerous step backwards.”

“(The) proposed constitutional amendments would introduce in Turkey a presidential regime which lacks the necessary checks and balances to prevent it from becoming an authoritarian one,” said a panel of legal experts at the Strasbourg-based council.

The Venice Commission, a body of experts that advises the council on constitutional matters, said Erdogan’s power “to dissolve parliament on any grounds whatsoever” was fundamentally alien to democratic presidential systems.

Turkey goes to the ballot box next month.

Israel: Iran is responsible for more than 80% of Israel’s security problems, Prime Minister Benjamin Netanyahu said Monday.  “We are not deterred, and are also building out strength,” he noted at a ceremony in the Foreign Ministry marking 25 years to the bombing of an embassy in Buenos Aires.  “Since the attack in Argentina, Israel has gotten much stronger.”

Netanyahu said that it was clear from the very beginning that Iran was behind that attack, which killed 29 people, including Israeli diplomats, while injuring 250 more.

“Iran initiated and planned it, and Hizbullah, which does what it [Iran] says, carried it out,” said the prime minister.

Jordan: The government hanged 15 death row prisoners including convicted “terrorists” at dawn Saturday, in a further break with a moratorium on executions it observed between 2006 and 2014.

Ten of those put to death were convicted of terrorism offenses and five of “heinous” crimes. All were Jordanians.

Afghanistan: In a vicious attack, ISIS targeted a military hospital in Kabul, attackers dressed as doctors storming the largest such facility in the capital, resulting in at least 30 deaths, including staff and patients.  Commandos landed on the roof and killed all four attackers after several hours of fighting.

ISIS claimed responsibility. The Taliban denied its involvement.

President Ashraf Ghani said the attack at the 400-bed hospital “trampled all human values.”

South Korea: President Park Geun-hye was impeached on Friday, with the Constitutional Court upholding a parliamentary motion to dismiss her from office over her role in a corruption and influence-peddling scandal.  Park could now face criminal charges.

Acting Chief Justice Lee Jung-mi said Ms. Park’s “acts of violating the constitution and law are a betrayal of the public trust.”

“The benefits of protecting the constitution that can be earned by dismissing the defendant are overwhelmingly big.  Hereupon, in a unanimous decision by the court panel, we issue a verdict: We dismiss the defendant, President Park Geun-hye.”

An election for a new president is to be held in the next 60 days.  Liberal Moon Jae-in*, who lost to Park in the 2012 election, currently enjoys a comfortable lead in opinion surveys.  Pre-verdict surveys showed that 70-80% of South Koreans had wanted the court to approve Ms. Park’s impeachment.

But this leaves 20-30% who didn’t want to see this verdict and violent protests broke out immediately, with two killed in Seoul.

But at least the political paralysis in the country has the chance to end with elections, though it seems clear the lead-up to a vote could be chaotic.

All the while, Kim Jong Un sits in Pyongyang and we only wish we knew what was on his mind, and how much he wants to take advantage of the uncertainty in the South.  Needless to say, the U.S. and South Korean militaries tonight are on high alert.

*Moon’s election would mean a change in U.S.-South Korean relations.  How much of one is uncertain.

China/North Korea/South Korea: Beijing proposed that North Korea suspend its tests of missiles and nuclear technology to “defuse a looming crisis.”

Foreign Minister Wang Yi said that in exchange, the U.S. and South Korea could halt annual joint military drills, which always infuriate Kim Jong Un.

The appeal came after North Korea test-launched four missiles on Monday, once again breaking international sanctions against such activity.  Three of the missiles came down inside Japan’s exclusive economic zone (as close as 217 miles from coastal Japan), prompting both Japanese Prime Minister Shinzo Abe and President Donald Trump to declare the region had entered “a new stage of threat.”

Japan moved to the highest possible alert level.  Abe added: “North Korea’s nuclear and missile capabilities have really improved, and they are becoming more difficult to predict.”

For its part, Pyongyang issued a blunt statement saying it fired the rockets in hopes of eventually reaching U.S. military bases in Japan.  A direct article from the government published by the state media outlet KCNA described the missiles as “so accurate that they look like acrobatic flying corps in formation.”

So the United States in response has sped up deployment of its anti-missile defense system in South Korea, with Wang, on the sidelines of China’s annual parliamentary meeting, saying the Korean peninsula was like “two accelerating trains, coming toward each other with neither side willing to give way.”

“Are the two sides really ready for a head-on collision?” he asked.

The U.N. Security Council strongly condemned the launch in a unanimous statement, calling it a grave violation of North Korea’s international obligations.

As for the deployment of THAAD (Terminal High Altitude Area Defense System), China has always viewed it as a threat to its own military ambitions because it can conduct surveillance, and also marks a broader expansion of U.S. defense forces in China’s direction.

“We once again strongly urge the relevant sides to stop the process of deployment and refrain from going further down that wrong path,” said a Chinese foreign ministry spokesperson.

As I wrote last week, Beijing also continues to ramp up the pressure on South Korean companies doing business in China, such as the Lotte Group, while banning Chinese tour groups to South Korea.

It’s just a real tension convention in East Asia overall, with the war of words between North Korea and Malaysia escalating further following the assassination of Kim Jong Un’s half-brother Kim Jong Nam.    North Korea said it was temporarily banning the exit of Malaysian citizens from its borders, and then Malaysia said it would do the same to North Koreans looking to leave Malaysia.

This is extremely serious because you know Pyongyang is holding the Malaysians hostage.  Malaysia said it knows of at least 11 of its nationals currently inside North Korea.

Meanwhile, the son of Kim Jong Nam, a fellow who described himself as Kim Han Sol, suddenly appeared in a video, speaking English, saying he was safe with his mother and sister.

South Korea’s main spy agency confirmed the video was of Kim Han Sol.  The video mysteriously links to a website belonging to a heretofore unknown group, Cheollima Civil Defense, which says on its site that in response to an emergency request from the family, it had taken them to an unnamed safe location.

It’s not known if this group put itself out there to encourage defections from the North, saying it specializes in “urgent needs for protection.”

And is Kim Han Sol a potential successor to Kim Jong Un should he be toppled?  Is China protecting the family?  Cheollima said its statement is the only one it will make and hasn’t responded to emailed questions.

This all sounds like a perfect “24” plot.  Events taking place....in real time....

Lastly, Chinese Premier Li Keqiang for the first time publicly condemned the notion of Hong Kong independence, warning that the movement would “lead nowhere.”  It was the first time Li had mentioned Hong Kong in his yearly report to the National People’s Congress.

Li said Beijing was committed to the principle of one country, two systems in Hong Kong and that the framework would be applied without being “bent or distorted.”

At the National People’s Congress, it was also announced defense spending will rise “about 7 percent,” according to a senior government official, even as President Trump announced a 10 percent increase for the United States. 

Spokesman Fu King said China must continue to build up its military but this should not be seen as a threat.

“The gap in capabilities with the U.S. is enormous, but China’s military development and construction will continue in keeping with our need to defend our national sovereignty and security,” she said.  “The strengthening of Chinese capabilities benefits the preservation of peace and security in this region, and not the opposite.”  [Financial Times]

Russia: John Huntsman is expected to be appointed ambassador to Russia, after previously serving as ambassador to China in the Obama administration. This would be a good move, and the former governor of Utah will be confirmed easily.

At a minimum the decision should reduce the unpredictability and uncertainty in the relationship between Moscow and Washington, with President Trump not yet having put forward a coherent plan on dealing with Russia, which has long cooled to a Trump presidency after a period of irrational exuberance.

There are no plans for an early summit, for example, and there may not be a scheduled meeting between the two at the G20 summit in Germany this June.  Investigations into Russian meddling in the U.S. election aren’t helping.

And Trump now expects Russia to return Crimea, which is at odds with his statements during the campaign, when he suggested Russia should keep it and that U.S. sanctions imposed after its seizure would be lifted.

At that, the Kremlin suddenly stopped its pro-Trump coverage.

And in the United States overall, anti-Russian sentiment is building in Congress amid all the investigations.  Recall, Trump didn’t even mention Russia in his speech to Congress (ditto China, for that matter).

What were once positive expectations between the two are now described as “toxic,” according to one commentator, Konstantin von Eggert, in an interview with USA TODAY.

“The Kremlin is realizing that maybe the best outcome would be to maintain the current level of tensions between Russia and America rather than having something worse,” he said.

Separately, Moscow announced one of its soldiers died in the storming of Palmyra in Syria, with the Kremlin officially acknowledging the deaths of 27 Russian soldiers in Syria thus far.

Northern Ireland: The main Catholic nationalist party in Northern Ireland, Sinn Fein, scored a surprising victory in snap elections last weekend, winning its greatest number of legislative seats ever and pulling even with its Protestant rivals, thus throwing two decades of peaceful power sharing into doubt.

There are growing tensions and fears that Britain’s exit from the European Union could lead to customs and security checks along the border with Ireland, let alone economic strife and a return to sectarian conflict.

The Protestant majority has been able to defeat any ballot on merging with Ireland, and it has never been so threatened politically.

So Sinn Fein holds 27 of 90 seats, while the Democratic Unionist Party, made up of Protestants who support remaining part of Britain, lost 10 seats to 28.

If the two parties don’t form a new government within the next three weeks, there would be a return to “direct rule” from Britain.

This is going to be interesting.  The DUP is allied with Britain’s Conservative Party, which is pursuing Brexit, while Sinn Fein wants Northern Ireland to stay in the EU and eventually merge with Ireland.

Mexico: The Los Angeles Times reported crime has been exploding, with federal statistics showing nearly 2,000 people killed in the first month of 2017 – “more than any January since federal officials began releasing crime data in the 1990s.”

The Mexican government does not break down the number tied to the cartels, but some experts have estimated that narco-violence possibly accounts for half of the death toll.

2011 was the most violent year in Mexico, when 22,852 people were killed.  It then dropped to 14,353 in 2014.

You know, my fellow Americans.  You could always just stop doing drugs.  There aren’t any violent beer cartels that I know of.

Random Musings

--Michael Goodwin / New York Post

“Each day, FBI director Jim Comey goes to work in a federal building named for his most famous predecessor. Yet for all his storied accomplishments and sordid controversies, J. Edgar Hoover never matched the singular feat of Comey.

“Only Comey simultaneously investigated the top two presidential candidates during an election.  Hillary Clinton and Donald Trump each battled Comey last year while they battled each other for the Oval Office.

“How’s that for power?

“Neither case led to charges, but that’s almost besides the point. Echoing Hoover’s attitude, if not his methods, Comey is adept at using innuendo and leaks to remind the powerful that he cannot be ignored. The prerogative to investigate, and the willingness to feed a scandal-hungry media, is close to being God in politics, and Comey plays the role with relish.

“We are witnessing a prime example. Not long after President Trump claimed that former President Barack Obama ‘had my ‘wires tapped’ in Trump Tower,’ anti-Trump media outlets got a scoop: Comey was demanding a Justice Department statement declaring Trump’s charge false.

“Naturally, the scoops carried only anonymous attribution. Experience tells me that Comey himself or someone acting on his behalf alerted the media.

“Either way, the point is the same.  Comey was asserting his unique power to rebuke the president of the United States.  A Justice Department statement never came, but no matter.  Comey made his feelings known and paid no price for it.

“Other leaks followed. We are told Comey was ‘incredulous’ at Trump’s claim and wanted the FBI cleared of the suggestion it broke the law.  Another ‘source’ was quoted as saying that Comey felt that ‘institutionally, he has to push back on this.’

“The episode was classic Comey. Once regarded as an independent straight-shooter, his career increasingly resembles the end of Hoover’s.  Comey’s aggressive self-righteousness makes him bigger than the institution he leads and everybody in Washington knows that crossing him can be dangerous to your career.

“Hillary Clinton’s team blamed him (and just about everybody else) for costing her the election. Whatever the merits, his probe of her handling of classified material was marked by numerous damaging leaks and then a crass assumption of others’ authority.

“After Attorney General Loretta Lynch recused herself from the case because of her private meeting with Bill Clinton, Comey made the highly unusual move of calling a press conference to recommend that no charges be filed, saying ‘no reasonable prosecutor’ would take the  case.  That was highly debatable, but his timing was politically convenient: It came just hours before Clinton joined Obama on Air Force One for their first joint campaign appearance.

“Yet Comey wasn’t done making news: He called Clinton ‘extremely careless’ and said she lied to the public repeatedly. Later, he reopened the investigation over Anthony Weiner’s e-mails, then promptly closed it before the election.

“Trump is now getting similar treatment. Some days Comey gives, and some days he takes. Whatever we know about investigations into whether Trump’s campaign collaborated with Russia during the election is only because of leaks, many of which appear to come from the FBI....

“During his rise, Comey has curried favor with Democrats by goring Republicans, then switching sides, then switching sides again.  The only consistency is that those who trust him end up disappointed....

“In death, Hoover is widely reviled because he is harmless.  Let’s not make the same mistake with Comey.”

Editorial / Wall Street Journal

“Speaking at a Boston business conference Wednesday, FBI Director James Comey offhandedly remarked, ‘You’re stuck with me for another 6 ½ years.’ It was an interesting way to put it, for ‘stuck’ is exactly the right word.

“Mr. Comey seems to regard himself as the last independent man in Washington, whose duty is to stand his ground amid undeserved slings from the Democrats and arrows from the Republicans.  And especially so now amid the controversy over allegations of Russian intervention in the 2016 presidential election.

“Something larger is at stake here than Mr. Comey completing his tenure. The decisions he made as director during the election damaged the credibility of the FBI in the eyes of the American public. The bureau’s institutional integrity needs to be repaired. He should step down now so that the nation does not have to wait 6 ½ years to begin the process of getting unstuck from the Comey years.”

--Los Angeles Mayor Eric Garcetti (Dem.) won re-election with 81% of the vote on Tuesday.

--Thursday, March 2, political scientist Charles Murray was prohibited by students at Middlebury College from giving a lecture.  In the mayhem, a Middlebury professor was seriously injured after being assaulted by the protesters who also attacked the cars they were in.  Murray was taken to another location where he was able to speak, but it was a despicable and outrageous display of intolerance.

Charles Murray: “The penalties imposed on the protesters need to be many and severe if last Thursday is not to become an inflection point. But let’s be realistic: The pressure to refrain from suspending and expelling large numbers of students will be intense.  Parents will bombard the administration with explanations of why their little darlings are special people whose hearts were in the right place. Faculty and media on the left will urge that no one inside the lecture hall be penalized because shouting down awful people like me is morally appropriate.  The administration has to recognize that severe sanctions will make the college less attractive to many prospective applicants.

“My best guess is that Middlebury’s response will fall short of what I think is needed: A forceful statement to students that breaking the code of conduct is too costly to repeat.  But even the response I prefer won’t generalize.  A tough response will be met with widespread criticism.  Students in other colleges will have no good reason to think their administration will follow Middlebury’s example.

“And so I’m pessimistic.  I say that realizing that I am probably the most unqualified person to analyze the larger meanings of last week’s events at Middlebury.  It will take some time for me to be dispassionate.  If you promise to bear that in mind, I will say what I’m thinking and rely on you to discount it appropriately. What happened last Thursday has the potential to be a disaster for American liberal education.”

I can’t imagine what I’d be doing if I were a college student today.  Well, actually, I can.  I’d be suspended after going off on some classmate who I thought was being intolerant.

--After his Saturday morning tweetstorm against Obama, Trump went after Arnold Schwarzenegger, who announced a day earlier that he was quitting “Celebrity Apprentice.”

Trump: “Arnold Schwarzenegger isn’t voluntarily leaving the Apprentice, he was fired by his bad (pathetic) ratings, not by me. Sad end to great show.”

Schwarzenegger was quick to respond: “You should think about hiring a new joke writer and a fact checker.”

--According to a CNN/ORC poll, Melania Trump’s approval rating is up 16 points since her husband was sworn in. 

52% of Americans have a favorable opinion of Melania, up from 36% pre-inauguration.  In February 2016, the former model’s favorable rating was just 24%, her unfavorable was 31% and 23% had never even heard of her. Now, just 3% say they don’t know who the first lady is, while her unfavorable has held steady at 32%.

But, as you’d expect, while 86% of Republicans view Melania favorably, just 22% of Democrats do.

58% of men view her favorably, and 46% of women.  Michelle Obama’s numbers were opposite.  78% of women and 68% men for the category.

--According to a new study by the U.S. Geological Survey, Southern California could be overdue for a major earthquake along the Grapevine north of Los Angeles.

The research found earthquakes happen there on average every 100 years. The last major temblor occurred 160 years ago, “a catastrophic geological event that ruptured an astonishing 185 miles of the San Andreas fault.”  [Rong-Gong Lin II / Los Angeles Times]

The problem now is that researchers have concluded the land on either side of the fault has been pushing against the other at a rapid rate, “accumulating energy that will be suddenly released in a major quake.”

Among the impacts would be the tearing up of Interstate 5, whose Grapevine section runs on top of the San Andreas fault at Tejon Pass.

“Central Los Angeles could experience a couple of minutes of shaking, which could feel like a lifetime compared with the 1994 Northridge earthquake, which shook for roughly 15 seconds.” [Rong-Gong Lin]

Lead author of the study, USGS geologist Kate Scharer, said: “This would be more broadly felt across the basin. It would impact our ability to be a world-class city.”

--Good friend Jeff B. from Connecticut noted on his recent annual trip to Antigua, with lovely Kathy I hasten to add, which he coordinates with three British couples they’ve gotten to know over the years, that this time they “were tired of fielding questions about Trump.”

--After the warmest February in decades across many parts of the country (2nd-warmest on record for the continental U.S.), Punxsutawney Phil’s prediction of six more weeks of winter was in tatters; his reputation shredded.  I was thinking of issuing a lifetime ban from the All-Species List.

But, owing to some of the coldest March air in history, which blew away temperature records in Canada in the past week, -66.5F in Mould Bay in the Canadian Arctic on Saturday, an all-time record, Phil was resting a little easier.  Monday, Fairbanks, Alaska, saw its temperature plummet to -38, the coldest temperature this late in the season since 1964.

And now you’re seeing winter weather return with a vengeance in much of the upper half of the United States, including forecasts of a blizzard along the East Coast this coming Tuesday.

So Punxsutawney Phil suddenly looks rather prescient. It’s six weeks after Groundhog Day, after all.  I think some of us just wish that with all the modern weather forecasting models at his disposal, he could have fine-tuned his outlook a bit more.

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

God bless America.

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Gold $1204
Oil $48.39...down almost $5 on the week

Returns for the week 3/6-3/10

Dow Jones  -0.5%  [20902]
S&P 500  -0.4%  [2372]
S&P MidCap  -1.6%
Russell 2000  -2.1%
Nasdaq  -0.15%  [5861]

Returns for the period 1/1/17-3/10/17

Dow Jones  +5.8%
S&P 500  +6.0%
S&P MidCap  +3.0%
Russell 2000  +0.6%...worrisome action
Nasdaq  +8.9%

Bulls 57.7
Bears  17.3  [Source: Investors Intelligence]

Have a great week. Remember to set your clocks ahead Saturday and replace those smoke detector batteries, as well as replenish the beer supply.  The NCAA Tournament starts this week, after all.

Brian Trumbore

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