Week in Review

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Week in Review

01/13/2018

For the week 1/8-1/12

[Posted 11:30 PM ET]

Note: StocksandNews has significant ongoing costs and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.  Special thanks this week to Lynn S.

Edition 979

Trump World

During the campaign and in his early days as president, President Donald Trump was fond of saying, “I can be more presidential than the late, great Abraham Lincoln.”

Please start trying, Mr. President. I beg you.

Before I get into the meat of the story of the week, understand something about our idiotic leader, something you will find nowhere else.

The State of the Union Address is Tuesday, Jan. 30.  The first look at fourth-quarter GDP is Friday, Jan. 26.  There is a good chance that the economy will have grown at a 3% clip for a third consecutive quarter when we get the news.

President Trump also appeared to be on the verge of accomplishing something Presidents Bush and Obama couldn’t do...comprehensive immigration reform, or, for now, at least a DACA fix while getting some assurances on his border wall and increased security.

Imagine what the combination of the above would have been for the audience on Jan. 30.  President Trump could rightly bask in the glow of success.  It wouldn’t matter what Democrats, and many Republicans, personally thought of the guy. He could enter the chamber a victor.  His poll numbers would rise significantly.

Instead, unless something positive happens on the immigration front next week, with a Jan. 19 deadline on crafting a new spending package to avoid a government shutdown looming, President Trump blew a tremendous opportunity.

And with his hurtful, racist comments, he has done real harm to America’s reputation around the world.

I recognize a small percentage of Americans really care about this last point.  They are the losers.  They are the people who haven’t traveled.  Don’t read a good newspaper or journal every day.  Get their news from one source only. Think they can live in their little cocoons and just not care about what is going on in the rest of the world.

These are the stupid.  The dolts.  Know Nothings.  All I have to say to them is, “Good luck.”

The rest of us have to give a damn.

Now the news....

The Washington Post first reported that during a meeting with lawmakers Thursday on immigration and DACA, Trump said, “Why are we having all these people from shithole countries come here?”

Trump was pushing back against a suggestion that the U.S. restore protections for immigrants from Haiti, El Salvador and African countries – and instead said America should be bringing in more people from countries like Norway.

Senators Lindsey Graham (R-S.C.) and Dick Durbin (D-Ill.) thought they would be meeting with Trump alone and were surprised to find immigration hard-liners such as Rep. Bob Goodlatte (R-Va.) and Sen. Tom Cotton (R-Ark.) at the meeting, as well as Sen. David Perdue (R-Ga.). 

Durbin confirmed Friday that the president made comments he considered “vile and racist.” 

Others who attended the meeting have said that Trump questioned why the U.S. would accept immigrants from “shithole countries” instead of Norway.

“I have seen the comments in the press, I have not read one of them that’s inaccurate,” Durbin told reporters in Chicago.

“In the course of (Trump’s) comments, he said things that were hate-filled, vile and racist,” Durbin said. “I use those words advisedly, I understand how powerful they are.  I cannot believe that in the history of the White House and that Oval Office any president has ever spoken the words that I personally heard our president speak yesterday.”  [Ed. Durbin needs to brush up on his presidential history.]

Sens. Cotton and Perdue say they “don’t recall” President Trump “specifically” smearing Haiti and African nations as “shitholes.”

Sen. Lindsey Graham told fellow Republican senator from South Carolina Tim Scott that the “shithole countries” comment was “basically accurate.”

Friday, House Speaker Paul Ryan called Trump’s remarks “very unfortunate” and “unhelpful,” noting that Ryan himself was a descendant of Irish immigrants who had faced prejudice and hostilities when they first moved to America.

Rep. Mia Love (R-Utah), who is Haitian American, called on Trump to apologize for remarks that were “unkind, divisive, elitist, and fly in the face of our nation’s values.”

Michael Steele, who was the first African American chairman of the Republican National committee, said it’s now “incontrovertible” that Trump is a racist.

Trump denied making the comment, tweeting:

“The language used by me at the DACA meeting was tough, but this was not the language used.  What was really tough was the outlandish proposal made – a big setback for DACA!”

And:

“Never said anything derogatory about Haitians other than Haiti is, obviously, a very poor and troubled country. Never said ‘take them out.’  Made up by Dems. I have a wonderful relationship with Haitians.  Probably should record future meetings – unfortunately, no trust!”

African politicians and diplomats were outraged after the comments were reported.   Botswana’s foreign ministry summoned the U.S. ambassador in protest and called the comments “highly irresponsible, reprehensible and racist.”

The African Union (AU), an organization which promotes cooperation on the continent, said it was alarmed by Trump’s “very racist” comments. “Given the historical reality of how African Americans arrived in the United States as slaves, and the United States being the biggest example of how a nation has been built by migration – for a statement like that to come is particularly upsetting,” AU spokeswoman Ebba Kalondo said.

Torbjoern Saetre, a politician representing Norway’s Conservative Party in a municipality near Oslo, tweeted: “On behalf of Norway: Thanks, but no thanks.”

Editorial / Los Angeles Times

“In an off-the-cuff comment with legislators gathered in the Oval Office on Thursday to discuss immigration, President Trump laid bare his world vision. There are wealthy white countries such as Norway, which are welcome to send immigrants to the United States. Then there are what the president called ‘shithole countries’ – Haiti and all the nations of Africa – whose people (overwhelmingly black and brown) the president doesn’t think belong here.

“Trump’s comment was outrageous, immature, inhumane and vulgar – and it shames the nation. It’s shocking that an American president would think so reductively and heartlessly about so much of the world. Nevertheless, it is unlikely that the president himself will feel shame. Instead, he’ll bluster and bray about ‘fake news’ and try to drag in the 2016 election results and the stock market, and in the end, he is unlikely to be punished by his base for what he said.

“But his comments stand for themselves.  ‘What do we want Haitians here for?’ the president reportedly asked.  ‘Why do we want all these people from Africa here?  Why do we want all these people from shithole countries?’ Then he added: ‘We should have people from places like Norway.’....

“ ‘Certain Washington politicians choose to fight for foreign countries, but President Trump will always fight for the American people,’ spokesman Raj Shah told the Post.  ‘...Like other nations that have merit-based immigration, President Trump is fighting for permanent solutions that make our country stronger by welcoming those who can contribute to our society, grow our economy and assimilate into our great nation.’

“So Trump’s dismissal of a large portion of the world is framed now as an argument for merit-based immigration?

“That’s self-serving baloney.  It’s hard to interpret Trump’s statement – comparing Haiti and Africa with Norway, in effect – as anything other than an attack on people of color around the world.  But even those who don’t interpret it that way should be appalled that the president would express such disdain and disgust for countries where poverty is rampant, where people struggle because they lack the economic advantages of Americans, where wars are not infrequent.”

Editorial / Wall Street Journal

“Once you hit bottom, there’s nowhere to go but up, and on Thursday the language of politics hit bottom.

“When the possibility of admitting immigrants from Haiti and Africa came up at a meeting with Senators at the White House, President Trump reportedly mused about why we’d want to admit people into the U.S. from ‘s---hole countries.’

“About that time, Rep. Nancy Pelosi, the former Speaker of the House, offered her thoughts on colleagues who are negotiating an immigration bill with the White House: ‘The five white guys I call them, you know. Are they going to open a hamburger stand next or what?’

“Maybe at some future date, Mr. Trump and Mrs. Pelosi can co-host a talk show on ESPN.  For now, this verbal mudslide from two of the nation’s highest officials is, in a word, unedifying.

“The House’s number two Democrat, Steny Hoyer, no doubt terrified that his party could become linked to Ms. Pelosi’s use of language from the fringe of identity politics, said, ‘That comment is offensive.’ Republicans, who might worry that Mr. Trump’s barstool belch has lost the African-American vote forever, should do the same.”

Trump also decided in his Thursday night tweetstorm that he wasn’t going to London in February for the opening of the new U.S. embassy.

“Reason I cancelled my trip to London is that I am not a big fan of the Obama Administration having sold perhaps the best located and finest embassy in London for ‘peanuts’ only to build a new one in an off location for 1.2 billion dollars.  Bad deal. Wanted me to cut ribbon-NO!”

So it was in 2008 that President George W. Bush signed a conditional agreement to acquire a site for the construction of a new embassy in a former industrial zone.  The subsequent $1 billion construction was wholly funded by the sale of other properties in London, as reported by Reuters.

The truth is the embassy was situated in an exclusive neighborhood, on a historic square, that was home to some of the city’s most valuable real estate.  The embassy had been based on the square since 1938 and in the era post-9/11, wasn’t a good spot in terms of security, and given its historical nature, it would have been difficult to make certain alterations.  In 2015, a report in the New York Times said it would have cost $730 million and still would not have provided state-of-the-art security.

It was in 2009, when Barack Obama was president, that the U.S. agreed to sell the embassy to a Gulf investor for an undisclosed sum to help fund the new location.

Sec. of State Rex Tillerson will be attending in lieu of the president, who is still supposed to travel to the U.K. for a state visit later in the year.

But as was clearly the case with the embassy opening, Trump has already indicated he does not want to take up the state visit invitation if he is going to face mass demonstrations, which of course now will be far worse. And it’s what he surely faced in February.

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Editorial / The Economist...written prior to the shithole comment.

“Almost one year into Donald Trump’s presidency, you have to pinch yourself to make sense of it all.  In ‘Fire and Fury,’ Michael Wolff’s gossipy tale of the White House, which did not welcome Mr. Trump’s anniversary so much as punch it in the face, the leader of the free world is portrayed as a monstrously selfish toddler-emperor seen by his own staff as unfit for office.  America is caught up in a debate about the president’s sanity. Seemingly unable to contain himself, Mr. Trump fans the flames by taking to Twitter to crow about  his ‘very stable genius’ and, in a threat to North Korea, to boast about the impressive size of his nuclear button.

“Trump-watching is compulsive.... But, as a record of his presidency so far, it is also incomplete and a dangerous distraction.

“To see why it is incomplete, consider first that the American economy is in fine fettle, growing by an annualized 3.2% in the third quarter. Blue-collar wage growth is outstripping the rest of the economy.  Since Barack Obama left, unemployment has continued to fall and the stock market to climb.  Mr. Trump is lucky – the world economy is enjoying its strongest synchronized upswing since 2010. But he has made his luck by convincing corporate America that he is on its side. For many Americans, especially those disillusioned with Washington, a jeremiad over the imminent threat to all of America from Mr. Trump simply does not ring true.

“Despite his grenade-throwing campaign, Mr. Trump has not carried out his worst threats. As a candidate he spoke about slapping 45% tariffs on all Chinese goods and rewriting or ditching the North American Free-Trade Agreement with Canada and Mexico. There may soon be trouble on both those fronts, but not on that original scale.  He also branded NATO as obsolete and proposed the mass deportation of 11m illegal immigrants. So far, however, the Western alliance holds and the level of deportations in the 12 months to September 2017 was not strikingly different from earlier years.

“In office Mr. Trump’s legislative accomplishments have been modest, and mixed.  A tax reform that cut rates and simplified some of the rules was also regressive and unfunded.  His antipathy to regulation has invigorated animal spirits, but at an unknown cost to the environment and human health.  His proposed withdrawal from the Paris climate agreement and the fledgling Trans-Pacific Partnership was, in our view, foolish, but hardly beyond the pale of Republican thinking.

“His opportunism and lack of principle, while shameful, may yet mean that he is more open to deals than most of his predecessors.  Just this week, he combined a harsh plan to deport Salvadorans who have temporary rights to live and work in America with the suggestion of a broad reform to immigration. He also said that he will be going to Davos, where he will rub shoulders with the globalists....

“As we have written repeatedly over the past year, Mr. Trump is a deeply flawed man without the judgment or temperament to lead a great country.  America is being damaged by his presidency.  But, after a certain point, raking over his unfitness becomes an exercise in wish-fulfilment, because the subtext is so often the desire for his early removal from office.

“For the time being that is a fantasy. The Mueller probe into his campaign dealings with Russia should run its course.  Only then can America hope to gauge whether his conduct meets the test for impeachment. Ousting Mr. Trump via the 25th Amendment, as some favor, would be even harder. The type of incapacity its authors had in mind was a comatose John F. Kennedy had he survived his assassination.  Mr. Trump’s mental state is impossible to diagnose from afar, but he does not appear to be any madder than he was when the voters chose him over Hillary Clinton....

“Each time Mr. Trump’s critics put their aim of stopping him before their means of doing so, they feed partisanship and help set a precedent that will someday be used against a good president fighting a worthy but unpopular cause....

“Ousting Mr. Trump on the gut feeling that he might be mentally unstable smacks of a coup.  Would you then remove a hawk for being trigger-happy or an evangelical for believing in the Rapture?

“Mr. Trump has been a poor president in his first year. In his second he may cause America grave damage. But the presidential telenovela is a diversion.  He and his administration need to be held properly to account for what they actually do.”

Trumpets....

--President Trump declined on Wednesday to commit to being interviewed by Robert Mueller, the special counsel investigating whether his campaign colluded with Russia to sway the 2016 election, backing off his statement last year that he would be willing to talk to Mueller under oath.

“I’ll speak to attorneys,” Trump said during a news conference with Prime Minister Erna Solberg of Norway, when asked whether he would agree to an interview.  “We’ll see what happens.”

Back in June, Trump said he would be “100 percent” willing to give a sworn statement to Mr. Mueller.

--In his Wall Street Journal interview Thursday, Trump said of the efforts to remake the North American Free Trade Agreement.

“We’ve made a lot of headway. We’re moving along nicely.”  Hardly.  Negotiators have set a March deadline to rewrite the pact between the U.S., Mexico and Canada. Trump said he didn’t have a firm timetable and was “a little flexible” due to Mexico’s July 1 presidential and legislative elections.  He did reiterate, though: “If we don’t make the right deal, I will terminate NAFTA, OK.”

Trump still believes in one form or another Mexico will pay for his border wall.

“They can pay for it indirectly through NAFTA,” he said.  “We make a good deal on NAFTA, and, say, I’m going to take a small percentage of that money and it’s going toward the wall. Guess what?  Mexico’s paying.”

--In the above-mentioned Journal interview, President Trump declined to say whether his relationship with Steve Bannon is broken beyond repair, however: “I don’t know what the word permanent means,” he said.  [Breitbart dumped Bannon.]

Separately, Trump doesn’t seem to understand that libel laws, one of his latest topics to bitch about, are a matter of state, not federal law; buttressed by constitutional protections.

--Selected Trump tweets:

“Disproven and paid for by Democrats ‘Dossier used to spy on Trump Campaign.  Did FBI use Intel tool to influence the Election?’ @foxandfriends Did Dems or Clinton also pay Russians? Where are hidden and smashed DNC servers? Where are Crooked Hillary Emails? What a mess!”

“The single greatest Witch Hunt in American history continues. There was no collusion, everybody including the Dems knows there was no collusion, & yet on and on it goes. Russia & the world is laughing at the stupidity they are witnessing. Republicans should finally take control!”

“The Democrats seem intent on having people and drugs pour into our country from the Southern Border, risking thousands of lives in the process. It is my duty to protect the lives and safety of all Americans. We must build a Great Wall, think Merit and end Lottery & Chain. USA!”

“Democrat Dianne Feinstein should never have released secret committee testimony to the public without authorization. Vey disrespectful to committee members and possibly illegal.  She blamed her poor decision on the fact she had a cold – a first!”

On the Michael Wolff book, and claims he’s a bit unhinged, Trump:

“Now that Russian collusion, after one year of intense study, has proven to be a total hoax on the American public, the Democrats and their lapdogs, the Fake News Mainstream Media, are taking out the old Ronald Reagan playbook and screaming mental stability and intelligence....

“...Actually, throughout my life, my two greatest assets have been mental stability and being, like, really smart. Crooked Hillary Clinton also played these cards very hard and, as everyone knows, went down in flames. I went from VERY successful businessman, to top T.V. Star...

“...to President of the United States (on my first try).  I think that would qualify as not smart, but genius...and a very stable genius at that!”

“I’ve had to put up with the Fake News from the first day I announced that I would be running for President. Now I have to put up with a Fake Book, written by a totally discredited author. Ronald Reagan had the same problem and handled it well. So will I!”

“Michael Wolff is a total loser who made up stories in order to sell this really boring and untruthful book.  He used Sloppy Steve Bannon, who cried when he got fired and begged for his job.  Now Sloppy Steve has been dumped like a dog by almost everyone. Too bad!”

Wall Street

The markets continued to surge to new highs (details below) and in its latest survey of economists, the Wall Street Journal found forecasters on average predicting GDP growth this year of 2.7%, with the unemployment rate, now 4.1%, falling to 3.9% by midyear and 3.8% in December.  The pace of hiring will slow further, with monthly nonfarm payroll gains of 165,000 this year, after averaging 171,000 in 2017 and 187,000 in 2016, according to the Labor Department.

More than 90% of the economists surveyed said the tax cuts would increase GDP growth over the next two years, though they aren’t confident the boost will prove long-lived, expecting GDP growth to ease to 2.2% in 2019 and 2% in 2020.

Wall Street analysts have furiously been upgrading their consensus forward earnings for the S&P 500 by an unprecedented 4.6% thus far in 2018, providing more fuel for the rally, though it’s important to note that the same multinationals I have been talking about the past year in terms of synchronized growth, won’t see any benefit from the tax cuts from their overseas operations.

But as economist and chief investment officer Donald Luskin of Trend Macrolytics LLC writes in today’s Wall Street Journal:

“My estimate (of future earnings growth) doesn’t consider business migration. Some American companies with operations in low-tax jurisdictions may bring these activities home. Some foreign companies may decide to forward-deploy their facilities into the U.S. market. All of this again will create new businesses, factories, jobs and earnings.

“(And) my estimate doesn’t factor in the competitive global response to American tax reform.  Nations afraid to be left behind may cut their own taxes in what could turn into a world-wide competition. That would be the delightful opposite of protectionism.  Instead of trying to punish each other with reciprocal tariffs, nations could engage in a race to the top to see who can more completely liberate their productive sector from the deadweight costs of corporate taxation. Again: new businesses, factories, jobs and earnings.

“Put it all together, and before you know it, that ‘E’ in the time-honored P/E ratio will have grown so much that today’s stock valuations won’t look out of line at all.”

Bond maven Jeffrey Gundlach of DoubleLine Capital said the S&P 500 “may go up 15 percent in the first part of the year, but I believe, when it falls, it will wipe out the entire gain of the first part of the year with a negative sign in front of it,” he said in his investor webcast on Tuesday.

Gundlach added that if the 10-year U.S. Treasury note’s yield goes above 2.63 percent, stocks will be affected...they’ll be spooked.  He added that financial markets have not priced in a “more hawkish” European Central Bank, which has been my point for months.

The other “Bond King,” Bill Gross at Janus Henderson Group, declared we are now in a bond bear market, but a careful reading of his comments shows he isn’t calling for calamity in the bond pits just yet, but more like a 2.70% year end yield on the 10-year, which on a total return basis would spell zero, or slightly negative.

It’s longer term that has the likes of Gundlach and Gross concerned because there is a looming glut of bond supply from the U.S., the U.K., Japan and Germany, with Japan the latest to announce a surprise reduction in purchases of long-dated Japanese government bonds by the Bank of Japan (though it is a small reduction thus far). It’s just that the BOJ’s move is yet another sign of central banks finally stepping back...the easy money, days of zero interest rates soon to be a thing of the past, especially if inflation expectations begin to take off.

Bottom line, Armageddon isn’t in the cards for the bond market yet, but many investors playing in this sandbox will be crushed by mid-year 2019.  Some in Europe, sooner.

In the here and now, we did have some key inflation readings this week. December producer prices came in at a surprising -0.1%, and -0.1% ex-food and energy; +2.6% year-over-year, +2.3% yoy on core.  Today, we had December consumer prices and the CPI was 0.1%, 0.3% on core; 2.1% for the year, 1.8% ex-stuff we use.  So the Fed needn’t be shaking in its boots when it gathers Jan. 30-31, at least over this data.

December retail sales were up 0.4% as forecast, ex-autos also up 0.4%, a strong reading.

Speaking of retail sales, the National Retail Federation released its final reading on holiday sales for November and December and they were up 5.5%, the best year since 2010’s 5.2%, and far ahead of the NRF’s initial 3.6% to 4% forecast.

And the Atlanta Fed’s GDPNow indicator has fourth-quarter GDP, which is to be released in two weeks, now coming in at 3.3%, up from its last look of 2.8%. That would be three straight 3%+ quarters.

Europe and Asia

First, in economic news, Eurostat reported the unemployment rate for November in the eurozone (EA19) ticked down to 8.7%, the lowest since January 2009, and down from 9.8% a year earlier.

Germany came in at 3.6% (the govt. calculates this differently and has it at 5.5%), France 9.2%, Spain 16.7%, Italy 11.0%, Ireland 6.1%, and Greece 20.5% (Sept.).

Separately, EA19 retail trade rose 1.5% in November, and was up 2.8% year-on-year (Eurostat).

So the strong data continues to flow in.

Meanwhile, the European Central Bank, in minutes from its last policy meeting in December, indicated that it might move sooner than investors had expected to phase out its giant bond-buying program, sending the euro and eurozone government bond yields higher, though various government bond auctions this week were orderly.

The minutes show that officials considered a move “early in the coming year” to further reduce the stimulus, assuming economic growth remains strong.  The ECB has previously pledged to extend its quantitative easing program through September 2018, but at a greatly reduced pace of 30bn euro ($36 billion) a month instead of 60bn euro.

A reduction in bond buying doesn’t mean the ECB will actually raise its benchmark interest rate off the zero level.  Inflation remains well below the central bank’s 2% target.

Brexit: This was yet another rocky week for British Prime Minister Theresa May as she works to secure the best trade deal with the European Union as part of the Brexit negotiations, after London’s mayor warned the U.K. could lose almost 500,000 jobs if Britain fails to agree to a deal (per a report the mayor’s office commissioned from Cambridge Econometrics).

For now, there was a 37 percent decline in job openings available in London’s financial sector last month, according to a report from recruiting firm Morgan McKinley released on Thursday, owing to Brexit uncertainty. Around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the country is denied access to Europe’s single market, according to a Reuters survey of firms employing the bulk of workers in international finance.

London’s future as Europe’s premier financial hub is at the heart of Brexit talks because the sector is Britain’s biggest source of corporate tax revenue.

Chancellor of the Exchequer Philip Hammond, though, said the U.K. is growing tired of complaints from the European Union that they don’t know what Theresa May’s government wants from Brexit, Hammond accusing the EU of being just as bad in hitting out against the bloc’s “relative silence” on what kind of trade terms it wants from Britain.

Addressing an economics conference in Berlin, Hammond said, “It takes two to tango: both sides need to be clear about what they want.”  Hammond added: “In London, many feel that we have little, if any, signal of what future relationship the EU27 would like to have with a post-Brexit Britain.”

Separately, Prime Minister May’s planned cabinet reshuffle went off the rails when two of her top ministers refused to be moved to new jobs. The shakeup was intended to refresh May’s team at the start of a high-pressure year.  Instead, she was unable to impose her will on some of her most senior colleagues.

Boris Johnson, foreign secretary, did get to stay as expected; Johnson having led the official campaign to take Britain out of the EU in the 2016 referendum who is also seen as May’s biggest rival inside the Cabinet. The aforementioned Philip Hammond also kept his key job, ditto Brexit Secretary David Davis.

One former minister, George Osborne, who was sacked by Mrs. May when she came to power in July 2016, called the reshuffle and attempt to reassert her authority a massive failure and “farce.”

Osborne, writing in London’s Evening Standard, said: “If they were not facing one of the worst oppositions we’ve ever had, the Tories would be finished.”

Gotta agree with that assessment, the opposition Labour Party led by the very strange Jeremy Corbyn.

One economic tidbit for the U.K.  House price growth was down to 2.7% year-on-year in December, with prices down 0.6% for the month. The yearly rate of growth in home prices was 3.9% in November and 4.5% in October, so the figure has been sliding; data courtesy of Halifax.

Germany: Chancellor Angela Merkel has survived to serve a fourth term but the coalition deal she struck with the Social Democrats (SPD) puts her fate in their hands and risks eroding support among her close allies before the end of what is expected to be another four years in office.

SPD leaders will ask their rank-and-file to approve the new grand coalition on Jan. 21, a repeat of an arrangement that governed from 2013 to 2017, but one which proved costly at the ballot box to the SPD in last September’s elections.  It’s only after a ‘yes’ vote, though, that real negotiations would take place.

An Infratest Dimap poll taken last week showed Merkel’s approval rating had dropped to 52%, but to win over the SPD, Merkel agreed to $7.2 billion of investment in education, research and digitalization by 2021, expanded child care rights, and a pledge to strengthen Europe’s cohesion with increased German contributions to the EU budget.  The deal also avoids any tax increases

Germany has a sizable surplus at its disposal so the above sum is small and for many in the SPD does not go far enough on their cherished social justice issues. 

Even if SPD members approve of the coalition arrangement, the government can still fail, as negotiations continue on more specifics. And Merkel has to deal with conservative Bavarian sister party the Christian Social Union (CSU) that wants to ensure a tough line on immigration and European policy.

Fiscally conservative Christian Democrats in Merkel’s party are also wary of France pushing Berlin into European reforms at increased cost to the German taxpayer.

Separately, the Germany economy grew 2.2% in 2017, according to the Federal Statistics Office, vs. 1.9% in 2016.

And the strikes with Germany’s biggest union IG Metall commenced this week, as I wrote last time would be the case, IG Metall seeking a 6% pay raise and shorter work week, which in no way will corporate leaders give into. The work stoppages are orderly thus far, and do not impact anywhere near a majority of the union’s 3.9 million workers as yet.  They mostly seem to be walkouts.  But the situation could escalate quickly next week if there is little movement between the two sides.

Catalonia: The two main separatist parties have agreed to support the re-election of ousted leader Carles Puigdemont as president in a sign the pro-independence movement is eager to ratchet up the tension with Madrid, following the Dec. 21 regional election.

Pro-separatist parties won a slim majority of seats in the regional assembly, but there are still divisions in the ranks before a new government can be formed over the coming weeks.  For his part, Puigdemont, still in self-imposed exile in Belgium after Spanish Prime Minister Mariano Rajoy imposed home rule and took control of Catalonia, ousting him from his position as head of the region, faces legal hurdles to return to power.

Separatists are talking of Puigdemont ruling from exile, but that’s absurd, plus I don’t see how Brussels, which would be under immense pressure from Madrid, could allow him to stay in the country.  Over time, it would hurt Belgians as they would be subject to sanctions from Spain, one would think.  [Though I am not claiming to know what EU law would be in that instance.]

Turning to Asia...in China, the National Bureau of Statistics reported that producer prices in December rose 4.9% at an annualized rate, the highest rate since 2008.  Consumer prices rose at an annualized pace of 1.8%, with falling pork prices, down 8.3%, helping...pork being a leading staple in China.  The tame CPI was also helped by falling fresh veggie prices all of 2017, leading to the first fall in food prices for Chinese consumers since 2003.  But some predict pork will spike anew this year.

Separately, China’s northern port city of Tianjin is likely to see official gross domestic product drop by almost 20 percent in 2017 after authorities recognized severe double-counting in the showcase financial district.  Other Chinese states have been acknowledging similar revisions that imply GDP overall was overstated in recent years.

According to the Financial Times, “The magnitude of falsified data in Northern China is only slowly becoming apparent after a four-year downturn in the coal, steel and oil on which the region depends was papered over by governments eager to show robust growth.”  I’m shocked!

Street Bytes

--What a start to 2018, the Dow Jones adding another 2% to 25803, the S&P 1.6% to 2786, and Nasdaq 1.7% to 7261, all record highs.  The S&P and Nasdaq have finished lower just one session in the first nine thus far in one of the best starts to a year in ages.  Needless to say, traders thus far couldn’t give a hoot about any intrigue in emanating from the White House.

--U.S. Treasury Yields

6-mo. 1.59% 2-yr. 2.00%  10-yr. 2.55%  30-yr. 2.85%

The average rate on a 30-year fixed-rate mortgage rose to 3.99 percent, from 3.95 percent last week, mortgage buyer Freddie Mac said.   A year ago, the 30-year rate averaged 4.12 percent.

--I forgot to note last time that I posted my yearend “Wall Street History” piece with all the numbers for 2017, and going back, so check it out.

But a few other figures for last year, courtesy of Bianco Research and Barron’s.

EAFE (Europe, Australasia, and Far East) developed markets returned 25.03%, with Europe up 25.51% and the Pacific Free developed markets up 24.64%.

MSCI Emerging Markets Free index rose 37.28%.  China was up 54.07%, and India rose 38.76%.

So the U.S., again, wasn’t the only game in town, sports fans.

--The price of crude oil continued to rise to a 4-year high, $64.40, with falling inventories and rising geopolitical risk in the Middle East, the market waiting to see what President Trump would do on the Iran nuclear deal and whether he extended U.S. sanctions relief or reinstated them, which could hinder Iran’s oil exports, further tightening global supply.

--Meanwhile, in a sudden about-face, the Trump administration decided to exclude Florida from its plan to expand offshore oil and gas drilling,.

Interior Secretary Ryan Zinke announced the decision Tuesday evening after meeting with Florida Gov. Rick Scott, the Republican who is expected to challenge Democratic Sen. Bill Nelson this year, Nelson being a long-time drilling foe.

Zinke in a statement said: “I support the governor’s position that Florida is unique and its coasts are heavily reliant on tourism as an economic driver.   As a result of discussion with Governor Scott and his leadership, I am removing Florida from consideration for any new oil and gas platforms.”

Of course this is all a tub of merde, seeing as Georgia and North and South Carolina, let alone California et al are reliant on coastal tourism as an economic driver too.

So needless to say, the other governors will want the same treatment (at least virtually all of them), making the initial decision moot, as Rev. Jesse Jackson would say.

--Walmart announced it was boosting the minimum hourly wage for its U.S. employees to $11 and dishing out bonuses of up to $1,000, crediting the Tax Cuts and Jobs Act for enabling the move.

The increase for the nation’s largest private employer comes amid ongoing political pressure to increase minimum wages, Walmart having more than 1 million U.S. hourly employees.

Walmart CEO Doug McMillon said in a statement: “Today, we are building on investments we’ve been making in associates, in their wages and skills development. It’s our people who make the difference and we appreciate how they work hard to make every day easier for busy families.”

The wage increase will take effect in February.  Walmart said the one-time bonuses would cost the company $400 million and would be based on length of service, while the hourly wage hike would cost another $300 million.

The company is also boosting its paid maternity leave policy for full-time hourly workers to 10 weeks and increasing its paid paternity leave policy to six weeks.

But, at the same time, Walmart more quietly announced it is closing 63 Sam’s Club stores in the U.S., though ten will be transformed into e-commerce distribution centers, with staff having a chance to reapply for new positions at those locations. Nonetheless, an estimated 3,800 will lose their jobs, according to a study of the locations involved by USA TODAY.  [Others say 10,000 job losses...I’m going with 3,800.]

And then Walmart tried to sneak another by everyone.  A story hit today that more than 1,000 corporate jobs will be cut, primarily at headquarters, and completed by month’s end.

--Fiat Chrysler is investing $1 billion in a Michigan truck factory and paying worker bonuses in the wake of the tax cut in the amount of $2,000 to about 60,000 U.S. workers.  Fiat Chrysler, in spending on a factory near Detroit to produce heavy-duty Ram pickups, is looking to add 2,500 jobs. The company had been making the vehicles in Mexico.

All good, but to be honest, these moves were made to curry major favor  with the administration, any withdrawal from NAFTA doing the auto industry major harm.  President Trump had also previously said he’d cut carmakers a break on fuel economy standards currently under review if they hired more workers.

--In more good news for the administration, Toyota and Mazda announced they have selected a site in northern Alabama, near Huntsville, for a $1.6 billion car plant the two automakers are building together. The plant is expected to employ about 4,000 workers and be open by 2021.

Toyota already operates four auto assembly plants in the United States, in Kentucky, Indiana, Mississippi and Texas. It also has two in Ontario and a small truck plant in Mexico. Mazda has a single North American plant in Mexico.

The new factory is part of Toyota’s previously announced initiative to invest $10 billion in the U.S. over the next five years.

--JPMorgan Chase & Co. beat Wall Street’s fourth-quarter earnings expectations and said tax law changes will help future profits by not only reducing the amount it pays the federal government but also by stimulating more business.  JPM said it expects its effective tax rate to drop to 19 percent from 32 percent last year.

In general, though, with the corporate tax rate falling to 21 percent from 35 percent, JPMorgan said it expects corporations to borrow more, offer more stock and pursue more mergers and acquisitions, all of which would boost JPM’s revenue.  “It is a really strong positive for the economy, the country and for our clients generally and so we are very optimistic,” Chief Financial Officer Marianne Lake said on a call with reporters.  Ms. Lake said the changes also allow the investment bank to return more capital to shareholders.

--In a major move, Facebook CEO Mark Zuckerberg said the centerpiece News Feed would undergo a series of changes in design, such as changing the filter to prioritize what friends and family share, while reducing the amount on non-advertising content from publishers and brands.

Facebook for years prioritized material that its complex computer algorithms think people will engage with through comments, “likes” or other ways of showing interest.

Zuckerberg said that would no longer be the case.

“I’m changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful social interactions.”

It’s so special that Mr. Zuckerberg is doing this for us.  [barf]

Facebook and its social media competitors have been criticized recently for having products that reinforce users’ views on social and political issues and lead to addictive viewing habits, raising questions about possible regulation and the businesses’ long-term viability.

In the case of FB, the shift is likely to mean that the time spent on it and some measures of engagement would go down in the short term, Zuckerberg wrote, but he said it would be better for users and for the business over the long term.  [Wall Street saw this and took the shares down 4.5% Friday.]

Congress is all over the issue of how social media platforms like Facebook, Twitter and Alphabet’s YouTube help spread propaganda.

Zuckerberg said an overhaul of the company’s products would help alleviate such concerns.

“We feel a responsibility to make sure our services aren’t just fun to use, but also good for people’s well-being,” he wrote.  [eegads]

--Microsoft Corp. said the patches released to guard against the Meltdown and Spectre security threats slowed down some personal computers and servers, with systems running on older Intel Corp. processors seeing a noticeable decrease in performance.  The security updates also froze some computers running AMD chipsets, Microsoft said in a blogpost, citing customer complaints.

Meltdown and Spectre are two memory corruption flaws that could allow hackers to bypass operating systems and other security software to steal passwords or encryption keys on most types of computers, phones and cloud-based servers.

Intel said last week that fixes for security issues in its microchips would not slow down computers. Rival AMD had also played down the threat, saying its products were at ‘zero risk’ from the Meltdown flaw, but that one variant of the Spectre bug could be resolved by software updates from vendors such as Microsoft.  [However, Friday AMD announced the other variant was a problem.]

So I experienced firsthand the frustrations of the fixes involved when the company hosting my site took it down about an hour after I posted last Friday night for about 8 hours until they installed the patches to the server.  They said it wasn’t anything they could schedule and that it had to get done ASAP.  I appreciate their diligence...it was just that when I woke up early Saturday morning, it’s always disconcerting to see FAILURE ALERTS in your email.  Hopefully, any future disruptions will be kept to a minimum.

Lastly, Intel CEO Brian Krzanich sold $39 million in Intel shares in November after the company learned of its chip security problems. The company said the sale had been unrelated to the security issues and followed a prearranged annual trading plan, but Krzanich reduced his holdings by about 50 percent.  [Word of the security flaws didn’t become public until last week.]

--SpaceX President Gwynne Shotwell pushed back against reports that the company’s Falcon 9 rocket may have malfunctioned during Sunday’s launch of a classified spy satellite, with news reports saying the satellite, named Zuma, may have plunged back toward Earth...never achieving orbit.

The loss, if it was determined to be a failure of SpaceX hardware, would clearly present a threat to the company’s future defense business.

After reports began to trickle in Monday that Zuma failed to achieve orbit and may have been lost, SpaceX said: “We do not comment on missions of this nature; but as of right now reviews of the data indicate Falcon 9 performed nominally.”

A spokesman for Northrop Grumman Corp., which built the satellite said to be worth more than $1 billion, said: “This is a classified mission. We cannot comment...”

The Wall Street Journal reported Monday night the mission failed after the satellite didn’t separate as intended after the firing of the rocket’s second stage; instead, plunging back into the atmosphere.

Bloomberg, citing government and congressional officials, reported the second-stage booster section failed; both the satellite and the second stage falling into the ocean.

To be technical, it seems the key is the “payload adapter,” which attaches a payload to the rocket’s second stage.  According to a Wired story last fall, Northrop Grumman provided the adapter in this mission to “mate” Zuma to the Falcon 9.  [Samantha Masunaga / Los Angeles Times]

But last I saw, there still hasn’t been an official announcement of the status of the mission.  The satellite, or a part of it, was in some kind of orbit on Tuesday, according to the U.S. space surveillance system, monitored by analysts at the Union of Concerned Scientists, among others.

SpaceX is led by Elon Musk.  Last year the company launched two other national security missions.  On its website, SpaceX says it has more than 70 upcoming missions, which could take several years.

--The Oracle of Omaha, Warren Buffett, elevated two in-house executives – both of whom have long been viewed as the front runners to replace him – to the board as well as vice chairmen.  Buffett, 87, and vice chairman Charlie Munger, 94, said it was the right time to make the succession plans clearer.  [Before they are 94 and 101, respectively, I presume.]

So it’s between Gregory Abel, named vice chairman of non-insurance business operations, and Ajit Jain, the new vice chairman of insurance operations.  Abel is 55 and joined the company in 1992.  Jain, 66, joined in 1986. Both are described as very Buffett-like in their approach to business, deal-making and management style, according to those who have followed the organization.

Buffett told CNBC this week his health is good and he feels great, so it’s not like he is stepping down soon, but he did emphasize he has an obligation to make any future health issues public and you have to believe he’ll know when it’s time.

--Delta Air Lines posted fourth-quarter adjusted earnings that beat the Street, with total revenue of $10.25 billion, also exceeding expectations. Shares rose on the news.

--Speaking of air travel, hope you weren’t caught up in the chaos at JFK Airport the past week, starting with the “bomb cyclone” and then a big water main break at a customs hall.  Bottom line, aside from thousands of passengers at one point or another having to sleep on the floor, today, thousands of passenger bags are still unclaimed and undelivered, most sitting in a nearby hotel.

Sen. Chuck Schumer (D-N.Y.) correctly called it “a disaster.”

--Takata announced it was recalling an additional 3.3 million faulty air bag inflators as it expands the largest automotive recall in U.S. history.

The latest recalls cover frontal air bags in certain 2009, 2010 and 2013 vehicles made by Honda, Toyota, Audi, BMW, Daimler Vans, Fiat Chrysler, Ford, GM....on and on.....

Ford Motor then said on Thursday it had confirmed a second death in an older pickup truck caused by a defective airbag inflator of Takata’s, and urged 2,900 owners in North America to stop driving immediately until they can get replacement parts.  Ford confirmed that a July 2017 crash death in West Virginia in a 2006 Ford Ranger was caused by a defective Takata inflator. It previously reported a similar death in South Carolina in 2015.

Check with the National Highway Traffic Safety Administration (NHTSA) website.

I look back on my own situation and think, gee, I was driving around in three Honda Accords with potentially exploding airbags.  [And I was hit three times in that period....phew....]

--Apple said it will turn over its cloud operations in China to a state-owned local partner Feb. 28, as mandated by Chinese law regarding customer data collection on the mainland.

So photos, documents and messages uploaded by Apple users throughout China will be stored at a data center in the southwest province of Guizhou operated by the local partner.

Customers who log on to the Chinese iCloud service are notified of the change, and are given a choice to either keep using iCloud or deactivate Feb. 28.

Apple said it will be spending the next seven weeks to ensure customers know of the coming change, adding that the company “has strong data-privacy and security protections in place and no backdoors will be created into any of our systems.”

In a joke worthy of the Friars’ Club, China said it tightened its cloud-computing oversight, saying it needs to ensure the privacy of its citizens’ data.  Last year, to comply with the rules, Amazon Inc.’s Amazon Web Services (AWS) unit sold computing used for its cloud services in China to its local partner.

It was also last year that Apple cooperated with the Chinese government in shutting down hundreds of virtual private network apps, or VPNs, that allowed users to view blocked websites, like mine.  Apple CEO Tim Cook said at the time that the company needed to abide by Chinese laws so it could participate in the market and not be an afterthought...which is true, but as I’ve written for years, Apple shareholders, down the road, especially when President Xi is forced to play the nationalism card, due to a crisis, will have the shock of their lives.  [Let alone that over time, there will be growing Chinese consumer acceptance of its domestic iPhone alternatives in terms of the quality...the companies having ripped off Apple’s technology, while selling for $100s less than Apple products.]

Separately, hedge fund JANA Partners LLC and the California State Teachers’ Retirement System (CalSTRS) pension fund said last weekend that iPhone overuse could be hurting children’s developing brains, an issue that may harm the company’s long-term market value.

I don’t know about the market value, but any idiot knows that iPhone / Smartphone overuse is a massive problem with our youth, globally.

Apple shareholder Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, however, said “We invest in things that are addictive...Addictive things are very profitable,” citing his investments in Starbucks, MGM Resorts International and alcohol-maker Constellation Brands Inc.

And that’s kind of the two sides to the argument.  Yes, there needs to be a discussion across the country about what the heck our kids are doing to themselves, let alone many adults (and freakin’ distracted driving, people!).

A letter from JANA and CalSTRS to Apple said in part: “We believe the long-term health of its youngest customers and the health of society, our economy and the company itself are inextricably linked.”

[For its part, Apple said it already has parental controls on its devices that “lead the industry.”]

Sean Parker, an early investor in Facebook, said in an interview with Axios last fall, referring to the sprawling influence of the social network: “It probably interferes with productivity in weird ways. God only knows what it’s doing to our children’s brains.”

Chamath Palihapitiya, an early Facebook executive, said recently he felt “tremendous guilt” about his role in building the social network.

“The short term, dopamine-driven feedback loops that we have created are destroying how society works. No civil discourse, no cooperation, misinformation, mistruth. And it’s not an American problem. This is not about Russian ads. This is a global problem.”  [David Gelles / New York Times]

Totally agree.

But as for investing in these companies?  I’m on record as saying that over the course of 2018, investors will sour on the big tech names, including Facebook, Google and Amazon, powering the market the last few years. But this backlash is both a social and valuation call on my part.

--Sears announced it failed to cash in on the holiday shopping season, with same-store sales plummeting 16-17 percent over the November-December period.  As a result, the embattled retailer now expects net losses of between $200m to $320m for the fourth quarter, worse than the comp period for last year.

But shares rose as the company announced it had secured $100m in new financing and said it was seeking to raise another $200m in talks with creditors.

--Target Corp. said holiday sales were strong both in its stores and online, with sales at stores open at least a year rising 3.4% during November and December, compared with a 1.3% decline in the same period last year.  Macy’s, JC Penney, and Kohl’s all previously reported sales growth in the critical holiday months.

Target also lifted its fourth-quarter and full-year earnings outlook, sending the shares higher.

Kohl’s had reported a day before and said its same-store sales rose 6.9% over the prior year.  Kohl’s new partnership with Amazon, allowing it to sell Amazon’s popular smart-home products in stores, likely helped.

--GoPro hired JPMorgan to help advise it on potentially selling the company, after GoPro lowered its fourth-quarter revenue forecast on weak demand for cameras in the holiday season, while announcing it was exiting the drone business, and cutting more than 250 jobs as it restructures.  GoPro had 1,250 employees as of Sept. 30.

The company has been cutting the price on its cameras, which is hurting revenue.

--Samsung Electronics expects to deliver record profits for the fourth quarter, forecasting $14.1 billion – up 64% from a year earlier, though this was shy of the Street’s expectations.  It will disclose full earnings later this month.

Separately, Samsung’s capital spending last year was $44 billion, doubling its investment in new or existing facilities making semiconductors, displays and other products, according to S&P Global Market Intelligence estimates that put Samsung atop the global ranking for the first time; a sum that is more than the likes of Royal Dutch Shell and Exxon Mobil Corp. – traditionally two of the largest investors – spent combined last year.  [Wall Street Journal]  A staggering comparison.

--Mexico’s annual inflation rate climbed to a 16 ½-year high in 2017, piling pressure on the central bank and its new governor to act again next month to rein in inflation after hiking its lending rate at the December policy meeting.  Inflation stands at 6.77 percent in the year to December, the highest since May 2001, according to the national statistics agency.  Mexico’s central bank targets inflation at 3 percent, with the short-term lending rate now at 7.25 percent.

This is all part of my global bond scenario, of course.

--South Korea’s government said on Thursday it plans to ban cryptocurrency trading, sending bitcoin prices plummeting and throwing the virtual coin market in turmoil as tax authorities and police raided local exchanges on alleged tax evasion.

South Korea has been a crucial source of demand for bitcoin and the rest, with policymakers wrestling with how to regulate it.

Justice minister Park Sang-ki said, “There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” he told a news conference.

But the Presidential office said hours later a ban had not yet been finalized.

Meanwhile, as I noted the other day, Chinese authorities have been concerned at how much electricity some of its bitcoin ‘miners’ are sopping up and this week they ordered the closing of operations that create a large share of the world’s supply, tightening a clampdown that has already shuttered exchanges in China.

But even as China cracks down, the country still accounts for the lion’s share in global bitcoin production.

Again, ‘miners’ use powerful computer systems to solve complex math problems to generate and verify units of cryptocurrencies.

Separately, Warren Buffett said on CNBC,  “In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending.”

But JPMorgan CEO Jamie Dimon said he regrets calling bitcoin a “fraud,” though added he still is not interested in cryptocurrency at all.  Dimon admits the blockchain technology employed has a purpose.

“The currency isn’t going to work,” Dimon had said at an investor conference in September.  “You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.

--Mark Mobius, the emerging-markets guru, is retiring after more than three decades with Franklin Templeton Investments.

Mobius joined the firm in 1987 to launch one of the first funds dedicated to emerging markets.  His star rose during the ensuing bull market and with his signature shaved head, he trotted around the globe, picking up investment ideas, while becoming one of the leading public figures for the fund industry, along with Sir John Templeton and Peter Lynch.

As one who spent a decent chunk of my career in the business, I admired Mobius (and Sir John) immensely. It helped that both were staples on Louis Rukeyser’s “Wall Street Week,” which was must-see viewing for any investor.

As for Mobius’ flagship Templeton Emerging Markets Fund, it began with $100 million in assets and as of Sept. 30 was up to $28 billion+.

So congratulations to a real Wall Street legend.  Enjoy your retirement, Mr. Mobius.

--Diet Coke is getting a makeover in an attempt to reboot the sugar-free soda’s slumping sales; Coca-Cola said it’s making its 12-ounce Diet Coke cans taller and slimmer, while adding four new flavors: mango, cherry, ginger lime and blood orange.  The taste of the plain Diet Coke will stay the same.

Actually, Coca-Cola is also keeping the standard cans, which doesn’t make any sense if you’re looking for a reboot amid falling sales. But then I’ve never had a Diet Coke so what do I know?  [Except now I’m kind of curious what mango tastes like...developing....]

--Meanwhile, Italy’s Ferrero is on the verge of formalizing a $2.8bn deal to acquire Nestle’s U.S. confectionary business, which includes brands such as Butterfinger, Nerds, Larry Taffy and Crunch chocolate bars.

Ferrero is the maker of Nutella and Tic Tacs, and it prevailed in an auction over Hershey and a private equity group.

Personally, I can’t stand Butterfinger’s, as a kid being a Baby Ruth guy.  When Trick or Treating, having a Butterfinger thrown in my pillow case was a real bummer.  Receiving a Baby Ruth bar, on the other hand, made it all worthwhile.

I used to be a huge fan of Crunch bars as well.  And that’s a memo.....                  

--Dunkin’ Donuts is axing 10 menu items, months after Dunkin’ eliminated a dozen doughnut flavors in stores across the nation, the goal being to have “faster, more accurate service and a more consistent consumer experience from store to store,” a statement from the company read.

Personally, for decades I have gotten a chocolate covered donut with sprinkles with my large black coffee each morning, but I’ve been diversifying my donut selection recently.  You only live once.

But I’m upset to see the Turkey Cheddar Bacon Sandwich on the chopping block before I ever tried it.

--The former Revel Hotel and Casino in Atlantic City, N.J., which has been closed since September 2014 after only two years in business, has been bought for $200 million by a Colorado development company and will be rebranded as the Ocean Resort Casino, opening next summer.  An arm of Integrated Properties out of Denver is the buyer.

Understand that Revel was built for $2.4 billion, hailed at the time as a game-changer.  But competition from Pennsylvania in particular killed the project, along with business decisions like having its own power plant that lost as much as $2 million a month. The casino hotel had an operating loss of $185 million its first full year and filed for bankruptcy shortly thereafter.

But I’m guessing the new owners got a good deal and a year from now we’ll talk about a real success story, especially if the Supreme Court allows sports betting. 

--NBC Sports said Thursday that the network expects to take in $500 million in ad revenue on Super Bowl Sunday, about the same as last year’s event, despite the problems facing the NFL – such as anthem protests and declining ratings. The amount is roughly equivalent to what NBC takes in from its daily morning program “Today” over an entire year, as reported by the Los Angeles Times’ Stephen Battaglio.

The average price for a 30-second sport in SB LII is “north of $5 million” according to the network, in line with recent years.

The audience for the Super Bowl has been over 106 million viewers since 2010.  Last year, New England’s stunning comeback over Atlanta, drew an average audience of 111.3 million on Fox; the fifth-most watched TV event of all time, according to Nielsen.

Dan Lovinger, EVP of advertising sales for NBC, added that the network expects a $900-million take in ad revenue from the PyeongChang Olympics, which would be a record for the Winter Games. The average audience is expected to be “close” to the 21.4 million viewers who tuned in in 2014 when the event was held in Sochi, Russia.

--A few weeks ago I wrote that veteran Fox News correspondent James Rosen had left the network without explanation and now we’re learning it was over sexual misconduct allegations with female colleagues, according to USA TODAY and NPR.  NPR interviewed eight of Rosen’s former colleagues, who said his departure was the result of an inquiry into “an established pattern of flirting aggressively with many peers” and sexual advances toward three female Fox News journalists.  The bad behavior started 2001 and occurred as recently as last spring.

--And then you have the story behind the film “All the Money in the World,” and how when disgraced actor Kevin Spacey was forced off the film in the lead role, Christopher Plummer quickly stepped in to shoot Spacey’s scenes, with director Ridley Scott hastily reassembling the cast and crew in London for reshoots.

But the movie, about the kidnapping of John Paul Getty III and his grandfather’s refusal to pay a $17 million ransom, has been thrust into the spotlight for another reason.  The film’s female star, Michelle Williams, was paid a per diem of $80 for 10 days of added work, but her male counterpart, Mark Wahlberg, received the same per diem – plus $1.5 million.

--CBS  announced that “Face the Nation” host John Dickerson is taking over for Charlie Rose on “CBS This Morning,” joining co-anchors Gayle King and Norah O’Donnell.  I like this guy a lot, and thought he did a super job on “Face the Nation” after taking over in 2015 from Bob Schieffer.

But now he’s going to abandon that program and relocate to New York full time, which means a new successor on the Sunday program. Drat!  Better be a good choice, boys.

--Lastly, Michael Wolff’s “Fire and Fury: Inside the Trump House” was released by the publisher, Henry Holt & Co., on Friday, Jan. 5, Holt having moved up the publication date.  This should have been a bonanza for struggling Barnes & Noble, right?

Wrong.  As a story the next day in the New York Post put it: “None of the chain’s 632 stores across the country had the red-hot book when they opened their doors Friday morning – a situation the company blamed on the weather and the publisher.”

So there was B&N, turning away disappointed customers.  It wasn’t until midday that some of the bigger stores, such as the midtown New York flagship, received a few copies that immediately sold out.  Across the country, B&N stores didn’t get a normal shipment until Monday, at the earliest.

Now to be fair, Amazon.com couldn’t deliver a hard copy for two to four weeks, but these are two different audiences.  You go to B&N when you want it ‘now.’

Foreign Affairs

North Korea: In an interview with the Wall Street Journal on Thursday [Michael C. Bender, Louise Radofsky, Peter Nicholas and Rebecca Ballhaus], President Trump said he believes he has developed a positive relationship with North Korea’s Kim Jong Un, despite their mutual public insults; Trump suggesting he is open to diplomacy.

“I probably have a very good relationship with Kim Jong Un,” Trump said.  “I have relationships with people. I think you people are surprised.”

Asked if he had spoken to Kim, Trump said: “I don’t want to comment on it.  I’m not saying I have or haven’t. I just don’t want to comment.”

Trump also praised China for its help in trying to pressure Pyongyang to end its nuclear program, while adding “they can do much more.”

Last week I said I had no problem with the U.S. and South Korea suspending military exercises during the Olympics, and it’s only a positive if North Korea participates in the Games; the North agreeing to send a delegation of athletes, cheerleaders and political officials to PyeongChang.

But on the topic of whether Kim is trying to drive a wedge between Washington and Seoul, Trump told the Journal: “If I were them, I would try. The difference is I’m president, other people aren’t.  And I know more about wedges than any human being that’s lived.”

Meanwhile, Chinese President Xi Jinping welcomed the recent progress in inter-Korean talks during a call with South Korean President Moon Jae-in on Thursday.

At Tuesday’s talks, North Korea had said it would attend the Olympics and both sides agreed to resolve problems through dialogue and revive military consultations to avoid accidental conflict.

The official China Daily cited Xi as telling Moon that China wanted to work with South Korea to “jointly maintain regional peace and stability.”

In a call Wednesday, Moon and President Trump said the dialogue “could naturally lead to talks between the United States and North Korea for the denuclearization of the Korean peninsula after the PyeongChang Winter Olympics,” per the readout.

But Pyongyang said it would not discuss its nuclear weapons because they were aimed only at the United States and not its “brethren” in China, Russia and South Korea. And it reiterated after the talks with the South that it would not be discussing denuclearization during, or after, the Olympics.

President Moon expressed “guarded optimism” on any talks between Seoul and Pyongyang, while acknowledging policy differences with the U.S., though adding in a press conference, “I believe Mr. Trump did a lot in order to facilitate the inter-Korean talks yesterday, so I’d like to express my gratitude to Mr. Trump.”

Later at a Cabinet meeting after Moon and Trump had talked, Trump said, “Who knows (where the inter-Korean) dialogue leads.  Hopefully it will be a success for the world.”

David Ignatius / Washington Post

“Sometimes diplomacy is the art of going in two directions at once, and the Trump administration seems to have chosen that sweet spot of ambiguity, for now, in managing its continuing confrontation with North Korea.

“President Trump has paused his ‘Little Rocket Man’ rhetoric and his boasts about the size of his own nuclear button.  He’s insisting this week that talk of a U.S. military strike (which he had encouraged) is ‘completely wrong’ and is calling for discussions with North Korea ‘under the right circumstances.’

“A fragile détente seems to have begun. North Korea hasn’t tested weapons in more than a month and is talking to South Korea.  North Korean athletes and spectators will attend the PyeongChang Olympics next month. The United States has postponed joint military exercises with South Korea until after the last gold medal is awarded.  Call it speed-skater diplomacy, if you like, but the table for negotiations has at least been set.

“Trump administration diplomacy is like the oft-quoted description of New England weather: If you don’t like it, wait awhile. But at least through February, we’re likely to experience a thaw on the Korean Peninsula, and it’s interesting to explore what it means.

“Trump is already taking credit for the success of ‘peace through strength,’ and you can’t dismiss his argument that firmness brought some benefits. But the real winners in this round are probably North Korean leader Kim Jong Un, who pivoted toward diplomacy during a Jan. 1 speech, and South Korean President Moon Jae-in, who responded to the overtures....

“The problem with this Olympic peace parade is that nothing has really been resolved.  Once the games have ended, all the same problems will continue to exist. If the United States resumes military exercises, North Korea may go back to testing missiles and bombs.  ‘We have avoided escalation of tension,’ said one U.S. official, but in several months, ‘we’re back to square one.’”

Editorial / Wall Street Journal

“Talks between North and South Korea Tuesday at the Demilitarized Zone have handed Kim Jong Un a propaganda victory. The two sides agreed that athletes from the North will compete in next month’s Winter Olympics in the South. The talks and the ‘Olympic truce’ allow the young dictator to pose as a man of peace, even as he threatens to annihilate his enemies with nuclear weapons.

“This is galling enough, but Kim has his eye on the bigger prize of driving a wedge between Seoul and Washington.  In recent days U.S. officials have expressed confidence that this won’t happen because the talks would be limited to the Olympics. But the onus is now on South Korean President Moon Jae-in to make clear that the North can’t divide and conquer....

“North Korea may hope the South will continue talks after the Olympics and break ranks with the U.S.  Stricter United Nations sanctions are now coming into force, cutting the flow of fuel imports and preventing North Korea from earning hard currency with exports. That makes the prospect of a reconciliation with South Korea especially appealing.

“But even if Mr. Moon wants to help the North, he faces greater constraints than his predecessors.  The sanctions restrict his ability to offer monetary aid, and the heightened tension on the Korean Peninsula as a result of the North’s dash to become a nuclear-weapons state has increased the South’s dependence on the U.S. security umbrella.

“The U.S. military has announced that the aircraft carrier Carl Vinson and its battle group will deploy off the coast of Korea during the Olympics. Such deployments are a more reliable guarantor of peace than the gestures of a young dictator who pretends to want peace even as he threatens war.”

It’s possible that with Vice President Mike Pence leading the U.S. delegation to PyeongChang, that some talks around the edges will occur.

One more item. China’s December imports from North Korea slumped 81.6 percent year-on-year to $54.34 million, according to China’s customs officials. China’s exports to the North also declined, 23.4 percent from a year ago to $260 million.

For 2017, China’s imports from North Korea fell 33 percent from a year earlier, while exports to the country rose 8.3 percent.  [Reuters]

Iran: President Trump decided to extend sanctions relief to Iran, following the advice of his top advisers and thus keeping the Iran nuclear deal intact for at least another few months. At the same time, Trump announced a package of new sanctions that are not technically related to the nuke agreement.  He also stated this will be the “last time” he waives the sanctions, unless the U.S. and its European allies can find a way to remove “loopholes” in the nuclear deal within the next four months.

Officials have been urging the president to keep the deal in place at least for now while they work to address some of the concerns.  Under the 2015 accord, the U.S. agreed to waive sanctions against Iran that are contained in a series of U.S. laws. The waivers for each must be renewed periodically to extend the sanctions relief.

Earlier this week, French President Macron stressed to Trump in a phone call the importance of abiding by the nuclear deal. The French presidency said in a statement after: “The proper implementation of the agreement should be accompanied by a strengthened dialogue with Iran on its ballistic missile program and its regional policy, in order to guarantee better stability in the Middle East.”

As for the protests in Iran, as of Tuesday, an Iranian lawmaker said some 3,700 people had been arrested since the protests began, a higher figure than authorities previously reported.  A prosecutor in Tehran said 70 had been released on bail, with more to follow, except for the “instigators” who will be “dealt with seriously.”  [AP / Daily Star]

Also, as noted last week, the interior minister has said about 42,000 people at most took part in the anti-government protests.

What’s clear is that the protests were waning as the week went on.  I told you, this was really nothing, despite the 21 or so deaths.  I also told you, correctly, this was hardly 2009 and the Green Revolution, which resulted from a rigged presidential election.

Tuesday, Supreme Leader Ayatollah Ali Khamenei said on Twitter that Iran had foiled attempts by its foreign enemies to turn legitimate protests into an insurgency to overthrow the Islamic Republic.

“Once again, the nation tells the U.S., Britain, and those who seek to overthrow the Islamic Republic of Iran from abroad that ‘you’ve railed, and you will fail in the future, too,” Khamenei tweeted.

Khamenei said President Trump was grandstanding when he tweeted that protesters were trying “to take back their corrupt government,” promising “great support from the United States at the appropriate time!”

The Iranian leader tweeted: “...this man who sits at the head of the White House – although, he seems to be a very unstable man – he must realize that these extreme and psychotic episodes won’t be left without a response.”

But Khamenei did make a rare concession when he said the citizens had a right to air legitimate concerns.  “These concerns must be addressed.  We must listen, we must hear. We must provide answers within our means.”

What’s unclear is whether Iran will now accept a certain level of protest as long as they are peaceful.

As for President Hassan Rouhani, the supposed “moderate”, he said the protesters were objecting not just to the bad economy but also to widespread corruption and the clerical government’s restrictive policies on personal conduct and freedoms.

“One cannot force one’s lifestyle on the future generations,” Rouhani said in remarks reported by the ISNA news agency.  “The problem is that we want two generations after us to live the way we like them to.”

Rouhani added in expansive comments: “Some imagine that the people only want money and a good economy, but will someone accept a considerable amount of money pre month when for instance the cyber network would be completely blocked?” he asked. “Is freedom and the life of the people purchasable with money? Why do some give the wrong reasons? This is an insult to the people.”

Rouhani has been seeking a relaxation in social controls, but he faces resistance from hard-liners in the judiciary and state media; both of these, along with the vetting councils who weigh in on candidates, wanting to keep in place a framework of Islamic laws that dictate how people should live.

The thing is, Rouhani has twice run for president, vowing to reinvigorate the economy, but has little to show for it, plus his recent budget enraged many calling for cuts in fuel subsidies and cash payments to the poor.  [New York Times]

Speaking of the Iranian budget, as Maryam Rajavi of the Wall Street Journal reports, $26.8 billion of it is allocated to military and security affairs and the export of terrorism, which is in addition to the $27.5 billion in military spending from institutions controlled by Ayatollah Khamenei and the Islamic Revolutionary Guard Corps. The budget for health care, by comparison, is just $16.3 billion.

Syria: I wrote last week of the ongoing violence here, despite the “peace process,” and there was a further upsurge in air strikes and ground attacks by Syrian government forces against besieged rebel-held Eastern Ghouta that was killed at least 85 civilians since the start of the year, according to the UN human rights chief on Wednesday.  Zid Ra’ad al-Hussein said in a statement: “In Eastern Ghouta, where a crippling siege has caused a humanitarian catastrophe, residential areas are being hit day and night by strikes from the ground and from the air, forcing civilians to hide in basements.”

Separately, the UK-based Syrian Observatory for Human Rights said a blast in Idlib killed 23, with many more injured. It was unclear who was responsible, and whether it was a car bomb or drone attack.

Thursday, Turkish President Erdogan told Russia’s Putin that for the various peace processes to succeed, Syrian regime attacks on Idlib and East Ghouta have to stop, according to Turkish presidential sources.  Syrian forces are totally ignoring an agreement between Russia, Iran and Turkey for “de-escalation zones,” Idlib province bordering Turkey.

Editorial / Washington Post

“Last year Russia brokered a series of cease-fires, or ‘de-escalation zones,’ in Syria, including one with the United States covering the southwest corner of the country. The Kremlin claimed its aim was to wind down the country’s civil war and lay the groundwork for a peace deal between the regime of Bashar al-Assad and rebel groups, some of them Western-backed.

“Longtime observers of the Syrian war wondered if the cease-fires, like many previously agreed to by Russia and the Assad regime, would be broken as soon as the allies were prepared to launch new offensives against rebel-held areas. But President Trump and his aides expressed optimism that Russian President Vladimir Putin was sincere.  ‘If we get...a few more [cease-fires], all of a sudden we are going to have no bullets being fired in Syria,’ Mr. Trump said in July.  ‘I think there is a level of commitment on the part of the Russian government,’ said Secretary of State Rex Tillerson.

“The administration should now be discovering, as the Obama administration did before it, just what Russia’s word in Syria is worth. With heavy Russian air support, Syrian government forces have been conducting new offensives against two of the de-escalation zones, the Damascus suburb of Eastern Ghouta and the northern provinces of Idlib. As in the past, the tactics include war crimes, including the deliberate bombing of hospitals. In Idlib, where hundreds of thousands of Syrians took refuge during previous stages of the war, another mass exodus is underway, with more than 100,000 people fleeing north toward the Turkish border.

“The onslaught in Idlib has drawn sharp protests from Turkey, with which Russia brokered the cease-fire in the area. Russia, in turn, has complained about attacks on one of its air bases using primitive drones of unknown origin. The Trump administration, meanwhile, is doing its best to ignore the new bloodshed. Officials are playing down the Idlib fighting on the grounds that the area is dominated by al-Qaeda-linked rebel groups.

“That explanation, which has been the standard excuse of the Assad regime and Russia for breaking previous commitments, is all too convenient.  While extremist groups control a large part of Idlib, Turkey says moderate Free Syrian Army units are involved in the fighting – an assertion that we also heard from several FSA leaders now visiting Washington.

“The mass of refugees being driven toward Turkey, with no protection from the winter weather, are not terrorists.  And if the offensive is successful, the result will be the further entrenchment in Syria of not just Russia but also Iran, the Assad regime’s closest ally.

“The United States, in short, stands to lose – again – to Russia in Syria. The Assad regime is relentlessly seeking to restore its control over the entire country by force, and Moscow is actively abetting it. By declining to challenge or even protest this brutal strategy, the Trump administration reveals its weakness.”

Afghanistan: The Pentagon is planning to bolster the administration’s new approach in the country, reallocating drones and other hardware while sending around 1,000 new combat advisers, all designed to bulk up the force ahead of the traditional fighting season that commences in the spring.

The moves help accelerate President Trump’s decision last August to place an additional 4,000 troops in Afghanistan, bringing the number of U.S. personnel there to 14,000. This week’s announcement could bring the total above that level.

Israel: Prime Minister Benjamin Netanyahu, still facing possible indictment as part of sweeping corruption and fraud investigations, had a new problem this week, his 26-year-old son, Yair, after recordings of a conversation between Yair and a young friend were aired by Israel’s top-rated news broadcast.

Yair’s drunken banter paints another unflattering picture of the family, which has been criticized for being cozy with ultra-rich donors and living a lavish lifestyle at taxpayer expense.

“Speaking of prostitutes, what’s open at this hour?” Yair asks his friends at one point in the recording. “It’s possible the waitresses there go with the flow.”

But the killer was Yair’s statement to the son of Israeli tycoon Kobi Maimon, as reported by the AP.

“My dad arranged $20 billion for your dad, and you’re whining with me about 400 shekels,” Yair says, referring to money he borrowed in a strip club.

According to CNN, that conversation was about a proposal to split future natural gas drilling proceeds between private and state companies.  Critics call this a sign of corruption.

The prime minister called the release of the recordings part of a media-orchestrated witch hunt aimed at ousting him.

Russia: Watch Moldova.  The gutty little country passed a law that would restrict Russian media broadcasts into the former Soviet Republic. Russia threatened retaliation, Foreign Ministry spokeswoman Maria Zakharova condemning the law as an “act of explicit discrimination against Russian media,” according to TASS.  The clampdown is “yet another anti-Russian attack by the ruling parliamentary majority in Chisinau,” Zakharova said, adding Russia was planning a reciprocal response.

Moldova, one of the poorest countries in Europe, has been torn between integration with the European Union and loyalties to its former Soviet ruler, Moscow.

Last month, Russia imposed restrictions on U.S. state-funded news outlets Voice of America and Radio Free Europe/Radio Liberty, labeling each of them a “foreign agent” after the U.S. imposed similar measures on Russian state-funded broadcaster RT, or Russia Today.

Go Moldova!

Meanwhile, President Putin said opposition leader Alexei Navalny appeared to be Washington’s pick for the Russian presidency, which was why the United States had complained about Navalny not being allowed to run for office; Russia’s central election commission barring Navalny last month, ruling he was ineligible due to a suspended prison sentence on charges he says were trumped up.

Separately, local authorities in Washington, D.C. voted to rename a square in front of the Russian Embassy on Wisconsin Avenue after murdered opposition politician Boris Nemtsov, leading, as you might imagine, to angry reactions from Russian lawmakers, though as yet no official word from the Kremlin.

Nemtsov was gunned down on Feb. 27, 2015, while crossing a bridge across from the Kremlin, and the District of Columbia Council said it would rename a portion of the area in front of the Embassy on February 27, the third anniversary.

China: David Ignatius / Washington Post

“A little-noticed passage in the Trump administration’s National Security Strategy released last month previewed a new push to combat Chinese influence operations that affect American universities, think tanks, movie studios and news organizations.

“The investigations by Congress and the FBI into Russian meddling in the 2016 presidential campaign won’t be affected by the added focus on China, officials say. Instead, the aim is to highlight Chinese activities that often get a free pass but can have a toxic long-term effect because of China’s growing wealth and power....

“The administration official said in an interview Tuesday that the target ‘is not Chinese soft power – the legitimate exchange of people and ideas, which is something we welcome. What we’re talking about are coercive and covert activities designed to influence elections, officials, policies, company decisions and public opinion.’

“Kurt Campbell, who oversaw Asia policy during the Obama administration and now runs an Asia consulting group, offered a measured endorsement: ‘The NSC-led inquiry about Chinese influence operations, if conducted dispassionately, could be useful. We focus mostly on Russian influence operations. But the Chinese have a much more subtle and complex agenda here.’”

It was just a few weeks ago I wrote of the Chinese meddling in Australia and Prime Minister Malcolm Turnbull’s actions to counter this.  Mr. Ignatius broaches the topic in his column as well.

But here is how American institutions can be pressured by China, per Mr. Ignatius:

“Universities host more than 350,000 Chinese, who make up nearly a third of all foreign students here.  Beijing encourages students to join local branches of the Chinese Students and Scholars Association....

“Students and university officials who resist Beijing can pay a price.  A Chinese graduating senior at the University of Maryland last year was shamed by social media into apologizing for a comment praising free speech....

“Hollywood studios face an especially delicate problem, because the Chinese box office is so important to their bottom line. Ticket sales in China rose from $1.5 billion in 2010 to $8.6 billion last year, second only to America’s.  Inevitably, U.S. studios fear offending Chinese official sensibilities....

“China can restrict visas for journalists or publications it sees as too aggressive....

“America has never faced a rival quite like China, which presents such a compelling, well-financed challenge to democratic values. America certainly doesn’t want a new ‘Red Scare,’ but maybe a wake-up call.”

Hell, it’s a Red Scare, people.  I’ve told you of the people in my own building over the years.  Some scary looking ‘agents’.  One guy in particular had the look of a killer.

Separately, the U.S. has accused China of “provocative militarization” of disputed areas in the South China Sea and will continue sending vessels to the region to carry out freedom-of-navigation patrols, according to a senior adviser to Sec. of State Rex Tillerson, Brian Hook, in an interview with the South China Morning Post.

China plans to launch 10 more satellites from the southern island of Hainan over the next three years for around-the-clock monitoring of the South China Sea, as Beijing seeks to consolidate control of the contested waters.

Beijing insists it has sovereignty over almost all the South China Sea but the Philippines, Vietnam, Malaysia, Brunei and Taiwan have their own claims.

Random Musings

--Presidential tracking polls....

Gallup: 37% approve of President Trump’s job performance, 58% disapprove*
Rasmussen:  46% approve, 53% disapprove

*The Gallup figure is for Jan. 1-7, as it switches to weekly vs. daily

--A new Quinnipiac University national poll had Trump with a 36% job approval rating, compared to 59% disapproval, which compares to 36% approval, 44% disapproval in a Jan. 26, 2017, post-inaugural survey.

The poll also found American voters say by a 53-44 margin that President Trump is intelligent, but by 69-28 percent they say he is not level-headed and 57-40 that he is not fit to serve as president.  By 63-34, the voters don’t believe he is honest.

But on the economy, 66 percent grade it as “excellent” or “good,” the highest positive rating since Quinnipiac first asked the question in 2001.

In a separate Quinnipiac survey, 79 percent believe “Dreamers” should be allowed to remain in the U.S. and apply for citizenship.  7 percent say Dreamers should be allowed to stay but not apply for citizenship, and 11 percent say they should be required to leave the U.S.

Also, American voters oppose 63-34 building a wall along the border with Mexico.

On marijuana, voters say 58-36 percent, including 79-17 among voters 18 to 34 years old, that marijuana use should be make legal. 

Surprisingly, because of the margin, voters disapprove 52-32 of the Republican tax plan, though support is 76-7 among Republicans.

Lastly, voters say 69-26 percent, including 49-44 among Republicans, that President Trump should stop tweeting from his personal account.

[Needless to say, of all the above, President Trump tweeted out: “In new Quinnipiac poll, 66% of people feel the economy is ‘Excellent or Good.’  That is the highest number ever recorded by this poll.”]

--Meanwhile, I just happened to catch Oprah Winfrey’s entire Golden Globes speech on Sunday and it was good.  I can see why in certain subsets of the American population there was an immediate rush on Oprah for President trinkets the next morning.  She’s a helluva talent and it would be fun to see her go for it.

I wouldn’t be voting for her, but while such polls are ridiculous, I’m building a running history of our times so I do have to note a Rasmussen national survey taken after her speech that had 48% of likely U.S. voters opting for Oprah in 2020 and 38% for President Trump were that the choice today.

Winfrey had the support of 76% of Democrats, 22% of Republicans and 44% of independents, while Trump earned 66% of Republicans, 12% of Democrats and 38% of independents.

Oprah has a 55% favorability rating, 34% unfavorable. Rasmussen notes these two figures are little changed from 2011, after she announced she was ending her TV talk show after 25 years on the air.

Anne Applebaum / Washington Post

“She’s a self-made billionaire, as opposed to one who inherited much of his money and business.  She’s a genuine philanthropist, with a real foundation instead of one under a cloud. She united people instead of dividing them, promotes positive emotions instead of hatred and fear, seems the perfect antidote to the sour, bigoted occupant of the White House. Nevertheless, the fact that anyone takes ‘Oprah for president’ seriously is yet another illustration of how degraded American democracy has become.

“There has long been a troubling divide between the qualities that it takes to get elected to the White House, and the qualities that it takes to be successful in the White House – between the chutzpah and sheer charisma that it takes to win and the knowledge and sheer experience it takes to shepherd legislation through Congress, negotiate with foreign leaders and build coalitions at home and abroad. You don’t need an elite education, and you don’t have to belong to a special political caste to do these things. But you need to invest years of your time into politics, as opposed to business or television, and to build a huge range of contacts while you are at it.

“Even President Barack Obama – who had been a state legislator and a one-term U.S. senator – suffered from his relatively short career and his consequent lack of contacts in Congress, especially, but not only, on the other side of the aisle.   As for President Trump, his aggressive ignorance has led him to bungle not just his legislation but also his executive orders, the vast majority of which are superficial anyway.

“But Trump’s total lack of qualifications shouldn’t lower the bar.  In an age when you can buy anything with a mouse click, or press a ‘like’ button to express your views, it’s tempting to think political change should be equally simple.  It isn’t, and it never will be: In a constitutional democracy such as ours, all of the important changes necessarily happen slowly, preferably starting at the state level and proceeding through cross-party coalitions. They succeed because a lot of people make them succeed by working together over time. The desire for an instant solution, the longing for an outsider to come and ‘fix’ things, is not just undemocratic; it’s also delusional, a form of magical thinking or perverted religious belief.

“If Oprah Winfrey is serious, she should run for the Senate, learn what it takes to turn emotions into issues and issues into laws.  She should decide whether she likes that kind of work, which is not anything like what she does now, then decide if she is good at it – and then run for president.  Our presidency is not a monarchy: The president is not just a national symbol, but rather a functioning, active part of the political process. Anyone who aspires to be president should be willing to take the time to understand that process. If they aren’t, then the American public shouldn’t be willing to take them seriously either.”

--Meanwhile, Rep. Darrell Issa (R-Calif.) became the latest to announce he was not seeking reelection this year; the Democrats with a good chance to flip it.

Issa barely won reelection in 2016 by just over half a percentage point in the San Diego-area district that went for Hillary Clinton by 7 points.

Issa was the former House Oversight Committee chairman and has been in the House 17 years.  Two days earlier, fellow California Republican Rep. Ed Royce also announced he won’t seek reelection, Royce in another district that was won by Clinton, though he won by 14 points while Clinton carried it by 9.

Democratic Congressional Campaign Committee spokesman Drew Godinich told The Hill: “California Republicans clearly see the writing on the wall and realize that their party and its priorities are toxic to their reelection chances in 2018.”

Eight House GOP committee chairmen have decided to call it quits, including Judiciary Committee Chairman Bob Goodlatte (R-Va.), and Financial Services Committee Chairman Jeb Hensarling (R-Tex.).

Democrats need to flip 24 seats to win back the House.

But with Issa and Royce’s departures, House Republicans will now have to defend at least 31 open seats due to retirements, resignations and lawmakers seeking other offices.  By contrast, House Democrats only have to defend 15 open seats...thus far.

--New Jersey bids farewell to Gov. Chris Christie this week, Tuesday, after eight tumultuous years in office.  I said during our recent gubernatorial election that we’re going to miss him, but that’s in comparison to what’s coming, Democratic Gov. Patrick Murphy.

Christie this week, in an interview with the Star-Ledger’s (NJ.com) Matt Arco, said, “They’re gonna miss me when I’m gone.”

This is a complicated man, no doubt. I voted for him twice, but came to loath him like the other 85% or so of my fellow New Jerseyans.  He leaves with a 15% approval rating.  A new Rutgers-Eagleton poll has 8% saying he leaves the state in better shape, 54% saying he leaves it in worse shape.  It’s not that he’s a polarizing figure...polarizing figures are normally close to 50/50 in their support, or, in the case of Donald Trump, can count on a 35% base regardless of what they do.

Christie, though, was far worse than this.  Yet one year into his governorship, he was being touted for president, and in 2012, in the aftermath of Superstorm Sandy, he did a commendable job.

But by his own admission, Christie concedes the scandal over closed lanes on the George Washington Bridge, what became the Bridgegate scandal, changed the course of his administration and political career because he lost “the benefit of the doubt,” as he told Matt Arco.

Christie says that he leaves Trenton with a sense of calm.

“We were gonna swing for the fences,” he said. “I had no interest in being a small bore governor with tiny accomplishments that wouldn’t offend, but probably wouldn’t impress either. I wanted to be a governor of consequences and do big things.”

Matt Arco: “That includes pension and health benefits reform for public workers, a 2 percent arbitration cap for police and firefighters aimed at keeping property taxes from soaring, the state’s higher education merger, an expansion of charter schools and bail reform. In his final year, he has focused on opioid addiction.”

Christie argues there isn’t any governor over the last 40 years who has done more of consequence.  He also says, “I took risks and the risks didn’t work out.”

But as to his demeanor, Christie said: “When you’re tough and you’re fighting, and pushing all the time...people love that as long as it doesn’t stray over a  line, that they draw somewhere, that goes from that to bullying.

“And I think people viewed that conduct of having gone over the line, and they blamed me for it even though everyone has proven I had nothing to do with it (Bridgegate). The part that I think is grossly unfair, that there was a rush to judgment and that rush to judgment turned out not to be borne out by the facts.”

When it came to running for president, Christie remains convinced he would have won had Trump not decided to run.  And when Trump said at a rally that Christie knew about Bridgegate, the governor said he called him and told him to cut it out.

As for not running in 2012, Christie maintains he wasn’t ready...and he wasn’t.

Christie says he relishes some of his friendships, including Bono, who texts him on his birthday and holidays, Jon Bon Jovi, and kind of out of nowhere, King Abdullah of Jordan.

--You saw yet another example this week of the importance of rescue dogs in the aftermath of the mudslides in California.  Unfortunately, you also have cadaver dogs, which it is hoped help provide closure at least.

--For the record, the miserable, historic cold wave and bomb cyclone we had in the New York area resulted in 14 consecutive (not 13 as forecast) days where our temperature here in Summit, N.J. (and that of New York City) didn’t reach 32 degrees, just shy of the all-time mark of 16 days.  We are very ready for spring, though it’s hitting 60 degrees today, before the temps plummet anew, which doesn’t help re: flu season, boys and girls.

Speaking of which, we’ve learned that Puerto Rico is where hospital IV solution bags are manufactured (most of them), and with Hurricane Maria that production has been almost totally shut down. Good commercial for Gatorade, though, as you’re seeing on some newscasts; Gatorade being used in hospitals as a substitute for the IV solution.

Meanwhile, Sydney, Australia has experienced its hottest weather in 79 years with temperatures in the region in recent days hitting as high as 47.3C (117F).  If you know the area, you know that there are a ton of bats in the trees in the parks in the city.  [Very cool, once you know they are harmless.]  They were dropping to the ground due to the heat this week...dead.

And in the Swiss and Italian Alps, a single snowfall, related to winter storm Eleanor that first ravaged the British Isles, dumped more than six feet of snow in a single day, paralyzing the key tourism area, stranding thousands in the likes of Zermatt. A number of folks died in avalanches.

Finally, last time I wrote of the looming wind chills on Mount Washington in New Hampshire.  Saturday morning, the air temp was minus 36, the wind chill minus 94.  I don’t believe it hit the predicted minus 100 WC, not that you would have felt the difference. 

--French police recovered all the jewelry stolen by armed robbers from a shop at the famous Ritz Hotel in Paris on Wednesday.  The loot, $5.4 million worth, was in a bag dropped by one member of the five-strong gang during the brazen raid. Three of the five have been arrested, while the others remain on the run.

The gang used axes to smash the shop’s windows on the ground floor of the hotel at 6:00 p.m. local time.  The three arrested were blocked in the building, while the two outside managed to escape by car and scooter, the car later discovered in a suburb north of Paris.

This seems to happen once a year here...the gangs usually being from the Balkans.

--The White House physician Ronny Jackson pronounced Donald Trump to be in “excellent health” after the president’s first medical exam since he was elected.  Jackson will field questions from reporters on Tuesday.

--The Wall Street Journal reported late today that Trump lawyer Michael Cohen arranged a payment of $130,000 a month before the 2016 election to keep an ex-porn star, Stormy Daniels (real name Stephanie Clifford) quiet about an alleged hookup she had with the future president ten years earlier. 

Reminds me of The Spaniels’ version of the classic, “Stormy Weather.”

Stormy Daniels, oohhh...since my man and I ain’t together....Stormy Daniels, oohhh....Keeps rainin’ all the time....

Daniels, err, Clifford, starred in such hits as “Dirty Deeds,” “Nymphos” and “Good Will Humping.”

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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 $1338
Oil $64.40

Returns for the week 1/8-1/12

Dow Jones  +2.0%  [25803]
S&P 500  +1.6%  [2786]
S&P MidCap  +1.5%
Russell 2000  +2.0%
Nasdaq  +1.7%  [7261]

Returns for the period 1/1/18-1/12/18

Dow Jones  +4.4%
S&P 500  +4.2%
S&P MidCap  +3.4%
Russell 2000  +3.7%
Nasdaq  +5.2%

Bulls 64.4
Bears 13.5 [Source: Investors Intelligence...’Bulls’ and the split beyond the danger level if you’re a contrarian]

Have a great week. 

Brian Trumbore

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