Week in Review

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Week in Review

02/16/2019

For the week 2/11-2/15

[Posted 11:30 PM ET, Friday]

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Edition 1,036

This week marks 20 years of StocksandNews and this column.  I went through my life story, and the genesis of why I do what I do, in a series last spring.  My detractors immediately ignored it and because I don’t want my president to lie to me forty times a day, and I call him out, I have received more than a few hateful notes from folks as they ‘sign off.’  To them I basically say “thanks for tuning in.”  That’s one thing I learned from day one, never argue with a hater. 

I am very proud of what I’ve done.  It is the only running history of what has been a tumultuous two decades; both geopolitics and global financial markets. 

From the tech bubble, to 9/11, to the Iraq War, to the rise of China, to Vladimir Putin’s entire reign, to the global financial crisis, the presidencies of George W. Bush, Barack Obama, and now Donald Trump, the rise of the likes of Facebook, issues such as climate change, and in that other column I do, “Bar Chat,” a history of sports like no other.

On every major topic I deal in facts and give you all sides, with my own opinion thrown in.

But for now, today, I can’t help but say I watched our president’s performance in the Rose Garden and again he had me shaking my head.  I go through it all below, including some of the key lines, but here’s one you won’t find in the reporting thus far as I go to post... at least from what I’ve seen.

The guy who keeps having us believe, at every rally and presser (or press availability), that he’s building new wall ‘that you guys don’t know about,’ or ‘you aren’t reporting’...this same president actually said at one point today, “I’ve been restricted to renovating thus far.”

That’s your stable genius.

Oh well.  As Tony Soprano would have said, “Whaddya gonna do?”

Trump World

President Trump declared a national emergency to pay for his long-promised border wall today, the move freeing up $8 billion – far more than the $5.7 billion he initially demanded – to free up funding for 234 miles of bollard wall, the White House said.  A long, drawn out legal battle will now ensue over the president’s ability to use the tool for that purpose.

Included in the $8 billion, Trump is attempting to access $3.6 billion in military construction funds, with the money earmarked for military bases and other projects.  President George W. Bush tapped into this same account following 9/11.  But in this case, various constituencies who were promised military housing and schools, or hospitals, or facilities for new aircraft, will be fuming.

Today, Trump said he asked “a couple generals” what they’d use this money for if Trump didn’t use it for the wall. He said he can’t say what they answered, but “didn’t sound too important to me.”

Katie Bo Williams and Marcus Weisgerber / Defense News

“President Trump announced that he will sign a national emergency order so that he can redirect $8 billion to extend barriers on the country’s southern border.  In a dark, rambling speech, he asserted that there is an “invasion” of the country “with drugs, with human traffickers, with all types of criminals and gangs.”

But he undermined his own contention that there actually exists a dire and urgent need for the extraordinary declaration. ‘I could do the wall over a much longer period of time,’ Trump said during his free-wheeling speech.  ‘I didn’t need to do this.’  [Emphasis mine.]  That statement will be ‘plaintiffs’ Exhibit A,’ constitutional scholar Elizabeth Goitein said in a tweet.

“He also repeated his contention that longer walls are necessary.

“ ‘You don’t have to be very smart to know you put up a barrier, the people don’t come in, and that’s it, they can’t do anything unless they walk left or right and they find an area where there is no barrier and they come into the United States, welcome,’ Trump said.

“Claims by Democrats – and his own U.S. Customs and Border Protection – that the majority of drugs that are caught being smuggled across the border are seized at ports of entry and not on unguarded frontiers are ‘lies,’ he said.

“ ‘It’s wrong, it’s wrong.  It’s a lie.  It’s all a lie,’ he said.

“According to U.S. Customs and Border Protection statistics, 90 percent of heroin, 88 percent of cocaine, 87 percent of meth and 80 percent of fentanyl seized along the border in the first 11 months of 2018 was intercepted at legal crossing points.

“Asked where he gets his statistics, the president said, ‘I get many stats.’”

Peter Baker / New York Times

“(The national emergency declaration) came during a freewheeling appearance in which Mr. Trump ping-ponged from topic to topic, touching on the economy, China trade talks and his coming summit meeting with North Korea’s leader.  He again suggested that he should win the Nobel Peace Prize and reviewed which conservative commentators had been supportive of him, dismissing Ann Coulter, who has not.

“Sounding alternately defensive and aggrieved, Mr. Trump refused to accept that he lost his two-month drive to press Congress to give him the border wall money he demanded even as he criticized former Speaker Paul D. Ryan, without naming him, for failing to provide the funding when Republicans controlled the House.  Mr. Trump’s speech and answers to questions were replete with misinformation and, when challenged by reporters, he refused to accept statistics produced by his own government that conflicted with his narrative.

“ ‘The numbers you gave are wrong,’ he told one reporter.  ‘It’s a fake question.’”

In a joint statement, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer, said in part: “This is plainly a power grab by a disappointed president, who has gone outside the bounds of the law to try to get what he failed to achieve in the constitutional legislative process,” adding “The Congress cannot let the president shred the Constitution.”

Editorial / Wall Street Journal

“The White House said Thursday that President Trump will sign a border-security funding bill but also declare a national emergency to spend even more to build his wall at the Rio Grande.  The emergency declaration will please his most ardent supporters, but Mr. Trump is setting an unfortunate precedent – and judges could tie up his wall in court for years.

“Mr. Trump had little choice other than to sign the spending bill or see the government shut down for the second time in a month. He boxed himself in by saying in December that he’d gladly take ownership of a shutdown, only to discover that his poll numbers fell further the longer the January closure went on.

“Republicans in Congress bailed him out by getting at least $1.38 billion for border funding, enough for about 55 miles of fencing.  Mr. Trump is grousing that Senate Republicans were out-negotiated, but they had to play the bad hand he dealt them.   He should be grateful because he blundered into the shutdown with bluster but no strategy.

“Yet rather than declare partial victory and fight again in the next budget, Mr. Trump will now test the limits of his executive power. The White House hasn’t released the details of its legal justification. But it’s likely he will employ the National Emergencies Act of 1976 so he can move funds previously appropriated for other purposes to build his wall. This looks to us like a misuse of the emergency power delegated by Congress, which is meant for genuine security crises, not to fulfill a campaign promise.

“There are problems at the border, such as a stretched Immigration and Customs Enforcement agency, but the budget bill Mr. Trump is signing addresses many of those needs.  U.S. asylum policy also invites migrants to cross illegally and then seek asylum, knowing they can then stay in the U.S. for months or years before their cases are heard.  But fixing that probably requires a statutory change by Congress.

“As a political matter, Congress may respond by passing a resolution in both houses to override his emergency declaration.  A simple majority would suffice in both houses under the emergency law, and there may be enough Senate Republicans to get to 51 votes.  Mr. Trump can then veto, and he’s unlikely to be overridden. But this would still be a political defeat that unites Democrats and divides his own party.

“We’ve argued that Mr. Trump might win his emergency gambit if the case goes to the Supreme Court, but it is a close call and he is taking a big legal risk.  Property owners affected by the wall will sue, and the House of Representatives will surely sue as well on grounds that Mr. Trump is usurping its constitutional power of the purse.  House Republicans set that precedent with their important and successful lawsuit against President Obama on ObamaCare funding....

“If the Supreme Court doesn’t step in to let the President proceed while lower courts consider the merits, Mr. Trump will be stymied well into 2020....

“Constitutional conservatives should also worry if Mr. Trump wins in court.  A precedent will be set that future Presidents could use to impose their own priorities despite a reluctant Congress.  If climate change will end life as we know it in 12 years, why not impose part of the Green New Deal?  No one believes more than we do that a President needs flexibility to move with dispatch in wartime.  But the Constitution is also clear that Congress must appropriate money for public purposes.

“Mr. Trump’s obsession with building a wall has caused him no end of political grief.  He’ll be lucky if this emergency declaration doesn’t end the same way.”

Editorial / Washington Post

“Admittedly, it is an overworked trope.  ‘Imagine how Republicans would have responded if Barack Obama had tried this!’  Democrats exclaim at each fresh outrage. In the case of President Trump’s plan to declare an emergency to build a border wall, it is certainly apt; the Freedom Caucus (including Mick Mulvaney, now Mr. Trump’s acting chief of staff) would have been apoplectic. But in considering this phony emergency conjured cynically for electoral advantage, it is more apt to imagine the future than the past.

“Imagine indeed if, two years from now, a President Booker, Harris, Warren or Bennet, seizing on the Parkland massacre’s anniversary, invoked emergency powers to halt the killing of innocents – by banning the sale of semiautomatic weapons, imposing uniform background checks for gun purchases or levying a stiff federal surtax on the sale of gun parts and ammunition.

“If an emergency can be manufactured over border security when illegal border crossings are near a 20-year low, as measured by Border Patrol arrests, then it’s a snap to make the case for an emergency over gun deaths, which are near a 20-year high.

“It seems logical that Senate Republican leader Mitch McConnell (Ky.), having approved Mr. Trump’s emergency, would acquiesce in future such emergency declarations.  By becoming a rubber stamp for Mr. Trump, Mr. McConnell has set a precedent: that he is prepared to accept any president who would treat the will of Congress, and the Constitution, with cavalier contempt.

“For make no mistake, that is precisely what Mr. Trump will have done if he goes ahead with his plan.  His fulminations about a border wall having failed to convince the legislative branch, which forged a deal that yielded less than a quarter of the funds the president demanded, he has decided by his planned emergency declaration simply to render the legislative branch irrelevant. That’s a tried-and-true technique for autocrats the world over; it’s not what the framers had in mind when they granted Congress the power of the purse.

“It was in the exercise of that power that 17 lawmakers of both parties spent the past two weeks hammering out details of a measure to fund the government, including $1.375 billion to construct 55 miles of new fencing in the Rio Grande Valley. That measure cleared the Senate easily, with broad bipartisan support.

“The president’s response was to say, in effect: So what?...

“By his declaration, Mr. Trump will inaugurate a new, imperial phase of his presidency.  Mr. McConnell, who had previously warned him against such an action, will show he has perfected a trick: roll over and play dead.”

Trumpets

--William Barr was confirmed to be the next attorney general, the Senate voting 54-45, with Kentucky Sen. Rand Paul the only Republican to vote against, while North Carolina Republican Richard Burr did not vote.

Democrats Doug Jones (Ala.), Joe Manchin (West Va.) and Kyrsten Sinema (Ariz.) voted in favor of Mr. Barr.

Barr had previously held the post of AG from 1991 to 1993 under President George H.W. Bush.

--Andrew McCabe, the former deputy FBI director, said in an interview Thursday that top Justice Department officials were so alarmed by President Trump’s May 2017 decision to fire James B. Comey, the bureau’s director, that they discussed whether to recruit cabinet members to invoke the 25th Amendment to remove Mr. Trump from office.

McCabe’s remarks were made in an interview for “60 Minutes,” to be aired on Sunday.  He is promoting his memoir, “The Threat: How the FBI Protects America in the Age of Terror and Trump,” which is being released next week.

McCabe said he spoke to the president right after Comey was fired, and the next day he met with the team investigating Russia’s election interference.

“I was very concerned that I was able to put the Russia case on absolutely solid ground, in an indelible fashion,” McCabe said.  “That were I removed quickly, or reassigned or fired, that the case could not be closed or vanish in the night without a trace.”

McCabe was fired in March 2018 by then-Attorney General Jeff Sessions, citing lack of candor.

CBS correspondent Scott Pelley confirmed a New York Times report that the deputy attorney general, Rod Rosenstein, had suggested wearing a wire in meetings with President Trump and that Justice Department officials discussed recruiting cabinet members to invoke the 25th Amendment to remove the president from office.

--A federal judge ruled on Wednesday that former Trump campaign manager Paul Manafort repeatedly lied to prosecutors after he agreed to cooperate with the special counsel’s investigation into Russia’s interference in the 2016 election.

Judge Amy Berman Jackson of U.S. District Court is handing out Manafort’s prison sentence in the coming weeks, March 13, Judge Jackson saying Manafort intentionally lied about his contacts with a Russian associate (Konstantin Kilimnik) during the campaign and after Trump was elected.

Kilimnik has ties to Russian intelligence services, according to prosecutors.

[Tonight, Robert Mueller is recommending Manafort receive 24 ½ years.]

--Trump tweets:

“Senator Richard Burr, The Chairman of the Senate Intelligence Committee, just announced that after almost two years, more than two hundred interviews, and thousands of documents, they have found NO COLLUSION BETWEEN TRUMP AND RUSSIA! Is anybody really surprised by this?”

“I think it is very important for the Democrats to press forward with their Green New Deal. It would be great for the so-called ‘Carbon Footprint’ to permanently eliminate all Planes, Cars, Cows, Oil, Gas & the Military – even if no other country would do the same. Brilliant!”

“The Democrats are so self righteous (sic) and ANGRY! Loosen up and have some fun.  The Country is doing well!”

“No president ever worked harder than me (cleaning up the mess I inherited)!”

“The media was able to get my work schedule, something very easy to do, but it should have been reported as a positive, not negative. When the term Executive Time is used, I am generally working, not relaxing. In fact, I probably work more hours than almost any past President....

“....The fact is, when I took over as President, our Country was a mess.  Depleted Military, Endless Wars, a potential war with North Korea, V.A., High Taxes & too many Regulations, Border, Immigration & HealthCare problems, & much more.  I had no choice but to work very long hours!”

“ ‘Fact checkers have become Fake News.’ @JesseBWatters So True!”

“Well, it happened again. Amy Klobuchar announced that she is running for President, talking proudly of fighting global warming while standing in a virtual blizzard of snow, ice and freezing temperatures. Bad timing. By the end of her speech she looked like a Snowman(woman)!”

--I loved when Trump was at his El Paso rally and he talked about the effectiveness of German Shepherds on the border, as the Border Patrol has told him.

“You love your dogs,” the president then said, Trump being a notorious hater of the species.

Then he talked about if he had a dog and was walking it outside the White House, “Feels a little phony to me.”

You might pick up a few votes, Mr. President. 

Wall Street and China Trade Talks

We finally began to receive some economic data, post-shutdown and the government reopening, with key inflation figures for January, as in there continues to be little of it.

Consumer prices were unchanged, up only 0.2% ex-food and energy; the year-over-year figures 1.6% and 2.2% on core.

The producer price index for last month was down 0.1%, up 0.3% on core; 2.0% and 2.6% year-over-year.

Nothing for the Federal Reserve to concern themselves with in those numbers.

Friday’s industrial production figure for January was awful, down 0.6% when a slight gain was expected.

And I address the budget deficit figure for December down below.

But the biggie, the shocker, was we finally had the release for December retail sales.  They were expected to have risen 0.1%, but instead plunged 1.2%, -1.7% ex-autos.  The headline figure, -1.2%, was the worst reading since Sept. 2009.

Was this an outlier?  Is it real?  We need to see January.  Many analysts just don’t believe the number, but there is no doubt, as CNBC’s Jim Cramer correctly pounded the table on end of the year, that post-Black Friday (Thanksgiving), retailers just weren’t doing that well, certainly against rosy expectations.

Here’s the import, at least until we get more data, of the retail sales number.  You know the Atlanta Fed GDPNow barometer I like to use?  It’s been forecasting fourth-quarter GDP of around 2.7%, which would be terrific.

But this one number, along with the tepid PPI data, lowered the outlook from 2.7% to 1.5%!  I had to look at it a couple of times.  I in no way think this is close to the GDP figure we’ll end up seeing end of February for the fourth quarter, but it is alarming.

As for the stock market, however, Wall Street largely shrugged off Thursday’s retail sales news, finishing with a minimal loss for the Dow and S&P (Nasdaq actually finished higher), and for the week the major averages soared anew, all three essentially already at my projected returns for the year after just seven weeks, the Dow and Nasdaq now having eight-week winning streaks, after the markets bottomed on Christmas Eve.

Looking back, it really was like “A Christmas Carol.”  Christmas Eve, Scrooge was his usual “Bah humbug” self, grudgingly giving Cratchit Christmas Day off, Scrooge going to bed after his porridge, having been given a little scare by Jacob Marley, as played by Michael Hordern, my brother and I only watching the definitive 1951 Alastair Sim version, but I digress....

And so after being visited by the three spirits, Christmas morning he was giddy as a school boy. 

You see, the world wasn’t that bad after all.  The Dow Jones has now had its best eight-week stretch since September 2009, rising more than 15%.  Much of the giddiness is fake, however, and while the market can run further, the year is setting up already as I expected.

On trade and the talks with China, officials from the two sides met this week in Beijing and agreed to get together again next week in Washington to continue working on a deal, after having made progress, according to White House officials.

But President Trump admitted in his national emergency announcement and press conference in the Rose Garden that he didn’t really know if progress had been made, though we do know that China is not going to fundamentally reform their system to the satisfaction of the administration, and that they’ll just offer to buy more ‘stuff,’ like soybeans, and so we’ll see where it really all ends up.  Officials did warn “very difficult issues” remain unresolved.

U.S. Trade Representative Robert Lighthizer said, “We feel that we have to make headway on some very, very important and very difficult issues.”

President Xi Jinping, who met with the U.S. delegation today, said he hoped negotiators would “continue to work hard to promote a mutually beneficial and win-win agreement.”

I continue to believe that at some point, after an extension of the March 1 deadline, that President Trump will just accept the kind of deal he could have had long ago.  No one should be satisfied then, but Wall Street will, at least temporarily.

Sen. Marco Rubio / Washington Post

“As American officials continue talks with their counterparts in Beijing to end the U.S.-China trade dispute, they should resist the temptation to cut a bad deal.  At a minimum, they should strive to achieve the goals that President Trump outlined late last year; meaningful structural changes regarding forced technology transfers, intellectual-property theft, non-tariff barriers and cybersecurity.

“Bringing balance to America’s relationship with the People’s Republic of China is the geopolitical challenge of this century. That the United States is now in a position to deliver on the challenge is impressive.  The opportunity shouldn’t be wasted by focusing on a handful of individual trade matters that do little to address structural imbalances. An improved U.S. trade surplus in soybeans would not be enough.

“For nearly two decades, the communist Chinese government fooled the world into believing it would eventually embrace international norms.  By welcoming China into the World Trade Organization in 2001, the United States and other nations hoped it would truly open its economy and markets to foreign companies and, someday, even allow for political liberalization.

“The hopes were mistaken.

“As China rises, seeking to become the dominant global superpower, it is violating the international rules of the past century while moving to write new rules for the new century in its mercantilist and authoritarian image.

“China has maintained its one-party political system’s authoritarian character, including an utter disregard for human rights and the impartial rule of law.  An increasingly aggressive Beijing poses a direct threat to U.S. national interests and to the nation’s most deeply held values....

“Chinese President Xi Jinping clearly would like to de-escalate the trade conflict.  But efforts such as fast-tracking the passage of a foreign investment law next month, supposedly to address international alarm about China’s forced technology transfers and intellectual-property theft, are just shiny objects intended for the financial markets.  U.S. trade negotiators must stay focused on the fundamental issues of economic theft and competition.

“Haggling over soybeans, footwear or other low-value goods is not enough when China is engaged in a national effort to displace the United States and dominate 5G technologies, quantum computing, artificial intelligence, advanced pharmaceuticals and high-value manufacturing.

“Coming away with a strong deal is all the more important because Beijing is pursuing foreign policies that actively undermine American and allied interests.  China has thrown financial lifelines to Nicolas Maduro and his criminal cronies in Venezuela.  It is also aggressively militarizing the South China Sea, allowing the North Korean regime to evade sanctions and turning a blind eye to destabilizing arms sales by Chinese entities in the Middle East.  Moreover, China still has not followed through on Xi’s commitment to halt the illegal flow of the addictive opioid fentanyl from China to the United States.  China is still unjustly detaining U.S. and Canadian citizens, and accelerating its systematic and egregious human rights abuses, including the internment of more than 1 million Uighurs and other Muslim minorities in Xinjiang province, and its broader attack on religious adherents, including Christians and Tibetan Buddhists.

“In an ideal world, the Trump administration might even push for a deal that went beyond trade issues and also required China to reconsider these threatening policies.

“Trump is doing what few thought possible: creating powerful leverage that could be used to change the behavior of China’s government and potentially bring more balance and reciprocity to the entire relationship.  If American negotiators waste their leverage by prematurely agreeing to a bad deal, China will be emboldened to pursue policies that run directly counter to America’s national interest, and the United States will risk losing this century’s most important strategic, economic and geopolitical competition.

“The stakes couldn’t be higher – for the American people, for the 1.4 billion Chinese living under an authoritarian regime and for the stability of the world.”

Europe and Asia

Eurostat released the GDP figures for the fourth quarter in the eurozone (EA19), up just 0.2%, and just 1.2% for the year, vs. an annualized rate of 1.6% in the third quarter and 2.4% in Q1 of last year.

A reflection of this lies in the December industrial production figure for the EA19, down 0.9% over November, and down a whopping 4.2% year-over-year.

Germany’s GDP was flat in the fourth quarter, after being down 0.2% in the third.  For the year, Germany grew just 0.6%, owing to the slowdown in the global economy, and a weaker auto sector for this heavily export-driven economy.  Low water levels for the Rhine River have also hurt the transportation of goods.

Weakening global demand is hurting all of Europe’s major exporters.

Elsewhere in the euro area, annualized GDP for 2018:

France 0.9%
Italy 0.1% [currently in recession]
Spain 2.4%
Netherlands 1.8%

The U.K.’s GDP was up 0.2% in Q4, 1.4% for 2018, the lowest since 2009, with the Bank of England forecasting 1.2% this year, though depending on how the Brexit process goes, the BOE sees a potential recession in the second half.  I’d say it’s virtually guaranteed regardless.

Currently, auto and steel production are down sharply, ditto construction spending and business investment.

Brexit: It’s February 15.  The U.K. is supposed to exit the European Union on March 29.  But Prime Minister Theresa May suffered another defeat on her Brexit strategy on Thursday that undermines her pledge to the European Union to get her divorce deal approved if they grant her concessions.

Hardline Brexit supporters in May’s Conservative Party decided to abstain, handing her an embarrassing defeat as she tries to renegotiate her deal with the EU.  It’s still all about the Irish “backstop” and while the prime minister is continuing to try to get some changes to it from the EU that would be acceptable to the hardliners, the EU has steadfastly said the original deal stands and there can be no changes.

So now we come down to the latest “crunch vote,” Feb. 27, when May is due to return to parliament – and lawmakers who fear leaving without a deal could try to seize control of the process.

Today, the odds of Britain leaving the union without a deal, a nightmare scenario for business, have gone up.

Or Brexit could be delayed. Or potentially never happen.

Mrs. May has vowed the U.K. will indeed leave, regardless, on March 29.  But her position was undermined this week when her chief Brexit negotiator, Olly Robbins, was overheard saying in a Brussels bar that lawmakers would have to choose whether to accept a reworked Brexit deal or a potentially significant delay.

While Feb. 27 is the next ‘key’ date, a make-or-break final moment could come at the next EU summit scheduled for March 21.  Leaders could agree on a fresh deal, specifically changes to the “backstop” language, but this would leave just a few days for British lawmakers to ratify any fresh arrangement.

Spain: The week started with tens of thousands of people waving Spain’s red-and-yellow flag to oppose any concessions by the government to Catalan pro-independence parties and to call for early elections; the largest protest Socialist Prime Minister Pedro Sanchez has faced in eight months in office.

The opposition center-right and far-right parties called the rally, seeking to make a show of force against Sanchez by capitalizing on anger with Catalonia’s separatist leaders and the government’s efforts to establish a dialogue with them.

Sanchez, who replaced a conservative government last June in a vote of confidence, holds just a quarter of the seats in parliament and relies on backing from anti-austerity party Podemos, Catalan nationalists and other small parties to pass laws.

The Catalan groups want a referendum on independence included on the agenda of government talks, which Madrid will not accept.

This week saw the start of the trial of 12 Catalan independence leaders, who face up to 25 years in prison on charges of rebellion and misuse of public funds for their role in a failed secession bid from Spain that they are accused of spearheading in 2017.

So by week’s end, Prime Minister Sanchez was forced to call a snap election for April 28, after Catalan nationalist MPs withdrew support for the Socialist government’s budget.

Opinion polls show that no single party would win a clear majority.  But conservatives and the far-right Vox party are expected to do well.

The Catalan separatist MPs rejected Sanchez’s budget after the government refused to discuss the region’s right to self-determination.

The socialists (PSOE) have 84 seats in the 350-seat lower house (Congress of Deputies), and their main allies, anti-austerity Podemos, have 67. But the biggest party is the conservative opposition Popular Party (PP), with 134.

Here we go again.

Turning to Asia, China’s formal Lunar New Year holiday ended, with the Shanghai Composite up 2.4% on the week, the market shuttered the preceding one.

But the government reported 7-day holiday sales growth was up 8.5%, which sounds good but that’s the slowest in a decade, and down from 2018’s 10.2%, another reflection of the slowdown.  Tourism revenue was up 8.2%, down from 12.1% last year.

And January’s producer price index (or factory-gate) came in at its lowest level since Sept. 2016 as demand falters; up 0.1% year-over-year, according to the National Bureau of Statistics, down 0.6% over December. This isn’t good.  Potential deflation.

The Economic Information Daily, a state-run paper, estimated full-year growth for 2019 of 6.3% and “the possibility that growth for the present quarter could reach 6%.”  [GDP was 6.4% in the fourth quarter, and 6.6% for all of 2018, the slowest pace since 1990.]

Street Bytes

--For the week the Dow Jones rose 3.1% to 25883, less than 1,000 points from the all-time high of 26828, the S&P 500 was up 2.5% to 2775 (2930 its closing high), and Nasdaq rallied 2.4% to 7472 (8109 its all-time mark).

Earnings are coming in as expected, up a projected 16-17% on the S&P 500 for the fourth quarter, though that number is now expected to be about flat for Q1.

For now, the market is being totally irrational in its China trade talks expectations, but, again, that’s how I said it would be when forecasting the year.  It won’t be about reality, it’s about sentiment.

--U.S. Treasury Yields

6-mo. 2.50%  2-yr. 2.51%  10-yr. 2.66%  30-yr. 2.99%

--The national debt topped $22 trillion for the first time, the Treasury Department said Tuesday.  It stood at $19.95 trillion when President Trump took office on Jan. 20, 2017.

Michael Peterson, head of the Peter G. Peterson Foundation, said that interest on the national debt now costs more than $1 billion daily and “as we borrow trillion after trillion, interest costs will weigh on our economy and make it harder to fund important investments of our future.”

Separately, the Treasury Department reported the budget deficit for December was $13.5 billion, with the total for the first three months of the 2019 fiscal year (which commenced Oct. 1, 2018) being $318.9 billion, with the Congressional Budget Office projecting this year’s deficit will be $897 billion, compared with $779 billion for fiscal 2018.  The budget deficit is projected to top $1 trillion annually beginning in 2022, much of the increase coming from rising entitlement spending (Social Security and Medicare).

Thus far, the Trump tax cuts haven’t been paying for themselves as the administration has contended, though we’ll see what happens the next 2-3 years.  The CBO can be wrong.

--OPEC significantly reduced its crude-oil production in January, making good on its latest deal to curb output and rebalance an oversupplied market, the cartel said Tuesday.

In its monthly oil market report, OPEC said its crude output had fallen by 797,000 barrels a day in January, month-on-month, to average 30.81 million barrels a day; the bulk of the cuts shouldered by Saudi Arabia, as well as the UAE and Kuwait, according to the report.

In December, OPEC and a group of 10 producers outside the cartel, led by Russia, agreed to cut back a collective 1.2 million barrels a day for the first half of 2019.

But Russia had agreed to be 230,000 barrels of the 1.2 million and apparently in January, preliminarily, Russian supply came down by just 90,000, according to OPEC.

--Following is a great summary of California’s high-speed rail project, that new California Gov. Gavin Newsom announced is being greatly scaled back.

The project was initially conceived to connect San Francisco and Sacramento with Los Angeles and San Diego, but with humongous cost overruns and delays, the project was most recently projected to cost $77 billion.

Editorial / San Diego Union-Tribune

“It only took 10 years after California voters narrowly approved $9.95 billion in bond seed money for what was then a $33 billion statewide high-speed rail network, but a governor is finally acknowledging the project’s major problems. Gavin Newsom used his first State of the State address to declare that while he supported completion of an under-construction route from Bakersfield to Merced, ‘there simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to L.A.’  Hallelujah.  In his speech and a series of subsequent tweets, Newsom emphasized that he wasn’t abandoning high-speed rail, but he can’t walk his welcome criticism back.

“Newsom crammed a lot into 43 minutes... But by far the biggest news in his speech was his reality check on the state and the nation’s largest infrastructure project.  ‘Let’s be real,’ he said.  It ‘would cost too much and take too long.’

“As Ralph Vartabedian of the Los Angeles Times has reported, there’s at least a $50 billion gap in funding to build a now-$77 billion San Francisco-Los Angeles route, based on cost estimates from the unreliable California High-Speed Rail Authority.  In November, Vartabedian also cited this fact: A project that was then 10 years old was 13 years behind schedule.  How is such incompetence even possible?

“Newsom’s candor was in sharp contrast with former Gov. Jerry Brown.  He liked to ridicule project critics as ‘declinists’ who were scared of the future – while never addressing the long list of concerns that began building about the bullet train just days after the passage of Proposition 1A in 2008.  That’s when the California High-Speed Rail Authority released an overdue business plan that said the project was unlikely to attract private investors unless they received ‘both financial and political commitments from state officials that government would share the risks to their participation.’  In other words, they would get subsidies if revenue forecasts fell short.  But under Proposition 1A, such subsidies were illegal.  The authority had this information in the spring of 2008 but never shared it with the public until after the measure passed – even as then-Gov. Arnold Schwarzenegger and other advocates told voters it would be easy to get the private investment necessary to finish the project.

“This original sin has been compounded by years more of dishonesty from state rail officials, most notably the periodic claims that the large international firms which were interested in building and/or managing the project wanted to invest in it.  No, they weren’t – not without the prospect of subsidies.

“The authority’s credibility hit rock bottom in 2015.  That’s when Vartabedian reported that the authority had refused to make public a 2013 analysis from Parsons Brinckerhoff, its main project contractor, that predicted a $9 billion cost overrun on the bullet train’s initial 300-mile segment.  Not only did the authority continue to issue cost estimates that didn’t reflect this warning, its CEO – Jeff Morales – claimed he didn’t know about the report.  If Newsom is serious about bringing transparency to the rail authority, he should remove every single senior official who countenanced this cover-up.

“Despite Newson’s talk of  good jobs and investment, his decision to seek completion of the Merced-Bakersfield segment is baffling. That wouldn’t link Silicon Valley jobs with potentially cheap housing in the Central Valley, which he said last year was a great idea.  It’s also hard to see how ridership could be adequate to cover the high cost of buying and maintaining bullet trains and upkeep of the high-speed rail line – remember, subsidies are illegal.

“Whatever Newsom’s calculations, his decision to be honest about this sinkhole of a project deserves praise.  Better late than never, to be honest about it.”

Needless to say, President Trump had to tweet on the topic:

“California has been forced to cancel the massive bullet train project after having spent and wasted many billions of dollars.  They owe the Federal Government three and a half billion dollars.  We want that money back now.  Whole project is a ‘green’ disaster!”

Days after the speech, Gov. Newsom responded to the president:

“We’re building high-speed rail, connecting the Central Valley and beyond. This is CA’s money, allocated by Congress for this project. We’re not giving it back.  The train is leaving the station – better get on board!”

But now everyone is confused by Newsom’s pushback, the governor having blamed the press for making it sound like he was abandoning the project, but that’s exactly what he said, save for the sole link.

--Airbus SE decided to stop making the A380 double-decker after a dozen years in service, surrendering on a prestige project that won the hearts and minds of travelers, and politicians, but never the support needed from the airlines that instead prefer smaller, more fuel-efficient aircraft.

I could take you way, way back, and show you where I said the “jumbo flying hot dog” wouldn’t work out, and now we learn production will end by 2021, after the A380’s biggest customer, Emirates, and a handful of remaining buyers receive their last orders.  Emirates is paring down its current order to 14 from 53, Airbus said in a statement on Thursday.  Emirates will now purchase 70 smaller A330neo and A350 widebodies listed at $21.4 billion before customary discounts.

Airbus CEO Tom Enders said in a statement, “Today’s announcement is painful for us and the A380 communities worldwide.”  As many as 3,500 jobs will be affected by the decision.

From inception, the A380 was a grand European project; wings made in the UK, components in Germany and France, with the main facility in Toulouse, France, and the planes painted and kitted out in Hamburg, Germany.

At the same time the Boeing 747 was also struggling, with Boeing betting in the early 2000s that the future lied in smaller long-range planes that could economically overfly the mega-hub airports and directly connect smaller markets, thus its 777 and 787 Dreamliner, along with Airbus’ A350, that used carbon fiber and efficient engines, helping airlines drastically cut fuel costs.

--I wrote the following Thursday, when, literally five minutes after I finished the passage, we had big news, but I’m including this as a lead-in.

According to various reports, Amazon.com is reconsidering plans to build a second headquarters in New York City, specifically Queens, amid protests that Amazon shouldn’t be receiving $3 billion in subsidies and that the economic impact won’t be the positive to the area that supporters, such as Democratic Gov. Andrew Cuomo and Democratic Mayor Bill de Blasio, have touted.

But a Siena College Research Institute poll found 56% of voters statewide support the project, which Amazon says would create 25,000 jobs.  Further, among city residents, 58% support it and 35% are opposed when told of both the promised jobs and incentives.

Cuomo and de Blasio offered up the $3bn in goodies, saying the new campus would diversify the economy and generate $27 billion of new government revenue over 25 years.  During a news conference Monday, Cuomo said, “This was the grand prize from an economic development point of view.”

An Amazon spokesperson said the poll is a “clear validation” of the development.

But opponents, including various unions, as well as progressive groups, and some Democratic politicians, including Rep. Alexandria Ocasio-Cortez, oppose the deal.

I understand the opposition to the $3bn in incentives, but I can’t see the project not being a major net-positive.

Well, minutes later, as I noted above, Amazon canceled it.

Editorial / Wall Street Journal

“After getting mauled by a mob of unions and politicians, Amazon on Thursday cancelled plans to build a second headquarters in New York City.  It’s a testament to New York’s toxic business environment that even $3 billion in subsidies wasn’t enough to keep the company in town.

“ ‘A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City,’ Amazon said in calling off the three-month engagement.

“The Seattle-based retailed had only kind words for Gov. Andrew Cuomo and Mayor Bill de Blasio, who wooed it like contestants on ‘The Bachelor.’  In return for the promise of 25,000 jobs, the state and city in November offered up to $3 billion in subsidies as well as a helipad for CEO Jeff Bezos and other executives to fly over congested city streets.

“But the ensuing gang-beating offered a portent of what Amazon was walking into.  An Amazon executive was asked at a City Council meeting last month whether the company would agree to unionization.  ‘We have great-paying jobs and we respect an employee’s right to choose or not to join a union,’ the executive explained.  ‘The goal that you are trying to achieve is good jobs, not low-paying jobs.’

“Mr. de Blasio’s response?  ‘We’re a union town.’  He added: ‘There is going to be tremendous pressure on Amazon to allow unionization and I will be one of the people bringing that pressure. I believe that ultimately that pressure will win the day.’  This followed Mr. de Blasio’s recent declaration that there’s too much money in the city in the ‘wrong hands.’

“Mr. Cuomo blamed hostile state Senate Democrats for driving off Amazon and insisted the state’s ‘fundamentals’ will ‘continue to attract world class business.’  If that’s so, why did New York politicians spend $10 billion last year – more than any other state – on business incentives?  Republican states also compete with subsidies, but progressives have to offer more to compensate for their oppressive business climates.

“The city has the country’s second-highest income tax, and Mr. de Blasio last month proposed that all private employers be required to provide workers two weeks of paid vacation each year. That’s on top of paid family leave. Animus toward business represses the organic investment and job growth that make a dynamic economy.

“Reacting like a spurned suitor, Mr. de Blasio trashed Amazon.  ‘You have to be tough to make it in New York City,’ he said.  ‘We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world.  Instead of working with the community, Amazon threw away that opportunity.’....

“Amazon was right to pull out of New York City, but it would have avoided a lot of grief if it had made its original headquarters decision on the business ‘fundamentals.’”

Andrea Peyser / New York Post

“On Valentine’s Day, Amazon broke hearts all over New York City, dumping us like a boyfriend with cold feet. The loss is incalculable.

“Gone, apparently for good, is the promise of not only more than 25,000 new highly skilled and well-paying jobs, at least a chunk of them for women and minorities, but all the goodies that go along with them.

“With the withdrawal from its proposed campus in Long Island City, the company has snatched away potentially tens of billions in tax revenue, soaring interest in local real estate, plus new stores, restaurants and guaranteed employment for everyone from babysitters to dog-walkers.

“Nice going.

“It’s official.  New York is not only freakishly hostile to business, but suspicious to a suicidal degree of billionaires who own things, the very people who bring employment to our midst.  With their ‘Take these jobs and shove it’ attitude, New York’s sanctimonious, progressive politicians and assorted naysayers should be proud of themselves.

“But what about the rest of us?

“Democratic City Council member Jimmy Van Bramer took part in an unseemly ‘victory press conference’ Thursday, one with little support from ordinary Joes and Janes who badly wanted to work for the company, only to see their hopes demolished.

“Newbie U.S. Rep. Alexandria Ocasio-Cortez, self-described democratic socialist, reacted to the exit news not with somber reflection or the announcement of new jobs-creating initiatives – but with an insulting Twitter celebration.

“ ‘Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world,’ she tweeted.

“She failed to explain how she intends to pay for her signature initiatives, a basket of gifts, including free health care, free college, and the total elimination of carbon emissions, as contained in her Green New Deal – a draft proposal of which bemoaned the likely inability to rid the nation quickly of airplanes and ‘farting cows.’

“Long Island City’s Democratic state Sen. Mike Gianaris, the deputy majority leader – a former Amazon enthusiast...joined anti-Amazon activists at a ridiculous rally in Queens Saturday, where he said, ‘We’ve learned over the last year that Amazon is not a responsible company.   They want to take $3 billion from us. We’re trying to stop it.’

“Well, he did. Thanks a lot.

“Every politicians who expended oxygen or computer keystrokes to run out what would have been a gigantic boon to the city is guilty of ‘political malpractice,’ as Gov. Andrew Cuomo said about Gianaris.

“Every one of these bozos should pay for this incredible loss with their jobs, come Election Day.   Or sooner.

“As recent polls demonstrate, a majority of New Yorkers were all in for Amazon. We know better than these out-of-touch politicos what’s good for us. No professional activist will feed our families.

“While Amazon’s kiss-off of the city may well serve us right, I am not alone in bemoaning this development.  Not only have we been stripped of a great opportunity for real employment growth and related monetary benefits, the fleeing of Amazon will reverberate for years to come.

“The officers of other corporations considering setting up shop in the city will realize they’d rather stick pins in their eyes than tangle with New York’s loathsome political class....

“As the company fades away, shame should fall squarely on the shoulders of all the people responsible, most of whom have never even met their constituents. The entire city will live to regret their boneheaded moves.”

Meanwhile, Amazon CEO Jeff Bezos, who has accused the National Enquirer’s parent company, American Media Inc., of extortion and blackmail, continued to be in the headlines over the weekend.

Aside from being the brunt of jokes on “Saturday Night Live,” along with AMI CEO David Pecker, cough cough, Elkan Abramowitz, an attorney for Pecker, appeared on ABC’s “This Week” to double down on the company’s assertion of innocence.

In insisting it wasn’t extortion and blackmail, Abramowitz told host George Stephanopoulos that what AMI was doing was journalism.  He also suggested that it was Bezos who threatened the tabloid by insinuating its moves were somehow being directed by Saudi Arabia.

“So that’s why lawyers sit down and lawyers negotiate to try to resolve differences,” Abramowitz said of the emails Bezos published.  “That’s exactly what this was.”

Stephanopoulos pressed him.

“How is that journalism, though?” he asked.  “If you believe the photos are newsworthy, how is it journalism to say we’re not going to publish this if you give us something we want?”

Abramowitz argued that the story of Bezos’ affair with former television host Lauren Sanchez was already “out there.”

“Is it journalism to decide not to print a story three times?” Pecker’s lawyer said.  “You can make journalistic decisions as to how many times you’re going to write the same story. That’s not the job of the prosecutors or anybody else to determine.”

But some legal analysts, such as ABC’s Dan Abrams, argued AMI was threatening to publish photos that had not yet been released.  But does that constitute legal blackmail or extortion?

Separately, Abramowitz said the information (photos) was provided to the Enquirer by a “reliable source” who had been giving information to the publication for the past seven years, adding the source was “well known to both Mr. Bezos” and Lauren Sanchez, many believing the source to be Sanchez’ brother, a big Trump supporter.

Bezos, in his blog post accusing AMI of trying to blackmail him, also alluded to Saudi Arabia’s displeasure at the Bezos-owned Washington Post for its coverage of the murder of its columnist and Saudi journalist Jamal Khashoggi.

Saudi representative Adel al-Jubeir told CBS’ “Face the Nation” that when it came to alleged links between AMI and the kingdom, “This is something between the two parties, we have nothing to do with it.”

Maureen Dowd / New York Times

“This past week, Pecker and his thugs upgraded to blackmail, threatening to print more sexts and louche pics that Bezos and Sanchez had exchanged unless Bezos made a statement in the press rebutting the idea that the Enquirer story was politically motivated.

“Again, Bezos’ superior survival instincts kicked in. He refused.

“Pecker is up to his slimy neck in politically motivated messes.  He had to make a deal with prosecutors after he helped deliver his pal Donald Trump’s hush payments to the Playboy model and the porn star.  The Dickensian-named head of American Media Incorporated, The Enquirer’s owner, was ‘apoplectic,’ according to Bezos’ post in Medium, about his investigation into who leaked the texts.

“ ‘I prefer to stand up, roll this log over, and see what crawls out,’ Bezos wrote.

“And thus a P.R. debacle turned into a triumph.  Besides unbridled consumerism, Americans love nothing more than seeing a bully like Pecker get kicked in the groin.

“Bezos may be a key player in the Silicon Valley scheme to destroy privacy and ratchet up excess in the interest of mammonism, but for the moment, he’s a hero.

“ ‘If in my position I can’t stand up to this kind of extortion,’ he wrote, ‘how many people can?’”          

--iPhone shipments in China fell far more than overall smartphone shipments in the fourth quarter, costing Apple Inc. further market share against local rival Huawei Technologies Co. in the world’s biggest smartphone market.

Apple’s smartphone shipments in China in the last three months of 2018 were down 20% from a year earlier, according to International Data Corp.  Last month, Apple CEO Tim Cook blamed declining iPhone sales in China on the slowdown there.

According to IDC, smartphone shipments in China dropped 9.7% in the quarter, with Apple’s market share in the country declining to 11.5% from 12.9% a year ago.  Apple is now the fourth-biggest vendor in China, after being the top smartphone seller as recently as early 2015.

This was all so predictable.  I’ve written scads on the topic, and how the likes of Huawei, whose phones are now just as good as Apple’s (initially they weren’t), but sell for far less, of course would be more attractive to the Chinese consumer, especially as Beijing plays the nationalism card.

Now on this last point, understand that there have been only whiffs of nationalism against the likes of Apple, but at any moment the government could come down full-force on the company.

Admittedly, as long as trade talks are playing out, this isn’t likely, but it’s a massive risk I’ve long said Apple shareholders needed to be aware of.

Back to Huawei, their shipments were up 23% in Q4, giving it 29% of the market.  Two other local brands, BBK Electronics Corp.’s Oppo and Vivo, also were up in the quarter.

Globally, Huawei’s smartphone shipments were up 44%, according to IDC which now ranks it third worldwide, trailing Samsung and Apple in global sales.

--A former Apple executive, Gene Levoff, was accused by the SEC of insider trading.

Levoff, formerly Apple’s senior director of corporate law and corporate secretary, “exploited his positions...to unlawfully trade Apple securities ahead of Apple quarterly earnings announcements.”

“Levoff was responsible for ensuring compliance with the company’s insider trading policy,” yet he traded on insider information on at least three occasions in 2015 and 2016, including in July 2015, when he “received material nonpublic financial data that showed Apple would miss analysts’ third quarter estimates for iPhone unit sales.”

He profited and avoided losses of about $382,000 through illegal insider trading, and also on three occasions in 2011 and 2012 that resulted in him making about $245,000 in profit.

I mean back then, this is the guy who was sending out emails to employees, notifying them of blackout periods... “Reminder, trading is not permitted...if you possess or have access to material information that has not been disclosed publicly,” and then he went and did it himself.

Levoff was fired last September.

--Ford Motor Co. is recalling nearly 1.5 million pickup trucks in North America because the transmissions can suddenly downshift into first gear. The recall covers F-150 trucks from the 2011 through 2013 model years with six-speed automatic transmissions.

Ford has had five reports of accidents, but no serious injuries.

The F-Series pickup is the top-selling vehicle in the U.S.

--Cisco Systems Inc. posted strong sales growth for its networking gear despite the trade fight between the U.S. and China.

The Trump administration’s 10% tariffs on Chinese-produced goods that went into effect late September hit a collection of Cisco’s switches and routers, some of which Cisco manufactures in China and imports to the U.S.  Cisco raised prices on some of the products in response.

But CEO Chuck Robbins said the company had “navigated them incredibly well, and I think the results would tell you that they didn’t have much of an impact.”

Cisco reported a fiscal second-quarter profit of $2.82 billion, with revenue rising 4.7% to $12.45 billion.  Revenue from Cisco’s core switcher, router and other networking equipment rose 6% to $7.13 billion.  Both the profit and revenue were slightly ahead of expectations.  The company also guided more or less in line with current forecasts.  The shares rose on the news.

--Coca-Cola Co. reported slightly stronger-than-expected revenue for its latest quarter, boosted by demand for tea, coffee, water and sports drinks, but the beverage company expects sales will slow down this year.  The shares fell sharply on the guidance.

CEO James Quincey said the company tempered its expectations after noting a slowdown in emerging and developing markets in late 2018.

Organic revenue, which excludes currency swings, acquisitions and divestitures, is likely to rise about 4% in 2019.  The company is seeing strong sales of Coca-Cola Zero Sugar.

--Meanwhile, PepsiCo Inc. reported fourth-quarter net income of $6.85 billion, the results matching Wall Street’s expectations, with revenue of $19.52 billion in line, though net sales were flat from the year-ago period.

Like Coca-Cola, PepsiCo expects 4% organic revenue growth in 2019.

The company did announce it was committing to a multi-year productivity plan, which involves slashing jobs and closing plants, which would involve pre-tax charges of about $2.5 billion over the next five years, much of it for severance.

--CBS missed forecasts for profits and sales in the latest quarter, weighing on shares as the most popular U.S. television network looks to rebuild after a year of tumult.

Revenues for the year climbed 6 percent to $14.5 billion.    Advertising sales in the fourth quarter grew 7 percent to $1.9bn, helped by political sales from the midterm elections.

But CBS is also stepping up its ambitions for streaming services.  The owner of Showtime and its namesake broadcast network is now aiming for 25 million domestic subscribers for its online services by 2022, up from about 8 million now.  Its fourth-quarter earnings underscored the need to get more money from streaming.  The service offers original shows like “Star-Trek: Discovery” and “The Good Fight,” and also carries live NFL games.  Investors and analysts are waiting to see if CBS and Viacom Inc. will renew their on-again, off-again merger talks.

--So I saw a note in the Boston Globe on the city of Boston being named the most congested city for traffic in the country, and then saw a piece in the Moscow Times that had Moscow as the world capital of traffic jams (which I know from firsthand experience is very true), and I had to get the full report by the INRIX automotive analytics company.

220 cities were ranked around the world.

In the U.S. ....most congested....

1. Boston
2. Washington, D.C.
3. Chicago
4. New York City
5. Los Angeles

In the world....

1. Moscow
2. Istanbul
3. Bogota
4. Mexico City
5. Sao Paulo
6. London
7. Rio de Janeiro
8. Boston
9. Saint Petersburg (Russia)
10. Rome

The report is kind of fascinating, as it measures things like “inner city last mile travel time (minutes)” and “inner city last mile speed (MPH).”  All of the most congested cities have last mile times of 5-8 minutes, with last mile speed of 7-13 MPH.

Moscow drivers on average waited 210 hours in traffic last year (hours lost in congestion).  Boston was 164 hours.  Los Angeles, which the study said has made substantial improvements, 128 hours.

Bogota, Colombia was actually the worst for hours lost in congestion, 272.

Of course all of this has a negative impact on an economy.

--Snowfall is very much an economic story, and there is good news if your job is tied to Mammoth Lakes, Calif., with Mammoth Mountain announcing the ski season should be extended to Fourth of July, after a spectacular amount of snow has fallen thus far, including another two-feet+ the past few days.

As of Tuesday, a spokesman for the site said, “The current base depth of 210 inches is also the highest in the country.”

Back in the 2010-2011 season, Mammoth (in the Sierras) received a record 668.5 inches, mostly in November and March.  Just this month, as I write, 150 inches has already fallen.

Foreign Affairs

Syria / Iran / Israel: In a speech in Warsaw, Poland, Vice President Mike Pence lashed out at Washington’s European allies for helping what he called a “murderous” Iran escape U.S. sanctions, warning their actions would exacerbate a divide between Europe and the U.S.

“The Iranian regime openly advocates another Holocaust and it seeks the means to achieve it.”

Pence’s message came as a bit of a shock to European countries that had been reassured by U.S. officials that a two-day conference on peace in the Middle East wasn’t solely an effort to build a coalition against Iran.

“At the outset of this historic conference, leaders from across the region agreed that the greatest threat to peace and security in the Middle East is the Islamic Republic of Iran,” Pence said.  “Countries across the globe are working to cut Iranian oil imports this year.”

“Sadly, some of our leading European partners have not been nearly as cooperative,” he said.

Pence took particular aim at Germany, France and the U.K., which together defied threats from Washington in late January to set up a special-payments company to in effect circumvent U.S. sanctions on Iran and open an avenue for trade between Europe and Iran.

“They call this scheme a special purpose vehicle; we call it an effort to break American sanctions against Iran’s murderous revolutionary regime,” Pence said.  “It’s an ill-advised step that will only strengthen Iran, weaken the EU and create still more distance between the EU and the United States.”

After Pence’s speech, the German Foreign Office said in a Twitter post: “EU is a cornerstone of the multilateral system.  Compromise and consensus are deeply embedded in its DNA. We are a reliable partner for those who want to uphold the rules-based order and who are prepared to shoulder more responsibility to this end.”

A spokesperson for the U.K. government said: “While we share U.S. concerns about Iranian regional activities and its missile program, we believe the best way to address these wider concerns is while the nuclear deal remains in place.” 

Israeli Prime Minister Benjamin Netanyahu accused Iran of trying to colonize Syria and use it as a base to threaten Israel.  “There should be a common international position to say to Iran, ‘get out of Syria.’  It’s actually in Assad’s interest.  I think it’s in the interest of just about everyone,’ he said in a closed-door session, according to a source present at the meeting.  [Jessica Donati and Sune Engel Rasmussen / Wall Street Journal]

Monday, Israel Defense Forces attacked three sites in western Syria bordering the Golan Heights, after reports Syria has been reinforcing the border.  Prime Minister Netanyahu confirmed the strike Tuesday prior to the conference in Poland.  “We are operating every day, including yesterday, against Iran. All the time. Against Iran and against its attempt to entrench itself in the area,” he said.

Separately, as thousands of civilians flee the U.S.-backed battle to oust Islamic State from the last territory it controls in Syria, they have had to run across minefields and ride in open-air trucks for hours in near-freezing temperatures to find safety – in a camp without enough tents.

According to the United Nations this week, at least 35 children and newborns have died since early December, mostly from hypothermia, either en route or shortly after arriving at the camp.

There are also at least 1,000 prisoners in detention, mostly suspected ISIS members, with fears they could be eventually released as the U.S.-backed forces don’t have the facilities to properly secure them.

Finally, the top U.S. general in the Middle East, Gen. Joseph Votel, told CNN today that ISIS was still active in Syria and U.S.-backed forces were not yet capable of handling the threat alone.

Votel had told the Senate last week that President Trump did not consult him ahead of announcing his Syria pull-out plans.

Votel told CNN, “(Islamic State) still has leaders, still has fighters, it still has facilitators, it still has resources, so our continued military pressure is necessary to continue to go after that network.

“When I say, ‘we have defeated them,’ I want to ensure that means they do not have the capability to plot or direct attacks against the U.S. or our allies.”

Bret Stephens / New York Times

“Abroad, and not just in the Middle East, Iran and its proxies continue to plot violence. An Iranian attempt to bomb the meeting of an opposition group near Paris was foiled last summer.  In October, Copenhagen recalled its ambassador to Tehran after another Iranian assassination attempt was prevented in Denmark.  In January, Germany banned Iran’s Mahan Air because of its role in ferrying arms and fighters to commit atrocities in Syria. German intelligence officials have also accused Iran of trying to acquire nuclear materials in 2016, after the nuclear deal went into effect.

“These are countries that want better with Iran, and have made efforts to steer a course independent from the Trump administration. Tehran’s behavior gives the lie to the idea that it matches conciliation with conciliation.  It matches conciliation with contempt.

“Donald Trump’s foreign policy has mostly been shambolic, but credit where it is due: Other than the stunning folly of the announced withdrawal of U.S. forces from Syria, where they could help check Tehran’s regional ambitions, he has gotten Iran mostly right.

“America’s withdrawal from the nuclear deal has not led Iran to resume its nuclear program (despite some gesturing to that effect). A tougher U.S. tone is likely behind the sharp drop in Iranian harassment of U.S. Navy ships in the Persian Gulf. The resumption of sanctions has put Iran under acute economic stress.

“Most importantly, ordinary Iranians know where to pin the blame. Last summer, social media captured Iranian protesters chanting ‘Death to Palestine,’ ‘No to Gaza, no to Lebanon,’ and ‘Leave Syria and think of us.’  There are people sick of going hungry and unpaid while singing the ‘Death to America’ theme song.

“The overarching goal of Western policy cannot be to appease Iran into making partial and temporary concessions on its nuclear program, purchased at the cost of financing its other malignant aims. The goal must be to put an end, finally, to 40 years of Persian night.

“This should not be a military campaign. But it can be a campaign of economic pressure, to put Iran’s leaders to a fundamental choice between their ideological ambitions and the needs of their people.  It can be a campaign of diplomatic pressure, to underscore that a regime that routinely flouts the rules of civilized countries can’t be treated as one itself. It can be an intelligence campaign, to continue to expose and subvert Iran’s efforts to acquire and field strategic arms.

“Above all, it has to be a human-rights campaign.  Liberals and progressives should not find it difficult to join conservatives in championing the rights of women in Iran, particularly women removing their headscarves in public and courageously facing the consequences.  Nor should it be difficult for liberals and conservatives alike to call attention to the plight of Iran’s political prisoners, much as both sides were once moved to action by the plight of political prisoners in the Soviet Union or China or South Africa.

“Back when there was an idea of something called the free world, led by the United States, Americans cared about such things, and were willing to act. It is not too late for Americans to do so again, when so many are still in the dark.”

Separately, the New York Times reported that the “Trump White House has accelerated a secret American program to sabotage Iran’s missiles and rockets, according to current and former administration officials, who described it as part of an expanding campaign by the United States to undercut Tehran’s military and isolate its economy.

“Officials said it was impossible to measure precisely the success of the classified program, which has never been publicly acknowledged. But in the past month alone, two Iranian attempts to launch satellites have failed within minutes.

“Those two rocket failures – one that Iran announced on Jan. 15 and the other, an unacknowledged attempt, on Feb. 5* – were part of a pattern over the past 11 years.  In that time, 67 percent of Iranian orbital launches have failed, an astonishingly high number compared to a 5 percent failure rate worldwide for similar space launches.” [David E. Sanger and William J. Broad]

*Today, Iranian Foreign Minister Mohammad Javad Zarif, in an interview with NBC News, confirmed the second test had failed, Iran clearly concerned there has been sabotage.

President Hassan Rouhani has vowed to “continue our path and our military power,” in singling out Tehran’s missile fleets.

Government officials asked The Times to withhold some details of its reporting, because the effort is continuing.

The campaign to disrupt Iran’s missile program took shape during the George W. Bush and Obama administrations. Often it takes “no more than a small design change in a critical valve, a modest alteration in an engine part or guidance system, or a contaminated alloy for making launcher fins, crucial for aerodynamic stability.” [NY Times]

Today, Secretary of State Mike Pompeo has helped greatly because of his knowledge in the importance of the supply chain for rockets and missiles, Pompeo, post-West Point, having founded, with classmates, Thayer Aerospace, named for a famous superintendent of the academy.  The company made parts for Boeing, Lockheed and Raytheon and Pompeo understood what happens when aerospace parts are produced with less than extreme precision.  When he got to the CIA, he pressed to reinvigorate the sabotage program.

Separately, a former U.S. Air Force special agent gave highly classified information to Tehran and helped backers mount campaigns against U.S. spies after defecting to Iran, according to an indictment unsealed Wednesday.

Monica Elfriede Witt, who left the Air Force in 2008 and a job with a defense contractor two years later, showed persistence in trying to betray her country, prosecutors said, eventually defecting in 2013.

The FBI said “Witt’s primary motivation appears to have been ideological.  She decided to turn against the United States and shift her loyalties to the government of Iran.”

“I am endeavoring to put the training I received to good use instead of evil,” she allegedly told her recruiter.

Witt and four Iranians who were also charged are accused of conducting a hacking campaign via social media for Iran’s Islamic Revolutionary Guard Corps in 2014 and 2015 to try to obtain access to the computer networks of Witt’s onetime U.S. intelligence colleagues, the indictment said.

Witt and the other defendants are believed to be in Iran and aren’t in U.S. custody.

Lastly, a suicide bombing killed 27 of Iran’s elite Islamic Revolutionary Guard members and injured 13 others on Wednesday in the country’s southeast.  The Sunni Muslim extremist group Jaish al-Adl claimed responsibility for an attack on a bus carrying guard members who had just finished patrolling in an area near the border with Pakistan.

Iran is overwhelmingly Shiite Muslim, but about 9% of the nation is Sunni.

The attack came two days after hundreds of thousands of Iranians commemorated the 40th anniversary of the Islamic Revolution.  On February 11, 1979, Iran’s army declared its neutrality, paving the way for the fall of U.S.-backed Shah Mohammad Reza Pahlavi, Ayatollah Ruhollah Khomeini, the Shiite cleric, then assuming power.

Egypt: Parliament has overwhelmingly voted to pass a batch of controversial constitutional amendments, including an extension to presidential terms that could see President Abdel Fattah el-Sisi remain in office until 2034.

The approval will later go to a national referendum, which would mean presidential terms will be extended from four to six years, and also give more power to the military.

The clause will restart the clock for Sisi – whose second term ends in 2022 – and will allow him to run for two more.

Supporters of the changes said they will bring stability to Egypt’s economy, along with bolstering security amid an ongoing deadly Islamist insurgency.

The flipside is this is another step toward authoritarianism.

North Korea: According to a report from three Stanford University researchers, North Korea has kept producing raw materials needed to make nuclear weapons, though the threat has subsided since 2017 as the country’s suspension of missile tests has halted its progress on delivery systems capable of hitting the U.S. mainland.

Despite promises to fully denuclearize, North Korea has continued to operate facilities that produce plutonium and highly enriched uranium.  The report did not conclude, however, that Kim Jong Un has used the newly produced material to actually enlarge his nuclear arsenal.

The lead author of the report is nuclear scientist Siegfried Hecker, who last visited the North’s nuclear facilities in 2010 and has advised U.S. negotiators involved in the current talks with Pyongyang.

The stockpile of fissile material is, nonetheless, a reminder of what North Korea is capable of doing should talks between Trump and Kim fail.

Next week, talk of the coming summit in Hanoi, Feb. 27-28, will no doubt heat up.  The first summit in Singapore last June delivered few concrete developments, and despite President Trump’s declaration that North Korea is no longer a nuclear threat, the Kim regime has never said it would give up its nuclear weapons program.

China: A group of specialists formed by the Asia Society released a 53-page report titled “Course Correction: Toward an Effective and Sustainable China Policy,” which concluded in part that the United States should not break with nearly 50 years of practice and challenge Beijing’s one-China policy, a move that would inflame tensions across the Taiwan Strait or, worse, precipitate military force from mainland China.

The report said: “Washington must maintain a strong and credible military presence in the Western Pacific to convince Beijing that the United States still has serious military options,” despite China’s rapid military expansion and development of advanced weapons.

The report addressed the gulf in military forces between Beijing and Taipei and said it was necessary for Washington to “assist Taiwan in developing asymmetric capabilities to hold off the massively superior mainland military until the United States can bring forces to bear.”

“Robust shore batteries, improved air defenses, mobile response units, and sea mines to counter landing craft can all pose major problems for an invading People’s Liberation Army (PLA) force,” the report suggesting that Washington ensure that Taiwan is properly equipped for self-defense.

India / Pakistan: A Pakistan-based militant group, Jaish-e-Mohammad, has taken responsibility for the deadliest attack on security forces in Indian Kashmir in 30 years of insurgency, ratcheting up tension between the nuclear-armed South Asian neighbors.  India says the group and its leader, Masood Azhar, enjoy free rein in Pakistan, and demands that Pakistan act to stop militant groups operating from its soil. 

Pakistan condemned the Thursday bomb attack that killed 44 paramilitary policemen near the main city in Indian-administered Kashmir, Srinagar, and denied any complicity.  Indian Prime Minister Narendra Modi vowed a strong response and the government said it would take “all possible diplomatic steps” to cut Pakistan off from the international community.

India has blamed Jaish for a series of attacks including a 2001 raid on its parliament in New Delhi that led to India mobilizing its military on the border, bringing the foes to the brink of a fourth war.

Both India and Pakistan claim all of Muslim-majority Kashmir but only control parts of it.

Jaish-e-Mohammad (JeM), or Army of Mohammad, has ties to other Sunni militant groups in Pakistan such as Lashka-e-Taiba (LeT) and Lashkar-e-Jhangvi.  It was banned in Pakistan in 2002 but U.S. authorities say it still operates openly there.

Masood Azhar and JeM have been linked with two assassination attempts on former Pakistani President Pervez Musharraf in 2003 as well as the kidnap and murder of U.S. journalist Daniel Pearl in 2002.  Azhar has also threatened to kill Narendra Modi.

Afghanistan: Editorial / USA TODAY

“The rough draft of an Afghanistan peace deal faintly traces the dark path that the United States followed when it left the Vietnam War.

“In 1973, a ‘peace with honor’ accord allowed North Vietnamese troops to stay in the south as U.S. forces withdrew.  Hanoi agreed to a cease-fire and no takeover of the south by force.  South Vietnam was frozen out of negotiations and reluctantly signed the agreement. ‘Sooner or later, the government will crumble,’ South Vietnamese President Nguyen Van Thieu predicted.  Saigon fell in 1975.

“Nearly half a century later, American and Taliban negotiators have agreed in principle to a peace framework in which U.S. troops leave Afghanistan and the Taliban promise to never again allow terrorists to attack the United States from their territory as happened on Sept. 11, 2001.

“In other parallels to the past, America is seeking a cease-fire and Afghan President Ashraf Ghani has been frozen out of the talks.  Last year, he told 60 Minutes, ‘We will not be able to support our army for six months without U.S. support.’

“Chief American negotiator Zalmay Khalilzad said Friday (Feb. 8) that the Trump administration is seeking an ‘honorable and just peace.’  And in last week’s State of the Union message, President Donald Trump spoke eloquently of ending America’s involvement in the conflict in Afghanistan.  ‘After two decades of war,’ he said, ‘the hour has come to at least try for peace, and the other side would like to do the same thing.  It’s time.’

“That’s a welcome message. If only the messenger – and the Taliban – could be trusted. Trump in two years has displayed a vexing pattern of hasty giveaways in the face of conflict:

“He agreed to a U.S. Embassy in Jerusalem without Middle East peace concessions from Israel.

“He announced a withdrawal from Syria after a premature declaration of victory over the Islamic State terrorist group.

“He granted the North Korean dictator the prestige of a presidential summit without concrete steps toward denuclearization.

“And as Taliban talks loomed, Trump, according to administration officials, said he was already willing to pull out half of the 14,000 U.S. troops deployed to Afghanistan.

“More negotiations are planned for this month.  But so far, the peace ‘framework’ for Afghanistan looks very different from accords that truly brought peace.  Those have almost always involved insurgents trading weapons for political engagement – as happened in Mozambique and El Salvador in 1992, Northern Ireland in 1998 and Colombia in 2016.

“There’s no word of the Taliban agreeing to disarm.

“The Afghanistan War is the longest in U.S. history and a stalemate. As of the end of October, 63.5 percent of the population lived in areas under Afghan government control or influence, down 1.7 percent from the previous quarter. Contested areas have increased.

“U.S. troops killed in action, always tragic, have been few compared with previous years – seven in the three months ending Jan. 15.

“But Afghan security losses – roughly 30 dead per day – appear unsustainable. The Taliban forces have also suffered significant casualties, which might be a factor in their willingness to negotiate peace.

“After nearly two decades of war, it is surely time for reconciliation in Afghanistan.  Nevertheless, the talks have to be more than a fig leaf for the withdrawal of U.S. troops.  The Afghan government must be brought into negotiations. The rights of girls and women must be protected.  Hostilities must cease.

“Any accord that paves the way for the Taliban to reclaim control in Kabul, provide sanctuary for anti-U.S. terrorists and reverse women’s rights would be neither honorable nor just.”

Venezuela: He’s still in power...Nicolas Maduro, that is.  There are some concerns the Trump administration underestimated the complexities of the situation here, especially the difficulty of spurring a mutiny in the military where many of the generals no doubt have benefited from corruption and drug trafficking.  Maduro continues to block aid shipments from getting into the country from Colombia, and the opposition hasn’t figured out a way to move the food and medicine across the border.

There are reports tonight the U.S. is airlifting much more aid to the area. 

Random Musings

--Presidential tracking polls....

Gallup: A new poll was released this week showing 44% approval of President Trump’s job performance, 52% disapproval; 89% Republicans approve, 38% Independents.  [The figures for Jan. 15 were 37/59, 88, 32.]
Rasmussen: 50% approval, 49% disapproval (Feb. 15)

--Democratic presidential hopeful Sen. Amy Klobuchar (Minn.) was hit with another report that says she tried to exact revenge on employees who sought new jobs by calling their bosses to have their offers rescinded.

Three former staffers and another source told Yahoo News about the alleged employment practice, which they saw as “vindictive, mystifying and counterproductive,” Yahoo said, and an indication of how far she would go.

This comes after former staffers reported hellish working conditions in her office, while she portrays herself as “Midwestern nice.”

Staffers said they were subject to outbursts over little matters and even office objects were thrown.

The senator does apparently have one of the highest staff turnover rates in Congress.

Klobuchar formally declared her candidacy on Sunday, in a snowstorm, seeking to position herself as a contrast to President Trump, focusing on both policy differences but also style and tact.

“I stand before you as the granddaughter of an iron ore miner, the daughter of a teacher and a newspaperman, the first woman elected to the United States Senate from the state of Minnesota, to announce my candidacy for president of the United States.”

With Klobuchar focusing on neighboring Iowa, and an early favorite it would seem to take the state, she would use that to catapult her the rest of the way, the way Barack Obama emerged in 2008 from underdog status with a win there.

Editorial / Wall Street Journal

“Though Ms. Klobuchar won’t be the first choice of the socialist left, she is running as a candidate who is liberal enough while also a sharp contrast in temperament to President Trump.

“At 58, she’s a generation younger than Joe Biden, her potential middle-of-the-road competitor.  With 12 years in the Senate, she has more experience than Julian Castro or Beto O’Rourke. She’s a Midwesterner, and Democrats need to win back Wisconsin, Michigan and Ohio.

“As a woman, she ticks the identity-politics box.  Yet she doesn’t carry the baggage of Elizabeth Warren (who impersonated a Native American), Kamala Harris (whose zeal as a prosecutor is passe), or Kirsten Gillibrand (whose politics have ‘evolved’ faster than the flu virus).

“Unlike most 2020 contenders, Ms. Klobuchar hasn’t parroted lefty slogans.  Asked last year about abolishing Immigration and Customs Enforcement, she said it would be better to focus on changing its policies, adding: ‘We are always going to need immigration enforcement.’  She advocates letting people buy into Medicare, rather than forcing it on everybody, while still saying universal health-care is the goal....

“Critics of her record in the Senate say she plays small ball. Ms. Klobuchar responds that she simply knows how to get things done.  Minnesotans clearly take her side.  During her re-election last year, she won 60% of the vote, including every congressional district.

“But when Democrats outside Minnesota are asked about Amy Klobuchar, they reply: Amy who?”

And her recent support in Iowa polls was minimal.  But as the Journal concludes, and I concur (as I told you last week):

“(How far will) Ms. Klobuchar go to raise her profile.  Last week she quietly co-sponsored the Senate resolution on a Green New Deal.  Running on a pledge to eliminate fossil fuels in 10 years?  Mr. Trump can only hope.  If Ms. Klobuchar, already a solid liberal, feels the need to zag further left, she could lose the strongest argument for her candidacy: She may be the Democrat best able to beat Mr. Trump.”

--Boy, Rep. Ilhan Omar (D-Minn.) is one unlikable woman.  Wednesday she got into a ridiculous back and forth with U.S. special envoy to Venezuela, Elliott Abrams, who is as experienced a diplomat, foreign affairs expert, as you’ll find.

Omar asked Abrams about his past dismissal of the 1981 El Mozote massacre – where more than 800 civilians in El Salvador were killed during the Salvadoran Civil War – as communist propaganda.

“You said that U.S. policy in El Salvador was fabulous achievement.  Yes or no.  Do you still think so?” Omar asked.

Abrams replied: “From the day that President [Jose] Duarte was elected in a free election to this day, El Salvador has been a democracy. That’s a fabulous achievement.”

“Yes or no. Do you think that massacre was a fabulous achievement that happened under our watch?” Omar asked.

“That is a ridiculous question, and – no!” Abrams said.

But Omar wouldn’t accept his answer.

“I will take that as a yes,” she said bizarrely.

More bizarrely, this ugly racist, Omar, serves on the House Foreign Affairs Committee, and the incident came less than a week after she was blasted over tweets that were clearly anti-Semitic.

Omar insinuated on Twitter Sunday night that American support for Israel is fueled by money from a pro-Israel lobbying group that has Jewish backing.

House Speaker Nancy Pelosi and the entire House leadership condemned Omar’s tweets.

Five House Democratic leaders, including Pelosi, issued a joint statement:

“Legitimate criticism of Israel’s policies is protected by the values of free speech and democratic debate that the United States and Israel share.  But Congresswoman’s Omar’s use of anti-Semitic tropes and prejudicial accusations about Israel’s supporters is deeply offensive.  We condemn these remarks and we call upon Congresswoman Omar to immediately apologize for these hurtful comments.  As Democrats and as Americans, the entire Congress must be fully engaged in denouncing and rejecting all forms of hatred, racism, prejudice and discrimination wherever they are encountered.”

Even Chelsea Clinton weighed in, saying on Twitter that Americans should expect “all public figures not to traffic in anti-Semitism.”

Rep. Omar first responded to a tweet by journalist Glenn Greenwald, who accused Rep. Kevin McCarthy, the House Republican leader, of targeting Omar and another Democratic freshman, Rep. Rashida Tlaib of Michigan (Tlaib a Palestinian American), who has also been sharply critical of Israel.

“It’s all about the Benjamins, baby,” Omar wrote, a reference to hundred-dollar bills.

That set off more tweets in which a Jewish journalist asked whom Omar was referring to when she suggested that money was driving American Israel policy.  “AIPAC!” she replied, referring to the American Israel Public Affairs Committee, which does not contribute directly to political campaigns, but holds large-scale conferences and congressional trips to Israel that have met enthusiastic bipartisan support.

Omar apologized Monday:

“Anti-Semitism is real and I am grateful for Jewish allies and colleagues who are educating me on the painful history of anti-Semitic tropes,” she said in a statement released on Twitter.  “My intention is never to offend my constituents or Jewish Americans as a whole.”

She added, “I unequivocally apologize.”

But then when you observed her actions after the apology, such as when she was approached by reporters, she was dismissive and defiant.

Editorial / Wall Street Journal

“The Democratic Party’s support for Israel has been fraying for years, and some new Members of Congress seem willing to indulge in arguments that border on the anti-Semitic.  So kudos to House Democratic leaders who slapped down one of their own, freshman Minnesota Rep. Ilhan Omar, for her ugly comments....

“Republicans in the House had threatened to offer a resolution rebuking Ms. Omar, who was at first indignant but apologized after hearing from party leadership.  ‘Anti-Semitism is real and I am grateful for Jewish allies and colleagues who are educating me on the painful history of anti-Semitic tropes,’ Ms. Omar said, adding that ‘I reaffirm the problematic role of lobbyists in our politics, whether it be AIPAC, the NRA or the fossil fuel industry.’  While she’s learning about history, she should also read the U.S. Constitution, which protects the right of Americans to petition their government.

“The rebuke from party leaders is especially important because anti-Israel sentiment is growing on the left.  While 79% of Republicans sympathize more with Israel than the Palestinians, according to a Pew survey last year, the split among Democrats is 27% for Israel and 25% for the Palestinians.

“In 2016 dozens of Black Lives Matter groups released a platform accusing Israel of ‘genocide’ and ‘apartheid’ and endorsing the boycott, divestment and sanctions (BDS) movement.  In 2017 the Democratic Socialists of America overwhelmingly endorsed BDS at its national conference, upon which the room erupted in chants of ‘From the river to the sea, Palestine will be free!’  Two Democrats the socialist group has propelled to Congress, Rashida Tlaib and Alexandria Ocasio-Cortez, are also anti-Israel.

“Ms. Omar says she ‘almost chuckles’ when Israel is called a democracy, comparing its Jewishness to the state-enforced Islam of Saudi Arabia and Iran.  Ms. Tlaib, who supports a one-state solution that would destroy Israel, argues that supporters of a pro-Israel, anti-BDS law ‘forgot what country they represent.’

“Democrats risk losing moderates as well as part of their base if these sentiments begin to define their party’s view of Israel in the public mind.  They’re wise to send a rebuke now.”

--Retired astronaut Mark Kelly, who became a prominent gun-control advocate after his wife, former Rep. Gabrielle Giffords, was shot in a failed assassination attempt, announced Tuesday he will run to finish John McCain’s last term in the Senate.

Kelly will thus take on Republican Martha McSally in what should be a tight race in 2020.  The winner then only serves the last two years of McCain’s term, so would have to run again for a full six-year term in 2022.

McSally had lost to Democrat Kyrsten Sinema last November in the race for outgoing Republican Sen. Jeff Flake’s seat.  McSally at the time was hurt by her embrace of President Trump, but then she was selected to replace McCain after Jon Kyl’s interim term.

Sinema, by the way, is becoming a very interesting figure, witness her Manchin-like tendencies.

--William Weld, a former Massachusetts governor who ran for vice president on the Libertarian Party ticket in 2016, became the first Republican to take a serious step toward challenging President Donald Trump in 2020.

Speaking at a breakfast in New Hampshire today, Weld said he has created a presidential exploratory committee, blasting President Trump for putting the nation in “grave peril.”

“We have a president whose priorities are skewed towards promotion of himself rather than for the good of the country,” Weld said.  “He may have great energy and considerable raw talent but he does not use that in ways that promote democracy, truth, justice and equal opportunity for all.  To compound matters, our president is simply too unstable to carry out the duties of the highest executive office in the land.”

--Virginia Gov. Ralph Northam (Dem.) defended his ability to lead and heal the state’s racial wounds in his first on-camera interview since the revelation of racist photos that threaten to derail his governorship.

“Right now, Virginia needs someone that can heal. There’s no better person to do that than a doctor,” Northam says in an interview with journalist Gayle King for CBS’ “Face the Nation.”

“Virginia also needs someone who is strong, who has empathy, who has courage and who has a moral compass.  And that’s why I’m not going anywhere.”

In an interview with the Washington Post the day before his sit-down with Mrs. King, Northam still contended he is not in the photograph of one person in blackface and another in a KKK robe but could not say how it would up on his yearbook page, nor why he initially took responsibility for it, other than to say that he was ‘shocked’ when he first saw it on an iPhone the afternoon of Feb. 1.

“I overreacted,” he said, by putting out a statement taking blame for the picture.

So here we are, this flat-out idiot still governor and, it would appear, governor for the rest of his term (three more years). 

A Washington Post-Schar School poll, released last weekend, found Virginia is literally split over Northam’s fate, with 47 percent wanting him to step down and 47 percent saying he should stay on.  Blacks say he should remain in office by a 58-37 margin.

I waited my 24 hours.  He should have resigned.

But then the state’s lieutenant-governor, Mr. Fairfax, and the attorney general, are also sticking around.

--In a Siena Research Institute poll released Monday, New York Gov. Andrew Cuomo’s favorability rating plummeted in the past month, with 43 percent having a favorable impression, 50 percent viewing him unfavorably.

But in terms of job performance, 35 percent approve, 64 percent disapprove, which is kind of stunning.

Last month, 51 percent had a favorable view of the governor, and 43 percent approved of the job he was doing.  This is the lowest favorability rating for Cuomo in the Siena survey.

Sen. Chuck Schumer’s favorability rating, at 47-46 positive, is the lowest for him.

--A new poll of New Jersey voters has given Gov. Phil Murphy (Dem.) a 43 percent approval rating after his first full year in office, compared to 40 percent who disapprove, essentially the same split as April 2018.

But 66 percent approve of the $15 minimum wage bill he recently signed into law.

--Mexico’s most notorious drug lord, Joaquin “El Chapo” Guzman (aka ‘Shorty’), was convicted Tuesday of running an industrial-scale smuggling operation after a three-month trial packed with Hollywood-style tales of grisly killings, political payoffs, cocaine hidden in jalapeno cans (contact highs for the packers), and a naked escape with his mistress through a tunnel.

The 61-year-old escape artist will be behind bars for decades in a maximum-security U.S. prison selected to thwart another one of the breakouts that embarrassed his native country.

But a major ‘thank you’ to the brave jurors, whose identities, needless to say, were kept secret.  That took major guts.

--It’s over.  After almost 15 years, NASA’s Mars Opportunity rover was declared dead.

“It is therefore that I am standing here with a deep sense of appreciation and gratitude that I declare the Opportunity mission is complete,” said Thomas Zurbuchen, NASA’s associate administrator for science.

Opportunity was designed to last only three months, but instead, the rover provided scientists a close-up view of Mars that they had never seen: “finely layered rocks that preserved ripples of flowing water several billion years ago, a prerequisite for life.”

Opportunity and Spirit, a twin rover that survived until 2010, provided NASA with a continuous robotic presence on Mars for more than 15 years.

And it continues. Curiosity, a larger, more capable rover that arrived in 2012, is doing its thing, and NASA is planning to launch another next year.

In the case of Opportunity, it was silenced by a giant dust storm last summer, and NASA kept calling it...the last time Tuesday.  It had been quiet since June.  NASA said that during the dust storm, the rover’s solar panels couldn’t generate enough power to keep the spacecraft awake.

Opportunity landed on Mars on Jan. 24, 2004, three weeks after Spirit, which set down on the opposite side of the planet.

Prior to this, NASA had two embarrassing failures, one when there was a mix-up between English and metric units.

But then successes beyond anything NASA could have imagined.

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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 closed at $1325
Oil $55.79

Returns for the week 2/11-2/15

Dow Jones  +3.1%  [25883]
S&P 500  +2.5%  [2775]
S&P MidCap  +3.3%
Russell 2000  +4.2%
Nasdaq  +2.4%  [7472]

Returns for the period 1/1/19-2/15/19

Dow Jones  +11.0%
S&P 500  +10.7%
S&P MidCap  +15.1%
Russell 2000  +16.4%
Nasdaq  +12.6%

Bulls 49.5
Bears 21.5

Have a great week and President’s Day holiday.

Pitchers and catchers have reported!

*I had a gremlin on the site last week and I apologize for the alignment of this column.  This happens a few times a year and I never know what has caused it.

Thank you for your support lo these many years.

Brian Trumbore

 

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