Week in Review

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Week in Review

11/24/2018

For the week 11/19-11/23

[Posted 11:30 PM ET, Friday]

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Edition 1,024

Trump World

I keep thinking of Republican Senator Ben Sasse (Neb.)  these days for a comment he’s made on various shows, touting his book, “Them: Why We Hate Each Other – And How To Heal,” and his point that it’s sad how politics has become the center of our discourse, “a tribe of people who think politics are the center of life.” 

In an interview with NPR, Sasse said: “Politics, again, are really important, but it’s a place to do specific things to maintain a framework for ordered liberty so that communities of love and persuasion and volunteerism can actually thrive and flower.

“The things that make Americans happy are – do you have a nuclear family?  Do you have a few deep friendships?  Do you have meaningful callings?  Do you have shared work?  Do you have shared vocations?  Do you  have local worshipping communities?  All of those things are connected to place, and place is being undermined by the digital revolution right now.”

I hate that I have to write about politics as much as I do these days, but it is where we are, under President Donald Trump.  Gone are the days of me opining on one or two legislative issues, like ObamaCare, or tax cuts...and the deficit.  Today, so many of us are in our little silos...easily broken down to CNN or Fox, which is why I watch a ton of both to do my job properly.

I know I’ve lost a lot of readers the last year in particular.  I also know I’ve picked up more than a few, mostly from overseas.  Hell, in a lot of countries where I’m still not blocked because I’m not big enough to trigger the censors, I’ve received emails thanking me for being their best source of news.

But I think of Sen. Sasse, who I know wants to run for president someday but he just wouldn’t play well across America (though I personally like him), because he is so right.  It really blows that politics is the center of our universe; and that it’s not just about anything else these days.

So we just had another extraordinary week in Trump World.  Regardless of which tribe you’re in, you know the drill by now.  If President Trump isn’t dominating the network and cable news coverage, he’ll do something about it.  I was still holding out hope, though, that maybe, just maybe, he’d leave us all alone for Thanksgiving, but, alas, he gave an impromptu press conference, after airing his grievances with the troops he was supposed to be addressing thusly, “All Americans love you, and we thank you for your service, and we’re sorry you can’t be with your families today, but just know the American people are eternally grateful...you are the defenders of all that makes this country great.”  Something like that.

Instead, the president actually told the soldiers on the other end of the line of how he is being attacked in the Ninth Circuit, and the problems at the border, and this in a week where he had the temerity to go after the leader of the Navy SEALs who took out Osama bin Laden.

Some of it started in an interview with Fox News’ Chris Wallace, but what dominated much of the coverage this week was the fallout from the following....

President Trump released an extensive statement early Tuesday defending Saudi Arabia as an important counterweight in the Middle East to Iran and extolled what he described as a Saudi pledge to spend $450 billion in the United States.  The president also questioned whether Saudi Crown Prince Mohammed bin Salman was involved in journalist Jamal Khashoggi’s death, despite the CIA reportedly concluding that the crown prince was responsible for the murder, Trump issuing his statement before the CIA released its formal conclusions.

Trump later told reporters at the White House that breaking with the Saudis, the leader of OPEC, would send oil prices “through the roof.”  The following is filled with lies, distortions and slander.

Statement from President Donald Trump, Tues., Nov. 20.

“The world is a very dangerous place!

“The country of Iran, as an example, is responsible for a bloody proxy war against Saudi Arabia in Yemen, trying to destabilize Iraq’s fragile attempt at democracy, supporting the terror group Hezbollah in Lebanon, propping up dictator Bashar Assad in Syria (who has killed millions of his own citizens), and much more.   Likewise, the Iranians have killed many Americans and other innocent people throughout the Middle East.  Iran states openly, and with great force, ‘Death to America!’ and ‘Death to Israel!’ Iran is considered ‘the world’s leading sponsor of terror.’

“On the other hand, Saudi Arabia would gladly withdraw from Yemen if the Iranians would agree to leave. They would immediately provide desperately needed humanitarian assistance. Additionally, Saudi Arabia has agreed to spend billions of dollars in leading the fight against Radical Islamic Terrorism.

“After my heavily negotiated trip to Saudi Arabia last year, the Kingdom agreed to spend and invest $450 billion in the United States. This is a record amount of money. It will create hundreds of thousands of jobs, tremendous economic development, and much additional wealth for the United States.  Of the $450 billion, $110 billion will be spent on the purchase of military equipment from Boeing, Lockheed Martin, Raytheon and many other great U.S. defense contractors.  If we foolishly cancel these contracts, Russia and China would be the enormous beneficiaries – and very happy to acquire all of this newfound business. It would be a wonderful gift to them directly from the United States!

“The crime against Jamal Khashoggi was a terrible one, and one that our country does not condone. Indeed, we have taken strong action against those already known to have participated in the murder. After great independent research, we now know many details of this horrible crime. We have already sanctioned 17 Saudis known to have been involved in the murder of Mr. Khashoggi, and the disposal of his body.

“Representatives of Saudi Arabia say that Jamal Khashoggi was an ‘enemy of the state’ and a member of the Muslim Brotherhood, but my decision is in no way based on that – this is an unacceptable and horrible crime.  King Salman and Crown Prince Mohammad bin Salman vigorously deny any knowledge of the planning or execution of the murder of Mr. Khashoggi. Our intelligence agencies continue to assess all information, but it could very well be that the Crown Prince had knowledge of this tragic event – and maybe he did and maybe he didn’t!

“That being said, we may never know all of the facts surrounding the murder of Mr. Jamal Khashoggi.  In any case, our relationship is with the Kingdom of Saudi Arabia. They have been a great ally in our very important fight against Iran. The United States intends to remain a steadfast partner of Saudi Arabia to ensure the interests of our country, Israel and other partners in the region.  It is our paramount goal to fully eliminate the threat of terrorism throughout the world!

“I understand there are members of Congress who, for political and other reasons, would like to go in a different direction – and they are free to do so.  I will consider whatever ideas are presented to me, but only if they are consistent with the absolute security and safety of America. After the United States, Saudi Arabia is the largest oil producing nation in the world. They have worked closely with us and have been very responsive to my requests to keeping oil prices at reasonable levels – so important for the world.  As President of the United States I intend to ensure that, in a very dangerous world, America is pursuing its national interests and vigorously contesting countries that wish to do us harm.  Very simply it is called America First!”

Later in the day, Tuesday, Trump told reporters that the CIA had “nothing definitive” on Prince Mohammed’s involvement.

But there have been numerous media reports that the CIA believes Mohammed bin Salman ordered the murder.  The assessment hasn’t been publicly released, although officials told the Wall Street Journal it includes U.S. electronic intercepts and material provided by Turkey.

In an interview on Sunday, President Trump told Fox News that he had refused to listen to a recording of Khashoggi’s murder provided by Turkey, calling it “a suffering tape.”  But it’s his responsibility to do so!

Republican Senator Bob Corker and Democrat Bob Menendez issued a statement on behalf of the Senate Foreign Relations Committee, calling on Mr. Trump to focus a second investigation specifically on the crown prince so as to “determine whether a foreign person is responsible for an extrajudicial killing, torture or other gross violation” of human rights.

The request, issued under the Global Magnitsky Human Rights Accountability Act, requires a response within 120 days.

Separately, Sen. Corker tweeted: “I never thought I’d see the day a White House would moonlight as a public relations firm for the Crown Prince of Saudi Arabia.”

Sunday, in Papua New Guinea, Vice President Mike Pence had sounded a tougher note:

“The murder of Jamal Khashoggi was an atrocity, and the U.S. is absolutely committed to ensuring that all of those responsible are held accountable.”

So President Trump’s first tweet early Thanksgiving Day was the following:

“ ‘It’s a mean & nasty world out there, the Middle East in particular. This is a long and historic commitment, & one that is absolutely vital to America’s national security.’ @SecPompeo I agree 100%. In addition, many Billions of Dollars of purchases made in U.S., big Jobs & Oil!”

This was followed by:

“HAPPY THANKSGIVING TO ALL!”

Sen. Lindsey Graham, who has become one of President Trump’s staunchest allies, warned the president Tuesday that ignoring Saudi Arabia’s bad behavior would risk America’s moral leadership on the world stage.

Graham said Saudi Arabia must he held accountable for Khashoggi’s death.

“It is not in our national security interests to look the other way when it comes to the brutal murder of Mr. Jamal Khashoggi,” Graham said in a statement Tuesday.

“I fully realize we have to deal with bad actors and imperfect situations on the international stage,” Graham said.  “However, when we lose our moral voice, we lose our strongest asset.”

Graham added the Senate should take action by voting on sanctions legislation.

“I firmly believe there will be strong bipartisan support for serious sanctions against Saudi Arabia, including appropriate members of the royal family, for this barbaric act which defied all civilized norms,” Graham said in his statement.  “While Saudi Arabia is a strategic ally, the behavior of the Crown Prince – in multiple ways – has shown disrespect for the relationship and made him, in my view, beyond toxic.”

Graham is one of several Republican co-sponsors of the Saudi Accountability and Yemen Act, which would suspend weapons sales to Saudi Arabia, prohibit U.S. planes from refueling Saudi-led coalition aircraft involved in the war in neighboring Yemen, and require a report on human rights abuses in Saudi Arabia.

Other Republicans chimed in, such as Sen. Rand Paul (Ky.), who criticized Trump’s statement as promoting a “Saudi Arabia First” policy instead of an “America First” doctrine.

Paul wants legislation blocking any arms sales to the kingdom.

Sen. Jack Reed (R.I.), the top Democrat on the Senate Armed Services Committee, accused President Trump of aiding in a cover-up by Saudi leadership after the president indicated he would not take further action against the kingdom.

“This White House statement is a stunning window into President Trump’s autocratic tendencies, his limited grasp of world affairs, and his weakness on the world stage,” Reed said in a statement.  “It is shocking to see President Trump continue to act as an accomplice to a clear cover up by Saudi leadership.”

Meanwhile, a Turkish newspaper reported on Thursday that CIA Director Gina Haspel signaled to Turkish officials last month that the agency had a recording of a call in which Saudi Arabia’s crown prince gave instructions to “silence” Khashoggi, if true, a “smoking gun.”  Asked about the report, a Turkish official told Reuters he had no information about such a recording.

When asked about the recording by reporters in Florida, President Trump said, “I don’t want to talk about it.  You’ll have to ask them.”

The CIA declined to comment on the report. 

The Hurriyet newspaper journalist wrote the purported call took place between MBS and his brother, Saudi Arabia’s ambassador to Washington.  “It is being said that CIA chief Gina Haspel indicated this during her visit to Turkey,” he wrote, adding that they had discussed Khashoggi, a critic of the kingdom’s de facto ruler.  “It is being said the crown prince gave orders to ‘silence’ Jamal Khashoggi as soon as possible,” in a call which was monitored by the U.S. agency, the journalist said.

Again, Trump said the CIA had not definitively concluded that the crown prince was responsible, and said he would stand by Saudi Arabia’s leadership because it was a key U.S. ally. “We want low oil prices and Saudi Arabia has really done a good job in that respect,” Trump said at his impromptu presser Thursday.  “I hate the crime. I hate what’s done. I hate the cover up. And I tell you what: the crown prince hates it more than I do,” the president said, without providing further detail.

Asked who might be behind Khashoggi’s murder, Trump said the Saudi royal family “vehemently denied” the prince was involved.

“Maybe the world should be held accountable because the world is a vicious place,” Trump said.

Saudi Foreign Minister Adel al-Jubeir warned that any attempt to penalize the royal family for Khashoggi’s death would be a “red line” that cannot be crossed.

Al-Jubeir told the BBC late Wednesday, referring to the crown prince and his father, King Salman.

“They represent every Saudi citizen, and every Saudi citizen represents them. And we will not tolerate any discussion of anything that is disparaging towards our monarch or our crown prince.”

Opinion....both sides....

Editorial / Wall Street Journal

“President Trump did himself and the country no favor with his crude statement Tuesday on the U.S. relationship with Saudi Arabia in the aftermath of Jamal Khashoggi’s murder by Saudi Agents.

“Commenting on whether Crown Prince Mohammed bin Salman knew about the murder, Mr. Trump said in a statement only he could have written: ‘Maybe he did and maybe he didn’t!’

“We are unsure of the purpose of the exclamation point here, just as we are unsure what goal Mr. Trump hoped to achieve with what can only be described as a raw and brutalist version of foreign-policy realpolitik.

“The bloody realities of the Middle East and the clear threat from Iran, which Mr. Trump described in his statement, give any U.S. President some latitude in forging a policy toward the region that reflects America’s interests.

“But we are aware of no President, not even such ruthless pragmatists as Richard Nixon or Lyndon Johnson, who would have written a public statement like this without so much as a grace note about America’s abiding values and principles. Ronald Reagan especially pursued a hardline, often controversial, foreign policy against Soviet Communism, but he did so with a balance of unblinkered realism and American idealism.  Mr. Trump seems incapable of such balance.

“It is startling to see a U.S. President brag in a statement about a bloodthirsty murder that, in his ‘heavily negotiated trip to Saudi Arabia’ last year, he did $450 billion in commercial deals, including $110 billion to benefit Boeing, Lockheed Martin, Raytheon and ‘many other great defense contractors.’  From Mr. Trump’s point of view, U.S. interests in the Middle East can be reduced to arms deals, oil and Iran. That is crass; no other word suffices.

“We don’t mean to join the critics who through moralizing glasses seem to be suggesting that the U.S. has no choice other than to sever its relationship with Saudi Arabia over this murder.  That wouldn’t cause the Saudis to change their behavior or serve U.S. interests. The Saudis, as Mr. Trump asserted, are important allies in a still-dangerous war against Middle Eastern terror fomented and supported by the mullahs in Iran.

“But Crown Prince Salman’s misjudgments have sometimes made protecting U.S. interests in the Middle East more difficult. He has shown himself to be reckless in his prosecution of the war in Yemen and willful in his dispute with Qatar. Even if he did not sanction Khashoggi’s murder, it’s clear he was aware that the journalist would be kidnapped and brought back to the Kingdom.

“That too is bad judgment that should raise doubts about the Crown Prince’s reliability and effectiveness as an ally.  The risk is that Mr. Trump’s public reduction of the relationship to crass interests is that the Crown Prince will feel he can do anything and suffer no diminution of U.S. support.  We hope Secretary of State Mike Pompeo and National Security Adviser John Bolton are delivering a much tougher message in private.

“Like any President, Mr. Trump also needs domestic allies in pursuit of a foreign policy that sometimes requires hard choices. Instead, Mr. Trump’s statement isolates him from his natural supporters on Mideast policy, such as Senator Lindsey Graham or Senator-elect Mitt Romney, who both separated themselves Tuesday from the President’s position.

“The reality is that few members of Congress will align themselves with a statement bereft of asserting America’s abhorrence for the murder of political opponents. Without political or public support, Mr. Trump diminishes the odds that his Middle East strategy will succeed.”

Michael Doran and Tony Badran / New York Times

“There’s not much Republicans and Democrats agree on nowadays, but President Trump’s expression of support for Saudi Arabia on Tuesday in the wake of the Jamal Khashoggi killing managed to unite them.  Democratic and Republican leaders declared that the president’s statement was dishonest, morally blinkered and strategically obtuse.

“True, Mr. Trump’s sidestepping of reports that the CIA believes that Crown Prince Mohammed bin Salman ordered the killing as ‘Maybe he did and maybe he didn’t!’ was jarring. But every president since Harry Truman has aligned with unsavory Middle Eastern rulers in the service of national interests. The difference here is that Mr. Trump seemed unapologetic about this state of affairs with only a passing nod to the affront to our values that Mr. Khashoggi’s murder represents.

“That’s nothing to cheer. But it is vitally important to evaluate the policy on its merits more than its mode of expression....

“Let’s start with the question of honesty. Critics focused on Mr. Trump’s claim that ‘we may never know all of the facts surrounding’ Mr. Khashoggi’s death, highlighting the contradiction between this energetic uncertainty and the reported assessment of the CIA.

“Presidents, however, routinely advance useful fictions.

“President Barack Obama, for example, helped sell his nuclear agreement with Iran by claiming that Iran’s supreme leader, Ayatollah Ali Khamenei, had issued a fatwa against the development of nuclear weapons.  No bipartisan clutch of senators insisted that Mr. Obama’s claims clashed with the views of intelligence analysts, who possessed hard evidence of a nuclear weapons program.

“The true test of whether a presidential fiction is acceptable is whether the strategy it serves is sound.

“In Mr. Obama’s case, the answer was no, because his policy did not actually stop Iran’s nuclear program. It only delayed it, and, in the meantime, strengthened Iran without moderating Tehran’s fundamental anti-Americanism. But Mr. Trump understands the centrality of Riyadh in the effort to counter a rising Iran and he is rightly unwilling to allow the murder of Mr. Khashoggi to imperil that strategy....

“His critics would say that Mr. Trump is now similarly emboldening a reckless Saudi regime.

“This is a false analogy. The Saudis are not the moral equivalents of Iranians and the Russians. The kingdom has sheltered comfortably for over 75 years under the American security umbrella, which the United States happily extended not least because the Saudis and their oil have played a pivotal role in American economic strategies.  Mr. Trump’s statement acknowledged that the Saudis are assisting him with stabilizing global oil prices as he seeks to quash Iranian oil sales.

“Whatever Prince Mohammed’s faults may be, he actively supports the American regional order that the Iranians openly seek to destroy.

“Mr. Trump’s critics are asking us to believe that the priority for stabilizing the Middle East today is distancing the United States from one of its oldest allies and instead working to achieve a balance of power between Riyadh and Tehran. The Saudis, they claim, need us far more than we need them.

“This is a dangerous assumption that is not born out by experience.  In recent years all of America’s allies, from Mr. Sisi in Egypt to Recep Tayyip Erdogan in Turkey to Benjamin Netanyahu in Israel, have begun spending as much time in Moscow as in Washington. Why would we think the Saudis might not also seek protection from Russia if they are shunned by America?

“Instead of standing with the Saudis, Mr. Trump’s critics call for, as Senator Lindsey Graham recently did, sanctions that would persuade King Salman to appoint a new crown prince. But King Salman is not the de facto ruler of Saudi Arabia; Prince Mohammed is. A policy that seeks to change the king’s mind is based on a delusion that is far more deranged than anything in Mr. Trump’s statement.

“Let’s imagine Mr. Trump’s critics get their wish. A replacement crown prince who rose to power under pressure of sanctions would be severely weakened, if not entirely illegitimate. This would serve only to validate Al Qaeda’s anti-Saudi ideology, which depicts the royal family as American stooges.  Would a compromised crown prince be a more reliable partner for the United States in stabilizing the Middle East?

“In all likelihood, sanctions would simply embitter Prince Mohammed, who would respond by tacking toward Russia and China. The United States could console itself by celebrating its staunch commitment to principle, but its influence would diminish considerably.

“Less likely but worth keeping in mind is the worst-case scenario.  Prince Mohammed’s enemies, inside and outside the kingdom, are numerous, and American sanctions on him would put a target on his back. In a violent succession battle, what horrific forces would be unleashed?  Outside actors, such as Iran and Russia, coveting control of the kingdom’s oil wealth and influence over the Islamic holy cities, would rush in. The United States would find itself embroiled in another civil war as in Syria.

“In either scenario, Iran would rejoice. Critics of Mr. Trump’s Saudi policy are already demanding that the United States pressure the kingdom to end the war in Yemen without so much as mentioning the need to ensure that the country does not become another base, like Lebanon, for Iran.

“The murder of Mr. Khashoggi was a brutal and grotesque act.  The United States has registered its feelings loudly and clearly by putting sanctions on the 17 men who were directly involved in the killing.  Punishing the de facto leader of Saudi Arabia will not bring justice for Mr. Khashoggi, nor will it make Saudi Arabia a more dependable ally. It will simply diminish the influence of the United States and embolden its enemies.

“The biblical advice to be as ‘wise as serpents, and harmless as doves’ offers sound counsel to anyone who seeks to see their principles influence the world. The advice of Mr. Trump’s critics is long on abstract morality but lacking in strategic wisdom.”

Editorial / New York Times

“In simplistic and often inaccurate terms, (the president’s) statement reflected Mr. Trump’s view that all relationships are transactional, and that moral or human rights considerations must be sacrificed to a primitive understanding of American national interests – or as he put it, ‘America first!’  ‘We may never know all of the facts surrounding the murder of Mr. Jamal Khashoggi,’ the president declared.  ‘In any case, our relationship is with the Kingdom of Saudi Arabia.’

“Mr. Trump’s first reference to Mr. Khashoggi came only after a long riff about Iran, which Mr. Trump depicted, remarkably, as solely responsible for the war in Yemen. With disregard for the abundant evidence that Saudi Arabia has waged an indiscriminate air campaign that is responsible for a humanitarian disaster, he claimed that the Saudis would ‘gladly’ withdraw if Iran did, and would provide humanitarian assistance. That was followed by a passage on the tens of billions of dollars in arms sales and investment Mr. Trump claims he has extracted from Saudi Arabia – claims that are vastly overblown.

“When Mr. Trump did briefly note Mr. Khashoggi’s murder – ‘a terrible one’ – the president repeated Saudi slanders that the journalist was an ‘enemy of the state’ and an Islamist, disingenuously adding that this did not affect his thinking. It’s not the first time Mr. Trump has suggested that this is not someone for whom America should jeopardize its interests.”

Robert Robb / Arizona Republic

“The House of Saud relies on two things to keep their rickety hereditary monarchy in power. The first is brutish repression. The second is subventions and subsidies to keep the populace sedated.

“Simply put, the House of Saud needs the money.

“Despite duping U.S. presidents of both parties and virtually all of the foreign policy establishment, Saudi Arabia has never been a U.S. ally.  The only interest the House of Saud has ever had regarding America is to get us to fight their fights for them.

“In that, they have succeeded mightily. And never more so than with the neoconservative conviction, embraced fully by President Donald Trump and his administration, that containing and deterring Iran should be a principal U.S. objective in the region.

“Saudi Arabia has persuaded U.S. leaders that we should enter its regional competition for influence with Iran fully and unreservedly on the side of Saudi Arabia. And align ourselves completely with the regional Sunni powers, particularly Saudi Arabia and Egypt, irrespective of how reprehensible their domestic policies are or become.

“Which brings us to Israel.  Iran does still threaten to destroy Israel, and it also issues threats against the United States. But unlike America, Iran can reach Israel.

“By contrast, Saudi Arabia and the other Sunni regional powers have established a sort of cold peace with Israel.

“Israel is a brave country in a dangerous neighborhood. It is the only true U.S. ally in the region.

“The United States should be willing to sell Israel the armaments needed to protect itself. And defend the country against calumnies in international forums, such as the United Nations.

“But U.S. interests aren’t advanced by offering Israel formal or de facto security guarantees. Its fights shouldn’t automatically become our fights.

“There is a six-decade history of maladroit U.S. involvement in the snake pit of the Middle East’s geopolitics. Not much of an argument can be made that those interventions have made the Middle East better.  Or America safer.

“U.S. interests lie in being as insulated from the snake pit as possible.”

Fred Ryan / publisher and chief executive of The Washington Post

“A clear and dangerous message has been sent to tyrants around the world: Flash enough money in front of the president of the United States, and you can literally get away with murder.

“In a bizarre, inaccurate and rambling statement – one offering a good reminder why Twitter has character limits – President Trump whitewashed the Saudi government’s brutal murder of journalist Jamal Khashoggi.  In the process, the president maligned a good and innocent man, tarring Khashoggi as an ‘enemy of the state’ – a label the Saudis themselves have not used publicly – while proclaiming to the world that Trump’s relationship with Saudi Arabia’s 33-year-old crown prince was too important to risk over the murder of a journalist. Whatever objections people may have to our turning a blind eye to Khashoggi’s assassination, the president argued, they do not outweigh the (grossly inflated) revenue we can expect from U.S.-Saudi arms deals....

“When officials here in Washington abandon the principles that the people elected them to uphold, it is our duty to call attention to it. For our part, we will continue to do everything possible to expose the truth – asking tough questions and relentlessly chasing down facts to bring crucial evidence to light.

“Throughout this crisis, the president has maintained that he’s looking after our ‘national interests.’  But Trump’s response doesn’t advance the United States’ interests – it betrays them.  It places the dollar values of commercial deals above the long-cherished American values of respecting liberty and human rights. And it places personal relationships above the United States’ strategic relationships. For more than 60 years, the U.S.-Saudi partnership has been an important one based on trust and respect; Trump has determined that the United States no longer requires honesty and shared values from its global partners.

“Security, as Trump noted in his statement, is an important U.S. interest. But we do not make the world safer by setting a double standard for diplomacy under which the United States abandons our values for anyone who offers to buy enough of our weapons.

“We do not make the world safer by abandoning our commitment to basic freedoms and human rights.  Under Crown Prince Mohammed bin Salman, Saudi Arabia has committed atrocities that, if perpetrated by other countries, would draw a strong rebuke from the United States.  Its intervention in Yemen has created a humanitarian disaster. Female activists have been imprisoned and brutalized simply for demanding the right to drive. Inconvenient Saudi business leaders were tortured inside a Ritz-Carlton hotel.  Lebanon’s prime minister was kidnapped. The crown prince, in the role for barely 17 months, has led a reign of terror and has already established a dark legacy of opposing press freedom.

“Failing to demand accountability for these crimes does not make the United States more secure. Stable, peaceful societies, governed by leaders who respect the rights of their people, need journalists who can expose wrongdoing and hold the powerful to account.  It is no mere coincidence that many of the worst abusers of press freedom are also some of the world’s most dangerous actors.

“The CIA has thoroughly investigated Khashoggi’s murder and concluded with high confidence that it was directed by the crown prince.  If there is reason to ignore the CIA’s findings, the president should immediately make that evidence public....

“Presidents from John F. Kennedy to Ronald Reagan – and many before and after – took courageous stands for human rights and press freedom when much more than weapons sales were at risk. Through these acts of presidential leadership, the world has come to know that America’s power is derived from America’s principles.

“On Thanksgiving Day, Americans can be grateful that we live under  a Constitution that ensures the rule of law rather than the role of one capricious man, and that it enables one branch of government to correct the failure of another.  We are eternally thankful for the brave men and women whose military service has long preserved those rights, and for the courage of first responders who are there to protect us when disasters strike at home.

“We can also be thankful that we have a vibrant press, protected by the First Amendment, that relentlessly seeks to hold the powerful to account. We can trust that they will fulfill this mission in the case of Jamal Khashoggi. This pursuit of truth and justice is what an innocent man, brutally slain, deserves – and what America’s real values demand.”

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And then we had the battle on Wednesday, as Chief Justice John Roberts defended the independence and integrity of the federal judiciary in an extraordinary statement rebuking President Trump’s criticism of a judge who ruled against the administration’s asylum policy.

Chief Justice Roberts was clearly offended by Mr. Trump’s assertion that Judge Jon S. Tigar, of the U.S. District Court in San Francisco, was “an Obama judge.”

Roberts sad the president deeply misunderstood the role of the judiciary.

“We do not have Obama judges or Trump judges, Bush judges or Clinton judges,” Roberts wrote in a statement.  “What we have is an extraordinary group of dedicated judges doing their level best to do equal right to those appearing before them.  That independent judiciary is something we should all be thankful for.”

The chief justice issued the statement on request from the Associated Press, which sought his comment on Trump’s remark Tuesday concerning the asylum ruling, which ordered the administration to resume accepting asylum claims from migrants no matter where or how they entered the United States.

Trump had also singled out the United States Court of Appeals for the Ninth Circuit, based in San Francisco, calling it a lawless disgrace and threatening unspecified retaliation.

“That’s not law,” he said of the court’s rulings.  “Every case that gets filed in the Ninth Circuit we get beaten.”

“It’s a disgrace,” said the president.

Trump also tweeted:

“Sorry Chief Justice John Roberts, but you do indeed have ‘Obama judges,’ and they have a much different point of view than the people who are charged with the safety of our country. It would be great if the 9th Circuit was indeed an ‘independent judiciary,’ but if it is why....

“....are so many opposing view (on Border and Safety) cases filed there, and why are a vast number of those cases overturned.  Please study the numbers, they are shocking.  We need protection and security – these rulings are making our country unsafe!  Very dangerous and unwise!”

But, again, what Chief Justice Roberts did was extraordinary in that it was the first time the leader of the federal judiciary has offered even a hint of criticism of Trump, who blasts any federal judge who rules against him.

Previously, Trump used the term a “so-called judge” after the first federal ruling against his travel ban.

The Washington Post reported Thursday that the administration is preparing to implement sweeping new measures that will mean those arriving at U.S. border crossings seeking asylum will have to wait in Mexico while their claims are processed.

The plan, called “Remain in Mexico,” amounts to a major break with current screening procedures, which generally allow those who establish a fear to return to their home countries to avoid immediate deportation and remain in the United States until they can get a hearing with an immigration judge.  Trump despises this system, what he calls “catch and release,” and has long vowed to end it.

Trump, after Roberts’ statement, continued tweeting about it, including Thanksgiving morning.

“Justice Roberts can say what he wants, but the 9th Circuit is a complete & total disaster. It is out of control, has a horrible reputation, is overturned more than any Circuit in the Country, 79%, & is used to get an almost guaranteed result. Judges must not Legislate Security...

“...and Safety at the Border, or anywhere else.  They know nothing about it and are making our Country unsafe.  Our great Law Enforcement professionals MUST BE ALLOWED TO DO THEIR JOB!  If not there will be only bedlam, chaos, injury and death. We want the Constitution as written!”

It is true that conditions are deteriorating inside the makeshift refuge at the sports center in Tijuana, where about 4,500 Central American migrants are sheltered, and Tijuana officials are scrambling to find another location for new arrivals.  Thousands more Central Americans are traveling through Mexico and on the way to Tijuana, according to the latest estimates from U.S. Customs and Border Protection field offices.

Trumpets....

--In his extraordinary interview with Fox News’ Chris Wallace on Sunday, Wallace pressed President Trump on many of the major issues of the day, including Trump’s attacks on the media and his critics, but it was the attack on William McRaven that was perhaps most astounding, and amazingly stupid.

WALLACE: Bill McRaven, retired admiral, Navy SEAL, 37 years, former head of U.S. Special Operations –

TRUMP: Hillary Clinton fan.

WALLACE: Special Operations –

TRUMP: Excuse me, Hillary Clinton fan.

WALLACE: Who led the operations, commanded the operations that took down Saddam Hussein and that killed Osama bin Laden says that your sentiment is the greatest threat to democracy in his lifetime.

“TRUMP: Okay, he’s a Hillary Clinton, uh, backer and an Obama-backer and frankly –

WALLACE: He was a Navy SEAL 37 years –

TRUMP: Wouldn’t it have been nice if we got Osama bin Laden a lot sooner than that?  Wouldn’t it have been nice?  You know, living – think of this – living in Pakistan, beautifully in Pakistan in what I guess they considered a nice mansion, I don’t know, I’ve seen nicer. But living in Pakistan right next to the military academy, everybody in Pakistan knew he was there. And we give Pakistan $1.3 billion a year and they don’t tell him, they don’t tell him –

WALLACE: You’re not even going to give them credit –

TRUMP: For years –

WALLACE: - for taking down bin Laden?

Once again, the president disses a decorated veteran.

Admiral McRaven told CNN’s Jake Tapper: “I did not back Hillary Clinton or anyone else.  I am a fan of President Obama and President George W. Bush, both of whom I worked for.  I admire all Presidents, regardless of their political party, who uphold the dignity of the office...”

Republican Sen. Marco Rubio:

“I don’t know if Adm. William McRaven shares my political views or not. But I do know that few Americans have sacrificed or risked more than he has to protect America & the freedoms we enjoy,” Rubio tweeted.  “His military career exemplified honor & excellence.  I am grateful for his service.”

Retired Gen. Stanley McChrystal said the military needs to have “confidence” in the leaders who send them into harm’s way.

“We have certain things we want and demand of leaders,” McChrystal said on CNN’s ‘Newsroom.’  “And to a degree, there has to be a confidence in the leader’s basic core values.  We have to be able to believe in enough of what that leader represents to feel comfortable following them, sometimes to our deaths.”

McChrystal, who commanded Army troops in Afghanistan, suggested that Trump’s chiding McRaven reveals his disregard for the U.S. military, despite the president’s claims otherwise.

“The president didn’t go to Arlington Cemetery for Veterans’ Day, and maybe that’s honest, because if you really don’t care, it would be dishonest to pretend that you do,” he said.  “I think there’s a certain honesty to what’s happening now.”

Trump told Chris Wallace he regretted his decision not to go Arlington on Veterans’ Day, saying he was “extremely busy because of affairs of state.”

But President Trump knows only attack mode.  And he knows his base will be with him...at least thus far.  But such criticisms have become the new normal.

--President Trump submitted written answers to the special counsel, Robert Mueller, over alleged Russian meddling during the 2016 presidential campaign.

Trump’s lawyer, Rudy Giuliani, said some of the questions posed by Mueller had gone “beyond the scope of a legitimate inquiry.”

Last week the president said he had answered the questions “very easily.”

The other day the New York Times  reported, through unnamed sources, that Trump earlier this year requested that prosecutions be opened against Hillary Clinton and former FBI director James Comey, which was then rebuffed by White House Counsel Don McGahn, who advised the president to hold off in order to avoid opening himself up to accusations of abuse of power.

Trump, in his interview with Chris Wallace, said he would not overrule his acting attorney general, Matt Whitaker, if he decides to curtail the special counsel probe.

“Look, it’s going to be up to him...I would not get involved,” Trump said.

--The Washington Post reported Ivanka Trump sent hundreds of emails last year to White House aides, Cabinet officials and her assistants using a personal account, many of them in violation of federal records rules, according to people familiar with a White House examination of her correspondence.

Aides were “startled by the volume” of Ivanka’s emails – “and taken aback by her response when questioned about the practice. She said she was not familiar with some details of the rules, according to people with knowledge of her reaction.”  [Carol D. Leonning and Josh Dawswy]

Yes, a bit of hypocrisy given Donald Trump’s criticisms of Hillary Clinton’s use of a personal email account while secretary of state (and private server...which is not what Ivanka had), but I can’t get worked up over this.

--Trump tweets:

“Of course we should have captured Osama Bin Laden long before we did.  I pointed him out in my book just BEFORE the attack on the World Trade Center.  President Clinton famously missed his shot.  We paid Pakistan Billions of Dollars & they never told us he was living there. Fools!...

“...We no longer pay Pakistan the $Billions because they would take our money and do nothing for us, Bin Laden being a prime example, Afghanistan being another.  They were just one of many countries that take from the United States without giving anything in return.  That’s ENDING!”

“Republicans and Democrats MUST come together, finally, with a major Border Security package, which will include funding for the Wall. After 40 years of talk, it is finally time for action. Fix the Border, for once and for all, NOW!”

“So funny to see little Adam Schitt (D-CA) talking about the fact that Acting Attorney General Matt Whitaker was not approved by the Senate, but not mentioning that Bob Mueller (who is highly conflicted) was not appointed by the Senate!”

Wall Street and Trade

In a dreadful week, the Dow Jones and S&P 500 gave up all their gains for the year and are now in the red, while Nasdaq is barely in positive territory, +0.5%.  I get into some of the reasons for the ugly two-week swoon that has seen the major averages decline 6% further below, but it’s about a global slowdown, ongoing trade tensions, poor corporate guidance in some key earnings reports, tough earnings comparisons going forward (Wall Street a supposedly forward-looking entity), debt markets rattled by the likes of General Electric, and lately, a collapse in the price of oil, which while great for consumers is causing more than a few oil company executives to throw up.

But perhaps the market weakness will convince the Federal Reserve to hold off for a spell on further rate hikes.  Or maybe not.  Dec. 18-19 is the next meeting of the Open Market Committee and the Street is more than a bit anxious.  We know President Trump will be ready to fire off some missives at a moment’s notice.

There was some economic news of import this week and housing starts for the month of October came in basically in line with expectations, while October existing home sales had their first increase in seven months, as reported by the National Association of Realtors, the median price of $255,000 up 3.8% year-over-year.

A figure on durable goods for October was down 4.4%, the biggest drop in 15 months, but ex-transportation (Boeing) it was up 0.1%.  I never make too much of this volatile number.

But it is interesting that the Atlanta Fed’s GDPNow barometer for the fourth quarter currently pegs growth at 2.5%.  We really need to see November numbers, though, before making too much of this decline from the prior two quarters’ figures of 4.2% and 3.5%.  And I hasten to add that there’s nothing wrong with 2.5%.

So it’s all eyes on the upcoming G-20 summit, and the Trump-Xi dinner, December 1. This week, President Xi warned at the Asia-Pacific Economic Cooperation (APEC) summit that countries which embrace protectionism are “doomed to failure,” in a veiled swipe at the United States’ America First policy.

Vice President Mike Pence, addressing the same group, said the U.S. was prepared to “more than double” the tariffs imposed on Chinese goods with trade tensions between the two remaining at a high level.

The White House says its tariffs are a response to China’s “unfair” trade policies, but Xi appeared to warn against any further escalation of tensions between the two countries.

“History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, will produce no winners... Attempts to erect barriers and cut close economic ties work against the laws of economics and the trends of history.

“This is a short-sighted approach and is doomed to failure,” adding that those who close their doors “will only cut himself off from the rest of the world and lose his direction.”

But Vice President Pence, who spoke directly after Xi, said the tariffs were a response to the “imbalance” with China.

“The United States, though, will not change course until China changes its ways.”

More broadly....

Editorial / South China Morning Post

“It was the great microchip heist – a stunning Chinese-backed effort that pilfered as much as U.S. $8.75 billion in patented American technology.

“U.S. officials say the theft took a year to pull off and involved commercial spies, a Chinese-backed company, a Taiwanese chip maker and employees affiliated with Micron Technology, a U.S.-based microchip behemoth.

“Yet what Micron called ‘one of the boldest schemes of commercial espionage in recent times’ is most notable because it is not unusual.

“Beijing over the last two years has significantly ramped up its swiping of commercial technology and intellectual property, from jet engines to genetically modified rice, as U.S. relations with China have grown more acrimonious under U.S. President Donald Trump, according to U.S. officials and security experts.

“ ‘They want technology by hook or by crook. They want it now. The spy game has always been a gentleman’s game, but China has taken the gloves off,’ said John Bennett, the special agent in charge of the FBI’s San Francisco office, which battles economic spies targeting Silicon Valley.

“ ‘They don’t care if they get caught or if people go to jail. As long as it justifies their ends, they are not going to stop.’

“The Trump administration has toughened its rhetoric against China and announced several dramatic arrests as the threats – and the costs – have soared.

“In a harshly worded speech last month, Vice President Mike Pence accused Chinese security agencies of masterminding the ‘wholesale theft of American technology.’

“China long has prioritized stealing U.S. intellectual property to boost its domestic industries and its rise as a global power, according to federal law enforcement officials.

“They say Beijing relies on an army of domestic computer hackers, traditional spies overseas and corrupt corporate insiders in U.S. and other companies.

“The surge in economic espionage comes as Trump has lobbed broadsides at China over trade, security and other issues....

“U.S. officials say Chinese thefts of U.S. commercial software and technology are relentless, growing and hitting on multiple fronts – with hackers penetrating corporate and government email and digital networks, and Chinese operatives recruiting U.S. executives and engineers to spill juicy secrets.

“The spike in hacking is taking place after a marked lull in such activity during the last two years of the Obama administration.”

Separately, the Wall Street Journal’s Stu Woo and Kate O’Keeffe reported:

“The U.S. government has initiated an extraordinary outreach campaign to foreign allies, trying to persuade wireless and internet providers in these countries to avoid telecommunications equipment from China’s Huawei Technologies Co., according to people familiar with the situation.

“American officials have briefed their government counterparts and telecom executives in friendly countries where Huawei equipment is already in wide use, including Germany, Italy and Japan, about what they see as cybersecurity risks, these people said.  The U.S. is also considering increasing financial aid for telecommunications development in countries that shun Chinese-made equipment, some of these people say.

“One U.S. concern centers on the use of Chinese telecom equipment in countries that host American military bases... The Defense Department has its own satellites and telecom network for sensitive communications, but most traffic at many military installations travels through commercial networks....

“The overseas push comes as wireless and internet providers around the world prepare to buy new hardware for 5G, the coming generation of mobile technology. 5G promises superfast connections that enable self-driving cars and the ‘Internet of Things,’ in which factories and such everyday objects as heart monitors and sneakers are internet-connected.

“U.S. officials say they worry about the prospect of Chinese telecom-equipment makers spying on or disabling connections to an exponentially growing universe of things, including components of manufacturing plants.”

Tuesday, the Trump administration said that China has failed to alter its “unfair” practices at the heart of the U.S.-China trade conflict, adding to tensions ahead of the G-20.  This came as part of an update of the U.S. Trade Representative’s “Section 301” investigation into China’s intellectual property and technology transfer policies, which sparked the tariffs on Chinese goods.

U.S. Trade Representative Robert Lighthizer said in a statement: “This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation.”

The office of the USTR said that China was continuing its policy and practice of conducting and supporting cyber-enabled theft of U.S. intellectual property and was continuing discriminatory technology licensing restrictions.

Editorial / Wall Street Journal

“With another 2% or so decline on Tuesday, U.S. stock indices have given up their gains for the year. The rout that started in tech stocks has moved to oil shares amid worries about global demand, as well as to retail stocks, which suggests concern about whether consumers will continue their pace of spending as asset prices fall.

“It’s a legitimate worry. The job market has been strong, and small business confidence remains high, but those tend to be lagging indicators. With the world economy showing strains, the chances of a significant U.S. growth slowdown can no longer be ruled out.  We’d note that our contributor Donald Luskin, the financial adviser and long-time growth optimist, has put himself on recession watch.

“Another reason to worry is...the sharp decline in the rate of growth in global trade in the first half of 2018.

“Trade flows aren’t a perfect proxy for GDP, but trade in an expanding economy tends to increase at a faster pace than overall growth. The average annual increase from 1987-2007 was 7.1%. Trade volume naturally fell during the recession but rebounded to 12% growth in 2010.  But it stagnated at 3% from 2012-2014, and then went below 2% in 2015 when the economy barely escaped another recession.

“Trade flows revived along with growth in 2017, but they fell again this year as Donald Trump unveiled his global tariff assault after tax reform passed. The World Trade Organization hasn’t yet reported third quarter trade data, but a fair guess would be continuing doldrums, as global growth has slowed and the threat of more tariffs hangs over supply chains, investment decisions and confidence.

“We hope someone at the White House is listening to this trade canary. Mr. Trump is expected to meet Chinese President Xi Jinping later this month at the G-20 meeting, and the world will be watching to see if they strike a trade truce. The chances of a deal have seemed slim, but the logic of a truce grows stronger as the stock market falls further.”

Lastly, Barron’s Randall W. Forsyth had some interesting takes on the California wildfires and the future of the area, as well as other at-risk regions.

“Even though it might be unseemly to consider the economic costs while the wildfires are still burning in California and the fatalities are still climbing, they can’t be ignored.  A price is already being exacted in the declines in the prices of securities of the entities affected. There will also be costs for insurers and property owners, as well as for state and local government budgets. Finally, there is an as-yet incalculable hit to property values, not just from the current damage, but also the concerns of potential buyers who may be reluctant to bear the environmental risk that has become increasingly apparent....

“One has to wonder...what effect the seemingly annual wildfires will have on the perceived livability of California and on the state’s population trends, Patricia Healy of Cumberland Advisors writes in a client note....

“There are considerations other than dollars and cents...

“(Philippa Dunne of the Liscio Report, who grew up in Malibu), writes that she spoke recently with a real estate agent friend from Montecito, which she describes as ‘one of the most idyllic places on earth.’   He said he couldn’t tell if business was slow because of the rise in mortgage rates or maybe ‘because buyers are afraid to invest in multimillion-dollar properties threatened by fires and rushing mud.’

“For now, investors are trying to come to terms with the immediate losses from the California fires.  Once the damage is repaired, the question will remain: Who will want to face the seemingly annual onslaught of fires and their aftermath?   A similar question may be asked of Florida and the rest of the Gulf and Atlantic coastal regions beset by seemingly worsening hurricanes.  Regardless of whether one accepts the scientific evidence of climate change, the economic risks appear to be increasing.  And increased risk inevitably is reflected in asset prices.”

Europe and Asia

Today, IHS Markit released flash eurozone (EA19) PMIs for November, the composite index at 52.4, a 47-month low and down from 53.1 in October (50 being the dividing line between growth and contraction).  The manufacturing PMI for the EA19 was 51.5, a 30-month low; the services (non-mfg.) reading coming in at 53.1, a 25-month low.

For Germany, the flash composite for the month is 52.2, a 47-month low, with manufacturing at 51.6, and services at 53.3.

France’s flash composite for November was a little better, 54.0, with manufacturing at 50.7, a 26-month low, and services at 55.0.

Chris Williamson, chief economist, IHS Markit:

“The cooling of Eurozone business growth to a four-year low adds to signs that the economy faces a disappointing end of the year.

“Manufacturing remains the main area of weakness, linked in part to having been hit hard once again by deteriorating exports.  The slowdown is also being temporarily exacerbated by persistent disappointing car sales.  However, November also brought further signs that the manufacturing-led slowdown is spilling over to services, as consumer and corporate demand was often reported to have weakened in the face of headwinds such as rising political uncertainty, tighter financial conditions and higher prices....

“The PMI readings so far in the fourth quarter are indicative of 0.3% GDP growth, with forward-looking indicators such as new orders and future expectations remaining worryingly subdued.”

Brexit: Thursday, European Union and UK negotiators agreed on an outline of future UK-EU ties, bringing Britain a step closer to an orderly departure from the union.

The tentative framework would allow Britain to negotiate trade deals during the transition phase and rejected any link between access to fishing waters and access to markets, adding that work on alternative arrangements to avoid a hard border in Ireland would begin before Britain left the bloc.

Last week, the two sides reached a withdrawal agreement that lays out the terms of the UK’s departure, such as the exit bill to settle future budget commitments; the status of EU citizens living in the UK and vice versa; and arrangements to avoid a hard border on Ireland.

This week’s draft is more of a forward-looking, nonbinding outline of the hoped for long-term relations between the two sides when it comes to security and trade.

Prime Minster May will hold talks on Saturday with Jean-Claude Juncker, head of the EU’s executive Commission, in Brussels.  The legal divorce treaty and an accompanying political declaration are then due to be rubber-stamped in Brussels on Sunday by Mrs. May and the other 27 EU leaders so that they can then go to their respective parliaments.

But Spain has asked for changes, at the last minute, to both the draft withdrawal treaty and the accompanying declaration on future ties to spell out that any decisions about Gibraltar, a rocky, peninsular British overseas territory that Spain claims as its own, would only be taken together with Madrid.  Spain says Britain had given it corresponding assurances before publishing its latest draft, Madrid wanting explicit language that a future trade deal won’t apply to the territory unless Spain and the U.K. reach a side agreement on it.

So at Sunday’s summit, the declaration is expected to be drafted by consensus, but Spain has the power to hold up the process.  Spanish Prime Minister Pedro Sanchez said on Thursday: “After my conversation with Theresa May, our positions remain far away,” adding, “If there are no changes, we will veto Brexit.”  Sanchez is playing the role of a-hole because he needs to demonstrate his determination at home ahead of a December regional election.

Berlin had earlier said there could be no more technical negotiations at the summit, so we’ll see what happens.  If everything goes according to plan, and Britain and Spain do work out something on the side, the EU will commit to try and secure prompt ratification by the European Parliament “to provide for an orderly withdrawal,” according to a draft statement.

But...the biggest opposition is in the British parliament, and without its approval, Britain could leave the bloc on March 29 without an agreement to mitigate economic and legal disruption.  Few believe parliament will approve the text. Former Brexit minister Dominic Raab, who recently resigned, said today he expected the House of Commons to vote it down.  The prime minister has responded Britain will not get a better deal if it did not take this one.

The EU doesn’t want to mess with making any last-minute changes because it took so long, through difficult negotiations, to get even this far. Remember, the trade negotiations come after Brexit. The agreement hopefully signed off on Sunday is primarily about the rules of the game during the transition period that is to last, at least, through December 2020.  [A decision on an extension beyond Dec. 2020 must be made before July 1, 2020. Prime Minister May doesn’t want any extension to go into 2022, which is when the country is scheduled to hold its next national election.]

Mrs. May insists she can win a vote in parliament and will focus her efforts on persuading members of her own party on the merits of the agreement.

But opposition Labour Party leader Jeremy Corbyn said after the publication Thursday of the political declaration on the framework for future relations with the EU that “These 26 pages are a testament to the failure of the (Conservatives’) bungled negotiations....It represents the worst of all worlds: no say over the rules that will continue to apply and no certainty for the future.”

Italy: The European Commission took the first step on Wednesday toward disciplining Italy over its expansionary 2019 budget after Rome refused to change it, raising the stakes in a dispute that has alarmed the whole eurozone and could eventually lead to fines.

The Commission said the draft budget raises the 2019 structural deficit, rather than cut it, as required by EU laws.  It also failed to trim Italy’s huge public debt in “a particularly serious case of non-compliance” with the rules, the Commission said.

But Italy believes its borrow-and-spend policy would boost economic growth, helping reduce the country’s debt ratio, while reducing unemployment, which stands at about 9.7 percent.

In Rome, the government of the right-wing League and the anti-establishment 5-Star Movement remained defiant.  “We are convinced about the numbers in our budget.  We will talk about it in a year’s time,” Deputy Prime Minister and League leader Matteo Salvini told reporters.

But as I pointed out last week, the process that is about to play out, such as the Commission gaining the backing of finance ministers, will play out over months and Italy, if it ever was fined, wouldn’t face the penalties until mid-year...and the fact is such penalties have never been levied against any eurozone country.

That said, Italy’s defiant tone isn’t what the EU needs at a combustible time, given Brexit, and political issues elsewhere in Europe.

France: President Emmanuel Macron’s approval rating is down to 25 percent in the latest Ifop poll, down from 29 percent in October.  Macron came to power 18 months ago, vowing to reshape the economy and overhaul institutions, and he has brushed off the slumping ratings to push through a series of reforms.

But when his government introduced fuel tax hikes to encourage drivers to embrace less-polluting cars, it touched a nerve with rural voters, and angry motorists, with demonstrations sweeping the country.  Last Saturday, some 288,000 protesters blocked roads across France in a grassroots campaign dubbed the “Yellow Vests.” 

Turning to Asia, no new data from China, but I found this bit from Bloomberg to be rather enlightening:

“The Communist Party, beset by slowing growth, a trade war and a weak stock market, is taking steps to ensure that those who predict the economy’s direction for a living take the state’s interests into account.

“In early November, Liu Shiyu, the head of the securities regulator, met in Beijing with representatives from more than 30 brokerages and fund firms.  His message, according to people with knowledge of the matter: Economists should strive for higher-level thinking and take into account the interests of the Party and the country when publishing research, so as not to mislead market participants.  Liu stopped short of urging economists to censor their research, the people said.

“Then, in an announcement late Friday, the Securities Association of China said senior economists from brokerages and fund companies had signed a ‘Chief Economist Self-Discipline Proposal’ – essentially a more formalized version of Liu’s admonition....

“The actions by the China Securities Regulatory Commission suggest that even as the country opens its securities markets more to foreign players, Beijing remains keen to manage perceptions of its economy.  Leaders’ tolerance for bearish research may be tested further in coming months as mounting trade tensions with the U.S. start to bite.”

Meanwhile, Japan reported October exports rose 8.2% from year ago levels, after a decline in September that was related to natural disasters.  Exports to the U.S. rose 11.6%, led by auto exports rising for the first time in five months.  Exports to China increased 9% year-over-year.

Overall imports for last month rose 19.9%, with imports from the U.S. up 34.3%, owing to corn, liquefied natural gas and crude oil.

Separately, Japan’s core consumer prices rose 1.0% in October from a year earlier, steady from the previous month in a sign the economy lacks momentum needed to accelerate inflation to the central bank’s elusive 2.0% target.

Japan’s core is ex-food, not energy, and when you exclude both, the CPI was only 0.4%.

Street Bytes

--The Dow Jones, -4.4%, and Nasdaq, -4.3%, had their worst weeks since March, with the Dow ending at 24285, its lowest level since early July. The S&P, -3.8% on the week, is now down 10.2% from its all-time high set in September...correction territory. Nasdaq is now down 14.4% from its high.

As noted above, the slide in crude oil is doing a number on the energy sector, which it’s important to remember is highly leveraged, while it didn’t help matters that Apple shares fell 11% this week amid reports the company had to slash production orders in recent weeks for all three of its latest iPhone Models on weaker-than-expected demand.  Then Friday, a Wall Street Journal report said Apple will be offering subsidies to the largest mobile-network operators in Japan as it seeks to reduce the price of its recently released iPhone XR.

Retailers also didn’t do well this week, and today, it was clear Black Friday isn’t what it used to be, especially with retailers now discounting a week before Thanksgiving.  I bought a nice pillow for $5 at Kohl’s on Monday, for example. And a new artificial Christmas tree at Michael’s, heavily discounted.  I had never been in a Michael’s.  Cool stuff.

By the way, getting off track, the Arby’s deep-fried turkey sandwich is quite tasty...Kohl’s, Michael’s, and Arby’s all being in the same shopping center...along with my favorite Dollar Tree, where I got the usual staples for....a dollar.

--U.S. Treasury Yields

6-mo. 2.52%  2-yr. 2.81%  10-yr. 3.04%  30-yr. 3.30%

Aside from the market swoon, the yield on the 10-year has been declining from an intraday high of about 3.25% to the 3.04% mark on the growing belief the Fed won’t be as aggressive in raising rates further as first thought.

--Oil prices recovered some on Wednesday after the prior day’s six percent rout, lifted by a report of an unexpected decline in U.S. commercial crude inventories as well as record Indian crude imports.

The American Petroleum Institute’s weekly report on U.S. crude inventories showed a draw, after weeks of gains, which has severely hampered prices.  [I don’t know why the Wall Street Journal has a story tonight talking about nine straight weeks of inventory “gains,” because there was indeed a “draw” this week, albeit a small one.  #FakeNews]

The International Energy Agency (IEA) warned of unprecedented uncertainty in oil markets due to a difficult economic environment and political risk.

And the slump in prices resumed Friday, reflecting “concerns over excess supply in 2019...(and) a broader cross-commodity and cross-asset sell-off as growth concerns continue to mount,” as Goldman Sachs put it.

With output surging and the demand outlook deteriorating, OPEC is pushing for a supply cut of between 1 million and 1.4 million bpd to prevent a repeat of the 2014 glut.

But West Texas Intermediate finished the week at $50.39, the lowest price since October 2017 and down a whopping $6 on the week, a full third in just seven weeks from the $75 high.

--Thursday, Nissan Motor Co.’s board voted unanimously to oust Chairman Carlos Ghosn after the shock arrest of the industry heavyweight on Monday in Japan, ushering in a period of uncertainty for its 19-year alliance with Renault.  The Japanese firm said its board also voted to remove Greg Kelly – who like Ghosn has been arrested after allegations of financial misconduct – from his post as representative director. The moves, which leave the chairman position vacant, came despite Renault urging Nissan’s board before its meeting to delay removing Ghosn, according to Reuters. The Franco-Japanese alliance, enlarged in 2016 to include Japan’s Mitsubishi Motors, has been shaken to its core.

Ghosn had shaped the alliance and was pushing for a deeper tie-up, including potentially a full Renault-Nissan merger at the French government’s urging, despite strong reservations at the Japanese firm.

The French state owns 15% of Renault, which in turn holds a 43.4% stake in Nissan.  French President Emmanuel Macron said the country would work to preserve the stability of Renault and its alliance with Nissan.

Japanese prosecutors said Ghosn and Kelly conspired to understate Ghosn’s compensation at Nissan over five years from 2010, saying it was about half the actual 10 billion yen ($88 million).

It is also believed that Ghosn used a subsidiary in the Netherlands to spend some $18 million buying and renovating personal homes, including a condominium in Rio de Janeiro and a house in Beirut. Ghosn was born in Brazil and grew up in Lebanon.  It is also reported Ghosn paid his older sister for non-existent consulting.

Prosecutors in Japan received approval to detain Ghosn for 10 days and could not comment on whether he has confessed to the allegations.

Nissan executives have five seats on the nine-member board, Renault loyalists have two seats and the remaining two are held by unaffiliated outside directors, one being a race driver.

So with Ghosn and Kelly in detention, they couldn’t defend themselves at the board meeting.  Renault has refrained from firing Ghosn as chairman and CEO, but Mitsubishi Motors plans to remove him from his post as chairman at a board meeting next week.

Japan’s industry minister and France’s finance minister are to meet in Paris on Thursday to seek ways to stabilize the situation.

--The scandal involving 1 Malaysia Development Berhad, or 1MDB, continues to grow, the New York Times on Thursday detailing a December 2012 meeting between Jho Low, a financier with close ties to Malaysia’s prime minister, and Goldman chairman and CEO Lloyd Blankfein (who stepped down as CEO on Oct. 1, but remains chairman).

Low is accused of masterminding a multibillion-dollar fraud involving the Malaysian government investment fund and remains a fugitive.

But as the Times reports: “Federal prosecutors are examining the 2012 meeting as they conduct a criminal investigation of the bank, (two of three people familiar with it) said. And the existence of a face-to-face meeting between Goldman’s chief executive and the man accused of being at the center of a sprawling fraud undercuts an argument the bank has made: that its problems stem from the actions of a small number of rogue employees.”

Goldman has stated it could face “significant fines” related to the scandal.  And on Wednesday, Abu Dhabi’s state energy investment company sued Goldman in a separate case, accusing bank employees of bribing Abu Dhabi officials.

Goldman shares were trading at $275 this past March, but finished the week at $189.

--Lowe’s Cos. Inc. reported net earnings fell to $629 million in the third quarter ended Nov. 2 from $872 million a year earlier.  Sales at stores open for more than a year rose 1.5 percent, well below expectations of a 2.9 percent increase, with CEO Marvin Ellison blaming the assortment of merchandise at stores and the inability to restock shelves with the right kind of inventory for poor sales.  The company cut its forecast for full-year sales growth to about 4 percent from 4.5 percent and expects same-store sales to rise about 2.5 percent, less than previously forecast.

So once again, Lowe’s underperformed vs. rival Home Depot, and the company announced it was seeking to shed its retail operations in Mexico and certain non-core U.S. businesses.

Lowe’s shares fell on the news.

--As did the shares of other retailers this week that reported earnings.  Target Corp. reported third-quarter earnings and comp sales below forecasts on Tuesday, the shares down 7 percent in response.

Same-store sales open at least a year rose 5.1 percent, which is solid, just not as expected, while profit missed expectations as higher wages and investments in its online business cut into margins. Ex-items, earnings were less than forecast.

But Target said it remained confident its investment in building up its online presence will pay off.  The company is offering free two-day shipping on hundreds of thousands of items through Dec. 22 with no minimum order or membership required.

--Meanwhile, Kohl’s shares also fell sharply as the company reported Q3 earnings that slightly exceeded expectations, ditto revenue of $4.63 billion, as comp-store sales were up 2.5% for the quarter, better than expected.

But the shares fell sharply because it seems investors were expecting higher guidance.

--And Best Buy Co. said its comparable sales increased 4.3% in the third quarter for its domestic stores and website.  It was the sixth straight quarter of comp growth above 4%.  But the company’s profit margin slipped.

The company cited strong demand in the quarter for smartphones, videogames, home appliances and wearable gadgets.

--Gap Inc. reported same-store sales in the third quarter were flat, helped by a 4% increase at Old Navy, its biggest division by sales.  But comp sales at the Gap brand fell 7% in the quarter, and Gap Inc. CEO Art Peck said on a conference call that he might close hundreds of underperforming Gap stores.  “These stores are a drag on the health and a drag on the performance of the brand,” he said.

--Shares in Boeing have been all over the place in light of the deadly Lion Air crash and various reports on the cause, and safety, of the 737 Max jetliner. Boeing shares hit $394 intraday back on Oct. 1 and closed this week at $313, as the company pushed back on suggestions it could have better alerted airlines to a new anti-stall feature in the 737, with Boeing then canceling a Tuesday call with carriers during which it had planned to discuss the model.

CEO Dennis Muilenburg wrote in a message to employees: “You may have seen media reports that we intentionally withheld information about airplane functionality from our customers.  That’s simply untrue.  The relevant function is described in the Flight Crew Operations Manual and we routinely engage with our customers about how to operate our airplanes safely.”

U.S. pilot unions, however, have criticized Boeing for deliberately withholding a description of the obscure flight-control system that sometimes can pitch the aircraft’s nose downward if it suspects the plane is losing lift on its wings.

Investors are concerned about the potential liability for a system that possibly was tripped up by a single bad sensor reading – as well as the damage to the 737 brand, Boeing’s largest source of profit.

--Deere & Company reported downbeat earnings for its fiscal fourth quarter with earnings coming in below analysts’ expectations as the machinery maker said its facing cost pressures.

Net sales rose 18% to $8.34 billion on a 65% jump in the construction and forestry segment, which the company said was boosted by the “successful integration” of its acquisition of Wirtgen Group of Germany. Worldwide net sales and revenue climbed 17% to $9.42 billion.

But earnings came in shy of the Street’s expectations. CEO Samuel Allen said:

“In the fourth quarter, farm machinery sales in the Americas made further gains while construction-equipment sales continued to move higher. At the same time, the company has continued to face cost pressures for raw materials such as steel, which are being addressed through pricing actions and ongoing cost management.”

Allen added that despite tensions over trade and other geopolitical issues, the replacement cycle for farm machinery “is very much alive.”

Deere share rose over 2%.

--Troubled Canadian airplane maker Bombardier Inc. is cutting 490 jobs at its Belfast operations, a big blow to the local economy.  Bombardier is the biggest high-tech manufacturer in Northern Ireland, currently employing about 4,000 there, most at a wing-making plant in Belfast.  This is part of the company’s previously announced plan to reduce its global workforce by 5,000.

--Furniture giant Ikea plans to cut 7,500 jobs worldwide as part of a plan to cater more to online customers, the company said Wednesday.  Yes, even Ikea is not immune.  Most of the job cuts will come in office positions vs. the retail workers.

But at the same time, Ikea is opening 30 new stores in urban centers and will create 11,500, or 4,000 more than it is cutting, in doing so, including by investing in its e-commerce and delivery offerings.

The company said that during the 12 months ending Aug. 31, its website only accounted for 5% of sales.

--From Barbara Ortutay / Associated Press

“For the last decade, Sheryl Sandberg has been the poised, reliable second-in-command to Facebook Inc. chief Mark Zuckerberg, helping steer the social networking giant’s rapid growth around the world while also cultivating her brand in ways that hint at bigger personal aspirations.

“But as criticism grows over the company’s practices or lack of oversight, her carefully cultivated brand as an eloquent feminist leader is showing cracks.  Questions these days aren’t so much about whether she’ll run for the Senate or president, but rather whether she ought to be able to keep her job at Facebook.

“ ‘Her brand was being manicured with the same resources and care as the gardens of Tokyo,’ said Scott Galloway, a New York University marketing professor.  ‘And, unfortunately, a hurricane has come through the garden.’”

Galloway is perhaps my favorite commentator on the tech scene these days and, like me, he believes the media is missing the real story of Zuckerberg and Sandberg, believing both should be fired for allowing Facebook to turn into an entity that harms democracy around the world.  “Every day executives are fired for a fraction of infractions these two have committed,” he said.

Zuckerberg defended Sandberg this week, saying in an interview with CNN, “Look, Sheryl is a really important part of this company and is leading a lot of the efforts to address a lot of the biggest issues that we have.”

“She’s been a really important partner to me for 10 years.  I’m really proud of the work we’ve done together and I hope that we work together for many decades to come.”

Last Friday, in a question-and-answer session with employees, Zuckerberg pushed back against criticism of the company in the wake of a New York Times investigation into how the company reacted to Russian influence operations.

The idea that Facebook tried to “cover up anything” was dead wrong, he said.

But then on the eve of Thanksgiving, Facebook admitted in a blog post that it has hired Republican-affiliated public relations firm Definers to do work on its critics – most notably, billionaire and hedge fund manager George Soros.

Outgoing communications chief Elliot Schrage detailed the social media platform’s involvement with Definers and admitted asking it to look into the potential financial motivation of Soros after he had called the company a “menace to society” in a speech at Davos.

Sheryl Sandberg, in the same post, “took full responsibility” for the work of its communications team and the PR firms associated with them and said that it was never their “intention to play into an anti-Semitic narrative against Mr. Soros or anyone else.  Being Jewish is a core part of who I am and our company stands firmly against hate. The idea that our work has been interpreted as anti-Semitic is abhorrent to me.”

--Bitcoin fell below $5,000 this week for the first time since October 2017, finishing the week around $4,250.

--Megyn Kelley is going to walk away from NBC News with more than $30 million, according to the Wall Street Journal – the full value left on the three-year, $69 million contract with the network.

--Taylor Swift signed a long-term record deal with Universal Music, ending a months-long bidding war over the most commercially successful artist in the world, with industry observers saying an artist of her earnings potential would easily fetch hundreds of millions of dollars.

In the age of Spotify, Ms. Swift is one of the few artists who still sells millions of physical albums, a source of stability for the music industry.

Swift is leaving Big Machine Records, her home since age 14. Scott Borchetta, the record executive who runs the company, discovered Swift in a Nashville bar.

As reported by Anna Nicolaou of the Financial Times: “Ms. Swift’s most recent album, Reputation, sold 1.2m copies in its first week on release, while the rest of that week’s top 200 albums sold only 863,000 combined.  Only six albums in the past decade have achieved 1m traditional U.S. album sales in the first week – four of them are from Ms. Swift.”

Foreign Affairs

Yemen: According to charity Save the Children, an estimated 85,000 children under the age of five may have died from acute malnutrition in three years of war in Yemen.  The UN warned last month that up to 14 million Yemenis are on the brink of famine.

Yes, it is difficult to get an exact number of deaths, but aid workers in the country say many go unreported because only half of the health facilities are functioning and many people are too poor to access the ones that remain open.

Save the Children says it based its figures on mortality rates for untreated cases of Severe Acute Malnutrition in children under five from data compiled by the UN. According to conservative estimates, it calculated that around 84,700 children may have died between April 2015 and October 2018.

The rebel-held port of Hudaydah (also spelled Hodeidah), through which the country has traditionally imported 90% of its food, has seen commercial imports fall by more than 55,000 metric tons a month, the charity says; enough to meet the needs of 4.4m people, including 2.2m children.

Save the Children says that based on historical studies, if acute malnutrition is left untreated, around 20-30% of children will die each year.

The charity’s director in Yemen told the BBC, “For every child killed by bombs and bullets, dozens are starving to death and it’s entirely preventable.”

Israel: Prime Minister Benjamin Netanyahu once again pulled out victory from the jaws of defeat, as a senior member of his coalition, Education Minister Naftali Bennett, retreated from his threat to resign if not appointed to serve as defense minister.

Israel’s coalition was in crisis following the resignation of Avigdor Lieberman, the hardline defense minister who accused Netanyahu of capitulating to terrorists by agreeing to a tacit cease-fire with Hamas, the militia ruling the Gaza Strip.  Netanyahu assumed the role of defense chief himself for the time being.

Lieberman’s withdrawal left Netanyahu’s right-wing coalition with just a one-seat parliamentary majority, and had Bennett and his Jewish Home party followed through on their threat, the government would have been left with an unmanageable minority and elections would have been triggered for early 2019, rather than their scheduled date of November 2019.

Netanyahu addressed the public on Sunday: “We are in the middle of a battle, and in the middle of a battle we don’t abandon our posts.  In the middle of a battle, we do not play politics. The security of the nation is beyond politics, and the security of the nation is also beyond personal considerations.”

In his own address the following day, Bennett said he was unwilling to be held responsible for ending the term of one of the most right-wing governments in Israeli history.

“If the prime minister is serious in his intention, and I want to believe his words from last night, I am saying here to the prime minister we are at this moment withdrawing all of our political demands and will help you in the huge mission of making Israel win again,” Bennett said, adding, ”I know I’ll pay a political price for this.  It’s not the end of the world, you win some, you lose some.”

Separately, Israeli Justice Minister Ayelet Shaked said the U.S. should not waste its time on its long-awaited peace plan, as the gaps between Israel and the Palestinians were too great to bridge.

Speaking at a conference on Wednesday, Shaked also said that any deterrence Israel had against Hamas after the 2014 Gaza War was lost over the last two years.

Not only that, but Shaked said the current ceasefire will not hold more than a few months, and that when it breaks Israel will have to use greater force than it has used in recent rounds of fighting.

Iran: Foreign Minister Mohammad Javad Zarif said Iran has no intention of renegotiating the 2015 nuclear deal, as demanded by the United States.  Speaking at an international conference in Rome, Zarif said the Iranian people will endure U.S. sanctions.

Monday, President Hassan Rouhani said Iran will continue to export oil despite the sanctions, which are part of a psychological war doomed to failure.

Washington wants to force Tehran to drop its ballistic missile programs, further curb its nuclear work and limit its support for proxy militias from Syria to Lebanon and Yemen.

“We will not yield to this pressure, which is part of the psychological war launched against Iran,” Rouhani said in a speech broadcast on state television.

“They have failed to stop our oil exports. We will keep exporting it.... Your regional policies have failed and you blame Iran for that failure from Afghanistan to Yemen and Syria,” he added, to chants of “Death to America!”

Rouhani said Washington lacked the necessary international support for its sanctions, and noted that it had granted temporary waivers to eight major buyers of Iranian oil.

“America is isolated now. Iran is supported by many countries. Except for the Zionist regime (Israel) and some countries in the region, no other country backs America’s pressure on Iran,” he said.

Afghanistan: At least 50 people were killed and 72 wounded on Tuesday when a suicide bomber struck a Kabul wedding hall where Islamic religious scholars had gathered to mark the birthday of the prophet Muhammad.

Witnesses told Afghan news media that at least 1,000 people were packed inside the hall when the assailant detonated the explosives. Suspicion fell on ISIS, which has carried out similar attacks on religious gatherings.

Three days later, a suicide blast at a mosque in an army base in eastern Afghanistan killed at least 26, all members of the Afghan security forces.  The Taliban committed this one.  The Afghan forces cannot continue to withstand these continuous blows, hundreds killed in recent weeks in such attacks.

Pakistan: A powerful bomb at an open-air food market in northwest Pakistan killed 25 people, just hours after armed separatists stormed the Chinese Consulate in the southern port city of Karachi, with four killed, including two policemen.

North Korea: We are approaching six months since the Singapore summit between President Trump and North Korean leader Kim Jong Un and there has been zero progress in disarmament talks, which aren’t even being held, and denuclearization, the ultimate goal, is as distant as ever.  Many experts also believe Pyongyang has been expanding their nuclear and missile capabilities, but we are told a second summit between the two leaders is still being scheduled for early next year.

Former CIA analyst Sue Mi Terry, who specializes in the Korean peninsula, told Bloomberg News, the North Koreans “don’t want to deal with bureaucrats. They think they can get the best deal possible” directly from Trump.

It was back on Oct. 7, after a visit to Pyongyang, that Secretary of State Mike Pompeo said Kim had agreed to allow UN inspectors into the country to inspect the Punggye-ri nuclear test site, which it claims it destroyed in May by blowing up several tunnels, but no inspections have taken place.

China: Josh Rogin / Washington Post

“Vice President Pence was not planning to meet with the leaders of Russia or China during his Asia trip last week, but they sought him out anyway.  In several conversations with Vladimir Putin, Xi Jinping and Chinese Premier Li Keqiang, Pence delivered messages on election interference, North Korea and the trade disputes, and also set the stage for big showdowns next week when President Trump meets the same leaders in Argentina.

“Pence stood in for Trump at the Association of Southeast Asian Nations (ASEAN) summit in Singapore and the Asia-Pacific Economic Cooperation (APEC) leaders meeting in Papua New Guinea. The trip was billed as a reassurance tour wherein the vice president would reinforce with allies the Indo-Pacific strategy Trump announced at these events last year.  The meetings with Russian and Chinese leaders were impromptu encounters but had real substance.

“Pence and Putin had three short conversations in Singapore.  First, they exchanged pleasantries at the ASEAN gala dinner. (Putin arrived late.) The following day, before the plenary, Putin tapped Pence on the shoulder as he walked to his seat. The press, still in the room, caught Pence looking sternly at Putin for the minute or so they talked. Putin offered Russian help to fight the California wildfires.  Pence confirmed to Putin that Trump would meet him at the upcoming Group of 20 meeting in Argentina.

“When the plenary ended, the two men huddled in the corner for about 15 minutes as staff, security and translators swarmed around them.  Pence decided to confront Putin about Russia’s interference in U.S. democracy.

“ ‘So I looked at him and I said, ‘We know what happened in 2016,’’ Pence told me in an interview.  ‘And I said, ‘As the president has told you, we’re not having it.’’

“Putin denied that Russia had done anything wrong, but Pence stuck to his guns....

“Pence then told Putin it was extremely important that Russia enforce UN sanctions on Pyongyang in the crucial period before the next U.S.-North Korea summit....

“Later that day, Chinese Premier Li caught Pence while the two were walking off stage after taking the ASEAN ‘family photo.’  Li wanted to talk about the ongoing U.S.-China trade war.

“Li told Pence to remember that China is a ‘developing nation,’ meaning it should get special treatment on trade.    ‘And we got down to the corner, and we just stopped for a minute, and I just looked at him and said, ‘Things have got to change,’’ Pence told me.

“Li was taken aback, with a look of surprise on his face.  Pence then delivered the same message he had told me at the start of the trip: that the G-20 was China’s best (if not last) chance to come to the table with a real offer to end its unfair trade and industrial practices.

“ ‘You should encourage President Xi to take full advantage of the opportunity in Argentina,’ Pence said he told Li.

“Pence delivered a similar message directly to Xi on Saturday night in Papua New Guinea, when the two leaders were seated near each other at the APEC gala....

“ ‘Pence did what President Donald Trump rarely does: stay on message, calm nervous security partners and clearly lay out a vision for American foreign policy,’ wrote Bloomberg’s Toluse Olorunnipa.  ‘While Asian leaders listened closely to Pence, many were waiting to see if Trump would do something to contradict him.’

“Everybody talking to Pence understood that he represented only what Trump’s position was that day and that Trump could change his mind the following day for any reason....

“But don’t believe reports that world leaders were upset Trump wasn’t there. They were fine dealing with Pence, and Pence was in his element.  Trump sees the boring work of diplomacy as a nuisance.  Perhaps sending Pence in his place is a win-win arrangement for both of them – and the country as well.”

Meanwhile, the APEC summit ended in acrimony, as a fight over Chinese trade practices cast doubt on the upcoming G-20. For the first time in the summit’s nearly three-decade history, officials of the 21-member Pacific Rim group ended two days of meetings without issuing a communique.

“You all know who the two big giants in the room were, so what can I say,” Papua New Guinea Prime Minister Peter O’Neill said.

Emotions were so high, it seems, that Chinese officials demanded a meeting with PNG’s foreign minister, who was leading negotiations, forced their way into his office on Saturday and had to be escorted away by police after a confrontation, as reported by the Wall Street Journal.  [China denied the story, but other news agencies, such as Agence France-Presse, also reported on the dustup.]

Supposedly the dispute in putting together a communique boiled down to one proposed sentence:  “We agreed to fight protectionism including all unfair trade practices.”

China believed this amounted to it being singled out for its trade practices, U.S. officials said.  But the fight wasn’t only between the U.S. and China on the language. Other APEC members also lined up against Beijing.

Vice President Pence separately announced that the U.S. would join Australia in developing a naval base in Papua New Guinea, in an apparent move to curb China’s growing influence, which torqued off the Chinese further.

In other news....

Voters in Taiwan go to the polls on Saturday to elect local officeholders, while considering referendums on topics from same-sex marriage to what name to participate under in the 2020 Olympics.  But the poll is being seen as a midterm report card on President Tsai Ing-wen, whose approval rating has been sliding, even as she takes a hardline position on Beijing.

Finally, construction at a Chinese ecotourism zone is believed to have caused the death of 6,000 critically endangered Chinese sturgeon.  As reported by the BBC:

“A bridge in Hubei province was being built close to a farm on the Yangtze river which was breeding the long-living fish.

“A Chinese news site said the deaths were ‘directly linked to the shocks, noises and changes of water sources.’

“All work has been halted while investigations are carried out.”

The Chinese sturgeon dates back more than 140 million years and individual fish can grow to a length of 16 feet and live up to 60 years, but they only spawn a few times in their lifespan.

This breeding program was critical to keeping the species going.  What a bunch of freakin’ idiots.

Russia: Vladimir Putin suffered a defeat as the international police body Interpol elected Kim Jong-yang of South Korea as president for a two-year term, beating a Russian national whose candidacy raised concerns in Europe and the United States about the risk of Kremlin interference.

Kim was elected to succeed China’s Meng Hongwei, who disappeared in September and later resigned after Chinese authorities said he was being investigated for suspected bribery.  Kim had been serving as acting president.  Despite the publicity surrounding the Russian candidate, this is a largely ceremonial role

Day-to-day work is handled by Secretary-General Jurgen Stock of Germany.

Russia blamed a group of U.S. senators for the defeat of Alexander Prokopchuk, a police major-general and a Putin crony.

Random Musings

--Presidential tracking polls....

Gallup: 43% approve of President Trump’s performance, 53% disapprove (Nov. 18); 90% Republicans, 37% Independents approve.
Rasmussen: 51% approval, 48% disapproval (Nov. 21).

--As of Friday, there were just two technically undecided House races, both in New York State, and it appears they will be split, but we won’t jump the gun. The Associated Press has it officially at 233-200, Democrats, 52-47 in the Senate, with the Mississippi runoff to come, which was expected to remain Republican but it’s tightened.  The vote is Tuesday, Nov. 27, President Trump stumping for Republican incumbent Sen. Cindy Hyde-Smith.

Meanwhile, according to an analysis by NBC News, Democrats won the popular vote in the House by the largest margins since the Watergate scandal and the 1974 midterm election.

The analysis found Democrats led Republicans in House races by 8.6 million votes, vs. 8.7 million in ’74 after Nixon had resigned the previous August.

In the Florida recount for the Senate, Republican, and out-going governor, Rick Scott ended up defeating incumbent Democratic Sen. Bill Nelson by 10,033 votes, Florida elections officials declared on Sunday, 50.05 percent to 49.93 percent.

--In his interview with the president, Fox News’ Chris Wallace had this exchange:

WALLACE: This was a historically big defeat in the House.  You lost 36, maybe 40 seats.  Some would argue that it was a thumping. And I want to talk about some of the ways in which you lost.  You lost in traditionally Republican suburbs, not only around liberal cities like Philadelphia and D.C. but also red-state cities like Houston and Oklahoma City.  You lost among suburban women.  You lost among independents and, in three key states that I think you remember pretty well – Wisconsin, Pennsylvania, Michigan – you lost both the governor seats and the Senate seats.

TRUMP: Are you ready?  I won the Senate, and that’s historic too, because if you look at presidents in the White House it’s almost never happened where you won a seat.  We won – we now have 53 as opposed to 51 and we have 53 great senators in the U.S. Senate.  We won.  That’s a tremendous victory.  Nobody talks about that.  That’s a far greater victory than it is for the other side.  Number two, I wasn’t on the ballot.  I wasn’t –

WALLACE: But if you can’t carry – and you certainly didn’t carry it two weeks ago – Michigan, Wisconsin, and Pennsylvania, you’re not going to get reelected.

TRUMP: I didn’t run.  I wasn’t running.  My name wasn’t on the ballot.  There are many people that think, “I don’t like Congress,” that like me a lot.  I get it all the time; “Sir, we’ll never vote unless you’re on the ballot.” I get it all the time.  People are saying, “Sir, I will never vote unless you’re on the ballot."  I say, “No, no, go and vote.”  “Well, what do you mean?”  As much as I try and convince people to go vote, I’m not on the ballot.

So the president both takes credit for “winning the Senate,” but also suggests the big losses in the House were not his fault. 

--Democrats swept all the congressional races in Orange County, Calif., further eroding one of the few bases of Republican political power left in the state.

The county’s representation is split between seven congressional seats, with Democrats holding three of the seven before the midterms, and then ousting Republican incumbents Dana Rohrabacher and Mimi Walters, while picking up open seats vacated by the retiring GOP lawmakers Darrell Issa and Ed Royce.

Orange County had been the heart of the modern conservative movement; Richard Nixon having been born in Yorba Linda and representing the region in Congress for several years, while Ronald Reagan launched his political career in Orange County, as part of his successful campaign for California governor.

But in recent years there has been a big demographic change with an influx of Latino and Asian-American voters, and in the 2016 election, Hillary Clinton became the first Democrat to carry the county in 80 years.

--Rich Lowry / New York Post

“Joe Biden is a gaffe-prone 75-year-old Washington veteran – who is exactly what Democrats need.

“The suburbs have turned against Republicans, but President Trump’s working-class base is still with him in a geographic and demographic stand-off that will – absent a game-changer – define the 2020 election.

“The play for Democrats should be obvious: Make a serious appeal to Trump’s voters, take back the Blue Wall states of Wisconsin, Michigan and Pennsylvania, and win the presidency.

“In other words, go with Joe Biden or someone like him with a Midwestern or working-class sensibility (newly re-elected senators Sherrod Brown of Ohio and Amy Klobuchar of Minnesota come to mind).

“Biden still talks of himself as a scrappy kid from Scranton, even though he became U.S. senator soon after Beto O’Rourke was born.  No one calls him, ‘Middle Class Joe,’ as he likes to refer to himself.  Yet he has roots in the Democratic Party of yore that had a solid base among working-class whites.

“His gruff manner, Catholic faith, Irish-ethnic background, union-friendly politics and upbringing in Delaware via Pennsylvania make him as close as the contemporary national Democratic Party gets to a working-class match for the Great Lakes states that Trump stole from it in 2016.

“From this juncture, those states again look absolutely crucial. If the rest of the electoral map stays the same, Democrats need to win all three of Wisconsin, Michigan and Pennsylvania to take back the White House. Even if they pick off 2016 red states Arizona and Georgia, they still need Michigan or Pennsylvania to get over 270.

“Conversely, it’s hard to see where Trump goes and wins new territory to make up for the loss of Wisconsin, Michigan and Pennsylvania.

“Trump didn’t win those three states by much, about 80,000 votes collectively.  More than anything, he depended on running against a Democratic candidate who was unacceptable to working-class whites. Right now, it looks like he needs a repeat performance by the Democrats, and he may well get one.

“This is the great advantage of Uncle Joe.  No matter how pompous and self-parodic he can be, he would almost certainly be impossible to render hateful or threatening to the working-class voters who sensed the Clinton campaign’s disdain for them.

“The problem for Biden is getting from here to there.  He didn’t cover himself in glory in his prior two runs (the first one 30 years ago).

“The Democrats don’t usually do old and familiar, at least not when they win.  The last three Democratic presidents, Jimmy Carter, Bill Clinton and Barack Obama, were fresh-faced newcomers on the national scene....

“The Democrats are not set up to go with, in the derisive phrase, stale, pale and male.  Perhaps they can find another Barack Obama-type candidate who lights up the base while having just enough draw for working-class whites. There is also more than one way to win back the Blue Wall – higher black turnout could make the difference.

“But there’s a good chance that Democrats will get consumed by the hot-house dynamic of their nominating process, and select someone who like those defeated progressive darlings of the midterms – Beto O’Rourke, Stacey Abrams and Andrew Gillum – is better suited to going down in a blaze of glory rather than winning over an increment of Trump voters.

“If so, Joe Biden will be one of the few people in American history who could have won two straight presidential elections – in theory.”

--Michael R. Bloomberg / New York Times

“Here’s a simple idea I bet most Americans agree with: No qualified high school student should ever be barred entrance to a college based on his or her family’s bank account.  Yet it happens all the time.

“When colleges review applications, all but a few consider a student’s ability to pay. As a result, high-achieving applicants from low- and middle-income families are routinely denied seats that are saved for students whose families have deeper pockets.  This hurts the son of a farmer in Nebraska as much as the daughter of a working mother in Detroit.

“America is at its best when we reward people based on the quality of their work, not the size of their pocketbook. Denying students entry to a college based on their ability to pay undermines equal opportunity.  It perpetuates intergenerational poverty.  And it strikes at the heart of the American dream: the idea that every person, from every community, has the chance to rise based on merit.

“I was lucky:  My father was a bookkeeper who never made more than $6,000 a year. But I was able to afford Johns Hopkins University through a National Defense student loan, and by holding down a job on campus.  My Hopkins diploma opened up doors that otherwise would have been closed, and allowed me to live the American dream.

“I have always been grateful for that opportunity. I gave my first donation to Hopkins the year after I graduated: $5. It was all I could afford.  Since then, I’ve given the school $1.5 billion to support research, teaching and financial aid.

“Hopkins has made great progress toward becoming ‘need-blind’ – admitting students based solely on merit.  I want to be sure that the school that gave me a chance will be able to permanently open that same door of opportunity for others. And so, I am donating an additional $1.8 billion to Hopkins that will be used for financial aid for qualified low- and middle-income students.

“This will make admissions at Hopkins forever need-blind; finances will never again factor into decisions....

“But Hopkins is one school.  A recent analysis by The Times found that at dozens of America’s elite colleges, more students came from the top 1 percent of the income scale than from the entire bottom 60 percent of that scale – even though many of those lower-income students have the qualifications to get in....

“Together, the federal and state governments should make a new commitment to improving access to college and reducing the often prohibitive burdens debt places on so many students and families.

“There may be no better investment that we can make in the future of the American dream – and the promise of equal opportunity for all.”

Mr. Bloomberg is seriously considering running for president in 2020.  Experts believe, though, this particular act of extreme generosity has nothing to do with this, because it would have had more of an impact if he waited a while to give the gift.

--Scientists from Harvard University’s Initiative for the Science of the Human Past, concluded that while the year 1349 was awful, with the Black Death wiping out half of Europe’s population, and 1918 – when influenza killed up to 100 million – the worst year ever to be alive on Earth was 536 A.D.

In that year, ash from a massive volcanic eruption in Iceland descended on Europe, the Middle East and Asia, causing a blanket of darkness that spanned 18 months – leading temperatures to plummet, crops to die and humans to starve to death, as Michael McCormick, a historian and archaeologist at Harvard noted.

Then in 541, the bubonic plague – known as the Plague of Justinian – rapidly wiped out one-third to one-half of the population of the Eastern Roman Empire, hastening its collapse.

So don’t have a conniption over the Romaine lettuce scare.  I’m not saying ‘go ahead and eat it,’ but, you know, don’t lose sleep over it.

--Maureen Dowd / New York Times:

“More and more, it seems that Donald Trump’s genius for hate and division has driven us all into a canyon that we won’t easily be able to climb out of.

“I worry that it will be a long time before we can talk across our jangly, angry chasms.”

Well, at least on Thanksgiving, we had no family arguments at our dinner table, all in seeming agreement as we toasted the First Responders, the troops, and.....

The National Turkey Federation notes that 46 million turkeys were consumed Thursday.

--I’ve had the Oklahoma-West Virginia football game on in the background as I finish up this review and it just has to be said, scoring in the sport, both college and pro, is getting a little out of hand...at least if you’re old and remember 28-24 as being pretty high-scoring like me.

---

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

God Bless America.

---

Gold $1223
Oil $50.39

Returns for the week 11/19-11/23

Dow Jones -4.4%  [24285]
S&P 500  -3.8% [2632]
S&P MidCap *
Russell 2000 *
Nasdaq -4.3%  [6938]

*Don’t have accurate readings on these two, but do ytd.

Returns for the period 1/1/18-11/23/18

Dow Jones  -1.8%
S&P 500  -1.5%
S&P MidCap  -4.0%
Russell 2000  -3.1%
Nasdaq  +0.5%

Bulls 42.9
Bears 19.0 [These are the figures from the prior week.  No new data available.]

Have a great week.

Brian Trumbore

 

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