Week in Review

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Week in Review

03/23/2019

For the week 3/18-3/22

[Posted 11:30 PM ET, Friday]

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Edition 1,041

After two years, the report from Special Counsel Robert Mueller was released this afternoon and there is nothing to say about it because we don’t have any facts, other than the reports Mueller will not recommend any more indictments in his probe into alleged collusion between President Trump’s 2016 presidential campaign and Russian officials.

Mueller’s office delivered its findings to Attorney General William Barr, the contents not being made public, with White House Press Secretary Sarah Huckabee Sanders saying Trump has not been briefed on them.

Barr told lawmakers he might be able to share “principal conclusions” of the report this weekend.  Then Barr has to decide how much of the report is released to Congress or the public, and where the case of Russian election interference goes.

I have been consistent since day one.  I have written very little on the investigation other than report the facts, and, for the record, Trump’s response to same.

Since day one, my issue with President Trump has been on critiquing his foreign policy, where warranted, and his behavior as the leader of this country, the example he sets, and as leader of the Free World.

But there is little doubt the Democrats will now overreach, and, politically, we need to also wait to see what comes out of the Southern District of New York and their ongoing investigations.

Needless to say, we’ll all learn a helluva lot more in the next 48 hours, and President Trump’s fingers will no doubt be tapping wildly on whatever device is at hand once the conclusions filter out.

But for now, if the president has escaped the Mueller probe that means America finally gets to focus on the issues that we should be focusing on...and that includes the economy.

We saw a slew of data, globally, this week that added further weight to the slowdown case, including weak numbers out of Europe.  The German 10-year bond, the bund, saw its yield collapse below 0.00% for the first time since 2016, closing today at -0.02%. And U.S. Treasury yields are falling to new cycle lows, the yield curve inverting; yields on the short end higher than the long end, which has long been a predictor of recession.

And you have the uncertainty over the U.S.-China trade deal, the ongoing chaos over Brexit, Italy’s highly shaky finances and more...all of which could cause the markets to swoon in the near future.

Yet Trump tweeted Friday morning: “3.1 GDP FOR THE YEAR, BEST NUMBER IN 14 YEARS!”

According to a CNN Poll conducted by SSRS, 71% say the nation’s economy is in good shape, the highest share to say so since February 2001, and the best rating during Trump’s presidency by two points.

Trump then tweeted: “Amazingly, CNN just released a poll at 71%, saying that the economy is in the best shape since 2001, 18 years!  WOW, is CNN becoming a believer?”

But there was a potentially significant release from the Census Bureau on Thursday that said revenues across the U.S. service sector rose a seasonally adjusted 1.2% in the fourth quarter from the third, the weakest pace of growth in five quarters.

Here’s why this is important.  Economists said the figure, along with other recent data, is likely to force downward revisions to estimates of fourth-quarter GDP.  The Bureau of Economic Analysis had said on Feb. 28 that GDP grew at a 2.6% annualized rate in the fourth quarter, but this was based on incomplete data due to the government shutdown and the catch-up still in play with the numbers.

The revised estimate for the fourth quarter is next Thursday, March 28.  If it is revised down below 2.0%, as many feel it could be, then that lowers GDP for all of 2018 solidly below 3%, which Trump has been touting.  It was actually 2.9%, officially, as I told you in February, but Q4 over Q4, 3.1%, which is why we just say 3%, and that’s still terrific.

So my point is, Trump will no longer be able to talk about the best economy in 14 years, which was a stretch to begin with, as I could prove, but I won’t bore you.

But then we have the issue of the first quarter.  It is probably going to be substantially below 2%.  The Atlanta Fed’s GDPNow barometer jumped up this week from 0.5% to 1.2%, which is roughly consensus.

As you’ll see below, the Federal Reserve is projecting growth for 2019 substantially below the 3% the administration is touting.  Well you aren’t likely to get 3% for the year if you start out at 2% or less, sports fans, especially given the gloomy global environment.

You aren’t hearing anyone today talk about this, but aside from giving you the facts each week, my job is to look ahead and I’m just imagining how the White House is going to try to spin what could be a string of poor news on the economy.

For the president’s sake, he should understand it’s better to take your lumps the next quarter or two and hope things are rebounding come 2020 and the real campaign, not the fake one of today.

But you know he won’t take the bad news that is coming well.  And that will be fascinating to watch.

Trump World...what follows was written prior to knowledge the Mueller report was going to be released late today.

--According to a CNN Poll conducted by SSRS, support for impeaching President Trump has fallen 7 points since December, following Speaker Nancy Pelosi calling impeachment “so divisive to the country.”

The decline – from 43% in favor in December to 36% now – stems largely from a change in Democratic views on impeaching the President.  In December, 80% of self-identified Democrats said they were in favor of impeachment, a figure now down to 68%.

Among college graduates, support for impeaching the president has fallen from 50% to 35%.

According to the poll, 53% of Americans don’t think Trump is doing enough to cooperate with Democratic investigations, while 32% say it’s the right amount and 9% say the President is doing too much.

About two-thirds (67%) say the president should release his tax returns publicly, about the same as in October.

As for special counsel Robert Mueller, his approval rating for handling the investigation has rebounded – 48% now approve while 37% disapprove, a shift from near-even divides on the question in February and December.

The president’s approval rating for handling the investigation held steady at 32%.

Regardless of the outcome, 87% of Americans want Mueller’s findings to be made public.

--In two internal memos, Marine Corps Gen. Robert Neller said the “unplanned/unbudgeted” deployment along the southwest border and funding transfers under the president’s emergency declaration, among other unexpected demands, have posed “unacceptable risk to Marine Corps combat readiness and solvency.”

Gen. Neller said the order last fall had forced him to cancel or reduce planned military training in at least five countries, and delay urgent repairs at bases.

Neller, a four-star general, said because of the problems, Marines will not participate in planned training exercises in Indonesia, Scotland and Mongolia, and will reduce their participation in joint exercises with Australia and South Korea.

Neller said, Marines “rely on the hard, realistic training” of the training exercises “to develop the individual and collective skills necessary to prepare for high-end combat.”

--The president took off after the late Sen. John McCain in a number of tweets last weekend, and then continued through the week.

“So it was indeed (just proven in court papers) ‘last in his class’ (Annapolis) John McCain that sent the Fake Dossier to the FBI and Media hoping to have it printed BEFORE the Election. He & the Dems, working together, failed (as usual). Even the Fake News refused this garbage!”

“Spreading the fake and totally discredited Dossier ‘is unfortunately a very dark stain against John McCain.’  Ken Starr, Former Independent Counsel.  He had far worse ‘stains’ than this, including thumbs down on repeal and replace after years of campaigning to repeal and repace!”

Speaking at a tank manufacturing facility in Lima, Oho, with many members of the military in attendance, President Trump lashed out at McCain, saying, “I endorsed him at his request and I gave him the kind of funeral he wanted, which as president I had to approve.”*

“I don’t care about this,” Trump continued.  “I didn’t get a thank you.  That’s okay. We sent him on the way. But I wasn’t a fan of John McCain.”

[The audience, which had applauded and cheered through much of the speech, sat virtually silent during the attack on the late senator and decorated war hero.]

*Neither of McCain’s two services, one at the National Cathedral and one at a church in his home state, required approval from the White House.  Trump may have been referring to McCain’s interment on the grounds of the U.S. Naval Academy in Annapolis.

Georgia Republican Sen. Johnny Isakson had had enough.  “It’s deplorable what he said,” Isakon said Wednesday on Georgia Public Broadcasting.  “There aren’t democratic casualties or republican casualties on the battlefield.”

This followed an interview with a conservative news website, Bulwark.

“I just want to lay it on the line, that the country deserves better, the McCain family deserves better.  I don’t care if he’s president of the United States, owns all the real estate in New York, or is building the greatest immigration system in the world,” Isakson told the site.

“Nothing is more important than the integrity of the country and those who fought and risked their lives for all of us.”

On ABC’s “The View,” where she is a co-host, Meghan McCain blasted Trump and defended her father.  “No one will ever love you the way they loved my father.”

And later:

“(My father) would think it was hilarious that our president was so jealous of him that he was dominating the news cycle in death,” she said.

Sen. Mitt Romney (R-Utah) rallied to McCain’s defense Wednesday.

“I can’t understand why the President would, once again, disparage a man as exemplary as my friend John McCain: heroic, courageous, patriotic, honorable, self-effacing, self-sacrificing, empathetic, and driven by duty to family, country, and God.”

27-year-old Bridget McCain, McCain’s youngest daughter who rarely makes a public statement, wrote on Twitter:

“Everyone doesn’t have to agree with my dad or like him, but I do ask you to be decent and respectful. If you can’t do those two things, be mindful. We only said goodbye to him around 7 months ago.”

In a follow-up tweet, Bridget McCain scolded Trump:

“Even if you were invited to my dad’s funeral, you would have only wanted to be there for the credit and not for any condolences,” she wrote.  “Unfortunately, you could not be counted on to be courteous, as you are a child in the most important role the world knows.”

Cindy McCain on Tuesday revealed one of the hateful messages she has received amid the Trump attacks on her husband.

It was a note from a woman on Twitter who called her a “c---” and said she was “glad” the late Arizona senator was dead.

“Your husband was a traitorous piece of warmongering s--- and I’m glad he’s dead,” the person wrote.

The woman also compared McCain’s daughter Meghan to Miss Piggy and said she hopes ‘The View’ co-host “chokes to death.”

In a sign that the president was sort of ‘getting it,’ he grew angry with Fox Business News anchor Maria Bartiromo in an interview that aired Friday when she pressed him on his renewed attacks on McCain.

Bartiromo asked Trump why he’s reviving his feud with the senator seven months after his death. Trump claimed that he only talks about McCain because “you just brought it up, you asked the question,” even though most of his slams on McCain, such as at the tank factory, have come from himself, unprompted.

As Bartiromo asked Trump if he feels any responsibility to bring the country together, Trump claimed that he has and that “a big portion of this nation is united like it’s never been united before.”  When she noted that Trump doesn’t unite the country with how he talks about McCain, the president claimed again that his attacks only come up because of outside prompts, and then he called Bartiromo “fake news.”

“You shouldn’t have brought it up,” Trump said, visibly angry.  “Actually, I thought you weren’t supposed to bring it up, but that’s okay, fake news every once in a while.”

“It’s not fake news,” Bartiromo pushed back.  “You just told me why you have an issue with him.”

When Bartiromo closed out that section of the interview, she said, “for the record, there were no conditions or stipulations agreed to ahead of the interview.”

It may have been Maria’s finest hour.

Former Senator Joseph Lieberman / Washington Post

“On one of the first foreign trips I took with John McCain, he handed me his comb and asked me to straighten out his hair.  He could not raise his arms above his shoulders to comb his own hair, a lifelong consequence – and not the only one – of the abuse he suffered during his more than five years in a North Vietnamese prison.

“Years later, I traveled to Hanoi with McCain and visited that prison, which is now a museum.  A group of Vietnamese high school students came through and when they recognized him, they began chanting his name, cheering, clapping and asking for pictures and autographs.  McCain had become a hero to the Vietnamese people because he had sponsored the legislation that normalized U.S. relations with Vietnam, the country that had treated him so inhumanely.

“Somehow, he had found it within his soul to put the past behind him and lead the way forward in U.S.-Vietnam relations because that was in the best interests of the United States.  McCain was a passionate person, and he had a temper, but he rarely stayed angry at anyone.  He liked people generally, but I also think he concluded that it wasn’t worth staying angry, particularly at those you needed to work with to get things done.  He was always looking forward, not backward.

“That is a powerful example for all of us, including President Trump, who has continued to attack McCain seven months after his death.  McCain’s life on Earth has ended.  His legacy as a great American patriot, hero and exemplary public servant is beyond revision. The person who suffers most from the strange, posthumous attacks by the president is the president himself.  Respectfully, the president should let McCain rest in peace and give his family the peace they deserve during this difficult time after his death.

“The two main grievances Trump seems to have against McCain are not well-founded.  If he were alive now, he would probably not answer the president. But I feel a responsibility as his friend to do so.

“First, when McCain turned a controversial dossier involving Trump over to the FBI in 2016, it was exactly what he should have done, what I would have done and what every senator I served with did in similar circumstances.  Serious allegations were made in that file, so McCain turned it over to the FBI to investigate.  Giving the file to anyone else or throwing it away would have been a dereliction of duty and improper in our rule-of-law country.

“Second, I know the president and many other Republicans were angry that McCain came back to Washington in July 2017 after his first operation to remove cancer from his brain and surprised everyone by voting against the repeal of ObamaCare.  But I can tell you, because I talked to him about it, that he didn’t vote that way to spite Trump, Senate Majority Leader Mitch McConnell or anyone else.  People who heard his speech on the Senate floor that day or have read it since know that McCain cast that vote not against the repeal of ObamaCare but against the partisanship that had taken over the Senate and made it into a feckless, gridlocked, divided place.  After his brain cancer diagnosis, McCain understood he might not have long to live and that the vote might have been one of the last, best times he would have to make the points he needed to make.  So he made them – and he did so brilliantly.  As he said in his speech in the Senate: ‘Our deliberations...are more partisan, more tribal more of the time than any other time I remember...We’ve been spinning our wheels on too many important issues because we keep trying to find a way to win without help from across the aisle.’

“He continued: ‘The Obama administration and congressional Democrats shouldn’t have forced through Congress without any opposition support a social and economic change as massive as ObamaCare. And we shouldn’t do the same with ours...What have we to lose by trying to work together to find those solutions? We’re not getting much done apart...The Times when I was involved even in a modest way with working out a bipartisan response to a national problem or threat are the proudest moments of my career, and by far the most satisfying.’

“That is the lesson Trump and every member of Congress should take away from McCain’s acts and words in the U.S. Senate on that long day in July 2017.  Trump, because he is president, has the greatest capacity to move our government in the direction McCain appealed for that day and that most Americans clearly want.

“I pray Trump will follow McCain’s advice and give Democrats in Congress an opportunity to work with him to solve some of our most pressing national problems and threats.  And I also pray Democrats respond to Trump in good faith and with the national interest as their guiding light, which it consistently was for McCain.”

--Trump tweets:          

“Just spoke to Mary Barra, CEO of General Motors about the Lordstown Ohio plant. I am not happy that it is closed when everything else in our Country is BOOMING. I asked her to sell it or do something quickly. She blamed the UAW Union – I don’t care, I just want it open!”

“GDP growth during the four quarters of 2018 was the fastest since 2005. This Administration is the first on record to have experienced economic growth that meets or exceeds its own forecasts in each of its first two years in office.  GROWTH is beating MARKET EXPECTATIONS!”

“What the Democrats have in trying to steal a Presidential Election, first at the ‘ballot box’ and then, after that failed, with the ‘Insurance Policy,’ is the biggest Scandal in the history of our Country!”

“Wow! A Suffolk/USA Today Poll, just out, states, ‘50% of Americans AGREE that Robert Mueller’s investigation is a Witch Hunt.’ @MSNBC.  Very few think it is legit!  We will soon find out?”

“The Fake News Media has NEVER been more Dishonest or Corrupt than it is right now. There has never been a time like this in American History. Very exciting but also, very sad!  Fake News is the absolute Enemy of the People and our Country itself!”

“It’s truly incredible that shows like Saturday Night Live, not funny/no talent, can spend all of their time knocking the same person (me), over & over, without so much of a mention of ‘the other side.’  Like an advertisement without consequences. Same with Late Night Shows.”

[The SNL episode was a rerun.]

“Should Federal Election Commission and/or FCC look into this?  There must be Collusion with the Democrats and, of course, Russia!  Such one sided media coverage, most of it Fake News.  Hard to believe I won and am winning.  Approval Rating 52 percent*, 93% with Republicans. Sorry!  #MAGA”

*Trump keeps using the 52% from his favored Rasmussen survey, but it was 52 last on Feb. 11.

“Bring back @JudgeJeanine Pirro.  The Radical Left Democrats, working closely with their beloved partner, the Fake News Media, is using every trick in the book to SILENCE a majority of our Country. They have all out campaigns against @FoxNews hosts who are doing too well.   Fox....

“....must stay strong and fight back with vigor. Stop working soooo hard on being politically correct, which will only bring you down, and continue to fight for our Country. The losers all want what you have, don’t give it to them.  Be strong & prosper, be weak & die! Stay true....

“....to the people that got you there. Keep fighting for Tucker [Carlson], and fight hard for @JudgeJeanine. Your competitors are jealous – they all want what you’ve got – NUMBER ONE.  Don’t hand it to them on a silver platter. They can’t beat you, you can only beat yourselves!”

[More on this last topic below.]

Wall Street, the Fed and the Trade War

The Federal Reserve indicated Wednesday that it is unlikely to raise interest rates this year and may be nearly finished with a series of increases they began more than three years ago (seven hikes in 2017-2018), with the economy slowing.  The Fed lowered its estimate for GDP in 2019 to 2.1%, down from 2.3% in December, and even lower in 2020 and 2021.  Though it needs to be noted, the Fed’s projections on growth are seldom on target.

At a news conference following a two-day meeting of the Open Market Committee, Chairman Jerome Powell said, “It may be some time before the outlook for jobs and inflation calls clearly for a change in [interest rate] policy,” adding, “It’s a great time for us to be patient.”

The Fed also announced that it would slow the pace at which it is shrinking its $4 trillion asset portfolio and end the runoff of its Treasury holdings at the end of September, exactly two years after it began the process.

Projections by Fed officials showed that 11 of the 17 didn’t think the bank would need to raise rates at all this year, up from two in December.  The remaining six officials projected between one and two increases would be needed in 2019.

Chairman Powell also admitted he was discouraged inflation hadn’t risen in a more sustainable fashion.

“I don’t feel we have convincingly achieved our 2% mandate in a symmetrical way,” he said.  “It’s one of the major challenges of our time, to have downward pressure on inflation” globally.

As for the economic data on the week, January factory orders were less than expected, 0.1%, but February existing-home sales surged 11.8% to 5.51 million, annualized.  Falling mortgage rates are helping.

Wall Street finished down on the week, with the Dow Jones plunging 460 points, 1.8%, today on slowdown fears.

But there was one more figure, released by the Treasury Department this afternoon.  The U.S. budget deficit widened 39% in the first five months of the fiscal year to $544 billion, October through February, compared with $391 billion a year ago.  Federal outlays rose 9%, while revenues declined less than 1%.

Higher spending on health care, the military and tariff-assistance programs for farmers pushed the deficit to a record $234 billion in February.

Regarding the U.S.-China trade war....

President Trump said on Wednesday that a trade deal with Beijing is “coming along nicely” but warned that he would not lift tariffs on Chinese goods until he is sure the country is abiding by the terms of the potential agreement.

“We’re not talking about removing them, but we’re talking about leaving them for a substantial period of time, because we have to make sure that if we do the deal with China that China lives by the deal.  They’ve had a lot of problems living by certain deals.”

The comments came as U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are expected to travel to Beijing next week to meet with Chinese Vice Premier Liu He, to pave the way for a deal to be sealed by the end of next month.

The two sides are aiming for a package that includes substantial increases in U.S. exports to China, and Chinese pledges on intellectual property, as well as the end of a policy of pressuring U.S. companies to transfer technology to their Chinese partners.

But U.S. officials are concerned that China may be pulling back on some concessions they’ve made with regards to IP policies, because the Trump administration hasn’t given them assurances that tariffs imposed on China would be lifted.

Washington has been pressing Beijing to buy more than $1 trillion of U.S. goods and services as part of any deal, and U.S. chip makers have told the White House they want no part of such an agreement.

“Because U.S. production costs are so high, mandatory-purchase quotas would essentially force U.S. chip makers to open new factories in China and give Beijing bureaucrats more sway over the U.S. firms, these companies said.  That would benefit Chinese competitors and make the U.S. firms more dependent on Beijing, executives at the U.S. companies fear.” [Bob Davis / Wall Street Journal]

On the issue of the impact of tariffs to fight trade wars, the Wall Street Journal opined in part:

“The Trump Administration argued that it was using steel tariffs as a bargaining chip in negotiations with Mexico and Canada for a revised NAFTA.  ‘The president’s view was that it makes sense that if we get a successful agreement, to have them be excluded,’ U.S. trade Representative Robert Lighthizer said last March.  ‘It’s an incentive to get a deal.

“Mexico and Canada signed a revised North American trade pact last year, but the U.S. still hasn’t exempted the two countries from steel tariffs.  The retaliatory tariffs by Mexico and Canada therefore remain in effect and are hurting American farmers and manufacturers. Tariffs lose their credibility as leverage for trade deals if negotiating partners assume they won’t go away after a deal is struck.

“This is all in addition to the overall economic cost of tariffs in 2018, which reduced U.S. growth momentum. A new study from the National Bureau of Economic Research finds the net economic loss was $7.8 billion, or 0.04% of GDP. That doesn’t include the lost investment due to policy uncertainty.

“One group of Americans has benefited from tariffs: steel companies, which are making more money as they benefit from their ability to raise prices in a protected market.  Government can always help a politically connected few at the expense of the many. But on every other measure, the steel tariffs have been a bust.”

As for jobs in the steel industry, despite President Trump boasts steel makers added 2,200 jobs in 2017, and just 200 in 2018.  One reason is that steel makers ramped up production at highly-efficient mini-mills which employ few workers.

Editorial / USA TODAY...on a side issue in the trade talks, Chinese telecom Huawei:

“The most troubling aspect of Huawei...is not its penchant for pilferage but its potential role in China’s global assault on democracy. China’s domestic internet is a walled garden that only allows people to access sanctioned sites.  Huawei plays a part in that.  China is also a kind of Wild West where visitors’ computers and cellphones are routinely hacked.  Huawei probably plays a role in that, too.

“If its equipment is widely deployed around the world, the Chinese government would be in a position to eavesdrop, by having Huawei build surveillance devices into its hardware and software.  It might also engage in a kind of mild censorship by slowing traffic to sites it does not like.  It could even launch cyberattacks.

“Huawei calls itself employee-owned, but its finances are secret, and telecom executives widely assume that it receives huge subsidies from a government that looks at it as a strategic asset.

“China’s widespread practices of undercutting companies with state-owned or state-subsidized companies of its own represents a violation of the principles of free trade that were instituted after World War II.

“When this practice takes place in areas of critical infrastructure, it should be seen for what it is – a threat to democratic governance the world over.”

Europe and Asia

In the eurozone (EA19), IHS Markit released its flash PMI for March, with the composite at 51.3, down from February’s 51.9 (50 being the dividing line between growth and contraction).

Manufacturing was 47.6, a 71-month low; Services activity 52.7, down from 52.8.

Germany’s flash readings were 44.7 for manufacturing, a 79-month low; 54.9 on services.

France had a flash manufacturing PMI of 49.8, down from 51.5 in February; 48.7 on services.

Chris Williamson / IHS Markit           

“The eurozone economy ended the first quarter on a soft note, with the flash PMI running at one of the lowest levels since 2014.  The survey indicates that GDP likely rose by 0.2% in the opening quarter, with a decline in manufacturing output in the region of 0.5% being offset by an expansion of service sector output of approximately 0.3%.

“A rebound in February from one-off factors such as the yellow vest protests in France appears to have already lost momentum.  Most worrying is the plight of the manufacturing sector, which is now in its deepest downturn since 2013 as trade flows contracted at the sharpest rate since the debt crisis-ridden days of 2012. The service sector is showing more resilience, notably in Germany, but remains in one of its worst growth patches since 2016.

“Forward-looking indicators such as business optimism and backlogs of work suggest that growth could be even weaker in the second quarter....

“Any such further loss of growth momentum in the second quarter compared to the 0.2% GDP rise signaled for the first three months of the year would raise doubts on the economy’s ability to grow by more than 1% in 2019.”

Brexit: On and on we go...this week European Union leaders on Thursday agreed to extend the March 29 deadline for Britain to exit the EU in order to give Prime Minister Theresa May and parliament a last chance to get their act together.

While a chaotic and disorderly departure from the bloc is still possible, the leaders decided that Britain’s exit date will be pushed back to May 22, IF next week Mrs. May can persuade lawmakers to accept her plan for leaving the EU, which they have already rejected twice by wide margins.

If the prime minister cannot get parliament to go along, then Britain must leave the EU by April 12.

However, should Mrs. May and parliament decide a fundamental rethink of Brexit is in order, which would require a much longer delay, perhaps a year, the EU would probably accept this.

IF this last option was to be adopted, then Britain would have to take part in elections to the European Parliament in May (May 23-26, thus the May 22 noted date).

Speaking at a news conference after the extended deadlines were announced, Donald Tusk, president of the European Council, said that until April 12, “all options will remain open and the cliff-edge date will be delayed.”

But, Tusk added, if there was no agreement in parliament, and Britain had not indicated by April 12 that it was willing to take part in the European elections, “the option of a long extension will automatically become impossible.”

The EU is trying to ensure that Britain doesn’t crash out of the bloc next week, while the 27 leaders of the union are tired of Mrs. May not making clear just what she wants.

Should Mrs. May somehow get a ‘yes’ vote next week, the reason for May 22 is to give time to pass the necessary legislation.

The prime minister ruled out revoking Article 50, which would cancel Brexit, and she also said “it would be wrong” to ask Britons to vote for candidates for the elections to the European Parliament, three years after they voted to leave the EU.

So next week MPs are expected to vote a third time on withdrawal, despite Commons Speaker John Bercow saying what is put forward must be substantially different to be voted on.

But with all the above in mind, France said that Britain would crash out of the EU on April 12 if it fails to ratify the Brexit withdrawal agreement and present a new plan.

Irish European Affairs Minister Helen McEntee said, “If there is no indication that they are going to run European elections...there is no ability to extend further.  But at the same time, it doesn’t mean that on April 12 that is the end date.

“It means that they have to give a timeline for what it is that they are doing or set out exactly what it is that they have planned.  It takes away the possibility of a cliff-edge in 24 hours.”

Dutch Prime Minister Mark Rutte said the legal deadline, assuming Britain does not participate in the May 23-26 European elections, was June 30 – the date the British prime minister had originally sought an extension until.

German Chancellor Angela Merkel argued for flexibility, but said if there was a no-deal Brexit there would have to be hard border in Ireland.  “We’re trying to avoid that,” she said.

Lastly, Mrs. May wants to avoid a long extension at all costs because it raises the chances of her being bounced into either a second referendum or even a general election.

Yes, this remains a titanic mess, and tonight, it appears a vote may not even take place in parliament this coming week, the clock now ticking down to April 12.

Eurobits....

A third of EU trade in 2018 was with the United States (17.1%) and China (15.4%), well ahead of Switzerland (6.7%) and Russia (6.4%), as reported by Eurostat.

France: French trade unions marched through Paris on Tuesday as public sector workers went on strike, calling for better pay, retirement protection and more.  This came after renewed violence last weekend amid a new round of yellow vest protests.

Turning to Asia...in Japan, exports fell for a third consecutive month in February as shipments to Asia slipped while imports posted the biggest fall in more than two years.

Exports dropped 1.2 percent year on year in February, easing from an 8.4 percent fall in the previous month.  Exports to China did rise 5.5 percent.

Imports fell 6.7 percent, the biggest drop since November 2016.

We also saw a flash reading on manufacturing for Japan in March came in at 48.9, still contraction mode.

As for February inflation, core CPI (ex-fresh food) was just 0.7% year-on-year, while ‘core-core’ (ex-food and energy) was 0.4% yoy, still far from the Bank of Japan’s 2% target.

Taiwan’s February exports fell the most in nearly three years, down 10.9 percent from a year earlier. China’s cooling economy and a year-long trade war between China and the United States, Taiwan’s two biggest markets, has hurt exporters in a big way.

Street Bytes

--The major indexes all fell on the week, with the Dow down 1.3% to 25502, the S&P 500 0.8% and Nasdaq 0.6%.  There’s been a little lull in corporate news as we gear up for first-quarter earnings reports, which will commence in earnest in three weeks.

--U.S. Treasury Yields

6-mo. 2.46%  2-yr. 2.32%  10-yr. 2.44%  30-yr. 2.87%

The yield on the 10-year continued to collapse, 2.44% the lowest weekly close since December 2017.  As yields fell and the curve flattened, as you can see above, bank stocks were hit hard, as the gap between what lenders pay on deposits and charge on loans narrows, a spread known as the net interest margin.

--Oil hit another high for 2019 this week, $60, before backing off to $58.97, a weekly closing high for the year, as a U.S. government report on Wednesday showed a drop in domestic inventories of crude, while the Fed’s dovish tone in taking further 2019 rate hikes off the table helped.  Today’s renewed global slowdown talk, though, didn’t help crude.

Also this week, Saudi Arabia said OPEC’s job of rebalancing the oil market was far from done as global inventories were still rising despite harsh U.S. sanctions on Iran and Venezuela, signaling it may need to expand output cuts into the second half of the year.  Russia, which is cutting oil output in coordination with OPEC, also said production cuts would remain in place at least until June.

National gas prices at the pump have been rising, 23 cents in the last month, though they are basically at last year’s level.

--The week started with Ethiopia saying on Sunday the crash of an Ethiopian Airlines plane that killed 157 had “clear similarities” with October’s Lion Air crash, according to analysis of the black boxes recovered from the wreckage of the March 10 disaster. Both planes were Boeing 737 MAX 8s, and both crashes occurred minutes after takeoff after pilots reported flight control problems.

A U.S. Senate panel plans a hearing on March 27 on aviation safety.  The hearing on federal oversight of commercial aviation by the Senate Commerce subcommittee on aviation and space will include the FAA’s acting administrator, Dan Elwell, National Transportation Safety Board chairman Robert Sumwalt and others.  Officials from Boeing would be part of a second hearing.

Separately, Southwest Airlines’ pilot union said extra computer-based training will be required after a planned update to the software on the 737 MAX.  The Southwest pilots union said in a statement: “It is still very disturbing to us that Boeing did not disclose (the ant-stall system called) MCAS to the operators and pilots. This methodology should, and can, be examined...Questions about increased digitization of an existing aircraft should be examined.”

Southwest said it would receive its first 737 MAX simulator in July, which might not be ready for use until October. The carrier has the most 737 MAX aircraft in the U.S.

Boeing has said the software update was expected to be deployed across the 737 MAX fleet “in the coming weeks.”

A report by the Seattle Times published on Sunday found that the FAA allowed Boeing engineers to carry out much of the safety assessments on their own new plane.

The report quoted unnamed Boeing and FAA experts who claimed that the company subsequently delivered an analysis that contained crucial flaws and out of date information.

The paper submitted questions to the FAA and Boeing about the certification process 11 days before the Addis Ababa crash that killed 157.

David Gelles and Thomas Kaplan / New York Times

“As regulators at the Federal Aviation Administration reviewed designs for Boeing’s newest passenger jet, they paid extra attention to several features, including the lithium ion batteries, the pressure fueling system and the inflatable safety slides.

“One feature that did not receive exceptional scrutiny: a new software system intended to prevent stalls....

“The United States transportation secretary, Elaine L. Chao, on Tuesday called for her agency’s internal watchdog to open inquiry into the (approval) process, saying that ‘safety is the top priority of the department.’”

Boeing defended the certification process for the jet, saying that “the 737 MAX was certified in accordance with the identical FAA requirements and processes that have governed certification of all previous new airplanes and derivatives.”

New York Times: “The FAA, in its approval of the plane, did not require training on the (MCAS) software, a sign that regulators did not see the system as critical for pilots to understand. Nor did the FAA require pilots who could fly the predecessor 737 to train on a simulator in order to fly the MAX.  Most pilots did not know about MCAS until after the Lion Air crash.”

The relationship between Boeing and the FAA prompted concern long before the two 737 MAX crashes.

“In 2012, an investigation by the Transportation Department’s Office of Inspector General found that FAA managers had not always been supportive of efforts by agency employees to ‘hold Boeing accountable.’ FAA employees viewed their managers as ‘having too close a relationship with Boeing officials,’ according to a report from the inspector general’s office.”

It remains unclear when the jet will start flying again.

And one other late item...Indonesian airline Garuda plans to cancel a $6 billion order for Boeing 737 MAX jets because some passengers say they would be frightened to board the plane at this point.  Others could follow.

--From Reuters:

“Midwestern farmers have been gambling they could ride out the U.S.-China trade war by storing their corn and soybeans anywhere they could – in bins, plastic tubes, in barns or even outside.

“Now, the unthinkable has happened. Record floods have devastated a wide swath of the Farm Belt across Iowa, Nebraska, South Dakota and several other states.  Early estimates of lost crops and livestock are approaching $1 billion in Nebraska alone.  With more flooding expected, damages are expected to climb much higher for the region.

“As river levels rose, spilling over levees and swallowing up townships, farmers watched helplessly as the waters consumed not only their fields, but their stockpiles of grain, the one thing that can stand between them and financial ruin.”

The thing is, it’s not just the floodwaters consuming storage bins, but in Nebraska, for example, the infrastructure (rails, roads, bridges) for moving products from farms to processing plants and shipping hubs has been severely damaged.

“The damage to roads means it will be harder for trucks to deliver seed to farmers for the coming planting season, but in some areas, the flooding on fields will render them all-but-impossible to use.

“The deluge is the latest blow for the Farm Belt, which has faced several crises in the last five years, as farm incomes have fallen by more than 50 percent due to a global grain glut.  President Trump’s trade policies cut off exports of soybeans and other products, making the situation worse.”

Nebraska Gov. Pete Ricketts said “This is clearly the most widespread disaster we have had in our state.”

Bill Thiele, board president of the Nebraska State Dairy Association, said, “We’re going to be years recovering out here.”

Agriculture accounts for 20% of the state’s gross domestic product, and livestock accounted for nearly 60% of its agriculture revenue.

Last week’s blizzard hit Nebraska during calving season for the state’s 1.9 million beef cows, and then the floods came.  One rancher told the Wall Street Journal he was forced to abandon 175 cows when the floodwaters rose.

--Shares of Bayer AG fell nearly 10% Wednesday after the chemicals and pharmaceuticals giant faced another legal setback in its fight against accusations that its Roundup weed killer causes cancer.

A San Francisco jury found that exposure to Roundup was a “substantial factor” in triggering a man’s non-Hodgkin lymphoma.  The verdict is yet another indication of how Bayer’s $63 billion acquisition of Monsanto Co. has become its biggest potential liability.

There are more cases going to trial this year and Bayer needs to win a few to convince investors damages can be limited, and that the Monsanto bet can still work out.

Bayer said it was disappointed with the jury’s decision and continues “to believe firmly that the science confirmed that glyphosate-based herbicides did not cause cancer.”

Bayer faces suits from 11,200 farmers, gardeners and landscapers.  Last August, in the company’s first legal defeat, a jury held Bayer responsible for a groundskeeper’s non-Hodgkin lymphoma.  The stock in Germany has lost a third of its value over the past year.

--While President Trump criticizes General Motors for closing its Lordstown, Ohio, plant, the company said on Tuesday it would invest $2.65 billion in two of its Brazilian plants in Sao Paolo state over the next five years, reversing what the state’s governor said was a previous plan to shut down the facilities, potentially costing 65,000 jobs.

GM is the sales leader in Brazil’s market, the largest in South America, but had warned employees that it was dealing with heavy losses, adding that sacrifices would be necessary.

But then today, CEO Mary Barra announced at a plant in Michigan that it will invest $300 million to build a new electric car domestically rather than outside the country, part of a broader initiative to spend $1.8 billion at its U.S. manufacturing operations, adding 700 jobs in several states over the next three years.

Of course when the auto industry goes into recession in the U.S., which is inevitable, GM and others of its ilk will scrap their expansion plans, as would be prudent, but President Trump will have a conniption anyway, especially if it occurred in, say, June 2020.  

--Volkswagen CEO Herbert Diess is under fire for a comment he made that evoked a Nazi phrase in a management meeting last week.

Diess, who took the reins of the world’s largest carmaker a year ago, told managers recently that the high margins of VW Group’s Porsche brand gave it more freedom than its other brands such as Audi.

But he said, “Ebit macht frei,” or “Profits will set you free,” which seemed to be a play on the phrase “Arbeit Macht Frei,” or “Work will set you free,” which was forged into the gates of the Auschwitz concentration camp.

Diess apologized for his “unfortunate choice of words,” but few expect him to survive. Several people at the meeting told Manager Magazin Diess used it multiple times.

--BMW announced a $13.5 billion cost-saving plan and warned that 2019 profits will be “well below” last year’s levels because of higher technology costs and foreign exchange movements.  This comes after the group, which also owns the Mini and Rolls-Royce brands reported an 8 percent drop in pre-tax profits for last year.

BMW said its forecasts for a drop in pre-tax profits this year were based on “the assumption that worldwide economic and political conditions will not be significantly [changed],” and added that any changes – such as a no-deal Brexit – could cause profits to fall even further.

Plus the trade war sparked by President Trump is threatening high tariffs on cars shipped between Europe, China and the U.S.

--Ford will cut 5,000 jobs in Germany and an undetermined number in the UK as it attempts to turn around its struggling operations in Europe. The announcement was made the same day we learned the CEO, Jim Hackett, received a package worth $17.8 million for last year, up from $16.7m a year earlier, even as profits were halved and the share price fell 40 percent.

--Lyft started its IPO road show on Monday, the offering oversubscribed based on commitments made so far by investors, as it has set an indicated price range of $62 to $68 per share for its debut March 28, though nothing is official.

Lyft’s IPO should bode well for larger rival Uber Technologies Inc., which is going public in April.

Lyft is looking for a valuation of as much as $23 billion, while Uber has been valued by bankers at around $120 billion.

--Levi Strauss & Co. shares hit the New York Stock Exchange on Thursday morning, marking its second Wall Street debut in the iconic jeans maker’s 166-year history.

Levi’s priced its shares at $17 and they ended up at $22.50 the first day, finishing the week at $22.20.

Levi Strauss was publicly traded from 1971 to 1985, then was bought in a leveraged buyout by the Haas family, descendants of the company’s namesake founder. The family made a fortune on the IPO and still owns roughly 80% of the voting shares.  Levi’s has overhauled its image and last year, posted sales of $5.6 billion, up 14% from the year before.

--FedEx Corp. cut its outlook for the second consecutive quarter after it reported a decline in revenue in its express unit and lower profit in its ground business from the higher cost of operating six days a week.

The global delivery giant blamed softening macroeconomic conditions and weaker global trade trends, while shippers are using slower, cheaper options in the express business.

FedEx also continues to struggle with the integration of European delivery company TNT Express, which it bought for $4.8 billion in 2016.

Meanwhile, the U.S. ground business posted a 6% drop in operating income.

FedEx executives continue to play down the ability of Amazon.com, which is adding more planes and trucks as well as delivering more of its orders to homes, to disrupt the market. FedEx said Amazon represents only 1.3% of FedEx’s revenue and isn’t “a threat to our future growth.”

But, overall, FedEx’s earnings and guidance are a potential warning sign before earnings season begins in earnest next month.

--Xiaomi, the world’s fourth-largest smartphone maker, reported a jump in fourth-quarter profits aided by overseas expansion that offset a shrinking market and competition at home.

Xiaomi reported revenue rose 27 percent for the period, even as it struggles to retain smartphone market share in China, with local rivals ZTE, Oppo, Vivio and Huawei challenging Xiaomi in its strongest budget phone category.

According to research firm IDC, global smartphone sales dropped 4.1 percent in 2018, the “worst year ever” for growth, with volumes in China, the world’s largest market, falling 10 percent.

Xiaomi, however, is helped by its leading position in India, now the company’s biggest market worldwide by phone shipments.  40 percent of the company’s overall revenue came from overseas markets, such as India, Indonesia and Europe.

--Shares in Biogen plunged 29% Thursday after the biotech announced it was discontinuing late-stage clinical trials for its closely watched experimental Alzheimer’s treatment.  Analysts had assumed all was going well and were forecasting sales of $3 billion for aducanumab in 2023, according to FactSet, a fifth of the projected sales rate for that year.

--Disney closed its $71.3 billion acquisition of 21st Century Fox assets, thus turning a behemoth into a colossus, the ripple effects of which will be felt for years to come.  Disney could now force smaller studios to merge as they scramble to compete, as Disney will have greater leverage over theater owners.  At the same time, Disney’s use of Fox content to move forcefully into streaming could slow the growth of Netflix.

Disney now owns most of Rupert Murdoch’s former empire, including the 20th Century Fox movie and television studio, which includes the likes of the “X-Men” and “Simpsons” franchises.  Disney also now owns the National Geographic and FX cable channels; most of the streaming service Hulu; and Star, a fast-growing television-service provider in India.

Prior to the Fox acquisition, Disney already dominated sports television through ESPN, was the global theme park leader, and ran Hollywood’s No. 1 movie studio.

By week’s end, Disney began laying off senior-level executives in an effort to wring savings from the deal, most of those affected at the 20th Century Fox lot.

More than 3,000 people, mostly at Fox, are expected to lose their jobs as Disney integrates the two companies.

--Nike Inc. said strong consumer demand in the U.S. and China helped the company sell more products at full price, but it cautioned that sales growth would slow in the current quarter.  Nike reported that revenue rose 7% in the quarter ending Feb. 28, with a 7% gain in North America and a 19% jump in Greater China; though these markets generated slower growth than they did in the prior quarter.

Nike said its digital business grew 36% and reached $1 billion in revenue for the first time.  Overall sales totaled $9.61 billion.

The report came a month after college basketball superstar Zion Williamson’s Nike sneaker ripped open during a nationally televised game, Duke vs. North Carolina, and Nike’s stock had  dropped on the news, though it rebounded.

--Tiffany & Co. reported slightly disappointing quarterly sales, but the shares rose 3% in a down market today on the company’s expectations for growth to resume in the second half of the year, helped by a healthy e-commerce business.

Tiffany also said it is taking steps to control the volatility surrounding tourist spending by investing in its domestic customers, with strong marketing campaigns and in-store experiences.

For the quarter ended Jan. 31, comp-store sales fell 1 percent, with flat sales in the Americas region.

--General Mills bucked the trend among packaged food companies by announcing it was raising, not lowering, its guidance. The maker of Cheerios, Haagen-Dazs ice cream and Yoplait yoghurt is boosting its profit outlook as it reaps the benefits of price increases and the addition of higher margin pet food sales following its acquisition of Blue Buffalo last year, the self-described “Whole Foods of dog food.”

General Mills’ stronger guidance stands in contrast to Kraft Heinz, which last month revealed a $15bn writedown, as well as a one-third cut to its dividend.

--Facebook on Thursday confirmed a report that some user passwords were being stored without encryption.

Brian Krebs, a cybersecurity journalist, reported on his website earlier in the day that the social-media giant saved up to 600 million passwords that were readable as plain text to thousands of the company’s employees.

A Facebook official said, “We estimate that we will notify hundreds of millions of Facebook Lite users, tens of millions of  other Facebook users, and tens of thousands of Instagram users.”

Facebook claims the issue was discovered in January during a security review and that it has been fixed.  The company also claims the passwords weren’t visible to anyone outside the company and that it has found no evidence that anyone at Facebook improperly accessed or abused them.

You’d be nuts to believe them.  Yet another outrageous breach of trust.

--Warner Brothers chief executive Kevin Tsujihara resigned after an investigation into a past relationship with an actress.  Three senior executives were appointed to oversee operations on a temporary basis while WarnerMedia head John Stankey works on a permanent replacement.

Tsujihara stepped down after revelations about a relationship he had with Charlotte Kirk in which he suggested in text messages that he would help to arrange meetings for her that could lead to roles in Warner movies.  She eventually landed two minor ones, the Hollywood Reporter first reported, courtesy of ye olde casting couch.  Kirk said the relationship was consensual.

--The Wall Street Journal reported that the brother of Jeff Bezos’ lover, Michael Sanchez, sold the billionaire’s racy texts that he was sending to Lauren Sanchez to the National Enquirer for $200,000.  Mr. Sanchez said he didn’t want to “dignify” the Journal’s reporting on the contract he struck, but declined to comment on whether he provided photos of Mr. Bezos to the Enquirer.

The Enquirer approached the Amazon chief for comment on Jan. 7, the Journal reports, and two days later, Bezos tweeted that he and his wife MacKenzie were splitting up after 25 years.

Foreign Affairs

Israel: Out of nowhere, on Thursday, President Trump tweeted:

“After 52 years it is time for the United States to fully recognize Israel’s Sovereignty over the Golan Heights, which is of critical strategic and security importance to the State of Israel and Regional Stability!”

Israeli Prime Minister Benjamin Netanyahu thanked President Trump for the move, which comes on the eve of his re-election bid, April 9.  “At a time when Iran seeks to use Syria as a platform to destroy Israel, President Trump boldly recognizes Israeli sovereignty over the Golan Heights. Thank you President Trump!” Netanyahu tweeted.

Netanyahu has been pressing the United States to recognize its claim and raised that possibility in his first White House meeting with Trump in February 2017.  Trump’s statement has given a huge boost to the Israeli prime minister’s campaign.

The United Nations has rejected Israel’s occupation of the Golan Heights since 1967, when Israeli troops seized the 400 square miles of rocky highlands from Syria during the Arab-Israeli war.

Aside from reverberating through the Middle East, Trump’s move could undermine his long anticipated peace proposal for Israel and the Palestinians, which the administration is preparing to release after Israel’s election.

Syria condemned Trump’s statement, vowing it would recover the area using “all available means.”

Syria’s state news agency cited a foreign ministry source who said: “The Syria nation is more determined to liberate this precious piece of Syrian national land through all available means,” adding Trump’s statement was “irresponsible” and showed “contempt” for international law.

A spokesman for the Iranian foreign ministry said Friday, “This illegal and unacceptable recognition does not change the fact that it belongs to Syria.”

Turkish President Erdogan said Trump’s statement has brought the region to the edge of a new crisis.  In a speech Friday, Erdogan said, “We cannot allow the legitimization of the occupation of the Golan Heights.”

Russia’s Foreign Ministry said on Friday that a change in the status of the Golan Heights would be a direct violation of United Nations decisions.

The move by Trump is symbolic for now, as there is no negotiation underway on the status of the Golan, and the United States will now veto any UN Security Council resolution condemning the move.

But the decision by the president is nonetheless momentous.

“I’ve been thinking about doing that for a long time,” Trump told Fox Business Network in an interview.  “Every president has said ‘do that.’ I’m the one that gets it done.”

Netanyahu is also being rewarded with a White House visit next Monday.

Saeb Erekat, a veteran Palestinian Authority peace negotiator, tweeted: “What shall tomorrow bring? Certain destabilization and bloodshed in our region.”

Editorial / Wall Street Journal

“President Trump made new U.S. policy on Thursday, as he often does these days, with a tweet recognizing Israel’s sovereignty over the Golan Heights on the border with Syria. This time his tweet was based on more than personal impulse and makes sense for American and Israeli interests.

“Israel captured most of the Golan from Syria in the 1967 war and formally annexed it in 1981. The rest of the world has never recognized Israel’s control, and U.S. negotiators over the decades have seen it as land Israel would return to Syria as part of a broader peace settlement.

“That scenario has become even more unlikely amid the chaos of Syria’s long civil war.  A country controlled by the Assad family has become a fractured cauldron of jihadist militias and Iranian proxies.  If Israel didn’t control the Golan, the heights might now be dominated by Hezbollah or perhaps Islamic State. Either reality is unacceptable to Israel.

“Prime Minister Benjamin Netanyahu has been lobbying Mr. Trump to recognize Israel’s control of the Golan, and the timing of Mr. Trump’s tweet might help Mr. Netanyahu with elections looming.  But annexation of the Golan isn’t controversial in Israel.  Arab countries will object, but that will fade as anger did when Mr. Trump moved the U.S. Embassy to Jerusalem.

“Recognizing the Golan sends a message to Russia, Syria’s patron, that the U.S. recognizes that the civil war has changed Syrian reality.   There is no returning to a nonexistent status quo ante.  It also tells the Palestinians that a return to pre-1967 borders is no longer realistic. They will have to allow some Israeli security presence in what they call the ‘occupied territories’ if they want a two-state solution in Palestine.

“Mr. Trump’s guiding foreign-policy doctrine of ‘principled realism’ can be hard to discern or define amid his policy-by-Twitter, but recognizing the Golan is principled in its support for an ally and realistic in recognizing the Middle East as it is.”

In a Channel 12 News poll, released before President Trump’s tweet, Israeli opposition leader Benny Gantz’s Kahol Lavan political alliance would receive 32 of the Knesset’s 120 seats, versus Netanyahu’s Likud at 27, but the prime minister’s right-wing bloc would still receive more seats than the center-left.

Tonight, Netanyahu has sued Gantz and ex-defense minister Moshe Yaalon for libel, claiming that they labeled him a traitor over a graft scandal involving a German submarine deal. This is an incredibly dirty campaign, Bibi, immensely corrupt, the chief offender.

Syria: Zvi Bar’el / Haaretz...very much related to the above...on Russian withdrawal from Syria.

“Anger and tension between Russia and Turkey sparked in recent weeks when Turkish President Recep Tayyip Erdogan asked Russia to grant another extension without clarifying how he intended on fulfilling his end of the withdrawal agreement.  Meanwhile, Russia is pushing to complete the move even through a military operation so it can proceed to the diplomatic stage and end the war.

“The one who should be worried about the expected Russian withdrawal is Israel, which sees in Russia the most important guarantor for stopping Iranian military entrenchment in Syria, especially along the border on the Golan Heights.  Russia, which did not keep its promise to keep the pro-Iranian forces dozens of kilometers to the east of the border, proposed in August establishing observation points along the border, with the purpose of preventing the entry of foreign forces to the border area – but only now has it completed the construction of a single observation point manned by Russian military police.

“The Russian statement said that five more surveillance bases along the border will be ready for operation soon, and as far as Moscow is concerned, there is no reason for United Nations observers not to return to these bases and their patrol missions along the ‘Bravo Line,’ which marks the Syria side of the demilitarized buffer zone established in the separation of forces agreement from 1974 after the Yom Kippur War.

“In practice, the UN observers began partially patrolling the border in August, but now it seems that these forces can soon return to carrying out their mission in full.  The UN observers’ return, when it actually happens, will testify not only to the return of Assad’s control of the border, but also to Israel’s agreement that Syrian forces can come up to the Bravo Line – as well as the return to the ceasefire agreements that will force Israel to stop military incursions through this border – a border used by Israel to provide aid to the civilian population across the border.

“Israel hopes that the removal of Russian forces will provide Moscow with more leverage over Iran to demand it withdraw its forces – but Tehran has yet to show any sign that it intends on adopting the Russian move.

“The official relations between Syria and Iraq are also growing stronger, and this is particularly worrying....

“Syria and Iraq are connected through three main border crossings.  One, near al-Tanf, is controlled by the American forces still in Syria and whose mission is to prevent Iranian forces from entering Syria via Iraq.  The second, al-Rabia in the northeast corner of Syria, is controlled – for now – by the Syrian Kurdish forces. The third, the al-Qa’im crossing, is under the control of the Assad regime and could serve as a convenient crossing point not only for Iraqi goods but also for soldiers and weapons from Iran passing through Iraq to Syria.”

So knowing what you know about the U.S.-backed Syrian Democratic Forces, SDF, you can see from the above the importance of the American troop presence in Syria.  For now, President Trump has been convinced to leave the troops in Syria, and at last report, 1,000 will stay in the theater for now, with the bulk of them continuing to work with the Kurds, primarily because Turkish President Erdogan has refused to guarantee the Kurds’ safety after the U.S. withdraws.

The SDF said on Sunday that more than 60,000 people, mostly civilians, had flooded out of ISIS’ last enclave in eastern Syria since the final assault to capture it began over two months ago.  29,600 people, the majority of them families of Islamic State fighters, had surrendered since the U.S.-backed forces laid siege to Baghouz and the surrounding hinterlands on the Euphrates River.

The SDF said that 1,306 “terrorists” had been killed alongside many who were injured in the military campaign that began on Jan. 9, while 82 SDF fighters had been killed.  The SDF also said another 520 militants were captured, so there are thousands more prisoners to watch over than the Pentagon had originally estimated, including those I noted the last two weeks.  All the more reason to keep a large force in the country.

[And despite claims from President Trump and others that the operation in Baghouz is essentially over, Agence France Presse reported today of more U.S.-led coalition airstrikes in eastern Syria to flush out holdout ISIS fighters.  The Britain-based Syrian Observatory for Human Rights also reported there were Daesh holdouts hiding in underground tunnels and caves in Baghouz.]

Iran: All of Israel is within range of Hezbollah’s missiles, Commander of the Islamic Revolution Guards Corps (IRGC) Maj-Gen. Mohammad Ali Jafari said in an interview with Iranian media last Sunday.

Israel and Hezbollah last fought a war – the Second Lebanon War – in 2006, and has since then morphed from a guerrilla group to an army with a set hierarchy and procedures.  With the help of Iran, it has rebuilt its arsenal since 2006 and has hundreds of thousands of short-range rockets and several thousand more missiles that can reach deeper into Israel.

“To put it in a nutshell, we can say that the enemy has not been successful in the region and all its plots and operations have ended up with nothing but failure for them and success for the Islamic Revolution and the Resistance Front,” Jafari said.

Afghanistan: Two American service members were killed during an operation in Afghanistan on Friday, the U.S. and NATO forces said without providing any other details on the combat deaths.

14,000 U.S. troops remain in Afghanistan, supporting embattled Afghan forces as they struggle on two fronts – against the resurgent Taliban, who holds sway over about half the country, and Islamic State, which has a footprint in Afghanistan.

The Pentagon has been developing plans to withdraw up to half the American forces still in the country, while negotiating with the Taliban.

North Korea: The United States sanctioned two China-based shipping companies it says helped North Korea evade U.S. and international sanctions over its nuclear weapons program, the first such steps since the Hanoi summit between Kim Jong Un and President Trump. The U.S. also listed 67 vessels that have engaged in illicit transfers or refined petroleum with North Korean tankers or were believed to have exported North Korean coal.

U.S.-North Korean engagement has appeared to stall after the summit’s breakdown, with Pyongyang warning it is considering suspending talks and may rethink a freeze on missile and nuclear tests in place since 2017 unless Washington makes concessions.

The UN recently issued a report saying North Korea continued to defy UN sanctions with a massive increase in smuggling of petroleum products and coal and violation of bans on arms sales.

And very worrisomely, today, North Korea announced it was withdrawing from the inter-Korean liaison office which was opened amid a warming of ties last year to facilitate talks with the South.

It’s not known if this is a permanent departure or the Kim regime just wanting to send a message that it wants ‘something’ before it returns.  The two Koreas have not met since the failed Hanoi summit.

The liaison office, on the North’s side of the demilitarized border, had allowed officials from North and South Korea to communicate on a regular basis for the first time since the Korean War.

The only good news this week came from South Korea’s defense minister, who told parliament on Monday that it was premature to say whether recent activity at some of North Korea’s rocket facilities involved preparation for a missile launch, though Defense Minister Jeong Kyeong-doo said there were signs of continued nuclear activity in the North, without elaborating.

So a few hours after I wrote this up, President Trump reversed the sanctions announced by the Treasury Dept. on Thursday and the White House said he was doing so because he “likes” Kim Jong Un and did not consider them necessary.

“It was announced today by the U.S. Treasury that additional large-scale Sanctions would be added to those already existing Sanctions on North Korea,” Trump tweeted.  “I have today ordered the withdrawal of those additional Sanctions!”

There were no further details from the White House this evening, the political world swept up in the Mueller report, but what a fiasco, and what a direct rebuke of national security adviser John Bolton, who said early this month the United States would look at ramping up sanctions on Pyongyang if it did not scrap its nuclear weapons program.

China: Nothing worries the regime of President Xi Jinping more than a big environmental disaster or product safety issues impacting the health of the people and China is in the midst of two such disasters this week.

An explosion at a pesticide plant in eastern Jiangsu province killed at least 47 people and injured more than 600, the latest in a series of industrial accidents angering the public. The fire spread to neighboring factories, with the offending company cited for work safety violation in the past, the China Daily said.  The local environmental officials said there were no abnormal concentrations of harmful chemicals or gases, but it’s tough to believe them.

Executives of the plant were taken into custody.

[The United States has its own issue with industrial safety this week; the petrochemical fire in Houston that flared anew today at a massive fuel storage facility, with fears the public is not being told the truth on air quality and the safety of the water supply.]

Separately, African swine fever is spreading and becoming more entrenched in China despite assurances that the situation has been brought under control, with fears local authorities are covering up outbreaks while journalists are being ‘ordered’ not to cover the story due to fear of spreading panic.

The disease, which is not harmful to humans but is deadly for pigs, poses a serious threat to the country’s farming industry and support industries, such as animal feed.

Supply shortages and possibly higher prices caused by the disease would affect Chinese consumers, for which pork is a staple.

Separately, another take on the Huawei story.

Katherine C. Epstein / Wall Street Journal

“There’s been a  good deal of hand-wringing in the U.S. over efforts by the Chinese telecommunications giant Huawei to replace U.S. suppliers of advanced equipment and wire the world with its 5G network. Most analysis of China’s strategy turns on the conviction that the Chinese are trying to challenge U.S. commercial and geopolitical hegemony – they steal U.S. technology and then sell their plagiarized equipment at a lower price. Worse, they seek to build an alternative, China-led global telecom infrastructure, positioning Beijing to spy on the users and capture yet more U.S. commerce....

“(Reflect) on Russia’s efforts to interfere with U.S. elections. Partisanship aside, Moscow has managed, at relatively low cost, to reduce the confidence that Americans have in each other and the electoral process.  It waged a successful psy-op, compromising not material resources but social confidence. Its campaign showed that foreign countries can manipulate information within global networks to sow distrust within American society.

“What would a scaled-up version of this attack look like?  What if it were carried out over a China-dominated information network?

“The second missing piece is awareness that if China is trying to challenge (or escape) U.S. hegemony by stealing American technology and building an alternative global telecommunications infrastructure, this would be analogous to what the U.S. tried to do vis-à-vis Britain, then the global hegemon, and the other great powers in the World War I era. Americans tend to forget how powerful Britain was and how weak the U.S. remained before World War I.

“In its drive for world status, America routinely pilfered foreign technology well into the 20th century, and it gained considerable strategic advantage from its theft....

“The U.S. came to appreciate the significance of controlling global economic infrastructure when Britain’s campaign of economic warfare against Germany in World War I caused huge collateral damage to the American economy.  Companies worked hand-in-hand with the U.S. Navy to build a global telecommunications grid – perhaps similar to the way Huawei, run by a former Chinese army officer, may be working hand-in-hand with the Chinese army.

“Wall Street cooperated with the U.S. government to develop a modern financial-services industry deliberately intended to help New York displace London as the world’s financial capital....

“In short, a century ago, the U.S. was the China of the age: an up-and-coming revisionist nation chafing against the established powers, importing and pirating what it could, free-riding on the security provided by the existing hegemon, and legitimizing its behavior with the pious conviction that it was on the right side of history. Could it be that the Chinese understand U.S. history better than Americans do?

“It’s easy to be moralistic about China, but in the quest to find a sound U.S. strategy, we need less pearl-clutching and more imagination. Rising powers have compelling strategic incentives to control the sinews of global economic activity as well as to acquire foreign technology.  Americans and their allies should ask themselves whether they would rather live in a world under U.S. or Chinese hegemony – and what they can do about it.”

Russia: President Vladimir Putin has signed a controversial set of bills that make it a crime to “disrespect” the state and spread “fake news” online, Russian media reported on Monday.  Observers and some lawmakers have criticized the legislation for its vague language and potential to stifle free speech.

The legislation will establish punishments for spreading information that “exhibits blatant disrespect for the society, government, official government symbols, constitution or governmental bodies of Russia.”

Online news outlets and users that spread “fake news” will face fines of up to 1.5 million rubles ($23,000) for repeat offenses.

Insulting state symbols and the authorities, including Putin, will result in a fine and 15 days in jail for repeat offenses.

Kazakhstan: Nursultan Nazarbayev, the president of Kazakhstan, said on Tuesday that he was resigning as the oil-rich Central Asian nation’s leader after three decades in power.

Nazarbayev, 78, had led the former Soviet republic since 1989, first as its Communist leader and then as president.

The speaker of the upper house of parliament will take over as the country’s acting president, but eventually, Nazarbayev’s daughter is going to take control, with Russia and China looking for influence.  Nazarbayev enjoys a strong working relationship with Vladimir Putin.

Venezuela: Another week with President Nicolas Maduro still in control, while there is seemingly no real U.S. strategy.

Opposition leader Juan Guaido said on Thursday that Maduro’s goons had detained his chief of staff during a pre-dawn raid, which the White House said would “not go unanswered.”  National security adviser John Bolton called for the immediate release of Robert Merrero.  “Maduro has made another big mistake,” Bolton said on Twitter.

Guaido invoked the constitution in January to assume the interim presidency after declaring Maduro’s 2018 re-election a fraud.

New Zealand: Acting with incredible speed, which caught the world’s attention, Prime Minister Jacinda Ardern said that all military-style semi-automatic weapons, assault rifles and high-capacity magazines will be banned in the country following the mass shootings at two Christchurch mosques that killed 50 people.

“Every semi-automatic weapon used in the terror attack on Friday will be banned,” Ardern said on Thursday.  “This legislation will be drafted and introduced in urgency.”

The goal is for the law to be in place by April 11.  The prime minister encouraged all gun owners who wish to surrender their weapons to start now.  A buy-back scheme will be put in place as well.

Ardern also called for a global fight to root out racist right-wing ideology, rejecting the idea that a rise in immigration was fueling racism.

Police in New Zealand say that Brenton Tarrant, the self-described white supremacist responsible for the massacre, acted alone.

Meanwhile, last week I said that ISIS would use the Christchurch massacre as a recruiting tool, and sure enough, the spokesman for the group emerged from nearly six months of silence on Monday to mock America’s assertion of having defeated the group and called for retaliation over the mosque attacks.

“The scenes of the massacres in the two mosques should wake up those who were fooled, and should incite the supporters of the caliphate to avenge their religion,” the spokesman, Abu Hassan al-Muhajir, said in a 44-minute audio recording.

The significance of this statement is that al-Muhajir (the name is made up...his true identity unknown) released just two audio statements in 2018, with the last one in September, less than four minutes long.

Mozambique: It is getting little press in the United States, but Cyclone Idai triggered a “massive disaster” in southern Africa, affecting millions of people; Mozambique, Zimbabwe and Malawi hit by devastating flooding.  The final death toll is incalculable at this point, with so many villages cut off, and large cities reduced to basically rubble, though the UN said today over 520 deaths were known of between Mozambique and Zimbabwe, though in a road out of the city of Beira* in Mozambique, CNN reported that an eyewitness saw “300 to 400” bodies line the banks.

The UN’s weather agency said “This is shaping up to be one of the worst weather-related disasters ever to hit the southern hemisphere.”

*The Red Cross estimated that 90 percent of Beira, a port city of 500,000, was damaged or destroyed.  

Brazil: Right-wing President Jair Bolsonaro, despite the outward appearances, won little from his meeting with President Trump at the White House. While Trump praised Bolsonaro and issued conditional promises, Brazilian negotiators came away grumbling about their hosts driving a hard bargain.

Brazil received virtually nothing for granting a unilateral visa waiver for U.S. visitors, a tariff-free quota for wheat imports and easier access for U.S. space launches from Brazil.

Bolsonaro, an outspoken admirer of Trump, failed to win concessions for Brazil’s sugar exports or overturn a U.S. ban on fresh Brazilian beef – both major objectives of the country’s farm sector.

Random Musings

--Presidential tracking polls...

Gallup: 39% approval of President Trump’s job performance, 57% disapproval; 90% Republicans, 33% Independents (Mar. 15)
Rasmussen: 45% approval, 53% disapproval (Mar. 22)

In the above-noted CNN Poll, 42% approve of Trump’s job performance, 51% disapprove.

--A separate CNN Poll conducted by SSRS shows a field of four in double digits in the race for the Democratic nomination for president.

Former vice president Joe Biden (28%), Sen. Bernie Sanders (20%), Sen. Kamala Harris (12%, and up from 4% in December) and former Texas congressman Beto O’Rourke (11%) have, for now, set themselves apart, among Democrats and Democratic-leaning independents.

Sen. Elizabeth Warren (6%) follows, along with former Sec. of State John Kerry (4%), Sen. Cory Booker (3%) and Sen. Amy Klobuchar (3%).

But the CNN poll is also showing a level of enthusiasm for the presidential contest far greater than previous elections, with four in 10 saying they are “extremely enthusiastic” about voting for president.

But among self-identified Republicans, 57% say they are extremely enthusiastic about voting for president, compared with 46% among Democrats and 26% among independents, though this is likely because Republicans are largely in sync with the president, while Democrats don’t have a sense of who their standard bearer will be.

Among Republicans and Republican-leaning independents, 78% say the party has a better chance of winning with Trump at the helm, than with someone else at the top of the ticket (17%).

--As for Beto O’Rourke, who raised $6.1 million in the first 24 hours after formally announcing his candidacy, he acknowledged, among other things, that he was part of a hacking group when he was a teenager in El Paso.  O’Rourke, 46, was a member of the group Cult of the Dead Cow back in the 1980s.

Reuters detailed some of O’Rourke’s posts, which were pretty awful, but he was supposedly 15 at the time.

But I said the whole ‘Beto thing’ will flame out...and it will.  There’s nothing there.

I also like what Kathleen Parker wrote from her Washington Post perch.

“It must be a grown-up thing, but every time I see Beto O’Rourke, I want to fix him a hamburger.  He’s precious.

“And, if my eyes serve me, he’s hungry.

“Call it maternal instinct; call it age.  But, let’s call the Texas Democrat’s nascent presidential campaign what it is: a youthful folly.  If only the media machine weren’t already doing its dangedest to advance a narrative primarily of its own making.  No one in recent memory, save for Donald Trump, has received so much free advertising by simply showing up....

“When he flails his arms, often in front of his own face, he reminds mothers everywhere of the moment when an infant suddenly realizes that the hand bobbling in front of his nose belongs to him, whereupon he remains mesmerized until he realizes there’s another one!

“O’Rourke apparently hasn’t quite made the connection, but some coaching may help. If not, we’ll be listening to the hand.”

--Editorial / Wall Street Journal

“Last week we wrote about Democratic ambitions to pack the Supreme Court. This week the Electoral College is on the chopping block as Senator Elizabeth Warren comes out in favor of its abolition, Beto O’Rourke makes sympathetic noises and Colorado’s Democratic Governor signs a bill adding his state to the ‘National Popular Vote Interstate Compact.’  Scrapping the system the U.S. has used to select Presidents since its founding will likely soon be the Democrats’ default position.

“Like the Supreme Court, the Electoral College sometimes frustrates the will of political majorities. That makes it an easy target in this populist age. But while ‘majority rules’ has always been an appealing slogan, it’s an insufficient principle for structuring an electoral system in the U.S.

“Presidential elections often do not produce popular majorities. In 2016 neither Hillary Clinton nor Donald Trump won 50%.  ‘Plurality rules’ doesn’t have the same ring to it.  In the absence of the Electoral College, the winner’s vote share would likely be significantly smaller than is common today.  Third-party candidates who can’t realistically win a majority in any state would have a greater incentive to enter the race.

“Democrats are upset that Mr. Trump is President with 46% of the vote to Ms. Clinton’s 48%. What if a Republican was elected with a third of the vote in an election featuring five formidable third-party candidates?  A free-for-all plebiscite would hurt the system’s legitimacy.  The Electoral College helps narrow the field to two serious contenders, as voters decide not to waste their vote on candidates who have no chance to win.

“The founders designed the Electoral College to help ensure that states with diverse preferences could cohere under a single federal government.  Anyone who thinks this concern is irrelevant today hasn’t been paying attention to the current polarization in American politics. The Electoral College helps check polarization by forcing presidential candidates to campaign in competitive states across the country, instead of spending all their time trying to motivate turnout in populous partisan strongholds....

“The Electoral College abolitionists are unlikely to get a supermajority of three-fourths of states to agree to pass a constitutional amendment.  The greater danger is the popular vote compact that Colorado has joined, which requires signatories to ignore their voters and grant their electoral votes to the national popular vote winner. It goes into effect once states representing 270 electoral votes have signed.  If the governors of New Mexico and Delaware sign their states’ bills as expected, then 14 states and the District of Columbia with 189 votes will have signed up. A Democratic sweep at the state level could one day get to 270.

“The pact is likely unconstitutional.  But if it succeeded it would inject more corrosive uncertainty into American elections in pursuit of a hyper-populist system that goes against the structure of the Constitution that has protected liberty for 230 years.”

--Two polls released this week show overwhelming support among New Yorkers for the effort to bring Amazon to Long Island City and even for giving the company $3 billion in incentives to do so.

A Siena poll released Monday showed that two-thirds of New York State registered voters (67%) thought Amazon’s decision to cancel its plan to bring 25,000 jobs over the next decade was bad for New York, while 21% said it was good for the state.  Rep. Alexandria Ocasio-Cortez (Dem.) was the chief villain, according to 38% of those polled.  Only 12% called her a hero.

A Qunnipiac survey Tuesday reported that two-thirds of New Yorkers approved of Gov. Andrew Cuomo’s efforts to try to convince Amazon to reverse its decision.  59% supported the $3 billion in incentives offered the company.

As for Ocasio-Cortez, whom most New Yorkers blame for the Amazon decision, Bloomberg reported that while she “rode into office failing against the influence of big money and hidden donors in U.S. elections,” AOC has hardly been transparent in her own political operation that helped win her seat.

“The New York congresswoman raised a hefty $2 million for her 2018 election while refusing to take money from business-related political action committees.  Of that, 61 percent came from individuals giving less than $200 – the highest rate of small-dollar funding among current U.S. House members.

“At the same time, Ocasio-Cortez’s campaign committee and two PACs paid almost $900,000 to a consulting company for campaign services, providing few details on what the money was for or who ultimately received it.

“The unorthodox arrangement – she sat on the board of one of the PACs, both of which were co-founded by the person who is now her chief-of-staff, who also ran the consulting company – appears to have taken advantage of gaps in the law, including the low level of detail that campaigns and PACs are required to provide about their spending.”

There is no evidence AOC actually did anything wrong other than paperwork violations, but it’s items like this that bring ammunition to her detractors (count me in that group).

Ocasio-Cortez, in a tweet, called the complaints “bogus,” and said “This is how the misinformation machine works, folks.”

--Jonah Goldberg / New York Post...on the admissions scandal...

“This scandal is a staggering indictment of higher education, and American education policy generally.  Virtually every constituency in American life has good reason to be rankled.

“Defenders of affirmative action are rightly livid about this effort, by mostly rich white people who already have every advantage imaginable, to game the system.  Opponents of affirmative action who argue that merit alone should determine admissions have every reason to be outraged as well.

“For both groups, and for everyone between the two extremes, the pressure to get kids into the best college possible – and then figure out how to pay for it – is a source of incredible anxiety.

“But the scandal goes beyond just these issues.  It’s also a searing indictment of the value of an elite college education in the first place.  None of these parents seemed remotely concerned about whether their kids could hack it once they got into their dream schools – and rightly so.

“In his book ‘The Case Against Education,’ George Mason economics professor Bryan Caplan makes a compelling case that most of the value in diplomas from elite colleges isn’t in the education they allegedly represent but in the cultural or social ‘signaling’ they convey.

“Imagine you’re deposited on a desert island, forced to fend for yourself.  Would you rather have the knowledge that comes with taking a survival training course, or just the piece of paper that says you took the course?  Obviously, you’d rather know how to identify poisonous plants and sources of water than have a diploma that says you know how to do things you can’t do.  Now, ask yourself: Would you rather have the Yale education without the diploma, or the diploma without the education?

“From an economic perspective, the piece of paper is vastly more valuable than the education, particularly in the humanities (and Caplan through the numbers to demonstrate this).  The paper opens doors and gets you callbacks from employers and entrée into elite social circles where who you know matters more than what you know. The education might make you a better person, but the parchment is the ticket to opportunity.  It’s no guarantee of success, but it’s a profound hedge against failure.

“Parents know this, and parents without special advantages (wealth, fame, connections) resent it.

“As a matter of public policy, the way we tell everyone they should go to college, even if it means incurring crushing debt, is a scandal.

“College isn’t for everyone, and it isn’t necessary for many careers or vocations – and shouldn’t be necessary for many others.

“If there’s a maxim that should serve as a golden rule for policymakers, it’s this: Complexity is a subsidy.  The more complex we make a system, the more it rewards people with the resources (social, cognitive, political or financial) to navigate them. A system that rewards subjective priorities – in the name of diversity, athletics, social justice, donations, preferences for legacy students, whatever – creates opportunities for bureaucrats, parents and students to game the system.

“You’re never going to create a system where some parents won’t do anything and everything to help their kids.  All you can do is create a system that makes it more difficult to cheat or exploit loopholes. That requires clear, simple rules applicable to everyone.”

--As alluded to above with some of President Trump’s tweets, Fox News pulled Saturday’s episode of conservative commentator Jeanine Pirro’s program after publicly admonishing her for on-air comments she made last week about a Muslim congresswoman’s hijab.

“Justice With Judge Jeanine,” a favorite of President Trump’s, is also not slated to be on this Saturday, though while Fox News issued a public rebuke of Pirro over her comments about Rep. Ilhan Omar (D-Minn.), they haven’t said as yet whether she has been suspended, or worse.  Four advertisers on the program suspended their sponsorship.

Fox News has been dealing with advertiser issues in two of its prime-time programs, “Tucker Carlson Tonight” and “The Ingraham Angle.”

Pirro said in a statement: “I’ve seen a lot of comments about my opening statement from Saturday night’s show and I did not call Rep. Omar un-American. My intention was to ask a question and start a debate, but of course because one is Muslim does not mean you don’t support the Constitution. I invite Rep. Omar to come on my show any time to discuss all of the important issues facing America today.”

Separately, Gabriel Sherman reported in Vanity Fair Tuesday that internal divisions are arising in Fox News’ coverage of President Trump.

“Donald Trump’s alliance with Fox News has been one of the few constants throughout his shambolic presidency,” Sherman wrote.  “But in recent days, that bond has shown signs of fraying.”

“Reporters are telling management that we’re being defined by the worst people on our air,” Sherman wrote, citing a senior source in Fox News.

Sherman added: “Sources said [Sean] Hannity is angry at the Murdochs’ firing of [Roger] Ailes and Bill Shine,” and that Hannity believes “the Murdochs are out to get Trump,” suggesting he may leave the network in the future.

Now I have no clue if Mr. Sherman’s reporting is accurate, but what we have clearly seen is President Trump’s relationship with some members of the Fox team is deteriorating, including an outrageous tweet last weekend concerning two of their weekend anchors...that was out of leftfield, to say the least.

“Were @FoxNews weekend anchors, @ArthelNeville and @LelandVittert, trained by CNN prior to their ratings collapse?  In any event, that’s where they should be working, along with their lowest rated anchor, Shepard Smith!”

The president also can’t be happy that former House Speaker Paul Ryan is joining the board of Fox Corp.

--Following up on the killing of reputed New York mob boss Frank Cali, Anthony Comello, 24, was arrested and accused of the murder, but at this point, it looks like it may have been motivated by a dispute over a relationship and not a mob hit.

Comello wanted to date Cali’s niece but he didn’t have Cali’s blessing.  Comello also may have been high when the shooting happened and he thought Cali was armed as well.  Police didn’t find a weapon on him.

Needless to say, Comello will have issues in jail. 

--In the latest World Happiness Report, published by the UN this week, Finland remains on top for a second year in a row.  The rankings used variables that support well-being, including GDP per capita, social support, healthy life expectancy, social freedom, generosity and absence of corruption.

1. Finland
2. Denmark
3. Norway
4. Iceland
5. Netherlands
6. Switzerland
7. Sweden
8. New Zealand
9. Canada
10. Austria

19. United States
68. Russia
93. China

Bottom three:

154. Afghanistan
155. Central African Republic
156. South Sudan

--In a survey of 424 weather stations throughout the Lower 48 states that had consistent temperature records since 1920, the Associated Press counted how many times daily hot temperature records were tied or broken and how many daily cold records were set.  In a stable climate, the numbers should be roughly equal.

Since 1999, the ratio has been two warm records set or broken for every cold one.  In 16 of the last 20 years, there have been more daily high temperature records than low.

The AP shared the data analysis with several climate and data scientists, who all said the conclusion was correct, consistent with scientific peer-reviewed literature and showed a clear sign of human-caused climate change.  They pointed out that trends over decades are more robust than over single years.

National Oceanic and Atmospheric Administration climate monitoring chief Deke Arndt said, “We are in a period of sustained and significant warming and – over the long run – will continue to explore and break the warm end of the spectrum much more than the cold end.”

The AP reported that when looking at extremes, no place has been more noticeable than the Southern California city of Pasadena, where 7,203 days went by between cold records being broken.  On Feb. 23, Pasadena set a low temperature record, its first since June 5, 1999.

In between the two cold records, Pasadena set 145 hot records, including an all-time high of 113 degrees last year.

--A beached whale found in the Philippines last weekend died with 88 pounds of plastic trash inside its body.  The 1,100-pound whale, measuring 15 feet in length, was found with more than 40 pounds of plastic bags inside its stomach, along with a variety of other disposable plastic products.  An expert on the scene who conducted the necropsy called it the worst collection of plastic inside an animal he had ever seen.

Darrell Blatchley said: “The plastic in some areas was so compact it was almost becoming calcified, almost like a solid brick.  It had been there for so long it had started to compact.”

--Congratulations to Jimmy Carter, who now holds the title of longest-living President in United States history, passing George H.W. Bush Thursday at 94 years and 172 days old – one day older than Bush was when he died last November.

Other than Carter and Bush, the only four other Presidents to have made it to 90: John Adams, Herbert Hoover, Ronald Reagan and Gerald Ford.

--Finally, I have to pay my respects to a local legend, Art Cotterell.  I had a great childhood, growing up in Summit, N.J., and Mr. Cotterell was a big part of it.  I couldn’t have lived in a better location, able to walk to all three schools, elementary, middle and high school, as well as downtown for my baseball cards, and I also lived a two-minute walk from Memorial Field, where there were a number of ballfields, including where the high school varsity played, and a track, and it was where the town fireworks and festivities were held on the Fourth of July.

Grades six thru eight, in the summer we had an informal baseball league, Summit not having a Little League then, and Art, the freshman baseball coach at the time, later varsity at Summit High School, ran it.   Kids from all over town would show up a few mornings a week, we’d figure out the teams, with Art’s help, and we had great games, Art also keeping everyone’s statistics.

I was way overmatched as a sixth grader, against eighth grade pitching, but I remember the next summer, I started 0-for-8, and then reeled off a 5-for-8 streak.  Heck, as Art looked at me after the last game of the run, he said, “Brian, you’re up to .313!” 

Funny what you remember, my brain being nowhere what it was even 10 years ago.  Of course I then went 0-for-6 and finished at .227, but that was OK.  I did not make the freshman team when I tried out, not knowing in part I badly needed glasses or contact lenses until it was too late, but it was fun.

More importantly when it came to Art, however, he was a tremendous high school history teacher.  Unfortunately I never had him, but many of my close friends today did and loved the man.

Art was old school, and boy his students learned their American history and what was important.  They are all better for it today...great citizens of a great country, but a discipline so sadly missing in our schools now.

Art, aside from being Willie Wilson’s baseball coach (for you baseball fanatics), and a member of the New Jersey Baseball Coaches Hall of Fame, was also the father of three great kids who I got to know at various levels over the years, including Bobby; a classmate, terrific pitcher, Naval Academy grad, Marine, fighter pilot, and now flying commercially with a leading airline. Younger brother Tom and I became great friends over the years through our Wall Street careers.

But I really got to know Art in the past few decades for his work at the Summit Historical Society, where I did a ton of research for a site I developed years ago.  Those conversations, as we poured through the local papers, were precious.

Art died yesterday.  If you ever wanted an example of the Best of America, in the truest sense, it was him.  He shaped so many lives in this community for the better.  He will be remembered fondly. 

---

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

God bless America.

---

Gold $1313
Oil $58.97

Returns for the week 3/18-3/22

Dow Jones  -1.3%  [25502]
S&P 500  -0.8%  [2800]
S&P MidCap  -2.2%
Russell 2000  -3.1%
Nasdaq  -0.6%  [7642]

Returns for the period 1/1/19-3/22/19

Dow Jones  +9.3%
S&P 500  +11.7%
S&P MidCap  +11.5%
Russell 2000  +11.7%
Nasdaq  +15.2%

Bulls N/A
Bears N/A [52.4 / 21.4 split last time]

Have a great week.

Brian Trumbore

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