Week in Review

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Week in Review

04/06/2019

For the week 4/1-4/5

[Posted 11:30 PM ET, Friday]

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Edition 1,043

Just another eventful week in the presidency of Donald Trump.  I have to admit I sometimes think of what “Week in Review” would have been like in the time of “Silent Cal,” President Calvin Coolidge.  Probably 3 pages.  And it would have included, “Babe Ruth hit his 60th home run for the New York Yankees....”

[Actually, since this was the “Roaring Twenties,” I would have been warning of the coming crash, as I did back in 1999-2000 with the tech bubble.]

But things are different these days, and President Trump flip-flopped within the span of 48-72 hours on health care and the border with Mexico this week, policy whiplash for both Republicans and his White House advisers, all part of the game to make sure he is first and foremost the ‘lead’ on the evening news and talk shows, both pro and con.  Any PR is good PR; we’ve learned when it comes to Donald Trump, going back to his days as a rising New York City developer and socialite, when he also routinely called gossip columnists, among others, using the names of John Miller or John Barron, to help further the brand.

But in terms of how the country is doing, President Trump can run for reelection on a strong economy, and he needs to pray it stays that way come the summer and fall of 2020.  I have some potentially good news for him on this front, down below, but Trump being Trump, today he couldn’t resist repeating his call for the Federal Reserve to cut interest rates and restart its bond-buying program to stimulate growth.

“In terms of quantitative tightening it should absolutely now be quantitative easing.”

That would be the worst possible thing for the Fed to do at this time.

But let’s get started.....

Trump World

President Trump delivered a pep talk on health care to wary Republican lawmakers on Tuesday, telling House members that the party will get “clobbered” in next year’s election if they fail to overhaul ObamaCare.

“Republicans should not run away from health care,” Trump said in a speech to the National Republican Congressional Committee, the campaign arm of House Republicans.  “If we stay away from that subject, we’re going to lose.”

Since his Department of Justice shocked members of both parties last week in siding with a Texas judge’s December 2018 ruling that the entire 2010 Affordable Care Act should be tossed out, some Republicans have expressed concern on relitigating a fight the party abandoned in 2017.

But since then, Trump has argued that Republicans would become the “party of health care,” though they aren’t remotely near putting together a plan; specifically, what should replace ObamaCare, let alone the fact they no longer control the House.

So then Trump issued a series of tweets saying he wouldn’t ask lawmakers to actually vote on a health care plan until after the 2020 election, but health care is to be the central issue for the campaign.

“I was never planning a vote prior to the 2020 Election on the wonderful HealthCare package that some very talented people are now developing for me & the Republican Party. It will be on full display during the Election as a much better & less expensive alternative to ObamaCare...

“...This will be a great campaign issue.  I never asked Mitch McConnell for a vote before the Election as has been incorrectly reported (as usual) in the @nytimes, but only after the Election when we take back the House etc. Republicans will always support pre-existing conditions!”

Also over the weekend, Trump warned there was a “very good likelihood” that he would close the border with Mexico this week if Mexico doesn’t do more to stem the influx of migrant families arriving from Central America.

But by Tuesday, he appeared to soften his position, clearly after business and congressional leaders, as well as White House advisers, warned him of the severe economic consequences of such a move. I guarantee you he did not think of this beforehand.

Dan Griswold, senior research fellow and trade expert at George Mason University, said in an interview, “With thousands of trucks and trains and cars crossing the border each day, you’d have huge backlogs, rotting produce and ripple effects across the supply chain. The effect would be immediate and devastating for industry.”

About $1.7 billion in goods crosses the border every day, and the effects would dwarf the fallout from the 10% tariff Trump has slapped on more than $200 billion in imports from China.

The big picture: The U.S. imported $346 billion in goods from Mexico last year and exported $265 billion in products to the country.  Of the $611 billion in trade between the two, $502 billion crossed the border in trucks and trains last year, according to the Commerce Department.

Shipments from Mexico comprise more than a third of all auto and auto-part imports, nearly half of imported vegetables and 40% of imported fruit, according to the Peterson Institute and the U.S. Department of Agriculture.

Then Thursday, Trump said he would delay closing the border with Mexico for a year, backtracking on his threat to seal if off as early as this week.

Trump told reporters at the White House that he would give Mexico a year to halt the flow of illegal drugs coming into the United States.  If the drugs don’t stop, he said, the U.S. will impose tariffs on Mexican autos.  If that doesn’t work, Trump said, then the U.S. would close the border.

“That will be a very powerful incentive,” he said.

The president insisted he wasn’t bluffing.  “I will do it. I don’t play games.”

Friday, he tweeted:

“The Crazed and Dishonest Washington Post again purposely got it wrong.  Mexico, for the first time in decades, is meaningfully apprehending illegals at THEIR Southern Border, before the long march up to the U.S.  This is great and the way it should be.  The big flow will stop....

“....However, if for any reason Mexico stops apprehending and bringing the illegals back to where they came from, the U.S. will be forced to Tariff at 25% all cars made in Mexico and shipped over the Border to us.  If that doesn’t work, which it will, I will close the Border....

“....This will supersede USMCA.  Likewise I am looking at an economic penalty for the 500 Billion Dollars in illegal DRUGS that are shipped and smuggled through Mexico and across our  Southern Border.  Over 100,000 Americans die each year, sooo many families destroyed!”

Editorial / Wall Street Journal

“President Trump is threatening to shut down all legal crossings at the U.S.-Mexico border, and let’s hope this is negotiating bluster and not a plan.  It’s hard to imagine a more self-destructive decision, and it wouldn’t solve the border asylum crisis in any event....

“Closing official border crossings won’t stop migrants from entering illegally, but it would damage the economy of both countries – and not merely at the border.  Shutting down legal border traffic would by most estimates halt some $1 billion to $1.2 billion in daily economic activity.  That’s more than 1.5% of U.S. GDP....

“The U.S. Chamber of Commerce says that 125,000 small and medium-sized U.S. businesses are exporters to either Canada or Mexico and 14 million American jobs rely on NAFTA.

“Shutting down the Mexican border would hurt the entire continent because integrated supply chains require components produced in all three countries.”

Finally, the U.S. is cutting off aid to El Salvador, Guatemala, and Honduras, known collectively as the “Northern Triangle,” the State Department said last Saturday, after President Trump blasted the countries for sending migrants to the United States.

But many argue the funds actually protect American citizens.

“We were giving them $500 million.  We were paying them tremendous amounts of money, and we’re not paying them anymore because they haven’t done a thing for us,” Trump said.

But as former Middle East envoy and veteran diplomat Dennis Ross put it:

“I find this hard to understand. The foreign aid is necessary to create better conditions in those countries so there’s less of a need for people to feel they have no choice but to leave. From the American standpoint, I don’t see the logic of it.  I think it actually will add to the problem. It won’t relieve the problem.”

[The aid is in part for developing a real criminal justice system in the countries to combat the gang violence the immigrants are fleeing.]

The issue of these three is also actually an Israeli issue, too, as I spell out below.

Trumpets

--When I first heard of the arrest of a Chinese woman who carried a malware-laced device into Mar-a-Lago, I thought it was a totally amateurish operation, given how she was changing her story as she went through the two checkpoints, before Secret Service agents acted on a tip from the registration desk.

Yujing Zhang, 32, was arrested with four cellphones, a hard drive, a laptop and a malware-infected thumb drive. She said she was there to attend a “United Nations Friendship Event” that had never been scheduled at the resort, and then she claimed she was there to use the swimming pool, but she had no swimsuit with her.

But her arrest, regardless if there was any kind of ‘state’ direction of her moves, does reveal the severe security gaps at Mar-a-Lago, especially vs. fortified Camp David, the former often with hundreds of guests milling about. The Secret Service issued an unusual statement effectively blaming the Mar-a-Lago staff for not tightly tracking the comings and goings of guests at the club.

“The Secret Service does not determine who is invited or welcome at Mar-a-Lago; this is the responsibility of the host entity,” the agency said in a statement late Tuesday.  “The Mar-a-Lago club management determines which members and guests are granted access to the property.”

But there has been an increasing interest in the resort in China, as the New York Times points out, “where advertisements on the internet and on social media sell invitations to the club, which also functions as a for-profit enterprise that rents itself out.    The advertisements promise the prospect of rubbing elbows with the president and his associates at banquets, fund-raisers and other events. Access to Mar-a-Lago is highly prized in China, bestowing respect, influence and the allure of potential business opportunities.”

The question is how many Chinese, or Russians, have purchased memberships to the club?  If you have the money, you can find a way to get in.  Once you’re in, imagine what some may have been doing the past two years regarding the computer networks.  [Heck, just think the business center, let alone infiltrating the resort staff.]

The Secret Service isn’t in charge of who is admitted to Mar-a-Lago.  It relies on the club’s security to guide them on the guest list and who belongs and who doesn’t, but once you’ve paid to be a member, you’re in.

--The New York Times reported: “Some of Robert S. Mueller III’s investigators have told associates that Attorney General William P. Barr failed to adequately portray the findings of their inquiry and that they were more troubling for President Trump than Mr. Barr indicated, according to government officials and others familiar with their simmering frustrations.

“At stake in the dispute – the first evidence of tensions between Mr. Barr and the special counsel’s office – is who shapes the public’s initial understanding of one of the most consequential government investigations in American history.  Some members of Mr. Mueller’s team are concerned that, because Mr. Barr created the first narrative of the special counsel’s findings, Americans’ views will have hardened before the investigation’s conclusions become public.”

Barr has said he will move quickly to release the nearly 400-page report but he needs time to scrub it of confidential information, grand jury testimony, sources and methods, and such.

If the Times report is true, look for some of the investigators to express their misgivings on “60 Minutes” in May.

Separately, a new Wall Street Journal/NBC News poll finds that fewer than 40% of Americans said they had paid a lot of attention to the submission of the Mueller report, compared with 56% who said they had closely followed Mr. Trump’s decision to fire then-FBI director James Comey.

Some 40% of Americans said the Mueller report, via the summary from Attorney General Barr, didn’t clear Trump, while 29% said it did.  31% said they were unsure.

36% of respondents said they had more doubts about Trump’s presidency because of the special counsel’s investigation, compared with 48% who said so in February.

Some 47% said Congress should not hold impeachment hearings and that Trump should finish his term.  33% said Congress should continue to investigate to see if there is enough evidence to hold impeachment proceedings in the future, while 16% said there is enough evidence for Congress to begin impeachment hearings now.

In a Washington Post/Schar School (George Mason University) survey, 83% want the Mueller report made public in its entirety, while 57% say Barr hasn’t released enough details.

8 in 10 Republicans are “satisfied” with the investigation’s conclusions.  53% of Democrats are disappointed with the conclusions.

Disturbingly to your editor, 54% of Republicans say Russia did not try to influence the vote.  83% of Democrats say the Russians did try to influence the election.

But...these percentages are little changed from a 2017 poll by the same folks.

To my fellow Republicans, how the hell can you think the Russians didn’t try to influence the election?!!!

Just put me on the first flight to Mars, once the cable is hooked up there so I can still watch the Mets.

--The House Ways and Means Committee on Wednesday formally requested that the IRS turn over President Trump’s tax returns.  The president later told reporters that he’s not “inclined” to release the documents since he’s under audit.

“I’m always under audit,” said Trump.  “Until such time as I’m not under audit, I would not be inclined to do it.”

You can be sure they won’t see the light of day until after the 2020 election, if ever. And today we learned that Trump is prepared to take the issue to the Supreme Court.

--The president once again went after Puerto Rico, which seems like an incredibly stupid move given the importance of Florida in 2020.

Trump tweeted:

“The Democrats today killed a Bill that would have provided great relief to Farmers and yet more money to Puerto Rico despite the fact that Puerto Rico has already been scheduled to receive more hurricane relief funding than any ‘place’ in history. The people of Puerto Rico....

“....are GREAT, but the politicians are incompetent or corrupt.  Puerto Rico got far more money than Texas & Florida combined, yet their government can’t do anything right, the place is a mess – nothing works.  FEMA & the Military worked emergency miracles, but politicians like....

“....the crazed and incompetent Mayor of San Juan have done such a poor job of bringing the Island back to health.  91 Billion Dollars* to Puerto Rico, and now the Dems want to give them more, taking dollars away from our Farmers and so many others. Disgraceful!”

“The best thing that ever happened to Puerto Rico is President Donald J. Trump. So many wonderful people, but with such bad Island leadership and with so much money wasted.  Cannot continue to hurt our Farmers and States with these massive payments, and so little appreciation!”

*The $91 billion number is the Office of Management and Budget’s estimate of how much Puerto Rico could receive over the next two decades.  In actuality, FEMA and other agencies have so far distributed $11.2 billion in aid to the island, and some $41 billion has been allocated.

Gov. Ricardo Rossello of Puerto Rico, a Democrat, responded to Trump in a tweet of his own on Tuesday.  “Mr. President, once again, we are not your adversaries, we are your citizens.”

--A White House whistleblower told lawmakers that more than two dozen denials for security clearances have been overturned during the Trump administration.

Tricia Newbold, a longtime White House security adviser under both Republicans and Democrats, told the House Oversight and Reform Committee that she and her colleagues issued “dozens” of denials for security clearance applications that were later approved despite their concerns about blackmail, foreign influence or other red flags, according to panel documents released Monday.

Newbold said she has already faced retaliation for declining to issue security clearances and challenging her superiors.

In the case of one top White House official, merely described as “Official 1” (Jared Kushner, we learned) in committee documents, Newbold said her superior overruled her and another employee’s denial of an application amid concerns about foreign influence.

President Trump does have the power to overrule the likes of Newbold and issue the clearances anyway.

Wall Street and the Trade Talks

International Monetary Fund Managing Director Christine Lagarde said on Tuesday that global growth has lost momentum amid rising trade tensions and tighter financial conditions, but pauses in rate hikes will help boost activity in the second half of 2019.  Lagarde, in a preview of the April 12-14 IMF and World Bank Spring Meetings, said the global economy is “unsettled” after two years of steady growth, with the outlook “precarious” and vulnerable to trade, Brexit and financial market shocks.

In January, the IMF cut its global growth forecast for 2019 to 3.5 percent from 3.7 percent, with Lagarde signaling further cuts when the IMF releases new forecasts next week.  “We had this synchronized acceleration of growth a couple of years ago.  Now it is synchronized deceleration and a slowing momentum across the spectrum,” Lagarde said at a U.S. Chamber of Commerce discussion.

Lagarde also cautioned that years of high public debt and low interest rates since the financial crisis a decade ago have left limited room in many countries to act when the next downturn arrives so countries need to make smarter use of fiscal policy.

The World Trade Organization said global trade shrank by 0.3 percent in the fourth quarter of 2018 and is likely to grow by 2.6 percent this year, slower than the 3.0 percent growth in 2018 and below a previous forecast of 3.7 percent.

In its annual report, the WTO said trade had been weighed down by new tariffs and retaliatory measures, weaker economic growth, volatility in financial markets and tighter monetary conditions in developed countries.

So in the U.S., we had lots of data releases this week.  February retail sales were worse than expected, -0.2%, but January was revised upward.  February construction spending was better than forecast, 1.0%.  And February durable goods were down 1.6% when a gain was projected, though this is a highly volatile number.

The March ISM  reading on manufacturing was 55.3 vs. 54.2 in February, and above forecast, 50 being the dividing line between growth and contraction, while the non-manufacturing number was a disappointing 56.1, down from 59.7 in February, but obviously still strong.

So then we had the March employment data and after February had come in at a godawful 20,000, March’s figure was 196,000, with February revised to 33,000 and January to 312,000.

The three-month average is thus 180,000, which is robust for an expansion this long in the tooth.

Average hourly earnings for March, however, were a slight disappointment, with the 12-month number 3.2% vs. 3.4% the prior month, but U6, the underemployment figure, at 7.3%, was unchanged vs. February and a multi-year low.

The overall unemployment rate remained at 3.8%. 

With some of the above in its ongoing calculations, the Atlanta Fed’s GDPNow barometer for first-quarter growth is up to 2.1% vs. 0.4% two weeks ago.  This is good if it holds.

Now we await the first quarter’s earnings news, with analysts raising their estimates on the top line, while the bottom line, earnings, are still expected to be down year-over-year. 

On the trade talks with China, President Trump was expected to announce plans for a future summit meeting with President Xi Jinping, where the two would resolve remaining trade issues and sign a final agreement between the two nations.

In a tweet on Thursday morning, Mr. Trump said a deal with China is “moving along nicely.”

Over nine rounds of negotiations, the U.S. is pressing China not just to make commitments on purchasing American goods, but opening markets to foreign business and increasing protections for foreign intellectual property.

But a big issue is the extent of the tariffs the administration has placed on $250 billion worth of Chinese goods and at what pace and level would they come off, aside from the rather important issues of compliance and enforcement.

Florida Republican Sen. Marco Rubio said in a Twitter post on Thursday: “Last week @POTUS told he would not sign a ‘good’ trade deal with #China he would only sign a ‘great’ one.  I believe him.  But to be a ‘great’ deal it must allow us to do in China what they can do in US & it must have real enforcement mechanisms.”

China has been pushing for an official state visit in Washington, or a neutral location in a third country, and not Trump’s preferred Mar-a-Lago.

President Xi, in a letter delivered to Trump by Chinese Vice-Premier Liu He on Thursday, said, according to Xinhua.

“Over the past month, the economic and trade teams of both nations have engaged in different kinds of intensive consultations, and made new concrete progress on the text of the trade deal.

“I hope the economic and trade teams of both nations can wrap up negotiations on the text as early as possible based on the principle of mutual respect and mutual benefit,” the letter said.  “Under the current situation, the healthy and stable development of China-U.S. relations is related to the interests of both Chinese and American people.  For that, strategic leadership is needed.”

Trump said Thursday from the Oval Office, with Liu He sitting alongside, “If we have a deal, there will be a summit.  I think we will know over the next four weeks.  I look forward to seeing Xi; he will be here.”

But Trump added, “We have to make sure there is enforcement,” adding he was hopeful agreement on such verification mechanisms would be reached.

Aside from tariffs being a key to the endgame, there is the flow of drugs from China to the U.S.

Editorial / Washington Post

“There were 70,237 drug overdose deaths in the United States in 2017, according to the Centers for Disease Control and Prevention, a number greater than all American deaths during the entire Vietnam War. Some 28,466 of those involved fentanyl, the highly addictive opioid that is many times more potent than heroin and, accordingly, considerably more deadly. The demand for this drug surges from the depths of despair afflicting too many individuals and communities across the United States.  The supply, however, comes from abroad – mainly from the People’s Republic of China.  A record seizure of 254 pounds of the stuff in January at the U.S.-Mexico border, enough to kill 115 million people, illustrated the issue.

“That may now be about to change: The Beijing government, fulfilling a promise that President Xi Jinping made to President Trump in December, has announced it will ban a broad category of fentanyl-like drugs – estimated at more than 1,400 variants – as opposed to the 25 substances China has previously deigned to prohibit in piecemeal fashion.  China appears to have acted as part of the broader negotiation with the Trump administration over trade; but Beijing also faced pressure from Congress, where Sens. Patrick J. Toomey (R-Pa.) and Doug Jones (D-Ala.) are co-sponsoring a bill that would condition foreign countries’ access to U.S. aid and Export-Import Bank loans on cooperation with U.S. anti-fentanyl efforts....

“Let it be remembered that the Xi government pledged to help during the waning days of the Obama administration, which announced on Sept. 3, 2016, that there would be ‘enhanced measures in conjunction with the Chinese government to combat the supply of fentanyl and its analogues to the United States,’  Nothing happened....

“There are inherent challenges to controlling supply: China’s 160,000 chemical firms are hard to regulate, and fentanyl is highly concentrated, so a lot of the drug can be shipped in relatively small containers. Also, it’s difficult legally to ban a substance that can be altered to produce a slightly different compound without changing its narcotic properties.  However, China is very good at policing what its Communist leaders really want to police: free speech and disfavored religions, for example.

“Compared to its immediate predecessor, the Trump administration has essentially extracted a better-quality promise from China.  Now the task is to hold Beijing to it.”

Republican Senators Tom Cotton (Ark.) and John Cornyn (Tex.) / Washington Post

“China’s premier telecommunications company, Huawei, has risen to power through a combination of force, fraud and coordination with the Chinese Communist Party.  Huawei has stolen valuable technology – and has allegedly stolen more, including the recent case of a high-tech robot arm – to get a leg up on the competition.

“Now, Huawei is constructing a global network of undersea Internet cables and next-generation mobile networks that could give China effective control of the digital commanding heights.

“Our European allies, including Britain, are deciding whether to allow Huawei to build their 5G wireless networks, which will soon facilitate everything from industrial manufacturing to NATO military communications. For Europe’s sake and for the transatlantic alliance, our allies must keep Huawei as far from their 5G networks as possible.  Adopting Chinese 5G technology will force the United States to reevaluate long-standing intelligence and military partnerships to protect our security interests.

“Some countries, such as Germany, have already indicated they’ll allow Chinese technology into their 5G networks.  Chancellor Angela Merkel reportedly wants assurances from Beijing that it won’t spy on Germany in exchange for using Huawei technology.  This ‘no-spying agreement’ will be as effective at abolishing spying as the Kellogg-Briand Pact was at abolishing war.

“Other European leaders claim that the risks posed by Huawei can be ‘managed’ through vigilance and oversight. But the most effective way to mitigate risk is to avoid it in the first place.  If you want to keep your enemies at bay, don’t let in the Trojan horse.

“The African Union learned the hard way to be wary of strangers bearing gifts. Its $200 million headquarters in Addis Ababa, Ethiopia, was a ‘gift’ financed, constructed and outfitted by China with Huawei servers.  Last year, African Union engineers alleged those servers had funneled massive amounts of sensitive data to China every night for years – a stunning cybertheft reportedly supplemented by old-fashioned listening devices found in the walls of the Chinese-built facility.  The African Union was forced to replace its servers and implement new security measures at great expense.  It declined an offer from Huawei engineers to configure the new system; once burned, twice shy....

“Huawei’s supposed allure, namely its artificially low prices and customer service, only reinforces the security threat it poses to our allies.  Huawei’s products are cheaper thanks to IP theft and subsidies from the Chinese government.  Huawei’s customer service, meanwhile, can regularly dispatch Chinese engineers to poke around the telecommunications infrastructure of major foreign corporations and governments, multiplying the opportunities for new security threats.  A 5G network built and managed by Huawei is a system that gives dangerous amounts of access to potential agents of the Chinese Communist Party.

“Secretary of State Mike Pompeo has stated that widespread adoption of Huawei technology could not only make our allies more vulnerable to cyberattacks but also endanger NATO troops fighting on future, 5G-equipped battlefields.  Just as importantly, adoption of Huawei technology will jeopardize intelligence sharing within the NATO alliance and the Five Eyes partnership of Australia, Britain, Canada, New Zealand and the United States.  This avoidable outcome would be a disaster for the free world and a coup for China....

“We’re in the midst of a frank discussion about Chinese telecommunications technology, which poses an unmanageable security risk to the alliance.  Our allies must take steps to keep Huawei out of their 5G networks.  If not, we could soon live in an unpredictable environment where information flows at the discretion of an authoritarian power, which at all times has its ear to the door and its finger on the kill switch.”

While White House officials, including economic adviser Larry Kudlow, have said Huawei has generally not come up during trade talks, of course it has.

--Finally, President Trump said Thursday he intends to nominate former GOP presidential candidate Herman Cain to the Federal Reserve’s board of governors, which comes after the nomination of his former campaign adviser Stephen Moore to fill another of the seats that are open.

Both Cain and Moore are Fed critics and as loyal Trump supporters it’s a blatant attempt to remake what is supposed to be an independent central bank.

The nominations are subject to Senate confirmation and the process will be contentious, especially with Trump’s unhappiness with Chairman Jerome Powell, whom the president had tapped to lead the Fed.

It’s true that past presidents have at times tried to pack the central bank’s powerful seven-seat board with devotees, but Moore and Cain are out there as picks.  Cain has also faced sexual-harassment accusations during his presidential campaign, which ended in 2011, and were later settled, while Moore currently has a $75,000 tax lien stemming from his 2014 federal income taxes and a 2012 contempt finding by a Virginia court after he failed to pay $300,000 owed to an ex-wife as part of a divorce settlement.  Moore counters the IRS owes him money and that he and his wife have worked out their differences.

Back to Cain, some White House officials were caught off-guard by the announcement he was being nominated, but Thursday, President Trump said Cain was his choice: “I have recommended him highly for the Fed. I’ve told my folks, ‘That’s my man.’”

To be fair to Cain, he did serve on the board of directors for the Federal Reserve Bank of Kansas City in 1992 and served as the board’s chairman from 1995 to 1996.  But that was a long time ago.  I’m not a fan, today.

Europe and Asia

We had a slew of month and quarter-end data for the eurozone this week, via IHS Markit, with the March composite for the EA19 coming in at 51.6 vs. 51.9 in February.

The manufacturing PMI for the euro area was 47.5 in March vs. 49.3 in February, the lowest since April 2013.  Services improved from 52.8 to 53.3.

Germany’s manufacturing PMI was 44.1, an 80-month low, with a solid 55.4 reading on services, or non-manufacturing.

France was 49.7 manufacturing, 49.1 on services (not good).

Spain was 50.9 manufacturing, 56.8 services.

Italy was 47.4 on manufacturing for March, a 70-month low, 53.1 services.

Other manufacturing PMIs:

Netherlands 52.5, a 33-month low; Ireland 53.9; Austria 50.0, a 48-month low; and Greece 54.7, a 12-month high.

German manufacturers also saw factory orders drop sharply in February, down 4.2% over January, increasing the likelihood of a contraction in the first half of 2019 for Europe’s flagship economy.

[The UK’s manufacturing PMI was 55.1 for March vs. 52.1 in February, owing mostly to a buildup in inventories with the uncertainty surrounding Brexit.  The service sector reading for March was a miserable 48.9, down from 51.3 the prior month.]

Chief Economist Chris Williamson / IHS Markit

“The final eurozone PMI for March confirms the sluggish end to the first quarter, with business growth ebbing to one of the most lethargic rates seen since 2014.

“Only at the turn of the year, when business was hit by headwinds such as widespread ‘yellow vest’ protests in France and an auto sector struggling with new emissions regulations, has growth been slower over the past four years.  The rebound from these temporary headwinds has clearly been disappointing and is already losing momentum, led by a deepening downturn in manufacturing.  The goods producing sector reports that global growth worries have intensified, meaning customers continue to pull back on spending.

“The service sector has managed to sustain a relatively resilient rate of growth but has also lost momentum in recent months.  This should come as no surprise as history tells us that robust service sector growth usually depends on a healthy manufacturing economy.

“At current levels, the PMI remains consistent with GDP rising by 0.2% in the first quarter, but unless manufacturing pulls out of its downturn the overall pace of economic growth will likely weaken in the second quarter as the malaise spreads to the service sector.  In this respect, with forward-looking indicators from the manufacturing sector suggesting goods production will fall further in the coming months, downside risks to the outlook have intensified.”

On the employment front, Eurostat released the numbers on February unemployment for the euro area, 7.8%, still the lowest since October 2008.

Germany 31.%, France 8.8%, Spain 13.9%, Italy 10.7% (vs. 10.5% in January), Netherlands 3.4%, Ireland 5.6%.

A flash reading on March inflation for the EA19  came in at 1.4%, just 1.0% ex-food and energy.

February retail trade for the eurozone was up 0.4% over January, 2.8% year-over-year, which was better than expected.

One last item, Italy’s public debt.  The OECD forecast Italy’s public finances will worsen as fiscal measures are not boosting economic growth.

While the Italian government projects that Italy’s public debt to GDP will fall to 120 percent by 2030 from the current 133 percent, the OECD expects it to rise to 144 percent with the baseline interest rates and 156 percent in case the spread of Italy bonds to German Bunds remains at high levels.

Combined with Italy’s demographics, “the rising costs from ageing will threaten the sustainability of the public debt,” according to the OECD’s report.

Brexit: Every week for months it’s been the same thing... ‘The next week is critical.’  Well, for once this will be true. British Prime Minister Theresa May wrote the European Union to request a further delay to Brexit beyond the April 12 date when the UK is currently due to exit, with no withdrawal deal having been approved by parliament.

Mrs. May wants to convince the EU that MPs can approve a deal in time to leave before May 23 and the start of European Parliamentary elections that day (May 23-26).

But she said the UK would begin to prepare a list of candidates in the elections should no agreement be reached.

Earlier, May had met with Labour leader Jeremy Corbyn and others to try to find a consensus over Britain’s future relationship with the EU to win support for her divorce deal, with Corbyn describing the talks as “useful but inconclusive,” while some of May’s Conservatives were furious she met with Corbyn, who favors staying in the Customs Union.

It is up to the EU to agree to an extension to the Article 50 process, under which the UK leaves the union, after parliament has repeatedly rejected the withdrawal agreement that the EU and the prime minister reached back in November.

EU leaders are holding an emergency summit on Wednesday, April 10, prior to their regularly scheduled summit of April 12.

Mrs. May at the last EU summit, days before the original March 29 exit date, had asked for an extension to June 30, but the EU granted her a delay to just April 12 – at which time the UK must say whether it intended to be part of the European Parliament elections – or until May 22 if UK MPs had approved the withdrawal deal negotiated with the EU, knowing the British parliament would need time to put the agreement into legislation.  But the withdrawal agreement was voted down by parliament a third time last week.

A key is that all 27 remaining EU leaders must agree unanimously to any extension that could be granted next week, and while it is assumed they would, there are going to be some major fireworks beforehand.

So is Mrs. May granted a short extension, or will the EU coalesce around a plan to grant the UK an extended delay, of say a year, a “flexible extension,” in the hope Britain either holds a new election, and referendum on the topic of Brexit, or finally reaches an exit deal.

June 30 is significant because it’s the day before the new European Parliament will hold its first session, with the selection of new officers, so Britain could leave without the need for British MEPs to take their seats in a parliament the UK electorate voted to leave going back to June 2016.

Mrs. May wrote to the EU that in proposing an extension until June 30, the UK “accepts the European Council’s view that if the United Kingdom were still a member state of the European Union on 23 May 2019, it would be under a legal obligation to hold the elections.”

But, again, this would mean approval of the May plan that has already been rejected three times.

So it’s assumed the EU will grant a lengthy extension, with the ability to leave the bloc if the British parliament agrees to a deal earlier, what European Council President Donald Tusk calls his “flextension.”  But an extension does Mrs. May no good, as she will face a growing rebellion in her ranks among the backbenchers who have supported Brexit and just want to leave, even if it is a ‘hard Brexit,’ with all the uncertainty that ‘crashing out’ entails.  No one, including the EU, wants to see that.

Dutch Prime Minister Mark Rutte, a key figure in the EU, said today that Britain’s request to delay Brexit until June 30 needs to be “clarified” before or at next week’s summit.  “We hope for more clarity from London before next Wednesday.”

“We need to give the British parliament and government the maximum chance in the run-up to Wednesday to make clear how they would want to use an extension,” Rutte said.

Earlier, European Commission President Jean-Claude Juncker warned he sees a no-deal Brexit scenario “more and more likely,” though “this is not an outcome that I want.”

The EU’s chief Brexit negotiator, Michel Barnier, said Britain now faced three remaining options: accept the deal, pursue a no-deal Brexit, or face a long delay.

“No deal was never our desired nor intended scenario.  No deal was never my intended scenario, but the EU 27 is now prepared.  It becomes day after day more likely,” Barnier said in a speech this week.

“Let’s not forget first that we have already an agreement, we have already a deal, and it was concluded by Theresa May and the British government and the European Council and European Parliament on Nov. 25 last year, four months ago,” he said.

“We tried to make sure that the UK could leave the EU on March 29, just as the UK had foreseen itself...If the UK still wants to leave the EU in an orderly manner, this agreement, this treaty is and will be the only one.”

Turning to Asia....

In China, the government’s official reading on manufacturing for March was 50.5 vs. a 3-year low of 49.2 in February, with non-manufacturing at 54.8 vs. the prior month’s 54.3, the latter representing more than half of China’s economy.  The composite was 54.0 vs. 52.4.

The private Caixin manufacturing PMI for March was 50.8 vs. February’s 49.9 reading, with services running at 54.4, up solidly from 51.1.

Reminder, the government’s data is focused on state-owned enterprises, while the Caixin stats are largely for small- and medium-sized businesses in the private sector.

Both sets of numbers are positive, but you need far more confirmation before concluding the bottom is in.  That said the stimulus measures put in by the government should have a lag effect, meaning further improvement could be in the cards.

Japan’s manufacturing PMI for March was a putrid 49.2, 52.0 for the service sector.

Elsewhere, South Korea’s manufacturing figure for March was 48.8, Taiwan’s 49.0, but while both remain in contraction mode, they are up from February.

Street Bytes

--Stocks had their second straight big week, the Dow Jones rising 1.9% to 26424, just shy of its all-time closing high of 26828; the S&P 500 up 2.1% to 2892, its record close being 2930; and Nasdaq up 2.7% to 7938, with its peak at 8106.

There is way too much optimism over the impact of any trade deal with China, and Europe’s issues are not going away (much more on this next time...think “May Day”), but now earnings season starts up and we’ll see what the companies say in issuing guidance for the balance of the year.  The market isn’t cheap, after this huge rally off the Christmas Eve lows.

--U.S. Treasury Yields

6-mo. 2.45%  2-yr. 2.34%  10-yr. 2.50%  30-yr. 2.90%

The level of the 10-year is key, when it comes to mortgage rates and the housing market.  If it can manage to hang out around its current mark, that bodes well.                                       

--U.S. crude exports remain strong, but domestic oil inventories rose for a second straight week; the Energy Information Administration saying crude oil inventories in the U.S. rose by 7.2 million barrels to 449.5 million, compared with expectations for a modest weekly decline.

Production in the Lower 48 states rose to 11.7 million barrels a day, putting overall U.S. output at a record 12.2 million barrels a day.  But U.S. imports were under 7 million barrels a day, and U.S. oil exports remained high, at 2.7 million barrels a day.

According to a poll of 12 investment banks by the Wall Street Journal, West Texas Intermediate, that which I quote each week down below, is expected to average nearly $60 a barrel, rising above that level, April-June, but then falling back toward the end of the year.  Today it closed at $63.26, the highest level since October.  I’m surprised President Trump isn’t tweeting anew, imploring OPEC to open up the spigots. 

Spring is refinery maintenance season, which leads to higher pump prices, but thus far, refinery utilization, at 86.4 percent last week, is less than the 93 percent rate of a year ago, which can lead to higher short-term prices for gasoline. At midweek, the national average at the pump was $2.71.

Oil prices have risen over 20% since OPEC and its production allies (Russia), known as OPEC+, began implementing a fresh round of cuts at the start of the year.

Saudi Arabia has said it would reduce production further in March, but the actual figure isn’t official yet.

--The Wall Street Journal’s Andy Pasztor and Andrew Tangel reported Thursday:

“Pilots at the controls of the Boeing Co. 737 MAX that crashed in March in Ethiopia initially followed emergency procedures laid out by the plane maker but still failed to recover control of the jet, according to people briefed on the probe’s preliminary findings.

“After turning off a flight-control system that was automatically pushing down the plane’s nose shortly after takeoff March 10, these people, said, the crew couldn’t get the aircraft to climb and ended up turning it back on and relying on other steps before the final plunge killed all 157 people on board.

“The sequence of events, still subject to further evaluation by investigators, calls into question assertions by Boeing and the U.S. Federal Aviation Administration over the past five months that by simply following established procedures to turn off the suspect stall-prevention feature, called MCAS, pilots could overcome a misfire of the system and avoid ending in a crash.

“The pilots on Ethiopian Airlines Flight 302 initially reacted to the emergency by shutting off power to electric motors driven by the automated system, these people said, but then appear to have re-engaged the system to cope with a persistent steep nose-down angle.  It wasn’t immediately clear why the pilots turned the automated system back on instead of continuing to follow Boeing’s standard emergency checklist, but government and industry officials said the likely reason would have been because manual controls to raise the nose didn’t achieve the desired results.”

Separately, accident investigators in Indonesia looking into last October’s Lion Air 737 MAX crash and a harrowing ride the previous day, say a faulty sensor that’s been linked to the fatal flight was repaired in a U.S. aircraft maintenance facility before the tragedy, according to investigative documents.

Investigators have been examining the work that a Florida repair shop previously performed on the so-called angle-of-attack sensor.

Erroneous signals from that sensor triggered the repeated nose-down movements on the Oct. 29 flight that pilots struggled with until the aircraft went down in the Java Sea, killing all 189 on board, according to a preliminary report by Indonesian investigators.

The sensor in question, according to Bloomberg, was repaired at XTRA Aerospace Inc. in Miramar, Florida, and later installed on the Lion Air plane on Oct. 28 in Bali, after pilots had reported problems with instruments displaying speed and altitude.  There’s no indication the same Florida shop did work on the Ethiopian jet’s device.

Boeing said it planned to submit a proposed software enhancement package for the 737 MAX in “the coming weeks” after the company had previously said it planned to deliver the fix for government approval last week.  The company confirmed a statement from the FAA that it would submit the upgrade later than previously announced.

Boeing said: “We will take a thorough and methodical approach to the development and testing of the update to ensure we take the time to get it right.”

On Wednesday, Norwegian Air Chief Executive Bjoern Kjos said, after visiting Boeing’s headquarters in Seattle, that he had tested the old system versus the new one in a MAX simulator and found the new MCAS control system foolproof.  Kjos, a former fighter pilot, said he tested the old and new software “under a malfunction,” saying after, “I will gladly take my family on board a Norwegian MAX.” 

Budget carrier Norwegian Air has 18 737 MAX aircraft in its fleet and has ordered dozens more.

And then on Thursday, CEO Dennis Muilenburg said: “As pilots have told us, erroneous activation of the MCAS function can add to what is already a high workload environment.  It’s our responsibility to eliminate this risk.  We own it and we know how to do it.”

But this afternoon, Boeing said it has identified a second software problem that must be resolved as part of an overall fix to get its 737 MAX airliners flying again, meaning that the completion of a comprehensive proposal by Boeing to fix MCAS is likely to extend until at least late this month, with testing and approval by the FAA taking us probably into early June.

Without identifying the new software complication, Boeing said “we are taking steps to thoroughly address this relatively minor issue and already have the solution.”

But then Boeing announced it needs to cut production of the 737 MAX by a fifth because, among other things, it has nowhere to put all the aircraft, seeing as those already in service are grounded.

Southwest Airlines, with the most 737 MAX aircraft in the U.S., said it was “publishing a revised schedule for April and May that is built around the currently available Southwest fleet and intends to reduce drastically last-minute trip disruptions and same-day cancellations.”

Federal prosecutors, the Transportation Department’s inspector general and U.S. lawmakers are investigating the FAA’s certification of the 737 MAX.  Transportation Secretary Elaine Chao has also said she is naming an outside panel to review the issue.

--Tesla shares cratered anew on Thursday after the electric car maker reported a record decline in deliveries during the first quarter, stoking concern demand is slackening for the cheaper Model 3 it introduced less than two years ago.

Tesla delivered 63,000 vehicles in the three months that ended in March, down from 90,966 in the fourth quarter.

In the U.S., tax incentives for Tesla vehicles shrank, while the company has struggled to quickly get the cars to consumers in Europe and China.  The 50,900 Model 3 Tesla delivered in the first quarter missed analysts’ average estimate for 51,750 and was fewer than the two previous quarters.  This comes as CEO Elon Musk was looking to accelerate sales with lower prices and targeting more markets worldwide.

Tesla did reiterate its forecast of 360,000 to 400,000 vehicle deliveries in 2019.

The company ended last year with about $3.7 billion in cash, but had to pay off a $920 million convertible bond in February, and it has a $566 million note coming due in November.  Tesla has said it has enough money to pay off debt obligations with cash flow.

Separately, a federal judge in Manhattan began considering on Thursday whether CEO Elon Musk should be held in contempt for violating a fraud agreement, the latest battle over the billionaire’s tweets.  Musk’s fight has led to concerns that the SEC could restrict Musk’s activities or even his removal from Tesla, while distracting him at a pivotal point in Tesla’s expansion.

U.S. District Judge Alison Nathan was also told by an SEC lawyer that Musk had not submitted a single tweet for review in the four months between the settlement and the contempt motion, and it was no excuse that Musk might have been merely repeating Tesla’s outlook.  Attorney Cheryl Crumpton said, “Tesla still appears to be unwilling to exercise any meaningful control over the conduct of its CEO.”

In the end, Thursday, Judge Nathan gave both sides two weeks to work out their differences, and said she could rule on whether Musk violated his fraud settlement.

For its part, the SEC stopped well short of recommending Musk’s removal as chief executive or even from the electric car company’s board.   SEC Chairman Jay Clayton has said he does not favor draconian penalties that could harm investors, saying when Musk settled that “the skills and support of certain individuals may be important to the future success of a company.”

--U.S. auto sales are expected to have posted an overall decline of around 5% in sales for March, normally one of the biggest months of the year as the unofficial start of the spring selling season.  For the first quarter, sales are expected to decline 3% to 4% compared with a year earlier, according to analysts.

The causes of the decline are three-fold.  The industry has gone through a super, multi-year period, coming off the 2007-2009 recession, while vehicle prices have risen sharply.

Plus there are more attractive used-car options as a record number of lightly used cars return from lease service, nudging buyers to the preowned lot.  Heck, I’m one of those who leases a new Honda every three years, but I’m only putting about 10,000 miles on it annually.

The first-quarter decline makes it likely the U.S. sales pace will fall below 17 million vehicles for the first time since 2014.

--General Motors, which no longer reports monthly auto sales, said sales in the first quarter were down 7% vs. a year ago, Q1 2018 being “a very strong quarter.”  GM delivered 665,840 vehicles in the last three months, with the average transaction price for GM’s all-new, light-duty pickups being $8,040 higher in the first quarter compared to their outgoing models in the first quarter of 2018, led by the GMC Sierra.

The Chevrolet Trax, Equinox, and Colorado all set GM first-quarter sales records and the GMC Acadia posted its best quarter ever.

Because of the average sales price being much higher, profits were strong despite the decline in sales, $2.6 billion on a pre-tax basis, but that’s down $944 million from a year ago.

Fiat Chrysler reported sales dropped 3% in the quarter.

Ford announced a profit of $1.7 billion, with sales down 1.6% in the March quarter vs. a year ago.  Passenger car sales declined 24%, but truck and SUV sales were up 4.1% and 5%, respectively.

Ford also said that F-150 and Super Duty combined sales bested its nearest rival by 94,585 trucks, which is nearly 16,000 higher than this point a year ago.

Toyota Motor Corp. reported March 2019 sales of 214,947 vehicles, down 3.5% on a volume basis.  For the quarter, sales were 543,714, a decrease of 5%.

The Toyota division reported sales down 5.1% in March, 6.1% for the quarter.

The Lexus division, though, posted a sales increase of 8.2% in March, up 4% for the quarter.

Nissan’s sales dropped 12% for the quarter amid weak sales of its best-selling vehicle, the Rogue SUV.

Honda Motor Co.’s sales rose by 2% in Q1.

The slowdown in the U.S. comes as auto demand weakens in China, the world’s largest car market by sales.

--Former Nissan Motor Co. Chairman Carlos Ghosn was arrested again in Tokyo early Thursday over new suspicions of financial misconduct less than a month after he was released on bail.

Prosecutors said they suspected on several occasions between 2015 and 2018, Mr. Ghosn personally received $5 million of a total $15 million sent by Nissan to an overseas distributor, which the Wall Street Journal believes was in Oman.  “Nissan investigated whether the Omani company helped Mr. Ghosn obtain a yacht and whether it helped fund an investment company partly owned by Mr. Ghosn’s son, (prosecutors) said.”

Ghosn said in a statement: “My arrest this morning is outrageous and arbitrary.  Why arrest me except to try to break me?  I will not be broken.  I am innocent of the groundless charges and accusations against me.”

Ghosn had been released on bail March 6, after being first arrested on Nov. 19.

Earlier, prior to this second arrest, Ghosn tweeted he planned to hold a news conference April 11 “to tell the truth about what’s happening.”

--South Korean technology giant Samsung said it expects to post a 60% decline in first-quarter operating profit as memory-chip demand has faded, the latest victim of the global pullback in spending.  Revenue is expected to fall a whopping 14% for the quarter ended March 31, when the company reports later this month.

--Delta Air Lines said it expects top-line growth of 7% in the March quarter while revenue per seat mile is expected to expand about 2% year-over-year amid “healthy” demand.

Diluted earnings are pegged from $0.85 to $0.95 a share, up from a prior forecast.  Shares jumped on the news.

--But shares in Walgreens Boots Alliance Inc. plummeted 12%, as the drugstore chain, and Dow component, cut its earnings expectations for the fiscal year, WBA saying it faced its most difficult quarter since the 2014 merger of Alliance Boots and Walgreens.

The company made less money on prescription drugs, which drive the bulk of store sales, amid tougher economics around generics and pressure from insurers to reduce reimbursements to pharmacies.  Retail sales also fell due to a slow cold and flu season.

Walgreens profit fell 14% to $1.16 billion in the quarter.  CEO Stefano Pessina said in a call with analysts that while other players in the industry face similar challenges, there is “no excuse” for Walgreens performance.

“We will respond quickly to ensure we return to growth,” he said.

Walgreens revenue rose 4.6% in its fiscal second quarter, but this is due to the company integrating Rite Aid stores.

Same-store pharmacy sales increased 1.9%, but comparable retail sales were down 3.8%.  The company is also shifting away from sales of tobacco products.

Walgreens increased its annual cost-savings target to more than $1.5 billion by fiscal 2022.

But as for Walgreens’ future, it has been searching for other avenues of growth to ward off competition from CVS Health and Amazon.com.  Walgreens needs to strike more partnership deals to increase pharmacy orders and get customers to make other in-store purchases.

--Facebook founder Mark Zuckerberg admitted in an op-ed for the Washington Post, the Sunday Independent and other papers, that the social media giant has “too much power” over free speech and needs greater regulation.  Zuckerberg called on governments around the world to shoulder responsibility  in regulating four key areas: harmful content, election integrity, privacy and data portability.

Zuckerberg said; “People shouldn’t have to rely on individual companies addressing these issues by themselves.”

His comments come months after Facebook admitted it had taken large sums of money from foreign groups that tried to influence Irish voters before the country’s abortion referendum, for one.

Zuckerberg writes: “We need a more active role for governments and regulators.  After focusing on these issues for the past two years, I think it’s important to define what roles we want companies and governments to play.

“By updating the rules for the internet, we can preserve what’s best about it – the freedom for people to express themselves and entrepreneurs to build new things – while also protecting society from broader harms.”

“Lawmakers often tell me we have too much power over speech, and frankly I agree.  I’ve come to believe that we shouldn’t make so many important decisions about speech on our own. So we’re creating an independent body so people can appeal our decisions.”

This is some of the most disingenuous garbage I’ve ever read.

--An investigator for Amazon boss Jeff Bezos says that Saudi Arabia hacked Mr. Bezos’ phone and accessed his data, which is a rather explosive charge.

Gavin de Becker was hired by Bezos to find out how his private messages had been leaked to the National Enquirer tabloid.

Mr. de Becker linked the hack back to the Washington Post’s coverage of the murder of Saudi writer Jamal Khashoggi at the Saudi consulate in Istanbul. De Becker said he handed his findings over to U.S. federal officials.

Bezos has accused American Media Inc. (AMI),  the publisher of the Enquirer, of blackmail.

Saudi Arabia didn’t respond to the allegations, while AMI refuted any connection to the Saudis, saying it got the information from Lauren Sanchez’s brother.

Separately, Jeff and MacKenzie Bezos announced Thursday that they have agreed to divorce terms, with MacKenzie saying in a tweet she would keep 25% of the couple’s Amazon stock, which should give her a 4% stake in the company.  Jeff Bezos will retain voting control over all her shares and will also maintain all his interests in the Washington Post and Blue Origin, his private space company.

Based on Amazon’s current market value, MacKenzie’s stake is worth roughly $35 billion, making her the wealthiest woman in the world.  The line of potential suitors outside her home has stretched to 800 miles but is said to be orderly.

Jeff Bezos said on Twitter that he was “grateful for her support and for her kindness in this process.”

--Kellogg Co. is cutting back on cookies and sweets, agreeing to sell its Keebler cookie business and other snack and baked-good brands to Ferrero Group for $1.3 billion in cash.  Ferrero is also acquiring the Kellogg businesses that make cookies for the Girl Scouts.  Ferrero’s lineup includes Nutella.  Last year, Ferrero upped its investment in North America by agreeing to buy Nestle SA’s U.S. chocolate business, giving it control of the Butterfinger and Baby Ruth candy bar brands.  As I told you at the time, I am not a fan of Butterfinger, but love Baby Ruth.

Kellogg is keeping the rest of its snacks business in North America, including Pringles and Cheez-It snacks.

--After last year’s 74% collapse in the price of bitcoin, the price soared Tuesday, topping $5,000 briefly, though it’s not clear why. Big buy orders can often lead to outsize moves, in part because volume is  spread across dozens of platforms.  It’s also a market used by trend-followers, and there was undoubtedly some “short covering.”  The last price I saw today was $4,985.

--The Verrazzano-Narrows Bridge is now the nation’s most expensive bridge to cross after an MTA toll hike ratcheting up the rate to $19 went into effect Sunday.

The one-way non-E-ZPass toll now tops the $18 it takes to cross Virginia’s Chesapeake Bay Bridge-Tunnel – which is 23 miles long. The full Verrazzano runs 2 ½ miles connecting Brooklyn and Staten Island. 

Under the new toll, drivers with E-ZPasses will be charged $12.24 – up from $11.52.

Staten Island residents pay only $5.50 under a rebate program.  But they don’t apply to Brooklyn residents.

Foreign Affairs

Syria:  U.S.-backed forces were still chasing ISIS militants in eastern Syria, with coalition warplanes pounding them a week after their “caliphate” was declared defeated.

The Syrian Democratic Forces, supported by the U.S.-led coalition, were attempting to dislodge ISIS fighters from their last redoubt in Baghouz, near the Iraqi border.

ISIS still has a presence in other parts of Syria and recently killed seven U.S.-backed fighters in an attack on a checkpoint in the northern city of Manbij.

The U.S. presence in the country is critical, the SDF warning it needs sustained coalition assistance to help smash sleeper cells.

Israel: The big election is Tuesday, with campaigning in the lead-up to the vote both vicious and personal.  Prime Minister Benjamin Netanyahu is expected to be able to build a majority coalition, but he has launched a final offensive against his primary centrist opponent, former general Benny Gantz.

In the past week, Netanyahu has accused Gantz of being mentally unfit to be defense minister, let alone prime minster.

As reported by the Wall Street Journal’s Felicia Schwartz: “One (of Netanyahu’s Likud party ads) features Mr. Gantz repeating the words ‘totally stable’ over and over, as the frame zooms in on his bulging eyes while scratchy, high-pitched string music from ‘Psycho’ plays.”

But Gantz was once Netanyahu’s chief of staff of the Israeli military in 2011, and was once a key security ally.

Polls show Gantz’ Blue and White coalition could win more seats than the prime minister’s Likud, but Netanyahu’s right-wing allies would gain enough seats to give him a majority in the Knesset.

In fact the final poll the law permits, the Channel 13 poll released this afternoon, has right-wing parties receiving a total of 66 seats, with center-left parties getting 54.  It was the best showing for right-wing parties out of the last three polls conducted by the channel.

Gantz’s Kahol Lavan party was tied with Netanyahu’s Likud in the poll with each receiving 28 seats.  There are 120 in the Knessett.

Separately, on the issue of the Golan Heights and President Trump’s proclamation recognizing the Golan as Israeli territory, UN Secretary-General Antonio Guterres said on Sunday that any resolution to the Syrian conflict must guarantee the territorial integrity of Syria, including the occupied Golan Heights.

Saudi King Salman said he “absolutely rejects” any measures that impact on Syrian sovereignty over the Golan.

European Union foreign policy chief Federica Mogherini said the same day that ignoring UN Security Council resolutions on the Golan was “not a solution.”  Mogherini also said a two state solution for Israel and Palestine was “the only viable and realistic solution...we have a responsibility to prevent the two state solution from being irreversibly dismantled,” she told an Arab League summit in Tunis.  “Any future plan will have to recognize the internationally agreed parameters including on the 1967 lines with mutually agreed swaps, and the status of Jerusalem as the future capital of the two states.”

Lastly, when President Trump decided to stop foreign aid for Guatemala, Honduras and El Salvador, he was cutting aid to three countries with strong relations with Israel.  For example, the move could jeopardize Israeli efforts to convince Honduras to move its embassy to Jerusalem.

Iran: Three of eight importers granted waivers by Washington to buy oil from Iran have now cut their shipments to zero, an administration official said Tuesday.  The U.S. reimposed sanctions on Iran after Trump withdrew from the 2015 nuclear deal last May.

While the U.S. has set a goal of completely halting Iran’s oil exports, it granted temporary import waivers to China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea to ensure low oil prices and no disruption to the global oil market.

Brian Hook, the special envoy for Iran, told reporters: “In November, we granted eight oil waivers to avoid a spike in the price of oil.  I can confirm today three of those importers are now at zero,” Hook said, without identifying the three.

But the below Libya story could be important in this regard, your editor guessing Italy and Greece are two of the three.

Turkey: President Recep Tayyip Erdogan suffered one of the worst defeats of his 16 years in office, as his party did not fare well in local elections, particularly in Istanbul and Ankara.

Though Erdogan was not a candidate in Sunday’s vote, he campaigned for management of Turkey’s 81 provinces as if it was a national election, seeking to distract from local complaints about rising inflation and unemployment by casting the vote as a battle for nationwide survival within the face of exterior threats.

Erdogan isn’t in immediate danger, but will he still be in charge in 2023, and presiding over celebrations for the republic’s centenary, which he so desperately wants to lead?  [Mustafa Kemal Ataturk declaring the country was a republic on Oct. 29, 1923.]  His term lasts four more years, but the election showed he has weaknesses...he’s not invincible.

Erdogan said after the vote, ‘If there are any shortcomings, it is our duty to correct them.”

Separately, the U.S. has been in contentious talks with Turkey over its plans to buy a missile defense system from Russia, though Secretary of State Mike Pompeo said he was confident the two NATO allies could find a path forward.

The United States has halted delivery of equipment related to the F-35 stealth fighter aircraft to Turkey, such as training equipment, as Washington attempts to block delivery of the jet to its NATO ally amid Ankara’s purchase of the S-400 missile defense system from Russia.

President Erdogan has refused to back down and today said, “We finished the S-400 process and our payments continue,” the U.S. contending the S-400 would compromise the security of the F-35 aircraft.

Despite the issues, Turkish pilot are continuing their training on the F-35 at an air base in Arizona, with Ankara expecting the aircraft to be delivered in November.

And today an official told Reuters, “It’s shocking that Russia isn’t more worried about sending their equipment to a NATO nation, co-located with U.S. forces, where it can be studied and where we are likely to gain valuable intelligence.”

Libya: The leader of forces in eastern Libya, Khalifa Haftar, once a favorite of the West, has ordered his troops to march on the capital Tripoli, which is the base of the internationally recognized government.  Khalifa Haftar’s order came as UN chief Antonio Guterres was in Tripoli.

Libya has seen non-stop internal conflict and division since long-time ruler Muammar Gaddafi was deposed and killed in 2011.

The U.S., UK, France, Italy and the United Arab Emirates issued a joint statement appealing for calm.

Any major conflict over Tripoli would not be good for the global oil market, Libya a key producer.

Tonight, Haftar’s forces are reportedly nearing Tripoli, with clashes at the main airport.

North Korea: According to Reuters: “On the day that their talks in Hanoi collapsed last month, U.S. President Donald Trump handed North Korean leader Kim Jong Un a piece of paper that included a blunt call for the transfer of Pyongyang’s nuclear weapons and bomb fuel to the United States, according to a document seen by Reuters.  Trump gave Kim both Korean and English-language versions of the U.S. position at Hanoi’s Metropole hotel on Feb. 28, according to a source familiar with the discussions, speaking on condition of anonymity.  It was the first time that Trump himself had explicitly defined what he meant by denuclearization directly to Kim, the source said.  A lunch between the two leaders was canceled the same day.  While neither side has presented a complete account of why the summit collapsed, the document may help explain it.

“The document’s existence was first mentioned by White House national security adviser John Bolton in television interviews he gave after the two-day summit. Bolton did not disclose in those interviews the pivotal U.S. expectation contained in the document that North Korea should transfer its nuclear weapons and fissile material to the United States.”

The document, if the story is true, appears to represent Bolton’s “Libya model” of denuclearization that Kim has rejected repeatedly, and Kim likely would have seen the document presented to him by Trump as insulting and provocative.

Again, according to Reuters, the document called for “fully dismantling North Korea’s nuclear infrastructure, chemical and biological warfare program, and related dual-use capabilities; and ballistic missiles, launchers, and associated facilities.”

Aside from the call for transfer of Pyongyang’s nuclear weapons and bomb fuel, “the document had four other key points. It called on North Korea to provide a comprehensive declaration of its nuclear program and full access to U.S. and international inspectors; to halt all related activities and construction of any new facilities; to eliminate all nuclear infrastructure; and to transition all nuclear program scientists and technicians to commercial activities.”

So where are we today?  The issue with North Korea has given China leverage over the U.S. in its trade talks, with 90 percent of North Korea’s external trade passing through China.

If Washington and Beijing reach a comprehensive trade deal, some sort of deal with Pyongyang might follow.

China: Beijing continued to put the pressure on Taipei, with two Chinese fighter jets crossing the Taiwan Strait’s “median line” on Sunday, leading to a standoff with Taiwanese jets in the island’s airspace.  Taiwan’s ministry of foreign affairs called the incident “intentional, reckless, and provocative.”

Taiwanese media labeled the incursion the first since 2011, and that one was considered an accident.

Beijing is upset following the voyage a week ago of a U.S. destroyer through the Strait, as well as President Tsai Ing-wen’s speech in Hawaii a few days later.  Tsai confirmed her government’s request to buy American M-1 Abrams tanks and F-16V fighters.

As the Wall Street Journal editorialized:

“The Chinese may hope Sunday’s escalation will convince Washington that its support for Taiwan’s democracy isn’t worth the risks. This strategy has worked for decades to convince American Presidents not to sell fighters to Taiwan, and the island’s forces are now heavily outnumbered. Taiwan has 144 fourth-generation F-16s from the 1990s compared to 600 fourth-generation planes on the Chinese side, an advantage that has made Beijing more aggressive.

“News reports say the Administration is close to accepting Taiwan’s request for some 60 F-16Vs, which are more advanced than the island’s existing fleet and would provide meaningful deterrence in the Taiwan Strait. Such a sale would ‘show to the world the U.S. commitment to Taiwan’s defense,’ as Ms. Tsai said last week.  America’s Pacific allies want to know how Mr. Trump will respond to Chinese aggression, and Taiwan is his most important test.”

Separately, 30 firefighters were killed in a maelstrom in southwestern China when winds shifted unexpectedly, focusing attention on the training and equipment of the country’s firefighters.

The official China Daily wrote after, “The advancement of technology in recent years should have provided them with better safety guarantees than before,” referring to a deadly blaze in 2015 at a chemical plant in Tianjin that killed more than 100.  “But the two fires in Tianjin and Sichuan have exposed that there is still a long way for China to go to modernize its firefighting system.”

Russia: In a new poll from the independent Levada Center, the number of Russians forecasting improved relations between their country and the West has reached a five-year high.

Public support for Russia’s annexation of Crimea from Ukraine has remained in the high 80s in the Levada poll since 2014, despite it leading to economic sanctions and strained Russia-West relations. Almost two-thirds of respondents said the annexation “caused more good” to Russia, versus nearly one-fifth who said it “caused more harm.”

A total of 54 percent told Levada that Russia’s relations with the West will return to pre-annexation levels, up from 46 percent last year.  34 percent expect the “new Cold War” to continue.

On a related topic....

Editorial / Wall Street Journal

“As it celebrates its 70th anniversary this week, the NATO alliance isn’t getting much respect on either side of the Atlantic.  Maybe people should start imagining what the world might look like today if it didn’t exist.

“The first half of the 20th century demonstrated that America would be dragged into Europe’s wars one way or another.  Part of NATO’s purpose was to reduce the risk that such a conflict would emerge and embroil the U.S. again. Membership in NATO allowed Germany to rebuild economically and militarily without frightening its neighbors.

“It worked.  NATO helped maintain Western unity against the Soviet Union and its Warsaw Pact. A reunited Germany today is at peace with its neighbors and the cornerstone of Europe’s economy.  European Union boosters claim their pet project deserves the credit for these achievements, but the EU wouldn’t exist without NATO to keep Europe’s peace.

“So it is that NATO today is that rarest of strategic animals – a treaty that’s a victim of its own success.  The Soviet Union’s collapse prompted dramatic reductions in military spending across the West, a trend NATO leaders still struggle to reverse.  NATO’s efficacy defending Europe has allowed successive U.S. Administrations to shift their focus elsewhere, lately toward China and domestic concerns.

“Yet Russian revanchism under Vladimir Putin shows NATO’s continuing relevance. The Russian cites NATO’s expansion into the Baltic states and Poland as provocative, but he knows this is no threat to Russia.  He uses NATO as a foil domestically to justify his incursions into neighboring countries and Ukraine.

“The alliance has awakened somewhat from its post-Cold War complacency since Mr. Putin’s invasion of Crimea. After many years of spending declines, leaders in 2014 recommitted to a goal of spending 2% of GDP on their militaries – an important target still too infrequently met, especially by Germany.

“NATO also has bolstered its forward presence in its eastern members.  But Mr. Putin would love to test the alliance’s commitment to mutual defense if he could find a way to intervene in the Baltic states.  NATO leaders need to make clear to Mr. Putin that the allies will be united in providing military support to even its smallest members.”

Ukraine: Volodymyr Zelensky, a 41-year-old comedian, won the first round of the presidential election with 30 percent, meaning he will now be in a runoff with President Petro Poroshenko, who was a distant second at 16 percent, and a hole that may be too deep to climb out from.  Poroshenko faced a public furious with his failed attempt to stamp out corruption and improve living standards after five years in power, following the ouster of a pro-Russian leader in a popular revolt.

Poroshenko attacked Zelensky as fundamentally unserious, a reckless choice at a time when the country still faces a conflict against Russian-backed separatists, a war that has killed 13,000 people.  President Vladimir Putin “dreams of a soft, pliant, tender, giggling, inexperienced, weak, ideologically amorphous and politically undecided president of Ukraine. Are we really going to give him that opportunity?” said Poroshenko.

In the field of 39 candidates, former prime minister Yulia Tymoshenko placed third with 13 percent.  The runoff is April 21.

Algeria: 82-year-old President Abdelaziz Bouteflika is resigning after weeks of mass protests.  Bouteflika, who has been in power for 20 years, had dropped plans to seek a fifth term as opposition grew, with the powerful military calling for him to be declared incapable of carrying out his duties.  He is due to leave before April 28, when his term expires.

Bouteflika suffered a stroke six years ago and has been seldom seen since.

According to the constitution, the Senate speaker takes over on an interim basis until fresh elections are held.

So the peaceful protests worked, with the military backing them.  This was the hoped for model for Venezuela.

Speaking of which....Jackson Diehl / Washington Post

“Back in January, the Trump administration launched an aggressive effort to convince the Venezuelan military that if it did not topple President Nicolas Maduro, it would be destroyed by sanctions and, perhaps, a U.S. invasion. The rhetoric succeeded in alarming American leftists, who loudly denounced the coming coup, and Russia, which dispatched two planeloads of military advisers and equipment to stiffen the regime’s defenses.

“To date, however, the campaign has had virtually no effect on its intended target. There have been no significant defections of Venezuelan generals, and no sign of any move against Maduro, who has remained entrenched in the presidential palace even as opposition demonstrations have sputtered. The drive to replace Maduro with National Assembly leader Juan Guaido, which has been the Trump administration’s most robust foreign policy initiative after the attempt to disarm North Korea, has stalled.

“The problem here is not the Russians and their mostly for-show intervention.  More important is the corruption of senior military leaders and the malign influence of the thousands of Cuban advisers embedded in the chain of command.

“The most salient factor, however, may be that, unlike Bernie Sanders and other self-styled resisters of U.S. imperialism, the Venezuelans know that Trump is bluffing.  There is no credible U.S. military option in Venezuela, and very little chance that Trump would actually try one....

“The administration’s calculation is that the weight of Venezuelan suffering will crack the military before it does the anti-Maduro alliance.  Along with the threats of invasion, conciliatory messages have been aimed at the generals, including a promise of amnesty and assurances that the Chavista movement will be free to compete in a restored democracy.

“In essence, what was meant to be a swift blitzkrieg against a crumbling dictatorship has turned into a war of attrition in which the primary weapon, for both sides, is human hardship.  It’s easy to understand why some Venezuelans hope for a U.S. Marines landing that puts a swift stop to it.  But notwithstanding Trump’s bluffing, that’s not the way this crisis will end.”

Random Musings

--Presidential approval ratings...

Gallup: 39% approval of Trump’s job performance, 57% disapproval; 90% Republicans, 33% Independents (Mar. 15)
Rasmussen: 51% approval, 47% disapproval (Apr. 5)

New Wall Street Journal/NBC News survey: 43% approve, 53% disapprove.  [It was 44% approval one month after Trump took office.  Yup, the base is rock solid.]

--Presumptive Democratic presidential candidate Joe Biden vowed Wednesday to change his handsy ways after at least seven women, as of week’s end, had come forward to accuse him of inappropriate touching.

“Social norms have begun to change, they’ve shifted and the boundaries of protecting personal space have been reset, and I get it,” said the former vice president in a video posted to his Twitter account.

“I hear what they’re saying, I understand it and I’ll be much more mindful.”

Biden maintained that he meant no ill will, and his penchant for hugs and shoulder rubs was “just who I am,” but conceded that it was on him to adjust to contemporary standards on personal space.

“I’ve never thought of politics as cold and antiseptic,” he said in the clip.  “I’ve always thought that shaking hands, hands on the shoulder, a hug, encouragement – and now it’s all about taking selfies together!

“But I will be more mindful and respectful of people’s personal space, and that’s a good thing.”

Biden – who has waited too long to announce his 2020 candidacy – also touted his bonafides as a supporter of women, as he’d faced increasing calls to tone down his touching.

“I’ve worked my whole life to empower women.  I’ve worked my whole life to prevent abuse.  So the idea that I can’t adjust to the fact that personal space is important – more important than it’s ever been – is just not thinkable,” he said.  “I will.”

The last three women all told the Washington Post stories similar to those of the first four who have described unwanted touching by the former veep.

One of the women, Vail Kohnert-Yount, is a former White House intern. She described an encounter with the vice president when she was walking out of the basement of the West Wing.

Biden walked over to shake her hand, she told The Post. “He then put his hand on the back of my head and pressed his forehead to my forehead while he talked to me,” she said.

“I was so shocked that it was hard to focus on what he was saying,” she added.

Now that’s creepy.

Andrea Peyser / New York Post

“Creepy, handsy Uncle Joe Biden, who had the temerity to hug, kiss and space-invade a smattering of unsuspecting women and girls – some of whom dug it while a few felt ‘uncomfortable,’ if not exactly violated – is guilty.  But of what, exactly?

“Weird Joe, who’s been showing keen affection to members of the fairer sex since before he became a big Democratic macher, has done the unforgivable in this humorless age.  He’s shown genuine human warmth of the male variety to females in the scary era of #MeToo.  And he’s demonstrated that the vast suspicion, bordering on hatred, of men – even dudes on the political left – is a force so powerful, he has only one choice: Pack in your presidential hopes, Joe, and repent. The feminists of America are coming for you with torches and pitchforks.

“The insanity has spread like measles.  Once, a man who gave a lady a friendly pat, a shoulder rub or an encouraging peck on the noggin was either thanked profusely, ignored or simply asked to stop.

“Women, it was presumed, weren’t so powerless as to be unable to avoid unasked-for contact.  Whatever happened to telling a pesky guy to scram?  That is no longer an option.

“Now, men can be subjected to the kind of shaming the late George H.W. Bush endured in his final days by angry women who claimed that pats on the backside dished out by the nonagenarian Republican ex-president from his wheelchair amounted to sexual assaults....

“His apology wasn’t accepted.

“Even liberal Democrat Al Franken was driven to resign from the Senate for engaging in a stupid pre-politics prank involving a comedienne in a thick flak jacket and a grope from Franken, which he performed before a camera. Big mistake.

“We’ve lost all sense of proportion.  Many can’t – or choose not to – discern the difference between sexual violence and innocent flirtation, between a Harvey Weinstein and a Garrison Keillor.

“In the case of Biden, 76, I can’t for the life of me pinpoint the outrage he supposedly committed, one that threatens to end his career ignominiously.”

I saw a number of Biden’s first accuser, Lucy Flores’, media appearances and there isn’t anyone who’s been able to corroborate her story.  One of the Nevada television stations covering the 2014 apparent close encounter, went through all its footage, poured through still shots of the campaign event (Flores was running for Nevada lieutenant governor) and found nothing.

But that doesn’t mean it didn’t happen.

That said, other women, such as the wife of Ash Carter, who had her shoulders massaged by Biden during her husband’s 2015 swearing-in as defense secretary, praised Biden for comforting her nerves that day.

Andrea Peyser:

“During (Delaware Sen.) Chris Coons’ swearing-in to the Senate (in 2015), Biden whispered in the ear of the senator’s then-13-year-old daughter, and kissed the top of her head.

“A pervert?  Hardly.

“Sen. Coons maintains that his three kids consider Biden a grandfatherly figure. Soon after Flores’ essay dropped, the pile-on began.  Yet not one of the three other women who emerged from the woodwork to slime Biden described him as a sex fiend. Just a man, which could be enough.

“Biden is a lonely political centrist in a constellation of socialist-leaning Democratic stars, which may be the reason some in his own party are trying to destroy him with specious claims of sexual oddities, even before he’s expected to announce his presidential candidacy.

“Stop the madness.  Judge Uncle Joe on the real issues, not the vague sexual stuff.  Nor on offenses that even his accusers admit never happened.”

Maureen Callahan...also writing in the New York Post...had a different take on two of the above incidents.

“In 2015, Biden massaged the shoulders of Ash Carter’s wife Stephanie during Carter’s swearing in... Carter actually turned, mid-speech, and put his own hand on his wife’s shoulder to make Biden step away.  And though Stephanie wrote an essay for Medium defending Biden for comforting her as she was ‘uncharacteristically nervous,’ many women watching were made extremely uncomfortable.

“During Senator Chris Coons’ swearing in earlier that same year, Biden leaned down, cooed in his 13-year-old daughter’s ear and kissed her, all as the girl kept pulling away.  Her mother had to tap Biden’s shoulder several times to force him back.  In an interview that followed with Fox News Sunday host Chris Wallace, Coons similarly downplayed what we all saw.

“ ‘I have to ask, ‘cause a lot of people have been speculating about it – does [your daughter] think the vice president is creepy?’

“ ‘ No, Chris,’ Coons replied.  ‘She doesn’t think the vice president is creepy.’

“But those two incidents started a national conversation: What is wrong with Joe Biden?....

“So much of Biden’s agonizing over a 2020 run has been assumed to be over his age and messy family dynamics. As Page Six exclusively reported in 2017, after Biden’s 46-year-old son Beau died of brain cancer in 2015, Beau’s brother Hunter began an affair with Beau’s widow, leaving his own wife of 23 years, Kathleen, with whom he has three children.  The scandal was believed to be a key factor in Biden’s decision to sit out 2016.

“Time’s Up and #MeToo aside, Biden faces intra-party upset over his support of Bill Clinton’s 1994 crime bill; his brutish questioning of Anita Hill; and, most recently, for taking $200,000 for a speech in October boosting a House Republican just before the midterms.

“But to be  standard-bearing centrists in a progressive-moving party is the least of his concerns.  It’s his behavior with women – and young girls – that’s the far stickier problem, one the Democratic party is beginning to address in unison....

“Here’s the thing: We are no longer willing to define deviancy down.  The record number of women elected to Congress in 2018 was a direct response to this kind of dismissive, ridiculous argument.  As The Post reported on Sunday, some of Biden’s most high-profile challengers – Elizabeth Warren, John Hickenlooper, Amy Klobuchar – are refusing to defend Biden.  A cynic could obviously point to kneecapping a rival, but it’s worth noting that Bernie Sanders, himself of Biden’s generation and facing issues of sexual harassment among staff on his own 2016 campaign, declined to malign a possible frontrunner.  Incredibly, Sanders has said he’s unsure Biden should be disqualified for this ‘one incident alone.’

“Really?  One incident alone?....

“Byron York, writing for the conservative Washington Examiner, referenced this salient Biden quote from October 2000 regarding the Violence Against Women Act:

“ ‘There is no circumstance under which a man has a right to touch a woman without her consent, other than self-defense,’ Biden said.  ‘We are changing the attitudes of America about what constitutes appropriate behavior on the part of a man with a woman.’

“If that’s the truth, creepy Uncle Joe won’t be running.”

--In the fundraising race for the Democratic nomination for president, in the first quarter, Bernie Sanders raised $18.2 million, Kamala Harris $12 million, Beto O’Rourke $9.4 million, and Mayor Pete a very solid $7 million.

--I watched Howard Schultz’s town hall on Fox News Thursday and I must say, the guy has grown as a potential candidate in a very short period of time from his bumbling start.

--Chicago made history by electing an African-American woman as its mayor for the first time.  Lori Lightfoot is a former federal prosecutor who has not held political office before.  After fighting off 13 other candidates, she dominated the runoff, taking 74%.

Ms. Lightfoot is also the city’s first gay mayor.

Celebrating on-stage with her wife and daughter.

“Out there tonight a lot of little girls and boys are watching.  They’re watching us. And they’re seeing the beginning of something, well, a little bit different,” she told a crowd of supporters.

Yup.         

--As announced the other day, a small hamlet in southeastern Alaska, Klawock, recorded a 70-degree day back on March 19, the earliest 70-degree day in the state’s history – and more record temps are expected to follow.

Just as it’s clear Australia is Ground Zero for climate change, globally, Alaska is Ground Zero for the U.S.  According to the National Oceanic and Atmospheric Administration’s Climate.gov, Alaska is the fastest-warming state.

Alaska tied or broke 55 temperature records from March 1 through 23, NOAA said.  Anchorage hit 48 degrees March 25, tying a record from 1970.  The city also had no measurable snow in March for only the second time in history.

--I have to admit I’ve been surprised President Trump hasn’t responded to well-known sports columnist Rick Reilly’s new book, “Commander in Cheat: How Golf Explains Trump,” which came out Tuesday, excerpts appearing in all manner of publications.

Reilly writes: “To say ‘Donald Trump cheats’ is like saying ‘Michael Phelps swims.’  He cheats at the highest level.  He cheats when people are watching and he cheats when they aren’t.  He cheats whether you like it or not.  He cheats because that’s how he plays golf...if you’re playing golf with him, he’s going to cheat.”

One of the most egregious stories that appears in Reilly’s book concerns announcer Mike Tirico, who remembers hitting one of the best shots of his life on a par-5, an approach shot that was squarely onto the green, but when he walked up, the ball was 50 feet away in a bunker.

“Trump’s caddy came up to me and said, ‘You know that shot you hit on the par 5?” Tirico says.  “It was about 10 feet from the hole. Trump threw it in the bunker.  I watched him do it.”

--Finally, back to global warming....

Editorial / Washington Post

“The International Energy Agency reported last Monday that global energy-related greenhouse emissions rose 1.7 percent in 2018.  The robust global economy spiked demand for energy, which increased 2.3 percent, and fossil fuels met most of that demand.  Global coal use ticked up 0.7 percent, almost entirely in China and India.  In the United States, oil and natural gas consumption increased. The world must find a way to grow without supercharging greenhouse emissions.

“Another major contributing factor to the increase in energy demand was an uptick in heating and air conditioning in response to record-breaking temperature anomalies in some areas.  This suggests that global warming will create a vicious cycle in which temperature extremes encourage greater use of heating oil, electricity and other fuels to control interior environmental conditions....

“But the time in which global warming could be construed as mainly a challenge for the big Western economies is long past.  More than any others, China and India hold the climate’s future in their hands.  China, the world’s largest current greenhouse-gas emitter, generates four times as much coal-fired electricity as the United States does, and a major industrial group just proposed hiking that by a third.  There is also evidence that building has resumed on coal-fired power plants on which the Chinese government had previously halted construction.  India, meanwhile, is also boosting coal consumption, and it lacks China’s commitment to a vast increase in renewables. China and India face huge challenges in raising their millions out of poverty.  But it would be foolhardy to do so at the expense of future generations’ well-being.”

I’ll be dead.  You younger folk have to deal with this on your own.  But knowing China and India as I do, you don’t have a chance.

Actually, a virus emanating in China will kill us all before we have to worry about climate change catastrophes.

One more on a different topic.  As many of you are aware, there is a problem at Santa Anita racetrack in California, one of the nation’s great spots for watching thoroughbred racing.  Some 23 horses have died at the track, both in competition and in training, since December, and this weekend Santa Anita is under intense scrutiny as it has a card of big races on Saturday, including the Santa Anita Derby, a major prep race for the Kentucky Derby.  I’ve written of this topic extensively in my Bar Chat column, but if you love the sport, as I do, pray there are no fatalities there for an extended period.  The very future of the sport is at risk, and it’s one, for starters, that employs tens of thousands.

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

God bless America.

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Gold: $1297
Oil: $60.18

Returns for the week 4/1-4/5

Dow Jones  +1.9%  [26424]
S&P 500  +2.1%  [2892]
S&P MidCap  +2.8%
Russell 2000  +2.8%
Nasdaq  +2.7%  [7938]

Returns for the period 1/1/19-4/5/19

Dow Jones  +13.3%
S&P 500  +15.4%
S&P MidCap  +17.2%
Russell 2000  +17.4%
Nasdaq  +19.6%

Bulls 53.4
Bears 19.4

Dr. Bortrum posted a new column.

Have a great week.

Brian Trumbore

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