Week in Review

---

Week in Review

10/26/2019

For the week 10/21-10/25

[Posted 9:30 PM ET, Friday]

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

Edition 1,071

Having started this column in February 1999, I can’t help but remind everyone that I not only covered every day of both the George W. Bush and Barack Obama administrations, I labeled both of them two of the five worst presidents in U.S. history.

And in light of what has transpired the past few weeks with President Trump’s abandonment of the Kurds in Syria, I can’t help but remind you that I’m the one who said for years that President Obama’s failure to secure a no-fly zone in Syria in 2012, working with Turkish President Erdogan, would go down as one of the biggest mistakes of the century.

Recall that in 2012, as Obama ran for reelection, the theme was “Bin Laden is dead, GM is alive.”  The last thing the president and running mate Joe Biden wanted to deal with was a commitment in Syria.  There were about 20,000 dead at the time as a result of the civil war.  Today the figure is over 500,000. ISIS was years from emerging.  There was no Russian involvement.  There was no migrant crisis in Europe.  None of this would have happened had Obama chosen to act. 

So we advance the clock seven years and President Donald Trump (who I said I wouldn’t rate until the end of his first term) added to the tragedy of Syria with his reckless move to pull the small force the United States had in the country, which had done such a phenomenal job, working with our Kurdish allies to end the Islamic State caliphate. 

But as I go to post there is talk of the U.S. moving troops and tanks back in, as described below.  The incoherence in American policy is staggering.  It’s incredibly dangerous as well.

I have avoided talking about impeachment, except to report the story, just as I did for years with the Mueller investigation.  But I’m on record as of last week as warning the generals are getting restless.  Events are moving so quickly, owing in no small part to the fact that Donald Trump insists on it.  He must dominate the daily news cycle.

This can’t continue.

Trump World...compounding the Syrian disaster....

This afternoon Trump tweeted:

“Turkey fully understands not to fire on the Kurds as they leave what will be known as the Safe Zone for other fairly nearby areas.  I don’t have to repeat that large scale Sanctions will be imposed for violations.  Going well!  ISIS secured by Kurds with Turkey ready as backup....

“....USA has gained Trillions of Dollars in wealth since November 2016.  All others way down.  Our power is Economic before having to use our newly rebuilt Military, a much better alternative.  Oil is secured.  Our soldiers have left and are leaving Syria for other places, then....

“....COMING HOME! We were supposed to be there for 30 days – That was 10 years ago.  When these pundit fools who have called the Middle East wrong for 20 years ask what we are getting out of the deal, I simply say, THE OIL, AND WE ARE BRINGING OUR SOLDIERS BACK HOME, ISIS SECURED!”

Just shoot me.

Wednesday, flanked by Vice President Mike Pence and Secretary of State Mike Pompeo, both of whom looked immensely uncomfortable, President Trump claimed a diplomatic victory after Russia and Turkey took control of the areas in northeastern Syria previously overseen by U.S. forces, with Trump even lifting sanctions on Turkey.

A day earlier, Russia and Turkey agreed to a plan to push Syrian Kurdish fighters from a wide swath of territory just south of Turkey’s border, cementing Russian President Vladimir Putin’s preeminent role in Syria as U.S. influence wanes, American troops pelted with rotten fruit as they depart.

“This was an outcome created by us, the United States, and nobody else.  No other nation; very simple,” Trump said defiantly.  But the president had created the problem when he withdrew U.S. forces and green lighted Turkey’s subsequent invasion.

The same day Trump was declaring victory, Ambassador James Jeffrey, the special envoy to Syria, was telling the House Foreign Affairs Committee, “We obviously had troops there for a mission and that mission was defeating ISIS.  So if you remove those troops before that mission is complete, then you have a problem. And we do have a problem right now.”

Jeffrey added that the Turkish invasion “has scrambled the entire northeast, undercut our efforts against ISIS and brought in the Russians and Syrian regime forces in a way that’s really tragic for everyone involved.”

Trump said:

“We were supposed to be there for 30 days. That was almost 10 years ago. So we’re there for 30 days, and now we’re leaving. Supposed to be a very quick hit and let’s get out, and it was a quick hit except they stayed for almost 10 years.”

Just a flat-out lie.  It was October 2015, four years ago, that President Obama deployed a small number of troops to advise and assist the Kurds and their allies fighting ISIS.  The troops, numbering about 50, were never involved in a combat mission and there was never any 30-day timetable.

Trump:

“Through much work, we have done things that everybody said couldn’t be done. Today’s announcement validates our course of action with Turkey that only a couple of weeks ago was scorned. And now people are saying, ‘Wow, what a great outcome. Congratulations.”

There isn’t a single person saying this, save for the junior senator in Kentucky.  I was sickened to the core watching Trump Wednesday.

By week’s end, the White House was already rethinking their plans and considering leaving about 500 U.S. troops in northeast Syria, and possibly sending in dozens of battle tanks, which would be a complete reversal of the withdrawal Trump wanted.  The U.S. objective would also change from fighting ISIS to protecting the oil fields in the east.

Trump tweeted Thursday: “The Oil Fields discussed in my speech on Turkey/Kurds yesterday were held by ISIS until the United States took them over with the help of the Kurds. We will NEVER let a reconstituted ISIS have those fields!

“I really enjoyed my conversation with General @MazloumAbdi. He appreciates what we have done, and I appreciate what the Kurds have done.  Perhaps it is time for the Kurds to start heading to the Oil Region!”

[The oil region is desert, and not the Kurds traditional homeland.]

Editorial / Wall Street Journal

“President Trump on Wednesday announced what he called a ‘great outcome’ in Syria, and he’s right if he’s referring to the interests of Turkey’s President Recep Tayyip Erdogan and Russia’s Vladimir Putin.  In return for agreeing to consolidate their territorial and strategic gains, Mr. Trump is withdrawing American forces and lifting the sanctions against Turkey he imposed only a few days ago.

“The ‘big success,’ as Mr. Trump called it in a tweet, is that Mr. Erdogan has agreed to stop Turkey’s invasion into Syria at about 20 miles. This will save Kurdish lives, at least for a time, though at the cost of the territory they formerly controlled with U.S. assistance.

“The border and most of northern Syria will now be patrolled by Turkish and Russian forces, and the Russians will control the balance of power.  Abandoned by the U.S. and with no good options, the Kurds are cutting their own deal with the Russians and Syria’s Bashar Assad to survive.  Mr. Trump boasted about a ‘safe zone,’ but he must mean safe for Mr. Assad, Turkey, Russia and Iran.

“The only American purpose served here seems to be to facilitate Mr. Trump’s desire to pack up and leave.  As he put it Wednesday in remarks at the White House, ‘Let someone else fight over this long-bloodstained sand’ – though the U.S. special forces weren’t taking many if any casualties in the border region.

“Mr. Trump said an unspecified number of Americans will remain to protect ‘the oil’ in northeastern Syria, and ‘we’ll be deciding what we’re going to do with [the oil] in the future.’ Good luck trying to get a company to develop that oil without a more robust American presence, even assuming that Russia, Iran, Syria and sundry jihadists don’t first drive out the small and residual U.S. force.

“By lifting the sanctions, Mr. Trump also continues his puzzling indulgence of Mr. Erdogan. Apart from releasing American pastor Andrew Brunson, who was unjustly arrested, we’re not sure what the Turkish President has done for Mr. Trump or American interests.  Mr. Trump also refused to sanction Mr. Erdogan for buying S-400 anti-aircraft missiles from Russia despite U.S. warnings and Turkey’s obligations as a NATO ally. The President also hinted on Wednesday that Mr. Erdogan might soon be welcome at the White House.

“Congress can do more if it can muster bipartisan majorities, and it ought to try.  As an election year approaches, Mr. Trump is indulging more of his isolationist impulses.  If Members of Congress still want the U.S. to exert leadership and maintain alliances, they are going to have to speak up and form cross-party coalitions to get Mr. Trump’s attention.”

--On the impeachment front, a Quinnipiac University poll had approval among voters for a House inquiry to determine whether or not to bring impeachment charges against President Trump at 55%, while 43% disapprove.  Independent voters approve 58-37.  A week ago independents were divided 50-45, so this could be significant.

48% of registered voters say Trump should be impeached and removed from office, while 46% say he should not.

In his dealings with Ukraine, 59% say Trump was pursuing his own personal interest, while 33% say he was pursuing the national interest.

But a day before we had this New York Times/Siena College survey that showed registered voters in the states likeliest to decide the 2020 election supporting the impeachment inquiry by a 50-45 margin.  However, the same voters oppose impeaching Trump 53-43, which is basically like previous surveys from NBC/Wall Street Journal, Marist, Quinnipiac, CNN and Monmouth.

This survey was done among voters in Pennsylvania, Florida, Michigan, Wisconsin, North Carolina and Arizona.  Keep the inquiry going...but we are doubtful, is today’s message; or something like that.

Finally, a new NBC News/SurveyMonkey poll found Americans evenly split on whether President Trump should be impeached.  49% for, 49% against.

But of course 90% of Republicans are against impeachment, and 89% of Democrats favor it.

--From the Associated Press:

“More than two months before the phone call that launched the impeachment inquiry against President Trump, Ukraine’s newly elected leader was already worried about pressure from the U.S. president to investigate his Democratic rival Joe Biden.

“Volodymyr Zelensky gathered a small group of advisors on May 7 in the capital of Kiev for a meeting that was supposed to be about his nation’s energy needs.  Instead, the group spent most of the three-hour discussion talking about how to navigate the insistence from Trump and his personal lawyer, Rudolph W. Giuliani, for an investigation and how to avoid becoming entangled in the American elections, according to three people familiar with the details of the meeting.

“They spoke to the Associated Press on condition of anonymity because of the diplomatic sensitivity of the issue, which has roiled U.S.-Ukrainian relations.

“The meeting came before Zelensky was inaugurated but about two weeks after Trump called to offer his congratulations on the night of the Ukrainian leader’s April 21 election.

“The full details of what the two leaders discussed in that Easter Sunday phone call have never been publicly disclosed, and it is not clear whether Trump explicitly asked for an investigation of Biden and his son Hunter.

“The three people’s recollections differ on whether Zelensky specifically cited that first call with Trump as the source of his unease.  But their accounts all show the Ukrainian president-elect was wary of Trump’s push for an investigation into the former vice president and Hunter Biden’s business dealings.

“Either way, the newly elected leader of a country wedged between Russia and U.S.-aligned NATO members knew early on that vital military support might depend on whether he was willing to choose a side in an American political tussle.  A former comedian who won office on promises to clean up corruption, Zelensky’s first major foreign policy test came not from his enemy Russia, but rather from the country’s most important ally, the United States.”

So the top U.S. diplomat in Ukraine, William B. Taylor, recounted and presented in exacting detail what has already been described by previous witnesses to the House impeachment investigation that U.S. foreign policy was being hijacked by a “highly irregular” second channel, led by Rudolph Giuliani and others.

“It was the most thorough account we had so far of the events we’ve been investigating,” said Rep. Tom Malinowski (D-N.J., my congressman these days).  “It resolved any remaining doubts I have had.”

The White House didn’t rebut any of Taylor’s specific statements, but sought instead to label it “triple hearsay.”

White House press secretary Stephanie Grisham said in a statement: “President Trump has done nothing wrong – this is a coordinated smear campaign from far-left lawmakers and radical unelected bureaucrats waging war on the Constitution.  There was no quid pro quo.”

In his 15-page opening statement, Taylor said that he learned on July 18 during a secure video conference with National Security Council officials that the White House had ordered about $400 million in congressionally approved aid to Ukraine be held up.

“In an instant, I realized that one of the key pillars of our strong support for Ukraine was threatened,” Taylor said in his opening statement.  “The irregular policy channel was running contrary to the goals of long-standing U.S. policy.”

Taylor, who had been tapped in June by Secretary of State Mike Pompeo to come out of retirement to lead the U.S. Embassy in Ukraine, said, “I became increasingly concerned.”

Taylor described how Gordon Sondland, the U.S. ambassador to the European Union, said Trump had told Sondland that he wanted President Zelensky to state publicly that Ukraine would investigate Burisma, a natural gas company where former Vice President Joe Biden’s son Hunter had served as a board member for five years.

Trump also wanted a public commitment from Zelensky that Ukraine would examine debunked claims about Ukrainian interference in the 2016 U.S. presidential election, otherwise he wouldn’t agree to a public meeting with the Ukrainian leader.

There were further instances, as Taylor described, where Sondland told a Zelensky advisor that “security assistance money would not come until President Zelensky committed to pursue the Burisma investigation.”

A week after this, Sept. 8, Taylor described his own conversation with Sondland, who told him that “Trump was adamant that President Zelensky, himself, had to ‘clear things up and do it in public,’” Taylor recalled.  “He said that President Trump wanted President Zelensky ‘in a public box’ by making a statement about ordering such investigations.”

And Taylor goes on and on, saying, “the Ukrainians did not ‘owe’ President Trump anything, and holding up security assistance for domestic political gain was ‘crazy,’” Taylor wrote, quoting words he had used in a text message chain that has since become widely circulated.

It was four hours after this, as we’ve now learned, that Sondland, following a conversation with President Trump, texted Taylor that Trump “has been crystal clear, no quid pro quo of any kind.”

Trump on Wednesday compared the Democrats’ impeachment investigation to a “lynching.”

Editorial / Wall Street Journal

“But no President should use the word in the off-hand and self-indulgent way that Mr. Trump did in his tweet.  What’s so galling about this and similar pointless provocations is that, in his quest to remain always and forever in the headlines, Mr. Trump puts his more judicious allies on the political spot.  Every Republican in Congress is immediately asked either to ignore him and risk association with his reckless pronouncements, or criticize him and risk his wrath.

“Democrats are bent on impeaching Mr. Trump, and if he wants to survive he is going to need allies – especially in Congress. The more he forces Republicans to defend words or actions that don’t deserve defending, the more their resentment will build and the more political trouble he will be in.”

Editorial / Washington Post

“Unable to answer the mounting evidence that President Trump abused his office to advance his reelection campaign, the White House is resorting to character assassination.  Following reports of the congressional testimony Tuesday of William B. Taylor Jr., the acting ambassador to Ukraine, a statement attributed to press secretary Stephanie Grisham described ‘a coordinated smear campaign from far-left lawmakers and radical unelected bureaucrats waging war on the Constitution.’  We’ll let House Democrats defend themselves.  But the attempt to sully Mr. Taylor’s reputation, and that of other government servants who have testified in the Ukraine affair, is ludicrous – and vile.

“For the record: Mr. Taylor has served his country with distinction for 50 years.  After graduating from West Point, he was deployed for six years as an infantry officer, including with the 101st Airborne Division in Vietnam.  Later he worked at NATO and as a State Department diplomat in Afghanistan, Iraq, Israel and Ukraine, where he was first appointed ambassador by George W. Bush.

“In his testimony Tuesday, Mr. Taylor recounted that, after being asked to return to Kiev earlier this year by Secretary of State Mike Pompeo, he approached a former senior Republican official for advice.  He said ‘the mentor counseled: ‘If your country asks you to do something, you do it – if you can be effective.’’  Despite the strong opposition of his wife, the 72-year-old Mr. Taylor accepted the assignment.

“We feel confident that it was in that same spirit that Mr. Taylor agreed to testify about Mr. Trump’s extortion of the Ukrainian government.  He, and former ambassador Marie Yovanovitch, and Deputy Assistant Secretary of State George Kent, and former Pompeo adviser Michael McKinley, and former National Security Council aide Fiona Hill, are the opposite of ‘radicals.’  They are conservatives in the best sense – patriots who tried, and are still trying, to defend the country’s interests and values from a radically reckless and corrupt president.  They spoke in spite of the administration’s attempts to silence them and at the risk of losing jobs or otherwise becoming targets of retaliation.

“Two others who testified, Kurt Volker and Gordon Sondland, are Republicans appointed to their posts by Mr. Trump.  By Mr. Taylor’s account, Mr. Sondland, who donated $1 million to Mr. Trump’s inaugural committee, did not disclose to Congress all he did to advance Mr. Trump’s attempt to pressure Ukrainian President Volodymyr Zelensky into announcing investigations of Joe Biden and the Democratic National Committee.  But even Mr. Sondland spoke openly of his unease over the hijacking of policy toward Ukraine by Mr. Trump’s personal lawyer, Rudolph W. Giuliani.

“The accounts of these men and women have provided establish beyond any reasonable doubt that Mr. Trump conditioned a White House meeting that Mr. Zelensky badly wanted on his commitment to investigations that would advance Mr. Trump’s personal political interests – and Mr. Taylor offered considerable evidence that Mr. Trump froze U.S. military aid to Ukraine for the same reason.  That the testimony came behind closed doors is a drawback; though it might be necessary in this investigative phase, House leaders should arrange for the witnesses to tell their stories in public as the impeachment process moves forward.

“Americans who see and hear Mr. Taylor, Ms. Yovanovitch and the others are likely to perceive them for what they are: honest and courageous public servants.  Ms. Grisham, who in nearly four months on the job has yet to hold a public news conference, will be remembered – if she is remembered at all – as one of the political bullies who tried and failed to discredit them.”

So the House Republicans ground the impeachment inquiry to a halt on Wednesday, staging a protest at the Capitol that sowed chaos and delayed the deposition of a deputy assistant secretary of defense for Russia, Ukraine and Eurasia, Laura Cooper, who eventually answered questions for three hours, after waiting five hours for the protest to run its course.

“This is a Soviet-style process,” declared the No. 2 House Republican, Steve Scalise.  “It should not be allowed in the United States of America.  Every member of Congress ought to be allowed in that room.  The press ought to be allowed in that room.”

But a quarter of House Republicans are members of the three panels conducting the inquiry, and have been allowed to participate in the private depositions and interview from the start.  The Republicans who rushed the secure rooms are not committee members.

Wednesday, Senator John Thune of South Dakota, the No. 2 Senate Republican, told CNN: “The picture coming out of it (the inquiry), based on the reporting that we’ve seen, I would say is not a good one.  But I would say also that until we have a process that allows for everybody to see this in full transparency, it’s pretty hard to draw any hard and fast conclusions.”

--The Justice Department’s politically-charged inquiry into the origins of the Russia investigation has shifted to a criminal probe, we learned on Thursday.  Of course the timing is interesting, with the impeachment inquiry heating up.  For good reason some say Attorney General William Barr is providing political cover for Donald Trump.

But we’ll see what federal prosecutor John Durham, who was appointed by Barr to manage the investigation, comes up with.  It’s unclear when the examination moved from an administrative review to a criminal probe. 

It’s also a case of the Justice Department conducting a criminal investigation into itself.

--But then late today, a federal judge ordered the Justice Department to release certain grand jury materials from Robert Mueller’s investigation to the House Judiciary Committee amid its impeachment inquiry.  The materials must be disclosed by Wednesday.

The Judiciary Committee had filed suit in July seeking a court order for the release of certain redacted portions of Mueller’s 448-page final report.

Chief U.S. District Judge Beryl A. Howell of Washington cited a 1974 federal appeals court decision in Haldeman v. Sirica that upheld that congressional impeachment proceedings are excepted from normal grand jury secrecy rules.

--Under pressure from Democrats and some Republicans, President Trump announced on Twitter that he was reversing his decision to host the G-7 summit next year at Doral.

“I thought I was doing something very good for our Country by using Trump National Doral, in Miami, for hosting the G-7 Leaders.  It is big, grand, on hundreds of acres, next to MIAMI INTERNATIONAL AIRPORT, has tremendous ballrooms & meeting rooms, and each delegation would have...

“...its own 50 to 70 unit building. Would set up better than other alternatives. I announced that I would be willing to do it at NO PROFIT or, if legally permissible, at ZERO COST to the USA.  But, as usual, the Hostile Media & their Democrat Partners went CRAZY!

“Therefore, based on both Media & Democrat Crazed and Irrational Hostility, we will no longer consider Trump National Doral, Miami, as the Host Site of the G-7 in 2020.  We will begin the search for another site, including the possibility of Camp David, immediately. Thank you!”

“Doral in Miami would have been the best place to hold the G-7, and free, but too much heat from the Do Nothing Radical Left Democrats & their Partner, the Fake News Media!  I’m surprised that they allow me to give up my $400,000 Plus Presidential Salary!  We’ll find someplace else!”

Trump told reporters at the White House Monday that he dismissed as “phony” a section of the Constitution that bars federal office holders from accepting gifts from foreign governments.

“You people with this phony Emoluments Clause,” he said.  “I would have given it for nothing. The Democrats went crazy, even though I would have done it free.”

The Emoluments Clause, Article I, Section 9, is an anti-bribery provision that forbids any U.S. president from receiving gifts from foreign leaders.

Trump added, “I don’t need promotion. It would have been the best G-7 ever.”

Meanwhile, still not one word, from anyone, on how you can’t freakin’ secure Doral in the first place!!!

--Former Trump chief strategist Steve Bannon told the New York Post that impeachment is a “mortal threat” to Donald Trump’s presidency and the White House needs to start taking it more seriously.

“This is serious.  As sure as the turning of the earth, he is going to be impeached by Pelosi in the next six weeks.  Nancy Pelosi is very focused.”

Bannon said he was dismayed by Mick Mulvaney’s performance about ten days ago in which Mulvaney confirmed Trump’s decision to withhold military aid to Ukraine was part of a quid pro quo.

“The problem we have is that the president needs a team around him and somebody has got to step up and make a play. Trump can’t do everything,” Bannon said.  “There is just no coordination with the team.

“The fake news and witch hunt stuff is not working.”

--Peggy Noonan / Wall Street Journal, on the impeachment process thus far.

“More important will be a text or subtext of serious and consistent foreign-policy malfeasance that the public comes to believe is an actual threat to national security.  Something they experience as alarming.

“It cannot be merely that the president holds different views and proceeds in different ways than the elites of both parties.  It can’t look like ‘the blob’ fighting back – fancy-pants establishment types, whose feathers have been ruffled by a muddy-booted Jacksonian, getting their revenge.  It can’t look like the Deep State striking back at a president who threatened their corrupt ways.

“It will have to be serious and sincere professionals who testify believably that the administration is corrupt and its corruption has harmed the country.  The witnesses will have to seem motivated by a sense of duty to institutions and protectiveness toward their country.

“And the hearings had better start to come across as an honest, good-faith effort in which Republican members of Congress are treated squarely and in line with previous protocols and traditions.

“With all that the needle moves.  Without it, it does not.”

--Trump tweets:

“It would be really great if the people within the Trump Administration, all well-meaning and good (I hope!), could stop hiring Never Trumpers, who are worse than the Do Nothing Democrats.  Nothing good will ever come from them!”

“Never Trumper Republican John Bellinger, represents Never Trumper Diplomat Bill Taylor (who I don’t know), in testimony before Congress!  Do Nothing Democrats allow Republicans Zero Representation, Zero due process, and Zero Transparency....

“....Does anybody think this is fair?  Even though there was no quid pro quo, I’m sure they would like to try.  Worse than the Dems!”

“The Never Trumper Republicans, though on respirators with not many left, are in certain ways worse and more dangerous for our Country than the Do Nothing Democrats.  Watch out for them, they are human scum!”

Huh.

“Mark Esperanto, Secretary of Defense, ‘The ceasefire is holding up very nicely....”

Needless to say, Mark Esperanto was immediately ‘trending.’

“Crooked Hillary Clinton just called the respected environmentalist and Green Party candidate, Jill Stein, a ‘Russian Asset.’  They need a Green Party more than ever after looking at the Democrats disastrous environmental program.”

Through this tweet, President Trump just proved Jill Stein was a Russian asset.

--Finally, Donald Trump in Pittsburgh.

“And we’re building a wall on the border of New Mexico and we’re building a wall in Colorado, we’re building a beautiful wall, a big one that really works that you can’t get over, you can’t get under and we’re building a wall in Texas.  We’re not building a wall in Kansas but they get the benefit of the walls we just mentioned.”

The president later tweeted he was “kidding,” and “refered (sic) to people in the very packed auditorium, from Colorado & Kansas, getting the benefit of the Border Wall!”

I report, you decide.

Wall Street and the Trade War

It was a light week on the economic front, but it heats up next week with a meeting of the Federal Reserve’s Open Market Committee, which is expected to cut interest rates another ¼-point. And we’ll have our first look at third-quarter GDP, which may not be to the president’s liking.

This week we had the release of September existing home sales, slightly less than expected at 5.38 million annualized units, though the median existing home price was up 5.9% over a year earlier, the best pace since January 2018.

New home sales for September came in at 701,000 ann., in line with expectations.

September durable goods, though, were less than expected, -1.1%, -0.3% ex-transportation.  Business investment has been falling as CEO confidence wanes.

The Atlanta Fed’s GDPNow barometer for the third quarter is just 1.8%.

But one note from this afternoon.  The Treasury Department announced the federal budget deficit finished out the fiscal year ending Sept. 30 at $984 billion, up $205 billion or 26 percent over the prior year.

In less than three years, the federal deficit is up nearly 50 percent.  President Trump made a campaign promise to eliminate the debt within eight years.

It was back in 2011 that the GOP-controlled House pushed to pass a constitutional amendment that would require balanced budgets, but Republicans have abandoned their historic deficit obsession. 

Today, Treasury Secretary Steven Mnuchin lamely called on lawmakers “to cut wasteful and irresponsible spending.”  But neither the president, nor Congress, has done anything to cut spending in recent years.  Trump has recently told aides he’ll focus on it if he is elected to a second term.

I mean here we are, in supposedly the greatest economy since the Dawn of Man, and the deficit is rising. Pathetic.

And despite record low interest rates, the interest expense on the debt was still $380 billion in the year.  The deficit overall is now 4.6 percent of the economy, up from a low of 2.4 percent in 2015.

Neither party is talking about fiscal discipline as the 2020 campaign heats up.

Turning to the Trade War... President Trump said this afternoon that negotiators between the United States and China were close to finalizing a deal, that China wants to make a deal “very badly,” with a statement from the Office of the U.S. Trade Representative noting the two sides “made headway on specific issues and the two sides are close to finalizing some sections of the agreement.”  As first reported by CNBC, the statement added, “Discussions will go on continuously at the deputy level, and the principals will have another call in the near future.”

Earlier this week, Chinese state television, citing the cabinet, said China will boost imports of certain goods including agricultural, consumer and components products as part of its efforts to stabilize foreign trade.

Chinese Vice-Premier Liu He said last weekend that “China will work with the United States on the basis of equal and mutual respect to address each other’s core concerns,” adding the two sides had built an important foundation for the signing of a “phased deal.”

But the chief issues, such as forced technology transfers and the protection of intellectual property won’t be addressed until a second (or third) phase, and there is no telling when that would be. China has also been making waves it wants tariff relief for any phase one agreement.

Europe and Asia

A little economic data for the eurozone (EA19), as we had the flash PMIs for October.

The composite reading for the EA19 was 50.2 vs. 50.1 in September (50 the dividing line between growth and contraction)  Manufacturing was 45.7 vs. 45.1; services 51.8 vs. 51.6.

The flash readings also break out Germany and France.

Germany’s manufacturing reading for October remained a putrid 41.9 vs. 41.7; services 51.2 vs. 51.4.

France’s manufacturing PMI was 50.5 vs. 50.1 last month; services a respectable 52.9 vs. 51.1.

Separately, government debt to GDP in the EA19 fell to 86.4% from 87.3% a year earlier.

Germany’s debt to GDP is 61.2%, France 99.6%, Italy 138.0% (rising), Greece 180.2% (rising), Spain 98.9%, Netherlands 50.9%, and the UK 85.0%.

Chris Williamson / IHS Markit

“The eurozone economy started the fourth quarter mired close to stagnation, with the flash PMI pointing to a quarterly GDP growth rate of just under 0.1%.

“The manufacturing downturn remains the fiercest since 2012, and continues to infect the service sector, where October saw the smallest increase in new work for almost five years.

“The labor market is meanwhile being hit as firms retrench amid signs of excess capacity and uncertainty about the year ahead intensifies.  Optimism about future prospects deteriorated further in October to the lowest for over six years, commonly linked to global trade tensions, Brexit-related worries and increasingly gloomy economic forecasts.

“A further deterioration in jobs growth adds to the risk that the trade-led weakening is spreading further to the household sector, which could dampen growth further as we head towards the end of the year.

“The survey indicates that Mario Draghi’s tenure at the helm of the ECB ends on a note of near-stalled GDP, slower jobs growth, near-stagnant prices and growing pessimism about the outlook, piling pressure on Christine Lagarde to drive new solutions to the eurozone’s renewed malaise.”

Speaking of European Central Bank President Draghi, he held his last policy meeting this week.  On Nov. 1, he will hand things over to his successor, Ms. Lagarde, though she is going to have to deal with an institution beset by internal division over Draghi’s last, giant dose of stimulus, which he has argued was necessary to stave off recession in the eurozone.

There have been divisions over Draghi’s new giant bond-buying program (quantitative easing, or QE) and his decision to push the ECB’s policy rate further into negative territory.

But now it’s up to Lagarde to build consensus on where the ECB goes from here.  As reported in the Wall Street Journal, at least seven of the governing council’s 25 members opposed the decision to restart QE.  The ECB has already taken in huge quantities of debt.

Brexit: And we go on and on and on...but guess what?  This coming Monday could be another critical day!  Yes, Critical Day #142, or something like that.

Last weekend, in a rare Saturday session of Parliament, the House of Commons voted to withhold its approval of Prime Minister Boris Johnson’s Brexit deal, triggering another law that required him to request a delay to the country’s departure from the European Union.

Johnson then sent an unsigned letter to the European Union on Saturday asking for a delay and sent another message in which he said he did not want an extension.  Further chaos.

But one thing we do know.  There is a current Oct. 31 exit date for the UK and leaving the European Union, but we are supposed to have a vote on Monday on a new election, Dec. 12, which could result in a departure before then...maybe.  [Johnson needs a two-thirds majority to get the new vote.]

Today, the European Union agreed to Britain’s request for a Brexit deadline extension but set no new departure date, giving Boris Johnson and the divided parliament time to decide on his call for a snap election.

“There was full agreement on the need for an extension,” an EU officials said after ambassadors to the 27 countries staying together in the bloc met to discuss postponing Britain’s exit, less than a week before the Oct. 31 deadline.

“Work will continue over the weekend” and the envoys will meet again in Brussels next week, the spokesperson said.

Johnson said it was up to the EU to decide on an extension but that Britain “should be leaving on Oct. 31.”

“Of course October 31 is still possible – we could leave on Oct. 31 – unfortunately it depends on what the EU says,” he said, adding that if opponents frustrate his bid for an election on Dec. 12 his minority government would not engage in pointless “Brexitology” in parliament.

The EU was due to discuss the length of a third delay to Brexit, but diplomats wanted to see what happens in the UK first.

France had been pressing the other 26 to wait and favored a respite only until Nov. 15 or Nov. 30 to keep pressure on the House of Commons to approve Johnson’s deal or face a disorderly Brexit.

French President Emmanuel Macron has previously managed to sway the bloc’s extension decisions significantly, meaning there could still be a delay for three months – to Jan. 31, 2020 – if it’s clear Britain is headed for an early election.

With an Oct. 31 deadline, an extension can be granted by the EU as late as the end of Tuesday.

Befitting the attitude in the EU, a joke has been making the rounds among EU diplomats.

“The year is 2192. The British Prime Minister visits Brussels to ask for an extension of the Brexit deadline.  No one remembers where this tradition originated, but every year it attracts many tourists from all over the world.”

The bloc doesn’t want to see a damaging no-deal crashout, but it is also very tired of the proceedings.  Well over three years after Britons voted 52% to 48% to leave the EU, the future of Brexit is as uncertain, today, as ever, with the UK bitterly divide.

Parliament rejected Johnson’s Oct. 31 timetable this past Tuesday, 326-308.

On Thursday, Johnson told opposition Labour Pary leader Jeremy Corbyn he would give parliament more time to approve his Brexit deal by Nov. 6 if lawmakers back a December election.

Corbyn replied he would wait to see what the EU does on a Brexit delay, repeating he could only back an election when the risk of a no-deal Brexit is off the table.

So now the EU shelved its decision on a new Brexit date and I haven’t seen yet how Corbyn will respond.

Turning to Asia....in Japan, exports fell for a tenth straight month in September, amid the trade tensions, down 5.2% year-on-year.  Encouragingly, however, exports of semiconductors rose 4%, a sign of stabilization.

Exports to the United States were down 8%, with exports of vehicles down 16%.  Imports from the U.S. were down 12%.

Japan’s exports to South Korea were down 16% last month amid the dispute between these two.

Separately, a flash PMI on manufacturing in Japan in October came in at 48.5, the worst level in over three years.

South Korea reported that a first look at third-quarter GDP rose 0.4% over Q2, or 2.0% from a year earlier.  Exports rose 4.1% in the quarter after a 2.0% gain in the second quarter.

Street Bytes

--Stocks rose on a generally solid earnings picture, as described below, though with some high-profile misses, as well as the positive tone on the U.S.-China trade front today.  The Dow rose 0.7% on the week to 26958, while the S&P 500 fell just three points short of its all-time high at 3022, up 1.2%, while Nasdaq surged 1.9%.

--U.S. Treasury Yields

6-mo. 1.65%  2-yr. 1.62%  10-yr. 1.80%  30-yr. 2.29%

All about the Fed this coming week.

--After 40 days of picketing, the United Auto Workers union is ending its nationwide strike at General Motors Co., the UAW announcing today it has secured a new labor deal that ends one of the nation’s longest private-sector walkouts in years and allows the company to restart its U.S. factories.

GM workers approved a four-year deal that includes better wages, hefty signing bonuses and a commitment from GM to invest $7.7 billion in its U.S. manufacturing operations, securing 9,000 jobs.  The agreement also allows GM to move forward and close three factories, including its Lordstown, Ohio, assembly plant.

Workers are to return immediately.  Having missed out on a paycheck for six weeks, they will have an opportunity to make up for some of it through overtime.

UAW negotiators will now use the agreement as a template for reaching similar deals with Ford and Fiat Chrysler.

According to the Wall Street Journal (and Bank of America), the hit to GM’s bottom line will exceed $3 billion, most of which will be reported in the fourth quarter.

GM’s parts-suppliers were also hit hard and the auto company’s first order of business is to get the parts supply chain back up to speed.

--Boeing profits and revenue took a hit in the third quarter from the costs of the crisis surrounding the 737 MAX aircraft, which has been grounded by aviation authorities since March. Boeing announced a 43% drop in third-quarter earnings from operations to $1.3 billion, on revenues that were down by 21% to $19.98bn.

The company did not add to the $5 billion charge it took in the second quarter to cover the costs of the global grounding of its fastest selling jet, but most expect further costs to emerge, amid cancellations of orders and lawsuits from airlines and victims’ families from the two fatal crashes that precipitated the grounding.

Boeing said it had developed software and training updates for the MAX and “continues to work with the Federal Aviation Authority and global civil aviation authorities to complete remaining steps toward certification and readiness for return to service.”

Boeing shares didn’t slide on the news because the company said it assumed authorities would allow a return to service in the fourth quarter, though none of the impacted airlines are expecting this.

CEO Dennis Muilenburg, who had lost his chairman’s role and whose remaining position is very much in jeopardy, said, “Our top priority remains the safe return to service of the 737 MAX, and we’re making steady progress.  We’ve also taken action to further sharpen our company’s focus on product and services safety, and we continue to deliver on customer commitments and capture new opportunities with our values of safety, quality and integrity always at the forefront.”

If the recertification of the aircraft is delayed, there’s a risk Boeing will have to further reduce production of the aircraft, which has already been cut from 52 a month, and that could mean substantial job losses.

Boeing also announced the departure of its biggest outside hire in recent years, Kevin McAllister, who was brought in to head the $60bn a year commercial aircraft division in 2016, McAllister was replaced by a 33-year Boeing veteran Stan Deal.

A series of text messages sent in 2016 by two Boeing technical pilots – who prepare training simulators and manuals – were leaked last Friday, after which the stock tanked anew as they appeared to suggest that Boeing had long been aware of problems with the aircraft’s anti-stall system, known as MCAS.  But the company is arguing the texts had been handed over to the Department of Justice after the first crash in October 2017 and were not about problems with the software but with the simulator.

The head of the FAA blasted Boeing for failing to hand the texts over to the regulator.  Ergo, Muilenburg, who heads to Congress next week for a real grilling, cannot be sleeping well these days, and a fourth-quarter return to service for the MAX would appear to be a pipe dream.

--Meanwhile, the airlines with a significant MAX exposure are ramping up the pressure on Boeing.  Southwest Airlines CEO Gary Kelly said on Thursday he is unhappy that the airline has been forced to shrink this year, and said settling up with Boeing is one of his top priorities.

The grounding has been costly for Southwest and American Airlines, among others, with Southwest saying the grounding reduced its operating income by $435 million in the first nine months of the year and by $210 million in the third quarter.  The impact will now spill over into 2020.

American, which like Southwest announced earnings Thursday, said it expects the grounding to drag down its full-year pretax profits by $540 million.  CEO Doug Parker said he wants to ensure that ultimately Boeing’s shareholders – not American’s – pay for what he described as Boeing’s failures.

But both American and Southwest said they continue to see strong demand for travel, which helped boost revenues in Q3, despite having to curtail growth plans.  Bookings are healthy.  Both of the company’s shares rose solidly on the news.

--Shares in Amazon.com Inc. cratered 6% following release of its third-quarter earnings Thursday, as the company’s heavy investments into reducing shipping times for retail customers continue.

Q3 profit fell 26% from a year ago to $2.1 billion, or $4.23 a share, missing analysts’ consensus estimate of $4.59, according to FactSet.  This is Amazon’s first profit decline since 2017.

Revenue rose 24% to $70 billion, slightly better than forecast.

Last quarter, Amazon said it spent more than the estimated $800 million on building out next-day shipping, citing higher costs in shifting warehouses and in moving inventory closer to customers.  Spending in the fourth quarter is expected to be far greater.  Amazon has also been hiring, with employment reaching 750,000 workers.

But the company signaled a weaker profit outlook for the final quarter of the year, which includes the holiday season, well below current analyst estimates.

As for Amazon Web Services, the company’s cloud-computing operation and its main profit center, the unit delivered $9 billion in sales, rising 34.7% from a year earlier, still strong, but below the 37% clip of the previous quarter.  Until Q2, AWS had been growing at a 40% clip.

Amazon’s advertising business registered $3.6 billion in sales, a 43.7% increase from the year-earlier period.

Well, by the end of trading Friday, Amazon shares were only down 1%.

--Microsoft reported its latest solid quarterly report card, buoyed by another round of business signings for its cloud computing services.  The company reported fiscal first-quarter profit of $10.7 billion, up 21% from the same period last year, with net income of $1.38 per share beating the Street’s estimates. 

Revenue was $33.1 billion in the July-September period, up 14% from a year ago and also beating forecasts.

The strongest sales growth has come from adding new corporate and government clients to Microsoft’s Azure cloud computing platform.  Azure’s quarterly revenue grew 59 percent from the same time last year, helped by a number of contracts worth at least $10 million each, the company said.  But, the 59% is compared to 76% a year ago.  The cloud computing business that CEO Satya Nadella has pegged as the company diversifies from its Windows operating system software, faces intense competition from Amazon’s AWS and Alphabet’s Google.

Worldwide spending on cloud infrastructure services increased nearly 38% year-on-year in the second calendar quarter of 2019 to $26.3 billion, according to research from Canalys.  AWS still dominates the market with a 31.5% share, with Microsoft second at 18.1%.

Consumer product growth, on the other hand, such as for Xbox and Surface laptops, declined 4%.  Revenue from the personal computing division, still the largest by revenue, rose 4%.

--Tesla shares soared in the after-market on Wednesday as the company surprised investors with a quarterly profit, with CEO Elon Musk promising a 2020 rollout of a cheaper SUV and more self-driving technology to stay ahead of larger rivals rushing into the premium electric vehicle market he created.

The shares crossed $300 for the first time since March 1 after record deliveries and cost cuts (including three rounds of job cuts) ensured a profitable third quarter.  Tesla also announced its cash balance increased to $5.3 billion, with a profit of $1.86 per share, shattering analyst expectations for a loss of 42 cents.

The Q3 results are sweet redemption for Musk who had to step down as chairman after a series of scandals and investor doubts about Tesla’s ability to withstand competition from larger, better capitalized global rivals.

But Tesla still hasn’t proved it can be consistently profitable as it manages the start of production of its Model 3 sedans at its new factory in Shanghai and for Model Y SUVs next year.

Revenue fell to $6.3 billion in the quarter, missing analysts’ estimates and down from $6.8 billion a year earlier.  The drop is the first year-over-year decline for the company since 2012, when the Model S sedan was just going into production.

Musk said the company will be able to invest in divisions focusing on sustainable energy, including launching its third version of its solar roof tile this week.  “For about a year and a half we stripped Tesla energy of resources,” Musk said.  “Now that Model 3 production is in a good place and headed to a great place we have restored resources to Tesla storage and solar. That’s going to be a really crazy growth.”

But when it comes to Tesla vehicle sales, you still have the question of how rapidly they’ll grow as government subsidies for electric vehicle purchases dwindle in the U.S., China and other markets.  Tesla has said it aims to produce at least 1,000 Model 3 cars a week at the new Chinese factory by the end of this year.

--Ford Motor Co.’s third-quarter net income fell nearly 60% as the company booked $1.5 billion in charges mainly for restructuring, and Chinese and U.S. sales fell.

For the full year, Ford now says it will make $6.5 billion to $7 billion, with third-quarter net income at $425 million, though this was net of charges.  Adjusted, earnings handily beat expectations.

Revenue fell 2% to $36.99 billion, partly because of the bungled launch of the new Ford Explorer SUV, whose sales were down 48% for the quarter as quality problems forced Ford to hold back shipments to dealers.

--Facebook CEO Mark Zuckerberg faced an onslaught of questions from members of the House Financial Service Committee on Wednesday, as he sought to defend a cryptocurrency project, Libra, but most of the questions were on the company’s handling of political advertising and disinformation campaigns, as well as work force diversity.

Rep. Maxine Waters, the committee chairwoman, grilled Zuckerberg on Facebook’s willingness to allow unfettered speech across the platform and its recent decision to avoid vetting political advertising.

“The impact of this will be a massive voter suppression effort,” Waters said.  “Your claim to promote freedom of speech does not ring true.”

The company now faces several investigations by regulators in a number of countries and by 47 state attorneys general, as well as increasing calls to break it up into smaller companies.

Zuckerberg acknowledged his company has a trust problem.  “I get that I’m not the ideal messenger for this right now. We certainly have work to do to build trust.”

As to the cryptocurrency project, Zuckerberg pledged Facebook would not offer Libra anywhere in the world “unless all U.S. regulators approve it.”

--Twitter Inc. shares plunged 20% after glitches in the advertising software roiled the company, as a pullback in spending from some buyers and weaker pricing for ads also cut into revenue and profit, though it added millions of new users.  It didn’t help that the company issued a tepid outlook for the current quarter, another negative surprise.

Twitter said malfunctions in ad-targeting software meant that the company couldn’t serve ads to users with the same level of precision as it normally does, prompting advertisers to pause or reduce spending.

Revenue rose 9% from a year ago to $824 million, marking the smallest annual increase since late 2017 and below estimates. Advertising revenue accounts for 85% of the overall total.

Twitter did say the number of people using its platform daily increased by six million from the second quarter to 145 million.

--WeWork’s new Executive Chairman Marcelo Claure defended huge payouts to the office-sharing company’s founder Adam Neumann and said there is now “zero risk of the company going bankrupt,” per a meeting he held with employees.

WeWork’s largest shareholder, SoftBank, provided a $9.5 billion lifeline and took over the company, including payments to Neumann to give up control.

But employees are furious that Neumann has the right to sell his stake in the company for as much as $970 million, as part of a tender offer in which SoftBank will buy up to $3 billion in WeWork shares from investors and employees, while SoftBank also agreed to extend him a $500 million loan to repay a credit line from JPMorgan Chase & Co., as well as pay him a $185 million fee for a four-year assignment as a consultant.

But now there is talk of 4,000 layoffs, a third of the global workforce, with WeWork closing or selling a number of businesses outside of the main office-sharing operations.

SoftBank is valuing WeWork at about $8 billion, according to reports, a far cry from what it was aiming for in an initial public offering earlier this year and even less than the $47 billion at which a January investment from SoftBank pegged its worth. 

But while Neumann, who did build the company, walks away with the riches, employees are left holding worthless stock options that were at a roughly $20-a-share valuation.

On a call with investors in SoftBank’s $100 billion Vision Fund, which includes the WeWork investment, founder Masayoshi Son apologized, saying he had put too much faith in Mr. Neumann, according to the Wall Street Journal.

Between 2017 and earlier this year, SoftBank put more than $9 billion into WeWork at a roughly $24 billion valuation, according to Sanford C. Bernstein & Co.  What SoftBank has now agreed to add would bring its total equity investment to more than $13 billion for a company now worth less than $8 billion.

So a report by Bloomberg on Thursday said SoftBank was poised to write down at least $5 billion to account for the drop in the value of some of its biggest holdings including WeWork and Uber Technologies.

--PG&E Corp. on Wednesday began shutting off power to 179,000 customers in 17 California counties, the second major intentional blackout this month meant to head off potential wildfires.  But it was no help on Thursday and Friday as fires raged in various parts of the state.

PG&E cuts power when high winds that could knock down power lines and spark wildfires are predicted. Earlier in the month, the bankrupt utility unplugged 750,000 homes and businesses for as long as four days.  No one can continue to live this way.

And yet with the latest round of wildfires, PG&E said its planned outages this weekend could be the largest yet, potentially nearly all of its territory in Northern California on Sunday and Monday because of ferocious gusts.

“This system will likely be the strongest event of the year from a wind perspective,” the utility said on its website.  “Federal forecast agencies are in alignment that this will be a high-risk weather event.”

In Southern California, officials at Southern California Edison said they were considering shut-offs to 163,000 customers in Los Angeles, Orange, Riverside and San Bernardino counties, though there was the possibility of up to 380,000 being shut off.

At a news conference Thursday, California Gov. Gavin Newsom again criticized PG&E and other utilities for not making prior investments to systems in the faces of climate change and mounting wildfire threats.  He said PG&E must be held accountable.

“This is unacceptable,” said Newsom, who faces political risks from the continuing power outages.  “Issues of corporate greed meeting issues of climate change have created these conditions.”

PG&E told regulators Thursday that a jumper on one of its transmission towers broke close to where officials say the Kincade Fire started.

--Shares in Intel Corp. rose sharply after the largest chip maker in the U.S. by revenue posted stronger third-quarter earnings than expected and again raised its full-year guidance, with sales also topping the Street at $19.19 billion.

Intel highlighted demand for its products used in data centers, such as in the booming cloud-computing market.

The company reported a 5% drop in PC-related revenue despite strong demand for computers, due to shortages of chips.

--Caterpillar shares reversed course after a slump following the release of the company’s earnings when CEO Jim Umpleby said in a conference call the company is “taking steps to reduce production to match dealer demand.”

The company had fallen after the construction machinery and equipment manufacturer posted third-quarter results that missed the Street’s estimates and lowered its full-year profit outlook.

Total sales amounted to $12.76 billion, down from $13.51 billion in the year-ago quarter and trailing forecasts, as CAT suffered a 13% slide in Asia driven by weakening demand in China, the latest hint of the deepening fallout for companies of U.S.-China trade tensions and a broader slowdown in the world’s second-largest economy.  Sales in North America also slowed 3%.  And Caterpillar lowered its full-year profit per share guidance range to $10.90 to $11.40, compared to a prior projection of $12.06 to $13.06.

“In the fourth quarter, we now expect end-user demand to be flat and dealers to make further inventory reductions due to global economic uncertainty,” Umpleby said.

--Nokia Corp. shares fell more than 20% after the company cut its guidance and halted its dividend, saying it needed to save cash for its ongoing rollout of gear for 5G mobile networks.

Essentially, the Finland-based company reported lower profits in China and an uncertain outlook amid carrier consolidation in North America, amid fierce competition from rivals.

Nokia is the world’s second-largest telecom-equipment maker by sales, behind Huawei Technologies Co., as the industry overall races to supply the world’s carriers with gear to buildout their 5G networks.

But Nokia said it’s been costly to develop and make the products required, thus the need to eliminate the dividend for the time being to maintain its cash position.

--In an exclusive report from Reuters:

“Facing off against a plaintiff’s lawyer for the first time about Johnson & Johnson’s Baby Powder, the company’s CEO Alex Gorsky earlier this month insisted that the company’s iconic brand was safe.

“ ‘We unequivocally believe that our talc and our baby powder does not contain asbestos,’ Gorsky testified in an Oct. 3 deposition in a case involving a retired Indiana college professor who alleges his cancer was caused by the Baby Powder he used for decades. The deposition has not been previously reported.

“Gorsky, citing ‘thousands of tests and studies’ to support his testimony, said: ‘I’m not aware of our baby powder or talc containing asbestos.’

“That’s harder for him to say now.  Last Wednesday, just 13 days after his deposition, the U.S. Food and Drug Administration told the healthcare giant it had discovered asbestos, a known carcinogen, in a bottle of Johnson’s Baby Powder.

“On Friday, a day after getting the full FDA test results, J&J recalled 33,000 bottles of Baby Powder in the United States.  It marked the first time the company has recalled Baby Powder for possible asbestos contamination and the first time U.S. regulators have announced finding asbestos in the product.”

So just another blow for the company that is now facing thousands of lawsuits over a variety of products, including legal action by more than 15,000 consumers claiming its talc powders caused their cancers.

J&J told Reuters that Gorsky had no knowledge of the FDA finding of asbestos at the time of his deposition.

But it was Dec. 14 last year that Reuters first published an investigation that found J&J knew for decades asbestos lurked in its talc.

CVS Health Corp. said Thursday it is removing 22 oz. bottles of Johnson’s Baby Powder from pharmacy shelves and its online store in response to J&J’s recall of certain bottles last week.  Then today, Walmart and Target were among those taking the same action.

--Separately, the nation’s three biggest drug distributors and a major drugmaker agreed to an 11th-hour, $260 million settlement over the toll taken by opioids in two Ohio counties, averting the first federal trial over the crisis.

Drug distributors AmerisourceBergen, Cardinal Health and McKesson will pay a combined $215 million, while Israeli-based Teva will contribute $20 million in cash and $25 million worth of generic Suboxone, a drug used to treat opioid addiction.

The deal contains no admission of wrongdoing by the defendants.

Across the U.S., the pharmaceutical industry still faces more than 2,600 other lawsuits over the disaster.  The hope is the Ohio decision allows the players to work out a nationwide settlement of all claims.

--Shares in Biogen Inc. skyrocketed Tuesday on word it would ask the Food and Drug Administration to approve an experimental drug, aducanumab, to treat people with mild cognitive impairment and the earliest signs of Alzheimer’s disease.

About 10 million Americans might qualify for treatment if the drug were approved, according to the company’s CEO, but as some are pointing out, the company has yet to release its most recent analyses, and experts are in the dark as to how the drug works.  This is neither a cure nor does it prevent Alzheimer’s; Biogen just claiming it slows cognitive decline in some patients.

As the New York Times Gina Kolata pointed out: “In fact, Biogen announced in March that it was halting two large studies of aducanumab for treatment of Alzheimer’s disease because data showed the effort was likely to be futile.

“The company resurrected the drug after additional analyses suggested it might have some effect at higher doses.  (‘Just in time for Halloween, aducanumab has risen from the dead,’ one drug industry analyst said in an email.)”

I have been doing this column for well over 20 years, and I bet I have used my phrase “wait 24 hours” and urged caution with every ‘great’ drug announcement, especially on the cancer front, dozens of times.

Understand, if you weren’t following the market this week that shares in Biogen, which closed on Monday at $223.50, hit an intraday high of $318! on Tuesday, before finishing the week at $280.

We hope the company is right.  The world desperately needs treatments and solutions to a growing crisis, with an estimated 50 million cases of dementia globally.  As Dr. Michael Weiner, an Alzheimer’s researcher at the University of California, San Francisco, told the Times the other day, if aducanumab works, it’s a triumph, “the dawn of a new era.”  Still, “this is not a cure,” he added.  “It is a slowing of decline.  The practical impact on patients remains to be seen.”

But approval would nonetheless be a huge win for Biogen and probably result in $10 billion or more in annual sales, according to some analysts.

--Shares in McDonald’s Corp. fell more than 5% after the world’s largest restaurant company said U.S. sales disappointed last quarter while consumers were going for rivals’ fast-food chicken products.

Sales of grab-and-go chicken meals were already doing well when Popeyes unveiled its new sandwich in August, that rocked the Internet, which kicked off a chicken sandwich war with KFC and Chick-fil-A, among others, reporting they sold more than twice as much chicken in July and August as a year ago, while McDonald’s, known for its chicken nuggets, saw its poultry sales slump.

CFO Kevin Ozan told Wall Street analysts Tuesday, “We did go a little bit the opposite way on chicken.”

While same-store sales globally grew a very solid 5.9% in the third quarter, beating expectations, U.S. comp sales fell far short of forecasts at 4.8%.

Customer traffic at McDonald’s U.S. stores, declined, without management disclosing by how much.  The company also reported earnings of $1.6 billion, or $2.11 per share, on sales of $5.4 billion, both missing the Street.

McDonald’s is also behind in the fake-meat craze.  Rival Burger King, for example, saw its sales jump 6% in the third quarter – driven in part by its new plant-based Impossible Whopper.

McDonald’s has been testing a plant burger with Nestle in Germany and a Beyond Meat burger in Canada.

But while the company’s results fell short, it does need to be noted McDonald’s now has 17 consecutive quarters of global comp sales growth, which is pretty good.

--Nike Inc. CEO Mark Parker is handing the reins to former EBay Inc. head John Donahoe next year, entrusting an e-commerce veteran with the job of running a $40 billion shoe-and-apparel giant that’s increasingly relying on data and technology to keep its edge (like the Vaporfly running shoe that is setting all kinds of marathon records).

Parker, a veteran of 40 years with Nike, will remain executive chairman and said he would continue to be involved with product design and marketing.  But he turns 65 next year and succession has been a big question at Nike for years.

In picking an outsider as the new CEO, the company is attempting to deal with a number of controversies, including a doping scandal, as well as a corporate culture that has resulted in the departure of several senior executives over sexual harassment claims.

--Procter & Gamble Co. has been on a roll, posting another quarter of strong sales of household staples, helped by price increases, as the maker of Tide laundry detergent and Pampers said revenue rose across all of its product lines, even its struggling Gillette shaving unit.

Organic sales, which excludes currency moves and deals, rose a super 7% from a year ago.  Competitors Kimberly-Clark and Unilever saw their comparable sales rise 4% and 2.9% by comparison.

P&G also stressed that with its new products and leaner portfolio of brands, it is far better positioned to ride out any pullback in consumer spending, as opposed to 2008 and the financial crisis.  The  company also said it largely stopped selling products that tend to suffer amid consumer belt-tightening, such as makeup and perfume.

--Shares of Hasbro Inc. fell 17% after the company reported that trade tensions with China cut into its latest quarterly results.  Retailers, spooked by tariffs on imports from China, canceled or changed their orders during the third quarter, the toy maker said.

“The threat of and the implementation of tariffs in certain instances impacted our shipments and our ability to fully meet demand,” CEO Brian Goldner said on an earnings call.  “The prospect had our retailers cancel major direct import program orders and rewrite many of those orders as domestic shipments.”

Revenue was essentially flat in the third quarter, below expectations, with revenue in the U.S. and Canada declining 2%, while international sales were flat.

Retailers could continue to alter their orders before the Dec. 15 tariffs are implemented, should President Trump authorize this.

--Fidelity Investments became the latest to pull funds it has invested with Ken Fisher’s investment firm, a reported $500 million, bringing the total yanked from Fisher Investments to more than $1.8 billion in the wake of vulgar comments made by Fisher at an industry conference. 

At the Tiburon CEO Summit earlier this month, Fisher compared the process of gaining a client’s trust to “trying to get into a girl’s pants” and talked about genitalia.  Fisher, a billionaire, apologized for the comments.

--“CBS Evening News” anchor Norah O’Donnell is getting paid at least $7 million a year to revive the perennially third-ranked newscast, but her ratings are beyond atrocious.  As reported by Nielsen, last week they plunged 17 percent to 5.1 million, and among viewers in the critical 25 to 54 demographic that’s coveted by advertisers, the decline was 25%, as reported by the New York Post.

Her predecessor, Jeff Glor, who was pulling down $2 million a year, had just single-digit drops during his year-and-a-half tenure.

As The Post notes, however, all three nightly newscasts have seen declines as viewers increasingly turn to the Web for their news, but ABC’s “World News Tonight” with David Muir came in first place, down just 0.3%, while Lester Holt’s NBC “Nightly News” fell 2.6%, though he beat Muir in the 25 to 54 demo.

Foreign Affairs

Syria, part II: Around 300 more Russian military police arrived today in Syria, under the accord between Ankara and Moscow, which requires that Russian military police and Syrian border guards remove all Kurdish YPG militia from within 30 kilometers (19 miles) of the Turkish border by next Tuesday.

Next Tuesday, under the terms of the deal reached in Sochi, Russian and Turkish forces will start to patrol a 10km (6-mile) strip of land in northeast Syria where U.S. troops had been deployed for years along with their former Kurdish allies.

Meanwhile, Turkey is forcibly sending Syrian refugees to an area of Syria near the border where it aims to set up the safe zone even though the conflict there has not ended, Amnesty International said in a report published today.

Turkey currently hosts some 3.6 million refugees who fled Syria’s eight-year-long civil war,   But, with Turkish public sentiment towards them souring over time, Ankara hopes to resettle up to two million in the planned safe zone in northeast Syria.

Ankara says more than 350,000 Syrian refugees have already voluntarily returned to their country.

But Amnesty said refugees it has spoken to complained of being threatened or physically forced by Turkish police to sign documents stating that they were voluntarily returning to Syria.

Amnesty said in its report that “Turkey was putting the lives of Syrian refugees under serious danger by forcing them to return to a war zone.”

Separately, the Kurdish-led Syrian Democratic Forces (SDF) accused Turkey of launching a large land offensive targeting three villages in northeast Syria despite the truce, forcing thousands of civilians to flee. “Our forces are still clashing,” the SDF said.

President Erdogan said Turkey will use its right to crush Kurdish militia fighters if they have not withdrawn from a “safe zone” in northern Syria as per the truce agreement with Russia.

President Trump tweeted:

“ ‘The ceasefire is holding up very nicely. There are some minor skirmishes that have ended quickly. New areas being resettled with Kurds.  U.S. soldiers are not in combat or ceasefire zone.  We have secured the Oil.’ Mark Esper, Secretary of Defense.  Ending endless wars!”

Editorial / The Economist

“Four years after they were welcomed as protectors, American troops leaving north-east Syria received a less friendly send-off.  As they drove out of the region, a surprise withdrawal ordered by President Donald Trump earlier this month, angry locals pelted their armored cars with rocks and tomatoes.  ‘Like rats,’ one man yelled.

“America’s retreat cleared the way for Turkey to invade and dislodge a Kurdish militia, the People’s Protection Units (YPG), that controlled the region.  Backed by a raggedy crew of Syrian Arab mercenaries, the Turkish invasion was a fatal blow to Kurdish autonomy. The YPG had no choice but to seek protection from Bashar al-Assad, Syria’s dictator, and surrender most of its self-rule in return.

“At first Mr. Trump acquiesced to the Turkish offensive. Then he dispatched his vice-president, Mike Pence, to Ankara, where he secured a five-day ceasefire laden with concessions to Turkey.  But that agreement was merely a sideshow. The real diplomacy took place on October 22nd in Sochi, where President Vladimir Putin of Russia hosted his Turkish counterpart, Recep Tayyip Erdogan.  They struck a deal that leaves Turkish troops in a zone between the Syrian towns of Tel Abyad and Ras al-Ain, much of which they already control.

“Russian military police and Syrian border guards will enter areas to the east and west to ensure that the YPG vacates them as well.  The Kurds will have until October 29th to withdraw to a depth of 30km along the whole border and disarm.  Russian and Turkish forces will then begin patrolling the border together.

“In less than three weeks Russia has helped Mr. Assad retake much of the north-east, played peacemaker and deepened the wedge between Turkey and its NATO ally, America.  As ever, Mr. Putin proved adept at taking advantage of American mistakes.  For years America has wavered over Syria.  Mr. Putin, by contrast, steadfastly backed Mr. Assad.  Russia, as a result, has emerged as the chief arbiter in Syria and a major power-broker in the region.

“Mr. Erdogan is no doubt pleased.  As expected, NATO’s second-biggest army prevailed over the lightly armed YPG.  A week of war and a couple of ceasefire deals have reduced the Kurdish proto-state in Syria to ashes.  But his victory is hardly complete. Turkey aimed to create a 440km buffer zone stretching from the Iraqi border to the Euphrates.  What it has now is one-third of that. The agreement with Russia permits the Syrian regime to retake the remainder of the Kurdish area.

“Turkey will have to cope with the diplomatic fallout from its offensive. Several European countries have stopped selling it arms....Many in Congress are still itching to impose crippling sanctions. Reports of atrocities committed against Kurds by the mercenaries deployed by Turkey keep pouring in.

“Mr. Erdogan also faces a headache in Idlib, where the Assad regime is gearing up for an offensive that may send another million people, as well as tens of thousands of hardened jihadists, fleeing toward the border with Turkey.  So far, and at Turkey’s behest, Russia has persuaded Mr. Assad to postpone the bloodbath. Mr. Putin may try to squeeze yet more concessions from Turkey before giving the regime a green light.

“None of this seems to perturb Mr. Trump.  ‘Sometimes you have to let them fight a little while,’ he said, referring to Turkey and Syria’s Kurds.  ‘It’s like two kids in a lot, you got to let them fight and then you pull them apart.’  Bizarrely, he also tweeted about how America ‘secured the oil’ in Syria.  Aides have tried gamely to put a positive spin on a ruinous policy. James Jeffrey, America’s special envoy for Syria, claimed that the tomato-throwing crowds were Mr. Assad’s supporters, not Kurds – never mind that some spoke Kurdish.

“At this point, though, it is unclear why the likes of Mr. Jeffrey still bother turning up to work.  In a strategic sense, the Syrian civil war is over. There will be horrors to come in Idlib, but the rebels in that bleak corner of Syria cannot unseat Mr. Assad.  Many Arab states have already begun making overturns to him, wither for economic reasons or in the vain hope of acquiring some influence. And now Mr. Putin has forced Turkey to come to terms with the regime.  Countless Syrians will suffer for it.”

Lebanon:  The country is closer to a financial crisis than at any time since at least the war-torn 1980s, as nationwide protests entered a ninth day today, allies and investors also piling pressure on the government to tackle corruption and enact long-promised reforms.  Prime Minister Saad al-Hariri’s government on Thursday hastily reversed a plan, announced hours earlier, to tax WhatsApp voice calls in the face of the biggest public protests in years. 

Lebanon’s government quickly needs to convince regional allies (such as Saudi Arabia) and Western donors it is finally serious about tackling entrenched problems such as an unreliable and wasteful electricity sector. 

Arab Gulf states’ enthusiasm to help Lebanon has been undermined by the growing clout of Tehran-backed Hezbollah, and the need to check Iran’s growing influence across the region.

Today, Hezbollah warned that a power vacuum could tip Lebanon into civil war, suggesting that adversaries including the United States and Israel were seeking to exploit an unprecedented wave of demonstrations to provoke conflict, which is nuts.

Hezbollah leader Sheikh Nasrallah did reiterate his rejection of the resignation of the Hariri government and any move to topple its Christian ally, President Michel Aoun, saying this would leave a void.  Or course Hezbollah is part of the government.

Nasrallah urged his supporters to stay away from the protests, after some members got into scuffles today.

But now no new money is flowing into Lebanon until it commits to take clear steps toward reforms.  At some point, Lebanon must change its political system that gives sectarian politicians a slice of the pie that is then channeled into political patronage rather than building a functional state.  Lebanon, for one, has probably the world’s worst trash disposal system.  Having been to Beirut twice, I can tell you it is a beautiful city, the one-time Paris of the Mediterranean, but it is tremendously polluted, garbage everywhere.  And it’s gotten ten times worse since my last trip years ago.

Iraq: In renewed anti-government protests today, at least 25 were killed when security forces used tear gas and an Iranian-backed militia opened fire to try to quell demonstrations against corruption and economic hardship.  According to medical sources, a staggering 1,800 were injured nationwide.  One young protester told Reuters, “All we want are four things; jobs, water, electricity, and safety.  That’s all we want.”

At least 157 have died in the two weeks of clashes between protesters and security forces.  This all comes after two years of relative stability in the country after the ISIS insurgency had been put down.

Israel: President Reuven Rivlin tasked centrist politician Benny Gantz with trying to form the next coalition government after Prime Minister Benjamin Netanyahu failed to win support from a majority of parliament; Gantz turning down the PM’s offer to be part of it.

Gantz now has 28 days to form a government of his own or there will be another general election, the third since April.

Netanyahu’s Likud placed second in the September ballot with 32 seats in the 120-member parliament, behind 33 for Gantz’s Blue and White party.

China / Hong Kong: The Foreign Ministry blasted Vice President Mike Pence for a major speech on China.  Pence on Thursday accused China of curtailing “rights and liberties” in Hong Kong while blasting U.S. company Nike and the National Basketball Association for falling in line with Beijing in a disagreement over free speech.

In a policy speech on China that touched on an array of disputes ahead of talks with Beijing to ease a trade war, Pence said the United States does not seek confrontation or to “de-couple” from its main economic rival. But he directly addressed some of the political rifts between the two countries, praising Taiwan as a beacon of democracy and criticizing China for its treatment of Muslim Uighurs in the Xinjiang region.

So Friday, speaking in Beijing, Chinese Foreign Ministry spokeswoman Hua Chunying said Pence’s speech was full of lies and prejudice, and that it had made China “strongly indignant.”  China is resolute in defending its sovereignty and security, and will never allow anyone to interfere in its internal affairs over Hong Kong, Taiwan or Xinjiang, she added.

“A handful of politicians with Pence at their head have confused black and white on these issues, making irresponsible remarks and creating rumors to slander others,” Hua said.  Pence is “easily arrogant” about other countries, and yet turns a blind eye to the ills of his own country, instead trying to shift the focus of the American public onto other nations, she added.

“From the large-scale monitoring of the ‘Prismgate’ to frequent and serious shootings, from ubiquitous racial discrimination to the gap between the rich and the poor that is obvious at a glance, from sanctions against other countries, arbitrary withdrawal from international agreements, treaties, and misconduct, morality and trust have long since disappeared.”

Certain people in the United States need to take a good long look at themselves in the mirror, recognize their own problems and manage their own affairs properly, Hua said.  [Ben Blanchard / Reuters]

But, as harsh as this criticism was, the state-backed Global Times said in an editorial there was still “room for optimism.”

“(Pence) emphasized the U.S. does not want to ‘decouple’ and repeated how President Trump is willing to start a new future with China,” the paper said.  “He also underlined the friendship between Chinese President Xi and his U.S. counterpart.”

Meanwhile, China’s Communist Party leaders meet on Monday for the start of their most important meeting this year, with President Xi expected to champion the Chinese model of governance while fighting crises at home and abroad.

The four-day gathering comes amid the ongoing Hong Kong protests, the prolonged trade war, and a slowing economy.

Xi needs to use the occasion to cast the Chinese political system as unchallengeable and superior to Western democracy, according to some China experts.

In September, Xi said China was entering a period of “concentrated risks” – economic, political and diplomatic – and the country must be ready to fight.

The conclave is formally called a plenum, and it’s a closed-door meeting of the party’s Central Committee, which comprises 370 people and is the largest of the elite bodies ruling the country.

The elephant in the room next week, however, will be the issue of Xi’s continuation of power since he removed presidential term limits last year.  Xi has no obvious successor.

Once the meetings have ended, a final communique is issued, released by state news agency Xinhua.  [It’s already written, from what I’ve read.]

Chinese leaders will be holding another meeting in December to chart the course of the economy in 2020.

As for Hong Kong, the protests continue, with heavy violence last weekend in Kowloon, hundreds of shops trashed.  Xie Feng, commissioner at China’s ministry of foreign affairs in the city, strongly condemned the protest movement on Thursday, hitting out at the demonstrators and what he said were “black hands” behind them, saying their opposition to the now-withdrawn extradition bill* – which would have allowed fugitive transfers to mainland China – was merely a pretext for insurrection.

*The bill was formally withdrawn this week, though protesters vowed to continue their demonstrations.

“The true motive of the opposition in Hong Kong and the foreign forces behind them is to mess up the city, overthrow the legitimate government...and ultimately destroy ‘one country, two systems’ by turning Hong Kong into an independent or semi-independent political entity,” Xie said.

He described the street violence as a “virus,” adding that it was more deadly than the severe acute respiratory syndrome (Sars) virus which caused 299 deaths in Hong Kong in 2003.

“From Spain to the UK to Chile, protesters are threatening to copy Hong Kong.  Should the Pandora’s box of street violence be opened...civilization as a whole would be plunged into calamity and no country would stay immune,” Xie said.

This week, some Hong Kong protesters marched in support of Catalonia’s independence movement, which I frankly thought was stupid. Stay focused, lads!

As for Hong Kong leader Carrie Lam, there were various stories this week that she is being replaced, the Financial Times reporting, with an “interim” chief executive, though the timing is unknown, and it seems officials in Beijing want the situation to stabilize before making a final decision, as they don’t want to be seen giving in to violence.

Lam’s term doesn’t end until 2022, so whoever was appointed to replace her would stay in power until then.

Canada: Prime Minister Justin Trudeau barely survived this week’s election and remains in power despite the scandals he has dealt with, but he has ruled out any formal or informal coalition pact with rival parties to ensure his Liberal Party remains in power in a minority government.

“I intend to sit down with all party leaders in the coming weeks to talk about their priorities, and how we can work together to respond to the preoccupations that Canadians have,” he said in his first press conference since the Monday vote. “But I can tell you it is not in our plans at all to form any sort of formal or informal coalition.”

Trudeau’s Liberal Party won 157 seats in the national legislature, falling short of a 170-seat majority.  The Liberals held 177 seats before the vote.  The Conservative Party, led by Andrew Scheer, came in second with 121 seats, picking up 26 seats, but all are in agreement Scheer ran a poor campaign.

So Trudeau will need support from other parties to get legislation passed and remain in power, but he’s signaling he’ll do it on a case-by-case basis, bringing one other party along as needed.

There are two parties, Bloc Quebecois, with 32 seats, and the New Democratic Party, 25 seats, that share common interest with the Liberals on some major issues and will be likely partners at times.

Minority governments normally don’t last more than 2 ½ years in Canada, but I read that Trudeau shouldn’t find himself in danger beforehand because many legislators need to serve another two years to meet the six-year requirement for a Parliamentary pension.  Ergo, they won’t want to risk losing in an election for a good spell.

The big issue in Canada is energy policy and climate change.  The economy needs Canada’s strong energy sector, but many legislators want to curb it, despite the risks to growth.

Chile: This is one of the last places you would have expected extensive rioting and looting, for days on end, but protests against the government continue, at least 15 dead, with the arrest of more than 2,600. Ten cities were placed under a state of emergency and under evening curfew.

The demonstrators are protesting high living costs and inequality. There have been charges of rights violations in the way the protestors are being treated.

Of the dead, eleven died in arson attempts.

The protests were first sparked by an increase in public transport fares in early October, but they reflect simmering anger over intense economic inequality in the country, as well as costly health, education and pension systems seen by many as inadequate.

Chile, specifically Santiago, is where the Asia-Pacific Economic Cooperation summit is to be held Nov. 16-17, at which Presidents Trump and Xi are presumed to be signing a trade deal.

Random Musings

--Presidential tracking polls....

Gallup: 39% approve of Trump’s job performance, 57% disapprove, 87% Republicans approve, 34% of independents (Oct. 1-13).
Rasmussen: 43% approve, 56% disapprove...the 43% figure is the lowest since January.

In a Quinnipiac University poll, Trump’s job approval dropped to 38%, 58% disapproving.

--In a new CNN national poll, Joe Biden shockingly, to me, takes 34% of Democratic and Democratic-leaning registered voters, his best showing in CNN polling since just after his campaign’s formal launch on April 25.

Elizabeth Warren and Bernie Sanders are at 19% and 16%, respectively.  Behind them are Mayor Pete Buttigieg and Kamala Harris at 6%, with Amy Klobuchar and Beto O’Rourke at 3%.

Biden’s boost from prior polls doesn’t come from his October debate performance, but rather, it seems, from his policy arguments on healthcare, foreign policy and the economy, which I thought were largely incoherent, but what do I know.

There’s another theory that President Trump’s attacks on Hunter Biden are backfiring among the Democratic electorate, but I’m not sold on that either.

One thing we do know.  Voters are beginning to question Sen. Warren on how she is going to pay for her healthcare plan.

But a new Quinnipiac University national survey has Warren at 28%, Biden 21%, Sanders 15% and Mayor Pete 10%.  Kamala Harris is at 5% and Klobuchar 3%.  No other candidate tops one percent.  Prior to the fourth debate, it was Warren at 30%, Biden at 27%.

Throughout the year, the polls have been pretty consistent in their trends, so it’s mystifying why Quinnipiac and  CNN differ so wildly.

--A Suffolk University/USA TODAY poll of likely caucusgoers in Iowa has Biden at 18%, Warren at 17%, and Mayor Pete at a surprising 13%.  The same survey taken in June had Biden leading Warren by double digits and Buttigieg at just 6%.  Bernie Sanders garnered just 9%.

Iowa can be different.  Every candidate has a certain benchmark. In such a big field, though, you better finish in the top six, while if you’re Biden, Warren and Sanders, you sure as heck don’t want to be fourth.

--A Monmouth University poll of likely Democratic voters in South Carolina shows Joe Biden the clear front-runner with 33% support, down from 39% in Monmouth’s July survey.  But Warren is at 16% and Sanders 12%.  Kamala Harris 6%, down from 12% in July.  Tom Steyer actually gets 4% here, Mayor Pete 3%, and Cory Booker and Amy Klobuchar, 2% each.   Andrew Yang also received 2%.

--Michael Goodwin / New York Post

“Like the swallows coming back to Capistrano, reports are surfacing that Michael Bloomberg is considering a White House run. Again.

“The former New York mayor dipped his toes into the water in both 2012 and 2016, and backed off a 2020 race last March.  Always for the same reason: He concluded he couldn’t win.

“He was right and many actual candidates should follow Bloomberg’s example.  The 12 Democrats on the debate stage last week proved that quantity does not guarantee quality.

“Yet a new reality is prompting Bloomy’s second thoughts.  It is the growing likelihood that Sen. Elizabeth Warren, an extreme leftist, will win the nomination and guide the party into the political wilderness.

“Bloomberg, a Democrat again after being a Republican and independent, regards Warren’s economic plans as dangerous nonsense.  He told her as much at a gun-control event he bankrolled.

“Taking the microphone after her, he told the audience, ‘I just said to Senator Warren on the way out, ‘Senator, congratulations, it’s a nice talk. But let me just remind you if my company hadn’t been successful, we wouldn’t be here today, so enough with this stuff.’’

“Earlier, he denounced her plan for a wealth tax, saying, ‘It’s called Venezuela.’

“Bloomberg’s reconsideration, reported by CNBC, comes with a hitch.  He’s said to be holding back until Joe Biden craters or quits.

“Big mistake because by that point, it will be too late.

“It’s true that Biden is an impediment to others, which is why I urged him to drop out a month ago.  My point then was that no other relative centrists, including Bloomberg, would run because none could beat Biden in the primary.

“But at the same time, it was already clear that the former vice president can’t go the distance and win the nomination.  His early debate performances were dreadful and his inability to finish a sentence without veering into gibberish is painful to watch.

“And that was before President Trump’s focus on the fact that Biden’s son, Hunter, made millions from foreign governments while his father was vice president.

“The many blows on Joe Biden are having an impact....

“Still, because Dem voters are divided among the large field, Biden could limp along well into the primary season, which starts with the Iowa caucus on Feb. 3 and includes Super Tuesday just a month later.

“At some point, he will collapse but there probably will not be enough time for a newcomer to get into the race and amass the delegates needed to stop Warren.

“Which is why Bloomberg should take the plunge now.  Later will be too late.”

But, as Goodwin and all of us know, Bloomberg’s just not the kind of charismatic figure that could capture the hearts of Democratic moderates and independents.  I believe the guy would be a solid president, but there’s just no chance, which is unfortunate.

--Not for nothing but Bernie Sanders’ campaign rally in Brooklyn last Saturday was very impressive.  Great crowd...Trumplike, frankly.  “I am back,” Sanders told his supporters, AOC by his side.

--Hawaii Democratic congresswoman Tulsi Gabbard fought back after Hillary Clinton appeared to call her “the favorite of the Russians” in a recent interview and said she believes the Russians have “got their eye on somebody who’s currently in the Democratic primary and are grooming her to be the third-party candidate.’  Clinton did not name Gabbard directly, but it was rather clear who she was talking about.

So in a series of tweets last Friday, Gabbard called Clinton the “personification of the rot that has sickened the Democratic Party for so long.”  Gabbard also alleged there has been a “concerted campaign” to destroy her reputation since she announced her presidential run in January.

“It’s now clear that this primary is between you and me,” Gabbard tweeted about Clinton.  “Don’t cowardly hide behind your proxies.  Join the race directly.”

U.S. intelligence agencies have warned that Russia intends to meddle in the 2020 presidential election just as it did in 2016, and that campaign has already started.

Clinton also described 2016 Green Party presidential candidate Jill Stein as “a Russian asset.” 

Stein only received about 1% of the vote in 2016, but some Democrats said her candidacy siphoned votes away from Clinton and helped Trump win, particularly in states like Wisconsin.

Here’s the thing.  Stein did attend a 2015 dinner in Moscow sponsored by Russian television network RT with Putin, while Gabbard is picking up support from some non-traditional groups for a Democrat, including a few far-right outfits and the likes of David Duke.

Early Friday morning, Gabbard announced she would not seek reelection for her congressional seat and instead focus on her White House bid.

--George Will, in a Washington Post op-ed, talked about the situation with Texas’ congressional delegation and ‘Texodus,’ Republican Rep. Will Hurd recently becoming the sixth Texas Republican congressman to decide not to seek reelection next year.  In the 2018 version of Texodus, five Texas Republican representatives retired (a sixth resigned) and two were defeated.  “Of the 241 Republicans in the House when President Trump was inaugurated, almost 40 percent are gone or going.  See a trend?....

“In 2008, with the Great Recession underway, John McCain carried Texas by 12 points.  In 2012, Mitt Romney carried it by 16.  In 2016, Trump (whom Hurd did not endorse) won by nine points.  In Texas’ most important 2018 contest for a federal office, incumbent Republican Sen. Ted Cruz won by just three.  See a trend?

“If the Democratic Party can collect Texas’ electoral votes – 38 today, perhaps 41 after the 2020 Census – as well as California’s 55, it will reap 35.5 percent of a winning 270 from just two states.  Then the GOP will have almost no plausible path to 270, and Democrats who are currently hot to abolish the electoral college will suddenly say: Oh, never mind.

“And Hurd will repeat what he says today: Texas is ‘already purple.’  Republicans ‘have to get out of our own way’ because ‘if the Republican Party in Texas does not start looking like Texas, there will not be a Republican Party in Texas.’”

--The National Highway Traffic Safety Administration released a report that U.S. traffic fatalities fell for a second consecutive year in 2018, which regulators attribute to new vehicles with better safety technologies.

Vehicle crashes killed 36,560 people on U.S. roadways last year, a 2.4% decline from 2014.

But here’s the thing.  6,283 pedestrians were killed in 2018, an increase of 3.4%, and the highest number since 1990.

This doesn’t surprise me in the least.  I’ve been startled, myself, how seemingly in just the last year everyone in my area has decided it is a good idea to just walk in the freakin’ street rather than the sidewalk!  I’m floored how stupid people are.  I mean this isn’t Bangladesh...we actually have sidewalks in the more populated areas of America.  Use them.

--Boy, I hope actress Lori Loughlin gets the max, along with her hubby, for not pleading guilty in the college admissions scandal and prolonging the process; Loughlin and nearly a dozen others getting slapped with additional bribery charges Tuesday.

--Heather Long / Washington Post

“A great migration is happening on U.S. college campuses. Ever since the fall of 2008, a lot of students have walked out of English and humanities lectures and into STEM classes, especially computer science and engineering.

“English majors are down more than a quarter (25.5 percent) since the Great Recession, according to data compiled by the National Center for Education Statistics.  It’s the biggest drop for any major tracked by the center in its annual data and is quite startling, given that college enrollment has jumped in the past decade.

“Ask any college student or professor why this big shift from studying Chaucer to studying coding is happening and they will probably tell you it’s about jobs.  As students feared for their job prospects, they – and their parents – wanted a degree that would lead to a steady paycheck after graduation. The perception is that STEM (science, technology, engineering and math) is the path to employment.  Majors in computer science and health fields have nearly doubled from 2009 to 2017.  Engineering and math have also seen big jumps.

“As humanities majors slump to the lowest level in decades, calls are coming from surprising places for a revival.  Some prominent economists are making the case for why it still makes a lot of sense to major (or at least take classes) in humanities alongside more technical fields.

“Nobel Prize winner Robert Shiller’s new book ‘Narrative Economics’ opens with him reminiscing about an enlightening history class he took as an undergraduate at the University of Michigan.  He wrote that what he learned about the Great Depression was far more useful in understanding the period of economic and financial turmoil than anything he learned in his economic courses.

“The whole premise of Shiller’s book is that stories matter.  What people tell each other can have profound implications on markets – and the overall economy.  Examples include the ‘get rich quick’ stories about bitcoin or the ‘anyone can be a homeowner’ stories that helped drive the housing bubble.

“ ‘Traditional economic approaches fail to examine the role of public beliefs in major economic events – that is, narrative,’ Shiller wrote.  ‘Economists can best advance their science by developing and incorporating into it the art of narrative economics.’  Shiller, who is famous for predicting the dot-com crash and coming up with the Case-Shiller Home Price Index, is spending a lot of time looking at old newspaper clippings to understand what stories and terms went viral and how they influenced people to buy things – to stop buying things.

“When asked if he’s essentially arguing for more English and history majors, Shiller said, ‘I think so,’ adding: ‘Compartmentalization of intellectual life is bad.’....

“In many ways, President Trump’s constant attempts to call this the greatest economy of all time are an effort to tell a positive story to encourage Americans to keep spending, Shiller said, even if his claim is not based in fact.

“Perhaps the most powerful argument for why students (and their parents) might want to think twice about abandoning humanities is the data.  The National Center for Education Statistics also keeps track of pay and unemployment rates by major.

“There’s no denying that the typical computer science major makes more money shortly after graduation than the typical English major.

“Contrary to popular belief, English majors ages 25 to 29 had a lower unemployment rate in 2017 than math and computer science majors.

“That early STEM pay premium also fades quickly, according to research by David J. Deming and Kadeem L. Noray from Harvard.  After about a decade, STEM majors start exiting their job fields as their skills are no longer the latest and greatest.  In contrast, many humanities majors work their way to high-earning management positions.  By middle age, average pay looks very similar across many majors.

“ ‘By age 40, the earnings of people who majored in fields like social science or history have caught up,’ wrote David Deming in a recent New York Times op-ed.

“In management and leadership positions, communication is key, as leading economists and central bankers have been quick to point out at this critical juncture for the world economy.”

Granted, my own example isn’t recent, but I was a Poli-Sci major at Wake Forest, yet at age 40 was national sales manager of a major mutual fund firm.  [Whereupon I stupidly quit to ride the rails, or rather start StocksandNews, but we’ll ignore this chapter of my life today.]

---

Pray for the men and women of our armed forces...and all the fallen.  We pray for the families of the three soldiers killed in a training exercise this week at Ft. Stewart.

God bless America.

---

Gold: $1507
Oil: $56.64

Returns for the week 10/21-10/25

Dow Jones  +0.7%  [26958]
S&P 500  +1.2%  [3022]
S&P MidCap  +1.2%
Russell 2000  +1.5%
Nasdaq  +1.9%  [8243]

Returns for the period 1/1/19-10/25/19

Dow Jones  +15.6%
S&P 500  +20.6%
S&P MidCap  +17.8%
Russell 2000  +15.6%
Nasdaq  +24.2%

Bulls 52.8
Bears 17.9*

*Last week’s readings were confusing, and then clarified this week, for those of you who chart this as I do.

Oct. 8....  47.6 / 17.2
Oct. 15... 49.1 / 17.0
Oct. 22... 52.8 / 17.9

Have a great week.

Dr. Bortrum posted a new column.

Brian Trumbore

---