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01/21/2017

For the week 1/16-1/20

[Posted 11:30 p.m. ET, Friday]

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Edition 928

Washington and Trump

What a week.  It started with president-elect Trump saying in an interview with German and British media that he was open to lifting sanctions on Russia, NATO was “obsolete” and he wouldn’t commit to the “One China” policy.  Our European allies were terrified, the Kremlin was smiling, and China was torqued off.  Days later he took the oath of office.

President Donald J. Trump, Inaugural Address

[Excerpts]

“We, the citizens of America, are now joined in a great national effort to rebuild our country and restore its promise for all of our people. Together we will determine the course of America and the world for many, many years to come.  We will face challenges. We will confront hardships, but we will get the job done....

“For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost.  Washington flourished, but the people did not share in its wealth....

“The establishment protected itself, but not the citizens of our country.  Their victories have not been your victories; their triumphs have not been your triumphs; and while they celebrated in our nation’s capital, there was little to celebrate for struggling families all across our land....

“What truly matters is not which party controls our government, but whether our government is controlled by the people.  Jan. 20, 2017, will be remembered as the day the people became the rulers of this nation again.

“The forgotten men and women of our country will be forgotten no longer....

“(For) too many of our citizens, a different reality exists: Mothers and children trapped in poverty in our inner cities; rusted-out factories scattered like tombstones across the landscape of our nation; an education system flush with cash, but which leaves our young and beautiful students deprived of knowledge; and the crime and gangs and drugs that have stolen too many lives and robbed our country of so much unrealized potential.

“This American carnage stops right here and stops right now....

“For many decades we’ve enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

“We’ve defended other nations’ borders while refusing to defend our own and spent trillions and trillions of dollars overseas while America’s infrastructure has fallen into disrepair and decay.  We’ve made other countries rich while the wealth, strength and confidence of our country has dissipated over the horizon....

“From this day forward, a new vision will govern our land.  From this day forward, it’s going to be only America first.  America first....

“We do not seek to impose our way of life on anyone, but rather to let it shine as an example.  We will shine for everyone to follow.

“We will reinforce old alliances and form new ones – and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

“At the bedrock of our politics will be a total allegiance to the United States of America, and through our loyalty to our country, we will rediscover our loyalty to each other. When you open your heart to patriotism, there is no room for prejudice.  The Bible tells us how good and pleasant it is when God’s people live together in unity.

“We must speak our minds openly, debate our disagreements honestly, but always pursue solidarity. When America is united, America is totally unstoppable. There should be no fear.  We are protected, and we will always be protected....

“We will no longer accept politicians who are all talk and no action, constantly complaining but never doing anything about it.  The time for empty talk is over.  Now arrives the hour of action....

“A new national pride will stir ourselves, lift our sights and heal our divisions....

“We will make America proud again.  We will make America safe again. And, yes, together, we will make America great again.  Thank you.”

Trump wasn’t the least bit magnanimous, nor did he give our allies any cause for optimism.  He ripped them.  There was also no talk of freedom and liberty.

But Trump’s supporters loved it.  I’ll have some comments from a few of the pundits next time.

For now, though, it’s ‘wait 24 hours,’ even though this is the total antithesis of our president’s behavior.  You know where I stand.  I’m reasonably optimistic on the domestic front, but I’m scared to death when it comes to U.S. foreign policy and the immediate threats we face.  I like the president’s foreign policy team, but in the end he makes the call, and the first one is likely to be, ‘What to do with Kim?’

Richard Haass, president of the Council on Foreign Relations / Wall Street Journal...on his advice to President Trump concerning foreign policy.

“The U.S. should be especially wary of sudden or sharp departures in what it undertakes abroad.  Consistency and reliability are essential attributes for a great power.  Allies who depend on Washington for their security need to know that this dependence is well placed. Serious doubt about America would inevitably give rise to a very different and much less orderly world....

“As soon as President-elect Trump is inaugurated, he will face many difficult challenges: from an unraveling Middle East to an uncertain Europe to a blustering North Korea.  Rushing to reverse longstanding American policies could generate new challenges and make existing ones harder to resolve.

“A few items already in the news suggest precisely what the new administration should not do.  The first would be to discard the ‘one China’ policy.  For 4 ½ decades, Washington and Beijing have successfully finessed the difference between the mainland’s claims to Taiwan and America’s commitment to the principle that any change in the island’s status can only come about peacefully and voluntarily.  Central to this successful maneuver is the idea that there is only one China and Taiwan is part of it.

“The formula has not only allowed Taiwan to flourish economically and become a thriving democracy, it has enabled the U.S. and China to develop important economic ties and cooperate on a range of regional and global challenges.  Continuing to finesse the issue is far preferable to abandoning ‘one China.’  The latter course risks triggering armed conflict with Beijing, ruling out any possibility of cooperation on North Korea, and poisoning what will be the most important bilateral relationship of this century.”

David Ignatius / Washington Post

“Donald Trump’s inauguration marks a global inflection point: He takes office at a moment when many analysts see a transition to a new economic and political order – one where the risks for the United States and its allies are likely to increase.

“Trump’s promise to ‘make America great again’ resonated with many disaffected voters at  home.   But abroad, it created fear that the United States’ global power is receding, with China and Russia moving to fill the vacuum.  Analysts forecast a new era in which the U.S.-led, post-1945 global order, which brought unparalleled economic growth, will be replaced by a structure whose rules and rewards aren’t yet clear....

“Trump has embraced the breakup of the old order.  He has criticized NATO as ‘obsolete’ and predicted the European Union’s demise – challenging two crucial allies in America’s network of power.  He has talked of imposing tariffs on imports not just from China, but from Germany, too, raising fears of a global trade war.  He has promised a revival of U.S. manufacturing jobs that many economists argue can’t be restored without disrupting other parts of the economy.

“ ‘Wait and see’ is always a good rule on Inauguration Day, but we’ve never had a president quite like Trump, with so many disruptive ideas and so little experience.  Change is his political brand.  If he carries through on what he talked and tweeted about, he will reshape the framework of global economic and security relationships – for the worse, I fear....

“The revolt against economic globalization has boosted right-wing nationalist politicians in the United States and Europe.  The real beneficiaries may be Russia and China, which seek to replace the U.S.-led system.

“This theme of risky transition was explored in ‘Global Trends,’ a report published this month by the National Intelligence Council.  ‘The next five years will see rising tensions within and between countries...An era of American dominance following the Cold War [is ending].  So, too, perhaps, is the rules-based international order that emerged after World War II.  It will be much harder to cooperate internationally and govern in ways publics expect.’

“A similar grim assessment was offered this month by the Rand Corp.  In a study titled ‘Strategic Choices for a Turbulent World,’ Rand described a global tipping point: ‘The post-Cold War period is over.  While historians may argue about the timing, it has become clear to most foreign-policy practitioners that the world has entered a new era, a complex age of turbulence and opportunity.’....

“Trump now owns responsibility for shaping a world in turmoil. And the United States owns the stark reality that Trump is president.”

Editorial / The Economist

“It is extraordinary how little American voters and the world at large feel they know about what Mr. Trump intends.  Those who back him are awaiting the biggest shake-up in Washington, D.C., in half a century – though their optimism is an act of faith. Those who oppose him are convinced there will be chaos and ruin on an epoch-changing scale – though their despair is guesswork.  All that just about everyone can agree on is that Mr. Trump promises to be an entirely new sort of American president.  The question is, what sort?....

“Even before taking office, Mr. Trump has hacked away at the decades-old, largely bipartisan cloth of American foreign policy. He has casually disparaged the value of the European Union, which his predecessors always nurtured as a source of stability.  He has compared Angela Merkel, Germany’s chancellor and the closest of allies, unfavorably to Vladimir Putin, Russia’s president and an old foe.  He has savaged Mexico, whose prosperity and goodwill matter greatly to America’s southern states.  And, most recklessly, he has begun to pull apart America’s carefully stitched dealings with the rising superpower, China – imperiling the most important bilateral relationship of all.

“The idea running through Mr. Trump’s diplomacy is that relations between states follow the art of the deal.  Mr. Trump acts as if he can get what he wants from sovereign states by picking fights he is then willing to settle – at a price, naturally.  His mistake is to think that countries are like businesses.  In fact, America cannot walk away from China in search of another superpower to deal with over the South China Sea. Doubts that have been sown cannot be uprooted, as if the game had all along been a harmless exercise in price discovery.  Alliances that take decades to build can be weakened in months.

“Dealings between sovereign states tend towards anarchy – because, ultimately, there is no global government to impose order and no means of coercion but war.  For as long as Mr. Trump is unraveling the order that America created, and from which it gains so much, he is getting his country a terrible deal....

“As Mr. Trump assumes power, the world is on edge. From the Oval Office, presidents can do a modest amount of good.  Sadly, they can also do immense harm.”

President Obama’s Legacy, cont’d....

This is the last time for a while. 

Barbara Plett / BBC News

“How did a man who took office espousing a new era of engagement with the world end up a spectator to this century’s greatest humanitarian catastrophe?

“Barack Obama was not against using force to protect civilians.  Yet he resisted, to the end, a military intervention to stem Syria’s six-year civil war, even as it killed or displaced half the country’s population, brutally documented in real time on social media.

“Part of the answer to this vexing question has been clear from the beginning.  President Obama was elected to end America’s war in Iraq and Afghanistan by a people tired of paying the cost in blood and treasure. He was extremely reluctant to get sucked into another messy Middle East conflict.

“But when the siege and bombardment of cities like Aleppo placed the violence on the genocidal scale of atrocities set by Rwanda and Srebrenica, inaction by the U.S. and its allies mocked the international community’s vows of ‘never again.’

“Despite the pressing moral imperative, Obama remained convinced a military intervention would be a costly failure.

“He believed there was no way the U.S. could help win the war and keep the peace without a commitment of tens and thousands of troops. The battlefield was too complex: fragmented into dozens of armed groups and supported by competing regional and international powers.

“ ‘It was going to be impossible to do this on the cheap,’ he said in his final press conference of 2016.

“But that was not the conclusion of some senior military and cabinet officials, nor did they even propose a mass ground deployment, according to former defense secretary Chuck Hagel.

“They argued that a more limited engagement could have effectively tilted the balance of power against President Bashar al-Assad.  Among the options: arming the rebels and setting up a safe zone from where they could operate early in the conflict, or military strikes on the Syrian air force to push Assad to the negotiating table....

“ ‘If there is to be any hope of a political settlement, a certain military and security context is required,’ former CIA Director David Petraeus told a Senate committee last year.  ‘We and our partners need to facilitate it, and...have not done so.’....

“U.S administrations have tended to bridge the gap between values and interests when the moral choice is also strategic.  But Obama calculated early on that the Syrian civil war did not directly endanger America’s national security.

“Instead he focused U.S. military might against the so-called Islamic State (IS), which he did eventually see as a threat to the homeland.

“Again, he was able to organize an international coalition that has had considerable success in achieving a limited goal.

“Dividing his Syria policy in two, however, meant inevitable contradictions.  The White House held that the only way to stop the spread of IS was to end the rule and brutality of the Assad regime.  But America’s absence from the civil conflict served to strengthen the Syrian president....

“ ‘Syria exploded in strategic ways,’ says Vali Nasr, who’s written a book arguing that the president’s policies have diminished America’s leadership role in the world.

“ ‘It empowered Russia and Iran, produced ISIS, strengthened al-Qaeda and created the refugee crisis which became a strategic threat to Europe.’

“Obama’s critics have also faulted him for a detached, analytical leadership style they say is unsuited to geopolitical jousting.

“ ‘He wasn’t good at brinkmanship, it wasn’t his inclination,’ says Ian Bremmer, president of the political risk firm Eurasia Group.

“ ‘I’ve always thought [George W.] Bush was a leader who didn’t like to think, and Obama a thinker who didn’t like to lead.’

“Obama has taken the lead on combating what he sees as one of the biggest threats, climate change.  And he hasn’t hesitated from unilaterally ordering force when he felt America’s security was at stake, as shown by his prolific use of drones against terrorist suspects.

“But in Syria his administration left a perception of American weakness.

“Stepping back from his red line on chemical weapons damaged U.S. credibility, shaking the confidence of allies and, some argue, emboldening its adversaries....

“Although Obama says he came to understand that very little is accomplished in international affairs without U.S. leadership, he doesn’t talk about it as a strategic asset, says Nasr.

“That sets him apart from his predecessors who ‘believe U.S. leadership is important for the world and important for America’s hardnosed interests.  Obama believes we can selectively lead where we have clear definable interests...but American leadership as a free-floating independent idea doesn’t have value to him.’....

“History could very well judge Obama positively on Iran, Cuba and climate change.  But the most important test of his foreign policy philosophy will be Syria, because it has been the crucible for the kind of realism he believes in.

“He argues that he’s saved the U.S. from getting trapped in another disastrous Middle East war that would sap America’s power.  His critics charge he has diminished U.S. power in a crucial region, and weakened American global leadership in the process.”

America will be paying the price for such thinking for decades to come.

Clive Crook / Bloomberg

“Nobody thinks Margaret Thatcher’s claim on posterity is that she was Britain’s first female prime minister.  Admirers and critics alike know she was more consequential than that.  Barack Obama was America’s first black president, which is a huge thing and a fine thing.  But when you’ve said that, you’ve probably said what matters most about his time in office.

“Perhaps it was harder – less probable – for a black man with little experience of government to be elected president of the U.S. in 2008 than it was for a woman to lead the British Conservative Party to electoral victory in 1979.  Obama’s rise to the presidency was a remarkable accomplishment.  Talk about audacity.  But reflecting on his eight years in office, one wonders how much ambition he had left after that.

“He doubtless wanted to succeed, and he did, in some ways.  Not least, he won re-election in 2012 and departs the White House with most voters thinking well of him.  But already in 2008 he could say and think, ‘Yes we did.’  Nothing he achieved afterward eclipses that.  Thatcher, in contrast, betrayed little or no interest in defeating a prejudice about what women could aspire to be.  She wanted power because she believed it was necessary to transform Britain, and nobody else was up to the job.  For good or ill, transform Britain is what she did.

“A prime minister with a comfortable majority in Parliament has more power to change Britain than any president has to change the U.S.  No checks and balances to deal with. Yet you could argue that Ronald Reagan managed it.  Obama, you could also argue, might have managed it too, had he tried.  The occasion presented itself in the form of an economic crisis.  Leaders subsequently deemed great usually find themselves contending with a crisis, domestic or foreign, sometimes of their own making.  But Obama let his particular crisis go to waste.

“Obama’s admirers will say, what nonsense: His stimulus bill saved the U.S. from a new Great Depression; his health-care reform was a decisive and (despite the Republicans’ forthcoming efforts) irreversible advance; he used his executive powers to shift policy across a wide range of issues, from climate change to national security.  Take all that together, and his legacy is indeed a country transformed.

“All of this is very questionable. The recession would certainly have been worse without the stimulus, and the stimulus might have been smaller without Obama’s input, but modern economies with huge public sectors and forceful central banks aren’t vulnerable to depression in the way countries were in the 1920s and 1930s.  Britain’s economy fell further in the slump, but its subsequent recovery has been about as strong as America’s, for the most part with a fiscally orthodox Conservative government in charge.

“We’ll see what remains of the Affordable Care Act in due course, but its prospects certainly aren’t helped by its unpopularity from the outset....

“As for the rest, what executive actions can do, executive actions can undo.  On race relations, hopes were high that Obama would mark a decisive break with the past; if anything, the divisions are deeper than before.  Even Obama’s most fawning admirers rarely call his foreign policy a success.  China is throwing its weight around.  So is Russia.  Iran’s nuclear ambitions are only on pause, the Middle East is in turmoil, and Syria has fallen into an abyss at the hands of a corrupt government and its Russian sponsor....

“In 2008, it seemed possible.  The new president was a man of enormous talent, effortlessly commanding respect, an enthralling speaker, calm, sober and instantly likable.  He’d come up from nothing, and by the way, he was black.  He was something entirely new, yet quintessentially American.  The country, it seemed, was proud of him and proud of itself for having produced him.  The politically uncommitted wanted him to succeed, and despite later controversies and disappointments this never really changed.

“It would be wrong to say he squandered these assets, but he took no chances with them.  You don’t realign politics by tending exclusively to the hopes and ideas of your partisan followers.  That’s what he did.  As president, Obama was most comfortable preaching to the converted....

“America’s polarization and the deep political dysfunction that flows from it are themselves a kind of crisis.  Now they’ve yielded President Trump – and who knows what harm will flow from that?  If Obama had been willing to think big and take risks – not just before getting elected but afterward as well – things might have been different.  But Obama wasn’t that man.” 

Robert J. Samuelson / Washington Post

“It is far too early to render final judgment on the Obama presidency. All the chatter about his ‘legacy’ overlooks two obvious realities. The significance of President Obama will depend heavily on events that have not yet happened (for starters, the fate of the Iranian nuclear deal) and comparisons, for better or worse, with his successor. Still, it’s possible to make some tentative observations.

“As I’ve written before, the administration’s greatest achievement was, in its first year, stabilizing a collapsing economy and arguably avoiding a second Great Depression. Even now, only eight years after the event, many people forget the crash’s horrific nature.  Unemployment was increasing by roughly 700,000 to 800,000 job losses a month. No one knew when the downward spiral would stop.

“In this turbulence, Obama was a model of calm and confidence. The policies he embraced – various economic stimulus packages, support for the Federal Reserve, the rescue of the auto industry, the shoring up of the banking system – were what the economy needed, though they were not perfect in every detail.  Although the subsequent recovery was disappointing, it’s not clear that anyone else would have accomplished more.

“If Obama had done nothing else, rescuing the economy would ensure a successful presidency.  But he did do other things, and we shouldn’t forget the historic significance of having an African American as the nation’s leader.

“Still his broader record is mixed.  I think he will get credit for ObamaCare, regardless of how Donald Trump and the Republicans modify it.  The argument will be made, accurately I think, that the expansion of insurance coverage to roughly 20 million Americans would never have occurred if Obama hadn’t put it at the top of his agenda.

“This does not mean that promoting ObamaCare was uniformly wise. It did not solve the problem of high health-care costs, and it aggravated political polarization.  It also seems a product of personal ambition, reflecting Obama’s desire to be remembered as the liberal president who finally achieved universal coverage. In reality, even after the 20 million, there are an estimated 28 million uncovered Americans in 2016, says the National Center for Health Statistics.

“Some of Obama’s biggest setbacks were widely shared.  One was coming to grips with an aging society.  As I’ve repeatedly written, the growing population of older people is distorting government priorities, because Social Security, Medicare and Medicaid (which covers nursing home care) increasingly dominate the federal budget, squeezing other programs and enlarging budget deficits.

“Obama never dealt aggressively with this problem, because doing so would have offended his liberal political base....

“What Obama lacked was the ability to inspire fear as well as respect, and this also helps explain why his foreign policy often fell short – Syria being the best but not the only example.  Few presidents have worshiped their words more than Obama.  To take one example: His farewell speech last week ran 50 minutes; the average for seven other post-World War II presidents was 18 minutes, according to the Wall Street Journal.

“Not only did he worship his words, but he assigned them more power than they possessed.  At times, he seemed to treat the White House as a graduate-school seminar where he was the smartest guy in the room and, therefore, deserved to prevail.  At news conferences, he gave long, convoluted responses full of subtleties that may have impressed political and media elites but didn’t do much to shift public opinion.

“Our government has turned into a quasi-parliamentary system.  Controversial proposals are supported and opposed mainly, or exclusively, by one party or the other.  This is a bad development.  It strengthens fringes in both parties, who hold veto power.  It discourages compromise and encourages stalemate....

“The question historians need to ask is whether Obama contributed to this dysfunctional system or was victimized by it....

“In this era of snap judgments, a true verdict on Obama is years away.”

Christi Parsons and Lisa Mascaro / Los Angeles Times

“He first achieved national renown with a speech hailing bipartisanship, and spent much of his presidency singing the praises of cooperation across party lines.

“But nearly all of his major accomplishments resulted from party-line votes or executive actions.

“And if Republicans accused him of paying too much attention to Democratic interests, allies blamed him for neglecting his party.  Democrats lost a dozen governorships and hundreds of state legislative seats, as well as control of Congress, during his tenure.

“President Obama leaves office with job approval ratings comparable to the high final marks for Presidents Reagan and Clinton. But unlike them, Obama’s support is overwhelmingly party-based....

“That’s disheartening for the leader who, as a little-known Illinois state legislator running for the U.S. Senate, was hailed at the Democratic National Convention in 2004 when he declared, ‘There’s not a liberal America and a conservative America; there’s the United States of America.’....

“Republican leaders say Obama never offered half a loaf – or anything like it.  They say he didn’t have the legislative experience to cut deals and was too aloof to engage in the fine art of wining and dining lawmakers to his side. 

“ ‘Almost without exception, President Obama begins serious policy discussions by explaining why everyone else is wrong,’ (Senate Republican leader Mitch) McConnell wrote in his 2016 autobiography.”

Peggy Noonan / Wall Street Journal

“President Obama delivered his farewell address, at a semi-raucous and sentimental rally in Chicago. There was nothing terrible in it and little strikingly good.  In the tradition of presidential warnings, he spoke of the need to work harder for economic opportunity and racial harmony.  We are too divided, sort ourselves out and away from each other, and ‘keep talking past each other.’  We are increasingly stuck in cultural and intellectual enclaves, and choose whatever news we’re inclined to believe.  All true.

“Mr. Obama’s has not been a successful presidency.  In foreign affairs his two terms, added to George W. Bush’s two terms, produced 16 years of unsuccess – an entire generation. Richard Haass, head of the Council on Foreign Relations, put it gently in conversation this week: Mr. Bush tried to do too much, which was unrealistic; Mr. Obama attempted too little, its own, perhaps more consequential unrealism.

“In domestic matters he put all his chips on health care and bullied it through without a single Republican vote, leaving his party fully owning it and the other with no investment in saving it.  His relationship with Congress started out at impasse proceeded to fraught and ended in estrangement. He saw this all as the other side’s fault. In his dealings with the Hill he was often imperious, sometimes a snot.  He allowed executive agencies such as the IRS to ruin their public reputations and stonewall scandal after scandal.  His most famous words as president came not in formal addresses but extemporaneous misjudgments – ‘red line,’ ISIS as the ‘jayvee team’ – plus an attempt to mislead: ‘If you like your plan, you can keep your plan.’

“He left his party weaker, in terms of public offices held, than at any point since the 1920s....

“Yet Mr. Obama’s approval ratings are at a respectable 55%.  I think I know some of why....

“Barack Obama had dignity in his personal sphere. He carried himself with confidence, like someone with self-respect.  You gathered, as you watched over eight years, that he did what a man does, taking care of his family, his wife and children.  He didn’t talk about it but he modeled it, represented it in his actions.  This, in an increasingly less parented country, was valuable....

“I put it here to remind everyone, mostly myself, that you can strongly oppose someone politically, really think you’re seeing bad things there, but have a responsibility to see and note what good there is.

“We’re losing that ability, in our enclaves.”

The other side on the Obama legacy....

Linda Stasi / New York Daily News

“Another open letter to the Obama sisters:

“Dear Sasha and Malia,

“Please do not believe the pap the Bush daughters, Barbara and Jenna, are pushing in their open letter to you.

“If they’d meant it sincerely, it wouldn’t have been an open letter, but a private one between presidential daughters.

“Here’s what’s true: They are the daughters of arguably the worst President in American history.

“You are the daughters of one of the finest.

“They have their whole lives to live down their father’s failures.

“You have your whole lives to live up to your father’s legacy.

“Their father left the economy in ruins, with half a million jobs lost.

“Your father’s term saw 11 million jobs added.

“Their father’s term ended with the worst economic crisis since the Great Depression.

“Your father brought an end to the recession, extended unemployment benefits, bailed out the U.S. auto industry, and upped American workers’ earnings 4.4 percent.

“Their father brought wrack and ruin upon not just the Middle East but upon the world.

“Your father worked to undo it.

“Their father was the pawn of Dick Cheney, Karl Rove and Ahmed Abdel Hadi Chalabi, a double or maybe triple agent who passed false information onto the disgraced New York Times reporter Judith Miller, which resulted in countless deaths.

“Your father was no one’s puppet, and instead saved countless American lives by withdrawing troops from the horrors of a war begun on false information.

“Their father and his minions convinced the cowards in our government to go to war and is responsible for the $6 trillion in taxpayer money wasted, as well as the half a million lives lost, and the ensuing destabilization of the Middle East.

“Your father tried, albeit unsuccessfully, to bring peace to the region.

“Their father was the man in charge when nearly 3,000 Americans were killed on 9/11.

“Your father’s eight-year term ended without one foreign terrorist invasion.

“Their father kissed the Saudi prince on the lips, in seemingly complete denial that 15 of the 19 hijackers had been Saudi citizens.

“Your father kissed no one when it came to America’s safety....

“So Sasha and Malia?  Ignore the Bush daughters’ advice, and rely on yourselves to succeed as post-White House young women.

“They have a father to be ashamed of, while you have one of which you can be very proud.”

Wall Street

Federal Reserve Chair Janet Yellen said in a speech Wednesday night that with inflation headed toward the Fed’s 2% target, and with the economy near full employment, it “makes sense” for the central bank to raise interest rates gradually.  “Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road – either too much inflation, financial instability, or both,” Yellen told a San Francisco audience.  “In that scenario, we could be forced to raise interest rates rapidly, which in turn could push the economy into a new recession.”

In a separate speech the next day, Yellen said: “Economic growth more broadly seems unlikely to pick up markedly in the near term given the ongoing restraint from weak foreign demand.”

But then she reiterated the Fed doesn’t want to wait too long to raise rates and let inflation get out of control.

Yes, as I’ve written for about a year, the Fed could be caught with its pants down, which I’ve argued it already has been.  So while the Fed won’t do anything at the Jan. 31-Feb. 1 meeting, it is a certainty they will hike another ¼-point at the March 14-15 confab.

Speaking of inflation, the December consumer price index was 0.3%, ex-food and energy 0.2%.  For 2016, the CPI rose 2.1%, 2.2% on core.

The 2.1% was the first time for the index over 2% since May 2014, but the Fed’s preferred PCE barometer is still below 2.

Separately, industrial production for December was 0.8%, the strongest since Nov. 2014.  December housing starts came in at a strong 1.226 million annualized pace.

Europe and Asia

This was a big week for Britain, and the European Union, on the Brexit front.  British Prime Minister Theresa May laid out her nation’s strategy for withdrawing from the European Union in a speech in London on Tuesday.  Some key points in May’s own words:

“This agreement should allow for the freest possible trade in goods and services between Britain and the EU’s member states.  It should give British companies the maximum freedom to trade with and operate within European markets, and let European businesses do the same in Britain.  But I want to be clear: What I am proposing cannot mean membership of the single market.

“We seek a new and equal partnership between an independent, self-governing, global Britain and our friends and allies in the EU.  Not partial membership of the European Union, associate membership of the European Union or anything that leaves us half-in, half-out.  We do not seek to adopt a model already enjoyed by other countries.  We do not seek to hold on to bits of membership as we leave.  No.  The United Kingdom is leaving the European Union and my job is to get the right deal for Britain as we do.

“An important part of the new partnership...will be the pursuit of the greatest possible access to the single market on a fully reciprocal basis through a comprehensive free trade agreement.

“Because we will no longer be members of the single market, we will no longer be required to contribute huge sums to the EU budget.  There may be some specific EU programs we might want to participate in. The days of Britain making vast contributions to the European Union will end.

“I must be clear: Britain wants to remain a good friend and neighbor to Europe.  Some voices are calling for a punitive deal that punishes Britain and discourages other countries from taking the same path. That would be an act of calamitous self-harm for the countries of Europe and it would not be the act of a friend.  Britain would not, indeed we could not accept such an approach.

“While I am sure a positive agreement can be reached I am equally clear that no deal for Britain is better than a bad deal for Britain.

“I want Britain to be able to negotiate its own trade agreements but I also want tariff-free trade with Europe and cross-border trade to be as frictionless as possible.  That means I do not want Britain to be part of the common commercial policy...

“I want the United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before. I want us to be a secure, prosperous, tolerant country, a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead.  I want us to be a truly global Britain, the best friend and neighbor to our European partners, but a country that reaches beyond the borders of Europe too.  A country that goes out into the world to build relationships with old friends and new allies alike....

“You will still be welcome in this country as we hope our citizens will be in yours.

“Brexit must mean control of the number of people who come to Britain from Europe and that is what we will deliver.  We will ensure we can control immigration to Britain from Europe....

“At a time when together we face a serious threat from our enemies, Britain’s unique intelligence capabilities will continue to help to keep people in Europe safe from terrorism.

“And at a time when there is growing concern about European security, Britain’s servicemen and women, based in European countries including Estonia, Poland and Romania, will continue to do their duty.”

The next day, addressing the World Economic Forum in Davos, May said Britain would “step up to a new leadership role as the strongest, most forceful advocate for free markets and free trade anywhere in the world.”

May said the Brexit referendum was a vote to “restore our parliamentary democracy and national self-determination.  A vote to take control and make decisions for ourselves.”

Britain would become “even more global in action and spirit too.  That is who we are as a nation. Britain’s history and country is profoundly internationalist,” she said.

“We are going to be a confident country that is in control of our destiny again.  A country in control of its own destiny is more, not less able, to strengthen the multi-lateral rules based system.”

As for May’s insistence the U.K. will be able to agree to exit terms, including a trade deal, by 2019, the EU Commission’s chief Brexit negotiator Michel Barnier has poured cold water on the plans.

And Dutch finance minister Jeroen Dijsselbloem said that any attempt to turn the U.K. into a low-tax center after leaving the EU would be “unproductive and damaging.”  This is the so-called plan B in the event of getting a ‘bad deal’ in the negotiations.  German finance minister Wolfgang Schauble echoed such talk, saying he expects the U.K. to continue to adhere to international taxation standards, whatever its status with the EU.

German chancellor Angela Merkel on Wednesday pledged to hold the rest of the EU together as the U.K. starts to implement its Brexit plans.

“The be-all and end-all is that Europe doesn’t let itself be divided, and we will ensure this through very intensive contacts.”

Merkel said she wouldn’t discuss specifics until Britain formally files its Article 50 notice to leave the union – which is expected by end of March – but she reiterated her warning that the U.K. would have no “cherry picking” of EU rights as access to the single market was bound with the EU’s four freedoms.  [Freedom of movement of goods, people, services and capital over borders.]

But Merkel added she was appreciative of the clarity of Prime Minister May’s speech, saying there was a clear impression of what the U.K. wanted.

JPMorgan CEO Jamie Dimon said he hoped European Union leaders would examine what caused the U.K. to vote to leave and then make changes.  Dimon warned “the eurozone may not survive” if nationalist politicians such as Marine Le Pen come to power.  [The first test of this is March 15 and parliamentary elections in the Netherlands, where Geert Wilders’ Freedom Party leads in the polls.]

Since the referendum last June, European markets have been too sanguine on Brexit, but these negotiations are not going to be easy. 

Editorial / Wall Street Journal

“The British have been consumed since they voted to leave the European Union last year with whether Brexit should be ‘hard’ or ‘soft.’  Theresa May all but ended that debate Tuesday by saying Brexit means a clean and honest break from the EU, and the Prime Minister is smart to do so.

“Mrs. May said Britain will forgo membership in the tariff-free common European market and instead seek a new and comprehensive free-trade agreement with the EU.  London also is ready to leave Europe’s customs union, which provides common external tariffs for EU nations.  Mrs. May said Britain will negotiate its own customs deal with the EU to simplify trade in goods.

“This framework sent advocates of softer Brexit options running for the smelling salts, with the pound falling more than 1% against the dollar Monday after the contents of Mrs. May’s speech leaked over the weekend.  What did they expect?  The political reality after June’s referendum is that there has to be some form of exit in Brexit, and the pound rallied Tuesday.

“Staying in the single market would require Britain to continue contributing to the Brussels budget, accept EU economic rules and the jurisdiction of the European Court of Justice, and admit levels of immigration that have become politically unacceptable.  Remainers said these concessions were worth making, but voters disagreed and they must be respected.

“Mrs. May’s strategy should prevent the EU from hamstringing Britain during negotiations and after Brexit is final.  Leaving the single market and customs union is the only way London can negotiate its own trade deals with the rest of the world.  President-elect Donald Trump told the Times of London the U.S. would start talks soon over a bilateral trade deal with Britain, and that opportunity can’t be missed.

“The prospect of a U.S.-British deal might also be useful as leverage with the EU.  Some EU voices continue to sound as if they want to punish Britain as a lesson to other countries that might consider leaving.  They want to drive the hardest bargain possible, and the lure of the common market was their best card.  Mrs. May has taken it off the table before they could play it.

“Both sides can now negotiate what is in their best interests, and the smart play is for both to help the other succeed.  Britain is a huge market for European goods, while Britain wants to remain Europe’s main financial center.  Mrs. May rightly warned in her speech that a punitive EU deal for Britain would be an act of ‘calamitous self-harm’ for the Continent.

“The biggest threat to the EU isn’t a Britain that succeeds outside the common market.  It is an EU that keeps failing to provide the economic prosperity demanded by its frustrated citizens.  What drove Britain from the EU was the Continent’s failure on immigration control, fighting terrorism and delivering jobs and rising incomes.”

Philip Stephens / Financial Times

“British prime ministers are prone to spend their last days governing from a bunker.  Convinced of their own immortality they dispense with forthright advisers in favor of devoted aides.   The passage of time narrows their sight of the world beyond the front door of 10 Downing Street.

“Theresa May has started out where her predecessors ended up.  Scarcely six months in the job, Mrs. May is roundly mistrustful of her senior civil servants.  Officials are shut out of decision-making.  Unvarnished advice invites histrionics from her political sidekicks.  It is not an intelligent way to run a government – never mind one charged with managing the biggest upheaval in the nation’s political and economic life since the end of the second world war.

“Mrs. May has now set out her plans for a ‘hard’ – a clean break with the EU that will take Britain out of the single market and the customs union.  There can be no half-in, half-out, she said, if Britain wanted to curb EU migration and renounce the jurisdiction of the European Court of Justice.

“The prime minister had previously dismissed the idea of such a trade-off.  She would get a bespoke deal, and Britain, in the tactful phrase of Boris Johnson, the foreign secretary, would have its cake and eat it.  Sir Ivan Rogers, the U.K.’s permanent representative in Brussels, resigned in frustration....

“The prime minister’s speech offered the usual pro-forma reassurance about strong, post-Brexit ties with Europe and fanciful guff about the vast new opportunities for a nation now rechristened ‘Global Britain.’  Yet no one should doubt the cost, economic and geopolitical, of the proposed break with the EU.

“Britain will cease to be a platform for foreign businesses – manufacturing and services – that want to sell unimpeded into the world’s largest market.  Companies will face new barriers to trade with an EU 27 accounting for more than two-fifths of British exports.  Dozens of third-country trade deals will be upended.  As economic ties weaken, political relationships will wither.  British prime ministers will be absent from the councils of their own continent.

“Perhaps Mrs. May has understood this in her eagerness to court U.S. president-elect Donald Trump.  Before the election she shared the Westminster establishment view of Mr. Trump as a dangerous vulgarian.  Now, word has gone out from No. 10 that nothing is to be said or done to put in question Britain’s admiration for the new administration.”

Britain’s auto sector is a key in the coming Brexit negotiations, as Britain tries to get the best possible EU market access.  Typical of the issues, the chairman of Japanese carmaker Toyota told the Financial Times this week: “We have seen the direction of the prime minister of the U.K., (so) we are now going to consider, together with the suppliers, how our company can survive.”

And then you have the critical financial sector, with Goldman Sachs providing an example of the issues every firm faces.  Goldman is considering moving up to 1,000 staff from London to Frankfurt because of concerns over what Brexit will yield.

As for Donald Trump and the EU, and his embracing skepticism of the club, while also calling NATO “obsolete,” German Chancellor Merkel told reporters, “We will cooperate with him on all levels, of course.”  But she said Europeans will need to take responsibility for themselves.  “We Europeans have our destiny in our own hands,” she said.  [Washington Post]

Eurobits....

The European Central Bank’s latest quarterly survey of professional economists has revised eurozone GDP up to 1.5% from an early projection of 1.4%, while inflation is expected to average 1.4% from an earlier estimate of 1.2% in 2017.  Unemployment is expected to drop to 8.9% in 2019.

Inflation in the eurozone hit a 3-year high of 1.1% annualized in December, though this is still well short of the ECB’s 2% target.

Germany is at 1.7% ann., France 0.8%, Italy 0.5%, Spain 1.4% and Greece 0.3%. 

The ECB met this week and it was uneventful.  Draghi said he wasn’t worried about the recent hike in inflation in the eurozone, claiming there was still no “convincing” evidence of inflationary momentum, though Germans see their 1.7% pace and get worried the ECB is behind the curve.

Turning to Asia, in China, the government reported that the economy grew 6.8% in the fourth quarter, 6.7% for the full year, the slowest full-year figure since 1990 but within the government’s target range of 6.5-7%...sooprize sooprize!  6.7% is down from 6.9% in 2015.

The National Bureau of Statistics reported that the average price for new residential housing across 70 major cities rose 12.4% in December, year over year, though prices fell 0.2% from November’s rate, the first deceleration since March 2015.

In month-on-month terms prices rose in 46 out of 70 cities  Year on year, prices rose in 65 of the 70.  In Beijing they were 28% higher than a year prior.

Fixed-asset investment (spending on new factories, housing and infrastructure) grew 8.1% last year, the slowest pace since 1999.  Retail sales rose 9.6%, with online sales climbing 26.2%.

But with all the above numbers, and the jokes surrounding some of them, on Tuesday, Northeast China’s Liaoning province confirmed that some of its economic data had been faked between 2011-2014.

In a speech to the World Economic Forum in Davos on Tuesday, President Xi Jinping defended free trade and globalization, drawing a contrast with Donald Trump.

“No one will emerge as a winner in a trade war,” said Xi, the first sitting Chinese president to attend the annual gathering.  “Pursuing protectionism is just like locking one’s self in a dark room.  Wind and rain may be kept outside, but so are light and air.”

Xi sought to portray Beijing as a benevolent power intent on upholding an international order that has boosted common prosperity, exhorting world leaders to “join hands and rise to the challenge.”

“Some people blame economic globalization for the chaos in our world,” Xi said, while acknowledging globalization had resulted in growing income inequality within many countries.

And while Donald Trump has accused of China of manipulating its currency to boost exports, Xi said: “China has no intention to boost its trade competitiveness by devaluing the renminbi, still less will it launch a currency war.”

But Xi’s talk was fraudulent.  Everyone in attendance knew that.  You try to do business in China today and you’re playing with fire.  But the attendees in Davos all kissed Xi’s ring anyway.

Editorial / Washington Post

“Xi Jinping took a stab at seizing the mantle of global economic leadership on Tuesday, delivering a lengthy defense of free trade and globalization at the annual World Economic Forum in Davos, Switzerland.  To some extent, it worked: Many in the elite crowd of business leaders, government ministers and journalists seemed thrilled to hear the Chinese president, in his first appearance at the swishy forum, proclaim that there was ‘no point in blaming economic globalization for the world’s problems’ – particularly as he spoke on a day when British Prime Minister Theresa May was outlining a ‘hard exit’ from the European Union and European newspapers were quoting President-elect Donald Trump on his plans for punitive tariffs.

“Mr. Xi certainly was shrewd to position himself as the alternative to Mr. Trump, and the eager response to him was a demonstration of the vacuum of U.S. leadership the incoming president may soon create.  But before China’s ruler is crowned the new champion ‘Davos man,’ it ought to be pointed out that his regime is, in most respects, far less liberal or embracing of globalization than the Trump administration will be even if the worst fears of its critics come true.

“For example, Mr. Xi declared that ‘we must remain committed to developing global free trade and investment, promote trade and investment liberalization...and say no to protectionism.’  Yet his own regime has sharply tightened the flows of capital and investment across China’s borders.  Imagine a Trump administration placing controls on the transfer of more than $5 million out of the United States, as the Xi regime just did in China.  Foreign companies that wish to invest in the country often still are forced to partner with local companies and hand over their technology.  Major U.S. Internet companies, including Facebook and Twitter, remain locked out of the market.

“Inconveniently for Mr. Xi, the American Chamber of Commerce in China released a report on Wednesday showing that 81 percent of 462 surveyed companies said they felt less welcomed in the country than before, and a quarter were reducing their operations or planning to do so.  ‘It is becoming apparent that the benefits of globalization are being taken for granted or even forgotten’ by Beijing, said a statement by AmCham China Chairman William Zarit.

“That’s not to speak of the side of globalization conspicuously omitted by Mr. Xi, who carefully used the modifier ‘economic.’ Since he took power in 2012, flows of information inside China as well as across its borders have been radically curtailed.  Independent civil society has been virtually shut down, and critical journalists and academics silenced; even lawyers who defend them have been persecuted and imprisoned.  While China barrages U.S. satellite viewers and newspaper readers with state-produced propaganda, the New York Times is banned in China, Google is censored, and critical journalists and academics are not allowed into the country.”

Meanwhile, on the economic front, a report from Standard Chartered estimates capital flows out of China totaled almost $730bn in 2016, a near-record level.  Outflows were $66bn in December, down from November’s $75bn.

At the same time, foreign direct investment flows turned positive for the first time in eight months with a $3bn inflow.

China’s foreign exchange reserves ended the year at $3.01 trillion, down $41bn last month.  [Financial Times]

In Japan, department store sales fell in December as consumers pulled back, down 1.7% year on year, though this was better than November’s -2.4% yoy pace.  But Japan’s department store sales fell every month last year except February.  Overall retail sales are released Jan. 30.

Street Bytes

--Stocks fell in this holiday-shortened week, albeit marginally, with the Dow Jones losing 0.3% to 19827, the S&P 500 0.15% and Nasdaq 0.3%.  The post-election momentum has faded with the reality that some portions of the Trump agenda, namely tax reform and an infrastructure program, will take time.

--U.S. Treasury Yields

6-mo. 0.61%  2-yr. 1.19%  10-yr. 2.47%  30-yr. 3.05%

The short end of the curve was unchanged, but the long end slumped (yields rose) some on the hawkish talk of Chair Yellen on the inflation front.

--OPEC’s monthly report forecast demand for its crude would average just 32.1m barrels a day this year, which is below its target output level of around 32.5m b/d.  Earlier, Saudi Arabia suggested that the output cuts agreed to in November may not need to be extended beyond the first half of the year, with OPEC next formally meeting in May.

But as oil has rallied almost 20% since OPEC agreed to curbing output in November, traders are watching to see whether the rise above $50 is enough to revive the U.S. shale industry.  OPEC’s latest report said U.S. production would expand just marginally in 2017.

OPEC is forecasting global demand will rise by almost 1.2m b/d this year to 95.6m b/d.  In December, OPEC’s oil output was 33.1m b/d, down from the record 33.3m b/d of November.  The planned cuts took effect on January 1, with Saudi Arabia, Venezuela, UAE and Nigeria making the largest reductions.

--Goldman Sachs’ fourth-quarter profit tripled with net income at $2.35bn, much better than a litigation-hit period a year earlier, while revenue rose 12%, with trading activity up 78% in the fixed-income, currencies and commodities unit.

--Citigroup reported revenues in its fixed-income division rose 36% from a year earlier amid a flood of orders post-election as well as the Fed’s decision to hike interest rates.  The equities business saw a 15% rise in revenues.

But revenues across the bank fell 8% as Citi continues to dispose of businesses around the world in its ongoing efforts to recover from the financial crisis, with Citi striking deals to sell assets in Canada, Argentina and Brazil.

--Morgan Stanley’s profit doubled in the fourth quarter, far exceeding expectations, as trading activity surged in keeping with the other investment banks post-election.  Earnings soared to $1.51 billion from $753 million a year earlier.  Revenue in the bank’s fixed-income unit jumped to $1.5bn from $550 million, while revenues from equities trading rose to $2bn from $1.8bn.

--Credit Suisse has agreed to pay $5.3bn to settle claims that it misled investors about the quality of mortgage-backed securities that it sold in the lead-up to the 2008 financial crisis.  $2.5bn of it is a fine, the other $2.8bn for relief to struggling homeowners, borrowers or communities.

--Target was the latest retailer to report holiday sales that came in below expectations as the company slashed its full-year earnings guidance, the shares falling 5% in response on Thursday.

Same-store sales for November and December fell 1.3% and it now expects a similar drop for the fourth quarter compared with its guidance of -1 to +1 percent.

“While we were pleased with Black Friday sales, December digital sales growth of more than 40% and continued strength in our Signature Categories, these results were offset by early season sales softness and disappointing traffic and sales trends in our stores,” said CEO Brian Cornell.

Target joins a long list expressing similar sentiments about the holidays, including Kohl’s, Macy’s, Sears, JCPenney and Tiffany.

The challenging outlook has also forced Neiman Marcus and Claire’s to pull their IPOs this month.

--Speaking of jeweler Tiffany, the company said its sales during the holiday season were “somewhat lower” than it had expected, hurt by a drop in sales at its flagship store in New York that is located next to Trump Tower.  Sales there declined a whopping 14 percent. Stepped up security in the area hasn’t made access to the store easy.

Worldwide net sales rose 0.5 percent, while worldwide comparable (same-store) sales fell 2 percent as growth in Asia-Pacific and Japan was offset by weakness in the Americas and Europe.

--Lowe’s, the home improvement chain, announced it was eliminating 2,400 positions, most of them in management...as in assistant store managers, it said in a statement.

--IBM topped estimates for revenues and earnings in the fourth quarter, but after an initial pop in after-hours trading, the shares fell* on concerns about the quality of the numbers (the effective tax rate was lower than last year’s, for example), plus the overall sales decline extended to a 19th straight quarter, down 1% from a year ago.

While revenue from its legacy operations – sales of hardware that companies need to run their data centers – are declining at a faster pace than gains in its growth businesses such as cloud and analytics, the company said the latter two areas grew 33% and 11%, respectively, more than a year ago.

*Friday, the shares rallied back some.

--Netflix blew past quarterly subscriber expectations, approaching 100 million as it celebrates a decade online.  The company said it added 1.9 million subscribers in the U.S. after stripping out cancellations for the quarter ended Dec. 31. Total U.S. membership was 49.4 million.  International net additions were 5.1 million totaling 44.4 million. So total new subscribers were 7 million.  Netflix had fourth-quarter net additions of 1.45 million domestically and 3.75 million internationally.

Profits grew to $66.7 million, while revenue rose 36% to $2.48bn, both in line with expectations.

Aside from its 10th year of streaming, it’s also the fourth year since Netflix launched original programming.  And this week Netflix announced a real coup, signing Jerry Seinfeld and his “Comedians in Cars Getting Coffee” program for a reported $100 million.  [Good lord.]

Seinfeld had been doing it on Crackle, Sony’s streaming network, so a big blow for them.  But also a blow for HBO, which has been king of one-off comedy programming, as well as series like “Curb Your Enthusiasm,” which obviously has a connection with Seinfeld.

--Shares in Toshiba nosedived again on Thursday, down over 25%, the biggest one-day decline in more than four decades, as concerns over huge writedowns at the company’s nuclear business prompted further fears of a full-blown crisis.  Japanese media reported the writedowns could be as high as $6bn, when earlier the scale was said to be between $1bn and $4.5bn.  But Toshiba’s shareholder equity is less than $4bn.  Uh oh.  Some analysts are talking about a symbol of Japan’s industrial progress being delisted from the Tokyo Stock Exchange.

--General Motors said it would invest $1bn in the U.S. to create and safeguard 1,500 jobs, becoming the latest automaker to pledge to bring jobs into the country ahead of Trump’s inauguration.  The president-elect had criticized GM for expanding production in Mexico.

GM made just under 700,000 cars in Mexico in 2015, and exported 470,000 of these to the U.S. or Canada.

Donald Trump quickly tweeted: “With all of the jobs I am bringing back into the U.S. (even before taking office), with all of the new auto plants coming back into our country and with the massive cost reductions I have negotiated on military purchases and more, I believe the people are seeing ‘big stuff.’”

Separately, Hyundai announced a $3bn investment drive in the U.S., with the suggestion it’s next plant could be in the U.S.  [Either Hyundai or its sister Kia division.]

--Not to be outdone, Bayer, the German conglomerate, said it will invest $8bn in research and development in the U.S. over the next six years as part of its planned acquisition of Monsanto.  No doubt the U.S. investment should bolster Bayer’s chances of gaining approval from antitrust regulators, a combination of Bayer and Monsanto creating the world’s largest supplier of seeds and crop sprays to farmers.

But with the merger between DuPont and Dow Chemical, plus ChemChina’s acquisition of Switzerland’s Syngenta, there is the fear farmers will have few choices and ultimately prices will rise.

--As reported by the Wall Street Journal, the Education Department released a memo showing how badly they had overstated student loan repayment, like they inflated the repayment rate for 99.8% of all colleges and trade schools in the country.

“The new analysis shows that at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years.”

--SpaceX resumed flights, launching a Falcon 9 vehicle on Saturday, the first mission by the company since one of its vehicles exploded on the launch pad in September.  The return to space enabled SpaceX to renew what was the original global handheld satellite phone network, run by Iridium.

A few minutes later, the first stage of the rocket landed successfully on  a platform in the Pacific ocean.

The flight had 10 spacecraft for Iridium’s network, with a total of 81 satellites having been ordered from the European manufacturer Thales Alenia Space to completely overhaul the original but now aging infrastructure.

--Billionaire investor George Soros hasn’t been right in years, but he has a microphone and speaking at the World Economic Forum he said Donald Trump was a “con man” and that the stock market rally since his election will come to a grinding halt, British Prime Minister May won’t last long because of her divided cabinet, while Britons are in denial about the impact of Brexit, and China is going to become more repressive and that Xi Jinping’s growth model won’t work.  [Actually, I agree with much of this.]

--Another billionaire investor Carl Icahn is coming off a second poor investment year, as reported by Andrew Bary in Barron’s.  The nearly $6bn hedge fund that Icahn oversees suffered a loss of 20.3% in 2016 after a decline of 18% in 2015, according to a regulatory filing.

The weak 2016 performance was largely a result of Icahn’s bearish stance on the market.  Even though he announced he made a large bullish bet on election night as global markets were tanking immediately following Trump’s win, those purchases clearly weren’t enough to offset his net short position.

--The New York Times said it would cut its budget and eliminate an unspecified number of print-centric editing and production jobs this year, but, it will also invest an additional $5m to cover the Trump administration, according to top editors.

“We cannot pretend to be immune from financial pressures but we view this moment as a necessary repositioning of The Times’ newsroom, not as a diminishment,” Dean Baquet, executive editor, and Joe Kahn, managing editor, wrote in a memo to staff.

The Times has a goal of increasing digital revenue to $800m by 2020.  Last year it was nearly $500m, with 1.5m paying digital subscribers vs. more than 1m print subscribers.

--Construction-related fatalities in New York City rose from 17 in 2011 to 25 in 2015, and in the state as a whole, including the city, from 33 to 55, according to a New York State report.

But over this same period of time, inspections have dropped 27%, as the number of OSHA inspectors in New York State has fallen from 82 to 66.  [Crain’s New York Business]

--According to a report from New York City Comptroller Scott Stringer that includes the latest data, immigrants have played a critical role in the city’s economic success, which I was actually writing back in the Giuliani years (as he himself was touting, too).

Stringer’s study finds that 40% of New Yorkers today were born in other countries, the highest percentage since the turn of the last century.

And as Greg David notes in Crain’s New York Business, “In most cities, one group represents the vast majority of newcomers.  In New York, people from the leading source, the Dominican Republic, make up only 14% of immigrants. The top 10 countries account for barely more than half.”

--Editorial / Wall Street Journal

“Public tastes change and nothing lasts forever, but you don’t have to be a nostalgist to feel some sense of loss at the news that the Ringling Bros. and Barnum & Bailey Circus is closing down after 146 years. All the more so because abusive and bogus litigation contributed to the decision.

“Kenneth Feld, CEO of Feld Entertainment, has announced that the circus will hold its final performances in May.  ‘Ringling Bros. ticket sales have been declining, but following the transition of the elephants off the road, we saw an even more dramatic drop,’ said Mr. Feld, whose family has run the Big Top for nearly 50 years.  ‘This, coupled with high operating costs, made the circus an unsustainable business for the company.’

“Animal acts, especially elephants, have long been a major circus attraction for adults as well sa children.  But Ringling Bros. became a target of a coordinated legal assault in 2000 that stretched for years and cost the company tens of millions of dollars.

“The Feld family prevailed in court...the allegations of elephant abuse were false, and the losers agreed to pay Feld millions of dollars in settlements.

“But lawsuits take their toll in public relations and management attention as well as costs....Without the elephants the circus was even less able to attract families amid competition from video games, live-streaming of TV and movies, and other short-attention-span diversions.

“Perhaps market forces would have ended the circus eventually, but America would be a better place if left-wing activists didn’t always seek to destroy legal industries they dislike.”

Ringling’s last show is at the Nassau County Coliseum on May 21.  That will be a sad day.  I can’t imagine what the performers will be feeling.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: It’s pathetic that ISIS was allowed to re-enter the ancient city of Palmyra a few weeks ago and now we’re learning it is once again destroying part of the Roman amphitheater from the second century.  IS previously held the site for ten months up to March 2016.

ISIS has reportedly killed at least 12 people in Palmyra, beheading four, according to the Syrian Observatory for Human Rights. The victims included state employees and government soldiers, with some of the killings carried out in the amphitheater.

ISIL also launched a large-scale attack in eastern Syria, storming and capturing parts of Deir Ezzor, leaving 150,000 residents in the government-controlled areas of the city surrounded.  82 were killed in the initial fighting according to the Observatory, 40 of whom were ISIS fighters.

And last weekend, 48 were killed in a truck bombing in the Syrian border town of Aza.  ISIS claimed responsibility.  They obviously aren’t going away.

Separately, Russia announced it had joined forces with Turkish jets to target IS militants holding the town of al-Bab, 25 miles northeast of Aleppo.  It was the first time the air forces of Russia and Turkey had teamed up in this way.

In Iraq, Iraqi forces are making progress in the battle for Mosul, but now comes the toughest fighting in the west of the city.  The offensive is three months old, as ISIS has put up far more of a fight than many thought it would.

According to the United Nations, 750,000 people remain in Mosul’s west bank, which includes the old city and landmarks such as the mosque where ISIS leader Abu Bakr al-Baghdadi proclaimed his “caliphate” in June 2014.

The UN and other relief agencies were preparing for an unprecedented exodus of up to a million people but there are currently only around 150,000 civilians displaced.  The main concern today is that 300,000 children are in west Mosul and now they face a siege.

There were also reports an air strike on Mosul killed up to 30 civilians in a raid that appeared to target a senior militant who was not in the building at the time, according to Iraq Body Count, a group run by academics and peace activists.

Iran: Awful tragedy in the heart of Tehran on Thursday as an iconic 17-story building, that was part of a mega mall, collapsed during a massive fired, trapping a large number of firefighters, at least 20 of whom were killed (another 25 missing as of Friday night), according to IRIB. 

The building went down in a matter of seconds, on live TV (state television), which was doing an interview with a journalist at the scene.  Some of the pictures are heart-breaking, especially of firemen whose comrades were caught inside.

The builder of the 53-year-old tower was an Iranian Jewish businessman Habib Elghanian and it was the tallest building in the city at the time.  He was then tried on charges that included espionage and executed in the months after the 1979 Islamic Revolution, a move that caused much of the country’s longstanding Jewish community to flee. 

This could have political implications as Tehran’s mayor is a potential presidential candidate later this year. 

Separately, Iranian President Hassan Rouhani said on Tuesday that he was optimistic about the future of the nuclear deal and said Donald Trump cannot unilaterally cancel the accord.

“The president-elect has shown he is not happy...calling it the worst deal ever signed.  This is only propaganda. I don’t think he can do much when he goes to the White House,” Rouhani said in a news conference.

Israel: A conference aimed at kick-starting peace talks between Israel and the Palestinians concluded last weekend in Paris with more than 70 organizations and countries pledging their support for a two-state solution, but neither Israel nor the Palestinians were represented, so call the whole effort worthless.

Meanwhile, Hamas and Fatah have agreed to establish a Palestinian unity government, the two factions said in a statement from Moscow, where they were holding unity talks.

But there have been rare mass protests in Gaza over the power situation as there is a huge gap between production capacity and consumption needs.  On regular days, there is only 7 or 8 hours of electricity, but the Hamas government in the winter is forced to reduce supply to three or four hours.

Qatar announced it would contribute funds to keep the Gaza power plant running and Turkey is delivering 200,000 tons of fuel to get Gazans through the winter.

Turkey: The man suspected of carrying out the New Year’s Eve attack on a nightclub in Istanbul was trained in Afghanistan, the city’s governor says.  Reportedly, the attacker’s ISIS controller changed the target at the last minute.  He was originally going to launch the attack in Taksim Square. 

Libya: U.S. B-2 bombers carried out air strikes against Islamic State camps outside of Sirte that reportedly killed at least 80 militants, according to U.S. defense officials.  The strikes were carried out with the cooperation of the UN-backed Government of National Accord.  Officials insisted there were no women or children in the camps.

Last month, Libyan forces backed by U.S. air strikes cleared ISIS out of Sirte, though at a heavy cost.

Russia: Nikki Haley, nominee to be U.S. ambassador to the United Nations, said in her confirmation hearing: “Russia is trying to show their muscle right now.  It is what they do. And I think we always have to be cautious.  I don’t think that we can trust them.  I think that Russia has to have positive actions before we lift any sanctions on Russia.”

But Donald Trump has been receiving fawning television coverage in Russia, hailing him as “a man of his word.” 

However, as Bloomberg reported, there is growing skepticism that détente with the U.S. can be achieved, especially after seeing the confirmation testimony of many of Trump’s cabinet selections who have been taking a tougher line on Russia.  And Trump’s often contradictory statements are worrying Russia as well.  For example, Trump’s statement a few weeks ago he wanted to modernize and greatly expand America’s nuclear force, seemingly calling for a new arms race, but then the next week he spoke of reaching an agreement for “very substantially” cutting both sides’ nuclear arsenals.

Meanwhile, secretary of state-designate Rex Tillerson called Russia a “danger” and defense secretary-designate Ret. Gen. James Mattis put Russia at the top of his principal-threat list.  [Mattis was then confirmed by the Senate Friday evening.]

Separately, a cybersecurity professional told Defense One’s Patrick Tucker that Vladimir Putin’s kompromat campaign of attempted data theft and election meddling continues across Europe.  France’s minister of defense recently said he expects Russian actors to target his country’s election.  “Of course, one cannot be naïve,” said Jean-Yves Le Drian.

The objective is to advance Marine Le Pen, who supported Putin on the issue of Crimea, aside from calling for an exit from the EU.

The Kremlin is also targeting Germany, and officials in Sweden have said they see increased Russian activity there.

Putin himself said on Tuesday that an unsubstantiated report that alleged Russia had gathered compromising material on Donald Trump was a hoax.  Putin, who reiterated he had never met Trump, said he hoped that Moscow and Washington could eventually get their troubled relations back to normal.

China: Beijing announced through state media that if Donald Trump continues to provoke China over Taiwan and the “One China” policy it would “take off the gloves.”

The China Daily said: “If Trump is determined to use this gambit in taking office, a period of fierce, damaging interactions will be unavoidable, as Beijing will have no choice but to take off the gloves....

“The Chinese mainland will be prompted to speed up Taiwan reunification and mercilessly combat those who advocate Taiwan’s independence,” the paper’s editorial said.

An editorial in the Global Times said: “For every bit of empty promise that Taiwan’s pro-independence forces get from the U.S., we will make them pay the price; for every bit of ‘good news’ they get, they will feel multiple fear.  The Chinese mainland is wise and strong enough to turn the ‘lifeline’ of pro-independence forces into a rope to strangle them.”

Gideon Rachman / Financial Times

“The questions surrounding Donald Trump’s relationship with Russia are lurid and compelling.  But they are distracting from a more important and more dangerous story: the growing signs that the Trump administration is heading for a clash with China.

“The latest indication came last week at the confirmation hearings of Rex Tillerson, who is Mr. Trump’s nominee to be U.S. secretary of state.  Mr. Tillerson signaled a significant hardening in the U.S. attitude to the artificial islands that Beijing has been building in the South China Sea. He likened the island-building program to Russia’s illegal annexation of Crimea and said that the Trump administration intended to send a clear signal to Beijing that ‘your access to those islands is not going to be allowed.’

“That sounded like an American threat to blockade the islands, on which China has been building military installations. China would almost certainly attempt to break such a blockade, by sea or air. The stage would be set for a modern version of the Cuban missile crisis.  The Chinese state-sanctioned media reacted ferociously to Mr. Tillerson’s statement.  The Global Times, a nationalist paper, warned of ‘a large-scale war,’ while China Daily spoke of a ‘devastating confrontation between China and the U.S.’...

“Changes in U.S. policy on Taiwan and trade point in the same direction....last week, Mr. Trump gave an interview in which he underlined that his administration might indeed jettison the One China policy, unless Beijing makes concessions on trade.  Since China has repeatedly insisted that it will go to war rather than accept Taiwanese independence, this too is a high-risk policy....

“Put together the three Ts – Taiwan, Tillerson and trade – and there seems little doubt that Trump’s America is steaming towards a confrontation with China.  That is all the more likely since China under President Xi Jinping has itself moved in a markedly more nationalist direction.”

South Korea: A Korean court turned down an arrest warrant for Samsung’s chief, Jay Y. Lee, in a big blow to prosecutors who are trying to tie him to the bribery and corruption scandal that has led to the impeachment of President Park Geun-hye.  Lee was allowed to go home after being detained on multiple charges.

So while prosecutors are not happy, Samsung shareholders and executives are as a long court case involving Lee would have been a potentially major negative for the world’s biggest maker of smartphones, flat-screen televisions and memory chips.

The Constitutional Court is still reviewing the impeachment of President Park and will rule on that in the next month or two.

Nigeria: More than 70 were killed in an accidental military bombing at a camp for displaced people fleeing Boko Haram militants, with at least nine of them humanitarian workers.  This makes you want to cry.

Gambia: Foreign troops crossed the border on Thursday with orders to dislodge Yahya Jammeh, the repressive leader who had refused to step down after losing a presidential election last month.  Friday, Jammeh agreed to go into exile.

Brazil: The Supreme Court justice who has been overseeing the investigation of the Petrobras political kickback scandal, the largest ever uncovered in the country, was killed in a small plane crash that claimed five lives overall.  Bad weather appears to have been the cause, but you can imagine the conspiracy theories.  The case was nearing a point where the judge, Teori Zavascki, was to rule on the admissibility of dozens of plea bargains that would implicate upward of 200 powerful politicians and business leaders.

Cuba: Carlos Eire / Wall Street Journal

“On Thursday [Ed. Jan. 12], when President Obama ended the ‘wet foot, dry foot’ policy allowing any Cuban who reached U.S. shores to be granted resident status as a refugee, he merely followed his unconditional support of the Raul Castro regime to its logical end.

“The logic is easy to follow: If relations have been normalized between the United States and Cuba, why should those Cubans who arrive here in rafts be treated any differently from other migrants?  Why should Cuban doctors working as indentured servants abroad be allowed to claim refugee status when they manage to reach a U.S. Embassy?  After all, if Obama and Castro can enjoy a baseball game together, laugh and do the wave together, can Cuba be really any different from any other normal country?

“For all practical purposes, wet foot, dry foot became an anachronism on Dec. 17, 2014, when Obama announced his new Cuba policy.  On that day, regarding Cubans as victims of repression became an anachronism, too.  For Obama declared to the world that the Castro government was not so different from those of Canada, France or Andorra.

“Oh, yes, there was a wee problem with human rights in Cuba, Obama said, but that was inconsequential, because his new policy of friendship with the most brutal dictatorship in the Western hemisphere would change all that, eventually.  Castro would come to see the error of his ways once U.S. tourists began flocking to Cuba.  Or maybe one of Castro’s successors would be the one to ease up on the repression. The who and when didn’t really matter to Obama.  Eventually was good enough for him.

“Meanwhile, in Cuba, Obama’s policy created a panic.  Many Cubans were smart enough to grasp the twofold significance of Obama’s embrace of the Castro government: First, how this new support from the United States could prolong the life of the Castro regime indefinitely and allow it to rule despotically; and second, how Cubans would no longer continue to be viewed by the United States as an oppressed people....

“Now comes the second repercussion feared by Cubans: Obama strips them of their refugee status just as he heads out the White House door.  The Castro government is normal; no more special treatment for Cubans. Cubans are no different from Haitians, or Mexicans or any other migrants. End of story....

“With strokes of his pen, Obama has not only stripped Cuban boat people of their refugee status but also left behind a radioactive stink bomb as a gift for his successor.”

Mexico: Notorious drug lord Joaquin “El Chapo” Guzman was extradited to the U.S. on Thursday and he made a court appearance Friday in New York.  Guzman had escaped from two Mexican high-security jails in the past.  That won’t be the case here.

Random Musings

--Lots of poll data for the record:

CBS News:  48% disapprove of how Donald Trump has handled his presidential transition, 37% approve.  [Republicans approve 74-16; Democrats disapprove 79-10; Independents swing 36% approve, 43% disapprove.]

Trump has a 32% favorable rating, the lowest of any president-elect in CBS News polling going back to Ronald Reagan in 1981.  In 2009, 60% held a favorable view of Barack Obama, and just 9% had an unfavorable one.  George W. Bush had a 44% favorable rating in Jan. 2001, and Bill Clinton had a 45% favorable rating.  Ronald Reagan came into office with a 47% favorable.

59% do express at least some confidence in Trump’s decision-making on the economy.

A Wall Street Journal/NBC News survey has 38% of Americans viewing Trump in a favorable light, 48% in a negative one.  But among Republicans, just 10% view him negatively, while 85% of Democrats hold an unfavorable view.

As president-elect, Obama had a 67% favorable rating, George W. Bush was at 50% positive, and Bill Clinton 64%.

44% approve of Trump’s handling of the transition, 52% disapprove.  In 2009, Obama’s ratings were 71% approve, 14% disapprove.

President Obama’s job-approval rating, at 56%, is the highest since his first year in office.

A new CNN/ORC poll gave Donald Trump an approval rating of just 40%, compared with Obama’s 84% approval rating when he took the oath in 2009.  Bill Clinton’s was 67% and George W. Bush’s transition was met with 61% approval.

The public is split evenly, 48-48, on whether Trump will be a good or poor president.

[Incoming vice president Mike Pence holds a narrowly net-positive favorability rating, 40% favorable to 37% unfavorable.]

But in the CNN/ORC poll, President Obama’s approval rating is at 60%, bested only by Bill Clinton’s 66% in January 2001 and Ronald Reagan’s 64% in January 1989.  65% say Obama’s presidency was a success.

One-quarter (25%) say Obama is one of the nation’s greatest presidents (11% described Reagan that way, 10% Clinton).  But while 54% of Democrats consider Obama one of the greatest presidents, 54% of Republicans label him a poor president.

A Washington Post/ABC News poll has 44% of Americans saying Trump is qualified to serve as president, 52% believe he is not.  Just 40% have a favorable impression of him, 54% view him unfavorably.

Last week a Gallup poll had Trump’s approval rating at 44% and his disapproval rating at 51%.

A Quinnipiac University national poll had President Obama with a 55% approval rating.  51% disapproved of Donald Trump’s handling of his job as president-elect.

But Americans are optimistic by a 52-43 percent margin about the next four years with Trump and say by a 47-31 percent margin that he will help rather than hurt the nation’s economy.

Yet 53 percent believe Trump is not honest, while 39 percent say he is; which compares to 52-42 on Nov. 22.

American voters also say by a 55-36 percent margin that the Russian government interfered with the 2016 president election through hacking, and 75 percent of those who believe the Russians interfered, say they did it to help Trump become president, according to the same Quinnipiac survey.

Donald Trump said of all the above polls that grade him poorly: “The same people who did the phony election polls, and were so wrong, are now doing approval rating polls. They are rigged just like before.”

A final survey from Military Times and Syracuse University’s Institute for Veterans and Military Families on President Obama as commander in chief revealed some of the following.

How favorable or unfavorable is your view of President Obama?

Enlisted: 35% favorable...52% unfavorable
Officer: 44% favorable...49% unfavorable
Army: 36% favorable...53% unfavorable
Navy: 43% Favorable...46% unfavorable
Marine Corps: 26% favorable...60% unfavorable
Air Force: 35% favorable...50% unfavorable

Have these decisions made the U.S. more or less safe?

Drawing down from Iraq: 59% less safe
Drawing down from Afghanistan: 54% less safe
Less emphasis on large-scale overseas missions: 42% less safe
More reliance on Special Forces: 58% more safe

How have these issues affected military readiness?

Gender integration within combat units: 30% hurt...15% helped
Transgender service: 41% hurt...12% helped

--A Pew Research Center poll of American attitudes about various threats had some of the following:

79% believe ISIS is a major threat vs. 17% who say it is not a threat.

71% believe cyberattacks from other countries are a major threat, 24% don’t.

By a 64-27 margin, North Korea’s nuclear program is viewed as a major threat.

By a 54-36 margin, Russia’s power and influence is viewed as a major threat.

Global climate change is viewed as a major threat by a 52-32 margin.

China is viewed as a major threat by a 52-36 margin.

Separately, this same Pew poll has Americans wanting Donald Trump to release his taxes by a 60-33 margin.  [79% of Democrats say he should, 38% of Republicans.]

--President Obama commuted the remaining prison sentence of Chelsea Manning, the army intelligence analyst convicted of an enormous 2010 leak that revealed American military and diplomatic activities across the world and made WikiLeaks, the recipient of the disclosures, famous.

Manning, a transgender woman who was known as Bradley Manning when she deployed with her unit to Iraq in 2009, had access to a classified computer network.  Manning then copied hundreds of thousands of military incident logs from the Afghanistan and Iraq wars, which exposed abuses of detainees by Iraqi military officers working with American forces, among other things, while she also copied about 250,000 diplomatic cables form American embassies.  WikiLeaks then disclosed them.

Incarcerated at the male military prison at Fort Levenworth, Kan., Manning has been jailed for nearly seven years, and her 35-year sentence was by far the longest ever imposed in the United States for a leak conviction.

Manning will be freed on May 17, rather than in 2045. 

House Speaker Paul Ryan said President Obama “now leaves in place a dangerous precedent that those who compromise our national security won’t be held accountable for their crimes.” 

Arkansas Republican Sen. Tom Cotton: “I don’t understand why the president would feel special compassion for someone who endangered the lives of our troops, diplomats, intelligence officers, and allies.  We ought not treat a traitor like a martyr.”

Arizona Republican Senator John McCain, chairman of the Senate Armed Services Committee, called it a “grave mistake.”

In a statement, McCain said: “It is a sad, yet perhaps fitting commentary on President Obama’s failed national security policies that he would commute the sentence of an individual that endangered the lives of American troops, diplomats, and intelligence sources by leaking hundreds of thousands of sensitive government documents to WikiLeaks, a virulently anti-American organization that was a tool of Russia’s recent interference in our elections.

“Her prison sentence may end in a few months’ time, but her dishonor will last forever,” the senator said.

Editorial / Wall Street Journal

“President Obama’s decision Tuesday to commute the 35-year prison sentence of Pfc. Chelsea, nee Bradley, Manning will be celebrated on the left as a vindication of a well-intentioned whistleblower whose imprisonment at Ft. Leavenworth as a transgender woman was a travesty of justice.  The real travesty is the show of leniency for a progressive cause celebre whose actions put hundreds of lives at risk.

“For those who need reminding, Manning was stationed in Iraq as a low-level intelligence analyst when he gained access to troves of classified material.  Starting in 2010 he leaked nearly 750,000 documents to Julian Assange’s WikiLeaks.  Included in the material were thousands of secret State Department cables and masses of military information on the wars in Iraq and Afghanistan. Assange worked with reporters from several news organizations to publish the material, to much self-congratulation about the virtues of transparency.

“U.S. diplomats and military officers took a less charitable view, with good reason.  While many of the State Department cables contained little more than diplomatic party gossip, others disclosed sensitive conversations between U.S. diplomats and opposition leaders in repressive regimes....

“Even more dangerous were leaks of operational secrets, including the names of Afghan informants working with U.S. coalition forces against the Taliban.  A Navy SEAL who participated in the 2011 raid on Osama bin Laden’s compound in Pakistan testified that Manning’s leaks were found on the terrorist’s computer.

“Little wonder that at the time Mr. Obama criticized ‘the deplorable action by WikiLeaks.’  Then-Secretary of State Hillary Clinton warned that the document dump ‘puts people’s lives in danger’ and was ‘an attack on America’s foreign policy,’ its partnerships and alliances....

“The commutation sends a dreadful message to others in the military who might have grievances or other problems but haven’t stolen national secrets.  The lesson is that if you can claim general dysphoria or some other politically correct condition, you can betray your country and get off lightly.”

Michael Rubin / New York Post

“As the clock winds down on his presidency, President Obama has commuted the sentence of Chelsea Manning, the army intelligence analyst convicted of leaking hundreds of thousands of U.S. diplomatic and military documents to WikiLeaks.

“Manning told Adrian Lamo, an ex-hacker and confidant, that she hoped her leak would spark ‘worldwide discussion, debates and reforms.’

“ ‘If not,’ she added, ‘then we’re doomed as a species.’

“Make no mistake: Manning was neither an altruistic liberal nor free-speech warrior: She was a narcissist and would-be tyrant who believed rules did not apply to her. She was not motivated by a desire to expose wrongdoing, for she ignored channels used by generations of whistleblowers and instead sought the wholesale exposure of government secrets.

“Diplomats are like journalists, doctors and lawyers: their jobs depend on the trust and confidentiality of those with whom they speak.  As the U.S. military engages increasingly in civil affairs, soldiers are not much different.

“Manning not only burned the sources of hundreds of diplomats, but she effectively dissuaded foreigners from trusting any future American official.

“The exposure may also have cost lives: Both al Qaeda and the Taliban combed through documents to identify those cooperating with the United States.

“WikiLeaks – the chief beneficiaries of Manning’s crime – didn’t care.

“WikiLeaks founder Julian Assange suggested those murdered as a result deserved their fate.

“ ‘We are not obligated to protect other people’s sources,’ he said, adding that Afghans ‘should know about’ those who have engaged in ‘genuinely traitorous’ acts, such as talking to the U.S. military.

“Just as turning his back on the ‘no chemical weapons’ red line in Syria convinced the Syrian government and other rogue regimes that they could massacre civilians without consequence, Obama’s willingness to free Manning will convince the disgruntled and unstable that they can betray the trust put in them.”....

“Manning’s commutation...rationalizes treason and reflects Obama’s disdain both for the bureaucracy over which he presided and those who abided by its rules and placed meaning in their oaths.”

As for Assange, he had promised to allow himself to be extradited to the United States if Manning was released, but now it seems he’s not so sure.  One of his lawyers, Barry Pollack, in an email to The Hill, said: “Mr. Assange welcomes the announcement that Ms. Manning’s sentence will be reduced and she will be released in May, but this is well short of what he sought.  Mr. Assange had called for Chelsea Manning to receive clemency and be released immediately.”

But another of Assange’s attorneys said on Tuesday that he would keep his word.

--Thomas L. Friedman / New York Times

“When Donald Trump was elected president, it felt to me like the most reckless thing our country had done in my lifetime. But like many Americans, I hoped for the best: He’ll grow into the job.  He’ll surround himself with good people. The country could use a jolt of fresh thinking.  He’ll back off some of his most extreme views.

“But now that Trump is about to put his hand on the Bible and be sworn in, I’ve never been more worried for my country.  It’s for many reasons, but most of all because of the impulsive, petty and juvenile tweeting the president-elect has engaged in during his transition.

“It suggests an immaturity, a lack of respect for the office he’s about to hold, a person easily distracted by shiny objects, and a lack of basic decency that could roil his government and divide the country.  I fear that we’re about to stress our unity and institutions in ways not seen since the Vietnam War....

“Yes, I know, in his Inaugural Address Trump will again summon us to ‘bind the wounds of division.’ [Ed. Trump didn’t.]  But given all his impulsive digital ax wielding, those words will ring hollow.  He’s already emptied them of all emotional force with his venomous tweets and refusal to bring even one Democrat into his cabinet.

“Trump is hardly the first person elected president to have his legitimacy attacked.  Indeed, he led the onslaught on President Obama’s legitimacy.  But more than any president since Richard Nixon, Trump has shown himself incapable of turning the other cheek and converting doubters into allies. In an age that demands giant leadership, he’s behaved utterly small....

“I’ve noted before that one of my favorite movies is ‘Invictus,’ which tells how Nelson Mandela, when he became South Africa’s president, built trust with the white community. Shortly after Mandela took power, his sports advisers wanted to change the name and colors of the country’s famed rugby team – the almost all-white ‘Springboks’ – to something more reflective of black African identity.

“Mandela refused.  He told his black aides that the key to making whites feel at home in a black-led South Africa was not uprooting all of their cherished symbols.  ‘We have to surprise them with restraint and generosity,’ said Mandela.

“Most Americans are good-hearted people who are actually starved to feel united again.  Many who voted against Trump would have given him a second look had he surprised them with generosity and grace.  He did just the opposite. Sad.”

--Bret Stephens / Wall Street Journal

“This column has previously observed that few things are as dangerous to democracy as a demagogue with a half-valid argument. The president-elect has offered at least a half-dozen such arguments, and that’s merely in the last week.

“First we had Donald Trump’s press conference attack on CNN’s Jim ‘You Are Fake News’ Acosta.  Then a salvo against the pharmaceutical industry, which, he said, is ‘getting away with murder.’  Mr. Trump also accused intelligence agencies of leaking a smear against him, asking in a tweet: ‘Are we living in Nazi Germany?’

“This was followed by an interview with British and German newspapers, in which Mr. Trump called NATO ‘obsolete,’ dismissed the European Union as ‘basically a vehicle for Germany,’ and threatened to slap a 35% tariff on BMW for wanting to build a plant in Mexico.

“Oh, and the feud with John Lewis.  The congressman from Georgia had accused Mr. Trump of being illegitimately elected on account of Russian meddling.  Mr. Trump fired back on Twitter that Mr. Lewis should spend his time fixing his ‘crime infested,’ ‘falling apart’ district in Atlanta.

“Say this for Mr. Trump: He has no use for pieties.  Mr. Lewis is routinely described in the press as a ‘civil rights icon.’  The next president could not care less.  Wall Street Journal Republicans believe that business decisions should be left to business. As of Friday those businesses will do as Mr. Trump says.  NATO?  Too old.  The EU?  Not salvageable.  The fourth estate?  A fraud. The folks at Langley?  A new Gestapo.

“All this baits Mr. Trump’s critics (this columnist not least) into fits of moral outrage, which is probably his intention: Nobody in life or literature is more tedious than the prig yelling, ‘Is nothing sacred anymore?’....

“But the main reason the president-elect’s attacks stick is that they each have their quotient of truth.

“Mr. Trump is not wrong that NATO’s European members don’t carry that weight. He isn’t wrong that the EU is in deep trouble no matter what he says.  He isn’t wrong that Mr. Lewis’ attack on the legitimacy of his election was out of line, or that the congressman’s courage in the 1960s should not insulate him from criticism today. He isn’t wrong that drug companies price-gouge....

“But the opposite of not wrong isn’t necessarily right.  There’s a distinction between ‘unverified’ and ‘fake.’ There’s a difference between BuzzFeed’s unethical decision to publish the unredacted dossier and CNN’s appropriate efforts to report on what Mr. Trump knew about it....

“Do mainstream journalists tend to have a liberal political bias?  Sure.  But when Mr. Trump tags them as ‘the disgusting and corrupt media,’ he is making a different point: Down with the hole lot of them.  Was Angela Merkel foolhardy to open Germany’s arms to a million refugees in a year?  She was, but with Mr. Trump it has become a pretext to predict, and cheer, the end of the liberal order in Europe.  It might be possible to dismiss Mr. Trump’s ‘Nazi’ smear of the intelligence community as another case of rhetorical excess.  Except that he has already made plain his indifference for intelligence briefings and his disdain for judgments that don’t square with his policy goals or his personal vanity.

“For supporters of the president-elect, all this may be a refreshing turn away from the stale certainties of the Obama years....

“The optimistic scenario: Mr. Trump’s blasts will get NATO to spend real money on weapons. Maybe they will also get intelligence officials to reconsider leaks against their civilian masters, get companies to think harder about the social effects of their decisions, and get editors to raise publication standards.

“I fear another scenario.  Mr. Trump’s genius for tearing things down will not be matched by an ability to build things up.  Half-valid points will not be made whole.  In the bonfire of discarded truisms and broken institutions will lie more than the failure of one man’s presidency.”

--I wrote the following in this space, 6/25/16:

“Regarding ‘civil rights hero’ Rep. John Lewis (D-Ga.)....I have long admired the man like most Americans, but it was truly despicable how in the heat of the South Carolina Democratic primary, Lewis flat-out lied about his relationship with the Clintons during the civil rights era, while demeaning Bernie Sanders’ efforts in the cause, even though Lewis didn’t meet the Clintons until over 10 years after the time in question and Hillary wasn’t involved in civil rights (in her case ‘children’s rights’ campaigns) until 1973!  Sanders, on the other hand, was legitimately intimately involved in the civil rights movement going back to his University of Chicago days in 1962.

“Lewis, when feebly confronted by the facts, said, ‘Well, I never met (Sanders).’  What an ass.

“But ‘icon’ John Lewis got away with it. [I hinted at my disgust back in a March column.]  It was a key moment in the presidential campaign and it was disgraceful behavior.”

--At least 60 Democratic congressman skipped the inauguration following Trump’s criticism of Rep. Lewis.

--Scientists reported on Wednesday that the Earth reached its highest temperature in 2016, easily beating a record set a year earlier, which beat the one set 2014.  It is the first time in the modern era of global warming data that temperatures have hit a record three consecutive years.

[NOAA did register three record years in a row, 1939-41, but 1941 now ranks as only the 37th-warmest year on record.]

Deke Arndt, chief of global climate monitoring for the National Oceanic and Atmospheric Administration, said, “A single warm year is something of a curiosity.  It’s really the trend, and the fact that we’re punching at the ceiling every year now, that is the real indicator that we’re undergoing big changes.”

The heat extremes were most pervasive in the Arctic, as last fall we saw temperatures 20 to 30F. above normal across large stretches of the Arctic Ocean.

But part of the reason for the heat of the last two years was El Nino and now that it has ended, climate experts believe 2017 will be cooler, so we’ll see. 

--Editorial / New York Post

“The nonpartisan Pew poll just confirmed the existence of the so-called ‘Ferguson effect’: 86 percent of cops polled say all the national controversy over police killings of civilians has made their jobs tougher.

“The St. Louis police chief coined the term after the shooting of Michael Brown, to describe the tendency of officers to back off from proactive policing in the wake of widespread protests.  The Manhattan Institute’s Heather MacDonald and others point to the Ferguson effect to help explain the rise in violent crime in many U.S. cities.

“Pew polled some 8,000 police officers on race relations, morale and reform last year – with most of it  done before the assassinations of cops in Dallas and Baton Rouge.

“Key findings:

“- 93 percent of officers say they’ve grown more concerned about their safety.

“- 76 percent are more reluctant to use force when necessary.

“- 75 percent believe interactions between police and blacks have become more tense.

“- 72 percent say they’re more reluctant to stop and question suspicious-looking people.

“- 67 percent report being verbally abused.

“But it does flag the perils of a rush to judgment – as in the Ferguson case itself, where the Obama Justice Department’s investigation fully confirmed the account of the officer who shot Brown, and shredded the ‘hands up, don’t shoot’ claim that Brown was an innocent victim.”

--The wife of Orlando, Fla., nightclub gunman Omar Mateen was arrested on charges including obstruction of justice, and accusations she aided her husband and had some foreknowledge he planned to carry out an attack, according to the FBI.

--In a Quinnipiac University Poll, while Hillary Clinton isn’t expected to run for mayor of New York City, if she did, today she would beat Mayor Bill de Blasio 49% to 30% if she ran as an independent while he ran as a Democrat.  De Blasio’s job approval rating is 45% among New Yorkers, 46% of whom disapprove.

But with Clinton not expected to run, de Blasio handily beats Democratic challengers such as comptroller Scott Stringer who are expected to, 35% to 9% in the case of Stringer. 

--It is just amazing that ten survivors were found in the hotel that collapsed under an avalanche in Italy’s Abruzzo region.

--Finally, Gene Cernan died, the last person to walk on the moon.  He was 82.  Cernan commanded Apollo 17 and set foot on the lunar surface in December 1972, the last of a dozen men to walk on the moon – tracing his only child’s initials in the dust before climbing the ladder of the lunar module the last time.

Cernan recalled in an oral history, “Those steps up that ladder, they were tough to make. I didn’t want to go up.  I wanted to stay a while.”

He said that upon landing, and after things had settled down, “That’s where you experience the most quiet moment a human being can experience in his lifetime. There’s no vibration.  There’s no noise.  The ground quit talking.  You partner is mesmerized.  He can’t say anything.

“The dust is gone.  It’s a realization, a reality, all of a sudden you have just landed in another world on another body out there (somewhere in the) universe, and what you are seeing is being seen by human beings – human eyes – for the first time.”

Completing their third moon walk on Dec. 14, Jack Schmitt returned to the lunar module and was followed by Cernan, whose last words on the surface were:

“We leave as we came and, God willing, as we shall return, with peace and hope for all mankind.”

Appropriate words for today.

---

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

God bless America.  God bless Donald J. Trump.

---

Gold $1210
Oil $52.33

Returns for the week 1/16-1/20

Dow Jones  -0.3%  [19827]
S&P 500  -0.15%  [2271]
S&P MidCap  -0.7%
Russell 2000  -1.5%
Nasdaq  -0.3%  [5555]

Returns for the period 1/1/17-1/20/17

Dow Jones  +0.3%
S&P 500  +1.5%
S&P MidCap  +0.9%
Russell 2000  -0.4%
Nasdaq  +3.2%

Bulls  60.6
Bears 
17.3  [Source: Investors Intelligence...since the bull reading first crossed the 60 level three weeks ago, the market has largely stalled out.]

Have a great week.

Happy 66th wedding anniversary to my parents!

Brian Trumbore

 

 



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Week in Review

01/21/2017

For the week 1/16-1/20

[Posted 11:30 p.m. ET, Friday]

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

Edition 928

Washington and Trump

What a week.  It started with president-elect Trump saying in an interview with German and British media that he was open to lifting sanctions on Russia, NATO was “obsolete” and he wouldn’t commit to the “One China” policy.  Our European allies were terrified, the Kremlin was smiling, and China was torqued off.  Days later he took the oath of office.

President Donald J. Trump, Inaugural Address

[Excerpts]

“We, the citizens of America, are now joined in a great national effort to rebuild our country and restore its promise for all of our people. Together we will determine the course of America and the world for many, many years to come.  We will face challenges. We will confront hardships, but we will get the job done....

“For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost.  Washington flourished, but the people did not share in its wealth....

“The establishment protected itself, but not the citizens of our country.  Their victories have not been your victories; their triumphs have not been your triumphs; and while they celebrated in our nation’s capital, there was little to celebrate for struggling families all across our land....

“What truly matters is not which party controls our government, but whether our government is controlled by the people.  Jan. 20, 2017, will be remembered as the day the people became the rulers of this nation again.

“The forgotten men and women of our country will be forgotten no longer....

“(For) too many of our citizens, a different reality exists: Mothers and children trapped in poverty in our inner cities; rusted-out factories scattered like tombstones across the landscape of our nation; an education system flush with cash, but which leaves our young and beautiful students deprived of knowledge; and the crime and gangs and drugs that have stolen too many lives and robbed our country of so much unrealized potential.

“This American carnage stops right here and stops right now....

“For many decades we’ve enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

“We’ve defended other nations’ borders while refusing to defend our own and spent trillions and trillions of dollars overseas while America’s infrastructure has fallen into disrepair and decay.  We’ve made other countries rich while the wealth, strength and confidence of our country has dissipated over the horizon....

“From this day forward, a new vision will govern our land.  From this day forward, it’s going to be only America first.  America first....

“We do not seek to impose our way of life on anyone, but rather to let it shine as an example.  We will shine for everyone to follow.

“We will reinforce old alliances and form new ones – and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

“At the bedrock of our politics will be a total allegiance to the United States of America, and through our loyalty to our country, we will rediscover our loyalty to each other. When you open your heart to patriotism, there is no room for prejudice.  The Bible tells us how good and pleasant it is when God’s people live together in unity.

“We must speak our minds openly, debate our disagreements honestly, but always pursue solidarity. When America is united, America is totally unstoppable. There should be no fear.  We are protected, and we will always be protected....

“We will no longer accept politicians who are all talk and no action, constantly complaining but never doing anything about it.  The time for empty talk is over.  Now arrives the hour of action....

“A new national pride will stir ourselves, lift our sights and heal our divisions....

“We will make America proud again.  We will make America safe again. And, yes, together, we will make America great again.  Thank you.”

Trump wasn’t the least bit magnanimous, nor did he give our allies any cause for optimism.  He ripped them.  There was also no talk of freedom and liberty.

But Trump’s supporters loved it.  I’ll have some comments from a few of the pundits next time.

For now, though, it’s ‘wait 24 hours,’ even though this is the total antithesis of our president’s behavior.  You know where I stand.  I’m reasonably optimistic on the domestic front, but I’m scared to death when it comes to U.S. foreign policy and the immediate threats we face.  I like the president’s foreign policy team, but in the end he makes the call, and the first one is likely to be, ‘What to do with Kim?’

Richard Haass, president of the Council on Foreign Relations / Wall Street Journal...on his advice to President Trump concerning foreign policy.

“The U.S. should be especially wary of sudden or sharp departures in what it undertakes abroad.  Consistency and reliability are essential attributes for a great power.  Allies who depend on Washington for their security need to know that this dependence is well placed. Serious doubt about America would inevitably give rise to a very different and much less orderly world....

“As soon as President-elect Trump is inaugurated, he will face many difficult challenges: from an unraveling Middle East to an uncertain Europe to a blustering North Korea.  Rushing to reverse longstanding American policies could generate new challenges and make existing ones harder to resolve.

“A few items already in the news suggest precisely what the new administration should not do.  The first would be to discard the ‘one China’ policy.  For 4 ½ decades, Washington and Beijing have successfully finessed the difference between the mainland’s claims to Taiwan and America’s commitment to the principle that any change in the island’s status can only come about peacefully and voluntarily.  Central to this successful maneuver is the idea that there is only one China and Taiwan is part of it.

“The formula has not only allowed Taiwan to flourish economically and become a thriving democracy, it has enabled the U.S. and China to develop important economic ties and cooperate on a range of regional and global challenges.  Continuing to finesse the issue is far preferable to abandoning ‘one China.’  The latter course risks triggering armed conflict with Beijing, ruling out any possibility of cooperation on North Korea, and poisoning what will be the most important bilateral relationship of this century.”

David Ignatius / Washington Post

“Donald Trump’s inauguration marks a global inflection point: He takes office at a moment when many analysts see a transition to a new economic and political order – one where the risks for the United States and its allies are likely to increase.

“Trump’s promise to ‘make America great again’ resonated with many disaffected voters at  home.   But abroad, it created fear that the United States’ global power is receding, with China and Russia moving to fill the vacuum.  Analysts forecast a new era in which the U.S.-led, post-1945 global order, which brought unparalleled economic growth, will be replaced by a structure whose rules and rewards aren’t yet clear....

“Trump has embraced the breakup of the old order.  He has criticized NATO as ‘obsolete’ and predicted the European Union’s demise – challenging two crucial allies in America’s network of power.  He has talked of imposing tariffs on imports not just from China, but from Germany, too, raising fears of a global trade war.  He has promised a revival of U.S. manufacturing jobs that many economists argue can’t be restored without disrupting other parts of the economy.

“ ‘Wait and see’ is always a good rule on Inauguration Day, but we’ve never had a president quite like Trump, with so many disruptive ideas and so little experience.  Change is his political brand.  If he carries through on what he talked and tweeted about, he will reshape the framework of global economic and security relationships – for the worse, I fear....

“The revolt against economic globalization has boosted right-wing nationalist politicians in the United States and Europe.  The real beneficiaries may be Russia and China, which seek to replace the U.S.-led system.

“This theme of risky transition was explored in ‘Global Trends,’ a report published this month by the National Intelligence Council.  ‘The next five years will see rising tensions within and between countries...An era of American dominance following the Cold War [is ending].  So, too, perhaps, is the rules-based international order that emerged after World War II.  It will be much harder to cooperate internationally and govern in ways publics expect.’

“A similar grim assessment was offered this month by the Rand Corp.  In a study titled ‘Strategic Choices for a Turbulent World,’ Rand described a global tipping point: ‘The post-Cold War period is over.  While historians may argue about the timing, it has become clear to most foreign-policy practitioners that the world has entered a new era, a complex age of turbulence and opportunity.’....

“Trump now owns responsibility for shaping a world in turmoil. And the United States owns the stark reality that Trump is president.”

Editorial / The Economist

“It is extraordinary how little American voters and the world at large feel they know about what Mr. Trump intends.  Those who back him are awaiting the biggest shake-up in Washington, D.C., in half a century – though their optimism is an act of faith. Those who oppose him are convinced there will be chaos and ruin on an epoch-changing scale – though their despair is guesswork.  All that just about everyone can agree on is that Mr. Trump promises to be an entirely new sort of American president.  The question is, what sort?....

“Even before taking office, Mr. Trump has hacked away at the decades-old, largely bipartisan cloth of American foreign policy. He has casually disparaged the value of the European Union, which his predecessors always nurtured as a source of stability.  He has compared Angela Merkel, Germany’s chancellor and the closest of allies, unfavorably to Vladimir Putin, Russia’s president and an old foe.  He has savaged Mexico, whose prosperity and goodwill matter greatly to America’s southern states.  And, most recklessly, he has begun to pull apart America’s carefully stitched dealings with the rising superpower, China – imperiling the most important bilateral relationship of all.

“The idea running through Mr. Trump’s diplomacy is that relations between states follow the art of the deal.  Mr. Trump acts as if he can get what he wants from sovereign states by picking fights he is then willing to settle – at a price, naturally.  His mistake is to think that countries are like businesses.  In fact, America cannot walk away from China in search of another superpower to deal with over the South China Sea. Doubts that have been sown cannot be uprooted, as if the game had all along been a harmless exercise in price discovery.  Alliances that take decades to build can be weakened in months.

“Dealings between sovereign states tend towards anarchy – because, ultimately, there is no global government to impose order and no means of coercion but war.  For as long as Mr. Trump is unraveling the order that America created, and from which it gains so much, he is getting his country a terrible deal....

“As Mr. Trump assumes power, the world is on edge. From the Oval Office, presidents can do a modest amount of good.  Sadly, they can also do immense harm.”

President Obama’s Legacy, cont’d....

This is the last time for a while. 

Barbara Plett / BBC News

“How did a man who took office espousing a new era of engagement with the world end up a spectator to this century’s greatest humanitarian catastrophe?

“Barack Obama was not against using force to protect civilians.  Yet he resisted, to the end, a military intervention to stem Syria’s six-year civil war, even as it killed or displaced half the country’s population, brutally documented in real time on social media.

“Part of the answer to this vexing question has been clear from the beginning.  President Obama was elected to end America’s war in Iraq and Afghanistan by a people tired of paying the cost in blood and treasure. He was extremely reluctant to get sucked into another messy Middle East conflict.

“But when the siege and bombardment of cities like Aleppo placed the violence on the genocidal scale of atrocities set by Rwanda and Srebrenica, inaction by the U.S. and its allies mocked the international community’s vows of ‘never again.’

“Despite the pressing moral imperative, Obama remained convinced a military intervention would be a costly failure.

“He believed there was no way the U.S. could help win the war and keep the peace without a commitment of tens and thousands of troops. The battlefield was too complex: fragmented into dozens of armed groups and supported by competing regional and international powers.

“ ‘It was going to be impossible to do this on the cheap,’ he said in his final press conference of 2016.

“But that was not the conclusion of some senior military and cabinet officials, nor did they even propose a mass ground deployment, according to former defense secretary Chuck Hagel.

“They argued that a more limited engagement could have effectively tilted the balance of power against President Bashar al-Assad.  Among the options: arming the rebels and setting up a safe zone from where they could operate early in the conflict, or military strikes on the Syrian air force to push Assad to the negotiating table....

“ ‘If there is to be any hope of a political settlement, a certain military and security context is required,’ former CIA Director David Petraeus told a Senate committee last year.  ‘We and our partners need to facilitate it, and...have not done so.’....

“U.S administrations have tended to bridge the gap between values and interests when the moral choice is also strategic.  But Obama calculated early on that the Syrian civil war did not directly endanger America’s national security.

“Instead he focused U.S. military might against the so-called Islamic State (IS), which he did eventually see as a threat to the homeland.

“Again, he was able to organize an international coalition that has had considerable success in achieving a limited goal.

“Dividing his Syria policy in two, however, meant inevitable contradictions.  The White House held that the only way to stop the spread of IS was to end the rule and brutality of the Assad regime.  But America’s absence from the civil conflict served to strengthen the Syrian president....

“ ‘Syria exploded in strategic ways,’ says Vali Nasr, who’s written a book arguing that the president’s policies have diminished America’s leadership role in the world.

“ ‘It empowered Russia and Iran, produced ISIS, strengthened al-Qaeda and created the refugee crisis which became a strategic threat to Europe.’

“Obama’s critics have also faulted him for a detached, analytical leadership style they say is unsuited to geopolitical jousting.

“ ‘He wasn’t good at brinkmanship, it wasn’t his inclination,’ says Ian Bremmer, president of the political risk firm Eurasia Group.

“ ‘I’ve always thought [George W.] Bush was a leader who didn’t like to think, and Obama a thinker who didn’t like to lead.’

“Obama has taken the lead on combating what he sees as one of the biggest threats, climate change.  And he hasn’t hesitated from unilaterally ordering force when he felt America’s security was at stake, as shown by his prolific use of drones against terrorist suspects.

“But in Syria his administration left a perception of American weakness.

“Stepping back from his red line on chemical weapons damaged U.S. credibility, shaking the confidence of allies and, some argue, emboldening its adversaries....

“Although Obama says he came to understand that very little is accomplished in international affairs without U.S. leadership, he doesn’t talk about it as a strategic asset, says Nasr.

“That sets him apart from his predecessors who ‘believe U.S. leadership is important for the world and important for America’s hardnosed interests.  Obama believes we can selectively lead where we have clear definable interests...but American leadership as a free-floating independent idea doesn’t have value to him.’....

“History could very well judge Obama positively on Iran, Cuba and climate change.  But the most important test of his foreign policy philosophy will be Syria, because it has been the crucible for the kind of realism he believes in.

“He argues that he’s saved the U.S. from getting trapped in another disastrous Middle East war that would sap America’s power.  His critics charge he has diminished U.S. power in a crucial region, and weakened American global leadership in the process.”

America will be paying the price for such thinking for decades to come.

Clive Crook / Bloomberg

“Nobody thinks Margaret Thatcher’s claim on posterity is that she was Britain’s first female prime minister.  Admirers and critics alike know she was more consequential than that.  Barack Obama was America’s first black president, which is a huge thing and a fine thing.  But when you’ve said that, you’ve probably said what matters most about his time in office.

“Perhaps it was harder – less probable – for a black man with little experience of government to be elected president of the U.S. in 2008 than it was for a woman to lead the British Conservative Party to electoral victory in 1979.  Obama’s rise to the presidency was a remarkable accomplishment.  Talk about audacity.  But reflecting on his eight years in office, one wonders how much ambition he had left after that.

“He doubtless wanted to succeed, and he did, in some ways.  Not least, he won re-election in 2012 and departs the White House with most voters thinking well of him.  But already in 2008 he could say and think, ‘Yes we did.’  Nothing he achieved afterward eclipses that.  Thatcher, in contrast, betrayed little or no interest in defeating a prejudice about what women could aspire to be.  She wanted power because she believed it was necessary to transform Britain, and nobody else was up to the job.  For good or ill, transform Britain is what she did.

“A prime minister with a comfortable majority in Parliament has more power to change Britain than any president has to change the U.S.  No checks and balances to deal with. Yet you could argue that Ronald Reagan managed it.  Obama, you could also argue, might have managed it too, had he tried.  The occasion presented itself in the form of an economic crisis.  Leaders subsequently deemed great usually find themselves contending with a crisis, domestic or foreign, sometimes of their own making.  But Obama let his particular crisis go to waste.

“Obama’s admirers will say, what nonsense: His stimulus bill saved the U.S. from a new Great Depression; his health-care reform was a decisive and (despite the Republicans’ forthcoming efforts) irreversible advance; he used his executive powers to shift policy across a wide range of issues, from climate change to national security.  Take all that together, and his legacy is indeed a country transformed.

“All of this is very questionable. The recession would certainly have been worse without the stimulus, and the stimulus might have been smaller without Obama’s input, but modern economies with huge public sectors and forceful central banks aren’t vulnerable to depression in the way countries were in the 1920s and 1930s.  Britain’s economy fell further in the slump, but its subsequent recovery has been about as strong as America’s, for the most part with a fiscally orthodox Conservative government in charge.

“We’ll see what remains of the Affordable Care Act in due course, but its prospects certainly aren’t helped by its unpopularity from the outset....

“As for the rest, what executive actions can do, executive actions can undo.  On race relations, hopes were high that Obama would mark a decisive break with the past; if anything, the divisions are deeper than before.  Even Obama’s most fawning admirers rarely call his foreign policy a success.  China is throwing its weight around.  So is Russia.  Iran’s nuclear ambitions are only on pause, the Middle East is in turmoil, and Syria has fallen into an abyss at the hands of a corrupt government and its Russian sponsor....

“In 2008, it seemed possible.  The new president was a man of enormous talent, effortlessly commanding respect, an enthralling speaker, calm, sober and instantly likable.  He’d come up from nothing, and by the way, he was black.  He was something entirely new, yet quintessentially American.  The country, it seemed, was proud of him and proud of itself for having produced him.  The politically uncommitted wanted him to succeed, and despite later controversies and disappointments this never really changed.

“It would be wrong to say he squandered these assets, but he took no chances with them.  You don’t realign politics by tending exclusively to the hopes and ideas of your partisan followers.  That’s what he did.  As president, Obama was most comfortable preaching to the converted....

“America’s polarization and the deep political dysfunction that flows from it are themselves a kind of crisis.  Now they’ve yielded President Trump – and who knows what harm will flow from that?  If Obama had been willing to think big and take risks – not just before getting elected but afterward as well – things might have been different.  But Obama wasn’t that man.” 

Robert J. Samuelson / Washington Post

“It is far too early to render final judgment on the Obama presidency. All the chatter about his ‘legacy’ overlooks two obvious realities. The significance of President Obama will depend heavily on events that have not yet happened (for starters, the fate of the Iranian nuclear deal) and comparisons, for better or worse, with his successor. Still, it’s possible to make some tentative observations.

“As I’ve written before, the administration’s greatest achievement was, in its first year, stabilizing a collapsing economy and arguably avoiding a second Great Depression. Even now, only eight years after the event, many people forget the crash’s horrific nature.  Unemployment was increasing by roughly 700,000 to 800,000 job losses a month. No one knew when the downward spiral would stop.

“In this turbulence, Obama was a model of calm and confidence. The policies he embraced – various economic stimulus packages, support for the Federal Reserve, the rescue of the auto industry, the shoring up of the banking system – were what the economy needed, though they were not perfect in every detail.  Although the subsequent recovery was disappointing, it’s not clear that anyone else would have accomplished more.

“If Obama had done nothing else, rescuing the economy would ensure a successful presidency.  But he did do other things, and we shouldn’t forget the historic significance of having an African American as the nation’s leader.

“Still his broader record is mixed.  I think he will get credit for ObamaCare, regardless of how Donald Trump and the Republicans modify it.  The argument will be made, accurately I think, that the expansion of insurance coverage to roughly 20 million Americans would never have occurred if Obama hadn’t put it at the top of his agenda.

“This does not mean that promoting ObamaCare was uniformly wise. It did not solve the problem of high health-care costs, and it aggravated political polarization.  It also seems a product of personal ambition, reflecting Obama’s desire to be remembered as the liberal president who finally achieved universal coverage. In reality, even after the 20 million, there are an estimated 28 million uncovered Americans in 2016, says the National Center for Health Statistics.

“Some of Obama’s biggest setbacks were widely shared.  One was coming to grips with an aging society.  As I’ve repeatedly written, the growing population of older people is distorting government priorities, because Social Security, Medicare and Medicaid (which covers nursing home care) increasingly dominate the federal budget, squeezing other programs and enlarging budget deficits.

“Obama never dealt aggressively with this problem, because doing so would have offended his liberal political base....

“What Obama lacked was the ability to inspire fear as well as respect, and this also helps explain why his foreign policy often fell short – Syria being the best but not the only example.  Few presidents have worshiped their words more than Obama.  To take one example: His farewell speech last week ran 50 minutes; the average for seven other post-World War II presidents was 18 minutes, according to the Wall Street Journal.

“Not only did he worship his words, but he assigned them more power than they possessed.  At times, he seemed to treat the White House as a graduate-school seminar where he was the smartest guy in the room and, therefore, deserved to prevail.  At news conferences, he gave long, convoluted responses full of subtleties that may have impressed political and media elites but didn’t do much to shift public opinion.

“Our government has turned into a quasi-parliamentary system.  Controversial proposals are supported and opposed mainly, or exclusively, by one party or the other.  This is a bad development.  It strengthens fringes in both parties, who hold veto power.  It discourages compromise and encourages stalemate....

“The question historians need to ask is whether Obama contributed to this dysfunctional system or was victimized by it....

“In this era of snap judgments, a true verdict on Obama is years away.”

Christi Parsons and Lisa Mascaro / Los Angeles Times

“He first achieved national renown with a speech hailing bipartisanship, and spent much of his presidency singing the praises of cooperation across party lines.

“But nearly all of his major accomplishments resulted from party-line votes or executive actions.

“And if Republicans accused him of paying too much attention to Democratic interests, allies blamed him for neglecting his party.  Democrats lost a dozen governorships and hundreds of state legislative seats, as well as control of Congress, during his tenure.

“President Obama leaves office with job approval ratings comparable to the high final marks for Presidents Reagan and Clinton. But unlike them, Obama’s support is overwhelmingly party-based....

“That’s disheartening for the leader who, as a little-known Illinois state legislator running for the U.S. Senate, was hailed at the Democratic National Convention in 2004 when he declared, ‘There’s not a liberal America and a conservative America; there’s the United States of America.’....

“Republican leaders say Obama never offered half a loaf – or anything like it.  They say he didn’t have the legislative experience to cut deals and was too aloof to engage in the fine art of wining and dining lawmakers to his side. 

“ ‘Almost without exception, President Obama begins serious policy discussions by explaining why everyone else is wrong,’ (Senate Republican leader Mitch) McConnell wrote in his 2016 autobiography.”

Peggy Noonan / Wall Street Journal

“President Obama delivered his farewell address, at a semi-raucous and sentimental rally in Chicago. There was nothing terrible in it and little strikingly good.  In the tradition of presidential warnings, he spoke of the need to work harder for economic opportunity and racial harmony.  We are too divided, sort ourselves out and away from each other, and ‘keep talking past each other.’  We are increasingly stuck in cultural and intellectual enclaves, and choose whatever news we’re inclined to believe.  All true.

“Mr. Obama’s has not been a successful presidency.  In foreign affairs his two terms, added to George W. Bush’s two terms, produced 16 years of unsuccess – an entire generation. Richard Haass, head of the Council on Foreign Relations, put it gently in conversation this week: Mr. Bush tried to do too much, which was unrealistic; Mr. Obama attempted too little, its own, perhaps more consequential unrealism.

“In domestic matters he put all his chips on health care and bullied it through without a single Republican vote, leaving his party fully owning it and the other with no investment in saving it.  His relationship with Congress started out at impasse proceeded to fraught and ended in estrangement. He saw this all as the other side’s fault. In his dealings with the Hill he was often imperious, sometimes a snot.  He allowed executive agencies such as the IRS to ruin their public reputations and stonewall scandal after scandal.  His most famous words as president came not in formal addresses but extemporaneous misjudgments – ‘red line,’ ISIS as the ‘jayvee team’ – plus an attempt to mislead: ‘If you like your plan, you can keep your plan.’

“He left his party weaker, in terms of public offices held, than at any point since the 1920s....

“Yet Mr. Obama’s approval ratings are at a respectable 55%.  I think I know some of why....

“Barack Obama had dignity in his personal sphere. He carried himself with confidence, like someone with self-respect.  You gathered, as you watched over eight years, that he did what a man does, taking care of his family, his wife and children.  He didn’t talk about it but he modeled it, represented it in his actions.  This, in an increasingly less parented country, was valuable....

“I put it here to remind everyone, mostly myself, that you can strongly oppose someone politically, really think you’re seeing bad things there, but have a responsibility to see and note what good there is.

“We’re losing that ability, in our enclaves.”

The other side on the Obama legacy....

Linda Stasi / New York Daily News

“Another open letter to the Obama sisters:

“Dear Sasha and Malia,

“Please do not believe the pap the Bush daughters, Barbara and Jenna, are pushing in their open letter to you.

“If they’d meant it sincerely, it wouldn’t have been an open letter, but a private one between presidential daughters.

“Here’s what’s true: They are the daughters of arguably the worst President in American history.

“You are the daughters of one of the finest.

“They have their whole lives to live down their father’s failures.

“You have your whole lives to live up to your father’s legacy.

“Their father left the economy in ruins, with half a million jobs lost.

“Your father’s term saw 11 million jobs added.

“Their father’s term ended with the worst economic crisis since the Great Depression.

“Your father brought an end to the recession, extended unemployment benefits, bailed out the U.S. auto industry, and upped American workers’ earnings 4.4 percent.

“Their father brought wrack and ruin upon not just the Middle East but upon the world.

“Your father worked to undo it.

“Their father was the pawn of Dick Cheney, Karl Rove and Ahmed Abdel Hadi Chalabi, a double or maybe triple agent who passed false information onto the disgraced New York Times reporter Judith Miller, which resulted in countless deaths.

“Your father was no one’s puppet, and instead saved countless American lives by withdrawing troops from the horrors of a war begun on false information.

“Their father and his minions convinced the cowards in our government to go to war and is responsible for the $6 trillion in taxpayer money wasted, as well as the half a million lives lost, and the ensuing destabilization of the Middle East.

“Your father tried, albeit unsuccessfully, to bring peace to the region.

“Their father was the man in charge when nearly 3,000 Americans were killed on 9/11.

“Your father’s eight-year term ended without one foreign terrorist invasion.

“Their father kissed the Saudi prince on the lips, in seemingly complete denial that 15 of the 19 hijackers had been Saudi citizens.

“Your father kissed no one when it came to America’s safety....

“So Sasha and Malia?  Ignore the Bush daughters’ advice, and rely on yourselves to succeed as post-White House young women.

“They have a father to be ashamed of, while you have one of which you can be very proud.”

Wall Street

Federal Reserve Chair Janet Yellen said in a speech Wednesday night that with inflation headed toward the Fed’s 2% target, and with the economy near full employment, it “makes sense” for the central bank to raise interest rates gradually.  “Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road – either too much inflation, financial instability, or both,” Yellen told a San Francisco audience.  “In that scenario, we could be forced to raise interest rates rapidly, which in turn could push the economy into a new recession.”

In a separate speech the next day, Yellen said: “Economic growth more broadly seems unlikely to pick up markedly in the near term given the ongoing restraint from weak foreign demand.”

But then she reiterated the Fed doesn’t want to wait too long to raise rates and let inflation get out of control.

Yes, as I’ve written for about a year, the Fed could be caught with its pants down, which I’ve argued it already has been.  So while the Fed won’t do anything at the Jan. 31-Feb. 1 meeting, it is a certainty they will hike another ¼-point at the March 14-15 confab.

Speaking of inflation, the December consumer price index was 0.3%, ex-food and energy 0.2%.  For 2016, the CPI rose 2.1%, 2.2% on core.

The 2.1% was the first time for the index over 2% since May 2014, but the Fed’s preferred PCE barometer is still below 2.

Separately, industrial production for December was 0.8%, the strongest since Nov. 2014.  December housing starts came in at a strong 1.226 million annualized pace.

Europe and Asia

This was a big week for Britain, and the European Union, on the Brexit front.  British Prime Minister Theresa May laid out her nation’s strategy for withdrawing from the European Union in a speech in London on Tuesday.  Some key points in May’s own words:

“This agreement should allow for the freest possible trade in goods and services between Britain and the EU’s member states.  It should give British companies the maximum freedom to trade with and operate within European markets, and let European businesses do the same in Britain.  But I want to be clear: What I am proposing cannot mean membership of the single market.

“We seek a new and equal partnership between an independent, self-governing, global Britain and our friends and allies in the EU.  Not partial membership of the European Union, associate membership of the European Union or anything that leaves us half-in, half-out.  We do not seek to adopt a model already enjoyed by other countries.  We do not seek to hold on to bits of membership as we leave.  No.  The United Kingdom is leaving the European Union and my job is to get the right deal for Britain as we do.

“An important part of the new partnership...will be the pursuit of the greatest possible access to the single market on a fully reciprocal basis through a comprehensive free trade agreement.

“Because we will no longer be members of the single market, we will no longer be required to contribute huge sums to the EU budget.  There may be some specific EU programs we might want to participate in. The days of Britain making vast contributions to the European Union will end.

“I must be clear: Britain wants to remain a good friend and neighbor to Europe.  Some voices are calling for a punitive deal that punishes Britain and discourages other countries from taking the same path. That would be an act of calamitous self-harm for the countries of Europe and it would not be the act of a friend.  Britain would not, indeed we could not accept such an approach.

“While I am sure a positive agreement can be reached I am equally clear that no deal for Britain is better than a bad deal for Britain.

“I want Britain to be able to negotiate its own trade agreements but I also want tariff-free trade with Europe and cross-border trade to be as frictionless as possible.  That means I do not want Britain to be part of the common commercial policy...

“I want the United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before. I want us to be a secure, prosperous, tolerant country, a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead.  I want us to be a truly global Britain, the best friend and neighbor to our European partners, but a country that reaches beyond the borders of Europe too.  A country that goes out into the world to build relationships with old friends and new allies alike....

“You will still be welcome in this country as we hope our citizens will be in yours.

“Brexit must mean control of the number of people who come to Britain from Europe and that is what we will deliver.  We will ensure we can control immigration to Britain from Europe....

“At a time when together we face a serious threat from our enemies, Britain’s unique intelligence capabilities will continue to help to keep people in Europe safe from terrorism.

“And at a time when there is growing concern about European security, Britain’s servicemen and women, based in European countries including Estonia, Poland and Romania, will continue to do their duty.”

The next day, addressing the World Economic Forum in Davos, May said Britain would “step up to a new leadership role as the strongest, most forceful advocate for free markets and free trade anywhere in the world.”

May said the Brexit referendum was a vote to “restore our parliamentary democracy and national self-determination.  A vote to take control and make decisions for ourselves.”

Britain would become “even more global in action and spirit too.  That is who we are as a nation. Britain’s history and country is profoundly internationalist,” she said.

“We are going to be a confident country that is in control of our destiny again.  A country in control of its own destiny is more, not less able, to strengthen the multi-lateral rules based system.”

As for May’s insistence the U.K. will be able to agree to exit terms, including a trade deal, by 2019, the EU Commission’s chief Brexit negotiator Michel Barnier has poured cold water on the plans.

And Dutch finance minister Jeroen Dijsselbloem said that any attempt to turn the U.K. into a low-tax center after leaving the EU would be “unproductive and damaging.”  This is the so-called plan B in the event of getting a ‘bad deal’ in the negotiations.  German finance minister Wolfgang Schauble echoed such talk, saying he expects the U.K. to continue to adhere to international taxation standards, whatever its status with the EU.

German chancellor Angela Merkel on Wednesday pledged to hold the rest of the EU together as the U.K. starts to implement its Brexit plans.

“The be-all and end-all is that Europe doesn’t let itself be divided, and we will ensure this through very intensive contacts.”

Merkel said she wouldn’t discuss specifics until Britain formally files its Article 50 notice to leave the union – which is expected by end of March – but she reiterated her warning that the U.K. would have no “cherry picking” of EU rights as access to the single market was bound with the EU’s four freedoms.  [Freedom of movement of goods, people, services and capital over borders.]

But Merkel added she was appreciative of the clarity of Prime Minister May’s speech, saying there was a clear impression of what the U.K. wanted.

JPMorgan CEO Jamie Dimon said he hoped European Union leaders would examine what caused the U.K. to vote to leave and then make changes.  Dimon warned “the eurozone may not survive” if nationalist politicians such as Marine Le Pen come to power.  [The first test of this is March 15 and parliamentary elections in the Netherlands, where Geert Wilders’ Freedom Party leads in the polls.]

Since the referendum last June, European markets have been too sanguine on Brexit, but these negotiations are not going to be easy. 

Editorial / Wall Street Journal

“The British have been consumed since they voted to leave the European Union last year with whether Brexit should be ‘hard’ or ‘soft.’  Theresa May all but ended that debate Tuesday by saying Brexit means a clean and honest break from the EU, and the Prime Minister is smart to do so.

“Mrs. May said Britain will forgo membership in the tariff-free common European market and instead seek a new and comprehensive free-trade agreement with the EU.  London also is ready to leave Europe’s customs union, which provides common external tariffs for EU nations.  Mrs. May said Britain will negotiate its own customs deal with the EU to simplify trade in goods.

“This framework sent advocates of softer Brexit options running for the smelling salts, with the pound falling more than 1% against the dollar Monday after the contents of Mrs. May’s speech leaked over the weekend.  What did they expect?  The political reality after June’s referendum is that there has to be some form of exit in Brexit, and the pound rallied Tuesday.

“Staying in the single market would require Britain to continue contributing to the Brussels budget, accept EU economic rules and the jurisdiction of the European Court of Justice, and admit levels of immigration that have become politically unacceptable.  Remainers said these concessions were worth making, but voters disagreed and they must be respected.

“Mrs. May’s strategy should prevent the EU from hamstringing Britain during negotiations and after Brexit is final.  Leaving the single market and customs union is the only way London can negotiate its own trade deals with the rest of the world.  President-elect Donald Trump told the Times of London the U.S. would start talks soon over a bilateral trade deal with Britain, and that opportunity can’t be missed.

“The prospect of a U.S.-British deal might also be useful as leverage with the EU.  Some EU voices continue to sound as if they want to punish Britain as a lesson to other countries that might consider leaving.  They want to drive the hardest bargain possible, and the lure of the common market was their best card.  Mrs. May has taken it off the table before they could play it.

“Both sides can now negotiate what is in their best interests, and the smart play is for both to help the other succeed.  Britain is a huge market for European goods, while Britain wants to remain Europe’s main financial center.  Mrs. May rightly warned in her speech that a punitive EU deal for Britain would be an act of ‘calamitous self-harm’ for the Continent.

“The biggest threat to the EU isn’t a Britain that succeeds outside the common market.  It is an EU that keeps failing to provide the economic prosperity demanded by its frustrated citizens.  What drove Britain from the EU was the Continent’s failure on immigration control, fighting terrorism and delivering jobs and rising incomes.”

Philip Stephens / Financial Times

“British prime ministers are prone to spend their last days governing from a bunker.  Convinced of their own immortality they dispense with forthright advisers in favor of devoted aides.   The passage of time narrows their sight of the world beyond the front door of 10 Downing Street.

“Theresa May has started out where her predecessors ended up.  Scarcely six months in the job, Mrs. May is roundly mistrustful of her senior civil servants.  Officials are shut out of decision-making.  Unvarnished advice invites histrionics from her political sidekicks.  It is not an intelligent way to run a government – never mind one charged with managing the biggest upheaval in the nation’s political and economic life since the end of the second world war.

“Mrs. May has now set out her plans for a ‘hard’ – a clean break with the EU that will take Britain out of the single market and the customs union.  There can be no half-in, half-out, she said, if Britain wanted to curb EU migration and renounce the jurisdiction of the European Court of Justice.

“The prime minister had previously dismissed the idea of such a trade-off.  She would get a bespoke deal, and Britain, in the tactful phrase of Boris Johnson, the foreign secretary, would have its cake and eat it.  Sir Ivan Rogers, the U.K.’s permanent representative in Brussels, resigned in frustration....

“The prime minister’s speech offered the usual pro-forma reassurance about strong, post-Brexit ties with Europe and fanciful guff about the vast new opportunities for a nation now rechristened ‘Global Britain.’  Yet no one should doubt the cost, economic and geopolitical, of the proposed break with the EU.

“Britain will cease to be a platform for foreign businesses – manufacturing and services – that want to sell unimpeded into the world’s largest market.  Companies will face new barriers to trade with an EU 27 accounting for more than two-fifths of British exports.  Dozens of third-country trade deals will be upended.  As economic ties weaken, political relationships will wither.  British prime ministers will be absent from the councils of their own continent.

“Perhaps Mrs. May has understood this in her eagerness to court U.S. president-elect Donald Trump.  Before the election she shared the Westminster establishment view of Mr. Trump as a dangerous vulgarian.  Now, word has gone out from No. 10 that nothing is to be said or done to put in question Britain’s admiration for the new administration.”

Britain’s auto sector is a key in the coming Brexit negotiations, as Britain tries to get the best possible EU market access.  Typical of the issues, the chairman of Japanese carmaker Toyota told the Financial Times this week: “We have seen the direction of the prime minister of the U.K., (so) we are now going to consider, together with the suppliers, how our company can survive.”

And then you have the critical financial sector, with Goldman Sachs providing an example of the issues every firm faces.  Goldman is considering moving up to 1,000 staff from London to Frankfurt because of concerns over what Brexit will yield.

As for Donald Trump and the EU, and his embracing skepticism of the club, while also calling NATO “obsolete,” German Chancellor Merkel told reporters, “We will cooperate with him on all levels, of course.”  But she said Europeans will need to take responsibility for themselves.  “We Europeans have our destiny in our own hands,” she said.  [Washington Post]

Eurobits....

The European Central Bank’s latest quarterly survey of professional economists has revised eurozone GDP up to 1.5% from an early projection of 1.4%, while inflation is expected to average 1.4% from an earlier estimate of 1.2% in 2017.  Unemployment is expected to drop to 8.9% in 2019.

Inflation in the eurozone hit a 3-year high of 1.1% annualized in December, though this is still well short of the ECB’s 2% target.

Germany is at 1.7% ann., France 0.8%, Italy 0.5%, Spain 1.4% and Greece 0.3%. 

The ECB met this week and it was uneventful.  Draghi said he wasn’t worried about the recent hike in inflation in the eurozone, claiming there was still no “convincing” evidence of inflationary momentum, though Germans see their 1.7% pace and get worried the ECB is behind the curve.

Turning to Asia, in China, the government reported that the economy grew 6.8% in the fourth quarter, 6.7% for the full year, the slowest full-year figure since 1990 but within the government’s target range of 6.5-7%...sooprize sooprize!  6.7% is down from 6.9% in 2015.

The National Bureau of Statistics reported that the average price for new residential housing across 70 major cities rose 12.4% in December, year over year, though prices fell 0.2% from November’s rate, the first deceleration since March 2015.

In month-on-month terms prices rose in 46 out of 70 cities  Year on year, prices rose in 65 of the 70.  In Beijing they were 28% higher than a year prior.

Fixed-asset investment (spending on new factories, housing and infrastructure) grew 8.1% last year, the slowest pace since 1999.  Retail sales rose 9.6%, with online sales climbing 26.2%.

But with all the above numbers, and the jokes surrounding some of them, on Tuesday, Northeast China’s Liaoning province confirmed that some of its economic data had been faked between 2011-2014.

In a speech to the World Economic Forum in Davos on Tuesday, President Xi Jinping defended free trade and globalization, drawing a contrast with Donald Trump.

“No one will emerge as a winner in a trade war,” said Xi, the first sitting Chinese president to attend the annual gathering.  “Pursuing protectionism is just like locking one’s self in a dark room.  Wind and rain may be kept outside, but so are light and air.”

Xi sought to portray Beijing as a benevolent power intent on upholding an international order that has boosted common prosperity, exhorting world leaders to “join hands and rise to the challenge.”

“Some people blame economic globalization for the chaos in our world,” Xi said, while acknowledging globalization had resulted in growing income inequality within many countries.

And while Donald Trump has accused of China of manipulating its currency to boost exports, Xi said: “China has no intention to boost its trade competitiveness by devaluing the renminbi, still less will it launch a currency war.”

But Xi’s talk was fraudulent.  Everyone in attendance knew that.  You try to do business in China today and you’re playing with fire.  But the attendees in Davos all kissed Xi’s ring anyway.

Editorial / Washington Post

“Xi Jinping took a stab at seizing the mantle of global economic leadership on Tuesday, delivering a lengthy defense of free trade and globalization at the annual World Economic Forum in Davos, Switzerland.  To some extent, it worked: Many in the elite crowd of business leaders, government ministers and journalists seemed thrilled to hear the Chinese president, in his first appearance at the swishy forum, proclaim that there was ‘no point in blaming economic globalization for the world’s problems’ – particularly as he spoke on a day when British Prime Minister Theresa May was outlining a ‘hard exit’ from the European Union and European newspapers were quoting President-elect Donald Trump on his plans for punitive tariffs.

“Mr. Xi certainly was shrewd to position himself as the alternative to Mr. Trump, and the eager response to him was a demonstration of the vacuum of U.S. leadership the incoming president may soon create.  But before China’s ruler is crowned the new champion ‘Davos man,’ it ought to be pointed out that his regime is, in most respects, far less liberal or embracing of globalization than the Trump administration will be even if the worst fears of its critics come true.

“For example, Mr. Xi declared that ‘we must remain committed to developing global free trade and investment, promote trade and investment liberalization...and say no to protectionism.’  Yet his own regime has sharply tightened the flows of capital and investment across China’s borders.  Imagine a Trump administration placing controls on the transfer of more than $5 million out of the United States, as the Xi regime just did in China.  Foreign companies that wish to invest in the country often still are forced to partner with local companies and hand over their technology.  Major U.S. Internet companies, including Facebook and Twitter, remain locked out of the market.

“Inconveniently for Mr. Xi, the American Chamber of Commerce in China released a report on Wednesday showing that 81 percent of 462 surveyed companies said they felt less welcomed in the country than before, and a quarter were reducing their operations or planning to do so.  ‘It is becoming apparent that the benefits of globalization are being taken for granted or even forgotten’ by Beijing, said a statement by AmCham China Chairman William Zarit.

“That’s not to speak of the side of globalization conspicuously omitted by Mr. Xi, who carefully used the modifier ‘economic.’ Since he took power in 2012, flows of information inside China as well as across its borders have been radically curtailed.  Independent civil society has been virtually shut down, and critical journalists and academics silenced; even lawyers who defend them have been persecuted and imprisoned.  While China barrages U.S. satellite viewers and newspaper readers with state-produced propaganda, the New York Times is banned in China, Google is censored, and critical journalists and academics are not allowed into the country.”

Meanwhile, on the economic front, a report from Standard Chartered estimates capital flows out of China totaled almost $730bn in 2016, a near-record level.  Outflows were $66bn in December, down from November’s $75bn.

At the same time, foreign direct investment flows turned positive for the first time in eight months with a $3bn inflow.

China’s foreign exchange reserves ended the year at $3.01 trillion, down $41bn last month.  [Financial Times]

In Japan, department store sales fell in December as consumers pulled back, down 1.7% year on year, though this was better than November’s -2.4% yoy pace.  But Japan’s department store sales fell every month last year except February.  Overall retail sales are released Jan. 30.

Street Bytes

--Stocks fell in this holiday-shortened week, albeit marginally, with the Dow Jones losing 0.3% to 19827, the S&P 500 0.15% and Nasdaq 0.3%.  The post-election momentum has faded with the reality that some portions of the Trump agenda, namely tax reform and an infrastructure program, will take time.

--U.S. Treasury Yields

6-mo. 0.61%  2-yr. 1.19%  10-yr. 2.47%  30-yr. 3.05%

The short end of the curve was unchanged, but the long end slumped (yields rose) some on the hawkish talk of Chair Yellen on the inflation front.

--OPEC’s monthly report forecast demand for its crude would average just 32.1m barrels a day this year, which is below its target output level of around 32.5m b/d.  Earlier, Saudi Arabia suggested that the output cuts agreed to in November may not need to be extended beyond the first half of the year, with OPEC next formally meeting in May.

But as oil has rallied almost 20% since OPEC agreed to curbing output in November, traders are watching to see whether the rise above $50 is enough to revive the U.S. shale industry.  OPEC’s latest report said U.S. production would expand just marginally in 2017.

OPEC is forecasting global demand will rise by almost 1.2m b/d this year to 95.6m b/d.  In December, OPEC’s oil output was 33.1m b/d, down from the record 33.3m b/d of November.  The planned cuts took effect on January 1, with Saudi Arabia, Venezuela, UAE and Nigeria making the largest reductions.

--Goldman Sachs’ fourth-quarter profit tripled with net income at $2.35bn, much better than a litigation-hit period a year earlier, while revenue rose 12%, with trading activity up 78% in the fixed-income, currencies and commodities unit.

--Citigroup reported revenues in its fixed-income division rose 36% from a year earlier amid a flood of orders post-election as well as the Fed’s decision to hike interest rates.  The equities business saw a 15% rise in revenues.

But revenues across the bank fell 8% as Citi continues to dispose of businesses around the world in its ongoing efforts to recover from the financial crisis, with Citi striking deals to sell assets in Canada, Argentina and Brazil.

--Morgan Stanley’s profit doubled in the fourth quarter, far exceeding expectations, as trading activity surged in keeping with the other investment banks post-election.  Earnings soared to $1.51 billion from $753 million a year earlier.  Revenue in the bank’s fixed-income unit jumped to $1.5bn from $550 million, while revenues from equities trading rose to $2bn from $1.8bn.

--Credit Suisse has agreed to pay $5.3bn to settle claims that it misled investors about the quality of mortgage-backed securities that it sold in the lead-up to the 2008 financial crisis.  $2.5bn of it is a fine, the other $2.8bn for relief to struggling homeowners, borrowers or communities.

--Target was the latest retailer to report holiday sales that came in below expectations as the company slashed its full-year earnings guidance, the shares falling 5% in response on Thursday.

Same-store sales for November and December fell 1.3% and it now expects a similar drop for the fourth quarter compared with its guidance of -1 to +1 percent.

“While we were pleased with Black Friday sales, December digital sales growth of more than 40% and continued strength in our Signature Categories, these results were offset by early season sales softness and disappointing traffic and sales trends in our stores,” said CEO Brian Cornell.

Target joins a long list expressing similar sentiments about the holidays, including Kohl’s, Macy’s, Sears, JCPenney and Tiffany.

The challenging outlook has also forced Neiman Marcus and Claire’s to pull their IPOs this month.

--Speaking of jeweler Tiffany, the company said its sales during the holiday season were “somewhat lower” than it had expected, hurt by a drop in sales at its flagship store in New York that is located next to Trump Tower.  Sales there declined a whopping 14 percent. Stepped up security in the area hasn’t made access to the store easy.

Worldwide net sales rose 0.5 percent, while worldwide comparable (same-store) sales fell 2 percent as growth in Asia-Pacific and Japan was offset by weakness in the Americas and Europe.

--Lowe’s, the home improvement chain, announced it was eliminating 2,400 positions, most of them in management...as in assistant store managers, it said in a statement.

--IBM topped estimates for revenues and earnings in the fourth quarter, but after an initial pop in after-hours trading, the shares fell* on concerns about the quality of the numbers (the effective tax rate was lower than last year’s, for example), plus the overall sales decline extended to a 19th straight quarter, down 1% from a year ago.

While revenue from its legacy operations – sales of hardware that companies need to run their data centers – are declining at a faster pace than gains in its growth businesses such as cloud and analytics, the company said the latter two areas grew 33% and 11%, respectively, more than a year ago.

*Friday, the shares rallied back some.

--Netflix blew past quarterly subscriber expectations, approaching 100 million as it celebrates a decade online.  The company said it added 1.9 million subscribers in the U.S. after stripping out cancellations for the quarter ended Dec. 31. Total U.S. membership was 49.4 million.  International net additions were 5.1 million totaling 44.4 million. So total new subscribers were 7 million.  Netflix had fourth-quarter net additions of 1.45 million domestically and 3.75 million internationally.

Profits grew to $66.7 million, while revenue rose 36% to $2.48bn, both in line with expectations.

Aside from its 10th year of streaming, it’s also the fourth year since Netflix launched original programming.  And this week Netflix announced a real coup, signing Jerry Seinfeld and his “Comedians in Cars Getting Coffee” program for a reported $100 million.  [Good lord.]

Seinfeld had been doing it on Crackle, Sony’s streaming network, so a big blow for them.  But also a blow for HBO, which has been king of one-off comedy programming, as well as series like “Curb Your Enthusiasm,” which obviously has a connection with Seinfeld.

--Shares in Toshiba nosedived again on Thursday, down over 25%, the biggest one-day decline in more than four decades, as concerns over huge writedowns at the company’s nuclear business prompted further fears of a full-blown crisis.  Japanese media reported the writedowns could be as high as $6bn, when earlier the scale was said to be between $1bn and $4.5bn.  But Toshiba’s shareholder equity is less than $4bn.  Uh oh.  Some analysts are talking about a symbol of Japan’s industrial progress being delisted from the Tokyo Stock Exchange.

--General Motors said it would invest $1bn in the U.S. to create and safeguard 1,500 jobs, becoming the latest automaker to pledge to bring jobs into the country ahead of Trump’s inauguration.  The president-elect had criticized GM for expanding production in Mexico.

GM made just under 700,000 cars in Mexico in 2015, and exported 470,000 of these to the U.S. or Canada.

Donald Trump quickly tweeted: “With all of the jobs I am bringing back into the U.S. (even before taking office), with all of the new auto plants coming back into our country and with the massive cost reductions I have negotiated on military purchases and more, I believe the people are seeing ‘big stuff.’”

Separately, Hyundai announced a $3bn investment drive in the U.S., with the suggestion it’s next plant could be in the U.S.  [Either Hyundai or its sister Kia division.]

--Not to be outdone, Bayer, the German conglomerate, said it will invest $8bn in research and development in the U.S. over the next six years as part of its planned acquisition of Monsanto.  No doubt the U.S. investment should bolster Bayer’s chances of gaining approval from antitrust regulators, a combination of Bayer and Monsanto creating the world’s largest supplier of seeds and crop sprays to farmers.

But with the merger between DuPont and Dow Chemical, plus ChemChina’s acquisition of Switzerland’s Syngenta, there is the fear farmers will have few choices and ultimately prices will rise.

--As reported by the Wall Street Journal, the Education Department released a memo showing how badly they had overstated student loan repayment, like they inflated the repayment rate for 99.8% of all colleges and trade schools in the country.

“The new analysis shows that at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years.”

--SpaceX resumed flights, launching a Falcon 9 vehicle on Saturday, the first mission by the company since one of its vehicles exploded on the launch pad in September.  The return to space enabled SpaceX to renew what was the original global handheld satellite phone network, run by Iridium.

A few minutes later, the first stage of the rocket landed successfully on  a platform in the Pacific ocean.

The flight had 10 spacecraft for Iridium’s network, with a total of 81 satellites having been ordered from the European manufacturer Thales Alenia Space to completely overhaul the original but now aging infrastructure.

--Billionaire investor George Soros hasn’t been right in years, but he has a microphone and speaking at the World Economic Forum he said Donald Trump was a “con man” and that the stock market rally since his election will come to a grinding halt, British Prime Minister May won’t last long because of her divided cabinet, while Britons are in denial about the impact of Brexit, and China is going to become more repressive and that Xi Jinping’s growth model won’t work.  [Actually, I agree with much of this.]

--Another billionaire investor Carl Icahn is coming off a second poor investment year, as reported by Andrew Bary in Barron’s.  The nearly $6bn hedge fund that Icahn oversees suffered a loss of 20.3% in 2016 after a decline of 18% in 2015, according to a regulatory filing.

The weak 2016 performance was largely a result of Icahn’s bearish stance on the market.  Even though he announced he made a large bullish bet on election night as global markets were tanking immediately following Trump’s win, those purchases clearly weren’t enough to offset his net short position.

--The New York Times said it would cut its budget and eliminate an unspecified number of print-centric editing and production jobs this year, but, it will also invest an additional $5m to cover the Trump administration, according to top editors.

“We cannot pretend to be immune from financial pressures but we view this moment as a necessary repositioning of The Times’ newsroom, not as a diminishment,” Dean Baquet, executive editor, and Joe Kahn, managing editor, wrote in a memo to staff.

The Times has a goal of increasing digital revenue to $800m by 2020.  Last year it was nearly $500m, with 1.5m paying digital subscribers vs. more than 1m print subscribers.

--Construction-related fatalities in New York City rose from 17 in 2011 to 25 in 2015, and in the state as a whole, including the city, from 33 to 55, according to a New York State report.

But over this same period of time, inspections have dropped 27%, as the number of OSHA inspectors in New York State has fallen from 82 to 66.  [Crain’s New York Business]

--According to a report from New York City Comptroller Scott Stringer that includes the latest data, immigrants have played a critical role in the city’s economic success, which I was actually writing back in the Giuliani years (as he himself was touting, too).

Stringer’s study finds that 40% of New Yorkers today were born in other countries, the highest percentage since the turn of the last century.

And as Greg David notes in Crain’s New York Business, “In most cities, one group represents the vast majority of newcomers.  In New York, people from the leading source, the Dominican Republic, make up only 14% of immigrants. The top 10 countries account for barely more than half.”

--Editorial / Wall Street Journal

“Public tastes change and nothing lasts forever, but you don’t have to be a nostalgist to feel some sense of loss at the news that the Ringling Bros. and Barnum & Bailey Circus is closing down after 146 years. All the more so because abusive and bogus litigation contributed to the decision.

“Kenneth Feld, CEO of Feld Entertainment, has announced that the circus will hold its final performances in May.  ‘Ringling Bros. ticket sales have been declining, but following the transition of the elephants off the road, we saw an even more dramatic drop,’ said Mr. Feld, whose family has run the Big Top for nearly 50 years.  ‘This, coupled with high operating costs, made the circus an unsustainable business for the company.’

“Animal acts, especially elephants, have long been a major circus attraction for adults as well sa children.  But Ringling Bros. became a target of a coordinated legal assault in 2000 that stretched for years and cost the company tens of millions of dollars.

“The Feld family prevailed in court...the allegations of elephant abuse were false, and the losers agreed to pay Feld millions of dollars in settlements.

“But lawsuits take their toll in public relations and management attention as well as costs....Without the elephants the circus was even less able to attract families amid competition from video games, live-streaming of TV and movies, and other short-attention-span diversions.

“Perhaps market forces would have ended the circus eventually, but America would be a better place if left-wing activists didn’t always seek to destroy legal industries they dislike.”

Ringling’s last show is at the Nassau County Coliseum on May 21.  That will be a sad day.  I can’t imagine what the performers will be feeling.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: It’s pathetic that ISIS was allowed to re-enter the ancient city of Palmyra a few weeks ago and now we’re learning it is once again destroying part of the Roman amphitheater from the second century.  IS previously held the site for ten months up to March 2016.

ISIS has reportedly killed at least 12 people in Palmyra, beheading four, according to the Syrian Observatory for Human Rights. The victims included state employees and government soldiers, with some of the killings carried out in the amphitheater.

ISIL also launched a large-scale attack in eastern Syria, storming and capturing parts of Deir Ezzor, leaving 150,000 residents in the government-controlled areas of the city surrounded.  82 were killed in the initial fighting according to the Observatory, 40 of whom were ISIS fighters.

And last weekend, 48 were killed in a truck bombing in the Syrian border town of Aza.  ISIS claimed responsibility.  They obviously aren’t going away.

Separately, Russia announced it had joined forces with Turkish jets to target IS militants holding the town of al-Bab, 25 miles northeast of Aleppo.  It was the first time the air forces of Russia and Turkey had teamed up in this way.

In Iraq, Iraqi forces are making progress in the battle for Mosul, but now comes the toughest fighting in the west of the city.  The offensive is three months old, as ISIS has put up far more of a fight than many thought it would.

According to the United Nations, 750,000 people remain in Mosul’s west bank, which includes the old city and landmarks such as the mosque where ISIS leader Abu Bakr al-Baghdadi proclaimed his “caliphate” in June 2014.

The UN and other relief agencies were preparing for an unprecedented exodus of up to a million people but there are currently only around 150,000 civilians displaced.  The main concern today is that 300,000 children are in west Mosul and now they face a siege.

There were also reports an air strike on Mosul killed up to 30 civilians in a raid that appeared to target a senior militant who was not in the building at the time, according to Iraq Body Count, a group run by academics and peace activists.

Iran: Awful tragedy in the heart of Tehran on Thursday as an iconic 17-story building, that was part of a mega mall, collapsed during a massive fired, trapping a large number of firefighters, at least 20 of whom were killed (another 25 missing as of Friday night), according to IRIB. 

The building went down in a matter of seconds, on live TV (state television), which was doing an interview with a journalist at the scene.  Some of the pictures are heart-breaking, especially of firemen whose comrades were caught inside.

The builder of the 53-year-old tower was an Iranian Jewish businessman Habib Elghanian and it was the tallest building in the city at the time.  He was then tried on charges that included espionage and executed in the months after the 1979 Islamic Revolution, a move that caused much of the country’s longstanding Jewish community to flee. 

This could have political implications as Tehran’s mayor is a potential presidential candidate later this year. 

Separately, Iranian President Hassan Rouhani said on Tuesday that he was optimistic about the future of the nuclear deal and said Donald Trump cannot unilaterally cancel the accord.

“The president-elect has shown he is not happy...calling it the worst deal ever signed.  This is only propaganda. I don’t think he can do much when he goes to the White House,” Rouhani said in a news conference.

Israel: A conference aimed at kick-starting peace talks between Israel and the Palestinians concluded last weekend in Paris with more than 70 organizations and countries pledging their support for a two-state solution, but neither Israel nor the Palestinians were represented, so call the whole effort worthless.

Meanwhile, Hamas and Fatah have agreed to establish a Palestinian unity government, the two factions said in a statement from Moscow, where they were holding unity talks.

But there have been rare mass protests in Gaza over the power situation as there is a huge gap between production capacity and consumption needs.  On regular days, there is only 7 or 8 hours of electricity, but the Hamas government in the winter is forced to reduce supply to three or four hours.

Qatar announced it would contribute funds to keep the Gaza power plant running and Turkey is delivering 200,000 tons of fuel to get Gazans through the winter.

Turkey: The man suspected of carrying out the New Year’s Eve attack on a nightclub in Istanbul was trained in Afghanistan, the city’s governor says.  Reportedly, the attacker’s ISIS controller changed the target at the last minute.  He was originally going to launch the attack in Taksim Square. 

Libya: U.S. B-2 bombers carried out air strikes against Islamic State camps outside of Sirte that reportedly killed at least 80 militants, according to U.S. defense officials.  The strikes were carried out with the cooperation of the UN-backed Government of National Accord.  Officials insisted there were no women or children in the camps.

Last month, Libyan forces backed by U.S. air strikes cleared ISIS out of Sirte, though at a heavy cost.

Russia: Nikki Haley, nominee to be U.S. ambassador to the United Nations, said in her confirmation hearing: “Russia is trying to show their muscle right now.  It is what they do. And I think we always have to be cautious.  I don’t think that we can trust them.  I think that Russia has to have positive actions before we lift any sanctions on Russia.”

But Donald Trump has been receiving fawning television coverage in Russia, hailing him as “a man of his word.” 

However, as Bloomberg reported, there is growing skepticism that détente with the U.S. can be achieved, especially after seeing the confirmation testimony of many of Trump’s cabinet selections who have been taking a tougher line on Russia.  And Trump’s often contradictory statements are worrying Russia as well.  For example, Trump’s statement a few weeks ago he wanted to modernize and greatly expand America’s nuclear force, seemingly calling for a new arms race, but then the next week he spoke of reaching an agreement for “very substantially” cutting both sides’ nuclear arsenals.

Meanwhile, secretary of state-designate Rex Tillerson called Russia a “danger” and defense secretary-designate Ret. Gen. James Mattis put Russia at the top of his principal-threat list.  [Mattis was then confirmed by the Senate Friday evening.]

Separately, a cybersecurity professional told Defense One’s Patrick Tucker that Vladimir Putin’s kompromat campaign of attempted data theft and election meddling continues across Europe.  France’s minister of defense recently said he expects Russian actors to target his country’s election.  “Of course, one cannot be naïve,” said Jean-Yves Le Drian.

The objective is to advance Marine Le Pen, who supported Putin on the issue of Crimea, aside from calling for an exit from the EU.

The Kremlin is also targeting Germany, and officials in Sweden have said they see increased Russian activity there.

Putin himself said on Tuesday that an unsubstantiated report that alleged Russia had gathered compromising material on Donald Trump was a hoax.  Putin, who reiterated he had never met Trump, said he hoped that Moscow and Washington could eventually get their troubled relations back to normal.

China: Beijing announced through state media that if Donald Trump continues to provoke China over Taiwan and the “One China” policy it would “take off the gloves.”

The China Daily said: “If Trump is determined to use this gambit in taking office, a period of fierce, damaging interactions will be unavoidable, as Beijing will have no choice but to take off the gloves....

“The Chinese mainland will be prompted to speed up Taiwan reunification and mercilessly combat those who advocate Taiwan’s independence,” the paper’s editorial said.

An editorial in the Global Times said: “For every bit of empty promise that Taiwan’s pro-independence forces get from the U.S., we will make them pay the price; for every bit of ‘good news’ they get, they will feel multiple fear.  The Chinese mainland is wise and strong enough to turn the ‘lifeline’ of pro-independence forces into a rope to strangle them.”

Gideon Rachman / Financial Times

“The questions surrounding Donald Trump’s relationship with Russia are lurid and compelling.  But they are distracting from a more important and more dangerous story: the growing signs that the Trump administration is heading for a clash with China.

“The latest indication came last week at the confirmation hearings of Rex Tillerson, who is Mr. Trump’s nominee to be U.S. secretary of state.  Mr. Tillerson signaled a significant hardening in the U.S. attitude to the artificial islands that Beijing has been building in the South China Sea. He likened the island-building program to Russia’s illegal annexation of Crimea and said that the Trump administration intended to send a clear signal to Beijing that ‘your access to those islands is not going to be allowed.’

“That sounded like an American threat to blockade the islands, on which China has been building military installations. China would almost certainly attempt to break such a blockade, by sea or air. The stage would be set for a modern version of the Cuban missile crisis.  The Chinese state-sanctioned media reacted ferociously to Mr. Tillerson’s statement.  The Global Times, a nationalist paper, warned of ‘a large-scale war,’ while China Daily spoke of a ‘devastating confrontation between China and the U.S.’...

“Changes in U.S. policy on Taiwan and trade point in the same direction....last week, Mr. Trump gave an interview in which he underlined that his administration might indeed jettison the One China policy, unless Beijing makes concessions on trade.  Since China has repeatedly insisted that it will go to war rather than accept Taiwanese independence, this too is a high-risk policy....

“Put together the three Ts – Taiwan, Tillerson and trade – and there seems little doubt that Trump’s America is steaming towards a confrontation with China.  That is all the more likely since China under President Xi Jinping has itself moved in a markedly more nationalist direction.”

South Korea: A Korean court turned down an arrest warrant for Samsung’s chief, Jay Y. Lee, in a big blow to prosecutors who are trying to tie him to the bribery and corruption scandal that has led to the impeachment of President Park Geun-hye.  Lee was allowed to go home after being detained on multiple charges.

So while prosecutors are not happy, Samsung shareholders and executives are as a long court case involving Lee would have been a potentially major negative for the world’s biggest maker of smartphones, flat-screen televisions and memory chips.

The Constitutional Court is still reviewing the impeachment of President Park and will rule on that in the next month or two.

Nigeria: More than 70 were killed in an accidental military bombing at a camp for displaced people fleeing Boko Haram militants, with at least nine of them humanitarian workers.  This makes you want to cry.

Gambia: Foreign troops crossed the border on Thursday with orders to dislodge Yahya Jammeh, the repressive leader who had refused to step down after losing a presidential election last month.  Friday, Jammeh agreed to go into exile.

Brazil: The Supreme Court justice who has been overseeing the investigation of the Petrobras political kickback scandal, the largest ever uncovered in the country, was killed in a small plane crash that claimed five lives overall.  Bad weather appears to have been the cause, but you can imagine the conspiracy theories.  The case was nearing a point where the judge, Teori Zavascki, was to rule on the admissibility of dozens of plea bargains that would implicate upward of 200 powerful politicians and business leaders.

Cuba: Carlos Eire / Wall Street Journal

“On Thursday [Ed. Jan. 12], when President Obama ended the ‘wet foot, dry foot’ policy allowing any Cuban who reached U.S. shores to be granted resident status as a refugee, he merely followed his unconditional support of the Raul Castro regime to its logical end.

“The logic is easy to follow: If relations have been normalized between the United States and Cuba, why should those Cubans who arrive here in rafts be treated any differently from other migrants?  Why should Cuban doctors working as indentured servants abroad be allowed to claim refugee status when they manage to reach a U.S. Embassy?  After all, if Obama and Castro can enjoy a baseball game together, laugh and do the wave together, can Cuba be really any different from any other normal country?

“For all practical purposes, wet foot, dry foot became an anachronism on Dec. 17, 2014, when Obama announced his new Cuba policy.  On that day, regarding Cubans as victims of repression became an anachronism, too.  For Obama declared to the world that the Castro government was not so different from those of Canada, France or Andorra.

“Oh, yes, there was a wee problem with human rights in Cuba, Obama said, but that was inconsequential, because his new policy of friendship with the most brutal dictatorship in the Western hemisphere would change all that, eventually.  Castro would come to see the error of his ways once U.S. tourists began flocking to Cuba.  Or maybe one of Castro’s successors would be the one to ease up on the repression. The who and when didn’t really matter to Obama.  Eventually was good enough for him.

“Meanwhile, in Cuba, Obama’s policy created a panic.  Many Cubans were smart enough to grasp the twofold significance of Obama’s embrace of the Castro government: First, how this new support from the United States could prolong the life of the Castro regime indefinitely and allow it to rule despotically; and second, how Cubans would no longer continue to be viewed by the United States as an oppressed people....

“Now comes the second repercussion feared by Cubans: Obama strips them of their refugee status just as he heads out the White House door.  The Castro government is normal; no more special treatment for Cubans. Cubans are no different from Haitians, or Mexicans or any other migrants. End of story....

“With strokes of his pen, Obama has not only stripped Cuban boat people of their refugee status but also left behind a radioactive stink bomb as a gift for his successor.”

Mexico: Notorious drug lord Joaquin “El Chapo” Guzman was extradited to the U.S. on Thursday and he made a court appearance Friday in New York.  Guzman had escaped from two Mexican high-security jails in the past.  That won’t be the case here.

Random Musings

--Lots of poll data for the record:

CBS News:  48% disapprove of how Donald Trump has handled his presidential transition, 37% approve.  [Republicans approve 74-16; Democrats disapprove 79-10; Independents swing 36% approve, 43% disapprove.]

Trump has a 32% favorable rating, the lowest of any president-elect in CBS News polling going back to Ronald Reagan in 1981.  In 2009, 60% held a favorable view of Barack Obama, and just 9% had an unfavorable one.  George W. Bush had a 44% favorable rating in Jan. 2001, and Bill Clinton had a 45% favorable rating.  Ronald Reagan came into office with a 47% favorable.

59% do express at least some confidence in Trump’s decision-making on the economy.

A Wall Street Journal/NBC News survey has 38% of Americans viewing Trump in a favorable light, 48% in a negative one.  But among Republicans, just 10% view him negatively, while 85% of Democrats hold an unfavorable view.

As president-elect, Obama had a 67% favorable rating, George W. Bush was at 50% positive, and Bill Clinton 64%.

44% approve of Trump’s handling of the transition, 52% disapprove.  In 2009, Obama’s ratings were 71% approve, 14% disapprove.

President Obama’s job-approval rating, at 56%, is the highest since his first year in office.

A new CNN/ORC poll gave Donald Trump an approval rating of just 40%, compared with Obama’s 84% approval rating when he took the oath in 2009.  Bill Clinton’s was 67% and George W. Bush’s transition was met with 61% approval.

The public is split evenly, 48-48, on whether Trump will be a good or poor president.

[Incoming vice president Mike Pence holds a narrowly net-positive favorability rating, 40% favorable to 37% unfavorable.]

But in the CNN/ORC poll, President Obama’s approval rating is at 60%, bested only by Bill Clinton’s 66% in January 2001 and Ronald Reagan’s 64% in January 1989.  65% say Obama’s presidency was a success.

One-quarter (25%) say Obama is one of the nation’s greatest presidents (11% described Reagan that way, 10% Clinton).  But while 54% of Democrats consider Obama one of the greatest presidents, 54% of Republicans label him a poor president.

A Washington Post/ABC News poll has 44% of Americans saying Trump is qualified to serve as president, 52% believe he is not.  Just 40% have a favorable impression of him, 54% view him unfavorably.

Last week a Gallup poll had Trump’s approval rating at 44% and his disapproval rating at 51%.

A Quinnipiac University national poll had President Obama with a 55% approval rating.  51% disapproved of Donald Trump’s handling of his job as president-elect.

But Americans are optimistic by a 52-43 percent margin about the next four years with Trump and say by a 47-31 percent margin that he will help rather than hurt the nation’s economy.

Yet 53 percent believe Trump is not honest, while 39 percent say he is; which compares to 52-42 on Nov. 22.

American voters also say by a 55-36 percent margin that the Russian government interfered with the 2016 president election through hacking, and 75 percent of those who believe the Russians interfered, say they did it to help Trump become president, according to the same Quinnipiac survey.

Donald Trump said of all the above polls that grade him poorly: “The same people who did the phony election polls, and were so wrong, are now doing approval rating polls. They are rigged just like before.”

A final survey from Military Times and Syracuse University’s Institute for Veterans and Military Families on President Obama as commander in chief revealed some of the following.

How favorable or unfavorable is your view of President Obama?

Enlisted: 35% favorable...52% unfavorable
Officer: 44% favorable...49% unfavorable
Army: 36% favorable...53% unfavorable
Navy: 43% Favorable...46% unfavorable
Marine Corps: 26% favorable...60% unfavorable
Air Force: 35% favorable...50% unfavorable

Have these decisions made the U.S. more or less safe?

Drawing down from Iraq: 59% less safe
Drawing down from Afghanistan: 54% less safe
Less emphasis on large-scale overseas missions: 42% less safe
More reliance on Special Forces: 58% more safe

How have these issues affected military readiness?

Gender integration within combat units: 30% hurt...15% helped
Transgender service: 41% hurt...12% helped

--A Pew Research Center poll of American attitudes about various threats had some of the following:

79% believe ISIS is a major threat vs. 17% who say it is not a threat.

71% believe cyberattacks from other countries are a major threat, 24% don’t.

By a 64-27 margin, North Korea’s nuclear program is viewed as a major threat.

By a 54-36 margin, Russia’s power and influence is viewed as a major threat.

Global climate change is viewed as a major threat by a 52-32 margin.

China is viewed as a major threat by a 52-36 margin.

Separately, this same Pew poll has Americans wanting Donald Trump to release his taxes by a 60-33 margin.  [79% of Democrats say he should, 38% of Republicans.]

--President Obama commuted the remaining prison sentence of Chelsea Manning, the army intelligence analyst convicted of an enormous 2010 leak that revealed American military and diplomatic activities across the world and made WikiLeaks, the recipient of the disclosures, famous.

Manning, a transgender woman who was known as Bradley Manning when she deployed with her unit to Iraq in 2009, had access to a classified computer network.  Manning then copied hundreds of thousands of military incident logs from the Afghanistan and Iraq wars, which exposed abuses of detainees by Iraqi military officers working with American forces, among other things, while she also copied about 250,000 diplomatic cables form American embassies.  WikiLeaks then disclosed them.

Incarcerated at the male military prison at Fort Levenworth, Kan., Manning has been jailed for nearly seven years, and her 35-year sentence was by far the longest ever imposed in the United States for a leak conviction.

Manning will be freed on May 17, rather than in 2045. 

House Speaker Paul Ryan said President Obama “now leaves in place a dangerous precedent that those who compromise our national security won’t be held accountable for their crimes.” 

Arkansas Republican Sen. Tom Cotton: “I don’t understand why the president would feel special compassion for someone who endangered the lives of our troops, diplomats, intelligence officers, and allies.  We ought not treat a traitor like a martyr.”

Arizona Republican Senator John McCain, chairman of the Senate Armed Services Committee, called it a “grave mistake.”

In a statement, McCain said: “It is a sad, yet perhaps fitting commentary on President Obama’s failed national security policies that he would commute the sentence of an individual that endangered the lives of American troops, diplomats, and intelligence sources by leaking hundreds of thousands of sensitive government documents to WikiLeaks, a virulently anti-American organization that was a tool of Russia’s recent interference in our elections.

“Her prison sentence may end in a few months’ time, but her dishonor will last forever,” the senator said.

Editorial / Wall Street Journal

“President Obama’s decision Tuesday to commute the 35-year prison sentence of Pfc. Chelsea, nee Bradley, Manning will be celebrated on the left as a vindication of a well-intentioned whistleblower whose imprisonment at Ft. Leavenworth as a transgender woman was a travesty of justice.  The real travesty is the show of leniency for a progressive cause celebre whose actions put hundreds of lives at risk.

“For those who need reminding, Manning was stationed in Iraq as a low-level intelligence analyst when he gained access to troves of classified material.  Starting in 2010 he leaked nearly 750,000 documents to Julian Assange’s WikiLeaks.  Included in the material were thousands of secret State Department cables and masses of military information on the wars in Iraq and Afghanistan. Assange worked with reporters from several news organizations to publish the material, to much self-congratulation about the virtues of transparency.

“U.S. diplomats and military officers took a less charitable view, with good reason.  While many of the State Department cables contained little more than diplomatic party gossip, others disclosed sensitive conversations between U.S. diplomats and opposition leaders in repressive regimes....

“Even more dangerous were leaks of operational secrets, including the names of Afghan informants working with U.S. coalition forces against the Taliban.  A Navy SEAL who participated in the 2011 raid on Osama bin Laden’s compound in Pakistan testified that Manning’s leaks were found on the terrorist’s computer.

“Little wonder that at the time Mr. Obama criticized ‘the deplorable action by WikiLeaks.’  Then-Secretary of State Hillary Clinton warned that the document dump ‘puts people’s lives in danger’ and was ‘an attack on America’s foreign policy,’ its partnerships and alliances....

“The commutation sends a dreadful message to others in the military who might have grievances or other problems but haven’t stolen national secrets.  The lesson is that if you can claim general dysphoria or some other politically correct condition, you can betray your country and get off lightly.”

Michael Rubin / New York Post

“As the clock winds down on his presidency, President Obama has commuted the sentence of Chelsea Manning, the army intelligence analyst convicted of leaking hundreds of thousands of U.S. diplomatic and military documents to WikiLeaks.

“Manning told Adrian Lamo, an ex-hacker and confidant, that she hoped her leak would spark ‘worldwide discussion, debates and reforms.’

“ ‘If not,’ she added, ‘then we’re doomed as a species.’

“Make no mistake: Manning was neither an altruistic liberal nor free-speech warrior: She was a narcissist and would-be tyrant who believed rules did not apply to her. She was not motivated by a desire to expose wrongdoing, for she ignored channels used by generations of whistleblowers and instead sought the wholesale exposure of government secrets.

“Diplomats are like journalists, doctors and lawyers: their jobs depend on the trust and confidentiality of those with whom they speak.  As the U.S. military engages increasingly in civil affairs, soldiers are not much different.

“Manning not only burned the sources of hundreds of diplomats, but she effectively dissuaded foreigners from trusting any future American official.

“The exposure may also have cost lives: Both al Qaeda and the Taliban combed through documents to identify those cooperating with the United States.

“WikiLeaks – the chief beneficiaries of Manning’s crime – didn’t care.

“WikiLeaks founder Julian Assange suggested those murdered as a result deserved their fate.

“ ‘We are not obligated to protect other people’s sources,’ he said, adding that Afghans ‘should know about’ those who have engaged in ‘genuinely traitorous’ acts, such as talking to the U.S. military.

“Just as turning his back on the ‘no chemical weapons’ red line in Syria convinced the Syrian government and other rogue regimes that they could massacre civilians without consequence, Obama’s willingness to free Manning will convince the disgruntled and unstable that they can betray the trust put in them.”....

“Manning’s commutation...rationalizes treason and reflects Obama’s disdain both for the bureaucracy over which he presided and those who abided by its rules and placed meaning in their oaths.”

As for Assange, he had promised to allow himself to be extradited to the United States if Manning was released, but now it seems he’s not so sure.  One of his lawyers, Barry Pollack, in an email to The Hill, said: “Mr. Assange welcomes the announcement that Ms. Manning’s sentence will be reduced and she will be released in May, but this is well short of what he sought.  Mr. Assange had called for Chelsea Manning to receive clemency and be released immediately.”

But another of Assange’s attorneys said on Tuesday that he would keep his word.

--Thomas L. Friedman / New York Times

“When Donald Trump was elected president, it felt to me like the most reckless thing our country had done in my lifetime. But like many Americans, I hoped for the best: He’ll grow into the job.  He’ll surround himself with good people. The country could use a jolt of fresh thinking.  He’ll back off some of his most extreme views.

“But now that Trump is about to put his hand on the Bible and be sworn in, I’ve never been more worried for my country.  It’s for many reasons, but most of all because of the impulsive, petty and juvenile tweeting the president-elect has engaged in during his transition.

“It suggests an immaturity, a lack of respect for the office he’s about to hold, a person easily distracted by shiny objects, and a lack of basic decency that could roil his government and divide the country.  I fear that we’re about to stress our unity and institutions in ways not seen since the Vietnam War....

“Yes, I know, in his Inaugural Address Trump will again summon us to ‘bind the wounds of division.’ [Ed. Trump didn’t.]  But given all his impulsive digital ax wielding, those words will ring hollow.  He’s already emptied them of all emotional force with his venomous tweets and refusal to bring even one Democrat into his cabinet.

“Trump is hardly the first person elected president to have his legitimacy attacked.  Indeed, he led the onslaught on President Obama’s legitimacy.  But more than any president since Richard Nixon, Trump has shown himself incapable of turning the other cheek and converting doubters into allies. In an age that demands giant leadership, he’s behaved utterly small....

“I’ve noted before that one of my favorite movies is ‘Invictus,’ which tells how Nelson Mandela, when he became South Africa’s president, built trust with the white community. Shortly after Mandela took power, his sports advisers wanted to change the name and colors of the country’s famed rugby team – the almost all-white ‘Springboks’ – to something more reflective of black African identity.

“Mandela refused.  He told his black aides that the key to making whites feel at home in a black-led South Africa was not uprooting all of their cherished symbols.  ‘We have to surprise them with restraint and generosity,’ said Mandela.

“Most Americans are good-hearted people who are actually starved to feel united again.  Many who voted against Trump would have given him a second look had he surprised them with generosity and grace.  He did just the opposite. Sad.”

--Bret Stephens / Wall Street Journal

“This column has previously observed that few things are as dangerous to democracy as a demagogue with a half-valid argument. The president-elect has offered at least a half-dozen such arguments, and that’s merely in the last week.

“First we had Donald Trump’s press conference attack on CNN’s Jim ‘You Are Fake News’ Acosta.  Then a salvo against the pharmaceutical industry, which, he said, is ‘getting away with murder.’  Mr. Trump also accused intelligence agencies of leaking a smear against him, asking in a tweet: ‘Are we living in Nazi Germany?’

“This was followed by an interview with British and German newspapers, in which Mr. Trump called NATO ‘obsolete,’ dismissed the European Union as ‘basically a vehicle for Germany,’ and threatened to slap a 35% tariff on BMW for wanting to build a plant in Mexico.

“Oh, and the feud with John Lewis.  The congressman from Georgia had accused Mr. Trump of being illegitimately elected on account of Russian meddling.  Mr. Trump fired back on Twitter that Mr. Lewis should spend his time fixing his ‘crime infested,’ ‘falling apart’ district in Atlanta.

“Say this for Mr. Trump: He has no use for pieties.  Mr. Lewis is routinely described in the press as a ‘civil rights icon.’  The next president could not care less.  Wall Street Journal Republicans believe that business decisions should be left to business. As of Friday those businesses will do as Mr. Trump says.  NATO?  Too old.  The EU?  Not salvageable.  The fourth estate?  A fraud. The folks at Langley?  A new Gestapo.

“All this baits Mr. Trump’s critics (this columnist not least) into fits of moral outrage, which is probably his intention: Nobody in life or literature is more tedious than the prig yelling, ‘Is nothing sacred anymore?’....

“But the main reason the president-elect’s attacks stick is that they each have their quotient of truth.

“Mr. Trump is not wrong that NATO’s European members don’t carry that weight. He isn’t wrong that the EU is in deep trouble no matter what he says.  He isn’t wrong that Mr. Lewis’ attack on the legitimacy of his election was out of line, or that the congressman’s courage in the 1960s should not insulate him from criticism today. He isn’t wrong that drug companies price-gouge....

“But the opposite of not wrong isn’t necessarily right.  There’s a distinction between ‘unverified’ and ‘fake.’ There’s a difference between BuzzFeed’s unethical decision to publish the unredacted dossier and CNN’s appropriate efforts to report on what Mr. Trump knew about it....

“Do mainstream journalists tend to have a liberal political bias?  Sure.  But when Mr. Trump tags them as ‘the disgusting and corrupt media,’ he is making a different point: Down with the hole lot of them.  Was Angela Merkel foolhardy to open Germany’s arms to a million refugees in a year?  She was, but with Mr. Trump it has become a pretext to predict, and cheer, the end of the liberal order in Europe.  It might be possible to dismiss Mr. Trump’s ‘Nazi’ smear of the intelligence community as another case of rhetorical excess.  Except that he has already made plain his indifference for intelligence briefings and his disdain for judgments that don’t square with his policy goals or his personal vanity.

“For supporters of the president-elect, all this may be a refreshing turn away from the stale certainties of the Obama years....

“The optimistic scenario: Mr. Trump’s blasts will get NATO to spend real money on weapons. Maybe they will also get intelligence officials to reconsider leaks against their civilian masters, get companies to think harder about the social effects of their decisions, and get editors to raise publication standards.

“I fear another scenario.  Mr. Trump’s genius for tearing things down will not be matched by an ability to build things up.  Half-valid points will not be made whole.  In the bonfire of discarded truisms and broken institutions will lie more than the failure of one man’s presidency.”

--I wrote the following in this space, 6/25/16:

“Regarding ‘civil rights hero’ Rep. John Lewis (D-Ga.)....I have long admired the man like most Americans, but it was truly despicable how in the heat of the South Carolina Democratic primary, Lewis flat-out lied about his relationship with the Clintons during the civil rights era, while demeaning Bernie Sanders’ efforts in the cause, even though Lewis didn’t meet the Clintons until over 10 years after the time in question and Hillary wasn’t involved in civil rights (in her case ‘children’s rights’ campaigns) until 1973!  Sanders, on the other hand, was legitimately intimately involved in the civil rights movement going back to his University of Chicago days in 1962.

“Lewis, when feebly confronted by the facts, said, ‘Well, I never met (Sanders).’  What an ass.

“But ‘icon’ John Lewis got away with it. [I hinted at my disgust back in a March column.]  It was a key moment in the presidential campaign and it was disgraceful behavior.”

--At least 60 Democratic congressman skipped the inauguration following Trump’s criticism of Rep. Lewis.

--Scientists reported on Wednesday that the Earth reached its highest temperature in 2016, easily beating a record set a year earlier, which beat the one set 2014.  It is the first time in the modern era of global warming data that temperatures have hit a record three consecutive years.

[NOAA did register three record years in a row, 1939-41, but 1941 now ranks as only the 37th-warmest year on record.]

Deke Arndt, chief of global climate monitoring for the National Oceanic and Atmospheric Administration, said, “A single warm year is something of a curiosity.  It’s really the trend, and the fact that we’re punching at the ceiling every year now, that is the real indicator that we’re undergoing big changes.”

The heat extremes were most pervasive in the Arctic, as last fall we saw temperatures 20 to 30F. above normal across large stretches of the Arctic Ocean.

But part of the reason for the heat of the last two years was El Nino and now that it has ended, climate experts believe 2017 will be cooler, so we’ll see. 

--Editorial / New York Post

“The nonpartisan Pew poll just confirmed the existence of the so-called ‘Ferguson effect’: 86 percent of cops polled say all the national controversy over police killings of civilians has made their jobs tougher.

“The St. Louis police chief coined the term after the shooting of Michael Brown, to describe the tendency of officers to back off from proactive policing in the wake of widespread protests.  The Manhattan Institute’s Heather MacDonald and others point to the Ferguson effect to help explain the rise in violent crime in many U.S. cities.

“Pew polled some 8,000 police officers on race relations, morale and reform last year – with most of it  done before the assassinations of cops in Dallas and Baton Rouge.

“Key findings:

“- 93 percent of officers say they’ve grown more concerned about their safety.

“- 76 percent are more reluctant to use force when necessary.

“- 75 percent believe interactions between police and blacks have become more tense.

“- 72 percent say they’re more reluctant to stop and question suspicious-looking people.

“- 67 percent report being verbally abused.

“But it does flag the perils of a rush to judgment – as in the Ferguson case itself, where the Obama Justice Department’s investigation fully confirmed the account of the officer who shot Brown, and shredded the ‘hands up, don’t shoot’ claim that Brown was an innocent victim.”

--The wife of Orlando, Fla., nightclub gunman Omar Mateen was arrested on charges including obstruction of justice, and accusations she aided her husband and had some foreknowledge he planned to carry out an attack, according to the FBI.

--In a Quinnipiac University Poll, while Hillary Clinton isn’t expected to run for mayor of New York City, if she did, today she would beat Mayor Bill de Blasio 49% to 30% if she ran as an independent while he ran as a Democrat.  De Blasio’s job approval rating is 45% among New Yorkers, 46% of whom disapprove.

But with Clinton not expected to run, de Blasio handily beats Democratic challengers such as comptroller Scott Stringer who are expected to, 35% to 9% in the case of Stringer. 

--It is just amazing that ten survivors were found in the hotel that collapsed under an avalanche in Italy’s Abruzzo region.

--Finally, Gene Cernan died, the last person to walk on the moon.  He was 82.  Cernan commanded Apollo 17 and set foot on the lunar surface in December 1972, the last of a dozen men to walk on the moon – tracing his only child’s initials in the dust before climbing the ladder of the lunar module the last time.

Cernan recalled in an oral history, “Those steps up that ladder, they were tough to make. I didn’t want to go up.  I wanted to stay a while.”

He said that upon landing, and after things had settled down, “That’s where you experience the most quiet moment a human being can experience in his lifetime. There’s no vibration.  There’s no noise.  The ground quit talking.  You partner is mesmerized.  He can’t say anything.

“The dust is gone.  It’s a realization, a reality, all of a sudden you have just landed in another world on another body out there (somewhere in the) universe, and what you are seeing is being seen by human beings – human eyes – for the first time.”

Completing their third moon walk on Dec. 14, Jack Schmitt returned to the lunar module and was followed by Cernan, whose last words on the surface were:

“We leave as we came and, God willing, as we shall return, with peace and hope for all mankind.”

Appropriate words for today.

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

God bless America.  God bless Donald J. Trump.

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Gold $1210
Oil $52.33

Returns for the week 1/16-1/20

Dow Jones  -0.3%  [19827]
S&P 500  -0.15%  [2271]
S&P MidCap  -0.7%
Russell 2000  -1.5%
Nasdaq  -0.3%  [5555]

Returns for the period 1/1/17-1/20/17

Dow Jones  +0.3%
S&P 500  +1.5%
S&P MidCap  +0.9%
Russell 2000  -0.4%
Nasdaq  +3.2%

Bulls  60.6
Bears 
17.3  [Source: Investors Intelligence...since the bull reading first crossed the 60 level three weeks ago, the market has largely stalled out.]

Have a great week.

Happy 66th wedding anniversary to my parents!

Brian Trumbore