Week in Review

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Week in Review

11/05/2016

For the week 10/31-11/4

[Posted 11:00 PM ET, Friday]

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Edition 917

Washington and Wall Street...the Election

Our long national nightmare is either close to an end, or just starting.  We may learn a lot about the direction of the country come Wednesday morning, and we know roughly half the country will be upset with the result.  We should also have an idea whether or not outside forces attempted to influence the outcome through cyberwarfare, or other forms of terrorism.  [Yes, al-Qaeda may not get the press these days, but they only do big stuff.]

For example, while U.S. intelligence agencies do not believe Russia is capable of using cyberespionage to alter Tuesday’s outcome, they have not ruled out Russian-sponsored disruption, or continued meddling after the vote, in an attempt to delegitimize the outcome.

Last Friday night we were beginning to digest the actions of FBI Director James Comey, who had notified congressional leaders from both parties that emails had surfaced in a case involving former New York congressman Anthony Weiner, the estranged husband of top Hillary Clinton aide Huma Abedin, and that the emails appeared to be pertinent to the previously closed probe into Clinton’s private server.  That’s really all we knew on Friday.

In the week since, while it is not expected that the FBI will formally comment further before Election Day, various reports have come out saying the bureau found emails from Clinton’s private server on the laptop seized from Weiner – and that they are not necessarily duplicates of those already found in the server probe.  It isn’t clear, though, if any of the emails are related to the server scandal, but the FBI obtained a warrant to look through the laptop’s 650,000 emails overall.

Meanwhile, hacked emails from Hillary Clinton’s campaign chairman John Podesta revealed that he advised former Clinton chief of staff Cheryl Mills to “dump all those emails” the same day a report revealed Clinton’s use of a private server while secretary of state, as disclosed by WikiLeaks Tuesday. This was hours after the New York Times reported Clinton might have violated federal records requirements by using the server.

For his part, Senate Minority Leader Harry Reid (D-Nevada) accused Comey of suppressing negative information related to Donald Trump.

“In my communications with you and other top officials in the national security community, it has become clear that you possess explosive information about close ties and coordination between Donald Trump, his top advisors, and the Russian government,” a letter from Reid to Comey reads.  “The public has a right to know this information.”  Reid said there were “explosive” ties between Trump and Russia.

As for Comey himself, he was said to have defied his boss’s instructions when he told Congress he will reopen the probe.  Attorney General Loretta Lynch asked the FBI director to abide by past Justice Department policies and not do anything to meddle in an election.

Hillary Clinton, at an appearance last Saturday in Florida, said she “called on Director Comey to explain everything right away, put it all out on the table.”

Then there is Huma Abedin, who was clearly incredibly reckless in routinely storing State Department messages, including ones containing classified information, on her Yahoo email account. The FBI confronted her back in April with a 2010 email warning her that the account may have been compromised, Yahoo being notoriously vulnerable to hacking.

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John Podhoretz / New York Post

“Democrats are whistling past the graveyard.

“ ‘This is nothing,’ they insist, even as they call for FBI director James Comey’s scalp for reigniting the Hillary Clinton email scandal.  The problem is that the polls were tightening even before Comey’s Friday [10/28] announcement.  What was a 6-point race in the Real Clear Politics average nationally only a few days ago is now a 2-point race.

“And while Hillary still seems to have enough states locked down to win the Electoral College, what looked like a landslide a week ago is right now a potentially comfortable margin that may get narrower and less comfortable by the day.

“While most poll respondents say the email business isn’t affecting their potential vote, ‘most’ ain’t ‘all.’  One in 10 say it may.

“Introducing a 10-percent note of uncertainty into a race not yet put away isn’t nothing.  It’s something.  It’s quite a lot of something....

“The rise of Trump and the stark fissures in the Republican Party and the conservative movement have dominated the political conversation for the past 16 months.  And understandably so, for they reveal an institutional crisis at the heart of our politics, a loss of faith in the way we go about choosing leaders and a sense that Washington is broken.

“But lost in the focus on Republican disarray and decay has been the ongoing story of Democratic Party rot.

“The most important political story during the nearly eight years of the Obama presidency is how that presidency delivered a neutron-bomb strike to his party.  Obama and the political structure of America have been left standing – but nearly 1,000 Democratic officeholders have been defeated.

“In the House of Representatives, three successive elections in 2010, 2012 and 2014 have seen 63 Democratic Congress members lose their seats.  In 2009, Democrats held 60 Senate seats. Right now, they hold 46.

“So out of 535 elected positions in the U.S. Congress, Obama has overseen a 14 percent reduction in Democratic officeholding – and the loss of majorities in both chambers.

“Nationally, the numbers are even more stark. Democrats have lost 910 seats in state legislatures since 2009, while Republicans have gained 12 governor’s mansions....

“Democrats hope a good showing on Tuesday will win back five Senate seats and maybe 15 House seats, but relative to their party’s losses since 2009, that’s like a bandage on an amputation.

“Republicans are in lousy shape, and we all know it. They’ll be in lousy shape even if Trump wins, because victory isn’t going to heal the wounds of the past two years.

“But Democrats are in lousy shape as well, and will be in lousy shape even if the E-mail Bleacher wins.  Maybe now they’ll wake up to reality, the way Republicans have.”

The Wall Street Journal reported that the FBI had an internal battle over secret recordings of a suspect talking about the Clinton Foundation and whether it was evidence of corruption or worthless hearsay, according to the Journal’s sources.

“On Wednesday, President Barack Obama took the unusual step of criticizing the FBI when asked about Mr. Comey’s disclosure of the emails.

“Amid the internal finger-pointing on the Clinton Foundation matter, some have blamed the FBI’s No. 2 official, deputy director Andrew McCabe, claiming he sought to stop agents from pursuing the case this summer.  His defenders deny that, and say it was the Justice Department that kept pushing back on the investigation.”

Editorial / Wall Street Journal

“President Obama isn’t on the ballot Tuesday, but you wouldn’t know it from his lobbying for Hillary Clinton.  On Wednesday he even butted into his Administration’s legal process by implicitly criticizing his own FBI director for alerting Congress to new evidence related to the investigation into Mrs. Clinton’s emails.

“Mr. Obama didn’t mention FBI director James Comey by name when asked about the case.  But he echoed the Clinton campaign’s rhetoric against Mr. Comey by saying in an interview with NowThis News that, ‘I do think that there is a norm that when there are investigations, we don’t operate on innuendo and we don’t operate on incomplete information and we don’t operate on leaks.  We  operate based on concrete decisions that are made.’

“He then absolved Mrs. Clinton of wrongdoing, though he can’t possibly know what the new evidence might be.  ‘When this was investigated thoroughly the last time, the conclusion of the FBI, the conclusion of the Justice Department, the conclusion of repeated congressional investigations was that she had made some mistakes but that there wasn’t anything there that was prosecutable,’ Mr. Obama said.

“Mr. Obama was no doubt signaling voters to ignore the FBI news, but his comments are also a grossly inappropriate intervention in a criminal case.  He did the same in October 2015 and April 2016 when he said Mrs. Clinton had no ill intent – precisely the rationale Mr. Comey later used to exonerate Mrs. Clinton.  Liberal pundits these days are lamenting the end of political ‘norms,’ but they’d be more credible if they noticed that Mr. Obama is the leading offender.”

Holman W. Jenkins, Jr. / Wall Street Journal

“It’s hard to generalize about Hillary Clinton’s email situation except that she tried to afford herself an extraordinary privilege as a high-ranking official, and then caused for herself exactly the problems (and worse) that she presumably was trying to avoid.

“It’s the White House Travel Office, the Rose Law Firm billing records, the Seth Wardoption (don’t ask), the health-care task force, etc., all over again.

“Mrs. Clinton is a screw-up. And when a trait takes such trouble to announce itself, note must be taken.

“Complicating the legal question, of course, is the fact that she didn’t exactly hide her behavior. The State Department knew she was conducting business on a private server. Her boss, the president, exchanged emails with her via what was self-evidently a private email account.

“All this being so, many Americans probably would have been happy to see the difficulties bypassed by Mrs. Clinton simply returning all her emails and devices intact to the State Department.  This she did not do.  In response to reasonable and unavoidable questions about whether her arrangement and subsequent actions violated the law, the Obama administration had no choice but to launch a criminal investigation.

“Now a simple home truth is that Mr. Obama and his attorney general, Loretta Lynch, from day one, were hardly indifferent, objective observers of the process.  They did not want Mrs. Clinton charged.

“In our imperfect world, most will understand the dilemma before FBI Director James Comey: Would it be more damaging for the country, FBI and personal reputation to actively intervene in the election by indicting Mrs. Clinton or to passively intervene in the election by giving her a pass?

“A non-act is somehow easier to pass off than an act.  Yet events of the last few days point to the absurdity of him clearing Mrs. Clinton when he still hadn’t seen 33,000 pieces of evidence.  By definition, unless the FBI is full of remarkably unsuspicious cops, the emails that Mrs. Clinton and her aides deleted would seem the ones most likely to contain evidence of improper activity.

“Mr. Comey perhaps failed also to foresee how the server issue would become entangled with the WikiLeaks theft of Clinton Foundation emails, contributing to a rather more multidimensional view of the back-scratching and buck-raking world the Clinton entourage inhabited.”

President Obama told a rally in North Carolina on Wednesday: “The fate of the world is teetering and you, North Carolina, are going to have to make sure that we push it in the right direction.

“I am not on the ballot, but I tell you what – fairness is on the ballot; decency is on the ballot; justice is on the ballot; progress is on the ballot; our democracy is on the ballot.”

Jonah Goldberg / New York Post

“The word of the weekend was ‘protocol.’

“In deciding to tell Congress about a new trove of emails that may or may not contain classified information and may or may not relate to Hillary Clinton, FBI Director James Comey broke Justice Department protocol both by releasing information close to an election and by revealing details of an ongoing investigation.  It was a ‘stunning breach of protocol,’ former Attorney General Eric Holder dutifully insisted.

“Tim Kaine invoked protocol more than a half-dozen times Sunday in his interview with ABC’s George Stephanopoulos.  ‘It is just extremely puzzling,’ the Democratic vice presidential nominee said.  ‘Why would you break these two protocols?’

“ ‘Puzzled’ was the runner-up word of the weekend; Kaine used it repeatedly, as did Clinton’s campaign manager Robby Mook.  ‘We are so puzzled right now,’ Mook told NBC’s Chuck Todd.

“Well, let’s try to solve this riddle.  Comey’s regrettable decision is much easier to understand once you realize it is one small piece of the larger puzzle. He made a bad choice – though probably the least bad choice of those available to him – precisely because all of the relevant actors in this sordid mess have been breaking protocol for years.

“Clinton broke all kinds of protocol by setting up her stealth server and then lying about it not only in public but also, I would argue, to Congress.  She broke protocol when her aides smashed phones with a hammer and erased emails – official government records – after they were subject to a congressional subpoena.

“Bill Clinton broke protocol when he met with Attorney General Loretta Lynch in secret while his wife was still under investigation by the FBI.  Lynch, smarting from her breach of protocol with the former president, widened the breach by refusing to recuse herself and investing instead in the FBI director the authority to decide whether or not to prosecute Hillary Clinton.

“President Obama broke protocol when he told ’60 Minutes’ that Clinton – with whom he had corresponded over an unsecure email channel – did nothing to endanger national security long before the investigation was even concluded.

“And, of course, the Democratic Party broke not a formal protocol but one hell of a rule by thumb by nominating a woman who carries more baggage than the cargo hold of the Queen Mary.

“ ‘There is a very good argument – I would say, an irrefutable argument – that Comey should ever have pronounced that the Clinton emails investigation was closed (in fact, it would have been appropriate if he had made no public statement about the investigation at all),’ Andrew McCarthy, a former federal prosecutor, writes in National Review.  ‘But having made that pronouncement – which, again, Mrs. Clinton was thankful to have and which she has ceaselessly exploited – he was obliged by law-enforcement principles to amend it when it was no longer true.’

“And that gets to the heart of it. Comey, by his own hand, as well as with the encouragement of the Obama administration, the media and the Clinton Industrial Complex, found himself perched atop an enormous mountain of crap. Any effort to get off the fetid summit was bound to leave him soiled.”

Former U.S. attorney general Michael B. Mukasey / Wall Street Journal

“Mr. Comey reportedly wrote his letter to Congress over the objection of the attorney general and her deputy. Thus, regardless of what is in the newly discovered emails, the current Justice Department will not permit a grand jury to hear evidence in this case. And because only a grand jury can constitutionally bring charges, that means no charges will be brought.

“Which is to say, we know enough to conclude that what we don’t know is of little immediate relevance to our current dismal situation.”

Edward Luce / Financial Times

“Can Mrs. Clinton survive her October surprise?  If the question is will she win next week, the answer is still probably yes. Though it is too soon for polls to measure the impact of Mr. Comey’s hand grenade [Ed. Mr. Luce wrote this last weekend], Mrs. Clinton’s lead on Friday was wide enough to sustain a couple of points of damage.  If the question is whether she could govern, the picture looks different. Even a 1 percent swing against Mrs. Clinton could tip the race for the U.S. Senate.  Without a Democratic Senate majority, Mrs. Clinton’s chances of passing anything will drop. Even before Mr. Comey’s Halloween gift, it was likely that Republicans would retain control of the House of Representatives.

“The largest cost is likely to show up in the wake of a Clinton win.  The narrower her margin of victory, the easier it will be for Mr. Trump to spark outrage over a stolen election.  It would also give him more of a grip over Republicans in Congress.  Legislators respond to feedback from their districts.  By Jeffersonian design, the House is where the link between elected and elector is most electric. If Mr. Trump’s base is inflamed, Republican legislators will take their cue.  Most of their voters already believe Mrs. Clinton is dishonest and corrupt.  It is no great leap to endorsing Mr. Trump’s claim that the Clintons are a ‘criminal enterprise.’

“It is hard to talk yourself down from such incendiary language....With the help of WikiLeaks, Republicans believe they have enough ammunition to open up fresh investigations.  For ambitious legislators, holding her feet to the coals is a sure-fire route to folk-hero status.”

Thomas L. Friedman / New York Times

“While I’ve opposed the Trump candidacy from the start, I’ve never disparaged Trump voters. Some are friends and neighbors; they’re all fellow Americans.  We should take their concerns seriously. But we should also demand that they be serious, that they draw distinctions between these two presidential candidates.

“Yes, Hillary Clinton is a flawed leader – but in the way so many presidents were. We know her flaws: She has a weakness for secrecy, occasionally fudges truths, has fawning aides and a husband who lacks discipline when it comes to moneymaking and women.  But she is not indecent, and that is an important distinction.  And she’s studious, has sought out people of substance on every issue and has taken the job of running for president seriously.

“Trump is not only a flawed politician, he’s an indecent human being. He’s boasted of assaulting women – prompting 11 to come forward to testify that he did just that to them; his defense is that he could not have assaulted these women because they weren’t pretty enough.

“He’s created a university that was charged with defrauding its students.... He’s stiffed countless vendors, from piano sellers to major contractors.  He’s refused to disclose his tax returns because they likely reveal that he’s paid no federal taxes for years, is in bed with dodgy financiers and doesn’t give like he says to charity.

“He’s compared the sacrifice of parents of a soldier killed in Iraq to his ‘sacrifice’ of building tall buildings.  He’s vowed, if elected, to prosecute his campaign rival.

“We have never seen such behaviors in a presidential candidate.

“At the same time, Trump has shown no ability to talk about any policy issue with any depth.  Harlan Coben’s debate-night tweet last month had it right: ‘On Aleppo he sounds like a fifth grader giving a book report on a book he never read.’

“I understand why many Trump supporters have lost faith in Washington and want to just ‘shake things up.’  When you shake things up with a studied plan and a clear idea of where you want to get to, you can open new futures.  But when you shake things up, guided by one-liners and no moral compass, you can cause enormous instability and systemic vertigo.”

Charles Krauthammer / Washington Post

“Rule of thumb for a presidential campaign where the two candidates have the highest unfavorable ratings in the history of polling: If you’re the center of attention, you’re losing.

“As Election Day approaches, Hillary Clinton cannot shake the spotlight. She is still ahead in the polls, but you know she’s slipping when she shows up at a Florida campaign event with a week to go accompanied by the former Miss Universe, Alicia Machado.

“The original plan was for Clinton to pivot in the final week of the campaign from relentless criticism of Donald Trump to making a positive case for herself.  Instead, she reached back for a six-week-old charge that played well when it first emerged back then but now feels stale and recycled.

“The setback and momentum shift came courtesy of FBI Director James Comey.  Clinton’s greatest hurdle had always been the Comey primary, which the Democrats thought she’d won in July when he declined to recommend prosecuting her over classified emails.  This engendered an outpouring of Democratic encomiums about Comey’s unimpeachable integrity and Solomonic wisdom.

“When it was revealed last Friday that there had been a Comey recount and Clinton lost, Solomon turned into Torquemada.  But, of course, Comey had no choice.  How could he have sat on a trove of 650,000 newly discovered emails and kept that knowledge suppressed until after the election?

“Comey’s announcement brought flooding back – to memory and to the front pages – every unsavory element of the Clinton character: shiftiness, paranoia, cynicism and disdain for playing by the rules.  It got worse when FBI employees began leaking stories about possible political pressure from the Justice Department and about parallel investigations into the Clinton Foundation.

“At the same time, Clinton was absorbing a daily dose of WikiLeaks, offering an extremely unappealing tableau of mendacity, deception and the intermingling of public service with private self-enrichment.  It was the worst week of her campaign, at the worst time.

“And it raises two troubling questions:

“ –Regarding the FBI, do we really want to elect a president who will likely come into office under criminal investigation by law enforcement?  Congressional hearings will be immediate and endless. A constitutional crisis at some point is not out of the question.

“ –And regarding WikiLeaks, how do we know it will have released the most damning material by Election Day?  A hardened KGB operative like Vladimir Putin might well prefer to hold back whatever is most incriminating until a Clinton presidency. He is surely not above attempted blackmail at an opportune time....

“We are entering a period of unprecedented threat to the international order that has prevailed under American leadership since 1945.  After eight years of President Obama’s retreat, the three major revisionist powers – Russia, China and Iran – see their chance to achieve regional dominance and diminish, if not expel, U.S. influence.

“At a time of such tectonic instability, even the most experienced head of state requires wisdom and delicacy to maintain equilibrium.  Trump has neither. His joining of supreme ignorance to supreme arrogance, combined with a pathological sensitivity to any perceived slight, is a standing invitation to calamitous miscalculation....

“It took seven decades to build this open, free international order.  It could be brought down in a single presidential term. That would be a high price to pay for the catharsis of kicking over a table.”

As for yours truly, I have covered this entire race as closely as anyone.  You know where my priorities lie.  America can survive a domestic crisis or two. We will not survive a major modern military conflict and remain the same nation...period.

But I write about that every week.  For now, as a Republican who did not vote for the party’s nominee for the reason that he is hopelessly clueless on foreign affairs (and it’s not as simple as then hiring good people to advise him), all I care about for Tuesday is retaining the Senate, knowing that the House is secure.

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Turning to Wall Street...Friday saw the release of the employment report for October and while the nonfarm payroll figure of 161,000 was below expectations, it was nonetheless solid, including upward revisions of 44,000 combined for August and September, bringing the three-month average to 176,000.

The unemployment rate ticked back down to 4.9%, but there were two key positives.  Average hourly wages rose 0.4% and are now up 2.8% over the past 12 months, the best pace since 2009, and U6, the underemployment index that is a more accurate reading on the true jobs picture, fell to 9.5%, the best reading on this since April 2008.  Add it all up and the odds of the Federal Reserve raising interest rates at its Dec. 13-14 meeting rose to 80% and I certainly am not changing my tune from months ago that this is indeed when the Fed will act, barring a post-election market swoon or some geopolitical disaster.

[The Fed left interest rates unchanged as expected at its meeting this week.  No way they were doing anything prior to the election; especially after Comey interjected himself into the race.]

The wage growth is significant and is part of my long-held scenario that there will be an inflation scare that will rock the markets, roiling bonds and leaving the Fed caught with their pants down for not acting earlier.  It’s coming.  Sooner than later.

In other economic news this week, personal income for the month of September rose 0.3%, while consumption was up a solid 0.5%.  The Fed’s preferred inflation barometer, the personal consumption expenditures index, came in at a core rate of 1.7%, below its 2% target, but as I’ve been writing all year, the core CPI is already over 2% and now wages are nearing 3%.

September construction spending fell 0.4%, while factory orders rose 0.3%.

The Chicago manufacturing PMI was a less than expected 50.6 (50 being the dividing line between growth and contraction), while the ISM reading on manufacturing was 51.9 last month vs. 51.5 in September, with the services number at 54.8, down from September’s 57.1.

All in all, including the employment data, a pretty solid week and further evidence of an economy that is chugging along, though not necessarily accelerating.

As for the stock market, the S&P 500’s losing streak hit nine consecutive sessions on Friday, the longest such skid since 1980, though the move has been of the drip, drip, drip variety.  The tightening presidential race and collapsing oil prices fed the decline.  Both the S&P and Dow Jones hit levels not seen since July 7.

Europe and Asia

The U.K. government’s Brexit plans were thrown into turmoil on Thursday, after Britain’s High Court ruled Prime Minister Theresa May must grant a parliamentary vote before invoking the Article 50 divorce clause from the European Union.  Sterling immediately jumped on the ruling as there was the mistaken notion this meant no Brexit after all, but Mrs. May vowed to go to the Supreme Court in early December to try to overturn the three-judge panel’s decision.

MPs are not expected to block Brexit altogether, following June’s referendum, but they will try to amend legislation to push the prime minister towards a “soft Brexit” negotiating stance that would somehow keep Britain in the single market and customs union.

Mrs. May has a working Commons majority of 15, and there is some talk she could call early elections in 2017 to try to improve her mandate with a bigger majority, but Downing Street tried to quash the discussion.

May was going to allow debate in the parliament prior to the High Court ruling, but it was just going to be that, debate, as she also wasn’t going to spell out her government’s negotiating position prior to the actual start of exit talks next spring.

So it would seem that while MPs, who by a wide majority favor remaining in the EU, won’t block the will of the people, they will attempt to require the prime minister to show her negotiating hand.

On the economic front, a slew of data from Eurostat and IHS Markit.

The final eurozone PMI for manufacturing came in at 53.5 for October vs. 52.6 in September, while the services reading was 52.8 vs. 52.2.

Separately, Germany’s manufacturing figure was 55.0 vs. 54.3, a 33-month high, with services spurting higher to 54.2 from 50.9.

France’s manufacturing PMI was 51.8 vs. 49.7, the best since March 2014, while services fell to 51.4 from 53.3.

Spain’s manufacturing number was 53.3 vs. 52.3; services 54.6 vs. 54.7.

Italy’s manufacturing reading was 50.9 vs. 51.0; services 51.0 vs. 50.7 in September.

Greece had a manufacturing figure of 48.6 last month vs. 49.2, not good.

The above was all from Markit.  Eurostat reported that third-quarter GDP was 0.3% for the eurozone, same as Q2 and down from 0.5% in Q1.  Year over year GDP is running at 1.6% for the EA 19 (the 19 using the ‘euro’).

Inflation ticked up to 0.5% for the eurozone on an annualized basis in October, up from September’s 0.4%, and May’s -0.1% ann. pace, so some slight acceleration, which is what everyone wants to see.

Eurostat also reported that the EA 19 unemployment rate for September was 10.0%, same as July and August, and a slow improvement over September 2015’s 10.6% rate.

Germany was at 4.1%, France 10.2% (down from 10.5% in August), Italy 11.7%, Spain 19.3%, and Greece 23.2% (July).  [Ireland is down to 7.9%.]

The youth unemployment rates remained high in Spain, 42.6%; Italy, 37.1%; and Greece, 42.7% (July).

Back to the U.K., the Bank of England raised its growth and inflation forecasts for 2017 and kept interest rates on hold at 0.25%.  Estimated growth was hiked from 0.8% to 1.4% for next year, but the BoE cut the 2018 forecast from 1.8% to 1.5%.

Inflation was expected to triple to 2.7% next year.

“In the three months since [August], indicators of activity and business sentiment have recovered from their lows immediately following the referendum and the preliminary estimate of GDP growth in the third quarter was above expectations,” the Bank said.  “The near-term outlook for activity is stronger than expected three months ago.”

Governor Mark Carney also pointed out that household spending had held up better than expected since the vote to leave the EU.

Separately, Carney, whose term technically runs until 2021, though he had never planned on serving it out, said he will stay until June 2019.  While highly respected, Carney has been criticized over his forecasts about the economic cost of Brexit prior to the referendum, with critics saying the BoE produced doom-laden projections to boost the Remain camp.

Down in Spain, as expected, Mariano Rajoy was elected for a second term as prime minister last Saturday, securing a mandate from parliament after more than 10 months of stalemate.  But the leader of the conservative Popular party will head a minority government and he needs the support of at least some in the opposition to pass legislation and approve a new budget.  In the vote, 68 lawmakers abstained, allowing Rajoy to get the required simple majority of those casting a ballot.  He could force an early election by resigning, with many believing the PP would significantly increase its majority.

On the migration front, Paris officials began evicting 4,000 migrants that were occupying a squalid camp in the northeast part of the city.  The hellhole had doubled in size overnight after the closure of the “Jungle” in Calais the prior week.

The nearly 4,000 are being relocated across the country.  Interior Minister Bernard Cazeneuve said 85 percent of the Calais migrants are expected to qualify for asylum.

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Turning to Asia, China released its official PMIs for manufacturing and the service economy, with the National Bureau of Statistics saying the former in October came in at 51.2 vs. 50.4, while the services reading was 54.0 vs. 53.7 in September.

The private Caixin reading for manufacturing was 51.2 vs. 50.1, while for the service sector it was 52.4 vs. 52.0; Caixin deemed a more accurate reflection of the state of China’s economy.

In Japan, the manufacturing PMI for October, as published by Markit, was 51.4 vs. 50.4, with the services reading at 50.5 vs. 48.2; so both exhibited encouraging signs.

But retail sales for September were unchanged, which while better than August’s -1.2% reading, is still down 1.9% year over year.

Meanwhile, the Bank of Japan revised its forecast date for hitting 2% inflation to fiscal 2018, which ends in March 2019; a year later than the bank’s previous target of fiscal 2017.  The last core reading for inflation in September was only 0.2% annualized.

Just a few other manufacturing PMI figures of note: Taiwan was 52.7 in October vs. 52.2 in September; South Korea was 48.0 vs. 47.6. 

Street Bytes

--The Dow Jones fell 1.5% this week to 17888, while the S&P 500 fell 1.9% and Nasdaq 2.8%.  For the year, the three major indices are now up only 1% to 3%.

--U.S. Treasury Yields

6-mo. 0.51%  2-yr. 0.78%  10-yr. 1.78%  30-yr. 2.56%

In not moving this week, it was the seventh straight time this year the Federal Reserve decided to leave the benchmark funds rate alone.

In a statement, the Fed did say: “Household spending has been rising moderately but business fixed investment has remained soft.  Inflation has increased somewhat since earlier this year but is still below the committee’s 2 percent longer-run objective.”

But the Fed noted conditions for an increase in rates are steadily getting better.  Again, Yellen and Co. just didn’t want to be more specific than this prior to next Tuesday.

--U.S. crude oil continued to plummet after rallying up to $52 on West Texas Intermediate a few weeks ago.  The decline has come as a result of inventory figures that show renewed stockpiles, while there is doubt OPEC and non-OPEC producers can solidify a prior agreement to cut production when the cartel meets end of this month.  Iran and Iraq, for example, are more interested in increasing production rather than reducing it.

U.S. oil stocks jumped 14.4m barrels last week, according to the Energy Department, like nine times what analysts projected, and with the growing skepticism over OPEC, crude traded below $44 a barrel on Friday before closing the week at $44.13.

--General Electric Co. is acquiring Baker Hughes Inc., to create a $32 billion oil business combining GE’s petroleum-related businesses with Baker Hughes’ oilfield services, equipment manufacturing and technology.  GE will own 62.5 percent of the joint entity.

--Oil giant BP reported about a 50% fall in third-quarter profits to $2.8bn amid falling prices and weaker margins, while it expects capital expenditure in 2017 to be in a range of $15bn-$17bn, vs. an original forecast of $17bn-$19bn.

--Royal Dutch Shell reported an 18% rise in third-quarter profit, also $2.8 billion, beating analysts’ expectations handily, while Shell said its capital spending for 2017 would be in the neighborhood of $25bn, at the bottom of a range previously given and down from $29bn this year.

--U.S. auto sales came in at a 17.9 million seasonally-adjusted-annual-selling rate in October, which is slightly lower than October 2015’s 18.1 million rate, but still a strong performance.   

General Motors’ domestic sales fell 1.7% and Fiat Chrysler’s 10%.  Ford’s U.S. sales fell 12% last month vs. a year ago, slightly worse than expected, the three adding fuel to the perception the auto industry has peaked after a terrific run since the 2009 recession.

Toyota’s sales fell 8.7%, including a 17% decline in passenger car sales.  Nissan’s declined 2.2%.  Honda’s fell 4.2%.  

Honda, by the way, sold 5,000 more trucks and SUVs than cars in October, quite a shift from a few years ago when it was all sedans. But owners of more than 300,000 Hondas have yet to get their Takata air bags repaired, despite warnings from the automaker, and this is scary.

--Shares in Facebook fell 6% on warnings that revenue growth could slow next year, even as the company more than tripled its net income in the third quarter.  CFO David Wehner said advertising revenue would come down “meaningfully” in mid-2017, with Facebook facing limits on the amount of advertising it can show in its news feed.  Plus the company is looking to invest considerably in engineering and data centers.

Earnings came in at $1.09 a share, higher than analysts’ estimate for 97 cents.  Net income soared to $2.38bn, up 166% over the prior year.

Sales rose 56% to $7bn, with mobile advertising revenue up 70% to $5.7bn, or 84% of total ad revenue.  Expenses were up 28% to $3.9bn, with headcount rising 31%.

Monthly active users are now 1.8bn, up 16%; 1.2bn log in every day, up 17% over last year.

Instagram now has 500m monthly active users.

--Alibaba said its sales in the September quarter rose by 55% to $5.1bn, topping the Street’s estimates.  The Chinese e-commerce giant said its core business generated a 41% jump in revenue to $4.27bn.  Cloud computing sales saw sales growth of 130% to $224 million.

Meanwhile, the SEC is working with one or more whistleblowers as it investigates Alibaba’s controversial accounting practices. According to the New York Post, one insider is now “assisting the SEC in the hopes of a reward,” a source told the paper.

The problem for the SEC is trying to get relevant documents that are being held back in China and there are restrictions on what can be turned over, so that’s where an insider could provide them.

Short-sellers have long questioned items such as Alibaba’s accounting for China’s Single’s Day festival, which last year the company said accounted for $14.3 billion in sales on one single day, which some say is inflated by fake transactions.

--The U.S. Justice Department is close to bringing criminal charges for price-collusion in the generic-drug industry, as first reported by Bloomberg News. While the names of the companies involved weren’t immediately known, the Justice Department has sent subpoenas to several manufacturers of generic drugs the past two years and these names are known through the companies’ filings with the SEC; a list that includes Teva Pharmaceutical Industries Ltd. and Mylan NV, shares of which were both hit hard on Thursday when the story first broke.

--Starbucks Corp. beat earnings and revenue expectations in the quarter ending Oct. 2, but missed U.S. sales targets a fourth consecutive period, with same-store sales rising 4%, below projections of 4.8%.  CEO Howard Schultz has been vowing to return to the company’s historic rate of at least 5%.   [And to be fair, 4% is terrific.]

Schultz continues to emphasize China, which generated 6% same-store sales growth, with Starbucks looking to double its store count there to 5,000 by 2021.  “We are doubling down on China,” Mr. Schultz said.

Starbucks’ fiscal fourth-quarter profit rose 23% to $801 million, with revenue rising 16% to $5.71bn.

--The print media continues to suffer mightily with the accelerating decline in print advertising and this week the Wall Street Journal announced it was downsizing its hard copy edition starting Nov. 14, with reduced coverage of arts, culture and New York news, which sucks.  The Journal had previously announced it was offering buyouts to all staffers and warned of layoffs.

The Greater New York section will be reduced to just two pages from six. Selfishly, I hope they don’t drastically cut their excellent sports coverage.

Ad buying firm GroupM has projected that global print ad spending will drop 8.7% this year, the biggest decline since 2009.

Earlier this week, the New York Times Co. reported a 19% decline in print ad revenue in the third quarter. Last week USA TODAY owner Gannett Co.*  reported a 15% drop in same.

The Times said that it did see an increase in digital ad revenues of 21.4%, as the paper added the most online subscribers in a quarter since it launched its paywall model in 2011; 116,000 in the third quarter.

But when you add the 19% decline in print and the 21% increase in digital, total revenues for Q3 slipped 1%, while operating profit fell to $9m, though the company said the profit line was hit by severance payments from staff reductions.

Overall, NYT has 1.5m paying digital subscribers, including moi.  I’m also a digital subscriber to the Wall Street Journal, Barron’s, Washington Post, Financial Times, L.A. Times, and Sydney Morning Herald...all of which costs major dollars, sports fans, plus all the journals I subscribe to to bring you the best.

*Gannett decided it would not pursue a deal with rival newspaper group Tronc, which owns publications like the Los Angeles Times and Chicago Tribune, following reports banks were skittish to finance the transaction.

--Meanwhile, 21st Century Fox, whose TV portfolio includes Fox News, posted fiscal first-quarter earnings of $827 million, up from $678 million in the same period last year, with revenue rising 7% to $6.51 billion.

The jump in revenue was most attributable to higher ad sales at its cable channels, namely Fox News, which James Murdoch, CEO of 21st Century Fox, said “is as strong as it has ever been,” with the leadership change that saw the exit of Roger Ailes “nothing that would change the trajectory or course” of the channel.

Murdoch did concede that ratings for Fox News will probably fall after Nov. 8.  I know I sure as hell won’t be watching as much.  Soon it will be college basketball season (my NBA team, the Knicks, already playing unwatchable hoops).

Separately, Fox News announced this week that Tucker Carlson, a prominent conservative, is set to take over the Fox anchor chair at 7 p.m., once held by Greta Van Susteren and currently occupied by Brit Hume, who has been temporarily filling in for Greta. 

But then there is the issue of Megyn Kelly, whose contract ends next year.  Her memoir, “Settle for More,” is coming out soon and in an excerpt that’s been released, we learn that Roger Ailes promised to advance her career “in exchange for sexual favors” shortly after she arrived at the network in 2005.  Kelly is considering offers from other networks.

--Thomson Reuters Corp. third-quarter earnings beat analyst expectations on Tuesday and the company said it would cut about 2,000 jobs worldwide (of 48,000), mostly in its Financial & Risk business, as well as the Enterprise, Technology & Operations Group.  There will be no decline in the headcount in the Reuters newsroom, however.

Separately, the company reported third-quarter net income of $286 million vs. $293 million a year earlier, with revenue up 1% to $2.74bn.

--One country more than any other outside the U.S. is following the presidential election, and that’s Mexico, whose currency, the peso, has been roiled with all the twists and turns in the campaign, weakening when Donald Trump appears to be gaining in the polls, rallying when a poll or two show Hillary Clinton has stabilized, as was the case by week’s end.

It’s all about how if Trump wins, does he make good on his pledges to impose trade restrictions on Mexico, though if he did impose harsh ones, the falling currency would act as a safety valve in offsetting any deterioration in Mexico’s competitive position.  Mexico’s important tourism sector would be a big beneficiary of a weaker currency, but the country would in turn be importing more inflation.

--Brazil’s manufacturing PMI for October was 46.3 vs. 46.0, the 21st consecutive month in contraction territory.

--Wells Fargo warned its litigation costs could exceed its existing provisions by as much as $1.7bn as the bank faces a growing series of lawsuits tied to its sham account scandal.

--Chinese conglomerate Dalian Wanda Group is buying Dick Clark Productions for about $1 billion, marking its first play in the TV production industry and expanding its reach in Hollywood.  Wanda is led by China’s richest man, Wang Jianlin, while Dick Clark Productions’ management team is expected to remain in place.

Besides the Golden Globes, Dick Clark Productions produces the Academy of Country Music Awards, the Billboard Music Awards and “Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest.”

--Office Depot continues to shutter stores, 300 outlets over the next three years following its aborted $6.3bn merger with rival Staples.  Office Depot’s sales fell 7% (8% in the U.S.) in the third quarter, though net income improved to $44 million.

The ruling that said Office Depot and Staples couldn’t go through with the tie-up still pisses me off.  A merger would reduce competition?  Are you kidding me?  They are both failing! And who is sweeping in?  Amazon, of course. 

I love my Staples store.  They have what I need at a fair price and the service is good.  And that’s a memo....Charles Krauthammer is here.....

--Frozen orange juice prices hit a record this week amid concerns about a supply shortage.  Last month, the U.S. Department of Agriculture forecast that orange production in Florida, the country’s largest producer, would decline 14% to its lowest level since the early 1960s.

Citrus production has been hit by a bacterial disease spread by an insect.

--Americans traveled abroad in record numbers last year, ignoring fears of terrorism, Ebola and Zika.  Some 74 million U.S. residents traveled internationally in 2015, up 9% from the previous year, according to data from the Commerce Department.

The top five international destinations for U.S. travelers were Mexico, Canada, the U.K., the Dominican Republic and France. [Hugo Martin / L.A. Times]

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: Iraqi forces entered parts of Mosul this week and while there has been progress, Iraq’s special forces have recaptured just a small portion of the city, while at the same time, ISIS has been killing hundreds of people, including 50 deserters and 180 former Iraqi government employees this week, a U.N. human rights spokeswoman reported on Friday.  ISIS also transported 1,600 abducted civilians from the town of Hammam al-Alil to Tal Afar on Tuesday, for use as human shields against air strikes.

ISIS released an audiotape from leader Abu Bakr al-Baghdadi, the first public message from him in about a year, as he urged Iraqis to defend Mosul against the Iraqi army.  There have been repeated rumors Baghdadi was dead.

In Syria, rebels Thursday launched a new wave of car bombs and rockets on Aleppo’s western districts, as they redouble efforts to break the government’s three-month siege of the city.  According to the Syrian Observatory for Human Rights, rebel rocket fire killed 56 civilians this week.

Russia said rebels would be allowed to leave unharmed and with their weapons via two special corridors on Friday, while six other routes would be opened for civilians, but the rebels have rejected the offer.

Meanwhile, Syrian President Bashar al-Assad welcomed American and British journalists and analysts to the presidential palace in Damascus, saying he rejected any personal responsibility for the war that has ravaged his country, placing the blame on the United States and on Islamic militants, and none on his government or its security forces.  Assad also ruled out political changes until government forces had won the war, and declared that he expected to be president at least until his third seven-year term ends in 2021.

As if this wasn’t bad enough, he also asserted the social fabric in Syria was “much better” than before the war.  I’m not making this up.  Reminder...half the population of the country has been displaced, over 400,000 killed, tens of thousands more imprisoned, and entire city centers reduced to rubble.

Assad vowed government forces would regain control of the entire country.  He told his audience: “I’m just a headline – the bad president, the bad guy, who is killing the good guys.  You know this narrative. The real reason is toppling the government.  This government doesn’t fit the criteria of the United States.”  [New York Times]

Editorial / Washington Post

“The self-defeating passivity of President Obama’s policies in the Middle East may have reached its apotheosis earlier this month at a National Security Council meeting that he chaired.  On the table were options for responding to the bloody and criminal assault on the Syrian city of Aleppo, including grounding the Syrian air force with missile or air strikes, or supplying more advanced weapons to CIA-backed rebels.  In the end, Mr. Obama chose neither to approve nor reject the measures; instead, he decided not to decide.  History will record that as 250,000 people and their homes and hospitals were subjected to systematic bombing with white phosphorus and bunker-busters, and hundreds of children were reported killed, this U.S. president was unable even to affirmatively choose not to respond.

“The political exhaustion evident in that episode extends to U.S. policy throughout the Middle East.  Although U.S. air and special forces are backing an Iraq-led offensive to recapture the Iraqi city of Mosul from the Islamic State, the administration has declined to arbitrate the crucial question of how the city – and Iraq – will be secured and governed after the battle is over.  It is doing next to nothing to end the civil wars in Libya and Yemen, and its only strategy for Syria is the discredited figment that Russia and Iran will support a political transition that strips the Bashar al-Assad regime of power.

“Mr. Obama long ago gave up more than the most token opposition to gross human rights abuses by U.S.-supported governments in Egypt and Bahrain, which, perceiving the free pass, have stepped up repression of secular liberals, human rights activists and even U.S. citizens.  And while he is said to be considering a speech or U.N. resolution laying out terms for a Palestinian state, the absence of any preparatory diplomacy would likely cause such action to be regarded in the region as legacy-seeking grandstanding rather than as a contribution to peace.

“The consequence of this policy collapse is that the next U.S. president will be confronted by a pressing need to revitalize and reshape U.S. engagement in the Middle East.  Though many Americans share Mr. Obama’s evident desire to write off the region, it remains vital to U.S. interests – as a source of energy, as well as of terrorism, destabilizing flows of refugees, potential nuclear proliferation and crimes against humanity.”

Turkey: The Kurdish PKK militant group vowed Friday to intensify its struggle against Turkey, after police detained lawmakers from Turkey’s main pro-Kurdish opposition party, including the HDP’s joint leaders, one of whom, Selahattin Demirtas, was arrested in Diyarbakir.  Hours later a huge car bomb went off there, killing 8 and injuring more than 100.

Riot police clashed with demonstrators in Ankara, Istanbul and other cities over the detentions.

I agree with HDP lawmaker Adem Geveri, who told the AP that the government wanted to end the functioning of parliament to create “an authoritarian Turkey” devoid of democratic opposition.

European officials, who have been negotiating Turkey’s possible membership of the European Union, expressed “grave concerns” over President Erdogan’s latest crackdown.

Earlier in the week, German Chancellor Angela Merkel blasted the Erdogan government for the detention of senior staff at a Turkish newspaper.

This is explosive stuff...remember, there is still a loose agreement between the EU and Turkey to prevent waves of migrants from entering Europe from Turkey.  Erdogan can blow that deal up at any moment and another wave will wreak further havoc on the continent.

Yemen: Dozens of people were killed at a prison complex in air strikes by the Saudi-led coalition last Saturday.  The strikes were on a prison in the western port of Hudaydah, which is under the control of Iranian-backed Houthi rebels, but rebels and inmates were among up to 60 dead, as local media reported.  This is yet another attack where scores of innocents (in this case the prisoners) were among the victims.

Afghanistan: Two U.S. service members were killed and two others wounded in fighting against the Taliban in Kunduz province.  A NATO operation, with Afghan support, to clear a Taliban position did not go as planned and there were reports up to 30 civilians were killed as well.

Jordan: Three U.S. military trainers were killed in an exchange of gunfire at an air base here on Friday.  The first report said the trainers were killed when the car they were in failed to stop at the gate of a military base and it was fired on by Jordanian security forces.  The next report said they were in vehicles approaching the gate when they came under small-arms fire.

A U.S. defense official said it was a “green on blue” incident, a military term for when friendly forces attack U.S. personnel.

The U.S. has been training a small group of Syrian rebels in Jordan, as well as Iraqi and Palestinian security forces.  We’ll learn more shortly.

Lebanon: The nation suddenly has a government, as early in the week, Christian leader Michel Aoun, a close ally of Hizbullah, was tapped to be president and head of state, ending a 2 ½-year long presidential vacuum, and then on Thursday, Sunni Muslim leader Saad al-Hariri was asked by Aoun to become prime minister and to form a new government after Hariri won the support of a majority of MPs and the endorsement of influential parliament speaker, Nabih Berri, head of the Shiite Amal movement and another close ally of Hizbullah.

Saad Hariri took on the political mantle of his father, Rafik, following his assassination in 2005.  A U.N.-backed tribunal has charged five members of Hizbullah over the killing.

Issue number one for the new government, which will still be largely dysfunctional because of the consensus model it has historically operated on, is what to do with the 1.5 million refugees, let alone how to pick up the garbage.

China: Editorial / Financial Times

“For decades, Western democracies have pursued a policy of engagement with China underpinned by a belief that prosperity and openness would naturally lead to a more liberal political system in Beijing.  By demonstrating the benefits of the western way of life, the advanced economies thought China would become more like them.

“It is a belief that has now been shaken by President Xi Jinping, who has himself been named the ‘core’ of the ruling Communist Party at a plenary meeting of the Central Committee last week.  This designation effectively returns China to strongman rule and ends a short-lived period of consensus leadership.  While Mr. Xi’s predecessors made little progress in introducing democracy during their tenure, their implicit, and sometimes even explicit, aim was to move in that direction.

“In contrast, Mr. Xi has forcefully and repeatedly rejected democracy and most other universal values and instead promised a ‘great rejuvenation’ that hearkens back to a time when ‘all under heaven’ was ruled by an infallible emperor.

“Since he took office in late 2012, the president has concentrated power in his own hands and undermined institutions that provided some semblance of executive oversight. He has also led the most determined crackdown on dissent and civil society in decades....

“The West faces questions over how to deal with an increasingly powerful country led by someone who unapologetically rejects the tenets that underpin its systems.  Engagement with China remains the best course but this engagement must be principled and hard-headed....

“The assumption that China would automatically become democratic as it became rich and integrated into the global economy has been proved wrong...for now.  But the modern world has rarely, if ever, seen a large country that was able to run a highly open economy with a closed-off authoritarian system for any length of time.  All conventional bets are off.  Mr. Xi has set the stage for the biggest political science experiment in history.”

South Korea: President Park Geun-hye has been enmeshed in a “heartbreaking” scandal, as she herself said on Friday, taking sole blame for allowing a mysterious confidante to manipulate power from the shadows, or so the suspicions are among the Korean people.

“I feel a huge responsibility [for the scandal] deep in my heart,” Park said, her voice shaking during a televised address to the nation, as reported by the Associated Press.  “It is all my fault and mistake.”

Park addressed her relationship with the woman at the heart of the scandal, Choi Soon-sil, the daughter of a cult leader and a longtime friend of Park’s.

“I put too much faith in a personal relationship and didn’t look carefully at what was happening,” Park said.  “I realize that whatever I do, it will be difficult to mend the hearts of the people...”

Park denied media speculation that she had “fallen into worshipping cult religions or that shamanistic rituals were held at the presidential Blue House.”

Park is in the fourth year of a single five-year term, and one national poll had her approval rating at 5%...yes, 5%.

Last week, Park conceded that Choi had helped edit presidential speeches and that Park had relied on her for other undefined “public relations” issues.

There are reports, though, that Choi was heavily involved in government policy and helped choose presidential aides.  She has been arrested, having also been accused of pushing businesses to donate millions of dollars to two foundations that she controlled.

In an effort to regain public confidence, Park has fired eight presidential aides and tapped a new prime minister, the No. 2 spot in the country.

North Korea: Where is the first lady?  Ri Sol-ju is thought to have tied the knot with Kim Jong Un in 2009 and soon after gave birth to his child and heir to the hermit kingdom.  Ri in the past few years had become a more public figure at Kim’s side.

But now she has vanished from public view for the past seven months, after last being seen at a sporting event in March.

North Korean observers fear she either ran afoul of her husband, or incurred the wrath of his equally menacing sister, Kim Yo Jong.  Yo Jong is said to be the power behind the throne and more deadly than her brother.

Remind me not to ask Yo Jong out on a date.  [Plus no one seems to know if she’s married or not.]

Russia: The BBC reported the other day that Lithuania has updated its civil defense booklet telling citizens what to do in the event of a Russian invasion, with large sections on survival techniques, while warning Russia would not hesitate to use military force against its neighbors.  The government has also launched a hotline for citizens to report anyone they suspect of being a spy, which is rather unsettling, even if necessary.

The manual includes the words: “It is most important that the civilians are aware and have a will to resist – when these elements are strong, an aggressor has difficulties in creating an environment for military invasion.”

Remember, Lithuania shares a border with the Russian enclave of Kaliningrad, where ballistic missiles, and possibly nuclear warheads, have recently been introduced.

Anne Applebaum / Washington Post

“Back in March 2014, just after the Russian invasion of Crimea, Russia’s most famous state television broadcaster presented the international situation in stark terms.  ‘Russia,’ Dimitry Kiselyov told his millions of viewers, ‘is the only country in the world that can turn [the] USA into radioactive ash.’  Against a backdrop of mushroom clouds and throbbing nuclear targets, he spoke ominously of how President Obama’s hair was turning gray – ‘I admit this can be a coincidence’ – and the increasing desperation of a White House that truly feared that nuclear war might break out at any moment.

“Now it’s October 2016, and Kiselyov, who also heads Russia’s state-owned news agency, is at it again.  ‘Impudent behavior toward Russia’ has a ‘nuclear dimension,’ he warned ominously on Oct. 9.  In the same program, he again featured photographs of Obama.  Kiselyov said that there had been a ‘radical change’ in the U.S.-Russian relationship, and he added a threat: ‘Moscow would react with nerves of steel’ to any U.S. intervention in Syria – up to and including a nuclear response.  ‘If it should one day happen, every one of you should know where the nearest bomb shelter is.  It’s best to find out now,’ another television channel has advised.

“What a difference two years makes: The U.S. government, and the U.S. public, brushed off Russia’s nuclear narrative the first time it was presented. But this time around, the language sounds different....

“Now Trump is repeating Kiselyov’s threat, too.  ‘You’re going to end up in World War III over Syria if we listen to Hillary Clinton,’ he said this week.  Just like Kiselyov, he has also noted that Russia has nukes and – perhaps if Clinton is elected – will use them: ‘Russia is a nuclear country, but a country where the nukes work as opposed to other countries that talk.’....

“A ruling clique that stays in power thanks to violence and corruption is by definition nervous, and so it is using its media monopoly to frighten people: Only Putin’s regime can protect you from U.S. aggression.

“The regime surely wants to scare us, too, and persuade us to abandon Syria.  If the United States and Europe throw in the towel, then Russia will be free to help the Bashar al-Assad regime impose the same kind of ‘solution’ that Russia used in Chechnya more than a decade ago: kill tens of thousands of people, flatten the landscape, destroy all political alternatives and then start again, with a Russian-backed dictator.  In the interim, the war has its uses: It has increased the destabilizing flow of refugees to Europe, broadening political and economic chaos that Russia believes serves its interests....

“There is one more possible motive. Whatever the outcome on Nov. 8, political uncertainty will follow: the months of transition, a change of White House staff, perhaps even the violent backlash that Trump may incite. This could be an excellent moment for a major Russian offensive: a land grab in Ukraine, a foray into the Baltic states, a much bigger intervention in the Middle East – anything to ‘test’ the new president.

“If that’s coming, Putin needs to prepare his public to fight much bigger wars and to persuade the rest of the world not to stop him.  He needs to get his generals into the right mindset, and his soldiers ready to go.  A little nuclear war rhetoric never fails to focus attention, and I’m sure it has.”

Venezuela: There were some signs of hope early in the week as a few opposition politicians (reports ranged from three to five) were freed from detention, a day after the government and the opposition held talks on how to end the country’s political crisis.

The meeting, the first between President Nicolas Maduro and the opposition this year, was mediated by a Vatican envoy and former leaders of Spain, Panama and the Dominican Republic.

The two sides agreed to form four working groups to discuss broad topics such as confidence-building measures and strategies to tackle the economic crisis.  In return the opposition said it would suspend a symbolic trial against Maduro on Tuesday, just ten days after the opposition’s drive for a recall referendum was quashed.  But many of Maduro’s critics believe he is only playing for time.

And then days later, Maduro called the Popular Will party a terrorist organization, threatening to jail more rivals if they kept calling for street protests.

Philippines: A U.S. senator’s opposition to the sale of assault rifles to the Philippines has prompted President Rodrigo Duterte to lash out anew.

“(Washington) is disrespecting (us).  Just look at these monkeys,” Duterte said.  “The 26,000 rifles we are supposed to buy from them, they no longer want to sell to us. Son of a bitch.”

I thought he had announced last week he wasn’t going to swear anymore.

Maryland Democratic Sen. Ben Cardin signaled his opposition to the sale based on humanitarian grounds, Cardin being the senior Democrat on the Foreign Relations Committee.

Oh, sell the bastard the rifles.  We need to just let this guy blow off steam from time to time.  The long-term relationship between our two nations is far more important than one individual who is nonetheless steering his islands to China.

Random Musings

Presidential Polls....

A Reuters/Ipsos national survey released Monday had Hillary Clinton topping Donald Trump 44% to 39%.  Six points when you add third party candidates, with Johnson at 6%.  Then on Friday, the same tracking poll had the exact same margin, 44-39.

The national ABC News/Washington Post tracking poll controversially had Clinton with a 12-point lead two weeks ago, as Trump bitched and moaned about it.  Then as of Tuesday, Trump was suddenly ahead by one, but at week’s end Clinton was back up by four.

A national New York Times/CBS poll had Clinton beating Trump 45-42, Johnson 5, Stein 4.

A McClatchy/Marist national poll had Clinton up two, 46-44.

A Fox News national survey on Friday has Clinton with a 45-43 lead.

[At this point in the 2012 campaign, Obama and Romney were deadlocked in polling averages and Obama went on to win by four points.]

In state polling....

An NBC/Wall Street Journal/Marist poll had Clinton ahead in North Carolina 47-41, and 45-44 in Florida. 

But a New York Times/Siena poll had Trump ahead in Florida 46-42.

A CNN/ORC survey has Clinton leading in Florida 49-47.

Quinnipiac University’s poll of four key battleground states (Nov. 2):

Florida: Clinton 46, Trump 45, Johnson 2
North Carolina: Clinton 47, Trump 44, Johnson 3
Ohio: Trump 46, Clinton 41, Johnson 5
Pennsylvania: Clinton 48, Trump 43, Johnson 3

A Monmouth University survey of Pennsylvania has Clinton leading Trump 48-44, Johnson 3; so Monmouth and Quinnipiac agree.  Monmouth has Clinton’s favorability rate at 36%, Trump’s at 32%.

[In PA’s senate race, Monmouth has Democrat Katie McGinty ahead of Republican Sen. Pat Toomey, 47-44.]

The aforementioned CNN/ORC poll has Trump ahead of Clinton in Nevada, 49-43, 5% Johnson.

Among likely voters, CNN/ORC also has Trump ahead in Arizona 49-44, while Clinton leads 48-44 in Pennsylvania.

An NBC/Wall Street Journal/Marist poll of likely voters in Georgia has Trump leading Clinton by just 45% to 44%, while he leads in Arizona, 45-40, and Texas, 49-40.

Georgia last went for a Democrat in 1992.  There, Clinton is benefiting from an 89-5 margin among African-Americans, who make up about 30% of the electorate in the state.

Trump is doing fairly well among Hispanic voters in both Arizona and Texas, 24% in each.

A Bloomberg Politics national poll of independents has 30% Clinton, 27% Trump, 19% Johnson and 8% Stein.  Head-to-head it’s Clinton over Trump 39-35.

In 2012 Mitt Romney won this group, which represented 29% of the electorate, by five points.

--Military Times had a poll taken Oct. 12-14 in their 10/31 issue of active-duty members.  Trump came in at 40.5%, Johnson 27% and Clinton 21%.  But among enlisted men and women, Trump received 43%, to Johnson’s 26%, and Clinton’s 18%.  However, among officers, Johnson led with 31%, Trump 26% and Clinton 22%.

The same poll had active-duty women favoring Trump over Clinton, 27% to 23% in Sept., but in Oct., it was Clinton 36% to Trump’s 26%.

--An analysis of the early voting patterns shows that African-Americans are failing to vote at the robust levels they did four years ago in several states, not good for Hillary Clinton.  In North Carolina, for example, black turnout is down 16 percent, while white turnout is up 15 percent.  [Thus the targeting by President Obama of the state on Wednesday.]

--According to a Fox News poll, 67% of likely voters don’t think Hillary Clinton is “honest and trustworthy,” 5 percentage points more than those who said the same thing about Donald Trump.

--From the Associated Press: “An increasing number of people from far-flung corners of the world quietly have tried to sneak into the United States among the hundreds of thousands of other, mostly Latin American migrants caught at the Mexican border in the last year, according to arrest data from the Homeland Security Department.

“The arrests of more than 8,000 people from India, China, Romania, Bangladesh and Nepal between October 2015 and the end of August is offering a new challenge to immigration agents tasked with fully identifying would-be immigrants and quickly deporting people caught crossing the border illegally.

“The group of overseas migrants represents a tiny fraction of the more than 408,000 people caught crossing the Mexican border illegally in the last year. But the arrests suggest a rising trend in the number of migrants opting for a convoluted trek that sometimes wends across the seas to South America, over land to Central America and then through Mexico before arriving in the U.S. illegally.”

--CNN dumped long-time contributor Donna Brazile over leaks she was giving the Clinton campaign, as hacked emails from the account of John Podesta showed Brazile tipping off Clinton about what questions would be asked during a CNN debate and town hall last March.

CNN president Jeff Zucker ripped Brazile’s leaks as “disgusting” and “unethical,” but insisted no CNN staffers working on the debates revealed any questions.

Brazile doesn’t get it. “I did not expect to come out of this unscathed,” she tweeted late Monday.  “But I am surprised at the amount of scathing based on stolen hacked emails.”

--The FBI had another surprise up its sleeve this week with the release of 129 pages of documents from a 2001 investigation into Bill Clinton’s controversial presidential pardon of fugitive Marc Rich.  The Clinton team immediately questioned the timing but a statement on the FBI’s website notes: “The initial release consists of material from the FBI’s files related to the William J. Clinton Foundation, a non-profit 501 (c) (3) organization.  The bulk of these records come from a 2001 FBI investigation into the pardon of Marc Rich (1934-2013), aka Marcell David Reich, by President Clinton in 2001; it was closed in 2005,” the FBI adding that any material requested three or more times under the Freedom of Information Act is automatically made available to the public online on a “first in, first out basis.”

--A federal jury in Newark, N.J., convicted two former aides to Gov. Chris Christie over the scheme to close access lanes to the George Washington Bridge as punishment against a mayor who declined to endorse Christie’s re-election bid.

Bridget Anne Kelly and Bill Baroni were each charged with seven counts of conspiracy and wire fraud, including misusing the resources of the Port Authority of New York and New Jersey, which operates the bridge.

The crimes carry a maximum sentence of 20 years in prison, but the United States attorney for New Jersey previously said he is not seeking anything near this.  They will probably receive something like one to two years.

Kelly and Baroni said another former Christie associate, David Wildstein, who pleaded guilty to orchestrating the scheme and became the star witness for the government, duped them into believing that the lane closings were a legitimate traffic study.

Wildstein testified that he had told Christie about the scheme, in the middle of the lane closings.  Kelly testified she had received the governor’s approval before sending the email that triggered the ‘study.’

The judge in the trial told the jury explicitly not to consider why other potential co-conspirators were not on trial. 

--Congratulations to the Chicago Cubs and Cleveland Indians for giving us such a super World Series, the Cubs winning for the first time since 1908, Cleveland itself now with the longest streak without a title at 68 years.

Meanwhile, the city of Chicago’s murder rate is up 45% from the same period last year and with well over 600 total homicides to date, that is more than New York and Los Angeles combined and Chicago’s worst year since 2003.

--Ann Lukits / Wall Street Journal: “A large global study of more than 12,000 first-time heart-attack patients found a strong link between the attack and what the patients were doing and feeling in the hour preceding the event.

“The study, published in the journal Circulation, found that being angry or emotionally upset more than doubled the risk of suffering a heart attack.  Performing heavy physical activity in a highly emotional state more than tripled the risk. The researchers compared people’s behavior in the 60 minutes before the onset of heart-attack symptoms with the same one-hour period 24 hours earlier....

“Intense physical activity and negative emotions can increase heart rate and blood pressure, which reduces the supply of blood and oxygen to the heart, the researchers said.  This can cause arterial plaque to rupture and trigger an acute myocardial infarction, or heart attack, they said.

“Previous studies have found links between heart-attack risk and anger, stress, physical activity – even extreme unhappiness.  But these mostly involved a small number of subjects from Western countries, the researchers said.”

--I like Yuengling Beer, Yuengling being “America’s Oldest Brewery,” out of Pottsville, Pennsylvania.  Yuengling, like Shiner Bock, is one of America’s few ‘premium domestics,’ as I like to say.  [Sam Adams would be another.]

Anyway, Richard Yuengling Jr., the owner of Yuengling & Son Beer Company, recently hosted Eric Trump during a visit to the brewery, and Yuengling, 73, told Eric during a press conference, “Our guys are behind your father.  We need him in here.”

Well, this sweeping praise of Trump earned Mr. Yuengling a lot of scorn, especially on social media, with one Pennsylvania legislator, Brian Sims, announcing he would no longer pour Yuengling in his pints after 17 loyal years of drinking.  Sims, openly gay, then listed a bunch of gay bars, urging them to refrain from serving the beer at their establishments.

Others announced a boycott, including the Teamsters union, and it’s kind of a mess for Yuengling.

Well, I’m not voting for Trump, but I sure as hell will continue to drink the beer!  Those boycotting the product are, err, jerks....wrote the editor with a smile.  [Mark R., when I get around to paying off our Notre Dame-Wake Forest bets, you will indeed receive Yuengling.]

--Finally, for those of you who buy Newman’s Own products, they really do plow the profits back into the community.  I was reading the Oct. 31 issue of Army Times and it talked about this years’ Newman’s Own award winners that “received a combined total of $200,000 to expand their work,” some 29 different recipients.

“Since establishing the awards in 1999, Newman’s Own has recognized 169 [military-related] programs with grants totaling more than $1.5 million.  Judges evaluate entries based on their impact on their respective communities as well as creativity and innovation.”

Yes, the late Paul Newman keeps on giving, and this is but one sector of the company’s charitable giving.  There was a reason why so many of us loved the guy.  God bless him.

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Pray for the men and women of our armed forces...and all the fallen, including the two in Afghanistan and the three in Jordan this week.

The NYPD lost an officer in a shootout in the Bronx this afternoon, Sgt. Paul Tuozzolo, 41.  We pray for his family and his fellow officers, one of whom was seriously wounded. 

God bless America.  Keep us safe Nov. 8.

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Gold $1305
Oil $44.13

Returns for the week 10/31-11/4

Dow Jones  -1.5%  [17888]
S&P 500  -1.9%  [2085]
S&P MidCap  -1.4%
Russell 2000  -2.0%
Nasdaq  -2.8%  [5046]

Returns for the period 1/1/16-11/4/16

Dow Jones  +2.7%
S&P 500  +2.0%
S&P MidCap  +5.7%
Russell 2000  +2.4%
Nasdaq  +0.8%

Bulls  41.7
Bears  24.3  [Source: Investors Intelligence]

Dr. Bortrum posted a new column.  [Great stuff on the octopus...No. 8 on the All-Species List.]

VOTE!!!

Brian Trumbore

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