Week in Review

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Week in Review

11/26/2016

For the week 11/21-11/25

[Posted 10:30 PM ET, Friday]

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Edition 920...out of 921 weeks...

The Trump Transition, Washington and Wall Street

President-elect Donald Trump continued to fill out his Cabinet on Wednesday, selecting two prominent women for key positions; South Carolina Republican Governor Nikki Haley for the position of U.S. Ambassador to the U.N., and philanthropist Betsy DeVos for education secretary, DeVos being a conservative activist who has forcefully pushed for private school voucher programs. 

DeVos’ nomination will face strong opposition from public school advocates, who will oppose the funneling of tax dollars from public to private and religious schools.

In a statement, Trump said: “Betsy DeVos is a brilliant and passionate education advocate. Under her leadership we will reform the U.S. education system and break the bureaucracy that is holding our children back so that we can deliver world-class education and school choice to all families.”

DeVos is a highly popular pick in the conservative movement.

As for Gov. Haley, opponents are pointing to her lack of foreign policy experience, which is absurd.  Any governor should have extensive knowledge of world affairs (save for former Gov. Gary Johnson, whose brain, we learned, is fried) due to the fact governors are dealing with foreign governments all the time in trade relationships, especially one such as South Carolina.  Let’s just say I can virtually guarantee that Haley, after an initial stumble or two, will be a quick study.  [Plus her husband served a tour of duty in Afghanistan as a member of the South Carolina National Guard.]

If confirmed by the Senate, Haley would be replaced by South Carolina Lt. Gov. Henry McMaster, a major Trump ally, thus it’s a way to promote them both.

This was a great pick by Donald Trump, and with Haley being the daughter of Indian immigrants also shows his outreach. 

Meanwhile, in an interview with reporters and editors at the New York Times – which was scheduled, canceled, and then rescheduled after a dispute over ground rules – Trump said he had no obligation to establish boundaries between his business empire and his White House, noting the Trump brand “is certainly a hotter brand than it was before.” 

After saying during the campaign that he would prosecute Hillary Clinton, Trump reversed course and said he has no interest in pursuing this route, either over her use of a private email server or for financial acts committed by the Clinton Foundation.

“I want to move forward,” he said.  “I don’t want to move back.  I don’t want to hurt the Clintons, I really don’t.”

On the use of torture, Trump, who had repeatedly endorsed its use during the campaign, suggested his mind had been changed after talking with James N. Mattis, a retired Marine Corps general, who headed the United States Central Command and is a contender to be selected for secretary of Defense.

“He said, ‘I’ve never found (torture, like waterboarding) to be useful,’” Trump said.  He added that Mattis found more value in building trust and rewarding cooperation with terror suspects:  “ ‘Give me a pack of cigarettes and a couple of beers and I’ll do better.’”  Trump added: “I was impressed by that answer.”

Trump also refused to repeat his promise to abandon the international climate accord reached last year in Paris.  Trump told the Times: “I’m looking at it very closely.  I have an open mind to it.”

And Trump denounced a white nationalist conference in Washington last weekend where attendees gave the Nazi salute, criticized Jews and spoke German.

But when it came to his business interests, he said, “The law is totally on my side...The president can’t have a conflict of interest.”

On the controversial Stephen Bannon, his chief strategist, Trump said: “I’ve known Steve Bannon a long time. If I thought he was a racist or alt-right, I wouldn’t even think about hiring him.”  [Michael D. Shear, Julie Hirschfeld Davis and Maggie Haberman / New York Times]

After the big interview, former New York City Mayor Rudy Giuliani, a former U.S. attorney who had called for Hillary Clinton to be prosecuted, said Trump’s shift was fine with him.

“Look, there’s a tradition in American politics that after you win an election, you sort of put things behind you,” he told reporters at Trump Tower.  “And if that’s the decision he reached, that’s perfectly consistent with sort of a historical pattern of...you say a lot of things, even some bad things, and then you can sort of put it behind you in order to unite the nation.”

But the president of the conservative watchdog group Judicial Watch, Tom Fitton, said of Trump’s reversal, it would be a “betrayal of his promise to the American people” for Trump to abandon the Clinton case.

“Donald Trump must commit his administration to a serious, independent investigation of the very serious Clinton national-security, email, and pay-to-play scandals,” he said.

The day before the New York Times interview, some of the biggest names in television news, including on-air stars like Lester Holt and Wolf Blitzer and their bosses, were summoned to Trump Tower for a meeting with the president-elect to clear the air on the tense relationship that has developed between the media and Trump.

While the meeting was off-the-record, of course there were leaks and the New York Post reported: “The meeting was a total disaster. The TV execs and anchors went in there thinking they would be discussing the access they would get to the Trump administration, but instead they got a Trump-style dressing-down....Trump kept saying, ‘We’re in a room of liars, the deceitful, dishonest media who got it all wrong.’”

Editorial / Wall Street Journal

“Donald Trump’s approval rating is up nine points since Election Day in one survey, and one reason may be that he’s setting a tone of expansive leadership.  A case in point is his apparent decision not to seek the prosecution of Hillary Clinton for her email and Clinton Foundation issues.

“ ‘I think when the President-elect, who’s also the head of your party, tells you before he’s even inaugurated that he doesn’t wish to pursue these charges, it sends a very strong message, tone and content,’ Trump adviser Kellyanne Conway told MSNBC on Tuesday.  Mr. Trump later told the New York Times that ‘I don’t want to hurt the Clintons, I really don’t,’ adding ... ‘it’s just not something that I feel very strongly about.’

“That’s the right move – for the country and his Presidency.  We know from reading our email that many Americans want Mrs. Clinton treated like Mel Gibson in the climactic scene of ‘Braveheart.’  Their argument is that equal justice under the law requires that she be treated like anyone else who mishandled classified information.

“But discretion is also part of any decision to prosecute.  FBI Director James Comey was wrong to exonerate Mrs. Clinton before the election because that wasn’t his job and he let the Attorney General off the hook.  Loretta Lynch should have taken responsibility for absolving or indicting her party’s nominee – and voters could hold her and Democrats accountable.

“The voters ultimately rendered that verdict on Nov. 8, and being denied the Presidency is a far more painful punishment than a misdemeanor or minor felony conviction.  Prosecuting vanquished political opponents is the habit in Third World nations. Healthy democracies prefer their verdicts at the ballot box.”

Editorial / New York Times

“We would applaud any sensible change of position, however arrived at.  Mr. Trump’s apparent flexibility, combined with his lack of depth on policy, might be grounds to hope he will steer a wiser course than the one plotted by his campaign.  But so far he is surrounding himself with officials eager to enact only the most extreme positions.  His flexibility would be their springboard.

“President Obama, who also spoke of bringing the country together, invited Republicans to join his administration.  We have not yet seen Mr. Trump make any such effort to reach across party lines.

“And in one area, Mr. Trump remained quite inflexible: He made clear he has no intention of selling his businesses and stepping decisively away from corrupting his presidency with an exponentially enhanced version of the self-dealing he accused Hillary Clinton of engaging in.

“Ronald Reagan used to say that in dealing with the Soviet Union, the right approach was to ‘trust, but verify.’   For now, that’s also the right approach to take with Mr. Trump. Except, regrettably, for the trust part.”

Now we are awaiting Donald Trump’s picks for Defense, State and the Treasury.  The secretary-of-state appointment has turned into an open battle between opponents and supporters of the out-of-the-box potential selection of Mitt Romney.

But Trump adviser and former Campaign Manager Kellyanne Conway issued a number of  tweets on Thursday morning that questioned whether Romney could work alongside Trump.  Among them was one noting that previous secretaries of state such as Henry Kissinger and George Schultz “flew around the world less, counseled POTUS close to home more. And were loyal.  Good checklist.”

[Now other names are being floated for State, aside from Romney and Rudy Giuliani.]

Trump Foreign Policy

During the Times’ interview on Tuesday, Trump only made some broad generalizations about his foreign policy and the Middle East in particular, saying as he did during the campaign that the U.S. shouldn’t play a nation-building role as it did in Iraq and Afghanistan under the presidency of George W. Bush.

He did signal he wanted to do something to end the bloodshed in Syria.  “We have to end that craziness that’s going on in Syria.”  Very deep.

Trump also described the Israeli-Palestinian peace process as the ultimate deal, suggesting his son-in-law Jared Kushner, an orthodox Jew who has helped write Trump’s speeches on Israel policy, could be a player in striking a peace deal.

“I would love to be the one who made peace with Israel and the Palestinians,” Trump said.  “That would be such a great achievement.”

Ian Bremmer / TIME

“Donald Trump’s foreign policy? Still up in the air at this point. With Hillary Clinton, we would have known exactly what we were getting.  That was her biggest selling point – and a big part of the problem.  But Trump is the ultimate black box.  Much of this was by design – making America great again was always about America itself, allies and enemies be damned.  That makes for an effective political pitch, but it’s a wholly unrealistic governing philosophy for a person whose main responsibility is to navigate the country through choppy geopolitical waters.

“And these days, the waters are heaving.  The foreign policy challenges Trump will face on Jan. 20 are much more complex than those that Obama inherited from George W. Bush.  Technological change, particularly in communications and in the workplace, creates risks and problems that are entirely new.  Russia is looking to undermine U.S. power and influence whenever and wherever possible, and a Trump presidency could well embolden Vladimir Putin.  Trump becomes the face of Western capitalism at a moment China is offering the world an alternative economic model. For fans of globalization as it has progressed for the past few decades, that’s cause for concern.

“Let the questions begin. How best to respond to Russian aggression in cyberspace while minimizing the risk of a dangerous escalation?  How best to balance all-important relations with China?  How long before North Korea demands an urgent and forceful U.S. response?  How best to repair damaged relations with Britain, European allies, Japan, Israel and Saudi Arabia after a period of tension in which each of them has hedged bets on American staying power?  There are no easy answers.  There weren’t going to be any for a former Secretary of State, and there certainly won’t be any for Trump....

“Donald Trump has helped to reveal just how many Americans care more about nation building at home than in far-flung battle zones.  It’s clear that millions of Americans want a more robust economic recovery, a surge in job creation, investment in infrastructure and a budget surplus – quite a combination. Americans are divided on how to improve health care, immigration and tax policies, and those divisions are reflected in a polarized Congress.  But they’re not nearly so divided on the need to invest in the future of America’s economy rather that Iraq’s or Syria’s.  They aren’t nearly as interested in U.S. foreign policy.  That’s good news for Trump, who will have to figure it out as he goes along. That’s bad news for the rest of the world.”

Robert Kagan / Financial Times

“For those who hope that Donald Trump has no views on foreign policy, forget it.  Not only does he have a view about America’s role in the world, but it is one shared by many Americans. He may or may not cozy up to Vladimir Putin, have a trade war with China or even build his wall.  But on the biggest question of all, from which everything else flows, the question of U.S. responsibility for global order, he clearly has little interest in continuing to shoulder that burden. He aims to put America First, which means we are closer to the end of the 70-year-old U.S. world order.

“Mr. Trump, in this respect, is no anomaly.  Pat Buchanan rode ‘America First’ a long way against George HW Bush of New World Order fame in 1992; and after the Iraq and Afghan wars and the financial crisis, it became a national phenomenon.  Internationalists such as Jeb Bush and Marco Rubio went nowhere this year; Bernie Sanders joined Mr. Trump in attacking global involvement; and Hillary Clinton was hit from all sides for being too internationalist and too wedded to the idea of the U.S. as the ‘indispensable nation,’ the Bill Clinton phrase that encapsulated the thinking of every president from Harry Truman to George W. Bush.  President Barack Obama was the transitional figure away from that tradition, and Mr. Trump’s election is the decisive break.  The U.S. is, for now, out of the world order business.

“This does not mean a ‘return’ to a mythical American isolationism. This powerful, commercially minded nation has never cut itself off from the rest of the world, not even in the 1930s.  What it does mean is a return to national solipsism [Ed. all about ‘self,’ ‘self-interest’], with a much narrower definition of American interests and a reluctance to act in the world except to protect those narrow interests.  To put it another way, America may once again start behaving like a normal nation.

“A hypercritical Europe, with its own solipsism, has often taken for granted just how abnormally unselfish American behavior has been since the second world war.  No people ever took on such far-flung responsibilities for so little obvious pay-off. The U.S. kept troops in Europe and Asia for 70 years, not to protect itself from immediate attack but to protect its allies.  With half the world’s gross domestic product in 1945, it created an open economic order that let others prosper and compete. It helped spread democracy even though democratic allies proved more independent than the dictatorships they replaced.

“All this was profoundly in U.S. interests, but only when viewed from a most enlightened perspective. Americans came to that enlightenment only after a world war, followed by the rise of Soviet communism, which persuaded them to define their interests broadly and accept responsibility for a liberal world order that benefited others as much as, sometimes more than, it benefited them.

“Enlightenment doesn’t last forever, however, and with Mr. Trump’s election Americans have chosen, as in 1920, a return to normalcy.  So what does the normal solipsistic superpower do?  It looks for immediate threats to the homeland and finds only one: radical Islamist terrorism.  Its foreign policy becomes primarily a counterterrorism strategy.  Nations are judged not by whether they are allies or nominal adversaries, democracies or autocracies, only by their willingness to fight Islamists.  Mr. Putin’s Russia, Abdel Fattah al-Sisi’s Egypt, Bashar al-Assad’s Syria, Israel: all are equal partners in the fight and all are rewarded with control, spheres of influence and defense against critics within and without.  Most countries, by this calculus, are irrelevant....

“As for the projection of U.S. military power abroad, there should be no need. No foreign army threatens the homeland.  Nuclear powers can be deterred by America’s nuclear arsenal.  (Note to U.S. hawks: there will be no bombing of Iran under a Trump administration.)  Almost every intervention of the past 70 years was primarily to defend someone else or to uphold some principle of global order.  They were ‘wars of choice,’ not required by a narrow definition of U.S. interests. The war against radical Islamist terror can be fought by drone strikes a few special forces and by our partners on the ground....

“How long can this new era last?  Who knows?  Americans after 1920 managed to avoid global responsibility for two decades. As the world collapsed around them, they told themselves it was not their problem. Americans will probably do the same today. And for a while they will be right.  Because of their wealth, power and geography they will be the last to suffer the consequences of their own failures.  Eventually they will discover, again, that there is no escape. The question is how much damage is done in the meantime and whether, unlike in the past, it will be too late to recover.”

Max Boot / Foreign Policy

“It is hard to imagine two presidents more dissimilar than Barack Obama, the cerebral and elegant liberal law professor, and Donald Trump, the brash populist and reality TV star. But if Trump’s campaign pronouncements are anything to judge by, his foreign policy may be more in sync with President Obama’s than either man would care to admit. And not in a good way:  Trump shares with Obama a desire to pull back from the world but lacks Obama’s calm, deliberative style and respect for international institutions. A Trump presidency is inherently unpredictable – no one knows how much of his overblown rhetoric to take seriously – but if he does even half the things he suggested on the campaign trail, the result could be the end of the post-1945 Pax Americana.

“One of Trump’s top priorities is to improve relations with Vladimir Putin. In a post-election phone call, Trump told the Russian dictator that ‘he is very much looking forward to having a strong and enduring relationship with Russia and the people of Russia.’  Sound familiar?  Obama spoke in virtually identical terms when he took office in 2009.  Hence his failed ‘reset’ of relations with Moscow.

“This was part of Obama’s larger rejection of what he saw as the moralizing, interventionist approach of the George W. Bush administration....During the 2008 campaign, Obama made a big point of saying that he would talk to any foreign leaders without any preconditions – a stance that his primary challenger, Hillary Clinton, criticized as naïve.  In office, Obama has re-established relations with the Castros in Cuba and Myanmar’s junta, reached a nuclear deal with Ayatollah Ali Khamenei’s Iran, and did little to back up his calls for Bashar al-Assad to leave office.  Instead of enforcing his ‘red line’ with Syria, Obama agreed to a Russian-orchestrated deal under which Assad was supposed to give up his chemical weapons (a pledge the Syrian despot has not fully carried out).  Obama has also refused to take any military action to stop Assad’s assaults on civilians, notwithstanding his creation of an Atrocities Prevention Board.

“Obama has often expressed his admiration for George H.W. Bush, and he has largely governed as an amoral realpolitiker who has put American interests, as he defines them, above the promotion of American values.  Far from proselytizing for freedom and democracy, Obama has given a series of speeches in venues including Cairo and the Laotian capital of Vientiane – speeches that, to critics, have sounded like apologies for past American misconduct.  (Obama’s aides have claimed he was merely ‘reckoning with history.’)  When Iranian protesters took to the streets in the 2009 Green Revolution, Obama did not express support because he feared that doing so would interfere with his attempts to engage with the Iranian regime.

“On only a few occasions has Obama allowed idealistic considerations to gain the upper hand in his cold-blooded foreign policy – and never for long....

“As with Obama, Trump’s refusal to see America as a country with a mission leads him to look askance upon interventions abroad.  Like Obama, he eschews nation-building and expresses a preference to work with foreign rulers regardless of their lack of democratic legitimacy.  Trump reiterated to the Wall Street Journal after his election that he plans to end support for Syrian rebels and align with Russia in Syria: ‘My attitude was you’re fighting Syria, Syria is fighting ISIS, and you have to get rid of ISIS.’ And never mind that Iran, Russia, and Assad are all committing war crimes.

“Trump’s approach is quite different from what Clinton advocated during the campaign; she called for no-fly zones and safe zones. But it’s not so different from Obama’s current policy, which provides a modicum of aid to the Syrian rebels but tacitly concedes that Assad will stay in power and does little to oppose the Iranian-Russian offensive in support of the Syrian regime.  Indeed, some Syrian rebels welcome Trump for at least being honest: ‘Today,’ one rebel leader in Aleppo told the New York Times, ‘we know that [the Americans] are really and practically not backing us, whereas before, we considered them our friend while they were implementing our opponents’ agenda.’....

“In the terms coined by Walter Russell Mead, Obama is a Jeffersonian, while Trump is a Jacksonian: The former believes that the United States should perfect its own democracy and go ‘not abroad in search of monsters to destroy,’ whereas the latter believes that ‘the United States should not seek out foreign quarrels’ but that it should clobber anyone who messes with it.  What unites Jeffersonians and Jacksonians, in spite of their substantial differences, is that both support quasi-isolationism – or, if you prefer, noninterventionism – unless severely provoked.

“Obama has been intent on pulling the United States back from the Middle East.  The result of his withdrawal of troops from Iraq and his failure to get more actively involved in ending the Syrian civil war has been to create a vacuum of power that has been filled by the likes of the Islamic State and Hizbullah.  Undaunted, Trump has said he wants not only to continue the pullback from the Middle East (he wants to subcontract American policy in Syria to Putin) but also to retreat from Europe and East Asia.  He has suggested that he may lift sanctions on Russia and pull U.S. troops out of countries (from Germany to Japan) if he feels they are not paying enough for American protection.  It is quite possible, then, that Trump’s foreign policy would represent an intensification rather than a repudiation of Obama’s ‘lead from behind’ approach.”

Editorial / The Economist

“When Donald Trump vowed to ‘Make America Great Again!’ he was echoing the campaign of Ronald Reagan in 1980. Back then voters sought renewal after the failures of the Carter presidency.  This month they elected Mr. Trump because he, too, promised them a ‘historic once-in-a-lifetime’ change.

“But there is a difference.  On the eve of the vote, Reagan described America as a ‘shining city on a hill.’  Listing all that America could contribute to keep the world safe, he dreamed of a country that ‘is not turned inward, but outward – toward others.’  Mr. Trump, by contrast, has sworn to put America First. Demanding respect from a freeloading world that takes leaders in Washington for fools, he says he will ‘no longer surrender this country or its people to the false song of globalism.’  Reagan’s America was optimistic: Mr. Trump’s is angry.

“Welcome to the new nationalism.  For the first time since the second world war, the great and rising powers are simultaneously in thrall to various sorts of chauvinism.  Like Mr. Trump, leaders of countries such as Russia, China and Turkey embrace a pessimistic view that foreign affairs are often a zero-sum game in which global interests compete with national ones. It is a big change that makes for a more dangerous world.

“Nationalism is a slippery concept, which is why politicians find it so easy to manipulate. At its best, it unites the country around common values to accomplish things that people could never manage alone.  This ‘civic nationalism’ is conciliatory and forward-looking – the nationalism of the Peace Corps, say, or Canada’s inclusive patriotism or German support for the home team as hosts of the 2006 World Cup.  Civic nationalism appeals to universal values, such as freedom and equality.  It contrasts with ‘ethnic nationalism,’ which is zero-sum, aggressive and nostalgic and which draws on race or history to set the nation apart.  In its darkest hour in the first half of the 20th century ethnic nationalism led to war....

“The last time America turned inward was after the first world war and the consequences were calamitous.  You do not have to foresee anything so dire to fear Mr. Trump’s new nationalism today.  At home it tends to produce intolerance and to feed doubts about the virtue and loyalties of minorities.  It is no accident that allegations of anti-Semitism have infected the bloodstream of American politics for the first time in decades....

“Mr. Trump needs to realize that his policies will unfold in the context of other countries’ jealous nationalism.  Disengaging will not cut America off from the world so much as leave it vulnerable to the turmoil and strife that the new nationalism engenders. As global politics is poisoned, America will be impoverished and its own anger will grow, which risks trapping Mr. Trump in a vicious circle of reprisals and hostility. It is not too late for him to abandon his dark vision. For the sake of his country and the world he urgently needs to reclaim the enlightened patriotism of the presidents who went before him.”

Wall Street

The Trump rally continued, at least another week, with the major averages all at new all-time highs as described below in “Street Bytes.”  It helped that October existing home sales came in at an annualized pace of 5.6 million, above expectations and the highest since February 2007, with the median home price up 6% year over year to $232,200.  [October new home sales, though, came in less than expected, but this is far less important, about a tenth of existing home sales.]

The figure for October durable goods, up 4.8%, was downright giddy, ex-transportation also up a solid 1.0%.

But as for how Donald Trump is going to pay for his $1 trillion infrastructure package, $5 trillion in tax cuts, increases in military spending and the repeal of ObamaCare, which could cost more than $350 billion over ten years, plus his promise “not to touch” Social Security or make cuts to Medicare, who knows.  Not all Republicans are going to follow him in lockstep, as many don’t want to see Congress lift budget limits still in place until 2021.

Plus you have the Federal Reserve raising interest rates which will increase the cost of servicing the debt.  As Arizona Republican Sen. Jeff Flake noted back in September, for every quarter point that interest rates rise, the federal government would have to spend an additional $50 billion annually to service the debt.

But if the economy starts growing at 4%+, which is conceivable, how much of a problem will we really have as tax revenue floods into the Treasury’s coffers?  To be continued....

Europe and Asia

Just a little economic data for the eurozone before attacking the major political issues on the continent and in the U.K.

Markit’s flash composite reading for the eurozone economy in November came in at 54.1 (50 being the dividing line between growth and contraction) vs. 53.3 in October, an 11-month high.  The services reading, also 54.1, compared with 52.8, an 11-month high as well, while the manufacturing number, 53.7 vs. October’s 53.5, is a 34-month high.

The flash readings also look at Germany and France, specifically.  Germany’s comp was 54.9 vs. 55.1, services 55.0 vs. 54.2, and manufacturing 54.4 vs. 55.0.  France’s comp was 52.3 for November vs. 51.6 in October, services 52.6 vs. 51.4, and manufacturing 51.5 vs. 51.8.

Chris Williamson / Chief Economist, Markit

“The preliminary PMI results for November indicate the sharpest monthly increase in business activity so far this year, with plenty of signs that growth will continue to accelerate.

“The PMI readings so far for the fourth quarter point to GDP expanding 0.4%, led by a rebound in German growth to 0.5%.  France is also seen to be enjoying its best spell since the start of the year, with the PMIs signaling GDP growth of 0.2%-0.3% in the fourth quarter....

“ECB [European Central Bank] policymakers will also be pleased to see inflationary pressures are intensifying steadily.  Average prices charged for goods and services showed the biggest rise for over five years, albeit with the rate of increase being very modest.”

Now the big items, in no particular order....

Speaking of the ECB and European Commission, the EC has called for fiscal stimulus to create growth and jobs, a plea that is aimed at addressing the rise of populist parties in Europe, but German Finance Minister Wolfgang Schaeuble said on Tuesday that this should not be directed at his country, which has long been criticized for being too strict when it comes to budget rules, at the expense of the rest of the EU.

Schaeuble says this would be a sharp reversal of EU policy that has long focused on budgetary discipline and austerity, noting German investment grew 3.9% a year between 2005 and 2015, compared with a rise of 0.7% in the eurozone.  Schaeuble warned tax revenues would slow in coming years, giving Germany less fiscal room for maneuver as it plans to hike spending on defense and on migration.  The bottom line is, Germany is not about to take on new debt to finance more state spending.

But the budget expert for Germany’s radical Left party, Gesine Loetzsch, said, “It is time for you (Schaeuble) to realize that the austerity policy has driven Europe into a deep crisis,” which sums up the opponents’ stance all over Europe.

At the same time, the EC unveiled a package of reforms for the banking sector that already have Germany and France clashing.  German officials are concerned that aspects of the reforms would overly constrain bank supervisors, as they want to preserve the freedom for supervisors to demand buffers that go beyond agreed international minimum standards, i.e., on capital.

France (and Italy) have pushed for curbs on overzealous authorities to avoid European financial groups, i.e., French and Italian banks being put at a competitive disadvantage.

It’s about “too big to fail” and reducing the need for a taxpayer bailout.  What is the best way to accomplish this?  Germany doesn’t think enough is being done in the area of “risk reduction” and what qualifies as capital, along with required minimums on same.

As for Brexit...recognizing the high economic cost of withdrawing from the European Union, a pledge by the former chancellor of the Exchequer, or finance minister, George Osborne, has been shelved.  The current chancellor, Philip Hammond, this week proposed help for workers whose low earnings are supplemented by welfare payments, an increase in the minimum wage and new infrastructure spending.

The changes are centered on what British Prime Minister Theresa May said were JAMs, those “just about managing,” who are thought to have voted in large numbers for withdrawing from the European Union in the June 23 referendum.

Hammond laid out plans to finance construction of 40,000 new affordable homes and to provide more help with child care, though he also increased the tax on insurance premiums.

But the uncertainties of Brexit hover over any proposals and the economy. 

Hammond told lawmakers, “Our task now is to prepare our economy to be resilient as we exit the E.U.,” as he warns of a rocky outlook and an economy with an “eye-wateringly large debt,” though supporters of Brexit accuse him of negativity.  That said, the steep fall in the value of the pound is indisputably leading to inflation.

Hammond made his remarks as part of what is known as the Autumn Statement, or update from the Treasury (finance ministry). Among the other changes Hammond wants to make is a reduction in the corporate tax rate to 17 percent, as well as raising the personal allowance on income on which workers don’t have to pay tax.

Prime Minister May added the following in an op-ed for the Financial Times:

“We will show that capitalism and free markets continue to be the best way to create prosperity, spread opportunity and give people the chance of a better life.

“But if we believe in capitalism, free markets and free trade, we must be prepared to adapt.

“If we are to maintain confidence in a system that has delivered unprecedented levels of wealth and opportunity, lifted millions out of poverty around the world, brought nations closer together, improved standards of living and consumer choice, and underpinned the rules-based international system that has been key to global prosperity and security for so long, we need to ensure it works for everyone.”

France’s election....There was a shocking development in France’s Republican Party primary last weekend as former president Nicolas Sarkozy didn’t even survive the first round of voting and now this Sunday, the Republicans are choosing between Alain Juppe and Francois Fillon, both former prime ministers (Fillon being Sarkozy’s number two for five years), to see who could easily become France’s next president in the spring.  Fillon is expected to win the second round with 65 percent of the vote to just 35 percent for Juppe, according to an Ifop-Fiducial survey.  [61-39 in another poll late Friday.]

The upset of Sarkozy was due to a late surge of support for Fillon, who was hardly in the discussion, virtually all of it initially centering around Sarkozy and Juppe, with Juppe the heavy favorite in a run-off between the two.

But Fillon ended up attracting 44 percent, Juppe 28 and Sarkozy 21.  It’s likely we have heard the last of Sarkozy politically.

But here’s the thing.  This was the first-ever Republican Party primary and anyone could take part, whether they are members of Les Republicains or not.  All that was required was the payment of 2 euro and signing a charter stating they respected center-right Republican values.  Yet 15 percent of those voting (according to early polls) were leftwing sympathizers.  Afterwards, separate polling had 84 percent of those who sympathize with the National Front voting for Fillon on Sunday, while Juppe will receive 83 percent of the votes of left-wing voters who will go to the polling stations.

With support for the Socialist party having collapsed (President Francois Hollande’s approval rating at 4 percent!), the Republican nominee is likely to face National Front party leader Marine Le Pen; France’s answer to Donald Trump, whom she has long praised.  Were Le Pen to win, there are legitimate fears the European Union would be mortally wounded as she favors exiting from the club.

However, the polls now suggest that either Fillon or Juppe would defeat Le Pen handily in a run-off, though there is a long way to go, and while no one is mentioning this, if Donald Trump’s government got off to a good start, you can be sure Le Pen will be pointing to this as the kind of leadership she could deliver to her people as well.

But Fillon shares many of the positions of Le Pen.  He’s no friend of multiculturalism.  He takes a hardline on Islamic extremism.  He says immigrants must assimilate, while seeking to curb immigration from outside the union.  So he could gain conservative support from those who otherwise might flock to Le Pen.

Fillon differs greatly from Le Pen in that he’s a free-market capitalist, with an economic-policy revolution fashioned after Margaret Thatcher...lengthening the work week, increasing the retirement age, a huge tax cut for corporations, while slashing half a million public-sector jobs and a proposal to reduce spending $106 billion over his five years in office.

But there is the Russia angle.  Francois Fillon has also advocated rapprochement with Russian President Vladimir Putin.

So if you’re Putin, assuming it’s Fillon vs. Le Pen in a run-off next May, wouldn’t you back Fillon?  [Just thinking out loud.] 

Or as Leonid Bershidsky of Bloomberg put it in an editorial:

“While it’s unclear how well Russian President Vladimir Putin will get along with Donald Trump and his team of Republican hawks, it looks as though he has already won the French presidential election.  The front-runner in the primary election of the French center-right, Francois Fillon, is nearly as enthusiastic a Russophile as Marine Le Pen, leader of the far-right National Front, and the center-left hardly stands a chance in next year’s presidential election....

“Fillon has consistently backed Russia in Syria since 2012, saying Moscow could be instrumental in resolving the conflict and refraining from calling for Syrian President Bashar al-Assad’s removal until the Islamic State is defeated.  In 2013, Fillon was a guest of the Valdai forum, which Putin and his foreign policy elite use to communicate Russia’s policy views to Western experts; apart from calling for cooperation in Syria, he expressed hope that Europe would soon abolish short-term visas for Russia – something that’s not even on the agenda today.

“Fillon has also been fervently against economic sanctions against Russia following Putin’s Crimean escapade....

“Fillon’s position is so long-standing and unequivocal it shouldn’t be compared with Trump’s impulsive and often ignorant statements on Russia during the election campaign....Fillon, a professional politician with plenty of international experience, knows what he’s talking about, and it’s difficult to imagine him suddenly abandoning long-held views upon election....

“In a change election, it may simply be time for the moderate right’s turn at the wheel – and the French moderate right has never been anti-Russian.  (Angela) Merkel, who faces her own election in the fall, will soon need to decide whether, with France about to jump ship, it’s worth her while to back sanctions.  Many in Germany will be relieved if she decides it isn’t.”

Italy’s big referendum on reforming the country’s constitution is rapidly approaching, Dec. 4.  Prime Minister Matteo Renzi’s initiative is about shaking up Italy’s parliamentary democracy and shoring up government stability, instead of the constant changes in government that Italy has been used to post-World War II.  But it’s become a proxy on the leadership of Renzi and is being seen as a test of Europe’s establishment in the wake of Donald Trump’s election.

The question on the ballot for Italians is whether they are in favor of cutting the number of senators and reducing the bureaucracy.  Renzi has promised to step down and not lead a technocratic government should his ‘Yes’ campaign fail.

But with all the final polls having been released (Italy is now in a blackout period), the ‘No’ campaign has a 5-7 percentage point lead.  What has hurt the Yes camp is continued turbulence in the banking system while momentum has built for populist parties such as the leftist Five-Star Movement. 

But in a major development, the influential Economist magazine has voted ‘No’ on the referendum, saying in part in an editorial out today:

“Mr. Renzi’s constitutional amendment fails to deal with the main problem, which is Italy’s unwillingness to reform.  And any secondary benefits are outweighed by drawbacks – above all the risk that, in seeking to halt the instability that has given Italy 65 governments since 1945, it creates an elected strongman.  This in the country that produced Benito Mussolini and Silvio Berlusconi and is worryingly vulnerable to populism.

“Granted, the peculiar Italian system of ‘perfect bicameralism,’ in which both houses of parliament have the exact same powers, is a recipe for gridlock.  Laws can bounce back and forth between the two for decades.  The reforms would shrink the Senate, and reduce it to an advisory role on most laws, like upper houses in Germany, Spain and Britain.

“In itself, that sounds sensible.  However, the details of Mr. Renzi’s design offend against democratic principles.  To begin with, the Senate would not be elected. Instead, most of its members would be picked from regional lawmakers and mayors by regional assemblies. Regions and municipalities are the most corrupt layers of government, and senators would enjoy immunity from prosecution. That could make the Senate a magnet for Italy’s seediest politicians.

“At the same time, Mr. Renzi has passed an electoral law for the Chamber that gives immense power to whichever party wins a plurality in the lower house. Using various electoral gimmicks, it guarantees that the largest party will command 54% of the seats.  The next prime minister would therefore have an almost guaranteed mandate for five years.

“That might make sense, except for the fact that the struggle to pass laws is not Italy’s biggest problem. Important measures, such as the electoral reform, for example, can be voted through today.  Indeed, Italy’s legislature passes laws as much as those of other European countries do.  If executive power were the answer, France would be thriving: it has a powerful presidential system, yet it, like Italy, is perennially resistant to reform....

“One drawback of a No vote would be to reinforce the belief that Italy lacks the capacity ever to address its manifold, crippling problems.  But it is Mr. Renzi who has created the crisis by staking the future of his government on the wrong test.  Italians should not be blackmailed. Mr. Renzi would have been better off arguing for more structural reforms on everything from reforming the slothful judiciary to improving the ponderous education system.  Mr. Renzi has already wasted nearly two years on constitutional tinkering.  The sooner Italy gets back to real reform, the better for Europe.

“What, then, of the risk of disaster should the referendum fail?  Mr. Renzi’s resignation may not be the catastrophe many in Europe fear.  Italy could cobble together a technocratic caretaker government, as it has many times in the past.  If, though, a lost referendum really were to trigger the collapse of the euro, then it would be a sign that the single currency was so fragile that its destruction was only a matter of time.”

Wolfgang Munchau of the Financial Times

“Italy has three opposition parties, all of which favor exiting the euro...In democratic countries, it is common that opposition parties eventually come to power.  Expect that to happen in Italy too....(and) accelerate the path toward euro exit.”

Were Italy or France to exit the euro, Munchau adds, “it would bring about the biggest default in history. Foreign holders of Italian or French euro-denominated debt would be paid in the equivalents of lira or French francs.  Both would devalue.  Since banks do not have to hold capital against their holdings of government bonds, the losses would force many continental banks into immediate bankruptcy.”

My guess is the euro markets will take a No vote in stride.  But it’s the message it sends to the Netherlands, France and Germany and their populist movements that matters more.

Austrians also go to the polls Dec. 4 to elect a new president, in the re-vote of May’s invalid vote (as ruled by the constitutional court after irregularities in the counting of postal votes was found).  Norbert Hofer, the candidate of the Freedom party, the far-right nationalist movement originally formed in the 1950s by former Nazis, could win, as he almost did in May.  The position is largely ceremonial in Austria’s system of government, but it will still send shockwaves throughout Europe if Hofer is elected.

Looking out to next fall’s vote in Germany, while Chancellor Angela Merkel announced her bid for a fourth term last weekend, a few weeks earlier than expected by yours truly, she could face a stiff test from European Parliament President Martin Schulz, who on Thursday said he would stand down in January and run in next year’s elections.

Schulz, 60, has been a member of the EU’s legislature for 22 years and now there is speculation he could lead his Social Democratic Party’s ticket, to run against Merkel’s conservatives.

The SPD said it would decide in January who would lead it in the general election, which is likely to be held in September.  Sigmar Gabriel, the current party chairman, has the first shot but he could yield to Schulz, the two being longtime friends.  But because of his position in the European Parliament, Schulz doesn’t have a strong base, as yet, in the SPD.

In an Infratest Dimap poll for public broadcaster ARD last week, the SPD received 23% to 32% for Merkel’s Christian Democratic Union (CDU).  What Merkel has going for her is still solid approval, with 55% of Germans in this survey wanting her to remain chancellor after the next election.

On the migration front, Turkey’s President Recep Tayyip Erdogan is warning he will let hundreds of thousands of migrants travel to Europe if the European Parliament goes through with its effort to freeze talks on EU membership for Turkey.  The members of the European Parliament have called out Erdogan’s “disproportionate” response to a failed coup attempt in July.

The migrant numbers reaching the Greek islands have dropped since an EU-Turkey deal in March to curb the influx, but as part of the agreement, Turkey was to receive massive aid for keeping the migrants, while Turkey was supposed to enact certain reforms to further its membership talks.

So Erdogan has accused the EU of breaking its end of the bargain, including the granting of visa-free travel for its nationals, as well as aid dollars.

Turkey currently hosts almost three million migrants, mostly from Syria.  Under the March agreement, migrants arriving in Greece are sent to Turkey if they do not apply for asylum or their claim is rejected.

Meanwhile, on a related matter, the Dutch counter-terrorism coordinator said ISIS has between 60 and 80 operatives planted in Europe to carry out attacks.

And Friday, officials in Paris said five men arrested last weekend in raids in France were planning a terror attack next Thursday in the Paris area, the suspects receiving orders from an ISIS commander in Iraq or Syria.  The raids, in Strasbourg and Marseille, turned up automatic weapons.

The target of the planned attack has not been established, but GPS coordinates were found on a USB stick.  Among the potential targets stated by Paris’ chief prosecutor, Francois Molins, was the Christmas market on the Champs-Elysees.  I have been saying for over a decade that Europe’s Christmas markets are easy targets.

Four of the five arrested were French nationals of North African origin.  The fifth man is Moroccan.

There’s a reason why France remains under a state of emergency.

---

Turning to Asia, there was virtually zero economic data of note in the region this week, save for a flash reading on manufacturing for November in Japan, 51.1 vs. 51.4 in October.

More importantly, President-elect Trump has vowed that on his first day in office, he will tell the Pacific Rim countries that signed the Trans-Pacific Partnership (TPP) that the U.S. will put out of the trade deal that had become a signature policy of President Obama.

China is now aggressively trying to fill the void, as I’ve been writing for a while now, and this week, China and Russia announced they would push for a free-trade area in the Asia-Pacific region, after leaders of the two nations met in Peru during the Asia-Pacific Economic Cooperation summit in Lima.

Chinese President Xi Jinping pledged in his speech there last Saturday, to boost global trade and cooperation by opening up further and giving greater access to foreign investors (which is b---s---).

Xi offered a vision of a Chinese-led order marked by openness to trade, in a rebuke of Obama’s push to create a Trans-Pacific Partnership with Japan and 10 other economies that excluded China.

“China will not shut the door to the outside world but will open it even wider,” Xi said, vowing to “fully involve ourselves in economic globalization.”

“Close and exclusive arrangements are not the right choice,” he added.

John Key, New Zealand’s prime minister, said, “We like the U.S. being in the region.  But if the U.S. is not there that void needs to be filled, and it will be filled by China.”

Just a note on Mexico and President Enrique Pena Nieto. Last weekend he took a conciliatory approach to Donald Trump, saying that while he believed in the TPP and would work to try and convince the new U.S. president to back it, he was prepared to discuss “modernizing” the North American Free Trade Agreement between the U.S., Canada and Mexico.  Trump has vowed to begin renegotiating the 23-year-old agreement in his first 100 days in office.

Pena Nieto said, “Let’s modernize NAFTA, let’s make it a much more potent vehicle, a much more modern vehicle that could allow us to really consolidate this strategic relationship between Mexico, the U.S. and Canada...

“I want to be emphatic: for Mexico, due to its geopolitical position, without a doubt its central relationship is with the U.S.”   [Financial Times]

Street Bytes

--All the major averages hit new all-time highs on Monday, the first time the Dow Jones, the S&P 500, Nasdaq and the Russell 2000 small-cap index had closed at record highs on the same day in 17 years.  And then they all continued to do so, Tuesday, Wednesday and Friday (the markets being closed Thursday, not to insult anyone’s intelligence).

The Russell 2000 has now risen 15 straight days, its longest streak since 1996.

--Last week I noted that the Bull / Bear ratio I have posted down at the bottom since day one of this column, now nearly 18 years, was close to flashing danger territory, above 56, as I put it, with 60 being an outright ‘sell.’

Well this week the ratio is 55.9 / 21.6 and as the folks who put together the data, Investors Intelligence/Chartcraft, put it, “The reading now enters the danger zone...it shows a high since mid-Aug. when three readings exceeded 55% (peak 56.7%).  Those were serious warnings of a top which are starting again.  We should see still more bulls before a market top and a count above 60% would be a major call to consider defensive measures.”

The bear mark near 20% is also a danger signal.

I have actually been tracking this data since Aug. 1990...yup, handwritten on spreadsheets.  I have told you over the years that the Bull / Bear reading hasn’t been as effective as it was back in the day, but more recently it has marked tops and bottoms of some sort.  I bring it to you (at $350 per year) to give you an arrow in your quiver.

--U.S. Treasury Yields

6-mo. 0.62%  2-yr. 1.12%  10-yr. 2.36%  30-yr. 3.00%

After two weeks of turmoil in the bond pits, the action was quiet, both here and internationally; yields little changed.

--Investors withdrew $8.2 billion from U.S. bond funds in the week ending Nov. 16, according to data provider EPFR Global, the largest weekly outflow since June 2013 and the so-called Taper Tantrum, when the Fed inferred it could slow its bond purchases, which roiled the Treasury market for a spell.

--According to AAA, the estimated 43.5 million Americans who took to the road this Thanksgiving travel season will have paid the second-cheapest gas prices since 2008, $2.14 per gallon, though five cents higher than last year.

--As for the critical upcoming OPEC meeting next Wednesday, there was first going to be a meeting with non-OPEC producers this Monday, but Saudi Arabia said on Friday there was no reason for it to attend this prelim because the 14 oil cartel members have not yet reached a deal among themselves, and with that, the price of crude collapsed anew by the close on Friday to $45.96 after rallying back to $50 early on in the expectation there would be a production cut.

Iran still believes that, post-sanctions, it should be treated as a special case without any output restraints, while Iraq is fighting an expensive war against Islamic State and, while it has said it would reluctantly participate in an output reduction, there is no clarity from which level it would do so and how much it is willing to cut.

Monday’s meeting, with the likes of Russia and Kazakhstan, was initially designed to bring countries outside the cartel on board.  Russia has said OPEC must act first before involving other producers.

--Shares in Deere & Co. soared 11% on Wednesday as the company said the long slide in demand for its farm equipment could ease in 2017, even as revenue will still decline, 1% as now projected by the company for the year ending October 2017, but this is compared with the 9.3% drop it posted for the year that ended last month, and better than analysts were forecasting.

Net income, while 90 cents a share compared with $1.08 for the year-ago period, was substantially better than the 40 cents projected by the Street.

Deere also continues to slash costs and expenses, which fell 2.7% in the latest quarter.

While Deere said it expected sales to decline 5% in the European Union next year, it said improving economic and political conditions in Brazil and Argentina could lead to an increase of 15% for tractors and combines in South America.

--Conversely, shares in Eli Lilly dropped nearly 11% on Wednesday after the drugmaker said its Alzheimer’s drug had failed in a large clinical trial, a big blow for a theory on what causes the disease.

The story is about the medicine, Solanezumab (Sola), which many had expected would be found to delay the rate at which a patient loses their cognitive abilities, with previous studies seeming to show it could slow the progression of Alzheimer’s by a third in patients with a mild form of the disease.

But Lilly said that while the Phase III trial “directionally favored the drug, the magnitudes of the difference were small,” and thus it was not going to seek regulatory approval for the medicine.

CEO John Lechleiter said: “The results of the Solanezumab trial were not what we had hoped for and we are disappointed for the millions of people waiting for a potential disease-modifying treatment for Alzheimer’s disease.”

Sad and depressing.

As reported by the Financial Times’ David Crow:

“The results of the trial are a big blow for the so-called ‘amyloid hypothesis,’ the foremost theory of what causes Alzheimer’s, which holds that the brain stops functioning because of a build-up of sticky plaque known as amyloid.

“In an interview before the data were published, Dr. Martin Farlow, a leading neurologist, said an outright failure would be hugely damaging to the theory and deter investors from backing other medicines designed to reduce amyloid.

“ ‘It’s a very well-organized test of the amyloid hypothesis with a convincing number of patients, so in that sense I think it would be received very badly,’ said Dr. Farlow, who was one of the researchers investigating Sola for Lilly.”

Lilly said the negative study would result in a fourth-quarter charge of approximately $150 million.

CEO Lechleiter, who is leaving in January, had pressed ahead with the development of Sola after two earlier Phase III failures.

--HP Inc., the personal computer / printer half of the breakup of Hewlett-Packard Co., on Tuesday reported fiscal fourth-quarter revenue rose 2%, better than expected, though net income declined 63%, partially due to one-time charges.

HP is the No. 2 supplier of PCs behind Lenovo Group, but the company gets most of its profit from selling printers and ink and toner, with revenue in this business declining 8%.

--Shares in Dollar Tree rose sharply after the bargain retail chain reported its same-store sales grew more than expected, up 1.7% for the three months to October, the company’s 35th consecutive quarter of positive same-store sales.  The company also guided up for the current holiday quarter.  My local DLTR remains out of horseradish sauce.

--More than 100,000 Lufthansa passengers faced a disruption as a strike by pilots went into a third day on Friday, the German airline canceling about 830 flights on Friday. At first the strike impacted just short-haul flights, but now long-haul ones are being disrupted, with the pilots’ union saying all long-haul flights leaving Germany on Saturday will be impacted.

The union wants an average annual pay rise of 3.7% for 5,400 pilots in Germany, backdated to 2012.  Lufthansa has offered 2.5% over six years to 2019.

This is the 14th time Lufthansa pilots have walked out since early 2014 and this stoppage is costing the airline about $11 million a day.

However, at day’s end, the airline made a new wage offer, the union rejected it, but the pilots said they had no plans for further strikes beyond Saturday.  They did add any future strikes would be announced 24 hours in advance.  [Plus they said the company’s new offer was made two months ago and this was just a PR move.]

--The average age of a car or light truck on the road today in the U.S. is now a record 11.6 years, according to IHS Markit, great for service providers and parts makers.

--There were two big acquisitions in the soda business, with Dr. Pepper Snapple Group Inc. announcing it would acquire Bai Brands LLC, which makes low-calorie, coffee-fruit drinks, for $1.7 billion, while PepsiCo Inc. is buying KeVita Inc., a maker of fermented probiotic and kombucha beverages, whatever the heck that is, mused the beer drinker.  PepsiCo is paying more than $200 million for KeVita.

Both Dr. Pepper and Pepsi are thus joining the growing consumer appetite for exotic “functional beverages” that include kale juice and fermented tea (O.K., that’s kombucha).  U.S. sales of natural and organic foods and beverages alone grew at a 23% clip the past two years, while consumption of carbonated soft drinks will have declined a projected 12th straight year.  Local governments are continuing to approve special taxes on sweetened beverages.

Meanwhile, U.S. consumption of bottled water also keep surging vs. zero-calorie soft drinks, let alone full-calorie sodas.

--Campbell Soup Co. said its profit rose above expectations, with the shares rising about 4% in response, even as it continues to struggle with its fresh-food division (Bolthouse Farms carrots and refrigerated juices). While this division saw revenue decline 6%, overall company sales were flat.

Sales for its global biscuits and snacks segment, which includes Pepperidge Farm, rose nearly 3%.  I’m partial to PF’s cinnamon bread myself, as well as Campbell’s Chunky Hearty Cheeseburger soup.

--Fidelity chairman Ned Johnson, who has run the Boston-based financial giant the past 39 years, is finally turning over his last remaining responsibilities to his daughter, Abigail, who will add the title of chairman to that of CEO, which she took in 2014.    I’m so old, and familiar with this business, that I remember a time long ago when there was a question as to whether “Abby” wanted to be involved at all in the family business, but she’s now been at it 28 years.  Her father is 86.  His father founded Fidelity in 1949.  Today Fidelity oversees $5.5 trillion in retirement plans and brokerage accounts.

Fidelity’s actively-managed funds, however, continue to lose market share to lower-cost passive investment vehicles.

--Last week I wondered why the World Health Organization declared the global Zika emergency over because the link between the virus and microcephaly had been confirmed, and I’m thinking, yeah, all the more reason it’s an emergency.

So then days later we have the announcement that “Thirteen babies in Brazil born with normal head circumference have been diagnosed with congenital Zika syndrome, with brain scans showing extensive malformations, inflammation and reduced brain volume,” according to researchers, via Reuters’ Julie Steenhuysen.  “Of the 13 infants, 11 gradually developed the birth defect microcephaly, or abnormally small head size, in the months following birth.  The findings raise new concerns about the hidden effects of pre-natal exposure to the mosquito-borne Zika virus.”

This is the kind of thing I was inferring last time.  As Ms. Steenhuysen reported: “Although others have observed neurological problems in infants exposed to Zika during gestation, the study is the first to carefully document birth defects in a group of babies with confirmed Zika exposure whose head circumference fell into the normal range at birth.”

This was Tuesday, five days after the WHO declared Zika not to be an emergency, rather just another virus.  The WHO then said Tuesday that the definition of congenital Zika virus syndrome – the term the WHO is associated with Zika-related birth defects – continues to expand.

Excuse my French, but what the [blank] am I missing?  Why is it not still an emergency if we basically have no clue what all the dangers are and how it develops?  I mean if we get a few cases in Miami similar to what we’ve now seen in Brazil, cases where the mothers thought their baby was initially normal and then wasn’t, you will have an emergency, with an economic impact, thus Zika is back in “Street Bytes.”

--Barnes & Noble blamed the presidential election for another quarter of declining sales, but its fiscal second quarter losses were not as deep as expected, with total sales down 4% year on year; comparable-store sales off 3.2%.  Sales of the company’s Nook tablet and related content were down 19.4%, however.

--A Stanford University study of 7,800 middle-school students found that 825 couldn’t distinguish between an ad labeled “sponsored content” and a real news story on a website.  As reported by Sue Shellenbarger of the Wall Street Journal, “Many students judged the credibility of newsy tweets based on how much detail they contained or whether a large photo was attached, rather than on the source.”

--Meanwhile, Facebook CEO Mark Zuckerberg said his company was testing ways to avoid misinformation from proliferating.  “We take misinformation seriously,” Zuckerberg wrote in a post.

Zuckerberg has had to defend Facebook against claims that fake news on the site distorted public discourse about the presidential election and led to Donald Trump’s victory, which Zuckerberg calls “a pretty crazy idea.”  He has claimed fake news accounts for less than 1% of global content.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: A suicide truck bomb killed as many as 100 people, most of them Iranian Shiite pilgrims, lined up at a petrol station in the city of Hilla, south of Baghdad on Thursday.  ISIS claimed responsibility.

The attack came just two days after Prime Minister Haider al-Abadi applauded the efforts of the security forces to protect the millions of Shiites who have flowed through southern Iraq in recent days for what some have described as the world’s largest religious pilgrimage, even greater than the hajj in Saudi Arabia.  Until the bombing, the government was indeed doing a good job as it attempts to take out ISIS in Mosul to the north, while protecting the pilgrims in the south.

The pilgrims were en route back to Iran from the Iraqi Shiite holy city of Kerbala.  The petrol station was targeted because it has a restaurant on its premises popular with travelers.  Five buses loaded with pilgrims were set afire by the blast.

As for the Battle of Mosul, tens of thousands of Iraqi civilians have fled Tal Afar, a key ISIS-held town on the road between Mosul and Raqqa, the main cities of ISIL’s ‘caliphate’ in Iraq and Syria. But many of those fleeing Tal Afar are fleeing deeper into insurgents’ territory where there is no aid for them.

Mosul itself is said to be now fully encircled, with the road to Tal Afar sealed off.  The Iraqi military still puts the estimate of ISIS fighters inside Mosul at 5,000 to 6,000, while the coalition of Iraqi government units, Kurdish Peshmerga fighters and Shiite militias totals 100,000.

But this battle started over five weeks ago and you can see it has been a bit of a slog.

In Syria, U.S. officials said Thursday that an American service member died from wounds suffered in a roadside bomb blast in the northern part of the country.  Separately, three Turkish soldiers were killed in the same area in a Syrian government air strike, which represents the first time Turkish soldiers have been killed by government forces in the offensive.  There was no immediate comment from the Syrian military, though it has previously said Turkey’s support for the rebels with hundreds of troops, aircraft, and tanks was a “flagrant violation of Syrian sovereignty.”

As for the battle of Aleppo, the Syrian army pressed an offensive to recapture the whole city, with 250,000 civilians remaining trapped under siege, with no food or fuel supplies, the last hospital bombed this week.  At least 140 people have been killed in the latest round of airstrikes, barrel bombs and artillery fire.  Civilians have been trying to flee but have been forced back by gunfire.  The army accused the rebels of holding the civilians as “hostages.”  Rebel groups deny this.

Editorial / Wall Street Journal

“President Obama said in Peru on Sunday that he is ‘not optimistic’ about ending the violence in Syria any time soon, in an understatement for the ages.  The United Nations says a million Syrians are under siege across that country, especially in Aleppo where Russia, Iran and the Bashar Assad regime ramp up what they hope will be their final assault on rebel positions.....

“Turkey’s President Recep Tayyip Erdogan blamed everyone else for the charnel house on Monday, demanding that the U.S. and its allies reconsider a no-fly zone to protect civilians and refugees. He has a point, but he ought to include himself in the bill of indictment because for years he resisted U.S. pleas to assist the rebels unless the goal included toppling the Assad government.

“President Obama, true to his instincts to the end, has no appetite for even a humanitarian intervention. And without U.S. leadership, nobody else does either.  Mr. Obama was left to plead with Vladimir Putin in Peru Sunday to do something, but their exchange amounted to little more than a handshake and cold stare.  Mr. Putin knows he and his allies can do what they want safe from consequence save moral denunciations.  Mr. Obama won’t muster even that....

“The point to understand is that Syria is what the world looks like when the U.S. decides to abandon world leadership: The Pax Americana becomes Mr. Putin’s peace of the grave.”

Iran: From Laurence Norman of the Wall Street Journal:

“The U.S. and its Western allies are pressing Iran to take steps to sharply cut the amount of radioactive material it holds in a bid to shore up last year’s nuclear deal and discourage the incoming Trump administration from abandoning it, Western officials said.

“The discussions about reducing Iran’s stockpile of enriched uranium started months ago, officials said, and are among a number of measures the Obama administration has been examining to fortify the accord in its final months in office.  But the initiative has taken on new urgency since the election of President-elect Donald Trump created fresh uncertainty around the deal.  If agreed upon, the plan could reduce the odds of a sudden flashpoint between the U.S. and Iran over Tehran’s implementation of the deal once Mr. Trump takes office, Western officials say, by reducing its enriched-uranium stockpile well below the cap agreed to in the 2015 accord.  Officials say the plan would also lengthen, for a while, Iran’s so-called breakout time – the amount of time it would take the country to accumulate enough material for one nuclear weapon were it to quit or violate the deal – though it is unclear by how much.  The constraints of the nuclear agreement are currently set up to ensure it would take Iran at least a year to produce the ingredients for a nuclear weapon.”

Separately, Israel’s U.N. ambassador revealed intelligence information to the Security Council that Iran is smuggling weapons and ammunition to Hizbullah through commercial flights from Iran to Lebanon.  Ambassador Danny Danon said: “The Iranian Al-Quds Force packs weapons, ammunition and missile technology to Hizbullah in suitcases and puts them on Mahan Air flights.”

Such moves are prohibited by various Security Council Resolutions.

In July, Danon told the Security Council that Hizbullah possessed about 120,000 missiles, compared to 7,000 ten years earlier.

Israel: The nation has a serious issue with massive wildfires that are tearing through central and northern parts of the country, and on Friday, Israeli police arrested 12 people on suspicion of arson.  The fires forced the evacuation of 80,000 in the city of Haifa and have destroyed hundreds of homes.  Firefighters are battling flames in wooded hills around Jerusalem (one caused by a firebomb today), with support from Palestinian firemen and emergency teams from Greece, Cyprus, Croatia, Italy, Russia and Turkey.  Prime Minister Benjamin Netanyahu said he had also accepted aid from Egypt and Jordan.

Netanyahu accused those behind some of the fires with being terrorists, which they are.  A police spokesman said those detained had been caught attempting to set fires or were seen fleeing the area.

The fires are the biggest in Israel since 2010, when 44 were killed in one northern blaze.

Arab social media is having a field day with inflammatory celebratory reactions. The imam of Kuwait’s Grand Mosque chimed in in issuing remarks to his following of 11 million on Twitter.

“Good luck to the fires. #Israel_IsBurning,” he wrote, as reported by the Jerusalem Post.  Many of the posts refer to the fires being retribution over a controversial Israeli bill to ban outside loudspeakers from places of worships, such as the likes of those used in the five-time daily call to prayer by mosques.

Afghanistan: I’ve been writing that there has been a total breakdown in order in the capital of Kabul, which is more than a bit unsettling; the latest example of which was a suicide bombing claimed by ISIS that killed at least 32 at a Shia mosque this week.  The attacker arrived on foot and blew himself up among worshippers.

The latest round of attacks is aimed at shattering the fragile national unity.

Turkey: The government expanded its crackdown on political opponents following last summer’s failed coup, with an additional 15,000 civil servants dismissed from their jobs, while another nine news outlets were shut down.

More than 100,000 public workers, including police officers, teachers, soldiers and others have been fired for having alleged connections to the coup plotters.  This is all part of the debate concerning the migrant deal with the European Union as noted above.

Libya: The following is a true story: “Clan fighting has left at least 20 people dead in the south Libyan town of Sabha after an incident with a monkey, according to local reports.

“A pet monkey reportedly assaulted a schoolgirl, leading her family to seek revenge.  Three men were killed along with the animal in initial clashes.”

Days of fighting between the two clans then followed and the death toll could be a lot higher than the 20 figure because it seems this is just from one group.  [BBC News]

Russia: Editorial / Wall Street Journal

“A senior Russian parliamentarian announced Monday that Moscow would deploy short-range ballistic missiles as well as a sophisticated air defense system to Kaliningrad, a Russian exclave (sic) tucked between Poland and Lithuania.  Think of this as Vladimir Putin’s first test of Donald Trump’s mettle as a Commander in Chief.

“ ‘Why are we reacting to NATO expansion so emotionally?’ Mr. Putin asked in an interview the same day.  ‘What should we do?  We have, therefore, to take countermeasures, which means to target with our missile systems the facilities, that, in our opinion, start posing a threat to us.’

“Those missile systems include the mobile Iskander system, which can carry a nuclear warhead to a range of 300 miles, along with the S-400 surface-to-air missile system, capable of shooting down all but the most sophisticated stealth planes.  The ‘facilities’ to which these missiles are supposedly a response are future sites for an advanced version of the American SM-3 anti-ballistic missile system, which – unlike the Iskanders – has no offensive purpose.

“It’s worth recalling that as part of his ‘Russian reset’ in 2009, President Obama canceled a Bush administration plan to deploy ABM systems to Poland and the Czech Republic to defend against Iranian missiles.  The Kremlin’s vociferous opposition succeeded in getting Mr. Obama to yield, and the Russian strongman may be wagering that he can play the same trick with President-elect Trump....

“Mr. Trump has indicated he wants a reset of his own with the Kremlin. That’s a respectable goal, providing the President-elect pursues it not through Mr. Obama’s habit of pre-emptive concessions, but with the tried-and-true formula of peace through strength.  Completing the deployment of the SM-3s in Poland would send Mr. Putin the right message.”

Frankly, I don’t understand why this story is being treated as if it’s new, aside from Putin’s comments.  I wrote the following on Oct. 8 in this space.

“There was also a story on Friday, via Estonia, and later confirmed by U.S. intelligence sources, that Russia has moved nuclear-capable missiles into Kaliningrad, the tiny Russian enclave that sits between Poland and Lithuania.

“Now I’ve written of Kaliningrad before, including last Dec. 12, noting then that Russia was conducting ‘nuclear strike drills.’  But with today’s report, you wonder if Russia is about to blackmail the Baltics to see how much they can get away with, knowing how President Obama isn’t anxious to engage Putin in his final days.  Wouldn’t want to screw up his legacy!”

On a different issue, a poll conducted by the Levada Center, an independent polling firm in Russia, found that on the subject of political censorship, 32 percent of Russians said that denying access to certain websites would infringe upon the rights and freedoms of activists, while 44 percent said it did not and 24 percent could not answer.  35 percent of Russians thought the media was deceiving them frequently, while 49 percent said they felt that way only rarely.

India/Pakistan: Pakistan’s air force chief warned on Thursday that India better not escalate the dispute over Kashmir into full-scale war, with tensions soaring between New Delhi and Islamabad.  Wednesday, three soldiers and 12 civilians were killed in the latest border clash.  The civilians died when India shelled several villages along the Line of Control that divides the India and Pakistan sectors of Kashmir.  Then three Pakistani soldiers were killed in an exchange of fire between the two sides.

[Separately, a train derailment in India’s northern Uttar Pradesh state killed more than 100 last Sunday.]

South Korea: At first lawmakers here were willing to let South Korean President Park Geun-hye serve out her term as a lame duck leader amidst the scandal that has enveloped her, but now, with new evidence, Park is close to being impeached as soon as this coming week, with 40 representatives from her own party saying today, Friday, that they would support the proceedings.

In another twist to the political saga, Park’s office had to explain why it bought 364 Viagra pills for the president – apparently for altitude sickness – and her approval rating sank to 4 percent.  [Yes, very Hollande-like!]

But Park is digging in, which means there could be a power vacuum for months at a most dangerous time with a pudgy wacko with nukes (and a massive artillery capability) just about 30 miles from Seoul.  The impeachment process could take six months, while her term doesn’t officially expire for another 16.

Recall, Park is accused of enabling her lifelong friend, Choi Soon-sil, to use their relationship to extort money from corporations and to wield excessive influence over the running of the country, such as in appointing aides and cabinet members.  Choi has been indicted on charges of coercion, fraud and abuse of power, and what has radically changed the view of lawmakers in terms of impeachment talk is the fact prosecutors now say Park was an accomplice to the crimes.

This week prosecutors raided the headquarters of Samsung and other major conglomerates, looking for evidence of influence-peddling.

The 40 members of Park’s ruling Saenuri Party, coupled with 171 in the opposition, would easily overcome the two-thirds threshold needed to impeach her.

Should she be stripped of power, with the day to day running of the country turned over to the prime minister (who otherwise is largely a figure-head), the Constitutional Court would review the motion and Park is betting she can get a majority of their support.

On a totally different issue, South Korea signed a military intelligence-sharing pact with Japan aimed at better managing the threat from North Korea.  Previously, the U.S. was used as an intermediary for intelligence exchange.  It’s hard for many in the West to understand that relations between the two nations will always bear the scars of the Japanese occupation of South Korea from 1910 to 1945, and the issue of “comfort women” forced to work in Japanese military brothels during World War II.

North Korea: Gerald F. Seib / Wall Street Journal

“The Obama administration considers North Korea to be the top national security priority for the incoming administration, a view it has conveyed to President-elect Donald Trump’s transition team, according to people familiar with the conversations.

“President Barack Obama, in a policy of ‘strategic patience,’ refused to engage his administration in high-level negotiations with North Korea, waiting for leader Kim Jong Un to show he was committed to abandoning his nuclear arsenal.

“Current and former administration officials now worry that the pace of North Korea’s nuclear weapons development, particularly its steady march toward the ability to mount a weapon on a ballistic missile, demands a more aggressive strategy.”

No surprise here, sports fans.  Watch out Guam on the Fourth of July, though Kim will no doubt create some mischief during the transition in the White House; like another nuclear test.  As James Steinberg, who oversaw North Korea policy during Obama’s first term as deputy secretary of state, told Gerald Seib, “The North Koreans will up the ante.”

China: At least 74 people were killed in a construction accident at the site of a new power plant in Fengcheng (Jiangxi province).  A cooling tower that is part of a coal-fired power plant was being built when it apparently collapsed.

Separately, the Los Angeles Times’ Frank Shyong had an update on the issue of Chinese students arriving in droves to the U.S.

“In the last decade, the number of Chinese students in U.S. high schools and middle schools has jumped from 1,200 to 52,000.  More than a quarter of these students – called ‘parachute kids’ if they come without their family – land in California.

“Globalization and rapid wealth creation have put two Chinese traditional values at odds: family and education. Now, more parents are willing to split their families apart and send their children here alone....

“Most Chinese minors studying in the U.S. live in home-stay arrangements...An acquaintance or a friend or stranger found on the Internet agrees to feed, house and care for the students for about $1,000 a month. They form a huge, unregulated industry of parental surrogacy that depends largely on host families to ensure student safety and health.

“Parachute kids, separated from their family and culture at a formative age, are more susceptible to isolation, aggression, anxiety, depression and suicide.”

Myanmar: A U.N. official told the BBC that this nation is seeking the ethnic cleansing of the Muslim Rohingya minority from its territory.  Armed forces have been killing Rohingya in Rakhine state, forcing many to flee to neighboring Bangladesh, says John McKissick of the U.N. refugee agency. 

The government denies reports of atrocities and has claimed it is conducting counter-insurgency operations since attacks on border guards in October.

McKissick said security forces have been “killing men, shooting them, slaughtering children, raping women, burning and looting houses, forcing these people to cross the river” into Bangladesh.  [BBC News]

Bangladesh seems helpless.

Random Musings

--As first reported by the Washington Post, President-elect Trump has been dodging classified intelligence briefings, receiving only two thus far since his election.  At least Mike Pence has received the briefings almost every day since the election.  Some of us just hope Trump listens to Pence the next four years.  I do believe this will be the case, because I think Trump’s kids will be telling their father to do so.  [“Just help us build the brand, Dad!  Let Pence run the country.”]

--Trump has signaled he’ll use Twitter, large rallies and a sharp tongue to advance his agenda.  Republicans believe they can help Trump roll up Congress given GOP control of both chambers and as I pointed out the other week, with so many Democratic senators up for reelection in 2018, it’s expected that many of them will end up voting for many of Trump’s proposals.

As The Hill pointed out, Republicans have five potential Democratic votes in the Senate today on key measures: Sens. Claire McCaskill (Mo.), Joe Donnelly (Ind.), Jon Tester (Mont.), Heidi Heitkamp (N.D.) and Joe Manchin (W. Va.).  Trump won Missouri, Indiana and Montana by about 20 points each; North Dakota by more than 36; and West Virginia by a whopping 42.

Manchin, by the way, who I’ve said has long been rumored to be switching parties, was the first Democratic senator to back Sen. Jeff Sessions (R-Ala.), Trump’s nominee for attorney general.

--The story that Hillary Clinton should challenge the election results in three key states is totally bogus.

A group of activists, including J. Alex Halderman, director of the University of Michigan’s center for computer security and society, believe their evidence shows the results in three battleground states – Michigan, Wisconsin and Pennsylvania – may have been hacked, but there is zero evidence this is the case and, thus far, the Clinton team is making no indication it will challenge the results.

If they were to file a challenge and ask for a recount (which Green Party leader Jill Stein did do in the case of Wisconsin on Friday), it would have to do so by this Wednesday.  For Clinton to win she would have to win Michigan (still not officially called) and then overturn the results in Wisconsin and Pennsylvania, but, again, this just isn’t a story.

The fact is Clinton didn’t work hard enough, and in the right places, like Wisconsin.  She had it in the bag, though Comey didn’t help.

--Henry Kissinger said this week that Donald Trump is the “most unique” president-elect in his lifetime because the billionaire is not obligated to any particular group.  “He has absolutely no baggage,” Kissinger told CNN’s Fareed Zakaria.

Kissinger said Trump should not be held to all of his campaign promises if he doesn’t insist on keeping them.  He added:

“I think we should give him an opportunity to develop the positive objectives that he may have and to discuss those,” he said.  “And we’ve gone through too many decades of tearing incumbent administrations apart.  And it may happen again, but it shouldn’t begin that way.”

Dr. Kissinger sounds like a true ‘elder statesman,’ doesn’t he?

--Kyle Smith / New York Post

“(A) word of neighborly advice to our more genteel media friends, the ones who sit at the high table in their pristine white dinner jackets and ball gowns.  You’ve been barfing all over yourselves for a week and a half, and it’s revolting to watch.

“For your own sake, and that of the republic for which you allegedly work, wipe off your chins and regain your composure.  I didn’t vote for him either, but Trump won.  Pull yourselves together and deal with it, if you ever want to be taken seriously again.

“What kind of president will Trump be?  It’s a tad too early to say, isn’t it?  The media are supposed to tell us what happened, not speculate on the future.  But its incessant scaremongering, the utter lack of proportionality and the shameless use of double standards are an embarrassment, one that is demeaning the value of the institution.  The press’ frantic need to keep the outrage meter dialed up to 11 at all times creates the risk that a desensitized populace will simply shrug off any genuine White House scandals that may lie in the future (or may not).

“Hysteria is causing leading media organizations to mix up their news reporting with their editorializing like never before, but instead of mingling like chocolate and peanut butter the two are creating a taste that’s like brushing your teeth after drinking orange juice.”

--George Will / Washington Post

“Many undergraduates, their fawn-like eyes wide with astonishment, are wondering: Why didn’t the dean of students prevent the election from disrupting the serenity to which my school has taught me that I am entitled?

“Campuses create ‘safe spaces’ where students can shelter from discombobulating thoughts and receive spiritual balm for the trauma of microaggressions.  Yet the presidential election came without trigger warnings?

“The morning after the election, normal people rose – some elated, some despondent – and went off to actually work. But at Yale, that incubator of late-adolescent infants, a professor responded to ‘heartfelt notes’ from students ‘in shock’ by making that day’s exam optional.

“Academia should consider how it contributed to, and reflects Americans’ judgments pertinent to, Donald Trump’s election.  The compound of childishness and condescension radiating from campuses is a constant reminder to normal Americans of the decay of protected classes – in this case, tenured faculty and cosseted students....

“An American Council of Trustees and Alumni study – ‘No U.S. History?  How College History Departments Leave the United States out of the Major,’ based on requirements and course offerings at 75 leading colleges and universities – found that ‘the overwhelming majority of America’s most prestigious institutions do not require even the students who major in history to take a single course on United States history or government.’

“At some schools that require history majors to take at least one U.S. history course, the requirement can be fulfilled with courses like ‘Mad Men and Mad Women’ (Middlebury College), ‘Hip-Hop, Politics and Youth Culture in America’ (University of Connecticut) and ‘Jews in American Entertainment’ (University of Texas).  Constitutional history is an afterthought.

“Small wonder, then, that a recent ACTA-commissioned survey found that less than half of college graduates knew that George Washington was the commanding general at Yorktown; that nearly half didn’t know that Theodore Roosevelt was important to the construction of the Panama Canal; that more than one-third couldn’t place the Civil War in a correct 20-year span or identify Franklin Roosevelt as the architect of the New Deal; that 58 percent didn’t know that the Battle of the Bulge occurred in World War II; and that nearly half didn’t know the lengths of the terms of U.S. senators and representatives.

“Institutions of supposedly higher education are awash with hysteria, authoritarianism, obscurantism, philistinism and charlatanry.  Which must have something to do with the tone and substance of the presidential election, which took the nation’s temperature.”

--We note the passing of Dr. Denton Cooley, the Texas surgeon who performed the first successful heart transplant in the United States and the world’s first implantation of a wholly artificial heart.  He was 96.

As reported by Thomas H. Maugh II of the Los Angeles Times:

“Cooley was the leading expert on congenital heart defects in children, pioneered use of the heart-lung machine that made open-heart surgery possible, co-developed a technique for repairing torn aortic aneurysms, developed the techniques of ‘bloodless’ heart surgery and was one of the first and most successful proponents of the coronary artery bypass graft for treating blocked blood vessels.”

“What he did, more than anyone else, was make heart surgery safe,” heart surgeon Dr. O. Howard Frazier of the Texas Heart Institute in Houston told the Los Angeles Times in 1988.

Thomas Maugh:

“Cooley’s team at the institute, which he founded in 1962, conducted more than 100,000 open-heart surgeries over the course of four decades, with Cooley himself performing as many as 25 per day.”  [Ed. I can’t fathom this.]

Denton Cooley, though, had a mentor, and former partner, Dr. Michael E. DeBakey, the developer of the artificial heart, but on April 4, 1969, Dr. Cooley, working independently of Dr. DeBakey, performed his groundbreaking implantation of a totally artificial heart without DeBakey’s authorization.  At the time, DeBakey and a team at Baylor College of Medicine in Houston were still developing the artificial heart, which they viewed as an experimental device.

DeBakey felt betrayed and it sparked a feud that lasted 40 years.  [Lawrence K. Altman / New York Times]

The patient for the implantation of the artificial heart was Haskell Karp, 47, from Skokie, Ill; Karp living three days with the device.  It was 16 months earlier that Dr. Christiaan N. Barnard had performed the world’s first human heart transplant in South Africa, which led other surgeons to try the operation.   The genesis of the artificial heart by DeBakey and Cooley, though, was an attempt to develop a device to keep a patient alive until a donor heart could be found.

[The first totally artificial heart intended for permanent use, the Jarvik 7, was implanted in Dr. Barney B. Clark at the University of Utah in 1982. He survived for 112 days.]

I just have to note on a personal basis, being about age 10 at the time of Barnard’s first transplant, that these were massive media events and on the evening newscasts we had daily updates for these first patients.  I remember them vividly

The first recipient of a heart transplant was Louis Washkansky, who survived 18 days before succumbing to pneumonia.  Dr. Barnard’s second patient was Philip Blaiberg and he survived 19 months.  I remember these two names like they were baseball stars from yesterday (though in testing myself for this spot, I thought Blaiberg was first and Washkansky second).

Understand this was going on at the same time the United States was heading to the moon.  Some welcome diversions from all the chaos going on in the country and the world at the time.

--George Will / Washington Post, part deux....

“Modern presidential campaigns, like the presidency itself, are too much with us, which makes it difficult to relegate politics to the hinterlands of our minds.  Shortly before Thanksgiving 2013, the student government of Barnard College in New York City sent to all students this email: ‘Happy Turkey Week.  Thanksgiving is complicated.  We urge you not to forget that this holiday commemorates genocide and American imperialism.  But, enjoy the week off and make it into something meaningful.’

“The email’s authors deserve the fate of William Veazie, a Massachusetts church warden who in 1696 was spotted plowing a field on the day designated for Thanksgiving.  Kirkpatrick says he was fined 10 pounds and sentenced to an hour in the pillory in Boston.”

--Pilita Clark / Financial Times

“Scientists are struggling to understand why a burst of ‘scary’ warming at the North Pole has pushed Arctic temperatures nearly 20C higher than normal for this time of year.

“Experts in the U.S. and Europe say they have been shocked by the soaring temperatures recorded in November, when much of the region is plunged into freezing winter darkness.

“Temperatures this month have been as high as almost minus 5C when they are normally closer to minus 25C.

“ ‘We’ve been processing this data since 1958 and we haven’t really seen anything like this at this time of year,’ said Rasmus Tonboe, a sea ice expert at the Danish Meteorological Institute. ‘We are watching the situation and trying to analyze what is going on but it’s very surprising.’

“The unusual warmth has come as officials at the UN’s World Meteorological Organization said they were 95 percent sure that 2016 would be the hottest year since records began in the 19th century.  It would mean that 16 of the 17 warmest years on record have been this century.”

--I’ve made fun of Russia’s lone aircraft carrier and the many issues it has had, so it’s only fair that I note the Navy’s largest, most technologically advanced and expensive destroyer is laid up in a Panama dock after suffering a slew of “engineering issues,” according to a statement from U.S. Third Fleet commander Vice Adm. Nora Tyson.

The $4 billion guided-missile warship will remain in Panama until officials can determine how long the repairs will take.

--I saw the whole Mike Pence / “Hamilton” episode, watching it shortly after it happened on local television, and I was appalled, though hardly surprised (see below).  It was totally inappropriate for cast member Brandon Victor Dixon to upbraid Pence, though being the class guy he is, Pence handled it appropriately in sloughing the whole deal off.

As for Trump’s response, this is where he needs to follow his vice president-elect’s lead.  It’s continually disturbing that little stuff like this bothers The Donald to no end.

But E Street Band guitarist Steven Van Zandt, hardly a Trump supporter, put the whole episode best when he called upon Lin-Manuel Miranda to apologize to Mike Pence for the “Hamilton” cast’s speech to Pence.

Van Zandt tweeted that “everyone who is sane disagrees with [Pence’s] policies,” but he argued that a Broadway show is not the proper venue to “bully” an audience member.

“ ‘Hamilton’ made a mistake.  Audiences shouldn’t have to worry about being blindsided like that....

“Lin-Manual is a genius.  He has created the greatest play since West Side Story. He is also a role model. This sets a terrible precedent. Completely inappropriate.  Theater should be a safe haven for Art to speak. Not the actors. He needs to apologize to Mike Pence.’”

Van Zandt continued:

“When artists perform the venue becomes your home. The audiences are your guests.  It’s taking unfair advantage of someone who thought they were a protected guest in your home...A guy comes to a Broadway show for a relaxing night out.  Instead he gets a lecture from the stage!”

[If you’re thinking this is a little hypocritical of Van Zandt, Springsteen at least isn’t singling out someone in the audience for criticism when he injects his political views between songs.]

--Over the past week, at least six officers were attacked in Texas, Missouri, Florida, Idaho and Michigan, while this year alone, 60 officers have now been shot and killed – including 20 in ambushes – a 67 percent increase over last year.

--I saw the following on NJ.com, Nov. 21.

“The family of a California man killed in a suicide bomb blast in Afghanistan was reportedly booed by passengers during their flight to Philadelphia.

“Stewart Perry, whose 30-year-old son Sgt. John Perry died on Nov. 12, said his family was allowed off a flight first during a layover so they could make a time-sensitive connecting trip to Philadelphia before heading to Dover Air Force Base.

“According to reports, the plane’s captain asked passengers to remain seated while a ‘special military family’ was let off the American Airlines flight before heading to Delaware to receive their late son’s remains.”

---

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

God bless America.

---

Gold $1186
Oil $45.96

Returns for the week 11/21-11/25

Dow Jones  +1.5%  [19152]
S&P 500  +1.4%  [2213]
S&P MidCap  +2.2%
Russell 2000  +2.4%
Nasdaq  +1.5%  [5398]

Returns for the period 1/1/16-11/25/16

Dow Jones  +9.9%
S&P 500  +8.3%
S&P MidCap  +17.3%
Russell 2000  +18.6%
Nasdaq  +7.8%

Bulls 55.9
Bears 21.6  [Source: Investors Intelligence]

Have a great week.  Safe travels.

Brian Trumbore

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