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04/01/2017

For the week 3/27-3/31

[Posted 11:45 PM ET, Friday]

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Edition 938

I was all set for a huge rant to lead off this week, but I’ll save it.  Thank god baseball season is upon us.  No more Fox News every night...its Mets baseball for the kid.

I’ve told you my routine.  I catch all the networks, all the slants and such, but I am really sick of some of the hosts on Fox and the call of “Let’s Play Ball!” couldn’t have come soon enough.

Plus we have what we hope will be two solid Final Four college hoops contests on Saturday, then the national title game, Monday, and beginning Thursday...The Masters...a tradition unlike any other, on CBS.

Yes, I’m tired of all the ‘misdirection,’ ‘mislabeling,’ talk of how ‘unmasking’ is more important than any possible Russian collusion.  Seriously, Paul Manafort and Roger Stone and their history?

Yes, I’m as concerned as much as the next guy when it comes to civil liberties, but I’ve also studied Russia for far too long, especially Vlad the Impaler,  and to me the circumstantial evidence is piling up.  But we need hard evidence, and that’s where I see the biggest issues down the road...taking some Russian official’s word over others.

The dossier, in case you haven’t noticed, has reemerged.

In the meantime, I have to start out with the healthcare debacle, from which all else flows when it comes to Trump’s agenda.

I was for the AHCA.  I trust Paul Ryan and Sec. Tom Price to do the right thing.  I knew this was but a first step.  If it then died in the Senate, so be it...we move on...but passage out of the House still would have been a needed momentum boost in terms of items such as tax reform and infrastructure spending.  It would have showed the fractured caucus can still work together.  To accept the ‘good’ over holding out for the ‘perfect.’

Alas, instead it’s just one distraction after another...many of the self-inflicted variety. 

AHCA Fallout

Late last Friday, Speaker Paul Ryan said as the AHCA crashed and burned, “We were a 10-year opposition party.  Being against things was easy to do.”

Former Speaker Newt Gingrich, a Trump supporter, said last Friday, “Do you think Donald J. Trump goes home tonight, shrugs and says, ‘This is what winning looks like’?’ Gingrich added.  “No!  But this is where the Republican Party is right now, and it’s been this way for years.”

According to Glenn Thrush and Maggie Haberman in the New York Times, Friday evening, “a somewhat shell-shocked president retreated to the White House residence to grieve and assign blame.  He asked his advisers repeatedly: Whose fault was this?

“Increasingly, that blame has fallen on Reince Priebus, the White House chief of staff, who coordinated the initial legislative strategy on the health care repeal with Speaker Paul Ryan, his close friend and a fellow Wisconsin native....

“Mr. Trump, an image-obsessed developer with a lifelong indifference toward the mechanics of governance, made a game effort of negotiating with members of the far-right Freedom Caucus, even if it seemed to some members of that group, who spoke on the condition of anonymity, that he did not have the greatest grasp of health care policy or legislative procedure.”

Weirdly, before official word of the vote being pulled on Friday, Trump called reporters from the Times and Washington Post.

The Post’s Robert Costa reported:

“President Trump called me on my cellphone on Friday afternoon at 3:31 p.m.  At first I thought it was a reader with a complaint since it was a blocked number.

“Instead, it was the president calling me from the Oval Office.  His voice was even, his tone muted. He did not bury the lead.

“ ‘Hello, Bob,’ Trump began.  ‘So, we just pulled it.’....

“Before I could ask a question, Trump plunged into his explanation of the politics of his decision to call off a vote on the bill he had been touting.

“The Democrats, he said, were to blame.

“ ‘We couldn’t get one Democratic vote and we were a little bit shy, very little, but it was still a little bit shy, so we pulled it,’ Trump said....

“ ‘As you know, I’ve been saying for years that the best thing is to let ObamaCare explode and then go make a deal with the Democrats and have one unified deal.  And they will come to us, we won’t have to come to them,’ he said. ‘After ObamaCare explodes.’

“ ‘The beauty,’ Trump continued, ‘is that they own ObamaCare. So when it explodes they come to us and we make one beautiful deal for the people.’....

“Trump brought up the vote count.  ‘We were close,’ he said.

“How close?

“ ‘I would say within anywhere from five to 12 votes,’ Trump said – contradicting widespread reports that at least three dozen Republicans were opposed to the measure.”

Trump’s chief strategist, Stephen K. Bannon, according to the Times, described the AHCA debacle “as a flat-out failure that could inflict serious damage on this presidency – even if Mr. Bannon believes Congress, and not Mr. Trump, deserves much of the blame.”

While Paul Ryan is taking heat, others believe mutual disgust with the Freedom Caucus could pull the president and Ryan together, at least in the short run.

Saturday morning, Trump put his best face on the loss.  “ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE,” he said on Twitter.  “Do not worry!”

But the polls have showed the people still support ObamaCare, and last Friday, a Reuters/Ipsos poll had 49% of American adults saying the AHCA was “not an improvement” over ObamaCare, with 33% saying it was.  Previously, I wrote of the Quinnipiac poll that had just 17 percent approving of the GOP bill, 56% disapproving.

Saturday night, Trump took to Twitter anew urging people to watch Fox News and host Jeanine Pirro, who subsequently proceeded to call for Paul Ryan’s ouster.

“Ryan needs to step down as Speaker of the House.  The reason, he failed to deliver the votes on his healthcare bill, the one trumpeted to repeal and replace ObamaCare,” Pirro said in her opening statement.

“You come in with all your swagger and experience and sell them a bill of goods which ends up a complete and total failure and you allow our president, in his first 100 days, to come out of the box like that, based on what?” Pirro said.

[Spokespeople for both Pirro and Trump said there was no coordination on the matter...we were told Trump is just a fan of the show.  If I’m ever caught watching it, that means one thing...it’s an exceedingly slow sports night...but enough about me....]

During the Sunday morning shows, we heard the likes of Sen. Tom Cotton (R-Ark.), a critic of the AHCA, point out on CBS’ “Face the Nation,” that there were other high-profile defections, not just the Freedom Caucus, such as New Jersey Republican Rep. Rodney Frelinghuysen (whose district touches mine*), chairman of the powerful House Appropriations Committee.

“When you lose the chairman...,” Cotton said, “the problem is not with a specific faction in the House, it’s with the bill.”

*My own congressman, Republican Leonard Lance, moderate, also said he would not have voted for the AHCA, with both Frelinghuysen and Lance saying it would harm their constituents relying on Medicaid.

Cotton added: “I think the House moved a bit too fast, 18 days is simply not enough time for such a major landmark legislation.”

Trump tweeted Sunday that the Freedom Caucus, along with the Club for Growth and Heritage Action for America, “saved” Planned Parenthood and ObamaCare.

Freedom Caucus leader, Rep. Mark Meadows (N.C.), declined to return Trump’s fire.

“If they’re applauding (Democrats), they shouldn’t,” Meadows said on ABC’s “This Week.”  “Because I can tell you, conversations over the last 48 hours are really about how we come together in the Republican Conference and get this over the finish line.”

Meadows added, “This is not the end of the debate. We may be in overtime, but I can tell you at the very end of the day, the most valuable player will be President Trump on this because he will deliver.”

A founder of the Freedom Caucus, Jim Jordan (R-Ohio), told “Fox News Sunday,” “This is about the American people and what we told them we were going to do.”

Rep. Peter King (R-N.Y.) on Sunday pinned the failure of the AHCA on the Freedom Caucus.

“[The Freedom Caucus] was insisting on virtually a total repeal of ObamaCare, which sounds good,” King said in a radio interview Sunday. “You can’t end that overnight....We’re going to have to realize whether it’s healthcare, whether it’s tax reform coming up, that we’re going to have to find a way to get legislation through that is not just all Republican,” he said.  “Because then it becomes all or nothing, and it’s going to end up becoming nothing.”

White House chief of staff Reince Priebus told “Fox News Sunday,” “We’ll give these guys  another chance....(Trump) is not closing the door on anything” on healthcare.

Priebus added, “Democrats can come to the table as well....And it would be nice to get some Democrats on board.  But you’re right, at the end of the day, I think it’s time for the party to start governing.”

But Priebus also said, “We can’t be chasing the perfect all the time.  Sometimes you have to take the good, and put it in your pocket and take the win.”

Senate Minority Leader Charles Schumer (D-N.Y.) said in an interview on “This Week,” that Trump never called Democrats on healthcare reform.

“We Democrats, provided our Republican colleagues drop replace and stop undermining the ACA, are willing to work with our Republican friends – as long as they say  ‘no more repeal’ of the ACA.”

Schumer then criticized Trump for his comments on ObamaCare.

“For the president to say that he’ll destroy it or undermine it, that’s not presidential,” Schumer said, referring to another Trump tweet.  “That’s petulance...and it’s not going to work.”

Ohio Gov. John Kasich (R) got heated during an interview on CNN’s “State of the Union” Sunday, saying it is “pathetic” if Democrats and Republicans can’t work together to successfully pass major legislation such as healthcare policy, and that it is “unsustainable” for the two parties to not engage the other side.

“The Democrats did it with ObamaCare, and it’s not sustainable, and the Republicans tried to do it with just Republicans.  It doesn’t work like that in our country.  We’re not a parliamentary system, and whenever you continue to operate like that, what you pass will never be sustainable,” he continued.

Kasich stressed ObamaCare is “disintegrating” and that something had to be done.  [The Hill / Washington Post]

Tuesday, at an event at the White House for senators, Trump told them a bipartisan deal on healthcare could be made “very quickly.”

“Nobody ever told me that politics was going to be so much fun,” Trump joked to a group of 67 senators that included some Democrats.

“I know that we’re all gonna make a deal on healthcare – that’s a very easy one.  And I think that’s gonna happen very quickly.”

Thursday, Trump declared war on the House Freedom Caucus in a series of tweets.

“The Freedom Caucus will hurt the entire Republican agenda if they don’t get on the team, & fast... We must fight them, & Dems, in 2018!” Trump wrote.  Trump also singled out three members of the caucus.

Trump’s tweets, though, are not as impulsive as in the past.  Supposedly they are being orchestrated by Stephen Bannon.

Opinion (all sides)....

Daniel Henninger / Wall Street Journal

“On the night of Nov. 8, 2016, after it was clear that Donald Trump had upset Hillary Clinton, there was broad agreement that one word described the American electorate’s purpose: change.  Voters wanted change from the status quo.

“Last week, not 100 days into the Trump presidency, the members of the House Freedom Caucus decided that the 2016 election was not about change.  It was instead about legislative gridlock, with the bitterly ironic difference that these 25 or so self-described conservatives have locked up their own party.

“Democrats need 24 pickups to regain control of the House. There are 23 Republicans running from districts Mrs. Clinton won.  After the 2018 midterms, history may record that the Republican Party lost House control to the Democrats around 2 p.m. on Thursday, March 23, 2017.

“That was when Republican members from closely contested congressional districts – such as Virginia’s Barbara Comstock and New York’s John Faso – announced they would vote against the health-care reform bill.

“The Freedom Caucus, whose leaders are from ‘safe’ districts, opened a Pandora’s box that pushed these Republicans into impossible vulnerability on the health-care bill.  Now Democrats will exploit this vulnerability on every issue before the House.

“Meet the House Un-Freedom Caucus.

“The health-care bill’s provisions for individual patient choice are gone. The Republican Legislature in Kansas voted Tuesday to expand Medicaid.  Others will follow. The chances of a truly liberating tax-reform bill are now diminished.  As to their ‘principles,’ this caucus has probably helped entrench pure presidential power.  Mr. Trump, undercut by his own party, will likely resort to more Obama-like rule by executive order.

“This lost opportunity is not about Donald Trump’s House-of-Borgias White House operation or Paul Ryan’s leadership. It is the product of a conservative movement that over the past eight years talked itself, literally, into believing that political activism equals political accomplishment.  It does not....

“As to the Trump supporters, their hero was just taken down by the most right-wing members of the House.  At crunch time, the Freedom Caucus stiffed the Trump base that had given them politics’ rarest gift – control of government.”

Editorial / New York Post

“OK: Republicans now stand exposed as badly divided on how to replace ObamaCare.  So it’s time to move on with the ‘jobs, jobs, jobs’ core of the Trump agenda.

“The bill Speaker Paul Ryan pulled from the floor Friday wasn’t good enough for most of the Freedom Caucus, but pleasing them would’ve lost other Republicans.

“Every GOP member of Congress has been damning ObamaCare for eight years – without working out with each other what they’re actually for. So it’s back to the drawing board (or the conference room).

“Maybe ‘living with ObamaCare for the foreseeable future’ (as Ryan put it) will be incentive enough for Republicans to unite.  Perhaps the program’s ongoing ‘death spiral’ will make it easier to find the votes.

“For now, though, Congress and the president need to focus on getting the economy roaring again after so many years of slow growth and stagnant wages.  That means tax reform, and perhaps President Trump’s infrastructure bill.

“The regular Republicans couldn’t get it together to make good on one of their promises; now they have a duty to work with the president to make good on his.  It’ll be easier to replace ObamaCare when millions more Americans have good jobs.”

Editorial / Washington Post

“The next time someone argues that a businessman would manage the country better than an experienced politician, remember this past week. The attempt by President Trump and House Republicans to force through a health-care bill scorned by experts across the spectrum, projected to be a disaster for aging and low-income people and opposed by a large majority of Americans ended in debacle.  Now the danger is that a wounded president and his GOP allies will act on their sore feelings by irresponsibly attacking the existing health-care system in other ways.

“The right course for Mr. Trump and congressional Republicans following their decisive defeat would be to ensure that the system created by President Barack Obama is properly overseen, for the sake of the millions who depend on it.  That would mean abandoning their unilateral and unpopular legislative push to replace ObamaCare with a radically different scheme.  None of the major repeal-and-replace proposals they have offered would improve the system – and repealing ObamaCare without a replacement would invite disaster in health-care markets.

“Unfortunately, there are signs that Mr. Trump will rashly on his own, without Congress, weaken ObamaCare on purpose or by sheer incompetence.  Several times in recent weeks, Mr. Trump suggested that it would be savvier for Republicans to let the system persist – and collapse.  Independent experts, including the Congressional Budget Office just this month, predict no such crumbling.  Yet they may not have satisfactorily considered the likelihood of administrative sabotage: The Trump administration has already undermined federal enrollment efforts and the individual mandate that holds the system together. Health and Human Services Secretary Tom Price, who would lead any executive-branch regulatory overhaul, has shown himself to be a rigid ideologue on health-care policy.

“Mr. Trump should not imagine that angry Americans will blame Democrats, who are totally locked out of power, if he presides over an unraveling of  the system.  Public reaction to the replacement effort, including in polls, showed substantial support for ObamaCare and rejection of the Republican effort to destroy it.”

Gerald F. Seib / Wall Street Journal

“The collapse of Republicans’ first order of business in the new Washington, a health-care overhaul, reveals a startling reality for President Donald Trump: At this moment, two months into his presidency, he doesn’t yet have a reliable governing coalition.

“Moreover, he may be on his own to create one.

“The effort to repeal and replace the Affordable Care Act failed because Mr. Trump got zero Democratic support, because neither his threats nor his cajoling were sufficient to move enough Republicans, and because he couldn’t count on congressional leaders to change any of that for him.

“In a way, that outcome was the logical result of the utterly unconventional character of the Trump presidency.  Mr. Trump arrived in Washington as almost a political independent. He campaigned against the Republican establishment, and at the same time was never really embraced by the party’s conservative wing.

“There seemed, in his populist campaign message and his appeal to traditionally Democratic working-class voters, the potential to reach out to Democrats to build some new alliances.  But that hope has been swamped so far by the Democratic base’s deep antipathy toward Mr. Trump, as well as the decision to start with an attempt to overturn the signature issue of the previous Democratic president.

“That leaves Mr. Trump more on his own than a more traditional president might be at this point – and more in need of creating a nontraditional governing coalition. So far, that hasn’t happened....

“(Trump might) try to see whether he can find some of that bipartisanship that seemed possible shortly after he won the election. The one bigger issue where a convergence with Democrats has always seemed possible is a big program to improve American infrastructure.

“Democrats like that idea because it does something they’re fond of: It uses government money to help create jobs.  Moreover, the kind of construction jobs created by infrastructure spending go directly to many of those blue-collar Trump voters who helped propel him into office.

“The trick will be convincing conservatives skeptical about government spending. In any case, the health-care failure only underscores the need to find a way to create a working Trump team of some kind.”

Kathleen Parker / Washington Post

“In a week that felt like a month, Americans got a clear view of President Trump’s governing style and also of his fabled dealmaking approach

“Or rather, I should say, Trump got a good sense of what governing is like – hard, hard, hard. And it’s bound to get more difficult given the president’s tactics of consent: Do as I say or you’re dead to me.

“Even bolder, Trump told congressional Republicans that if they didn’t pass the American Health Care Act to repeal and replace ObamaCare, he was finished.  Done. He’d walk away and move on to other things, he told recalcitrants....

“(Trump), who promised repeal and replace (as has nearly every Republican the past seven years), has no patience with process.  As the chief executive of his own company for most of his life, and notwithstanding his reverence for his dealmaking skills, he prefers quick results.  And, hey, if things don’t tumble his way, well, there are other greens to sow and mow.  And, certainly, a 30-foot wall to build.  To the 60-day president, it seemed, getting health care out of the way was mostly a means to checking a box – an important one, to be sure – but nothing to bestir his personal passions.  Call it ego. Call it pride.  Call it a day, but get it done, he commanded.  Or else: ‘I’m gonna come after you,’ Trump told Rep. Mark Meadows (R-N.C.), one of his fiercest foes in the Freedom Caucus opposition.  The president was joking around, according to those present, but Meadows still might want to keep a close eye on his favorite bunny....

“Back in 2010, when then-House Speaker Nancy Pelosi (D-Calif.) said that ObamaCare had to be passed so that we could find out what was in the bill, Republicans guffawed – and never let her forget it.  At least, one observes, the Democrats had a bill.  GOP legislators have been racing to pass something that isn’t fully written yet.

“What’s with the rush, anyway?  Why not take the time to get things right? While Democrats solicited input from experts in the medical, pharmaceutical and insurance industries, Republicans have spent most of their time fighting among themselves.  The resulting bill was a patchwork of margin scribbles and cross-outs, even including instructions to the Senate to figure out ways to make certain parts work....

“The truth is, many Republicans never seriously thought ObamaCare could be repealed and replaced, probably for the good reason that it’s nearly impossible to do.  The most sensible solution was to fix what was already in place until the inevitable day, coming soon, when we become a dual health-care system: Single-payer for the majority of Americans and concierge health care for the wealthy. It’s just a matter of time.”

Editorial / Wall Street Journal

“Republicans are consoling themselves that after their health-care failure they can move on to tax reform, and they have little choice.  The large complication is that the Freedom Caucus’s ObamaCare preservation act has also made a tax bill much harder politically even as it makes reform more essential to salvaging the Trump Presidency and GOP majorities in 2018.

“President Trump campaigned on breaking Washington gridlock, increasing economic growth and lifting American incomes. The health collapse undermines those pledges. The legislative failure is obvious, but less appreciated is that House Speaker Paul Ryan’s reform included a pro-growth tax cut and major improvements in work incentives. The 3.8-percentage-point cut in taxes on capital income would have been a substantial increase in after-tax return on investment, nearly half of the eight-point cut in the capital-gains tax rate that helped propel growth after 1997.

“Now that’s dead, and so is the replacement for the especially high marginal-tax-rate cliff built into ObamaCare’s subsidies.  These steep tax cliffs as subsidies phase out are a major hindrance to work, as University of Chicago economist Casey Mulligan has shown.  The Ryan bill would have been a significant boost to economic growth and labor participation.  The critique that it would not have helped ‘Trump voters’ was willfully false coming from the left and uninformed on the right.

“This lost opportunity now makes tax reform even more important as a growth driver, but the health-reform failure also hurt tax reform in another major way. The Ryan bill would have reduced the budget baseline for tax reform by some $1 trillion over 10 years.  This means that suddenly Republicans will have to find $1 trillion more in loopholes to close or taxes to raise if they want their reduction in tax rates to be budget neutral.

“That means picking more fights with industries that fear they’ll be tax-reform losers. Take the irony of Senator Tom Cotton of Arkansas. He trashed the House health bill far and wide, but he also represents Wal-Mart, which hates the House GOP’s border-adjustment tax proposal that would raise some $1 trillion in revenue to pay for lower tax rates.  By helping to kill the Ryan health bill, Mr. Cotton has now killed $1 trillion in tax and spending cuts that would have made it easier to pass a tax reform without the border-adjustment fee.  We look forward to seeing the Senator’s revenue substitute.

“Some Republicans think the health failure will concentrate GOP minds on taxes as a political necessity, but then they said the same about repealing ObamaCare after seven years of promising to do so.  They flopped even though it’s unheard of for a new President to lose on his top priority so early in his term.  That’s when his political capital is highest and his own party has the most incentive to deliver on its promises....

“Mr. Trump lacks the political base of most Presidents, so he is hostage more than most to performance. Above all that means presiding over faster growth, which is the only real way to help Trump voters.  If the GOP can’t deliver on tax reform, the Freedom Caucus will have done far more harm than saving ObamaCare.”

An earlier Editorial / Wall Street Journal....

“The critics assailed the bill as ‘ObamaCare Lite,’ but the result of their rule-or-ruin strategy will now be the ObamaCare status quo, and Mark Meadows (North Carolina), Jim Jordan (Ohio), Louie Gohmert (Texas) and the rest own all of its problems.  Please spare everyone your future grievances about rising health spending or an ever-larger government.

“The grand prize for cynicism goes to Senator Rand Paul, who campaigned against the bill while offering an alternative that hasn’t a prayer of passing.  ‘I applaud House conservatives for keeping their word to the American people and standing up against ObamaCare Lite,’ said Dr. Paul.  ‘I look forward to passing full repeal of ObamaCare in the very near future.’

“There will be no such repeal in this Congress, and probably not in any other. Republicans run the government and that means they are responsible for what happens in health care.  Messrs. Trump and Ryan are right that the ObamaCare markets are imploding, and prices will rise and choices will shrink again next year on present trends. Republicans can try to blame Democrats, but they’re in charge....

“Mr. Trump said Friday he wants to move forward on cutting taxes, and Ways and Means Chairman Kevin Brady wants to do the same.  We wish them luck and support the effort.  But health reform is about a single industry.  Tax reform implicates every industry and its denizens are the definition of the Washington swamp.  Success on health care would have produced momentum and confidence that Republicans could fulfill their promises.  Now Democrats and the swamp rats smell blood.

“Perhaps Mr. Trump and the GOP can recover from their debacle, but as an opening act to a new Presidency the collapse of his first legislative campaign is ominous.  In business Mr. Trump liked to ‘get even.’  He’s got some scores to settle with the Freedom Caucus.”

Michael Goodwin / New York Post

“Something else Trump did also was confusing.  As soon as he and Ryan agreed to pull the bill because they didn’t have the votes, Trump called reporters from the New York Times and Washington Post to give them the scoop.

“These are the same papers that led the charge to kill Trump since he won the nomination. He calls both ‘dishonest’ and press secretary Sean Spicer often refuses to call on reporters from those papers at press briefings.

“Yet the bias is apparently forgiven when the president wants to get ahead of the news.  So the establishment, biased media is no longer part of the swamp that must be drained?

“Again, let us know when you make up your mind.

“Trump, because of his unorthodox background and the nation’s polarization, was destined to make rookie mistakes that would be used to undermine him.  But the failure to repeal ObamaCare, combined with his approval ratings sinking below 40 percent, show that he’s suddenly on thin ice with a big majority of voters. As his power slips, even Republicans will be hard to corral.

“If the president has solutions up his sleeve, now is the time to reveal them.”

David Ignatius / Washington Post

“In President Trump’s first months in office, he too often behaved as an insurgent and disrupter, rather than a chief executive.  He paid a severe price, seeing the collapse of his health-care legislation and, in a Gallup tracking poll this week, receiving the lowest approval ratings for any modern president so early in his term.

“There are some signs that Trump’s inner circle gets it.  On foreign policy, plans are being assembled carefully as part of a broad national-security strategy.  Before making big announcements on North Korea, China, Russia and the Middle East, officials want to see how the pieces fit.  Trade policy, now under the supervision of Commerce Secretary Wilbur Ross, looks less crazily destructive than it initially did.  Similar coordination is badly needed on tax policy.”

Rich Lowry / New York Post

“There’s’ stumbling out of the gate, and then there’s what Republicans just did on health care.

“They came up with a substantively indefensible bill, put it on an absurd fast-track to passage, didn’t seriously try to sell it to the public, fumbled their internal negotiations over changes – and suffered a stinging defeat months after establishing unified control of government.

“There has been a lot of different finger-pointing after the collapse of the bill, and almost all of it is right.  This was a party-wide failure.

“House Speaker Paul Ryan has – faint praise – thought more about health-care policy than almost any other elected Republican.  He rose to prominence with thoughtful policy proposals buttressed by power-point presentations.  This was his moment to shine as a wonk.

“Instead, with an eye to procedural constraints the legislation would face in the Senate, he wrote a mess of a bill that got failing grades from analysts across the political spectrum....

“Ryan gambled that he could get his fractious caucus to rally in record time because – unlike his frustrated predecessor as speaker, John Boehner – he had a president of his own party at his back.  And none other than ‘the closer,’ a President Trump whose calling card is his skill at deal-making.

“But you can’t be a closer if you don’t know anything about the product.  Trump knew the health-care bill was wonderful and beautiful and his other characteristic boosterish adjectives.  Otherwise, he was at sea.

“He wasn’t knowledgeable enough to engage in meaningful negotiations. One of his interventions – to try to placate House conservatives by stripping out the so-called ‘essential health benefits’ of ObamaCare – may have lost more moderates than it gained votes on the right....

“Perhaps most unforgivably, the White House and congressional Republicans now have decided to move on.  After seven years of promising to repeal and replace ObamaCare – with Trump thundering it at rallies and Republicans writing it into every campaign document – they’re giving up after three lackluster weeks....

“If tax reform is going to pass and get signed into law, Republicans will have to perform much better than in the foreshortened health-care debate.  On the bright side, they can’t perform much worse.”

Michael Gerson / Washington Post

“It is now dawning on Republicans what they have done to themselves. They thought they could somehow get away with Trump. That he could be contained.  That the adults could provide guidance.  That the economy might come to the rescue. That the damage could be limited.

“Instead, they are seeing a downward spiral of incompetence and public contempt – a collapse that is yet to reach a floor.  A presidency is failing.  A party unable to govern is becoming unfit to govern.

“And what, in the short term, can be done about it?  Nothing.  Nothing at all.”

Edward Luce / Financial Times

“The president made several big mistakes.  The first was to endorse a bill whose contents he did not know.  Early in the process Mr. Trump said: ‘Nobody knew healthcare could be so complicated.’  The bill had no overarching vision other than to fulfill a political promise to abolish ObamaCare.  The fact that it would have broken another of Mr. Trump’s promises – to protect entitlements, including Medicaid – apparently took him by surprise. In time he may be grateful that a bill that would have deprived 24m Americans of health insurance and cut maternity coverage from millions of women’s healthcare plans failed to become law.

“His second blunder was to try to rush the bill through Congress.  Nothing, barring the renaming of post offices, can go through Capitol Hill in a hurry – least of all healthcare.  Barack Obama took the best part of a year to marshal his healthcare reform on to the statute books and his bill had the ideological backing of his own party.  Mr. Trump tried to push his own version through n less than a month.  It was hard to find a single Republican who was enthusiastic about its contents....

“Mr. Trump’s third error was to believe that threatening Republican dissenters would be enough to do the trick.  White House officials said Mr. Trump ‘gave his all’ in trying to push the bill through.  But since the effort began Mr. Trump took five trips to Mar-a-Lago, played nine rounds of golf and allowed his daughter and son-in-law – Ivanka Trump and Jared Kushner – to be away on vacation in Aspen on the day it was supposed to go to the vote.  If this was Mr. Trump’s idea of pulling out all the stops, what would taking it easy look like?”

Intel Investigation

Aaron Blake / Washington Post

“Americans live in two realities when it comes to the Russian investigation.  On one side is the intelligence community, and on the other side is a Republican Party that very much believes President Donald Trump’s alternative facts. Including, apparently, that Trump’s offices were wiretapped during the 2016 election.

“A new CBS poll shows three in four Republicans believe it’s at least ‘somewhat likely’ that Trump’s offices were wiretapped or under some kind of surveillance during the campaign.  While 35 percent believe it’s ‘very likely,’ 39 percent say it’s ‘somewhat likely.’”

But even Rep. Devin Nunes, the House Intelligence Committee chairman under fire for being too friendly with the White House, has said that assertion is incorrect.

Nunes has said that “there was no wiretapping of Trump Tower.  That did not happen.”

Sunday on “Face the Nation,” Rep. Adam Schiff (D-Calif.) said, “We can’t have a credible investigation if one of the members, indeed the chairman, takes all the information he has seen to the White House and doesn’t share it with his own committee.”

When asked if Nunes was a tool of the White House, Schiff said: “I think the chairman has to make a decision whether to act as a surrogate of the White House – as he did during the campaign and the transition – or to lead an independent and credible investigation.”

Rep. Trey Gowdy (R-S.C.) defended Nunes on “Face the Nation,” saying, “My understanding is Chairman Nunes briefed the commander in chief on matters unrelated to the Russian investigation.  So if that’s a big deal in Washington, it has then sunk to a new low.”

Monday, we learned Chairman Nunes went to the White House the previous week to review classified documents that he later used to brief the White House on the possibility that President Trump and his associates were swept up in legal surveillance.

Nunes’ spokesman said he went to the White House “in order to have proximity to a secure location where he could view the information provided by the source.  Spokesman Jack Langer said the information had not been provided to Congress and that “the White House grounds was the best location to safeguard the proper chain of custody and classification of these documents.”

So this fueled accusations from Democrats that Nunes was coordinating with the White House, when he rushed to brief the president about intelligence reports that, he said, included references to people affiliated with Trump, and possibly the president-elect himself.

Press secretary Sean Spicer, when asked whether he could say for certain if Nunes did not obtain information from the administration that he later used to brief President Trump, replied “Anything is possible.”

Rep. Schiff said the new revelation about Nunes’ actions “casts quite a profound cloud over our ability” to conduct an investigation into the Russian role in the election and any coordination between Russia and the Trump campaign.

By the end of Monday, there was growing suspicion the White House itself was the source of the mysterious intelligence that Nunes, and no one else in Congress, has seen.

Meanwhile, Oren Dorell of USA TODAY had a very extensive report on Donald Trump’s Russia connections, many allegedly tied to organized crime, according to a USA TODAY review of court cases, government and legal documents and an interview with a former federal prosecutor.

“The president and his companies have been linked to at least 10 wealthy former Soviet businessmen with alleged ties to criminal organizations or money laundering.”

Trump told reporters in February: “I have no dealings with Russia. I have no deals that could happen in Russia, because we’ve stayed away.  And I have no loans with Russia.  I have no loans with Russia at all.”

Dorell:

“Yet in 2013, after Trump addressed potential investors in Moscow, he bragged to Real Estate Weekly about his access to Russia’s rich and powerful.  ‘I have a great relationship with many Russians, and almost all of the oligarchs were in the room,’ Trump said....

“Five years earlier, Trump’s son Donald Trump Jr. told Russian media while in Moscow that ‘Russians make up a pretty disproportionate cross section of a lot of our assets’ in places like Dubai and Trump SoHo and elsewhere in New York.

“New York City real estate broker Dolly Lenz [Ed. who CNBC viewers are very familiar with] told USA TODAY she sold about 65 condos in Trump World at 845 U.N. Plaza in Manhattan to Russian investors, many of whom sought personal meetings with Trump for his business expertise.”

Thursday, Sean Spicer said the White House has invited the top Republican and Democratic members of the Senate and House intelligence panels to review new material relevant to their investigation.  Some are wondering if it’s really just material previously seen by Nunes.

And the above is certainly related to the New York Times’ revelation Thursday that two sources who provided Nunes with the intelligence reports the week before had been identified.

Both of the officials are out of the White House; Ezra Cohen-Watnick, the senior director for intelligence at the National Security Council, and Michael Ellis, a lawyer who works on national security issues at the White House Counsel’s Office and formerly worked on the staff of the House Intelligence Committee.

The intelligence, as Devin Nunes has described before, is not related to the Russia investigations, so is it yet another smokescreen thrown up by the White House. 

Separately, the story emerged that FBI Director James Comey reportedly tried to go public with the information about Russia’s efforts to disrupt the election last summer, but Obama administration officials stopped him.

Comey attempted to publish an Op-Ed on allegations the Russian government was interfering in the U.S. election process well before federal agencies went public with the claims, Newsweek reported.

According to the publication, administration officials nixed the idea because they wanted to release a “coordinated message.”

Thursday night, as first reported by the Wall Street Journal, we learned that Michael Flynn has offered to be interviewed by House and Senate investigators regarding the Trump-Russia issue, but in exchange for immunity from prosecution, according to his lawyer.

But thus far, investigators, including from the Justice Department, are unwilling to broker a deal with Flynn until they are further along in their inquiries and they better understand what information Mr. Flynn might offer as part of a deal.  [As of today, at least the FBI had said ‘No,’ while the Senate won’t accept the offer to testify at this time, and Rep. Schiff of the House Intel Committee said it was premature to make a decision regarding immunity for Flynn.]

Friday, Trump tweeted: “Mike Flynn should ask for immunity in that this is a witch hunt (excuse for big election loss), by media & Dems, of historic proportion!”

Opinion....

David Ignatius / Washington Post

“The biggest danger to Trump 2.0 is the president’s own impulsive, embattled style – which shows most clearly in his handling of the FBI and congressional investigations of Russia’s covert action to influence the U.S. election.  The best course for Trump (and our system) is for the White House to cooperate with the inquiry, let it run its course – and, meanwhile, concentrate on doing the public’s business.

“Weirdly, Trump continues to do the opposite. He’s still arguing the discredited, bogus issue of President Barack Obama’s supposed wiretaps on Trump Tower. And he’s coyly dealing with House Intelligence Committee Chairman Devin Nunes to foster this distraction.

“The Trump-Nunes allegation seems to have morphed into a contention that Trump associates were picked up incidentally in lawful foreign-intelligence intercepts of others, but that their names weren’t properly masked (or ‘minimized,’ in the jargon) in subsequent intelligence reports that were then disseminated and leaked.

“This may satisfy Trump’s desire for a counterpunch. But does any reasonable person really believe that this technical legal issue is more important than whether Trump associates cooperated in a Russian covert action against the United States, which is what FBI Director James B. Comey has said the bureau is investigating?

“A better approach for dealing with the inquiry was shown this week by Jared Kushner, Trump’s son-in-law and perhaps now his important adviser.  Kushner’s Russia problem was that he met after the election not just with Ambassador Sergey Kislyak but also with a Russian banker named Sergey Gorkov, who was prepared to act as an intermediary to President Vladimir Putin.  Did Kushner blame leaks, or Nazi-like behavior in the intelligence agencies?  No, he agreed to testify to Senate investigators about the meetings.

“The message is that Kushner thinks he did nothing wrong and has nothing to hide.  One assumes he will tell the Senate that he wanted to explore opening a discreet channel to Putin, similar to those he established with numerous other global leaders during the transition.  But after the secretary of state nomination went to Rex Tillerson, a genuine friend of Putin, Kushner apparently concluded Trump didn’t need any such back channel.  We’ll see if that’s the whole story, but cooperating with the Senate investigation is the right start.”

Tuesday, press secretary Sean Spicer lashed out at reports the administration blocked former acting Attorney General Sally Yates from testifying before a panel investigating Russian meddling in the election.

“I hope she testifies,” Spicer said.  “I look forward to it. ...If they choose to move forward, great.”

Editorial / Wall Street Journal

“Devin Nunes is refusing Democratic calls to resign as chairman of the House Intelligence Committee, and rightly so.  If Mr. Nunes is going to step down for speaking out of school to the White House about his probe, then ranking Democrat Adam Schiff should also resign for spreading innuendo without evidence across the airwaves.

“Mr. Nunes blundered when he informed the White House about some information he received without first telling committee Democrats.  The intelligence panel is one of the least partisan on Capitol Hill, and Mr. Nunes handed Democrats an opening to cast doubt on his fairness.  He should protect his own credibility more than he protects the White House, which has nothing to worry about if President Trump’s claims about his lack of Russian ties are true.

“But the main reason Democrats are mad at Mr. Nunes is because he’s raising an issue they’d rather avoid – to wit, that he’s seen documents showing that U.S. intelligence agencies may have ‘incidentally’ collected information about people connected to Mr. Trump.

“We know from leaks to the media that one of those people was former national security adviser Michael Flynn, who lost his job over the news.... Such information is supposed to be ‘minimized’ and not widely shared so innocent Americans are protected if they happen to speak to a foreigner who is surveilled.

“Mr. Trump was wrong to claim that Mr. Nunes has vindicated his famous tweet of three weeks ago that President Obama had wiretapped him in Trump Tower... But the issue of whether and why the Obama Administration was listening to Trump officials is important for the public to know....

“Which brings us to Mr. Schiff, who while posing as a truth-teller is becoming more partisan by the hour.  The California Democrat started out telling everyone that there is ‘circumstantial evidence of collusion’ between Mr. Trump’s presidential campaign and Russia.  He later escalated to claiming ‘there is more than circumstantial evidence now,’ without providing any such evidence.  If Mr. Schiff is so confident of the Russia-Trump connection, why not wait for the evidence to come out?

“Meanwhile, Mr. Schiff evinces no interest in discussing, or even investigating, what happened to Mr. Flynn and why.  Maybe he’s shouting so much about Mr. Nunes because he doesn’t want to know the answers to the questions the Republican is asking.”

Kimberley A. Strassel / Wall Street Journal

“California Rep. Adam Schiff may not offer much by way of substance, but give him marks for political flimflam.  The ranking Democrat on the House Intelligence Committee was so successful at ginning up fake outrage over his Republican counterpart that he successfully buried this week’s’ only real (and bombshell) news.

“Mr. Schiff and fellow Democrats spent this week accusing Chairman Devin Nunes of carrying water for President Trump, undermining the committee’s Russia investigation, and hiding information. The press dutifully regurgitated the outrage, as well as Mr. Schiff’s calls for  Mr. Nunes to recuse himself from the investigation into possible Russian electoral meddling.

“All this engineered drama served to deep-six the important information Americans urgently deserve to know.  Mr. Nunes has said he has seen proof that the Obama White House surveilled the incoming administration – on subjects that had nothing to do with Russia – and that it further unmasked (identified by name) transition officials.  This goes far beyond a mere scandal. It’s a potential crime.

“We’ve known since early February that a call by former national security adviser Mike Flynn to the Russian ambassador was monitored by U.S. intelligence.  There’s nothing improper in tapping foreign officials.  But it was improper that Mr. Flynn’s name was revealed and leaked to the press, along with the substance of the conversation....

“Around the same time, Mr. Nunes’ own intelligence sources informed him that documents showed further collection of information about, and unmasking of, Trump transition officials. These documents aren’t easily obtainable, since they aren’t the ‘finished’ intelligence products that Congress gets to see.  Nonetheless, for weeks Mr. Nunes has been demanding intelligence agencies turn over said documents – with no luck, so far.

“Mr. Nunes earlier this week got his own sources to show him a treasure trove of documents at a secure facility.  Here are the relevant details.

“First, there were dozens of documents with information about Trump officials. Second, the information these documents contained was not related to Russia. Third, while many reports did ‘mask’ identities (referring, for instance, to ‘U.S. Person 1 or 2’) they were written in ways that made clear which Trump officials were being discussed.  Fourth, in at least one instance, a Trump official other than Mr. Flynn was outright unmasked.  Finally, these documents were circulated at the highest levels of government.

“To sum up, Team Obama was spying broadly on the incoming administration....

“If Mr. Schiff wants to be trusted with important information, he might start by proving he is trustworthy – rather than rumor-mongering that there is ‘more than circumstantial evidence’ of Trump-Russia collusion. He might voice some concern that a prior White House was monitoring its political opponents.  He might ask whether Obama officials had been ‘reverse monitoring’ – tracking foreign officials solely so they could spy on the Trump team.

“Mr. Nunes has zero reason to recuse himself from this probe, because he is doing his job.  It’s Mr. Schiff who ought to be considering recusal, for failing to do his own.”

---

And on other important issues....

A U.S. federal judge in Hawaii has indefinitely extended the suspension of President Trump’s new travel ban.  Judge Derrick Watson’s ruling means the ban on six mostly Muslim nations cannot be enforced while it’s being contested in court.

The original lawsuit in Hawaii said the travel ban would harm tourism and the ability to recruit foreign students and workers.

Any appeal of the Hawaii ruling would go next to the same Ninth Circuit Court of Appeals in San Francisco that said in February it would not block a ruling by a Seattle court halting the first executive order.

And then President Trump rolled back much of President Obama’s climate change agenda, Tuesday, with a wide-ranging executive order.

A senior White House official told reporters: “The United States is the largest producer of oil and natural gas in the world. We have plenty of deposits of coal. We want to look at nuclear, renewable, all of it.  And again, we can do both to serve the environment and increase energy at the same time.”

Sierra Club Executive Director Michael Brune shot back in a statement: “Right now, clean energy jobs already overwhelm dirty fuels in nearly every state across America, and that growth is only going to continue as clean energy keeps getting more affordable and accessible by the day.  These facts make it clear that Donald Trump is attacking clean energy jobs purely in order to boost the profits of fossil fuel billionaires.”

But when it comes to the coal industry, the simple fact is natural gas is cheaper, cleaner and more readily available.

A decade ago, coal accounted for 50% of American electricity, but today that figure is 29%, according to the Energy Information Administration. The number of U.S. coal mine jobs was 65,971 in 2015, down from 91,611 in 2011.

What might happen is job losses may stabilize, but you are unlikely to see old plants reopen, according to most experts.

But the prospect of additional drilling on federal land could be a boon to oil and gas jobs, which had also plunged with the crash in the oil price from $100 to $26 (now $50).

Opinion....

Editorial / Washington Post

“Under President Barack Obama’s leadership, the world finally began addressing one of the greatest challenges human beings have ever faced, a multi-generational struggle to keep the planet temperate and accommodating to human life.  President Trump’s move to rip up Mr. Obama’s climate policies are beyond reckless.   Children studying his presidency will ask, ‘How could anyone have done this?’

“Climate science is complicated, but the basics are easy enough for those schoolchildren to understand. When humans burn fossil fuels, they emit heat-trapping gases into the atmosphere.  Releasing vast amounts of these gases for decades changes the atmosphere’s chemistry, creating an ever-thicker blanket.  The world has therefore warmed and will continue to warm; the more fossil fuels burned, the hotter the planet will get.

“The human species still has time at least to moderate the trajectory. But on the course Mr. Trump set Tuesday, the prospect will be for sharp environmental disruption.  Among many other things, scientists have predicted more and more intense heat waves, more volatile weather, more abrupt changes in the landscape, more destruction from invasive pests, more illness from microbes flourishing in warmer fresh water and more urban flooding.   [Ed. it’s the microbes angle that scares the hell out of me.]  Americans alive today will saddle future generations with the costs of acting too late, when addressing the issue sooner would have been cheaper and far less destructive.

“Even as climate science has steadily improved, the U.S. climate debate has descended into a partisan mess, with a once-great American political party embracing rank reality-denial.  The nation has now reached an anti-intellectual nadir, elevating a man who called climate change a ‘hoax’ to the presidency and a climate-change denier to head the Environmental Protection Agency.  The country reaped the fruits of this decision Tuesday....

“The practical effects will be serious though not immediate....

“After 2020, the absence of the plan will be felt. According to an Energy Information Agency assessment released in January, energy-related greenhouse-gas emissions would have declined significantly between 2020 and 2030 – not by enough, but it would have been a decent start.  Without the plan, these emissions will stay roughly the same over that crucial decade.  And, by the way, energy experts predict no coal renaissance in Appalachia, despite Mr. Trump’s campaign promises, because the economics simply do not make sense in a country awash in cheap natural gas.”

Editorial / Wall Street Journal

“One area where President Trump is notching early victories is unleashing American energy, which for years has been held hostage to progressive climate obsessions.  On Tuesday, Mr. Trump signed an executive order to rescind many of the Obama Administration’s energy directives, and he deserves credit for ending punitive policies that harmed the economy for no improvement in global CO2 emissions or temperatures.

“The order directs the Environmental Protection Agency to review the Clean Power Plan, which the Supreme Court stayed last year in an extraordinary rebuke.  The plan essentially forces states to retire coal plants early, and the tab could top $1 trillion in lost output and 125,000 jobs, according to the American Action Forum.  Also expected are double-digit increases in the price of electricity – and a less reliable power grid.  All for nothing: A year of U.S. reductions in 2025 would be offset by Chinese emissions in three weeks, says Rice University’s Charles McConnell.

“The rule also fulfills a campaign promise to end Barack Obama’s war on coal. It’s true that market forces are reducing coal’s share of U.S. electric power – to some 30% from about 50% a decade ago – thanks mainly to fracking for natural gas.  Yet Mr. Obama still deployed brute government force to bankrupt the coal industry.  Mr. Trump is right to end that punishment and let the market, not federal dictates, sort out the right energy mix for the future....

“Another question is whether President Trump will withdraw from the Paris climate deal, which would – in theory – force annual U.S. emissions reductions of 26% over 2005 levels by 2025.  That decision is ‘still under discussion,’ according to a White House official who briefed reporters Monday night....

“Environmental groups are accusing Mr. Trump of ‘reversing climate progress,’ even as they call the order ‘symbolic’ because the regulatory damage to the coal industry – from rules on mercury, ozone, dust – is mostly irreversible.  In any event, Scott Pruitt’s EPA can expect lawsuits that may take years to untangle.

“The Trump order is a promise in the bank for the voters who elected the President because he promised to focus on jobs and revving up the economy.  It’s also a welcome return to regulatory modesty: One of the more outrageous aspects of the Obama anti-carbon agenda is that agencies rammed through what Congress refused to pass in legislation.

“As for climate change, President Trump’s order will have the same practical effect on rising temperatures as the Clean Power Plan: none.”

Meanwhile, Sen. Roy Blount (R-Mo.), a senior member of the Appropriations Committee, announced on Tuesday that Trump’s supplemental funding request will wait until later in the year, seeing as he believes House and Senate leadership are close to negotiating a bill to fund government for the rest of 2017.

This impacts Trump’s border wall, which Blunt says funding of which needs to wait.

And President Trump unveiled a new White House office with sweeping authority to overhaul the federal bureaucracy and fulfill key campaign promises – such as reforming care for veterans and fighting opioid addiction – by harvesting ideas from the business world, an office to be headed up by Jared Kushner.

Wall Street

Last Friday I wrote that the fallout from the AHCA debacle would lead to a “sloppy week” on Wall Street and I was right, for about a half hour. The Dow Jones opened up down 184 points Monday morning and then rallied and stabilized from there, finishing the week +0.3%.

Among the economic items was a final revision on fourth-quarter GDP, which came in at 2.1%, after the first two looks were 1.9%.  This follows the third quarter’s 3.5% pace.

What is important in terms of the Federal Reserve, though, was the release of the February personal income and consumption readings on Friday, the former up a solid 0.4%, the latter down a disappointing 0.1%.  Contained in the consumption (consumer spending) data was the Fed’s preferred personal consumption expenditures index and it showed the PCE had increased to 2.1%, above the Fed’s preferred 2% benchmark.  But, the core PCE, ex-food and energy, ticked up just to 1.8%, so the Fed can continue to say there is no inflation to speak of and thus it gives more ammunition to the doves on the committee when it comes to further rate increases.

Fed vice chairman Stanley Fischer said this week that two more rate hikes “is about right” the rest of the year, or the Fed’s initial Jan. estimate of three for all of 2017.

Two non-voting members, Eric Rosengren (Boston Fed) and John Williams (San Francisco) spoke of three or more rate hikes the rest of the year.  Williams said two more, but that there was “upside risk,” read three.

But voting member Charlies Evans of the Chicago Fed said there would be just another “one or two increases.”

And New York Fed chief William Dudley cautioned that there remains “considerable uncertainty” over fiscal policy, but that “it seems likely that it will shift over time to a more stimulative setting.”

“Consequently, it appears that the risks for both economic growth and inflation over the medium to longer term may be shifting gradually to the upside,” he said at a speech in Florida.  Dudley is a voting member of the Fed’s policy-setting board.

Two other readings on the economy. The Chicago Purchasing Managers manufacturing PMI rose to a strong 57.7 (50 being the dividing line between growth and contraction).

And the S&P Core Logic/Case Shiller home price index for January was up 5.9% year-over-year.  The 20-city index rose 5.7%, both far outpacing wage growth which isn’t exactly good longer term.

Regarding first-quarter growth, the Atlanta Fed’s GDPNow indicator is still forecasting just 0.9% for the first three months of the year.

Europe and Asia

Just a little economic news on the eurozone front before I get to Brexit and the French elections.

In a flash reading of inflation for March, as released by Eurostat on Friday, consumer prices rose 1.5% annualized, down from 2.0% in February.  Very importantly, the core inflation figure, ex-food and energy, was 0.7%, down from 0.9%, so the European Central Bank can say ‘I told you so’ in not worrying that inflation was taking off and that they didn’t need to stop their stimulus program, which is slated to continue through December, at least, though at a reduced rate come May.

Separately, Germany’s unemployment rate, as established by the government, hit a new all-time low since reunification in 1991, 5.8%.  [The EU lists it far lower.]

Spain’s retail sales have flat-lined, stagnating in February and revised lower for January, which means that the inflation surge to 3% must be biting, though inflation, such as in the overall EU19, appears to have topped out for now.  Year-on-year inflation in March was 2.1%, according to early estimates from the country’s National Statistics Institute.

Brexit: British Prime Minister Theresa May signed the letter formally beginning the UK’s departure from the European Union and it was delivered hours later on Wednesday to European Council President Donald Tusk.

In a statement to the House of Commons, Mrs. May spoke of “the moment for the country to come together.”

“It is my fierce determination to get the right deal for every single person in this country,” she said.  “For, as we face the opportunities ahead of us on this momentous journey, our shared values, interests and ambitions can – and most – bring us together.”

The prime minister told lawmakers: “This is an historic moment from which there can be no turning back.”

Her letter did warn: “Europe’s security is more fragile today than at any time since the end of the Cold War.  Weakening our cooperation for the prosperity and protection of our citizens would be a costly mistake.”

May also said she wants an “early” agreement over the rights of EU citizens and Britons to live in each other’s countries.  Her central goal for Brexit is to win back control of labor flows, which raises questions about the legal status of 3 million EU nationals living in the UK.

Donald Tusk said, speaking on behalf of the 27 other EU governments, “Our first priority will be to minimize the uncertainty caused by the decision of the United Kingdom for our citizens, businesses and members states.”

Carmaker Ford Motor Co. on Wednesday urged Mrs. May to secure the continuation of tariff-free trade and warned failure to strike a deal would be the “worst case.”  Ryanair Holdings Plc said the UK risked losing air links to the continent. 

Ryanair’s case is interesting.  Along with UK-based rival easyJet, the two are severely impacted by Brexit because they typically make more use of the EU rights to fly between other member states and not just to and from the UK. They could lose that right after Brexit. EasyJet said it was close to applying for a license to set up an operating company within the EU to protect its intra-EU flights.  But Lufthansa has already said it expected France and Germany would not agree to prioritize aviation; the German carrier of course wanting to swoop in and steal the routes.

For its part, Ryanair was 53.6 percent owned by EU nationals in mid-2016, including 20 percent ownership by UK nationals, meaning that following Brexit it may fall afoul of rules stating that EU carriers must be majority-owned by EU investors. Ryanair execs say they aren’t concerned about this now, but if talks turn ugly who knows.

For the EU, the focus is on ensuring Britain gets no easy ride as it seeks to safeguard the stability and commitment of the remaining 27 member states.

Prime Minister May has until the end of 2018 to agree on the terms of the breakup and to try to win what she calls the “best possible” trade arrangement for the future. If she can’t secure an agreement, Britain will crash out of the EU and over what businesses call a “cliff edge” of uncertainty and higher trade tariffs.

Irish Prime Minister Enda Kenny has warned the talks will turn “vicious.” German Chancellor Angela Merkel said the EU will speak in one voice and there will be no shortcuts.  The EU’s chief negotiator Michel Barnier said on Wednesday, “This is Day 1 of a very long and difficult road.”

I’ve said since last summer and the referendum that people have their heads in their sand if they don’t understand how the talks will lead to market disruptions.  I will mark the closing indexes on the major European exchanges for Friday and use that as my benchmark.

Reminder: For starters the EU accounts for 44 percent of Britain’s exports.

Friday, EU leaders drew up a tough opening stance in Brexit talks, “explicitly stating that Britain must accept the bloc’s existing laws, court, and budget fees if it seeks a gradual transition out of the single market.”

As reported by Alex Barker of the Financial Times:

“Draft European Council guidelines which the EU27 leaders aim to adopt at a summit (end of April), lay down a flinty political response to Theresa May that prioritizes withdrawal terms and the integrity of its founding principles rather than future UK relations.

“A copy obtained by the FT lays out the EU’s hopes of an ambitious future partnership with Britain, but it insists on a ‘phased approach’ to negotiations.  This requires Britain to make ‘sufficient progress’ on withdrawal before EU leaders will initiate talks on future relations.

“Most worrying for London, the draft unambiguously spells out conditions for a transition phase, which would minimize disruption until a trade deal is complete.  If the EU’s single market legal ‘acquis’ – its body of common rights and obligations – is prolonged at all after Brexit, the guidelines say it requires ‘existing regulatory, budgetary, supervisory, and enforcement instruments and structures to apply.’”

Now these are guidelines, and EU diplomats will be debating them ahead of the EU summit, but the principles are supported by Paris, Berlin and other major capitals, sources told the Financial Times.

There is also as much of a chance that conditions could be toughened further, as there are they could be softened.

Once the guidelines are adopted, the European Commission sets a mandate for talks, including the priorities for the EU’s chief negotiator, Michel Barnier.

The draft bluntly states that “Britain’s departure from the single market and customs union will involve disruption for the economy and citizens as new legal barriers are enforced.

“Six core principles are set for the negotiations, covering both the withdrawal and transition phases.

“It calls for a ‘balance’ of rights and obligations; the ‘autonomy’ of the EU rulemaking and ‘legal order’; the indivisibility of the EU’s four freedoms, including the free movement of labor; and the integrity of the single market.

“ ‘A non-member of the union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member,’ it states.  ‘In this context, the European Council welcomes the recognition by the British government that the four freedoms of the Single Market are indivisible and that there can be no ‘cherry picking.’”  [Alex Barker / FT]

British government officials may leave UK-based financial services out of the main Brexit negotiations over fear it will be too difficult to reach a deal in the two-year time frame for talks, according to Bloomberg News’ sources on Theresa May’s team.

“One minister said discussions about a new regulatory framework for UK-based banks should be put aside to avoid holding up conversations about other sectors, such as manufacturing and agriculture.  Another official said the idea of leaving a deal on banks until later was already being discussed in London and Brussels, where most of the negotiations will unfold.”  [Bloomberg]

But this reinforces the need for all the global banks with headquarters and/or a large presence in London to plan for the worst and many of them are moving quickly, while other European financial centers, from Dublin to Frankfurt to Warsaw, are licking their chops.  The other day, JPMorgan Chase & Co. said it was in talks to buy a Dublin office building, while Citigroup plans on moving many in its trading unit within the EU (though keep its Europe, Middle East and Africa, EMEA, headquarters in London).  Lloyd’s of London has chosen Brussels for its European Union subsidiary, as announced on Thursday.

Philip Stephens / Financial Times

“Until this week Brexit was about Britain. Now it is about Europe.  A conversation largely focused on what sort of deal Britain would pitch for on its departure has become one about what the EU27 are willing to offer.  To borrow a phrase, Brussels has taken back control.

“Those in Theresa May’s government who have blithely imagined they can have the best of all worlds face a cold shower of reality. If the two-year Article 50 process invoked by the prime minister does not break down in acrimony, it will conclude in 2019 with Britain a markedly diminished nation.  The terms of the relationship with its own continent will have been set by others; and power in today’s world does not belong to those striking out on their own.

“You would not have guessed any of this from Mrs. May’s statement to the House of Commons. Britain would henceforth ‘make our own decisions and our own laws.’  The European Court of Justice would be banished.  So too would the ‘four freedoms’ that underpin the European single market.  Brexit was Britain’s opportunity.  Though she would, of course, seek to sustain a ‘deep and special partnership.’

“Historic, Mrs. May called the invocation of Article 50.  For once that sounded something of an understatement.  The government is severing the ties that have shaped Britain’s economic and foreign policies for nearly half a century.  Missing from the prime minister’s statement was any explanation as to how departure from the EU will enhance the nation’s security and prosperity.  Britain is giving away the substance of power for the mirage of sovereignty.

“Overall, the prime minister got the tone about right, omitting silly threats that she would choose ‘no deal’ over a ‘bad deal.’  Thankfully, the text was also scrubbed of the boastful allusions to the second world war that so animate Boris Johnson, the foreign secretary.  The one jarring note came in the formal letter to Donald Tusk, the president of the European Council.  A breakdown of talks, it said, would weaken the fight against crime and terrorism.  The merest suggestion that intelligence and security resources should be deployed as a bargaining chip appalls British as much as European officials.  ‘Immoral’ and ‘counterproductive’ are among the adjectives applied by members of the security establishment in London.

“The future, we are to believe, now belongs to something called ‘global Britain.’  The snag is that beyond the obvious nod in the direction of imperial nostalgia this phrase is empty of all meaning.  The EU has not been a constraint on Britain’s capacity to engage with the wider world.  To the contrary, the union has served as a multiplier of national influence. Ask policymakers in Washington, Beijing or Delhi. Britain cannot escape the facts of geography.

“Nor can it break free of the negotiating framework laid down by Article 50 of the Lisbon treaty, which, once invoked, hands political control to those remaining in the club.  The asymmetry is intentional – the clause was drafted to discourage departures and to ensure that, in such an event, the terms of the divorce were set in Brussels.  Mrs. May can put her demands on the table, but it is for the other 27 to decide whether they are worthy of consideration – and then to calculate the price Britain must pay for future collaboration.”

I do have to note two other issues related to Brexit.  I will be talking a lot in the future about the status of Northern Ireland, which is in crisis since January after Sinn Fein pulled out of the government.  Northern Ireland voted 56-44 to remain in the EU last June, though the UK voted to leave.  But of course Sein Fein wants Northern Ireland reunited with Ireland.  Talk about complicated.  The fear is that violence returns in a big way.

As for Scotland and its hopes for a new referendum on independence, the Scottish parliament voted 69-59 to seek a referendum green light from London, but Prime Minister May quickly rejected this and there seems zero possibility they would be granted approval for a vote for years to come until Brexit is settled.

As for France and its presidential election, first round April 23rd, the latest Ifop-Financial poll had centrist Emmanuel Macron at 26%, far-right candidate Marine Le Pen at 25.5%, and Francois Fillon at 17.5%, with Macron beating Le Pen in a run-off by 60 to 40.  Very little change for weeks now.

Meanwhile, more than one in two French voters believe struggling Socialist  Party candidate Benoit Hamon should drop out of the race in favor of a rival left-winger, Jean-Luc Melenchon of the Left Party, who has overtaken him in the polls.  Hamon is having to deal with disenchantment with the Socialists under President Francois Hollande, whose approval rating at one point was 4 percent...you’re reading that right.

So Wednesday, former prime minister Manuel Valls said he would join a growing number of fellow Socialists in voting for Macron, though he said he would not do any campaigning for him. Hamon was livid.  For weeks he has been urging Melenchon to unite with the Socialists.  Hamon has been polling just 10-11 percent, Melenchon 12-14.

Valls wants to ensure that Le Pen does not get elected but stressed this is a one-time vote. Valls said he is “not asking for anything” from Macron in return for his support.

Meanwhile, the Fillon camp suffered another blow as his wife was placed under formal investigation in the fake pay scandal.

And Marine Le Pen is having a dickens of a time raising money. 

[A late BVA poll as I go to post has Macron at 25, Le Pen 24, Fillon 19 and Melenchon up to 15.  Hamon is at 11.5 percent.  Macron still whips Le Pen 60-40 in a run-off.]

Hungarian Prime Minister Viktor Orban blasted European immigration policies this week, particularly Germany’s. Orban used a speech in Angela Merkel’s presence at a gathering of Europe’s center-right parties in Malta to label European migration as a “Trojan horse of terrorism.”

It was hardly the kind of unity talk leaders wanted to hear after Britain’s Brexit announcement.

Orban called up a litany of charges against migration into the EU, warning of a “dominant Muslim presence” in western Europe in coming years and condemning a “leftist ideology” that imposed guilt “for the crusades and colonialism.” Orban said that Muslim immigrants were living in “parallel societies.”  He also called for overhauling the European Court of Human Rights for endangering security and setting up “safe spots” in Libya to hold asylum seekers bound for Europe.

The Strasbourg, France-based court had ruled this month that Hungary’s asylum policies breached human rights conventions.

I am long on record as approving of Hungary’s crackdown on migration, but the nation’s parliament recently approved the mass detention of asylum seekers in shipping containers while their applications are being processed.  No, I do not approve of this.

Orban warned about the western military interventions that caused instability in the Middle East, and their effects on migration.

“If you kick an anthill, we should not be surprised if the ants overwhelm us,” Orban told European People’s Party delegates. “If millions of migrants start marching on the Balkans again, it will be impossible to maintain stability.”

Chancellor Merkel was then the last to speak.  She said that Syria, beleaguered by a six-year civil war, is “our neighbor.”

“Do we just want to say that we don’t have any humanitarian responsibilities here?” Merkel asked, without directly addressing Orban’s charges.

Merkel instead said the EU bore responsibility for not sufficiently funding international refugee facilities in the Middle East, a main cause for the migration into Europe in 2015, but that when the emergency struck, “that’s why we took in refugees.  That was the right thing to do.”

Separately, Merkel scored a big win in elections in the western state of Saarland, the first test of voter support ahead of the September federal elections.  Merkel’s Christian Democratic Union took more than 40 percent to about 30 percent for the Social Democrats.  The anti-immigration Alternative for Germany received just 6%.

Turning to Asia, China’s National Bureau of Statistics reported the manufacturing PMI was 51.8* in March, better than February’s 51.6, while the service sector reading was a strong 55.1 vs. 54.2, the highest reading since March 2014.  Services now account for over half of China’s economy.

*Caixin-Markit just released its figure on manufacturing, which focuses on China’s private sector rather than state enterprises, and it was 51.2 for March vs. 51.7 in February.

Separately, profits of Chinese industrial firms soared 32% the first 2 months of 2017 over a year ago, the fastest pace in six years, owing largely to rising commodity prices from coal to iron ore.  This could lead to more fixed asset investment.

In Japan, the government announced core consumer prices (which here is ex-food) rose 0.2% annualized in February, the second straight month of growth after 12 months of contraction.  But ex-food and energy, the core was up just 0.1% ann.

Household spending, though, was down a whopping 3.8% year-on-year in February. But the jobless rate for February was 2.8%, the lowest since June 1994.

Street Bytes

--So the week ended nicely from a calendar standpoint at the end of the first quarter, the Dow Jones +4.6% for the three months, the S&P 500 +5.5%, and Nasdaq +9.8%, its best quarter since 2013. The tech sector index rose 12%.  As Ronald Reagan would have said, ‘Not bad, not bad at all.’

On the week, aside from the Dow return noted above, the S&P gained 0.8% and Nasdaq 1.4%, including a new all-time closing high on Thursday of 5914.

First-quarter earnings will trickle in by end of next week, and then the torrent will begin the week of April 10.

--U.S. Treasury Yields

6-mo. 0.90%  2-yr. 1.25%  10-yr. 2.39%  30-yr. 3.01%

The March jobs report will be important...released next Friday with an expectation of 180,000.  [235,000 in February.]  Will it be tweetable for Trump?

--A measure of after-tax corporate profits jumped 22.3% in the fourth quarter compared with a year earlier, as reported by the Commerce Dept., part of the GDP release.  This is the strongest year-over-year gain in nearly five years, though it’s partly because of a very low base established in the final months of 2015 as oil prices collapsed, weakening the energy sector severely.

For all of 2016, profits rose 4.3% after falling 8.5% in 2015.

Separately, the Congressional Budget Office said Thursday that the national debt is on track to nearly double over the next three decades.

The CBO’s annual report on long-term federal spending and revenue shows the federal debt, currently 77% of GDP, would reach 150% of GDP in 2047, up from an estimate of 145% made this past January.

The report’s estimates are based on GDP growth of just 1.9% on average each year through 2047, far lower than the 2.9% average over the previous 50 years.

But while long-range forecasts of this kind are normally absurd, and the CBO seems to be far too sanguine on the longer term interest rate environment, if we don’t tackle entitlements, we’re beyond screwed.

On the other hand, I’ll long be dead so you’re on your own.

--U.S. crude inventories climbed less than analysts predicted last week, sending oil prices higher and extending a recent rally.  There is also talk that OPEC and key non-OPEC producers will keep production lower for longer after their existing agreement expires in June.

Oil had been falling as worries mounted about U.S. drillers ramping up production, potentially offsetting OPEC’s cuts.

--Toshiba’s U.S. nuclear unit, Westinghouse, filed for U.S. bankruptcy protection as the firm struggles with hefty losses that have thrown its Japanese parent into a state of turmoil, putting its own future at risk.

Westinghouse has experienced huge cost overruns at its plants in Georgia and South Carolina.

Toshiba initially alerted investors in December about the serious issues it faced linked to the nuclear arm. Assets are now expected to be worth far less than expected.

The nuclear services business brings in about one-third of Toshiba’s revenue, and the company expects to write down $6.3bn.

Forget whether Toshiba can survive, now the entire nuclear industry, worldwide, could be in jeopardy...certainly the future for building new plants.  Today, Westinghouse is scrambling to reassure its Chinese partners that plants being built there (or on the drawing board) are not impacted by the bankruptcy filing.

--Wells Fargo has agreed to pay $110 million to settle a class-action lawsuit over up to 2 million accounts its employees opened for customers without their knowledge.  This is the first private settlement that Wells has reached since the company paid $185 million to federal and California authorities late last year.

--BlackRock Inc., in a major shake-up, has started relying more on robots rather than humans to make decisions on what to buy and sell.

BlackRock is the world’s largest asset manager with some $5.1 trillion in total assets, largely because of its dominance in low-cost, passive investments such as exchange-traded funds, and its stock-picking unit has lagged rivals in performance.

So as the Wall Street Journal’s Sarah Krouse reported, management has decided “it is difficult for human beings to beat the market with traditional bets on large U.S. stocks.”

But in overhauling its actively-managed equities business, that means job losses.  Several dozen positions are involved.

Of BlackRock’s $5.1 trillion, $275.1 billion is in active stock assets, down from $317.3 billion three years earlier.

Over those three years, 38% of the actively-managed stock products underperformed their benchmarks or peers.  More than half did over one year.

--California’s unemployment rate ticked down to 5% in February, reaching a 10-year low.  Pretty impressive. While this is above the national average of 4.7%, the state has seen 84 straight months of job growth, longest since 113 months in the 1960s, which was due in large part to the success of the Beach Boys and “Peanuts”...plus a booming aerospace industry.

--The world’s biggest agricultural commodities merchant, Cargill, reported its strongest fiscal third quarter in seven years, aided by sales of sweeteners and salt.

The Minnesota-based company said adjusted operating profit rose 50 percent to $715m in the quarter that ended last month.

While I understand how sales of sweeteners, cocoa and chocolate all boosted business, and the falling price of beef aided sales from its meat-packing plants in North America, plus sales from a cooked-chicken complex in Thailand, I didn’t think of Cargill in terms of salt for melting road surfaces, which it is doing well in.

The company’s revenues overall rose 8% in the quarter to $27.3bn.

--Brazil’s Agriculture Ministry ordered three more food processing facilities to suspend production amid an investigation into alleged corruption of inspectors and unsanitary conditions in the world’s biggest meat producer.  That makes six plants that have been ordered temporarily closed in this incredibly gross scandal.

But, last weekend, China lifted its own suspension of imported beef from Brazil, along with Egypt and Chile. Hong Kong, Brazil’s No. 2 market, however, continued to maintain full or partial bans.  [Alberto Alrigi / Reuters]

--Speaking of beef, fast-food chains Carl’s Jr. and McDonald’s are getting back to the basics.  Carl’s Jr. and its sibling, Hardee’s, is rolling out a new advertisement branding themselves as “pioneers of the great American burger.”  McDonald’s announced that it would switch to fresh beef from frozen in Quarter Pounders at a majority of its U.S. restaurants.

Well, here’s one guy who will miss Carl’s Jr.’s tasteful ads featuring scantily clad models and celebrities eating dripping hamburgers. 

As for McDonald’s, I obviously never had a problem with their frozen beef my entire lifetime and I just hope they aren’t sourcing their meat from Brazil.

--American Airlines is set to become the second big carrier in the United States to take a major stake in China’s airline industry, paying $200 for a minority stake in China Southern, the biggest airline there.

In 2015, Delta Air Lines paid $450 million for a 3.55 percent stake in China Eastern Airlines.

--Elon Musk has taken an active role in setting up a California-based company, Neuralink, which one day hopes to develop cranial computers...as if Musk didn’t already have enough on his plate with Tesla Inc., Space Exploration Technologies Corp. and Solar City.  This should more than worry Tesla investors.

But speaking of SpaceX, it became the first space company to use a recycled rocket to send a payload into orbit on Thursday, paving the way for a sharp drop in launch costs that is a key part of its long-term plan to carry passengers to Mars.

The company sent a rocket into orbit using a main booster stage that first flew on April 6 last year.  I’m assuming lots of Swiffer products were used in spiffing it up for a second flight.

Elon Musk called the mission “an amazing day for space as a whole, for the space industry.”

Indeed it is.

--An Uber self-driving car crashed in Arizona the other day, dealing another setback to the U.S. ride-hailing company after a spate of bad publicity involving senior management.  Last Saturday, Uber announced the vehicle was not carrying any customers at the time of the crash.

Tempe, Arizona police said the Uber SUV had been driving along a main road in the city when “another vehicle failed to yield while turning left” in front of it. “The vehicles collided, causing the autonomous vehicle to roll on to its side.”

The Uber vehicle was in self-driving mode at the time of the accident, according to a person familiar with the circumstances.  All Uber test cars have two people in the front of the vehicle to monitor it and take control in an emergency.

It wasn’t clear if the person behind the wheel tried to use the manual override or was on his cellphone playing games.  [Richard Waters / Financial Times]

--Turkey’s tourism numbers continued to crater, with the number of foreign visitors falling 6.5 percent in February compared to the same month in 2016, the 19th consecutive month of declines in arrivals.

Tourism accounts for 13 percent of the Turkish economy, with the industry helping support 8% of all jobs.

But Friday the government announced GDP expanded by 3.5 percent in the fourth quarter compared to the same period in 2015, rebounding from a 1.8 percent slump in the third quarter amid the failed coup and other security concerns.

Overall expansion for 2016 came in at 2.9 percent according to Turkstat, but this was for an economy that had been growing at a far higher rate.

The weak exchange rate has helped shelter some sectors of the economy.

--Shares in Lululemon tumbled 22 percent on Thursday, after the Canadian yogawear apparel maker warned that first-quarter sales would fall.

Holiday sales were stronger than for many retailers, but it was the forecast for the first same-store sales decline in 28 quarters, or since 2009, that most spooked investors.

But does this augur a slowdown in leisurewear and inappropriate dress?  Perhaps.  In the case of Lululemon, though, many analysts say it’s colors and prints are just too bland. 

--PIMCO agreed to pay $81 million to settle the lawsuit from its founder Bill Gross, who claimed he was illegally ousted in 2014, and thus deprived of at least $200 million in lost bonuses and compensation.  The money is going directly to his foundation, and Gross promised to top off the contribution with a further $20m.  PIMCO will also name a conference room after him.

--What an awful month of March it has been in the northeast, with really lousy weather.  I feel sorry for the high school spring sports teams and it’s doing a number on golf courses who normally get a fair amount of play second half of the month. 

Heck, it’s time for Opening Day, gosh darnit!

But the weather in California’s Sierra Nevada mountains has been spectacularly good...as in it now has the deepest snowpack this time of year in the state’s recorded history and the range is loaded with enough water to keep reservoirs and rivers swollen for months to come, too much water in some spots, of course, so there will be flooding.

But the snowpack, as just measured, was at 164% of average for this time of year; 147% in the northern region, 175% in the central, and 164% of average in the southern Sierras.

This equates to 46 inches of rain when it melts and many water agencies across the state are saying it’s time to declare the drought over and lift water restrictions.  The issue will be revisited in May.

--The U.S.-Sino co-production “Kong: Skull Island” ruled China’s box office last week, followed by Disney’s live-action remake “Beauty and the Beast.”

“Kong...” took in $72.2 million last weekend in China. The film features a Chinese actress, Jing Tian, who also played the female lead in “The Great Wall.”  The film is co-produced by Warner Bros., China’s Tencent Pictures and Legendary Entertainment, which is owned by the Chinese conglomerate Dalian Wanda. 

China’s box office has grossed $2 billion over the first quarter this year, a 1.5% decrease over last year. [Yingzhi Yang / Los Angeles Times]

--I talk about the ‘morning shows’ in this space because it’s all about the money in the end, programs like “Today” being highly lucrative.

So I got a kick out of the story in the tabloids that Michael Strahan is not exactly making friends at “Good Morning America” and that fellow anchors on the show are getting sick of how ABC bosses give him preferential treatment.

“They roll out the carpet for [Strahan] while seasoned talent is treated like dirt,” a source told the New York Daily News.

Strahan signed a special deal allowing him to continue as an analyst at “Fox NFL Sunday” and host ABC’s “$100,000 Pyramid.”

The paper added: “We also hear that George Stephanopoulos is over it.  ‘He’s bored with the fluff.  He goes into work, does the show and leaves by 8:57 a.m.  He doesn’t interact.  He’s been phoning it in for quite some time,’ the source said.”

An executive at ABC disputes this.  I go with the source.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: When I went to post late last Friday night, the first stories on the potential U.S. mishap in Mosul were coming through and I correctly opted to invoke my 24-hour rule.  The facts are still far from clear today.

But this week, Lt. Gen. Stephen Townsend said coalition forces “probably” played a role in the March 17 airstrike on west Mosul that may have killed more than 100 people (less than the initial reports of 200 I refused to parrot).

Townsend said there was “at least a fair chance” the U.S. was responsible, in “an unintentional accident of war.”

But Iraqi military officials said the building was bobby-trapped by ISIS with explosives and that this was the reason the building went down.  Townsend said this was also possible.

Witnesses said Islamic State had previously forced at least 140 civilians into the house to be used as human shields, and had indeed booby-trapped it.

So it could have been blown up by ISIS so they could blame it on the coalition in order to cause a delay in the offensive into Mosul and a halt to airstrikes.

Benny Avni / New York Post

“There will be more casualties in the war on ISIS.  But minimizing those deaths will take more, not less, American involvement.

“Quietly, President Trump is sending hundreds of additional troops into Syria and Iraq, and is widening U.S.-led air attacks there.  The president has also asked Defense Secretary James Mattis to take a more active role in developing the West’s anti-ISIS strategy and in overseeing its implementation, in sharp departure from the micromanagement that characterized President Barack Obama’s war efforts.

“Such a leadership role is not without its naysayers.  In one incident last week, 112 civilian bodies were pulled out of a house in Mosul – Iraq’s second-largest city, where the Iraqi military is fighting under a U.S. air umbrella.  The Pentagon has acknowledged a bombing operation in the area.

“Cue the critics.

“The Mosul incident fits an ‘alarming pattern’ of U.S.-led airstrikes that ‘destroyed whole houses with entire families inside,’ announced Amnesty International.  In Geneva, UN human rights chief Zeid Raad al-Hussein said air sorties in heavily populated areas ‘potentially have a lethal and disproportionate impact on civilians.’

“So are Americans heartless war criminals?

“Well, as Zeid, a Jordanian, acknowledged, ISIS is using ‘children, men and women to shield themselves from attack.’  Such ‘cowardly and disgraceful’ tactics, he said, include shooting civilians in the back as they flee – ‘an act of monstrous depravity.’

“Meanwhile, in Syria, according to a widely quoted report by the Russian military, U.S. air attacks destroyed bridges over the Euphrates River and hit a critical dam near ISIS’ stronghold in Raqqa.  Such attacks, tut-tutted Russian Gen. Sergei Rudskoi, risk an ‘ecological catastrophe’ and could lead to ‘numerous’ civilian deaths.

“Pot, meet kettle: Russian jets have razed entire cities on behalf of Moscow’s ally, Syrian dictator Bashar al-Assad. Diplomatically, the Russians shield Assad from accountability for his war crimes, including well-documented chemical attacks on civilians.

“The United States, by the way, denies damaging the dam.  In fact, according to some reports, ISIS is trying to score propaganda points by damaging it themselves.

“Free societies, enjoying a free press and unfettered antiwar protests, are by definition at a disadvantage in modern, urban, asymmetrical warfare.  And undoubtedly we must minimize civilian casualties.

“Yet if America is to do what Trump promised and ‘obliterate’ ISIS, mistakes will be made and innocents will perish – each one a tragedy for which the responsible parties must be held accountable. No war can be free of civilian blood, so expect more of it – and the accompanying criticism....

“(But) for five years, America mostly sat aside as the defining war of the new century raged in Syria.  But our clean hands allowed a bloodbath.  More than half a million people, mostly civilians, were killed.  Millions more fled their homes, living in refugee camps or risking life and limb to escape to Europe.

“America’s absence from the war did nothing to limit the toll on civilians. To end it, and ensure it stays ended, America’s presence is needed more than ever.”

Separately, ISIS claimed responsibility for a suicide bomber at an entrance to Baghdad who took out at least 14 people.  Yes, even as Iraq makes progress in Mosul, ISIS is more than deadly.

In Syria, it increasingly looks like the assault on ISIS’ de facto capital of Raqqa will start soon.  Surrounding towns are being captured by U.S.-backed Kurdish and Arab Syrian militia (the Syrian Democratic Forces, SDF), as well as a key airbase.

Israel: Prime Minister Benjamin Netanyahu and coalition partner, Finance Minister Moshe Kahlon, reached a deal on their public broadcasting dispute that threatened to force an early election.

According to the deal, the Public Broadcasting Corporation that the prime minister opposed will go on the air but its department will be run by the staff of the Israel Broadcasting Authority.

While the figures in the corporation that Netanyahu wanted ousted will keep their jobs, the news department will be run by a new director-general chosen by a council led by a judge who no doubt will be a Netanyahu loyalist.

Netanyahu has been concerned over the anti-Likud slant of the news.

Iran: I have said in this space since day one of the signing of the Iran nuclear agreement that it was now too late, there was no going back...the agreement couldn’t be just ripped up as some were screaming.

My reasoning was that the other five players in the P5+1 (which is the U.S., France, Britain, Germany, Russia and China) would immediately increase commerce with Iran after sanctions were lifted and that you would never get these five to go along with a significant change in the treaty beyond heightened inspections.

So this week we learned German exports to Iran rose by 26% last year, and by more than 30% in January alone, according to Germany’s Chamber of Commerce and Industry.  This is just a start.

Libya: Reuters reported last weekend, “The head of U.S. forces in Africa told reporters there was an ‘undeniable’ link between Russia and powerful Libyan Khalifa Haftar, something likely to add to U.S. concerns about Moscow’s deepening role in Libya.”

This is just confirmation of what I was writing about a few weeks ago.  Russia continues to deny its involvement, such as establishing an air base in western Egypt, near the Libyan border, occupied by Russian special forces.  Reuters first reported this.

Afghanistan: Shawn Snow of Military Times reports, “There is mounting evidence that Chinese ground troops are operating inside Afghanistan, conducting joint counter-terror patrols with Afghan forces along a 50-mile stretch of their shared border and fueling speculation that Beijing is preparing to play a significantly greater role in the country’s security once the U.S. and NATO leave.”

I have to admit, I forgot there is a spit of land that juts out of northeastern Afghanistan, attached to China, with Pakistan and Tajikistan on either side.

The Pentagon is unwilling to discuss the Chinese involvement, except a Pentagon spokesman said, “We know that they are there, that they are present.”

Russia: Thousands of Russians took to the streets around the country on Sunday in protests spurred by anticorruption and opposition activist Alexei Navalny.

Many of the protesters carried pairs of sneakers, a new symbol of corruption.  The shoes refer to Russian Prime Minister Dmitry Medvedev’s predilection for ordering sneakers and other clothing online, as Navalny once exposed on YouTube.

Medvedev is the real initial victim here.  For millions of Russians, he is the face of state corruption.  It was also in 2011, when Medvedev was still president, that he made the deal with Vladimir Putin that entered the Russian political narrative as the “castling”: Putin would return to the Kremlin and give Medvedev the prime minister post.

Since then, the elite have viewed Medvedev not just as Putin’s right-hand man, but also his probable successor.

But there is the growing feeling the latest protests have doomed Medvedev from becoming president.  He is also unlikely to keep his prime minister seat following Putin’s re-election in March 2018.

A court in Moscow on Monday issued a small fine and 15-day jail term against a defiant Navalny for organizing the protests and resisting police.

“Everyone who goes outside the boundaries of the law should be punished in accordance with Russian legislation,” Putin said, according to Interfax.

President Putin said on Thursday that he compared the street demonstrations to the first stirrings of the Arab Spring, warning that his government would deal harshly with unsanctioned protests.

“This tool was used at the beginning of the so-called Arab Spring,” Putin said.  “We know very well what this led to, what bloody events this led to.”

Leonid Bershidsky / Bloomberg

“At first sight, the Russian anti-corruption protests on Sunday didn’t draw enough people to rock the Kremlin. And yet they must be extremely worrying for Russian President Vladimir Putin: The movement against him, which he had every reason to write off as dead, is attracting a new generation of Russians throughout the country.

“Alexei Navalny, who plans to run for president next year, called on Russians to take to the streets on March 26 to protest the corruption of Prime Minister Dmitri Medvedev, as described in a recent investigation by Navalny’s Anti-Corruption Foundation.  It accused Medvedev of amassing vast wealth, including palatial homes, and a yacht, through a network of non-profit organization run by his friends.”

“Navalny’s report has been watched by 13 million on YouTube but the Kremlin didn’t respond.

(But) according to the Navalny team, some 150,000 people turned out across the country, up to 30,000 of them in Moscow.  The police, of course, reported lower numbers... As usual, the truth is probably somewhere in the middle, putting the total number of protesters in the high tens of thousands.

“That’s not an impressive number. In late 2011 and early 2012, after a blatantly rigged parliamentary election, about as many, if not more, people repeatedly took to the streets in Moscow alone. But back then, there was a stronger reason for the action than one man’s corruption investigation, and the rallies were officially permitted....

“(But Navalny will emerge from jail after his 15-day detention) a more dangerous man for the Kremlin than he’d been before last weekend.  And Putin’s men haven’t figured yet what they were going to do about the changed situation....

“The Kremlin will be tempted to respond to the new challenge with repression.  [Ed. as per Putin’s comments on Thursday above]  It will have to tread carefully, though. The revolution of 2013 and 2014 in Kiev began after President Viktor Yanukovych’s regime unleashed brute force on a peaceful student demonstration.  Hundreds of thousands of Kievans responded by taking to the street and holding the city center for months before Yanukovych was forced to flee....

“Putin’s administration will probably try to revive its youth program and attempt to subvert the nascent student movement.  It needs to rule out eruptions of protest before the 2018 election. That won’t be easy, and even if Navalny’s presidential bid is doomed, there are reasons for Putin and his people to fear, if not for their own future, then for that of their heirs.”

Meanwhile, regarding Russian meddling in the U.S. election, former vice president Dick Cheney said this week that Russia may have committed an “act of war.”

“There’s not any argument at this stage that somehow the election of President Trump was not legitimate, but there’s no question that there was a very serious effort made by Mr. Putin and his government – his organization – to interfere in major ways with our basic, fundamental democratic processes,” Cheney said at a forum in New Delhi.  “In some quarters, that would be considered an act of war.”

Cheney also said Putin was “doing everything he can to find ways to undermine NATO.”

On a totally different matter, Matthew Bodner of the Moscow Times reports that an investigation into quality control issues in the Russian space industry has discovered that nearly every engine currently stockpiled for use in Proton rockets is defective, as first reported by RIA Novosti news agency.

71 engines, mostly used to power the second and third stages of the Proton rocket, require complete overhauls to remove defects.  It appears high-quality metals were swapped by a plant manager for cheaper alternatives.

Proton was once considered the most reliable rocket in the world.  Since 1967, the design has been launched 400 times, and at one point was used to launch some 30% of commercial satellites into space.

Matthew Bodner: But “one of the most infamous disasters came in 2013, when one of the rockets flipped over almost immediately after launch – driving itself into the ground.  The fault was later identified to be a sensor that was installed upside down. The rocket’s computer believed the rocket was facing the wrong way.”

China: President Xi Jinping and President Trump are meeting in Mar-a-Lago April 6-7.  Among the many serious issues to be discussed are China’s activities in the South China Sea, the world’s most important waterway.  This week it was reported that China appears to have largely completed a major construction project on one of the artificial islands, an airbase where it can deploy combat planes and other military hardware at any time, according to Washington’s Center for Strategic and International Studies.

The week before, Premier Li Keqiang said defense equipment had been placed on some of the islands in the disputed waterway to maintain “freedom of navigation.”

China now has three airbases on the islands which allow it to operate over nearly the entire waterway.  China has also deployed surface-to-air missiles on one of them (Woody Island in the Paracel chain).

North Korea: Pyongyang carried out another test of a rocket engine that U.S. officials believe could be part of its program to develop an intercontinental ballistic missile. This is the second such test in weeks.

Bret Stephens / Wall Street Journal

“It’s time to make regime change in North Korea the explicit aim of U.S. policy, both on strategic and humanitarian grounds.  But there are two ways in which regime change can be pursued – and one can be used in furtherance of the other.

“The first type of regime change is pro-China. Beijing has little sympathy for Kim Jong Un, who brutally purged his regime of its China sympathizers after coming to power five years’ ago. But Beijing’s distaste is tempered by its interest in the existence of North Korea as an independent state, mainly because it has good reason to fear the strength and example of a unified, democratic Korea led from Seoul.

“Pro-China regime change would take the form of a coup, in which Kim would be given the choice of exile or execution, to be replaced by a pro-Beijing figure willing to move the country from totalitarianism to authoritarianism – a Korean replay of the transition from Mao Zedong to Deng Xiaoping.  The U.S. would recognize the new government in exchange for verifiable nuclear disarmament, sealing the division of the peninsula.

“The U.S. could support such a policy and work with China to achieve it because it would ease the suffering of North Korea’s people and put the country’s nuclear arsenal in safer ( and more negotiable) hands.  China should support it because it would maintain the North as a buffer state and get rid of a regime that might otherwise collapse in unpredictable and dangerous ways.

“Achieving such regime change will be tricky, but China could move things along by cutting off fuel supplies to the North and ‘inviting’ Kim and his family for an extended luxury vacation.

“And if the Chinese aren’t amenable to this strategy?  In that case, the U.S. should support the anti-China model of regime change, aiming not only at the end of the Kim regime but of North Korea itself.

“That would mean a formal U.S. declaration in favor of unification.  Other steps might include cutting off Chinese banks and companies that do business with Pyongyang from access to U.S. dollars, undertaking a campaign to highlight Chinese mistreatment of North Korean refugees, and further speeding the deployment of antiballistic missile systems to South Korea. As another inducement, Donald Trump could return to his suggestion last year that the South should have an independent nuclear deterrent.

“Mr. Trump is scheduled to meet Xi Jinping next month.  It would be a good occasion for the president to ask his Chinese counterpart which kind of regime change he’d prefer.”

Meanwhile, Hong Kong elected a new chief executive last weekend, the first woman, Carrie Lam, 59, who of course had the backing of the Chinese government in Beijing.  It is a rigged process, which is why there have been so many protests in recent years.

The chief executive is not chosen by the public, but by a 1,200-strong committee dominated by pro-Beijing electors.

In her acceptance speech, Lamm said: “Hong Kong, our home, is suffering from quite a serious divisiveness and has accumulated a lot of frustrations.  My priority will be to heal the divide.”

Lamm vowed to “tap the forces of our young people.”

“They are often at the forefront of society, pulling and pushing us as a whole to make progress.”

Gag me.  Calls for fully free elections have gone nowhere, but the young people here won’t just lie down.

The bottom line is China totally controls the political process in Hong Kong and there are promises for large demonstrations on Ms. Lam’s inauguration day, July 1, the 20th anniversary of Hong Kong’s transfer from British to Chinese control.  A date worth watching.

South Korea: Park Heun-gye, South Korea’s first female president and its first leader to be impeached and removed from office, was arrested Friday on charges including bribery, extortion and abuse of power.

A district judge issued a warrant for her arrest as prosecutors were concerned Park would destroy evidence as she goes through her trial.  She is now expected to remain in jail for the duration of the proceedings and, understand, South Korean prisons aren’t known for their comfy quarters.

Ms. Park was accused of conspiring with longtime confidante, Choi Soon-sil, to collect tens of millions of dollars from big businesses, including more than $38 million in bribes from Samsung.

South Africa: President Jacob Zuma threw his nation into a state of turmoil after he sacked his popular finance minister, Pravin Gordhan, along with eight other cabinet members in an attempt to purge growing numbers of his critics, two years ahead of a national election.  Zuma’s ruling African National Congress faces the biggest crisis yet under his leadership.

The currency, the rand, declined 7 percent this week and bank stocks tanked on the Johannesburg Stock Exchange.

Gordhan was on a campaign to restore investor confidence and root out corruption, and Zuma saw him as a threat.  Gordhan was ordered back from an overseas investor roadshow this week.

Venezuela: In a move expected for the better part of a year, President Nicolas Maduro’s loyalists on the Supreme Court seized power from the National Assembly in a ruling late Wednesday.

The ruling effectively dissolved the elected legislature, which is led by the opposition, and now the court can write its own laws.

So Venezuela is now officially a dictatorship.  It’s up to the army to take Maduro out.  Just do it!

But late word, tonight, has Maduro acquiescing in some fashion after a leading supporter dissented on the move by the Court.

Also crossing the wires are stories about pressure being applied by Peru, which is urging its neighbors to recall their ambassadors to Venezuela, while I also see that massive protests have broken out in Paraguay’s capital on a different issue.  The Senate there secretly voted to allow President Cartes to seek a new term, illegal under the 1992 constitution, passed after the toppling of a brutal dictatorship, and the Congress building has been set on fire.

Mexico: Drug kingpin Joaquin “El Chapo” Guzman’s capture has led to a surge in homicides in Mexico as cartel leaders fight to fill the vacuum created by his arrest.

Mexico’s homicide rate for 2016 (he was re-captured in Jan. 2016) led to a spike to 21.3 murders per 100,000 residents, up from 17.5 in 2015, that rivals record numbers earlier in the decade, according to a report from the Justice in Mexico Project at the University of San Diego.

Murder rates had dropped four years in a row, 2011 to 2014.

Again, heroin users.  You can always switch to beer.

[Venezuela just announced their murder rate for 2016...60 per day on average, up from 45 per day in 2015, or a murder rate of 70.1 per 100,000 inhabitants last year, one of the highest in the world.]

Random Musings

--A Gallup tracking poll had President Trump’s approval rating at 36% this week (rolling three-day average), which is perhaps not that fair, weekly and monthly averages being more so.  [The figure is 38% today.]

Republican-leaning Rasmussen’s survey had Trump at just 44% on Thursday.

But according to a CBS News poll, over half of Americans, 53%, say they are optimistic about the next four years with Donald Trump as president, down slightly from the start of his presidency.

If tax reform becomes the next legislative push, Republicans (86%) express overwhelming confidence in the president’s ability to make the right decisions about it, as they do with his legislative approach overall; most Democrats (18%) and Independents (42%) do not.

Trump’s overall approval rating is 40% in this one, 52% disapproval.

In this CBS News survey, approval for the Affordable Care Act is 49%, 45% disapprove.

An NBC News / Survey Monkey Poll has Trump’s overall approval number at 42%, 56% disapprove.  The 42% is down just a point from a month earlier.

--It seems clear that Supreme Court nominee Judge Neil Gorsuch is going to be approved, the issue is can he get 60 votes so Republicans don’t have to invoke the nuclear option.

Sen. Orrin Hatch, chairman of the Senate Judiciary Committee / Wall Street Journal

“(In testimony), Judge Gorsuch’s performance was outstanding.  Enduring more than 20 hours of questioning over two days, he displayed an impressive command of the law and an intellect befitting someone with his stellar credentials.  He showed that he understands the proper role of a judge in our system: to apply, not make, the law.  Throughout, his demeanor was serious, thoughtful and humble.  These qualities have defined his judicial service for the past decade and will serve him well on the Supreme Court.

“In stark contrast was the astonishing treatment Judge Gorsuch received from many of my Democratic colleagues. Whatever their motivation – be it the outcome of President Obama’s lame-duck nomination during last year’s election, an unwillingness to accept the November results, or the desire for judges to push a liberal political agenda – they have apparently decided to wage a desperate, scorched-earth campaign to derail this nomination, no matter the damage they inflict along the way.  We are now watching the confirmation process through the funhouse mirror....

“In Judge Gorsuch, the country has a Supreme Court nominee as fine as I could ever imagine.  But instead of the best tradition of the advice-and-consent process, which many of us have tried to live up to, what does he get?  Hypocritical attacks on the very judicial independence Democrats claim to prize, misleading characterizations of his record, and now a promise to filibuster his nomination.

“In essence, Judge Gorsuch gets the kind of treatment that leads him to regret putting his family through what ought to be a dignified process. This madness needs to stop.  End the dishonest attacks and scorched-earth tactics.  Instead, we should have a debate worthy of ‘the world’s greatest deliberative body,’ and confirm this outstanding nominee.”

Thursday, West Virginia Democratic Senator Joe Manchin, and Democrat Heidi Heitkamp of North Dakota, said they would vote in favor of putting Gorsuch on the bench, becoming the first Democrats to announce this.  But can Republicans get up to 60?  Not likely, as Missouri Dem. Senator Claire McCaskill, who was thought to be one the Republicans could pick up, announced late Friday she was supporting the filibuster.  This story will dominate next week.

--CBS “Face the Nation” moderator John Dickerson had the following monologue last Sunday:

“President Trump said President Obama wiretapped Trump Tower.

“This week, the FBI director said there was no evidence of that.  This wasn’t just a fact-check. It highlighted how lightly President Trump treats the presidency.

“We have presidents and we have an office of the presidency.  Opponents respect the office, even if they disagree with the occupant.  Presidents are criticized, but the presidency is behind protective glass.

“That’s why a president can come into office attacking his predecessor’s policies, but later celebrate the dedication of his predecessor’s presidential library. It is why George W. Bush prepared a smooth transition for Barack Obama, and why President Obama did the same for Donald Trump.

“Once on the job, a president also gains respect for the presidency because they learn, as President Trump did this week, that the job is harder than it appeared from the campaign trail.

“The historical continuity of the presidency is an heirloom and a tool.  Presidents gain stature by hugging those who came before them. Donald Trump visited Andrew Jackson’s grave and compared himself to the seventh president, who also spooked elites.

“These perks and protections are why presidents honor the presidency.

“ ‘I shall keep steadily in view the limitations of my office,’ said Andrew Jackson.  Break the limits, and you break the office.

“Nevertheless, President Trump compared his predecessor to Nixon and McCarthy, called him sick and bad.

“To break glass like that, a president must have a good reason and proof.  President Trump had no evidence and no higher purpose.

“Tending the presidency is important for a disruptive president like Donald Trump, because it shows people he knows the line between renovating the office and demolishing it.  You measure twice, and cut once.  You don’t cut without measuring at all.”

Dickerson interviewed former secretary of state George Schultz on last Sunday’s show as well.

DICKERSON: Let me ask you about honesty in public office.  President Trump made a claim that his predecessor, President Obama, wiretapped his Trump Tower and now the director of the FBI has said he has no evidence of that. What cost is that for a president, to say something that doesn’t turn out to have evidence behind it?

SCHULTZ: Well, he’s got to figure out a way to get out of it.  To say, OK, I made a mistake, and go on from there because you’ve got to establish an atmosphere of trust. Trust is the coin of the realm. And you need to do that with other leaders, or people you’re going to deal with, including your adversaries.  When I go back to my days in the Marine Corps boot camp at the start of World War II, sergeant handed me my rifle.  He says, take good care of this rifle. This is your best friend. And remember one thing, never point this rifle at anybody unless you’re willing to pull the trigger.  No empty threats. And you can extrapolate that and say, mean what you say, and carry out what you say you’re going to carry out, then people will trust you and they can deal with you because they know if you say you’ll do something, you’ll do something, that you’ll do what you said you were going to do.  If I can’t trust you, I can’t deal.  But if I trust you, then I can deal. And so trust is the coin of the realm.

--A judge on Friday approved an agreement for President Trump to pay $25 million to settle lawsuits over his now-defunct Trump University, ending nearly seven years of legal battles with customers claiming they were misled by failed promises to teach success in real estate.

The ruling was handed down by U.S. District Judge Gonzalo Curiel, who Trump had repeatedly insulted on the campaign trail, insinuating that the Indiana-born judge’s Mexican heritage exposed a bias.

Trump had vowed never to settle.

--According to ethics filings released by the White House Friday night, Ivanka Trump and Jared Kushner remain the beneficiaries of a sprawling real estate and investment business worth as much as $741 million. Ivanka maintains a stake in the Trump International Hotel in Washington, D.C., which the filing estimates at between $5 million and $25 million.  A good friend just stayed there with his family and loved it.

--Lawmakers in North Carolina announced late Wednesday night that they had reached an agreement to repeal a measure that restricts which public restrooms transgender people can use.

This is supposed to be a compromise by Republicans and the state’s Democratic governor, who has been a staunch opponent of the bill, in an attempt to save $billions in future convention and sports business, especially with the NCAA.

But upon further review, this doesn’t exactly seem like a solution.  Developing....

--Two former allies of New Jersey Gov. Chris Christie, Bill Baroni and Bridget Anne Kelly, were sentenced to 24 and 18 months, respectively, for their roles in the Bridgegate scandal. Christie is skirting scot-free.

--Last weekend marked the eighth weekend in a row that President Trump visited a property bearing his name.  He has done so on 21 of the 66 days he’s been in office, according to the Washington Post’s Philip Bump on Tuesday.  And despite his claim in August, “I’m going to be working for you.  I’m not going to have time to go play golf,” he has played golf at least 12 times.

Just stating the facts, Trumpians.  You know I generally have no problem with our presidents hitting the links.

--According to figures prepared for the Governors Highway Safety Association, which represents state highway safety offices, pedestrian deaths are climbing faster than motorist fatalities, reaching nearly 6,000 deaths last year – the highest total in more than two decades.

While it can’t be quantified, clearly both distracted drivers and walkers are a major cause for the increase, as miles driven are up only a few percentage points.

It’s bad enough that I know I will die while crossing the street, hit by a driver blowing through a red light as he/she plays on their phone, but it is equally appalling what we see every day; pedestrians carelessly walking across streets while looking at their phone as well.  [We also have a ton of joggers and walkers in my area who stupidly do their thing in the street...just waiting to be hit.]

---

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

God bless America.

---

Gold $1251
Oil $50.85

Returns for the week 3/27-3/31

Dow Jones  +0.3%  [20663]
S&P 500  +0.8%  [2362]
S&P MidCap  +1.5%
Russell 2000  +2.3%
Nasdaq  +1.4%  [5911]

Returns for the period 1/1/17-3/31/17

Dow Jones  +4.6%
S&P 500  +5.5%
S&P MidCap  +3.6%
Russell 2000  +2.1%
Nasdaq  +9.8%

Bulls 49.5
Bears 18.1 [Source: Investors Intelligence...Bulls hit highest reading since 1987 of 63.1 on Feb. 28...the S&P is literally unchanged since that date.  So not the expected selloff if you’re a contrarian, as yet.]

Have a great week.

*Dr. Bortrum posted a new column!

Brian Trumbore

Let’s Go Mets!!!

 



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Week in Review

04/01/2017

For the week 3/27-3/31

[Posted 11:45 PM ET, Friday]

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

Edition 938

I was all set for a huge rant to lead off this week, but I’ll save it.  Thank god baseball season is upon us.  No more Fox News every night...its Mets baseball for the kid.

I’ve told you my routine.  I catch all the networks, all the slants and such, but I am really sick of some of the hosts on Fox and the call of “Let’s Play Ball!” couldn’t have come soon enough.

Plus we have what we hope will be two solid Final Four college hoops contests on Saturday, then the national title game, Monday, and beginning Thursday...The Masters...a tradition unlike any other, on CBS.

Yes, I’m tired of all the ‘misdirection,’ ‘mislabeling,’ talk of how ‘unmasking’ is more important than any possible Russian collusion.  Seriously, Paul Manafort and Roger Stone and their history?

Yes, I’m as concerned as much as the next guy when it comes to civil liberties, but I’ve also studied Russia for far too long, especially Vlad the Impaler,  and to me the circumstantial evidence is piling up.  But we need hard evidence, and that’s where I see the biggest issues down the road...taking some Russian official’s word over others.

The dossier, in case you haven’t noticed, has reemerged.

In the meantime, I have to start out with the healthcare debacle, from which all else flows when it comes to Trump’s agenda.

I was for the AHCA.  I trust Paul Ryan and Sec. Tom Price to do the right thing.  I knew this was but a first step.  If it then died in the Senate, so be it...we move on...but passage out of the House still would have been a needed momentum boost in terms of items such as tax reform and infrastructure spending.  It would have showed the fractured caucus can still work together.  To accept the ‘good’ over holding out for the ‘perfect.’

Alas, instead it’s just one distraction after another...many of the self-inflicted variety. 

AHCA Fallout

Late last Friday, Speaker Paul Ryan said as the AHCA crashed and burned, “We were a 10-year opposition party.  Being against things was easy to do.”

Former Speaker Newt Gingrich, a Trump supporter, said last Friday, “Do you think Donald J. Trump goes home tonight, shrugs and says, ‘This is what winning looks like’?’ Gingrich added.  “No!  But this is where the Republican Party is right now, and it’s been this way for years.”

According to Glenn Thrush and Maggie Haberman in the New York Times, Friday evening, “a somewhat shell-shocked president retreated to the White House residence to grieve and assign blame.  He asked his advisers repeatedly: Whose fault was this?

“Increasingly, that blame has fallen on Reince Priebus, the White House chief of staff, who coordinated the initial legislative strategy on the health care repeal with Speaker Paul Ryan, his close friend and a fellow Wisconsin native....

“Mr. Trump, an image-obsessed developer with a lifelong indifference toward the mechanics of governance, made a game effort of negotiating with members of the far-right Freedom Caucus, even if it seemed to some members of that group, who spoke on the condition of anonymity, that he did not have the greatest grasp of health care policy or legislative procedure.”

Weirdly, before official word of the vote being pulled on Friday, Trump called reporters from the Times and Washington Post.

The Post’s Robert Costa reported:

“President Trump called me on my cellphone on Friday afternoon at 3:31 p.m.  At first I thought it was a reader with a complaint since it was a blocked number.

“Instead, it was the president calling me from the Oval Office.  His voice was even, his tone muted. He did not bury the lead.

“ ‘Hello, Bob,’ Trump began.  ‘So, we just pulled it.’....

“Before I could ask a question, Trump plunged into his explanation of the politics of his decision to call off a vote on the bill he had been touting.

“The Democrats, he said, were to blame.

“ ‘We couldn’t get one Democratic vote and we were a little bit shy, very little, but it was still a little bit shy, so we pulled it,’ Trump said....

“ ‘As you know, I’ve been saying for years that the best thing is to let ObamaCare explode and then go make a deal with the Democrats and have one unified deal.  And they will come to us, we won’t have to come to them,’ he said. ‘After ObamaCare explodes.’

“ ‘The beauty,’ Trump continued, ‘is that they own ObamaCare. So when it explodes they come to us and we make one beautiful deal for the people.’....

“Trump brought up the vote count.  ‘We were close,’ he said.

“How close?

“ ‘I would say within anywhere from five to 12 votes,’ Trump said – contradicting widespread reports that at least three dozen Republicans were opposed to the measure.”

Trump’s chief strategist, Stephen K. Bannon, according to the Times, described the AHCA debacle “as a flat-out failure that could inflict serious damage on this presidency – even if Mr. Bannon believes Congress, and not Mr. Trump, deserves much of the blame.”

While Paul Ryan is taking heat, others believe mutual disgust with the Freedom Caucus could pull the president and Ryan together, at least in the short run.

Saturday morning, Trump put his best face on the loss.  “ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE,” he said on Twitter.  “Do not worry!”

But the polls have showed the people still support ObamaCare, and last Friday, a Reuters/Ipsos poll had 49% of American adults saying the AHCA was “not an improvement” over ObamaCare, with 33% saying it was.  Previously, I wrote of the Quinnipiac poll that had just 17 percent approving of the GOP bill, 56% disapproving.

Saturday night, Trump took to Twitter anew urging people to watch Fox News and host Jeanine Pirro, who subsequently proceeded to call for Paul Ryan’s ouster.

“Ryan needs to step down as Speaker of the House.  The reason, he failed to deliver the votes on his healthcare bill, the one trumpeted to repeal and replace ObamaCare,” Pirro said in her opening statement.

“You come in with all your swagger and experience and sell them a bill of goods which ends up a complete and total failure and you allow our president, in his first 100 days, to come out of the box like that, based on what?” Pirro said.

[Spokespeople for both Pirro and Trump said there was no coordination on the matter...we were told Trump is just a fan of the show.  If I’m ever caught watching it, that means one thing...it’s an exceedingly slow sports night...but enough about me....]

During the Sunday morning shows, we heard the likes of Sen. Tom Cotton (R-Ark.), a critic of the AHCA, point out on CBS’ “Face the Nation,” that there were other high-profile defections, not just the Freedom Caucus, such as New Jersey Republican Rep. Rodney Frelinghuysen (whose district touches mine*), chairman of the powerful House Appropriations Committee.

“When you lose the chairman...,” Cotton said, “the problem is not with a specific faction in the House, it’s with the bill.”

*My own congressman, Republican Leonard Lance, moderate, also said he would not have voted for the AHCA, with both Frelinghuysen and Lance saying it would harm their constituents relying on Medicaid.

Cotton added: “I think the House moved a bit too fast, 18 days is simply not enough time for such a major landmark legislation.”

Trump tweeted Sunday that the Freedom Caucus, along with the Club for Growth and Heritage Action for America, “saved” Planned Parenthood and ObamaCare.

Freedom Caucus leader, Rep. Mark Meadows (N.C.), declined to return Trump’s fire.

“If they’re applauding (Democrats), they shouldn’t,” Meadows said on ABC’s “This Week.”  “Because I can tell you, conversations over the last 48 hours are really about how we come together in the Republican Conference and get this over the finish line.”

Meadows added, “This is not the end of the debate. We may be in overtime, but I can tell you at the very end of the day, the most valuable player will be President Trump on this because he will deliver.”

A founder of the Freedom Caucus, Jim Jordan (R-Ohio), told “Fox News Sunday,” “This is about the American people and what we told them we were going to do.”

Rep. Peter King (R-N.Y.) on Sunday pinned the failure of the AHCA on the Freedom Caucus.

“[The Freedom Caucus] was insisting on virtually a total repeal of ObamaCare, which sounds good,” King said in a radio interview Sunday. “You can’t end that overnight....We’re going to have to realize whether it’s healthcare, whether it’s tax reform coming up, that we’re going to have to find a way to get legislation through that is not just all Republican,” he said.  “Because then it becomes all or nothing, and it’s going to end up becoming nothing.”

White House chief of staff Reince Priebus told “Fox News Sunday,” “We’ll give these guys  another chance....(Trump) is not closing the door on anything” on healthcare.

Priebus added, “Democrats can come to the table as well....And it would be nice to get some Democrats on board.  But you’re right, at the end of the day, I think it’s time for the party to start governing.”

But Priebus also said, “We can’t be chasing the perfect all the time.  Sometimes you have to take the good, and put it in your pocket and take the win.”

Senate Minority Leader Charles Schumer (D-N.Y.) said in an interview on “This Week,” that Trump never called Democrats on healthcare reform.

“We Democrats, provided our Republican colleagues drop replace and stop undermining the ACA, are willing to work with our Republican friends – as long as they say  ‘no more repeal’ of the ACA.”

Schumer then criticized Trump for his comments on ObamaCare.

“For the president to say that he’ll destroy it or undermine it, that’s not presidential,” Schumer said, referring to another Trump tweet.  “That’s petulance...and it’s not going to work.”

Ohio Gov. John Kasich (R) got heated during an interview on CNN’s “State of the Union” Sunday, saying it is “pathetic” if Democrats and Republicans can’t work together to successfully pass major legislation such as healthcare policy, and that it is “unsustainable” for the two parties to not engage the other side.

“The Democrats did it with ObamaCare, and it’s not sustainable, and the Republicans tried to do it with just Republicans.  It doesn’t work like that in our country.  We’re not a parliamentary system, and whenever you continue to operate like that, what you pass will never be sustainable,” he continued.

Kasich stressed ObamaCare is “disintegrating” and that something had to be done.  [The Hill / Washington Post]

Tuesday, at an event at the White House for senators, Trump told them a bipartisan deal on healthcare could be made “very quickly.”

“Nobody ever told me that politics was going to be so much fun,” Trump joked to a group of 67 senators that included some Democrats.

“I know that we’re all gonna make a deal on healthcare – that’s a very easy one.  And I think that’s gonna happen very quickly.”

Thursday, Trump declared war on the House Freedom Caucus in a series of tweets.

“The Freedom Caucus will hurt the entire Republican agenda if they don’t get on the team, & fast... We must fight them, & Dems, in 2018!” Trump wrote.  Trump also singled out three members of the caucus.

Trump’s tweets, though, are not as impulsive as in the past.  Supposedly they are being orchestrated by Stephen Bannon.

Opinion (all sides)....

Daniel Henninger / Wall Street Journal

“On the night of Nov. 8, 2016, after it was clear that Donald Trump had upset Hillary Clinton, there was broad agreement that one word described the American electorate’s purpose: change.  Voters wanted change from the status quo.

“Last week, not 100 days into the Trump presidency, the members of the House Freedom Caucus decided that the 2016 election was not about change.  It was instead about legislative gridlock, with the bitterly ironic difference that these 25 or so self-described conservatives have locked up their own party.

“Democrats need 24 pickups to regain control of the House. There are 23 Republicans running from districts Mrs. Clinton won.  After the 2018 midterms, history may record that the Republican Party lost House control to the Democrats around 2 p.m. on Thursday, March 23, 2017.

“That was when Republican members from closely contested congressional districts – such as Virginia’s Barbara Comstock and New York’s John Faso – announced they would vote against the health-care reform bill.

“The Freedom Caucus, whose leaders are from ‘safe’ districts, opened a Pandora’s box that pushed these Republicans into impossible vulnerability on the health-care bill.  Now Democrats will exploit this vulnerability on every issue before the House.

“Meet the House Un-Freedom Caucus.

“The health-care bill’s provisions for individual patient choice are gone. The Republican Legislature in Kansas voted Tuesday to expand Medicaid.  Others will follow. The chances of a truly liberating tax-reform bill are now diminished.  As to their ‘principles,’ this caucus has probably helped entrench pure presidential power.  Mr. Trump, undercut by his own party, will likely resort to more Obama-like rule by executive order.

“This lost opportunity is not about Donald Trump’s House-of-Borgias White House operation or Paul Ryan’s leadership. It is the product of a conservative movement that over the past eight years talked itself, literally, into believing that political activism equals political accomplishment.  It does not....

“As to the Trump supporters, their hero was just taken down by the most right-wing members of the House.  At crunch time, the Freedom Caucus stiffed the Trump base that had given them politics’ rarest gift – control of government.”

Editorial / New York Post

“OK: Republicans now stand exposed as badly divided on how to replace ObamaCare.  So it’s time to move on with the ‘jobs, jobs, jobs’ core of the Trump agenda.

“The bill Speaker Paul Ryan pulled from the floor Friday wasn’t good enough for most of the Freedom Caucus, but pleasing them would’ve lost other Republicans.

“Every GOP member of Congress has been damning ObamaCare for eight years – without working out with each other what they’re actually for. So it’s back to the drawing board (or the conference room).

“Maybe ‘living with ObamaCare for the foreseeable future’ (as Ryan put it) will be incentive enough for Republicans to unite.  Perhaps the program’s ongoing ‘death spiral’ will make it easier to find the votes.

“For now, though, Congress and the president need to focus on getting the economy roaring again after so many years of slow growth and stagnant wages.  That means tax reform, and perhaps President Trump’s infrastructure bill.

“The regular Republicans couldn’t get it together to make good on one of their promises; now they have a duty to work with the president to make good on his.  It’ll be easier to replace ObamaCare when millions more Americans have good jobs.”

Editorial / Washington Post

“The next time someone argues that a businessman would manage the country better than an experienced politician, remember this past week. The attempt by President Trump and House Republicans to force through a health-care bill scorned by experts across the spectrum, projected to be a disaster for aging and low-income people and opposed by a large majority of Americans ended in debacle.  Now the danger is that a wounded president and his GOP allies will act on their sore feelings by irresponsibly attacking the existing health-care system in other ways.

“The right course for Mr. Trump and congressional Republicans following their decisive defeat would be to ensure that the system created by President Barack Obama is properly overseen, for the sake of the millions who depend on it.  That would mean abandoning their unilateral and unpopular legislative push to replace ObamaCare with a radically different scheme.  None of the major repeal-and-replace proposals they have offered would improve the system – and repealing ObamaCare without a replacement would invite disaster in health-care markets.

“Unfortunately, there are signs that Mr. Trump will rashly on his own, without Congress, weaken ObamaCare on purpose or by sheer incompetence.  Several times in recent weeks, Mr. Trump suggested that it would be savvier for Republicans to let the system persist – and collapse.  Independent experts, including the Congressional Budget Office just this month, predict no such crumbling.  Yet they may not have satisfactorily considered the likelihood of administrative sabotage: The Trump administration has already undermined federal enrollment efforts and the individual mandate that holds the system together. Health and Human Services Secretary Tom Price, who would lead any executive-branch regulatory overhaul, has shown himself to be a rigid ideologue on health-care policy.

“Mr. Trump should not imagine that angry Americans will blame Democrats, who are totally locked out of power, if he presides over an unraveling of  the system.  Public reaction to the replacement effort, including in polls, showed substantial support for ObamaCare and rejection of the Republican effort to destroy it.”

Gerald F. Seib / Wall Street Journal

“The collapse of Republicans’ first order of business in the new Washington, a health-care overhaul, reveals a startling reality for President Donald Trump: At this moment, two months into his presidency, he doesn’t yet have a reliable governing coalition.

“Moreover, he may be on his own to create one.

“The effort to repeal and replace the Affordable Care Act failed because Mr. Trump got zero Democratic support, because neither his threats nor his cajoling were sufficient to move enough Republicans, and because he couldn’t count on congressional leaders to change any of that for him.

“In a way, that outcome was the logical result of the utterly unconventional character of the Trump presidency.  Mr. Trump arrived in Washington as almost a political independent. He campaigned against the Republican establishment, and at the same time was never really embraced by the party’s conservative wing.

“There seemed, in his populist campaign message and his appeal to traditionally Democratic working-class voters, the potential to reach out to Democrats to build some new alliances.  But that hope has been swamped so far by the Democratic base’s deep antipathy toward Mr. Trump, as well as the decision to start with an attempt to overturn the signature issue of the previous Democratic president.

“That leaves Mr. Trump more on his own than a more traditional president might be at this point – and more in need of creating a nontraditional governing coalition. So far, that hasn’t happened....

“(Trump might) try to see whether he can find some of that bipartisanship that seemed possible shortly after he won the election. The one bigger issue where a convergence with Democrats has always seemed possible is a big program to improve American infrastructure.

“Democrats like that idea because it does something they’re fond of: It uses government money to help create jobs.  Moreover, the kind of construction jobs created by infrastructure spending go directly to many of those blue-collar Trump voters who helped propel him into office.

“The trick will be convincing conservatives skeptical about government spending. In any case, the health-care failure only underscores the need to find a way to create a working Trump team of some kind.”

Kathleen Parker / Washington Post

“In a week that felt like a month, Americans got a clear view of President Trump’s governing style and also of his fabled dealmaking approach

“Or rather, I should say, Trump got a good sense of what governing is like – hard, hard, hard. And it’s bound to get more difficult given the president’s tactics of consent: Do as I say or you’re dead to me.

“Even bolder, Trump told congressional Republicans that if they didn’t pass the American Health Care Act to repeal and replace ObamaCare, he was finished.  Done. He’d walk away and move on to other things, he told recalcitrants....

“(Trump), who promised repeal and replace (as has nearly every Republican the past seven years), has no patience with process.  As the chief executive of his own company for most of his life, and notwithstanding his reverence for his dealmaking skills, he prefers quick results.  And, hey, if things don’t tumble his way, well, there are other greens to sow and mow.  And, certainly, a 30-foot wall to build.  To the 60-day president, it seemed, getting health care out of the way was mostly a means to checking a box – an important one, to be sure – but nothing to bestir his personal passions.  Call it ego. Call it pride.  Call it a day, but get it done, he commanded.  Or else: ‘I’m gonna come after you,’ Trump told Rep. Mark Meadows (R-N.C.), one of his fiercest foes in the Freedom Caucus opposition.  The president was joking around, according to those present, but Meadows still might want to keep a close eye on his favorite bunny....

“Back in 2010, when then-House Speaker Nancy Pelosi (D-Calif.) said that ObamaCare had to be passed so that we could find out what was in the bill, Republicans guffawed – and never let her forget it.  At least, one observes, the Democrats had a bill.  GOP legislators have been racing to pass something that isn’t fully written yet.

“What’s with the rush, anyway?  Why not take the time to get things right? While Democrats solicited input from experts in the medical, pharmaceutical and insurance industries, Republicans have spent most of their time fighting among themselves.  The resulting bill was a patchwork of margin scribbles and cross-outs, even including instructions to the Senate to figure out ways to make certain parts work....

“The truth is, many Republicans never seriously thought ObamaCare could be repealed and replaced, probably for the good reason that it’s nearly impossible to do.  The most sensible solution was to fix what was already in place until the inevitable day, coming soon, when we become a dual health-care system: Single-payer for the majority of Americans and concierge health care for the wealthy. It’s just a matter of time.”

Editorial / Wall Street Journal

“Republicans are consoling themselves that after their health-care failure they can move on to tax reform, and they have little choice.  The large complication is that the Freedom Caucus’s ObamaCare preservation act has also made a tax bill much harder politically even as it makes reform more essential to salvaging the Trump Presidency and GOP majorities in 2018.

“President Trump campaigned on breaking Washington gridlock, increasing economic growth and lifting American incomes. The health collapse undermines those pledges. The legislative failure is obvious, but less appreciated is that House Speaker Paul Ryan’s reform included a pro-growth tax cut and major improvements in work incentives. The 3.8-percentage-point cut in taxes on capital income would have been a substantial increase in after-tax return on investment, nearly half of the eight-point cut in the capital-gains tax rate that helped propel growth after 1997.

“Now that’s dead, and so is the replacement for the especially high marginal-tax-rate cliff built into ObamaCare’s subsidies.  These steep tax cliffs as subsidies phase out are a major hindrance to work, as University of Chicago economist Casey Mulligan has shown.  The Ryan bill would have been a significant boost to economic growth and labor participation.  The critique that it would not have helped ‘Trump voters’ was willfully false coming from the left and uninformed on the right.

“This lost opportunity now makes tax reform even more important as a growth driver, but the health-reform failure also hurt tax reform in another major way. The Ryan bill would have reduced the budget baseline for tax reform by some $1 trillion over 10 years.  This means that suddenly Republicans will have to find $1 trillion more in loopholes to close or taxes to raise if they want their reduction in tax rates to be budget neutral.

“That means picking more fights with industries that fear they’ll be tax-reform losers. Take the irony of Senator Tom Cotton of Arkansas. He trashed the House health bill far and wide, but he also represents Wal-Mart, which hates the House GOP’s border-adjustment tax proposal that would raise some $1 trillion in revenue to pay for lower tax rates.  By helping to kill the Ryan health bill, Mr. Cotton has now killed $1 trillion in tax and spending cuts that would have made it easier to pass a tax reform without the border-adjustment fee.  We look forward to seeing the Senator’s revenue substitute.

“Some Republicans think the health failure will concentrate GOP minds on taxes as a political necessity, but then they said the same about repealing ObamaCare after seven years of promising to do so.  They flopped even though it’s unheard of for a new President to lose on his top priority so early in his term.  That’s when his political capital is highest and his own party has the most incentive to deliver on its promises....

“Mr. Trump lacks the political base of most Presidents, so he is hostage more than most to performance. Above all that means presiding over faster growth, which is the only real way to help Trump voters.  If the GOP can’t deliver on tax reform, the Freedom Caucus will have done far more harm than saving ObamaCare.”

An earlier Editorial / Wall Street Journal....

“The critics assailed the bill as ‘ObamaCare Lite,’ but the result of their rule-or-ruin strategy will now be the ObamaCare status quo, and Mark Meadows (North Carolina), Jim Jordan (Ohio), Louie Gohmert (Texas) and the rest own all of its problems.  Please spare everyone your future grievances about rising health spending or an ever-larger government.

“The grand prize for cynicism goes to Senator Rand Paul, who campaigned against the bill while offering an alternative that hasn’t a prayer of passing.  ‘I applaud House conservatives for keeping their word to the American people and standing up against ObamaCare Lite,’ said Dr. Paul.  ‘I look forward to passing full repeal of ObamaCare in the very near future.’

“There will be no such repeal in this Congress, and probably not in any other. Republicans run the government and that means they are responsible for what happens in health care.  Messrs. Trump and Ryan are right that the ObamaCare markets are imploding, and prices will rise and choices will shrink again next year on present trends. Republicans can try to blame Democrats, but they’re in charge....

“Mr. Trump said Friday he wants to move forward on cutting taxes, and Ways and Means Chairman Kevin Brady wants to do the same.  We wish them luck and support the effort.  But health reform is about a single industry.  Tax reform implicates every industry and its denizens are the definition of the Washington swamp.  Success on health care would have produced momentum and confidence that Republicans could fulfill their promises.  Now Democrats and the swamp rats smell blood.

“Perhaps Mr. Trump and the GOP can recover from their debacle, but as an opening act to a new Presidency the collapse of his first legislative campaign is ominous.  In business Mr. Trump liked to ‘get even.’  He’s got some scores to settle with the Freedom Caucus.”

Michael Goodwin / New York Post

“Something else Trump did also was confusing.  As soon as he and Ryan agreed to pull the bill because they didn’t have the votes, Trump called reporters from the New York Times and Washington Post to give them the scoop.

“These are the same papers that led the charge to kill Trump since he won the nomination. He calls both ‘dishonest’ and press secretary Sean Spicer often refuses to call on reporters from those papers at press briefings.

“Yet the bias is apparently forgiven when the president wants to get ahead of the news.  So the establishment, biased media is no longer part of the swamp that must be drained?

“Again, let us know when you make up your mind.

“Trump, because of his unorthodox background and the nation’s polarization, was destined to make rookie mistakes that would be used to undermine him.  But the failure to repeal ObamaCare, combined with his approval ratings sinking below 40 percent, show that he’s suddenly on thin ice with a big majority of voters. As his power slips, even Republicans will be hard to corral.

“If the president has solutions up his sleeve, now is the time to reveal them.”

David Ignatius / Washington Post

“In President Trump’s first months in office, he too often behaved as an insurgent and disrupter, rather than a chief executive.  He paid a severe price, seeing the collapse of his health-care legislation and, in a Gallup tracking poll this week, receiving the lowest approval ratings for any modern president so early in his term.

“There are some signs that Trump’s inner circle gets it.  On foreign policy, plans are being assembled carefully as part of a broad national-security strategy.  Before making big announcements on North Korea, China, Russia and the Middle East, officials want to see how the pieces fit.  Trade policy, now under the supervision of Commerce Secretary Wilbur Ross, looks less crazily destructive than it initially did.  Similar coordination is badly needed on tax policy.”

Rich Lowry / New York Post

“There’s’ stumbling out of the gate, and then there’s what Republicans just did on health care.

“They came up with a substantively indefensible bill, put it on an absurd fast-track to passage, didn’t seriously try to sell it to the public, fumbled their internal negotiations over changes – and suffered a stinging defeat months after establishing unified control of government.

“There has been a lot of different finger-pointing after the collapse of the bill, and almost all of it is right.  This was a party-wide failure.

“House Speaker Paul Ryan has – faint praise – thought more about health-care policy than almost any other elected Republican.  He rose to prominence with thoughtful policy proposals buttressed by power-point presentations.  This was his moment to shine as a wonk.

“Instead, with an eye to procedural constraints the legislation would face in the Senate, he wrote a mess of a bill that got failing grades from analysts across the political spectrum....

“Ryan gambled that he could get his fractious caucus to rally in record time because – unlike his frustrated predecessor as speaker, John Boehner – he had a president of his own party at his back.  And none other than ‘the closer,’ a President Trump whose calling card is his skill at deal-making.

“But you can’t be a closer if you don’t know anything about the product.  Trump knew the health-care bill was wonderful and beautiful and his other characteristic boosterish adjectives.  Otherwise, he was at sea.

“He wasn’t knowledgeable enough to engage in meaningful negotiations. One of his interventions – to try to placate House conservatives by stripping out the so-called ‘essential health benefits’ of ObamaCare – may have lost more moderates than it gained votes on the right....

“Perhaps most unforgivably, the White House and congressional Republicans now have decided to move on.  After seven years of promising to repeal and replace ObamaCare – with Trump thundering it at rallies and Republicans writing it into every campaign document – they’re giving up after three lackluster weeks....

“If tax reform is going to pass and get signed into law, Republicans will have to perform much better than in the foreshortened health-care debate.  On the bright side, they can’t perform much worse.”

Michael Gerson / Washington Post

“It is now dawning on Republicans what they have done to themselves. They thought they could somehow get away with Trump. That he could be contained.  That the adults could provide guidance.  That the economy might come to the rescue. That the damage could be limited.

“Instead, they are seeing a downward spiral of incompetence and public contempt – a collapse that is yet to reach a floor.  A presidency is failing.  A party unable to govern is becoming unfit to govern.

“And what, in the short term, can be done about it?  Nothing.  Nothing at all.”

Edward Luce / Financial Times

“The president made several big mistakes.  The first was to endorse a bill whose contents he did not know.  Early in the process Mr. Trump said: ‘Nobody knew healthcare could be so complicated.’  The bill had no overarching vision other than to fulfill a political promise to abolish ObamaCare.  The fact that it would have broken another of Mr. Trump’s promises – to protect entitlements, including Medicaid – apparently took him by surprise. In time he may be grateful that a bill that would have deprived 24m Americans of health insurance and cut maternity coverage from millions of women’s healthcare plans failed to become law.

“His second blunder was to try to rush the bill through Congress.  Nothing, barring the renaming of post offices, can go through Capitol Hill in a hurry – least of all healthcare.  Barack Obama took the best part of a year to marshal his healthcare reform on to the statute books and his bill had the ideological backing of his own party.  Mr. Trump tried to push his own version through n less than a month.  It was hard to find a single Republican who was enthusiastic about its contents....

“Mr. Trump’s third error was to believe that threatening Republican dissenters would be enough to do the trick.  White House officials said Mr. Trump ‘gave his all’ in trying to push the bill through.  But since the effort began Mr. Trump took five trips to Mar-a-Lago, played nine rounds of golf and allowed his daughter and son-in-law – Ivanka Trump and Jared Kushner – to be away on vacation in Aspen on the day it was supposed to go to the vote.  If this was Mr. Trump’s idea of pulling out all the stops, what would taking it easy look like?”

Intel Investigation

Aaron Blake / Washington Post

“Americans live in two realities when it comes to the Russian investigation.  On one side is the intelligence community, and on the other side is a Republican Party that very much believes President Donald Trump’s alternative facts. Including, apparently, that Trump’s offices were wiretapped during the 2016 election.

“A new CBS poll shows three in four Republicans believe it’s at least ‘somewhat likely’ that Trump’s offices were wiretapped or under some kind of surveillance during the campaign.  While 35 percent believe it’s ‘very likely,’ 39 percent say it’s ‘somewhat likely.’”

But even Rep. Devin Nunes, the House Intelligence Committee chairman under fire for being too friendly with the White House, has said that assertion is incorrect.

Nunes has said that “there was no wiretapping of Trump Tower.  That did not happen.”

Sunday on “Face the Nation,” Rep. Adam Schiff (D-Calif.) said, “We can’t have a credible investigation if one of the members, indeed the chairman, takes all the information he has seen to the White House and doesn’t share it with his own committee.”

When asked if Nunes was a tool of the White House, Schiff said: “I think the chairman has to make a decision whether to act as a surrogate of the White House – as he did during the campaign and the transition – or to lead an independent and credible investigation.”

Rep. Trey Gowdy (R-S.C.) defended Nunes on “Face the Nation,” saying, “My understanding is Chairman Nunes briefed the commander in chief on matters unrelated to the Russian investigation.  So if that’s a big deal in Washington, it has then sunk to a new low.”

Monday, we learned Chairman Nunes went to the White House the previous week to review classified documents that he later used to brief the White House on the possibility that President Trump and his associates were swept up in legal surveillance.

Nunes’ spokesman said he went to the White House “in order to have proximity to a secure location where he could view the information provided by the source.  Spokesman Jack Langer said the information had not been provided to Congress and that “the White House grounds was the best location to safeguard the proper chain of custody and classification of these documents.”

So this fueled accusations from Democrats that Nunes was coordinating with the White House, when he rushed to brief the president about intelligence reports that, he said, included references to people affiliated with Trump, and possibly the president-elect himself.

Press secretary Sean Spicer, when asked whether he could say for certain if Nunes did not obtain information from the administration that he later used to brief President Trump, replied “Anything is possible.”

Rep. Schiff said the new revelation about Nunes’ actions “casts quite a profound cloud over our ability” to conduct an investigation into the Russian role in the election and any coordination between Russia and the Trump campaign.

By the end of Monday, there was growing suspicion the White House itself was the source of the mysterious intelligence that Nunes, and no one else in Congress, has seen.

Meanwhile, Oren Dorell of USA TODAY had a very extensive report on Donald Trump’s Russia connections, many allegedly tied to organized crime, according to a USA TODAY review of court cases, government and legal documents and an interview with a former federal prosecutor.

“The president and his companies have been linked to at least 10 wealthy former Soviet businessmen with alleged ties to criminal organizations or money laundering.”

Trump told reporters in February: “I have no dealings with Russia. I have no deals that could happen in Russia, because we’ve stayed away.  And I have no loans with Russia.  I have no loans with Russia at all.”

Dorell:

“Yet in 2013, after Trump addressed potential investors in Moscow, he bragged to Real Estate Weekly about his access to Russia’s rich and powerful.  ‘I have a great relationship with many Russians, and almost all of the oligarchs were in the room,’ Trump said....

“Five years earlier, Trump’s son Donald Trump Jr. told Russian media while in Moscow that ‘Russians make up a pretty disproportionate cross section of a lot of our assets’ in places like Dubai and Trump SoHo and elsewhere in New York.

“New York City real estate broker Dolly Lenz [Ed. who CNBC viewers are very familiar with] told USA TODAY she sold about 65 condos in Trump World at 845 U.N. Plaza in Manhattan to Russian investors, many of whom sought personal meetings with Trump for his business expertise.”

Thursday, Sean Spicer said the White House has invited the top Republican and Democratic members of the Senate and House intelligence panels to review new material relevant to their investigation.  Some are wondering if it’s really just material previously seen by Nunes.

And the above is certainly related to the New York Times’ revelation Thursday that two sources who provided Nunes with the intelligence reports the week before had been identified.

Both of the officials are out of the White House; Ezra Cohen-Watnick, the senior director for intelligence at the National Security Council, and Michael Ellis, a lawyer who works on national security issues at the White House Counsel’s Office and formerly worked on the staff of the House Intelligence Committee.

The intelligence, as Devin Nunes has described before, is not related to the Russia investigations, so is it yet another smokescreen thrown up by the White House. 

Separately, the story emerged that FBI Director James Comey reportedly tried to go public with the information about Russia’s efforts to disrupt the election last summer, but Obama administration officials stopped him.

Comey attempted to publish an Op-Ed on allegations the Russian government was interfering in the U.S. election process well before federal agencies went public with the claims, Newsweek reported.

According to the publication, administration officials nixed the idea because they wanted to release a “coordinated message.”

Thursday night, as first reported by the Wall Street Journal, we learned that Michael Flynn has offered to be interviewed by House and Senate investigators regarding the Trump-Russia issue, but in exchange for immunity from prosecution, according to his lawyer.

But thus far, investigators, including from the Justice Department, are unwilling to broker a deal with Flynn until they are further along in their inquiries and they better understand what information Mr. Flynn might offer as part of a deal.  [As of today, at least the FBI had said ‘No,’ while the Senate won’t accept the offer to testify at this time, and Rep. Schiff of the House Intel Committee said it was premature to make a decision regarding immunity for Flynn.]

Friday, Trump tweeted: “Mike Flynn should ask for immunity in that this is a witch hunt (excuse for big election loss), by media & Dems, of historic proportion!”

Opinion....

David Ignatius / Washington Post

“The biggest danger to Trump 2.0 is the president’s own impulsive, embattled style – which shows most clearly in his handling of the FBI and congressional investigations of Russia’s covert action to influence the U.S. election.  The best course for Trump (and our system) is for the White House to cooperate with the inquiry, let it run its course – and, meanwhile, concentrate on doing the public’s business.

“Weirdly, Trump continues to do the opposite. He’s still arguing the discredited, bogus issue of President Barack Obama’s supposed wiretaps on Trump Tower. And he’s coyly dealing with House Intelligence Committee Chairman Devin Nunes to foster this distraction.

“The Trump-Nunes allegation seems to have morphed into a contention that Trump associates were picked up incidentally in lawful foreign-intelligence intercepts of others, but that their names weren’t properly masked (or ‘minimized,’ in the jargon) in subsequent intelligence reports that were then disseminated and leaked.

“This may satisfy Trump’s desire for a counterpunch. But does any reasonable person really believe that this technical legal issue is more important than whether Trump associates cooperated in a Russian covert action against the United States, which is what FBI Director James B. Comey has said the bureau is investigating?

“A better approach for dealing with the inquiry was shown this week by Jared Kushner, Trump’s son-in-law and perhaps now his important adviser.  Kushner’s Russia problem was that he met after the election not just with Ambassador Sergey Kislyak but also with a Russian banker named Sergey Gorkov, who was prepared to act as an intermediary to President Vladimir Putin.  Did Kushner blame leaks, or Nazi-like behavior in the intelligence agencies?  No, he agreed to testify to Senate investigators about the meetings.

“The message is that Kushner thinks he did nothing wrong and has nothing to hide.  One assumes he will tell the Senate that he wanted to explore opening a discreet channel to Putin, similar to those he established with numerous other global leaders during the transition.  But after the secretary of state nomination went to Rex Tillerson, a genuine friend of Putin, Kushner apparently concluded Trump didn’t need any such back channel.  We’ll see if that’s the whole story, but cooperating with the Senate investigation is the right start.”

Tuesday, press secretary Sean Spicer lashed out at reports the administration blocked former acting Attorney General Sally Yates from testifying before a panel investigating Russian meddling in the election.

“I hope she testifies,” Spicer said.  “I look forward to it. ...If they choose to move forward, great.”

Editorial / Wall Street Journal

“Devin Nunes is refusing Democratic calls to resign as chairman of the House Intelligence Committee, and rightly so.  If Mr. Nunes is going to step down for speaking out of school to the White House about his probe, then ranking Democrat Adam Schiff should also resign for spreading innuendo without evidence across the airwaves.

“Mr. Nunes blundered when he informed the White House about some information he received without first telling committee Democrats.  The intelligence panel is one of the least partisan on Capitol Hill, and Mr. Nunes handed Democrats an opening to cast doubt on his fairness.  He should protect his own credibility more than he protects the White House, which has nothing to worry about if President Trump’s claims about his lack of Russian ties are true.

“But the main reason Democrats are mad at Mr. Nunes is because he’s raising an issue they’d rather avoid – to wit, that he’s seen documents showing that U.S. intelligence agencies may have ‘incidentally’ collected information about people connected to Mr. Trump.

“We know from leaks to the media that one of those people was former national security adviser Michael Flynn, who lost his job over the news.... Such information is supposed to be ‘minimized’ and not widely shared so innocent Americans are protected if they happen to speak to a foreigner who is surveilled.

“Mr. Trump was wrong to claim that Mr. Nunes has vindicated his famous tweet of three weeks ago that President Obama had wiretapped him in Trump Tower... But the issue of whether and why the Obama Administration was listening to Trump officials is important for the public to know....

“Which brings us to Mr. Schiff, who while posing as a truth-teller is becoming more partisan by the hour.  The California Democrat started out telling everyone that there is ‘circumstantial evidence of collusion’ between Mr. Trump’s presidential campaign and Russia.  He later escalated to claiming ‘there is more than circumstantial evidence now,’ without providing any such evidence.  If Mr. Schiff is so confident of the Russia-Trump connection, why not wait for the evidence to come out?

“Meanwhile, Mr. Schiff evinces no interest in discussing, or even investigating, what happened to Mr. Flynn and why.  Maybe he’s shouting so much about Mr. Nunes because he doesn’t want to know the answers to the questions the Republican is asking.”

Kimberley A. Strassel / Wall Street Journal

“California Rep. Adam Schiff may not offer much by way of substance, but give him marks for political flimflam.  The ranking Democrat on the House Intelligence Committee was so successful at ginning up fake outrage over his Republican counterpart that he successfully buried this week’s’ only real (and bombshell) news.

“Mr. Schiff and fellow Democrats spent this week accusing Chairman Devin Nunes of carrying water for President Trump, undermining the committee’s Russia investigation, and hiding information. The press dutifully regurgitated the outrage, as well as Mr. Schiff’s calls for  Mr. Nunes to recuse himself from the investigation into possible Russian electoral meddling.

“All this engineered drama served to deep-six the important information Americans urgently deserve to know.  Mr. Nunes has said he has seen proof that the Obama White House surveilled the incoming administration – on subjects that had nothing to do with Russia – and that it further unmasked (identified by name) transition officials.  This goes far beyond a mere scandal. It’s a potential crime.

“We’ve known since early February that a call by former national security adviser Mike Flynn to the Russian ambassador was monitored by U.S. intelligence.  There’s nothing improper in tapping foreign officials.  But it was improper that Mr. Flynn’s name was revealed and leaked to the press, along with the substance of the conversation....

“Around the same time, Mr. Nunes’ own intelligence sources informed him that documents showed further collection of information about, and unmasking of, Trump transition officials. These documents aren’t easily obtainable, since they aren’t the ‘finished’ intelligence products that Congress gets to see.  Nonetheless, for weeks Mr. Nunes has been demanding intelligence agencies turn over said documents – with no luck, so far.

“Mr. Nunes earlier this week got his own sources to show him a treasure trove of documents at a secure facility.  Here are the relevant details.

“First, there were dozens of documents with information about Trump officials. Second, the information these documents contained was not related to Russia. Third, while many reports did ‘mask’ identities (referring, for instance, to ‘U.S. Person 1 or 2’) they were written in ways that made clear which Trump officials were being discussed.  Fourth, in at least one instance, a Trump official other than Mr. Flynn was outright unmasked.  Finally, these documents were circulated at the highest levels of government.

“To sum up, Team Obama was spying broadly on the incoming administration....

“If Mr. Schiff wants to be trusted with important information, he might start by proving he is trustworthy – rather than rumor-mongering that there is ‘more than circumstantial evidence’ of Trump-Russia collusion. He might voice some concern that a prior White House was monitoring its political opponents.  He might ask whether Obama officials had been ‘reverse monitoring’ – tracking foreign officials solely so they could spy on the Trump team.

“Mr. Nunes has zero reason to recuse himself from this probe, because he is doing his job.  It’s Mr. Schiff who ought to be considering recusal, for failing to do his own.”

---

And on other important issues....

A U.S. federal judge in Hawaii has indefinitely extended the suspension of President Trump’s new travel ban.  Judge Derrick Watson’s ruling means the ban on six mostly Muslim nations cannot be enforced while it’s being contested in court.

The original lawsuit in Hawaii said the travel ban would harm tourism and the ability to recruit foreign students and workers.

Any appeal of the Hawaii ruling would go next to the same Ninth Circuit Court of Appeals in San Francisco that said in February it would not block a ruling by a Seattle court halting the first executive order.

And then President Trump rolled back much of President Obama’s climate change agenda, Tuesday, with a wide-ranging executive order.

A senior White House official told reporters: “The United States is the largest producer of oil and natural gas in the world. We have plenty of deposits of coal. We want to look at nuclear, renewable, all of it.  And again, we can do both to serve the environment and increase energy at the same time.”

Sierra Club Executive Director Michael Brune shot back in a statement: “Right now, clean energy jobs already overwhelm dirty fuels in nearly every state across America, and that growth is only going to continue as clean energy keeps getting more affordable and accessible by the day.  These facts make it clear that Donald Trump is attacking clean energy jobs purely in order to boost the profits of fossil fuel billionaires.”

But when it comes to the coal industry, the simple fact is natural gas is cheaper, cleaner and more readily available.

A decade ago, coal accounted for 50% of American electricity, but today that figure is 29%, according to the Energy Information Administration. The number of U.S. coal mine jobs was 65,971 in 2015, down from 91,611 in 2011.

What might happen is job losses may stabilize, but you are unlikely to see old plants reopen, according to most experts.

But the prospect of additional drilling on federal land could be a boon to oil and gas jobs, which had also plunged with the crash in the oil price from $100 to $26 (now $50).

Opinion....

Editorial / Washington Post

“Under President Barack Obama’s leadership, the world finally began addressing one of the greatest challenges human beings have ever faced, a multi-generational struggle to keep the planet temperate and accommodating to human life.  President Trump’s move to rip up Mr. Obama’s climate policies are beyond reckless.   Children studying his presidency will ask, ‘How could anyone have done this?’

“Climate science is complicated, but the basics are easy enough for those schoolchildren to understand. When humans burn fossil fuels, they emit heat-trapping gases into the atmosphere.  Releasing vast amounts of these gases for decades changes the atmosphere’s chemistry, creating an ever-thicker blanket.  The world has therefore warmed and will continue to warm; the more fossil fuels burned, the hotter the planet will get.

“The human species still has time at least to moderate the trajectory. But on the course Mr. Trump set Tuesday, the prospect will be for sharp environmental disruption.  Among many other things, scientists have predicted more and more intense heat waves, more volatile weather, more abrupt changes in the landscape, more destruction from invasive pests, more illness from microbes flourishing in warmer fresh water and more urban flooding.   [Ed. it’s the microbes angle that scares the hell out of me.]  Americans alive today will saddle future generations with the costs of acting too late, when addressing the issue sooner would have been cheaper and far less destructive.

“Even as climate science has steadily improved, the U.S. climate debate has descended into a partisan mess, with a once-great American political party embracing rank reality-denial.  The nation has now reached an anti-intellectual nadir, elevating a man who called climate change a ‘hoax’ to the presidency and a climate-change denier to head the Environmental Protection Agency.  The country reaped the fruits of this decision Tuesday....

“The practical effects will be serious though not immediate....

“After 2020, the absence of the plan will be felt. According to an Energy Information Agency assessment released in January, energy-related greenhouse-gas emissions would have declined significantly between 2020 and 2030 – not by enough, but it would have been a decent start.  Without the plan, these emissions will stay roughly the same over that crucial decade.  And, by the way, energy experts predict no coal renaissance in Appalachia, despite Mr. Trump’s campaign promises, because the economics simply do not make sense in a country awash in cheap natural gas.”

Editorial / Wall Street Journal

“One area where President Trump is notching early victories is unleashing American energy, which for years has been held hostage to progressive climate obsessions.  On Tuesday, Mr. Trump signed an executive order to rescind many of the Obama Administration’s energy directives, and he deserves credit for ending punitive policies that harmed the economy for no improvement in global CO2 emissions or temperatures.

“The order directs the Environmental Protection Agency to review the Clean Power Plan, which the Supreme Court stayed last year in an extraordinary rebuke.  The plan essentially forces states to retire coal plants early, and the tab could top $1 trillion in lost output and 125,000 jobs, according to the American Action Forum.  Also expected are double-digit increases in the price of electricity – and a less reliable power grid.  All for nothing: A year of U.S. reductions in 2025 would be offset by Chinese emissions in three weeks, says Rice University’s Charles McConnell.

“The rule also fulfills a campaign promise to end Barack Obama’s war on coal. It’s true that market forces are reducing coal’s share of U.S. electric power – to some 30% from about 50% a decade ago – thanks mainly to fracking for natural gas.  Yet Mr. Obama still deployed brute government force to bankrupt the coal industry.  Mr. Trump is right to end that punishment and let the market, not federal dictates, sort out the right energy mix for the future....

“Another question is whether President Trump will withdraw from the Paris climate deal, which would – in theory – force annual U.S. emissions reductions of 26% over 2005 levels by 2025.  That decision is ‘still under discussion,’ according to a White House official who briefed reporters Monday night....

“Environmental groups are accusing Mr. Trump of ‘reversing climate progress,’ even as they call the order ‘symbolic’ because the regulatory damage to the coal industry – from rules on mercury, ozone, dust – is mostly irreversible.  In any event, Scott Pruitt’s EPA can expect lawsuits that may take years to untangle.

“The Trump order is a promise in the bank for the voters who elected the President because he promised to focus on jobs and revving up the economy.  It’s also a welcome return to regulatory modesty: One of the more outrageous aspects of the Obama anti-carbon agenda is that agencies rammed through what Congress refused to pass in legislation.

“As for climate change, President Trump’s order will have the same practical effect on rising temperatures as the Clean Power Plan: none.”

Meanwhile, Sen. Roy Blount (R-Mo.), a senior member of the Appropriations Committee, announced on Tuesday that Trump’s supplemental funding request will wait until later in the year, seeing as he believes House and Senate leadership are close to negotiating a bill to fund government for the rest of 2017.

This impacts Trump’s border wall, which Blunt says funding of which needs to wait.

And President Trump unveiled a new White House office with sweeping authority to overhaul the federal bureaucracy and fulfill key campaign promises – such as reforming care for veterans and fighting opioid addiction – by harvesting ideas from the business world, an office to be headed up by Jared Kushner.

Wall Street

Last Friday I wrote that the fallout from the AHCA debacle would lead to a “sloppy week” on Wall Street and I was right, for about a half hour. The Dow Jones opened up down 184 points Monday morning and then rallied and stabilized from there, finishing the week +0.3%.

Among the economic items was a final revision on fourth-quarter GDP, which came in at 2.1%, after the first two looks were 1.9%.  This follows the third quarter’s 3.5% pace.

What is important in terms of the Federal Reserve, though, was the release of the February personal income and consumption readings on Friday, the former up a solid 0.4%, the latter down a disappointing 0.1%.  Contained in the consumption (consumer spending) data was the Fed’s preferred personal consumption expenditures index and it showed the PCE had increased to 2.1%, above the Fed’s preferred 2% benchmark.  But, the core PCE, ex-food and energy, ticked up just to 1.8%, so the Fed can continue to say there is no inflation to speak of and thus it gives more ammunition to the doves on the committee when it comes to further rate increases.

Fed vice chairman Stanley Fischer said this week that two more rate hikes “is about right” the rest of the year, or the Fed’s initial Jan. estimate of three for all of 2017.

Two non-voting members, Eric Rosengren (Boston Fed) and John Williams (San Francisco) spoke of three or more rate hikes the rest of the year.  Williams said two more, but that there was “upside risk,” read three.

But voting member Charlies Evans of the Chicago Fed said there would be just another “one or two increases.”

And New York Fed chief William Dudley cautioned that there remains “considerable uncertainty” over fiscal policy, but that “it seems likely that it will shift over time to a more stimulative setting.”

“Consequently, it appears that the risks for both economic growth and inflation over the medium to longer term may be shifting gradually to the upside,” he said at a speech in Florida.  Dudley is a voting member of the Fed’s policy-setting board.

Two other readings on the economy. The Chicago Purchasing Managers manufacturing PMI rose to a strong 57.7 (50 being the dividing line between growth and contraction).

And the S&P Core Logic/Case Shiller home price index for January was up 5.9% year-over-year.  The 20-city index rose 5.7%, both far outpacing wage growth which isn’t exactly good longer term.

Regarding first-quarter growth, the Atlanta Fed’s GDPNow indicator is still forecasting just 0.9% for the first three months of the year.

Europe and Asia

Just a little economic news on the eurozone front before I get to Brexit and the French elections.

In a flash reading of inflation for March, as released by Eurostat on Friday, consumer prices rose 1.5% annualized, down from 2.0% in February.  Very importantly, the core inflation figure, ex-food and energy, was 0.7%, down from 0.9%, so the European Central Bank can say ‘I told you so’ in not worrying that inflation was taking off and that they didn’t need to stop their stimulus program, which is slated to continue through December, at least, though at a reduced rate come May.

Separately, Germany’s unemployment rate, as established by the government, hit a new all-time low since reunification in 1991, 5.8%.  [The EU lists it far lower.]

Spain’s retail sales have flat-lined, stagnating in February and revised lower for January, which means that the inflation surge to 3% must be biting, though inflation, such as in the overall EU19, appears to have topped out for now.  Year-on-year inflation in March was 2.1%, according to early estimates from the country’s National Statistics Institute.

Brexit: British Prime Minister Theresa May signed the letter formally beginning the UK’s departure from the European Union and it was delivered hours later on Wednesday to European Council President Donald Tusk.

In a statement to the House of Commons, Mrs. May spoke of “the moment for the country to come together.”

“It is my fierce determination to get the right deal for every single person in this country,” she said.  “For, as we face the opportunities ahead of us on this momentous journey, our shared values, interests and ambitions can – and most – bring us together.”

The prime minister told lawmakers: “This is an historic moment from which there can be no turning back.”

Her letter did warn: “Europe’s security is more fragile today than at any time since the end of the Cold War.  Weakening our cooperation for the prosperity and protection of our citizens would be a costly mistake.”

May also said she wants an “early” agreement over the rights of EU citizens and Britons to live in each other’s countries.  Her central goal for Brexit is to win back control of labor flows, which raises questions about the legal status of 3 million EU nationals living in the UK.

Donald Tusk said, speaking on behalf of the 27 other EU governments, “Our first priority will be to minimize the uncertainty caused by the decision of the United Kingdom for our citizens, businesses and members states.”

Carmaker Ford Motor Co. on Wednesday urged Mrs. May to secure the continuation of tariff-free trade and warned failure to strike a deal would be the “worst case.”  Ryanair Holdings Plc said the UK risked losing air links to the continent. 

Ryanair’s case is interesting.  Along with UK-based rival easyJet, the two are severely impacted by Brexit because they typically make more use of the EU rights to fly between other member states and not just to and from the UK. They could lose that right after Brexit. EasyJet said it was close to applying for a license to set up an operating company within the EU to protect its intra-EU flights.  But Lufthansa has already said it expected France and Germany would not agree to prioritize aviation; the German carrier of course wanting to swoop in and steal the routes.

For its part, Ryanair was 53.6 percent owned by EU nationals in mid-2016, including 20 percent ownership by UK nationals, meaning that following Brexit it may fall afoul of rules stating that EU carriers must be majority-owned by EU investors. Ryanair execs say they aren’t concerned about this now, but if talks turn ugly who knows.

For the EU, the focus is on ensuring Britain gets no easy ride as it seeks to safeguard the stability and commitment of the remaining 27 member states.

Prime Minister May has until the end of 2018 to agree on the terms of the breakup and to try to win what she calls the “best possible” trade arrangement for the future. If she can’t secure an agreement, Britain will crash out of the EU and over what businesses call a “cliff edge” of uncertainty and higher trade tariffs.

Irish Prime Minister Enda Kenny has warned the talks will turn “vicious.” German Chancellor Angela Merkel said the EU will speak in one voice and there will be no shortcuts.  The EU’s chief negotiator Michel Barnier said on Wednesday, “This is Day 1 of a very long and difficult road.”

I’ve said since last summer and the referendum that people have their heads in their sand if they don’t understand how the talks will lead to market disruptions.  I will mark the closing indexes on the major European exchanges for Friday and use that as my benchmark.

Reminder: For starters the EU accounts for 44 percent of Britain’s exports.

Friday, EU leaders drew up a tough opening stance in Brexit talks, “explicitly stating that Britain must accept the bloc’s existing laws, court, and budget fees if it seeks a gradual transition out of the single market.”

As reported by Alex Barker of the Financial Times:

“Draft European Council guidelines which the EU27 leaders aim to adopt at a summit (end of April), lay down a flinty political response to Theresa May that prioritizes withdrawal terms and the integrity of its founding principles rather than future UK relations.

“A copy obtained by the FT lays out the EU’s hopes of an ambitious future partnership with Britain, but it insists on a ‘phased approach’ to negotiations.  This requires Britain to make ‘sufficient progress’ on withdrawal before EU leaders will initiate talks on future relations.

“Most worrying for London, the draft unambiguously spells out conditions for a transition phase, which would minimize disruption until a trade deal is complete.  If the EU’s single market legal ‘acquis’ – its body of common rights and obligations – is prolonged at all after Brexit, the guidelines say it requires ‘existing regulatory, budgetary, supervisory, and enforcement instruments and structures to apply.’”

Now these are guidelines, and EU diplomats will be debating them ahead of the EU summit, but the principles are supported by Paris, Berlin and other major capitals, sources told the Financial Times.

There is also as much of a chance that conditions could be toughened further, as there are they could be softened.

Once the guidelines are adopted, the European Commission sets a mandate for talks, including the priorities for the EU’s chief negotiator, Michel Barnier.

The draft bluntly states that “Britain’s departure from the single market and customs union will involve disruption for the economy and citizens as new legal barriers are enforced.

“Six core principles are set for the negotiations, covering both the withdrawal and transition phases.

“It calls for a ‘balance’ of rights and obligations; the ‘autonomy’ of the EU rulemaking and ‘legal order’; the indivisibility of the EU’s four freedoms, including the free movement of labor; and the integrity of the single market.

“ ‘A non-member of the union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member,’ it states.  ‘In this context, the European Council welcomes the recognition by the British government that the four freedoms of the Single Market are indivisible and that there can be no ‘cherry picking.’”  [Alex Barker / FT]

British government officials may leave UK-based financial services out of the main Brexit negotiations over fear it will be too difficult to reach a deal in the two-year time frame for talks, according to Bloomberg News’ sources on Theresa May’s team.

“One minister said discussions about a new regulatory framework for UK-based banks should be put aside to avoid holding up conversations about other sectors, such as manufacturing and agriculture.  Another official said the idea of leaving a deal on banks until later was already being discussed in London and Brussels, where most of the negotiations will unfold.”  [Bloomberg]

But this reinforces the need for all the global banks with headquarters and/or a large presence in London to plan for the worst and many of them are moving quickly, while other European financial centers, from Dublin to Frankfurt to Warsaw, are licking their chops.  The other day, JPMorgan Chase & Co. said it was in talks to buy a Dublin office building, while Citigroup plans on moving many in its trading unit within the EU (though keep its Europe, Middle East and Africa, EMEA, headquarters in London).  Lloyd’s of London has chosen Brussels for its European Union subsidiary, as announced on Thursday.

Philip Stephens / Financial Times

“Until this week Brexit was about Britain. Now it is about Europe.  A conversation largely focused on what sort of deal Britain would pitch for on its departure has become one about what the EU27 are willing to offer.  To borrow a phrase, Brussels has taken back control.

“Those in Theresa May’s government who have blithely imagined they can have the best of all worlds face a cold shower of reality. If the two-year Article 50 process invoked by the prime minister does not break down in acrimony, it will conclude in 2019 with Britain a markedly diminished nation.  The terms of the relationship with its own continent will have been set by others; and power in today’s world does not belong to those striking out on their own.

“You would not have guessed any of this from Mrs. May’s statement to the House of Commons. Britain would henceforth ‘make our own decisions and our own laws.’  The European Court of Justice would be banished.  So too would the ‘four freedoms’ that underpin the European single market.  Brexit was Britain’s opportunity.  Though she would, of course, seek to sustain a ‘deep and special partnership.’

“Historic, Mrs. May called the invocation of Article 50.  For once that sounded something of an understatement.  The government is severing the ties that have shaped Britain’s economic and foreign policies for nearly half a century.  Missing from the prime minister’s statement was any explanation as to how departure from the EU will enhance the nation’s security and prosperity.  Britain is giving away the substance of power for the mirage of sovereignty.

“Overall, the prime minister got the tone about right, omitting silly threats that she would choose ‘no deal’ over a ‘bad deal.’  Thankfully, the text was also scrubbed of the boastful allusions to the second world war that so animate Boris Johnson, the foreign secretary.  The one jarring note came in the formal letter to Donald Tusk, the president of the European Council.  A breakdown of talks, it said, would weaken the fight against crime and terrorism.  The merest suggestion that intelligence and security resources should be deployed as a bargaining chip appalls British as much as European officials.  ‘Immoral’ and ‘counterproductive’ are among the adjectives applied by members of the security establishment in London.

“The future, we are to believe, now belongs to something called ‘global Britain.’  The snag is that beyond the obvious nod in the direction of imperial nostalgia this phrase is empty of all meaning.  The EU has not been a constraint on Britain’s capacity to engage with the wider world.  To the contrary, the union has served as a multiplier of national influence. Ask policymakers in Washington, Beijing or Delhi. Britain cannot escape the facts of geography.

“Nor can it break free of the negotiating framework laid down by Article 50 of the Lisbon treaty, which, once invoked, hands political control to those remaining in the club.  The asymmetry is intentional – the clause was drafted to discourage departures and to ensure that, in such an event, the terms of the divorce were set in Brussels.  Mrs. May can put her demands on the table, but it is for the other 27 to decide whether they are worthy of consideration – and then to calculate the price Britain must pay for future collaboration.”

I do have to note two other issues related to Brexit.  I will be talking a lot in the future about the status of Northern Ireland, which is in crisis since January after Sinn Fein pulled out of the government.  Northern Ireland voted 56-44 to remain in the EU last June, though the UK voted to leave.  But of course Sein Fein wants Northern Ireland reunited with Ireland.  Talk about complicated.  The fear is that violence returns in a big way.

As for Scotland and its hopes for a new referendum on independence, the Scottish parliament voted 69-59 to seek a referendum green light from London, but Prime Minister May quickly rejected this and there seems zero possibility they would be granted approval for a vote for years to come until Brexit is settled.

As for France and its presidential election, first round April 23rd, the latest Ifop-Financial poll had centrist Emmanuel Macron at 26%, far-right candidate Marine Le Pen at 25.5%, and Francois Fillon at 17.5%, with Macron beating Le Pen in a run-off by 60 to 40.  Very little change for weeks now.

Meanwhile, more than one in two French voters believe struggling Socialist  Party candidate Benoit Hamon should drop out of the race in favor of a rival left-winger, Jean-Luc Melenchon of the Left Party, who has overtaken him in the polls.  Hamon is having to deal with disenchantment with the Socialists under President Francois Hollande, whose approval rating at one point was 4 percent...you’re reading that right.

So Wednesday, former prime minister Manuel Valls said he would join a growing number of fellow Socialists in voting for Macron, though he said he would not do any campaigning for him. Hamon was livid.  For weeks he has been urging Melenchon to unite with the Socialists.  Hamon has been polling just 10-11 percent, Melenchon 12-14.

Valls wants to ensure that Le Pen does not get elected but stressed this is a one-time vote. Valls said he is “not asking for anything” from Macron in return for his support.

Meanwhile, the Fillon camp suffered another blow as his wife was placed under formal investigation in the fake pay scandal.

And Marine Le Pen is having a dickens of a time raising money. 

[A late BVA poll as I go to post has Macron at 25, Le Pen 24, Fillon 19 and Melenchon up to 15.  Hamon is at 11.5 percent.  Macron still whips Le Pen 60-40 in a run-off.]

Hungarian Prime Minister Viktor Orban blasted European immigration policies this week, particularly Germany’s. Orban used a speech in Angela Merkel’s presence at a gathering of Europe’s center-right parties in Malta to label European migration as a “Trojan horse of terrorism.”

It was hardly the kind of unity talk leaders wanted to hear after Britain’s Brexit announcement.

Orban called up a litany of charges against migration into the EU, warning of a “dominant Muslim presence” in western Europe in coming years and condemning a “leftist ideology” that imposed guilt “for the crusades and colonialism.” Orban said that Muslim immigrants were living in “parallel societies.”  He also called for overhauling the European Court of Human Rights for endangering security and setting up “safe spots” in Libya to hold asylum seekers bound for Europe.

The Strasbourg, France-based court had ruled this month that Hungary’s asylum policies breached human rights conventions.

I am long on record as approving of Hungary’s crackdown on migration, but the nation’s parliament recently approved the mass detention of asylum seekers in shipping containers while their applications are being processed.  No, I do not approve of this.

Orban warned about the western military interventions that caused instability in the Middle East, and their effects on migration.

“If you kick an anthill, we should not be surprised if the ants overwhelm us,” Orban told European People’s Party delegates. “If millions of migrants start marching on the Balkans again, it will be impossible to maintain stability.”

Chancellor Merkel was then the last to speak.  She said that Syria, beleaguered by a six-year civil war, is “our neighbor.”

“Do we just want to say that we don’t have any humanitarian responsibilities here?” Merkel asked, without directly addressing Orban’s charges.

Merkel instead said the EU bore responsibility for not sufficiently funding international refugee facilities in the Middle East, a main cause for the migration into Europe in 2015, but that when the emergency struck, “that’s why we took in refugees.  That was the right thing to do.”

Separately, Merkel scored a big win in elections in the western state of Saarland, the first test of voter support ahead of the September federal elections.  Merkel’s Christian Democratic Union took more than 40 percent to about 30 percent for the Social Democrats.  The anti-immigration Alternative for Germany received just 6%.

Turning to Asia, China’s National Bureau of Statistics reported the manufacturing PMI was 51.8* in March, better than February’s 51.6, while the service sector reading was a strong 55.1 vs. 54.2, the highest reading since March 2014.  Services now account for over half of China’s economy.

*Caixin-Markit just released its figure on manufacturing, which focuses on China’s private sector rather than state enterprises, and it was 51.2 for March vs. 51.7 in February.

Separately, profits of Chinese industrial firms soared 32% the first 2 months of 2017 over a year ago, the fastest pace in six years, owing largely to rising commodity prices from coal to iron ore.  This could lead to more fixed asset investment.

In Japan, the government announced core consumer prices (which here is ex-food) rose 0.2% annualized in February, the second straight month of growth after 12 months of contraction.  But ex-food and energy, the core was up just 0.1% ann.

Household spending, though, was down a whopping 3.8% year-on-year in February. But the jobless rate for February was 2.8%, the lowest since June 1994.

Street Bytes

--So the week ended nicely from a calendar standpoint at the end of the first quarter, the Dow Jones +4.6% for the three months, the S&P 500 +5.5%, and Nasdaq +9.8%, its best quarter since 2013. The tech sector index rose 12%.  As Ronald Reagan would have said, ‘Not bad, not bad at all.’

On the week, aside from the Dow return noted above, the S&P gained 0.8% and Nasdaq 1.4%, including a new all-time closing high on Thursday of 5914.

First-quarter earnings will trickle in by end of next week, and then the torrent will begin the week of April 10.

--U.S. Treasury Yields

6-mo. 0.90%  2-yr. 1.25%  10-yr. 2.39%  30-yr. 3.01%

The March jobs report will be important...released next Friday with an expectation of 180,000.  [235,000 in February.]  Will it be tweetable for Trump?

--A measure of after-tax corporate profits jumped 22.3% in the fourth quarter compared with a year earlier, as reported by the Commerce Dept., part of the GDP release.  This is the strongest year-over-year gain in nearly five years, though it’s partly because of a very low base established in the final months of 2015 as oil prices collapsed, weakening the energy sector severely.

For all of 2016, profits rose 4.3% after falling 8.5% in 2015.

Separately, the Congressional Budget Office said Thursday that the national debt is on track to nearly double over the next three decades.

The CBO’s annual report on long-term federal spending and revenue shows the federal debt, currently 77% of GDP, would reach 150% of GDP in 2047, up from an estimate of 145% made this past January.

The report’s estimates are based on GDP growth of just 1.9% on average each year through 2047, far lower than the 2.9% average over the previous 50 years.

But while long-range forecasts of this kind are normally absurd, and the CBO seems to be far too sanguine on the longer term interest rate environment, if we don’t tackle entitlements, we’re beyond screwed.

On the other hand, I’ll long be dead so you’re on your own.

--U.S. crude inventories climbed less than analysts predicted last week, sending oil prices higher and extending a recent rally.  There is also talk that OPEC and key non-OPEC producers will keep production lower for longer after their existing agreement expires in June.

Oil had been falling as worries mounted about U.S. drillers ramping up production, potentially offsetting OPEC’s cuts.

--Toshiba’s U.S. nuclear unit, Westinghouse, filed for U.S. bankruptcy protection as the firm struggles with hefty losses that have thrown its Japanese parent into a state of turmoil, putting its own future at risk.

Westinghouse has experienced huge cost overruns at its plants in Georgia and South Carolina.

Toshiba initially alerted investors in December about the serious issues it faced linked to the nuclear arm. Assets are now expected to be worth far less than expected.

The nuclear services business brings in about one-third of Toshiba’s revenue, and the company expects to write down $6.3bn.

Forget whether Toshiba can survive, now the entire nuclear industry, worldwide, could be in jeopardy...certainly the future for building new plants.  Today, Westinghouse is scrambling to reassure its Chinese partners that plants being built there (or on the drawing board) are not impacted by the bankruptcy filing.

--Wells Fargo has agreed to pay $110 million to settle a class-action lawsuit over up to 2 million accounts its employees opened for customers without their knowledge.  This is the first private settlement that Wells has reached since the company paid $185 million to federal and California authorities late last year.

--BlackRock Inc., in a major shake-up, has started relying more on robots rather than humans to make decisions on what to buy and sell.

BlackRock is the world’s largest asset manager with some $5.1 trillion in total assets, largely because of its dominance in low-cost, passive investments such as exchange-traded funds, and its stock-picking unit has lagged rivals in performance.

So as the Wall Street Journal’s Sarah Krouse reported, management has decided “it is difficult for human beings to beat the market with traditional bets on large U.S. stocks.”

But in overhauling its actively-managed equities business, that means job losses.  Several dozen positions are involved.

Of BlackRock’s $5.1 trillion, $275.1 billion is in active stock assets, down from $317.3 billion three years earlier.

Over those three years, 38% of the actively-managed stock products underperformed their benchmarks or peers.  More than half did over one year.

--California’s unemployment rate ticked down to 5% in February, reaching a 10-year low.  Pretty impressive. While this is above the national average of 4.7%, the state has seen 84 straight months of job growth, longest since 113 months in the 1960s, which was due in large part to the success of the Beach Boys and “Peanuts”...plus a booming aerospace industry.

--The world’s biggest agricultural commodities merchant, Cargill, reported its strongest fiscal third quarter in seven years, aided by sales of sweeteners and salt.

The Minnesota-based company said adjusted operating profit rose 50 percent to $715m in the quarter that ended last month.

While I understand how sales of sweeteners, cocoa and chocolate all boosted business, and the falling price of beef aided sales from its meat-packing plants in North America, plus sales from a cooked-chicken complex in Thailand, I didn’t think of Cargill in terms of salt for melting road surfaces, which it is doing well in.

The company’s revenues overall rose 8% in the quarter to $27.3bn.

--Brazil’s Agriculture Ministry ordered three more food processing facilities to suspend production amid an investigation into alleged corruption of inspectors and unsanitary conditions in the world’s biggest meat producer.  That makes six plants that have been ordered temporarily closed in this incredibly gross scandal.

But, last weekend, China lifted its own suspension of imported beef from Brazil, along with Egypt and Chile. Hong Kong, Brazil’s No. 2 market, however, continued to maintain full or partial bans.  [Alberto Alrigi / Reuters]

--Speaking of beef, fast-food chains Carl’s Jr. and McDonald’s are getting back to the basics.  Carl’s Jr. and its sibling, Hardee’s, is rolling out a new advertisement branding themselves as “pioneers of the great American burger.”  McDonald’s announced that it would switch to fresh beef from frozen in Quarter Pounders at a majority of its U.S. restaurants.

Well, here’s one guy who will miss Carl’s Jr.’s tasteful ads featuring scantily clad models and celebrities eating dripping hamburgers. 

As for McDonald’s, I obviously never had a problem with their frozen beef my entire lifetime and I just hope they aren’t sourcing their meat from Brazil.

--American Airlines is set to become the second big carrier in the United States to take a major stake in China’s airline industry, paying $200 for a minority stake in China Southern, the biggest airline there.

In 2015, Delta Air Lines paid $450 million for a 3.55 percent stake in China Eastern Airlines.

--Elon Musk has taken an active role in setting up a California-based company, Neuralink, which one day hopes to develop cranial computers...as if Musk didn’t already have enough on his plate with Tesla Inc., Space Exploration Technologies Corp. and Solar City.  This should more than worry Tesla investors.

But speaking of SpaceX, it became the first space company to use a recycled rocket to send a payload into orbit on Thursday, paving the way for a sharp drop in launch costs that is a key part of its long-term plan to carry passengers to Mars.

The company sent a rocket into orbit using a main booster stage that first flew on April 6 last year.  I’m assuming lots of Swiffer products were used in spiffing it up for a second flight.

Elon Musk called the mission “an amazing day for space as a whole, for the space industry.”

Indeed it is.

--An Uber self-driving car crashed in Arizona the other day, dealing another setback to the U.S. ride-hailing company after a spate of bad publicity involving senior management.  Last Saturday, Uber announced the vehicle was not carrying any customers at the time of the crash.

Tempe, Arizona police said the Uber SUV had been driving along a main road in the city when “another vehicle failed to yield while turning left” in front of it. “The vehicles collided, causing the autonomous vehicle to roll on to its side.”

The Uber vehicle was in self-driving mode at the time of the accident, according to a person familiar with the circumstances.  All Uber test cars have two people in the front of the vehicle to monitor it and take control in an emergency.

It wasn’t clear if the person behind the wheel tried to use the manual override or was on his cellphone playing games.  [Richard Waters / Financial Times]

--Turkey’s tourism numbers continued to crater, with the number of foreign visitors falling 6.5 percent in February compared to the same month in 2016, the 19th consecutive month of declines in arrivals.

Tourism accounts for 13 percent of the Turkish economy, with the industry helping support 8% of all jobs.

But Friday the government announced GDP expanded by 3.5 percent in the fourth quarter compared to the same period in 2015, rebounding from a 1.8 percent slump in the third quarter amid the failed coup and other security concerns.

Overall expansion for 2016 came in at 2.9 percent according to Turkstat, but this was for an economy that had been growing at a far higher rate.

The weak exchange rate has helped shelter some sectors of the economy.

--Shares in Lululemon tumbled 22 percent on Thursday, after the Canadian yogawear apparel maker warned that first-quarter sales would fall.

Holiday sales were stronger than for many retailers, but it was the forecast for the first same-store sales decline in 28 quarters, or since 2009, that most spooked investors.

But does this augur a slowdown in leisurewear and inappropriate dress?  Perhaps.  In the case of Lululemon, though, many analysts say it’s colors and prints are just too bland. 

--PIMCO agreed to pay $81 million to settle the lawsuit from its founder Bill Gross, who claimed he was illegally ousted in 2014, and thus deprived of at least $200 million in lost bonuses and compensation.  The money is going directly to his foundation, and Gross promised to top off the contribution with a further $20m.  PIMCO will also name a conference room after him.

--What an awful month of March it has been in the northeast, with really lousy weather.  I feel sorry for the high school spring sports teams and it’s doing a number on golf courses who normally get a fair amount of play second half of the month. 

Heck, it’s time for Opening Day, gosh darnit!

But the weather in California’s Sierra Nevada mountains has been spectacularly good...as in it now has the deepest snowpack this time of year in the state’s recorded history and the range is loaded with enough water to keep reservoirs and rivers swollen for months to come, too much water in some spots, of course, so there will be flooding.

But the snowpack, as just measured, was at 164% of average for this time of year; 147% in the northern region, 175% in the central, and 164% of average in the southern Sierras.

This equates to 46 inches of rain when it melts and many water agencies across the state are saying it’s time to declare the drought over and lift water restrictions.  The issue will be revisited in May.

--The U.S.-Sino co-production “Kong: Skull Island” ruled China’s box office last week, followed by Disney’s live-action remake “Beauty and the Beast.”

“Kong...” took in $72.2 million last weekend in China. The film features a Chinese actress, Jing Tian, who also played the female lead in “The Great Wall.”  The film is co-produced by Warner Bros., China’s Tencent Pictures and Legendary Entertainment, which is owned by the Chinese conglomerate Dalian Wanda. 

China’s box office has grossed $2 billion over the first quarter this year, a 1.5% decrease over last year. [Yingzhi Yang / Los Angeles Times]

--I talk about the ‘morning shows’ in this space because it’s all about the money in the end, programs like “Today” being highly lucrative.

So I got a kick out of the story in the tabloids that Michael Strahan is not exactly making friends at “Good Morning America” and that fellow anchors on the show are getting sick of how ABC bosses give him preferential treatment.

“They roll out the carpet for [Strahan] while seasoned talent is treated like dirt,” a source told the New York Daily News.

Strahan signed a special deal allowing him to continue as an analyst at “Fox NFL Sunday” and host ABC’s “$100,000 Pyramid.”

The paper added: “We also hear that George Stephanopoulos is over it.  ‘He’s bored with the fluff.  He goes into work, does the show and leaves by 8:57 a.m.  He doesn’t interact.  He’s been phoning it in for quite some time,’ the source said.”

An executive at ABC disputes this.  I go with the source.

Foreign Affairs

Iraq/Syria/ISIS/Russia/Turkey: When I went to post late last Friday night, the first stories on the potential U.S. mishap in Mosul were coming through and I correctly opted to invoke my 24-hour rule.  The facts are still far from clear today.

But this week, Lt. Gen. Stephen Townsend said coalition forces “probably” played a role in the March 17 airstrike on west Mosul that may have killed more than 100 people (less than the initial reports of 200 I refused to parrot).

Townsend said there was “at least a fair chance” the U.S. was responsible, in “an unintentional accident of war.”

But Iraqi military officials said the building was bobby-trapped by ISIS with explosives and that this was the reason the building went down.  Townsend said this was also possible.

Witnesses said Islamic State had previously forced at least 140 civilians into the house to be used as human shields, and had indeed booby-trapped it.

So it could have been blown up by ISIS so they could blame it on the coalition in order to cause a delay in the offensive into Mosul and a halt to airstrikes.

Benny Avni / New York Post

“There will be more casualties in the war on ISIS.  But minimizing those deaths will take more, not less, American involvement.

“Quietly, President Trump is sending hundreds of additional troops into Syria and Iraq, and is widening U.S.-led air attacks there.  The president has also asked Defense Secretary James Mattis to take a more active role in developing the West’s anti-ISIS strategy and in overseeing its implementation, in sharp departure from the micromanagement that characterized President Barack Obama’s war efforts.

“Such a leadership role is not without its naysayers.  In one incident last week, 112 civilian bodies were pulled out of a house in Mosul – Iraq’s second-largest city, where the Iraqi military is fighting under a U.S. air umbrella.  The Pentagon has acknowledged a bombing operation in the area.

“Cue the critics.

“The Mosul incident fits an ‘alarming pattern’ of U.S.-led airstrikes that ‘destroyed whole houses with entire families inside,’ announced Amnesty International.  In Geneva, UN human rights chief Zeid Raad al-Hussein said air sorties in heavily populated areas ‘potentially have a lethal and disproportionate impact on civilians.’

“So are Americans heartless war criminals?

“Well, as Zeid, a Jordanian, acknowledged, ISIS is using ‘children, men and women to shield themselves from attack.’  Such ‘cowardly and disgraceful’ tactics, he said, include shooting civilians in the back as they flee – ‘an act of monstrous depravity.’

“Meanwhile, in Syria, according to a widely quoted report by the Russian military, U.S. air attacks destroyed bridges over the Euphrates River and hit a critical dam near ISIS’ stronghold in Raqqa.  Such attacks, tut-tutted Russian Gen. Sergei Rudskoi, risk an ‘ecological catastrophe’ and could lead to ‘numerous’ civilian deaths.

“Pot, meet kettle: Russian jets have razed entire cities on behalf of Moscow’s ally, Syrian dictator Bashar al-Assad. Diplomatically, the Russians shield Assad from accountability for his war crimes, including well-documented chemical attacks on civilians.

“The United States, by the way, denies damaging the dam.  In fact, according to some reports, ISIS is trying to score propaganda points by damaging it themselves.

“Free societies, enjoying a free press and unfettered antiwar protests, are by definition at a disadvantage in modern, urban, asymmetrical warfare.  And undoubtedly we must minimize civilian casualties.

“Yet if America is to do what Trump promised and ‘obliterate’ ISIS, mistakes will be made and innocents will perish – each one a tragedy for which the responsible parties must be held accountable. No war can be free of civilian blood, so expect more of it – and the accompanying criticism....

“(But) for five years, America mostly sat aside as the defining war of the new century raged in Syria.  But our clean hands allowed a bloodbath.  More than half a million people, mostly civilians, were killed.  Millions more fled their homes, living in refugee camps or risking life and limb to escape to Europe.

“America’s absence from the war did nothing to limit the toll on civilians. To end it, and ensure it stays ended, America’s presence is needed more than ever.”

Separately, ISIS claimed responsibility for a suicide bomber at an entrance to Baghdad who took out at least 14 people.  Yes, even as Iraq makes progress in Mosul, ISIS is more than deadly.

In Syria, it increasingly looks like the assault on ISIS’ de facto capital of Raqqa will start soon.  Surrounding towns are being captured by U.S.-backed Kurdish and Arab Syrian militia (the Syrian Democratic Forces, SDF), as well as a key airbase.

Israel: Prime Minister Benjamin Netanyahu and coalition partner, Finance Minister Moshe Kahlon, reached a deal on their public broadcasting dispute that threatened to force an early election.

According to the deal, the Public Broadcasting Corporation that the prime minister opposed will go on the air but its department will be run by the staff of the Israel Broadcasting Authority.

While the figures in the corporation that Netanyahu wanted ousted will keep their jobs, the news department will be run by a new director-general chosen by a council led by a judge who no doubt will be a Netanyahu loyalist.

Netanyahu has been concerned over the anti-Likud slant of the news.

Iran: I have said in this space since day one of the signing of the Iran nuclear agreement that it was now too late, there was no going back...the agreement couldn’t be just ripped up as some were screaming.

My reasoning was that the other five players in the P5+1 (which is the U.S., France, Britain, Germany, Russia and China) would immediately increase commerce with Iran after sanctions were lifted and that you would never get these five to go along with a significant change in the treaty beyond heightened inspections.

So this week we learned German exports to Iran rose by 26% last year, and by more than 30% in January alone, according to Germany’s Chamber of Commerce and Industry.  This is just a start.

Libya: Reuters reported last weekend, “The head of U.S. forces in Africa told reporters there was an ‘undeniable’ link between Russia and powerful Libyan Khalifa Haftar, something likely to add to U.S. concerns about Moscow’s deepening role in Libya.”

This is just confirmation of what I was writing about a few weeks ago.  Russia continues to deny its involvement, such as establishing an air base in western Egypt, near the Libyan border, occupied by Russian special forces.  Reuters first reported this.

Afghanistan: Shawn Snow of Military Times reports, “There is mounting evidence that Chinese ground troops are operating inside Afghanistan, conducting joint counter-terror patrols with Afghan forces along a 50-mile stretch of their shared border and fueling speculation that Beijing is preparing to play a significantly greater role in the country’s security once the U.S. and NATO leave.”

I have to admit, I forgot there is a spit of land that juts out of northeastern Afghanistan, attached to China, with Pakistan and Tajikistan on either side.

The Pentagon is unwilling to discuss the Chinese involvement, except a Pentagon spokesman said, “We know that they are there, that they are present.”

Russia: Thousands of Russians took to the streets around the country on Sunday in protests spurred by anticorruption and opposition activist Alexei Navalny.

Many of the protesters carried pairs of sneakers, a new symbol of corruption.  The shoes refer to Russian Prime Minister Dmitry Medvedev’s predilection for ordering sneakers and other clothing online, as Navalny once exposed on YouTube.

Medvedev is the real initial victim here.  For millions of Russians, he is the face of state corruption.  It was also in 2011, when Medvedev was still president, that he made the deal with Vladimir Putin that entered the Russian political narrative as the “castling”: Putin would return to the Kremlin and give Medvedev the prime minister post.

Since then, the elite have viewed Medvedev not just as Putin’s right-hand man, but also his probable successor.

But there is the growing feeling the latest protests have doomed Medvedev from becoming president.  He is also unlikely to keep his prime minister seat following Putin’s re-election in March 2018.

A court in Moscow on Monday issued a small fine and 15-day jail term against a defiant Navalny for organizing the protests and resisting police.

“Everyone who goes outside the boundaries of the law should be punished in accordance with Russian legislation,” Putin said, according to Interfax.

President Putin said on Thursday that he compared the street demonstrations to the first stirrings of the Arab Spring, warning that his government would deal harshly with unsanctioned protests.

“This tool was used at the beginning of the so-called Arab Spring,” Putin said.  “We know very well what this led to, what bloody events this led to.”

Leonid Bershidsky / Bloomberg

“At first sight, the Russian anti-corruption protests on Sunday didn’t draw enough people to rock the Kremlin. And yet they must be extremely worrying for Russian President Vladimir Putin: The movement against him, which he had every reason to write off as dead, is attracting a new generation of Russians throughout the country.

“Alexei Navalny, who plans to run for president next year, called on Russians to take to the streets on March 26 to protest the corruption of Prime Minister Dmitri Medvedev, as described in a recent investigation by Navalny’s Anti-Corruption Foundation.  It accused Medvedev of amassing vast wealth, including palatial homes, and a yacht, through a network of non-profit organization run by his friends.”

“Navalny’s report has been watched by 13 million on YouTube but the Kremlin didn’t respond.

(But) according to the Navalny team, some 150,000 people turned out across the country, up to 30,000 of them in Moscow.  The police, of course, reported lower numbers... As usual, the truth is probably somewhere in the middle, putting the total number of protesters in the high tens of thousands.

“That’s not an impressive number. In late 2011 and early 2012, after a blatantly rigged parliamentary election, about as many, if not more, people repeatedly took to the streets in Moscow alone. But back then, there was a stronger reason for the action than one man’s corruption investigation, and the rallies were officially permitted....

“(But Navalny will emerge from jail after his 15-day detention) a more dangerous man for the Kremlin than he’d been before last weekend.  And Putin’s men haven’t figured yet what they were going to do about the changed situation....

“The Kremlin will be tempted to respond to the new challenge with repression.  [Ed. as per Putin’s comments on Thursday above]  It will have to tread carefully, though. The revolution of 2013 and 2014 in Kiev began after President Viktor Yanukovych’s regime unleashed brute force on a peaceful student demonstration.  Hundreds of thousands of Kievans responded by taking to the street and holding the city center for months before Yanukovych was forced to flee....

“Putin’s administration will probably try to revive its youth program and attempt to subvert the nascent student movement.  It needs to rule out eruptions of protest before the 2018 election. That won’t be easy, and even if Navalny’s presidential bid is doomed, there are reasons for Putin and his people to fear, if not for their own future, then for that of their heirs.”

Meanwhile, regarding Russian meddling in the U.S. election, former vice president Dick Cheney said this week that Russia may have committed an “act of war.”

“There’s not any argument at this stage that somehow the election of President Trump was not legitimate, but there’s no question that there was a very serious effort made by Mr. Putin and his government – his organization – to interfere in major ways with our basic, fundamental democratic processes,” Cheney said at a forum in New Delhi.  “In some quarters, that would be considered an act of war.”

Cheney also said Putin was “doing everything he can to find ways to undermine NATO.”

On a totally different matter, Matthew Bodner of the Moscow Times reports that an investigation into quality control issues in the Russian space industry has discovered that nearly every engine currently stockpiled for use in Proton rockets is defective, as first reported by RIA Novosti news agency.

71 engines, mostly used to power the second and third stages of the Proton rocket, require complete overhauls to remove defects.  It appears high-quality metals were swapped by a plant manager for cheaper alternatives.

Proton was once considered the most reliable rocket in the world.  Since 1967, the design has been launched 400 times, and at one point was used to launch some 30% of commercial satellites into space.

Matthew Bodner: But “one of the most infamous disasters came in 2013, when one of the rockets flipped over almost immediately after launch – driving itself into the ground.  The fault was later identified to be a sensor that was installed upside down. The rocket’s computer believed the rocket was facing the wrong way.”

China: President Xi Jinping and President Trump are meeting in Mar-a-Lago April 6-7.  Among the many serious issues to be discussed are China’s activities in the South China Sea, the world’s most important waterway.  This week it was reported that China appears to have largely completed a major construction project on one of the artificial islands, an airbase where it can deploy combat planes and other military hardware at any time, according to Washington’s Center for Strategic and International Studies.

The week before, Premier Li Keqiang said defense equipment had been placed on some of the islands in the disputed waterway to maintain “freedom of navigation.”

China now has three airbases on the islands which allow it to operate over nearly the entire waterway.  China has also deployed surface-to-air missiles on one of them (Woody Island in the Paracel chain).

North Korea: Pyongyang carried out another test of a rocket engine that U.S. officials believe could be part of its program to develop an intercontinental ballistic missile. This is the second such test in weeks.

Bret Stephens / Wall Street Journal

“It’s time to make regime change in North Korea the explicit aim of U.S. policy, both on strategic and humanitarian grounds.  But there are two ways in which regime change can be pursued – and one can be used in furtherance of the other.

“The first type of regime change is pro-China. Beijing has little sympathy for Kim Jong Un, who brutally purged his regime of its China sympathizers after coming to power five years’ ago. But Beijing’s distaste is tempered by its interest in the existence of North Korea as an independent state, mainly because it has good reason to fear the strength and example of a unified, democratic Korea led from Seoul.

“Pro-China regime change would take the form of a coup, in which Kim would be given the choice of exile or execution, to be replaced by a pro-Beijing figure willing to move the country from totalitarianism to authoritarianism – a Korean replay of the transition from Mao Zedong to Deng Xiaoping.  The U.S. would recognize the new government in exchange for verifiable nuclear disarmament, sealing the division of the peninsula.

“The U.S. could support such a policy and work with China to achieve it because it would ease the suffering of North Korea’s people and put the country’s nuclear arsenal in safer ( and more negotiable) hands.  China should support it because it would maintain the North as a buffer state and get rid of a regime that might otherwise collapse in unpredictable and dangerous ways.

“Achieving such regime change will be tricky, but China could move things along by cutting off fuel supplies to the North and ‘inviting’ Kim and his family for an extended luxury vacation.

“And if the Chinese aren’t amenable to this strategy?  In that case, the U.S. should support the anti-China model of regime change, aiming not only at the end of the Kim regime but of North Korea itself.

“That would mean a formal U.S. declaration in favor of unification.  Other steps might include cutting off Chinese banks and companies that do business with Pyongyang from access to U.S. dollars, undertaking a campaign to highlight Chinese mistreatment of North Korean refugees, and further speeding the deployment of antiballistic missile systems to South Korea. As another inducement, Donald Trump could return to his suggestion last year that the South should have an independent nuclear deterrent.

“Mr. Trump is scheduled to meet Xi Jinping next month.  It would be a good occasion for the president to ask his Chinese counterpart which kind of regime change he’d prefer.”

Meanwhile, Hong Kong elected a new chief executive last weekend, the first woman, Carrie Lam, 59, who of course had the backing of the Chinese government in Beijing.  It is a rigged process, which is why there have been so many protests in recent years.

The chief executive is not chosen by the public, but by a 1,200-strong committee dominated by pro-Beijing electors.

In her acceptance speech, Lamm said: “Hong Kong, our home, is suffering from quite a serious divisiveness and has accumulated a lot of frustrations.  My priority will be to heal the divide.”

Lamm vowed to “tap the forces of our young people.”

“They are often at the forefront of society, pulling and pushing us as a whole to make progress.”

Gag me.  Calls for fully free elections have gone nowhere, but the young people here won’t just lie down.

The bottom line is China totally controls the political process in Hong Kong and there are promises for large demonstrations on Ms. Lam’s inauguration day, July 1, the 20th anniversary of Hong Kong’s transfer from British to Chinese control.  A date worth watching.

South Korea: Park Heun-gye, South Korea’s first female president and its first leader to be impeached and removed from office, was arrested Friday on charges including bribery, extortion and abuse of power.

A district judge issued a warrant for her arrest as prosecutors were concerned Park would destroy evidence as she goes through her trial.  She is now expected to remain in jail for the duration of the proceedings and, understand, South Korean prisons aren’t known for their comfy quarters.

Ms. Park was accused of conspiring with longtime confidante, Choi Soon-sil, to collect tens of millions of dollars from big businesses, including more than $38 million in bribes from Samsung.

South Africa: President Jacob Zuma threw his nation into a state of turmoil after he sacked his popular finance minister, Pravin Gordhan, along with eight other cabinet members in an attempt to purge growing numbers of his critics, two years ahead of a national election.  Zuma’s ruling African National Congress faces the biggest crisis yet under his leadership.

The currency, the rand, declined 7 percent this week and bank stocks tanked on the Johannesburg Stock Exchange.

Gordhan was on a campaign to restore investor confidence and root out corruption, and Zuma saw him as a threat.  Gordhan was ordered back from an overseas investor roadshow this week.

Venezuela: In a move expected for the better part of a year, President Nicolas Maduro’s loyalists on the Supreme Court seized power from the National Assembly in a ruling late Wednesday.

The ruling effectively dissolved the elected legislature, which is led by the opposition, and now the court can write its own laws.

So Venezuela is now officially a dictatorship.  It’s up to the army to take Maduro out.  Just do it!

But late word, tonight, has Maduro acquiescing in some fashion after a leading supporter dissented on the move by the Court.

Also crossing the wires are stories about pressure being applied by Peru, which is urging its neighbors to recall their ambassadors to Venezuela, while I also see that massive protests have broken out in Paraguay’s capital on a different issue.  The Senate there secretly voted to allow President Cartes to seek a new term, illegal under the 1992 constitution, passed after the toppling of a brutal dictatorship, and the Congress building has been set on fire.

Mexico: Drug kingpin Joaquin “El Chapo” Guzman’s capture has led to a surge in homicides in Mexico as cartel leaders fight to fill the vacuum created by his arrest.

Mexico’s homicide rate for 2016 (he was re-captured in Jan. 2016) led to a spike to 21.3 murders per 100,000 residents, up from 17.5 in 2015, that rivals record numbers earlier in the decade, according to a report from the Justice in Mexico Project at the University of San Diego.

Murder rates had dropped four years in a row, 2011 to 2014.

Again, heroin users.  You can always switch to beer.

[Venezuela just announced their murder rate for 2016...60 per day on average, up from 45 per day in 2015, or a murder rate of 70.1 per 100,000 inhabitants last year, one of the highest in the world.]

Random Musings

--A Gallup tracking poll had President Trump’s approval rating at 36% this week (rolling three-day average), which is perhaps not that fair, weekly and monthly averages being more so.  [The figure is 38% today.]

Republican-leaning Rasmussen’s survey had Trump at just 44% on Thursday.

But according to a CBS News poll, over half of Americans, 53%, say they are optimistic about the next four years with Donald Trump as president, down slightly from the start of his presidency.

If tax reform becomes the next legislative push, Republicans (86%) express overwhelming confidence in the president’s ability to make the right decisions about it, as they do with his legislative approach overall; most Democrats (18%) and Independents (42%) do not.

Trump’s overall approval rating is 40% in this one, 52% disapproval.

In this CBS News survey, approval for the Affordable Care Act is 49%, 45% disapprove.

An NBC News / Survey Monkey Poll has Trump’s overall approval number at 42%, 56% disapprove.  The 42% is down just a point from a month earlier.

--It seems clear that Supreme Court nominee Judge Neil Gorsuch is going to be approved, the issue is can he get 60 votes so Republicans don’t have to invoke the nuclear option.

Sen. Orrin Hatch, chairman of the Senate Judiciary Committee / Wall Street Journal

“(In testimony), Judge Gorsuch’s performance was outstanding.  Enduring more than 20 hours of questioning over two days, he displayed an impressive command of the law and an intellect befitting someone with his stellar credentials.  He showed that he understands the proper role of a judge in our system: to apply, not make, the law.  Throughout, his demeanor was serious, thoughtful and humble.  These qualities have defined his judicial service for the past decade and will serve him well on the Supreme Court.

“In stark contrast was the astonishing treatment Judge Gorsuch received from many of my Democratic colleagues. Whatever their motivation – be it the outcome of President Obama’s lame-duck nomination during last year’s election, an unwillingness to accept the November results, or the desire for judges to push a liberal political agenda – they have apparently decided to wage a desperate, scorched-earth campaign to derail this nomination, no matter the damage they inflict along the way.  We are now watching the confirmation process through the funhouse mirror....

“In Judge Gorsuch, the country has a Supreme Court nominee as fine as I could ever imagine.  But instead of the best tradition of the advice-and-consent process, which many of us have tried to live up to, what does he get?  Hypocritical attacks on the very judicial independence Democrats claim to prize, misleading characterizations of his record, and now a promise to filibuster his nomination.

“In essence, Judge Gorsuch gets the kind of treatment that leads him to regret putting his family through what ought to be a dignified process. This madness needs to stop.  End the dishonest attacks and scorched-earth tactics.  Instead, we should have a debate worthy of ‘the world’s greatest deliberative body,’ and confirm this outstanding nominee.”

Thursday, West Virginia Democratic Senator Joe Manchin, and Democrat Heidi Heitkamp of North Dakota, said they would vote in favor of putting Gorsuch on the bench, becoming the first Democrats to announce this.  But can Republicans get up to 60?  Not likely, as Missouri Dem. Senator Claire McCaskill, who was thought to be one the Republicans could pick up, announced late Friday she was supporting the filibuster.  This story will dominate next week.

--CBS “Face the Nation” moderator John Dickerson had the following monologue last Sunday:

“President Trump said President Obama wiretapped Trump Tower.

“This week, the FBI director said there was no evidence of that.  This wasn’t just a fact-check. It highlighted how lightly President Trump treats the presidency.

“We have presidents and we have an office of the presidency.  Opponents respect the office, even if they disagree with the occupant.  Presidents are criticized, but the presidency is behind protective glass.

“That’s why a president can come into office attacking his predecessor’s policies, but later celebrate the dedication of his predecessor’s presidential library. It is why George W. Bush prepared a smooth transition for Barack Obama, and why President Obama did the same for Donald Trump.

“Once on the job, a president also gains respect for the presidency because they learn, as President Trump did this week, that the job is harder than it appeared from the campaign trail.

“The historical continuity of the presidency is an heirloom and a tool.  Presidents gain stature by hugging those who came before them. Donald Trump visited Andrew Jackson’s grave and compared himself to the seventh president, who also spooked elites.

“These perks and protections are why presidents honor the presidency.

“ ‘I shall keep steadily in view the limitations of my office,’ said Andrew Jackson.  Break the limits, and you break the office.

“Nevertheless, President Trump compared his predecessor to Nixon and McCarthy, called him sick and bad.

“To break glass like that, a president must have a good reason and proof.  President Trump had no evidence and no higher purpose.

“Tending the presidency is important for a disruptive president like Donald Trump, because it shows people he knows the line between renovating the office and demolishing it.  You measure twice, and cut once.  You don’t cut without measuring at all.”

Dickerson interviewed former secretary of state George Schultz on last Sunday’s show as well.

DICKERSON: Let me ask you about honesty in public office.  President Trump made a claim that his predecessor, President Obama, wiretapped his Trump Tower and now the director of the FBI has said he has no evidence of that. What cost is that for a president, to say something that doesn’t turn out to have evidence behind it?

SCHULTZ: Well, he’s got to figure out a way to get out of it.  To say, OK, I made a mistake, and go on from there because you’ve got to establish an atmosphere of trust. Trust is the coin of the realm. And you need to do that with other leaders, or people you’re going to deal with, including your adversaries.  When I go back to my days in the Marine Corps boot camp at the start of World War II, sergeant handed me my rifle.  He says, take good care of this rifle. This is your best friend. And remember one thing, never point this rifle at anybody unless you’re willing to pull the trigger.  No empty threats. And you can extrapolate that and say, mean what you say, and carry out what you say you’re going to carry out, then people will trust you and they can deal with you because they know if you say you’ll do something, you’ll do something, that you’ll do what you said you were going to do.  If I can’t trust you, I can’t deal.  But if I trust you, then I can deal. And so trust is the coin of the realm.

--A judge on Friday approved an agreement for President Trump to pay $25 million to settle lawsuits over his now-defunct Trump University, ending nearly seven years of legal battles with customers claiming they were misled by failed promises to teach success in real estate.

The ruling was handed down by U.S. District Judge Gonzalo Curiel, who Trump had repeatedly insulted on the campaign trail, insinuating that the Indiana-born judge’s Mexican heritage exposed a bias.

Trump had vowed never to settle.

--According to ethics filings released by the White House Friday night, Ivanka Trump and Jared Kushner remain the beneficiaries of a sprawling real estate and investment business worth as much as $741 million. Ivanka maintains a stake in the Trump International Hotel in Washington, D.C., which the filing estimates at between $5 million and $25 million.  A good friend just stayed there with his family and loved it.

--Lawmakers in North Carolina announced late Wednesday night that they had reached an agreement to repeal a measure that restricts which public restrooms transgender people can use.

This is supposed to be a compromise by Republicans and the state’s Democratic governor, who has been a staunch opponent of the bill, in an attempt to save $billions in future convention and sports business, especially with the NCAA.

But upon further review, this doesn’t exactly seem like a solution.  Developing....

--Two former allies of New Jersey Gov. Chris Christie, Bill Baroni and Bridget Anne Kelly, were sentenced to 24 and 18 months, respectively, for their roles in the Bridgegate scandal. Christie is skirting scot-free.

--Last weekend marked the eighth weekend in a row that President Trump visited a property bearing his name.  He has done so on 21 of the 66 days he’s been in office, according to the Washington Post’s Philip Bump on Tuesday.  And despite his claim in August, “I’m going to be working for you.  I’m not going to have time to go play golf,” he has played golf at least 12 times.

Just stating the facts, Trumpians.  You know I generally have no problem with our presidents hitting the links.

--According to figures prepared for the Governors Highway Safety Association, which represents state highway safety offices, pedestrian deaths are climbing faster than motorist fatalities, reaching nearly 6,000 deaths last year – the highest total in more than two decades.

While it can’t be quantified, clearly both distracted drivers and walkers are a major cause for the increase, as miles driven are up only a few percentage points.

It’s bad enough that I know I will die while crossing the street, hit by a driver blowing through a red light as he/she plays on their phone, but it is equally appalling what we see every day; pedestrians carelessly walking across streets while looking at their phone as well.  [We also have a ton of joggers and walkers in my area who stupidly do their thing in the street...just waiting to be hit.]

---

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

God bless America.

---

Gold $1251
Oil $50.85

Returns for the week 3/27-3/31

Dow Jones  +0.3%  [20663]
S&P 500  +0.8%  [2362]
S&P MidCap  +1.5%
Russell 2000  +2.3%
Nasdaq  +1.4%  [5911]

Returns for the period 1/1/17-3/31/17

Dow Jones  +4.6%
S&P 500  +5.5%
S&P MidCap  +3.6%
Russell 2000  +2.1%
Nasdaq  +9.8%

Bulls 49.5
Bears 18.1 [Source: Investors Intelligence...Bulls hit highest reading since 1987 of 63.1 on Feb. 28...the S&P is literally unchanged since that date.  So not the expected selloff if you’re a contrarian, as yet.]

Have a great week.

*Dr. Bortrum posted a new column!

Brian Trumbore

Let’s Go Mets!!!