Week in Review

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Week in Review

05/04/2019

For the week 4/29-5/3

[Posted 11:30 PM ET, Friday]

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Edition 1,047          

In new Gallup and CNN surveys this week, both have 56% of Americans believing President Trump is doing a good job on the economy, and this was before Friday’s blockbuster jobs report; 263,000 jobs added in April, with an unemployment rate of 3.6%, lowest in 50 years.

White House acting chief of staff Mick Mulvaney spelled out Trump’s 2020 economic message earlier this week – suggesting voters would still be willing to support the president even if they don’t like him personally.

“You hate to sound like a cliché, but are you better off than you were four years ago?  It’s pretty simple, right?  It’s the economy, stupid.  I think that’s easy.  People will vote for somebody they don’t like if they think it’s good for them,” Mulvaney said at a talk at the Milken conference in Los Angeles.

Like Mr. Mulvaney, I’ve been saying the president should focus solely on the economy, and stay away from the heated rhetoric, but I know this is impossible for him.

And then there is Trump’s foreign policy, my chief concern in these pages since day one.  This afternoon and tonight, it’s close to returning to center stage.

Trump tweeted at midday after an hour-long phone call with Vladimir Putin, the first between the two since the Mueller Report:

“Had a long and very good conversation with President Putin of Russia.  As I have always said, long before the Witch Hunt started, getting along with Russia, China and everyone is a good thing, not a bad thing....

“....We discussed Trade, Venezuela, Ukraine, North Korea, Nuclear Arms Control and even the ‘Russian Hoax.’ Very productive talk!”

But then, speaking to reporters afterwards in the Oval Office, Trump said he did not broach the threat of Russian interference in the 2020 election, despite the Mueller Report’s unrefuted case study on just how systemic Russian interference was in 2016, let alone the assessments of the nation’s intelligence agencies.

Instead, Trump said this afternoon that he and Putin pledged to embark on a new era of cooperation on issues from North Korea to Venezuela, with Trump saying, incredibly, that Putin “is not looking at all to get involved (in Venezuela), other than he’d like to see something positive happen.”

A direct refutation of his own secretary of state, Mike Pompeo, who as I detail below, said Russia, which has a very visible presence in Venezuela, propping up Nicolas Maduro, prevented Maduro from flying out of town on Tuesday during the attempted overthrow of his regime.

This was a return to Helsinki, by Trump.  Nothing to see here, people...move along....even as officials portray Venezuela as a proxy battle between Washington and Moscow.

Trump and Putin also talked about a potential three-way deal on nuclear arms that would include China.  It was Trump who announced he would withdraw from the Intermediate-Range Nuclear Forces Treaty, a 1987 pact, largely because of evidence Russia has been cheating (of course), but today, Trump said nothing about past Russian violations, with a simpleton statement instead that we need cooperation to “get rid of some of the tremendous firepower that we have right now,” this as Putin has very publicly talked of new nuclear weapons in development that have the potential to destroy an area the size of Texas.

And as for China, I have written for years of just how naïve America is when it comes to its own nuclear threat.  Washington and Beijing have never held serious talks on our respective forces, and in the case of China, their whole program is underground.  Forget any estimates you see in the press on the size of their arsenal and its capability; unless it’s of the submarine variety, or on its warships, we don’t have a clue.

Which is why the trade talks between the U.S. and China are absurd, even as I give President Trump credit for letting the Commies know we’re tired of their s---.  China will never abide by any agreement struck, save for one or two items, as I discuss below, while at the same time, not for nothing but relations between the two are growing worse by the day, a fact seemingly lost on Trump.  His “good friend,” President Xi, is out to rule Asia and limit U.S. influence in the region, forever.  Xi himself may not survive in office long enough to achieve this, but that’s his goal.

Oh, and tonight, South Korea’s Defense Ministry announced North Korea had fired a number of short-range missiles off its eastern coast.  That’s another of President Trump’s great friends...the chubby guy who blows relatives away with anti-tank guns.

It’s May 2019, not May 2020.  If it was the latter, Trump’s reelection would be essentially secured with the economic news.

But we’re 18 months away, sports fans.  I will be shocked if there isn’t some kind of military conflict, or major cyberattack beforehand that will roil the markets, and this presidency...and the election.

Trump World

Prior to Attorney General William Barr’s appearance before the Senate Judiciary Committee, a letter that special counsel Robert Mueller sent to Barr, days after the AG’s four-page letter to Congress summarizing the “principal conclusions” of Mueller’s findings, was leaked to the Washington Post, with Mueller expressing concerns that while he didn’t think Barr’s letter was inaccurate, the special counsel believed his report was more nuanced on the obstruction of justice issue, and Mueller was frustrated by the media coverage, wanting more of the report to come out, namely his prepared summaries.

Barr’s position was he wasn’t going to do so in a piecemeal way, so he was pushing the special counsel’s office to finish the redactions of the full report as soon as possible. But all this time, none of us schmucks knew Mueller expressed any displeasure, though a few reports said later that some on Mueller’s staff were unhappy.

At the same time, senior Justice officials have been puzzled by Mueller’s decision not to reach a conclusion on the obstruction issue and Barr felt he needed to provide finality on the matter as the attorney general.

On March 24, Barr submitted his letter to Congress summarizing the main conclusions from Mueller’s report.  And then earlier this month, Barr held a news conference before the redacted report was released by the Justice Department where he framed Mueller’s report in President Trump’s language.  The report found no wrongdoing by Trump and its findings were favorable to the President.

The redacted version of Mueller’s report then didn’t find conspiracy or coordination between the Trump campaign and the Russian government.  Mueller did not decide whether Trump obstructed justice in violation of the law, though he found in several instances potentially obstructive behavior and motive, leaving it to Congress to pursue the matter, if they thought it appropriate.

But the issue this week was that Mueller’s letter stating his concerns to Barr was sent March 27, so Democrats on the Judiciary Committee tried to make the case that Barr was oversimplifying the report’s findings to protect the president.

In his testimony, despite Barr’s posture generally favoring Trump when it came to legal questions, there were a couple moments in which he disputed key Trump talking points, such as when Barr made clear he didn’t view his decision not to accuse Trump of obstruction of justice as the “complete and total exoneration” that Trump claims.

“I didn’t exonerate,” Barr said.  “I said that we didn’t believe that there was sufficient evidence to establish an obstruction offense.”

But Democrats honed in on Barr’s prior testimony before the House last month – after receiving Mueller’s letter – where he suggested he wasn’t familiar with how the Mueller team perceived his actions.

When asked whether he knew what was behind reports that members of the Mueller team were unhappy with his summary of the report, Barr said, “No, I don’t.”

Barr explained he was narrowly answering the question: “I don’t know what members he’s talking about, and I certainly am not aware of any challenge to the accuracy of the findings...I talked directly to Bob Mueller – not members of his team.”

But the issue was whether Barr cherry-picked from the Mueller report, the special counsel implying Barr had misled and excluded important information.

But Barr countered, “I offered Bob Mueller the opportunity to review that letter before it came out, and he declined.”

Barr added: “(Mueller’s) work concluded when he submitted the report to the attorney general.  At that point, it was my baby. It was my decision how and when to make it public – not Bob Mueller’s.”

Look, Barr got to set the first narrative, and that matters.  And as for the hearing, despite the blather from the Democrats, Barr’s job was done, and there was zero reason for him to go to the House the next day for an appearance there, especially after they changed the rules.

I believe the attorney general was a bit disingenuous at times in his testimony, but who on Capitol Hill isn’t?

Opinion...both sides....

Editorial / Wall Street Journal

“Washington pile-ons are never pretty, but this week’s political setup of Attorney General William Barr is disreputable even by Beltway standards.  Democrats and the media are turning the AG into a villain for doing his duty and making the hard decisions that special counsel Robert Mueller abdicated.

“Mr. Barr’s Wednesday testimony to the Senate Judiciary Committee was preceded late Tuesday by the leak of a letter Mr. Mueller had sent the AG on March 27.  Mr. Mueller griped in the letter that Mr. Barr’s four-page explanation to Congress of the principal conclusions of the Mueller report on March 24 ‘did not fully capture the context, nature and substance’ of the Mueller team’s ‘work and conclusions.’  Only in Washington could this exercise in posterior covering be puffed into a mini-outrage.

“Democrats leapt on the letter as proof that Mr. Barr was somehow covering for Donald Trump when he has covered up nothing.  Hawaii Sen. Mazie Hirono, the Democratic answer to Rep. Louis Gohmert, accused Mr. Barr of abusing his office and lying to Congress, and demanded that he resign.  The only thing she lacked was evidence.

“Mr. Barr’s four-page letter couldn’t possibly have covered all the nuances of a 448-page report.  It was an attempt to provide Mr. Mueller’s conclusions to Congress and the public as quickly as possible, while he took the time to work through the entire document to make redactions required by law and Justice Department rules.

“This is exactly what he promised to do in his confirmation hearing.  Even Mr. Mueller’s complaining letter admits that Mr. Barr’s letter wasn’t inaccurate, a fact that Mr. Barr says Mr. Mueller also conceded in a subsequent phone call.  The Mueller complaint, rather, was that there was ‘public confusion about critical aspects’ of his investigation.

“Translation: Republicans were claiming vindication for Donald Trump, and Mr. Mueller was taking hits in the press for not nailing the worst President in history.  Having been hailed for months as a combination of Eliot Ness and St. Thomas More, Mr. Mueller and his team of prosecutors seem to have been unnerved by some bad press clips.

“Mr. Barr told the Senate Wednesday that he offered Mr. Mueller the chance to review his four-page letter before sending it to Congress, but the special counsel declined.  Mr. Mueller worked for Mr. Barr, and that was the proper time to offer suggestions or disagree.  Instead, Mr. Mueller ducked that responsibility and then griped in an ex-post-facto letter that was conveniently leaked on the eve of Mr. Barr’s testimony.  Quite the stand-up guy.”

Editorial / Washington Post

“Attorney General William P. Barr entered office with more credibility than many Trump appointees.  A veteran of the George H.W. Bush administration, Mr. Barr avowed loyalty to the Justice Department’s mission and, nearing the end of his career, seemed to have little incentive to serve as another Trump sycophant.  Yet Mr. Barr has lit his reputation on fire, and he just added more fuel during his Wednesday testimony before a Senate panel.

“Much of the hearing centered on the attorney general’s decision to release a highly misleading representation of the findings of special counsel Robert S. Mueller III’s Russia investigation.  In particular, Mr. Barr failed to acknowledge the alarming nature of Mr. Mueller’s analysis on whether President Trump obstructed justice, and he did not explain why the special counsel declined to say whether Mr. Trump was guilty of the charge.  This really matters: Given the damning account in Mr. Mueller’s report, what appeared to be keeping the special counsel from accusing the president of criminal acts was not the lack of evidence but the fact that the president cannot be charged under Justice Department rules.

“Mr. Barr defended himself Wednesday by insisting that his memo, publicized weeks before he released any additional material, was technically accurate, despite the fact that his spin deeply affected the reception of Mr. Mueller’s full report when the public finally got it.  It was not supposed to be a full summary of the special counsel’s report, he insisted – just a brief explanation of the top-line conclusions.  Mr. Barr’s long history in Washington belies his argument: He should have known how his pre-spinning of the Mueller report would distort the truth of the special counsel’s damning findings to the president’s benefit.  He did it anyway....

“It is long past time the public stopped hearing Mr. Barr’s views on how Mr. Mueller feels, and heard from the special counsel himself. The Justice Department should enable Mr. Mueller to speak publicly and under oath at the earliest opportunity.  The special counsel should address not only his substantive findings on the president’s misbehavior but also the attorney general’s manipulation of his work.  Not just Mr. Trump should be held accountable for his actions. So should his attorney general.”

Editorial / New York Post

“Rising to chairman of the House Judiciary Committee after more than a quarter-century in Congress, New York’s Rep. Jerry Nadler is finally enjoying his moment in the spotlight – by turning the committee into a circus.

“On Thursday, Nadler chaired a mock hearing, complete with an empty chair for Attorney General William Barr, who he knew wouldn’t show up.

“Playing to the TV cameras, one committee Democrat placed a fake chicken on the chair – and, for good measure, brought a bucket of fried chicken.

“The point: ‘Chicken’ Barr was afraid to show his face and testify about his summary of the Mueller report.  Never mind that he’d faced a Senate committee the day before, or that the idea of Bill Barr being afraid of Jerry Nadler is just ludicrous.

“The reason Barr refused to show is that Nadler demanded that he face questioning from staff lawyers. The AG was perfectly right to object: There’s no precedent for non-members quizzing a cabinet official in a public Judiciary hearing.

“Nadler knew full well Barr would refuse to play the patsy in what would’ve been a mock trial.  As the committee’s top Republican, Doug Collins, said, the only reason Barr wasn’t there is that ‘Democrats decided they didn’t want him here.’

“Besides, the Judiciary Committee is packed with lawyers, including Nadler.  Does the chairman think they’re just not competent to question the AG?

“Playing out the show, Nadler went fully over the top, threatening Barr with contempt or impeachment and warning that our ‘very system of government...is at stake.’  Please.

“Don’t be misled: The Mueller report was a dud, but Democrats don’t dare admit it – nor pay the political price they’d incur if they went for impeachment anyway.  So they’ve created a distraction – a phony scandal centered on Barr.

“If anyone’s showing contempt for our ‘very system of government,’ it’s Jerry Nadler and his crew.”

Eli Lake / Bloomberg [via Wall Street Journal]

“Some Democrats have said [AG] Barr lied to Congress when he told the House that he did not know why [special counsel Robert] Mueller’s investigators were perturbed about his March 24 letter.  But on Wednesday Barr had a plausible, if slippery, answer: He was asked about Mueller’s staff, he said, and Mueller himself had told him in a phone call that he did not believe his letter was inaccurate.  Senator Lindsey Graham, the chairman of the Senate Judiciary Committee, said he would be asking Mueller if Barr accurately described their phone conversation.

“So what are Democrats so upset about?  Is it that they lost a precious 25 days – from March 24 to April 18 – to spin Mueller’s findings to their liking? This is worse than Watergate!  They will never get those news cycles back.

“This complaint is not only picayune but also hypocritical.  Since [Donald] Trump won the 2016 election, the narrative (that word again) that he might be a Russian asset or may have conspired with Russia has been a near article of faith for the resistance.  If Democrats can chastise Barr for spinning Mueller’s report for 25 days, then why can’t Republicans ask why Mueller didn’t end all the speculation about a Trump-Russia conspiracy as soon as he found out it wasn’t true?”

After Wednesday’s Senate Judiciary Committee hearing, President Trump said via phone on Fox Business’ Network, “(Barr) did a fantastic job today I am told.  I got to see some of it.  He did a fantastic job.”

Trump accused the three senators on the committee who are running for the Democratic presidential nomination, Kamala Harris, Cory Booker and Amy Klobuchar, of “trying to score political points.”

“How about these three people? ...You have three of them running against me and they are up there ranting and raving.  Like lunatics, frankly.  How is that fair?” Trump said.

“So you have Bill Barr, highly respected, great attorney general and he has to take the abuse from people that are running for office. They don’t care about this, they’re just looking for political points.  And I really think the American people see through it so easily.”

To be fair, Sen. Klobuchar (Minn.) was totally reasonable in her questioning of AG Barr.  Democrats should hope she eventually gains some traction in the race because she is the kind of candidate they should want on the ticket.  I would guess she could shine in the coming first debates.

Trumpets

--A $2 trillion infrastructure program?  Good lord.

Editorial / Wall Street Journal

“Who says there’s no bipartisanship in Washington?  Democrats in Congress visited the White House on Tuesday, and they emerged to say that they and President Trump had agreed to spend $2 trillion on public works. When it comes to spending more money, Washington can always find common ground.

“ ‘We agreed on a number, which was very, very good - $2 trillion,’ said Senate Minority Leader Chuck Schumer.  ‘Originally we had started a little lower.  Even the President was eager to push it up to $2 trillion.’  Given Mr. Trump’s fondness for big, round numbers, who can doubt it?

“The question is who is going to pay for all this?  The annual federal budget deficit is already nearing $1 trillion.  House Democrats couldn’t even pass a budget outline because their left flank wants $67 billion more in domestic spending than the leadership offered.  Republicans want more for defense. And that’s before any infrastructure blowout.

“Democrats have been saying they won’t agree to raise the gasoline tax unless Mr. Trump agrees to roll back some of his 2017 tax cut. But if Mr. Trump is entertaining such a trade, he’s walking into a political trap.  He’ll be undercutting his supply-side boost to the economy.  And once the President lets Congress know his tax reform is open for renegotiation, the special interests will emerge from every corner of Washington to spend revenue from a higher corporate tax rate.

“Mr. Trump campaigned on rebuilding America’s infrastructure, but he and Democrats don’t even agree on what to spend it on.  Rest assured that Democrats don’t mean merely roads and bridges.

“As Mr. Schumer and House Speaker Nancy Pelosi put it in a joint statement after Tuesday’s meeting, ‘infrastructure is about creating jobs immediately’ but also about ‘advancing public health with clean air and clean water’ and ‘addressing climate change’ and ‘expanding broadband to rural, urban and other underserved areas.’

“Oh, and about paying ‘the prevailing wage’ and ‘the imperative to involve women, veteran and minority-owned businesses in construction.’  In other words, it is about income redistribution and the social pork barrel.

“If this is what a grand infrastructure bargain looks like, we’ll take gridlock.”

--Republican and Democratic senators blasted President Trump’s proposal for a 23 percent cut in the budget for foreign aid and diplomacy as “insane” and “short-sighted” on Tuesday, and said it would not pass.

Republican Sen. Lindsey Graham, chairman of the Appropriations subcommittee that oversees the State Department and foreign aid budget, said: “We’re not going to approve this budget reduction.  It’s insane. It makes no sense.”

“I don’t know who writes these things over in the White House, but they clearly don’t understand the value of soft power,” Graham continued in a hearing on the foreign aid budget.

--President Trump’s second pick for the Federal Reserve Board, Stephen Moore, withdrew his name, as Herman Cain had done the week before, with Moore losing support among Senate Republicans who grew skeptical about Moore’s chances after decades-old comments resurfaced in which Moore made disparaging and sexist remarks about women involved in sports.  His more recent comments on similar topics haven’t been much better.

--Trump tweets:

“OK, so after two years of hard work and each party trying their best to make the other party look as bad as possible, it’s time to get back to business. The Mueller Report strongly stated that there was No Collusion with Russia (of course) and, in fact, they were rebuffed....

“....at every turn in attempts to gain access.  But now Republicans and Democrats must come together for the good of the American people. No more costly & time consuming investigations.  Let’s do Immigration (Border), Infrastructure, much lower drug prices & much more – and do it now!”

“Why didn’t President Obama do something about Russia in September (before November Election) when told by the FBI?  He did NOTHING, and had no intention of doing anything!”

“Sleepy Joe Biden is having his first rally in the Great State of Pennsylvania.  He obviously doesn’t know that Pennsylvania is having one of the best economic years in its history, with lowest unemployment EVER, a now thriving Steel Industry (that was dead) & great future!...

“The Dues Sucking firefighters leadership will always support Democrats, even though the membership wants me. Some things never change!”

Wall Street and Trade

Aside from the jobs report today, on Monday we had data on personal income and consumption for both February and March, all part of the catchup from the government shutdown beginning of the year.

Personal income in February was up 0.2%, and then just 0.1% in March, both below expectations.

Consumption (consumer spending) was up only 0.1% in February, but up a strong 0.9% in March.

The core personal consumption expenditures index, the Federal Reserve’s key inflation barometer, was up only 1.6% in March.

Tuesday, we had the S&P CoreLogic Case-Shiller home price data for February, up 0.2% over January for the 20-city index, and only 3.0% year-over-year, as the big slowdown in home prices continues across the land. 

The California median home price growth was just 1.4% in San Francisco year-over-year, 1.1% in San Diego, and 1.8% in Los Angeles.

A reading on Chicago manufacturing for April, the PMI, came in at 52.6 (50 being the dividing line between growth and contraction), well below the forecasted 58, and down from 65 in two months.

Later, the national ISM reading on manufacturing was also well below forecasts at 52.8, down from March’s 55.3.  And then a separate reading on non-manufacturing, services, came in today at 55.5, also short of expectations and the lowest since March 2017.

So all three key PMIs are well shy.  No doubt the Fed will be watching these figures carefully in the coming months.

Separately, a reading on March construction spending was -0.9%, much worse than forecast, while March factory orders were better than estimated, 1.9%.

One more, and a key one.  A report on productivity of nonfarm workers this week from the Labor Department for the first quarter increased at a 3.6% seasonally adjusted annual rate from the prior three months; a sizable increase from a year earlier, when productivity rose 2.4%.  That was the best gain year-over-year since the third quarter of 2010, when the economy was just emerging from a deep recession.

Normally, productivity is best at the beginning of an economic cycle, so the fact it is accelerating 10 years after the recession ended is a great sign that the expansion can continue, with stronger wage growth.

But there is cause for caution, because many economists, and yours truly, expect the first-quarter GDP initial estimate of 3.2% growth to be ratcheted down some.  That said, productivity improvements are key to sustaining a 3% growth rate.

So back to today’s jobs report, the 263,000 non-farm payroll number handily beating estimates of 175,000.  Again, the unemployment rate of 3.6% is the best since December 1969, while the underemployment rate, U6, remained unchanged from February and March at 7.3%.

[February’s jobs number was revised up from 33,000 to 56,000; March was revised down from 196,000 to 189,000, for a three-month average of 169,000.]

Average hourly wages were up just 0.2% over the prior month, and 3.2% over the past 12 months, unchanged from March.  While this figure is better than we’ve seen in years, it’s still below the 4%+ growth we should be seeing in a booming economy, and that has vexed some folks.

The Atlanta Fed’s GDPNow barometer began forecasting second-quarter growth, and after all of the above, it’s pegged at 1.7%, though we all know how much this can change, especially after looking at the progression of the numbers in the first quarter.

As for the Federal Reserve Board, its Open Market Committee met this week and as expected held the line on interest rates, as it’s now expected to do the rest of the year, though some, most vociferously President Trump, want the Fed to lower rates.

After their meeting, however, it was clear the Fed and Chairman Jay Powell are sitting on their hands for the foreseeable future, even as they concede inflation, according to its key barometer, the above-noted PCE, is running cold.  So it’s highly unlikely the PCE will hit the Fed’s 2% target the rest of the year.

But you don’t want a deflationary mindset to develop, so over the coming months, the data will be even more important as the Fed decides if it indeed should lower rates to push prices higher.

On the other hand, further data like we saw today on the jobs front could give the Fed pause, and contemplate hiking one more time by year’s end, especially if 3%+ growth prevails the first three quarters.

For now, Chairman Powell said in his press conference following the FOMC’s decision:

“We think our policy stance is appropriate at the moment; we don’t see a strong case for moving it in either direction...Overall, I see us on a good path for this year.”

That said, nonetheless, President Trump was tweeting:

“China is adding great stimulus to its economy while at the same time keeping interest rates low.  Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening.  We have the potential to go....

“....up like a rocket if we did some lowering of rates, like one point, and some quantitative easing. Yes, we are doing very well at 3.2% GDP, but with our wonderfully low inflation, we could be setting major records &, at the same time, make our National Debt start to look small!”

On the U.S.-China trade front, as alluded to above these negotiations, in my mind, have hit a wall, but we’ll see what happens when China sends its representatives to Washington this coming week.

We keep hearing “negotiators are making headway,” as we were told was the case this week in Beijing, including on access to key markets and how to roll back punitive tariffs, but it’s been the same mantra for weeks now.

Among the sticking points are access to China’s cloud-computing market and what portion of tariffs will remain in place on each other’s goods once an agreement is signed, as part of an enforcement regime (a schedule for having them removed if certain conditions are met).

But the Chinese are balking at a U.S. push for an enforcement process under which Beijing would agree not to retaliate should the U.S. impose tariffs on China for failing to live up to some pledges.

Other issues, such as Beijing’s support for domestic companies (subsidies) remain unresolved.

So will President Trump stand firm, as the China hawks in the administration want him to do, or will he accept a lesser deal that Beijing will hardly adhere to anyway, outside of buying some farm products and pretending to open up market sectors like financial services.

I mean, after all, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Mnuchin were in Beijing less than 24 hours this week, yet we are told China is bringing a delegation of 100, headed up by Vice Premier Liu He, to Washington next week for the purposes of putting together a draft in both English and Chinese.

Meanwhile, it is increasingly clear the Trump administration is going to have a tough time in Congress winning approval for the new U.S.-Mexico-Canada-Agreement, or USMCA.

The deal must be ratified by all three countries, and there is no deadline for that to happen.

Democrats say they want to make it easier to enforce new rules designed to strengthen labor rights in Mexico, saying a lack of worker protections there hurts wages and job prospects for U.S. workers.  The Trump administration says this is the sort of matter best handled in follow-up legislation.

And you have some Republicans in key states, such as Iowa Sen. Chuck Grassley, who support the USMCA in principle, but as he wrote in a Journal op-ed:

“A significant roadblock is the administration’s tariffs on steel and aluminum and retaliatory Canadian and Mexican tariffs on U.S. products.  These levies are a tax on Americans, and they jeopardize USMCA’s prospects of passage in the Mexican Congress, Canadian Parliament and U.S. Congress. Canadian and Mexican trade officials may be more delicate in their language, but they’re diplomats.  I’m not.  If these tariffs aren’t lifted, USMCA is dead.    There is no appetite in Congress to debate USMCA with these tariffs in place.

“Many Americans have been harmed by retaliatory tariffs.  Mexican tariffs on U.S. pork, to take one example, have lowered the value of live hogs by $12 an animal.  Iowa is the top pork-producing state in the country.  That means jobs, wages and communities are hurt every day these tariffs continue – as I hear directly from Iowans.  It’s time for the tariffs to go.”

The retaliatory tariffs are killing Wisconsin’s dairy farmers, too.

And on one of my favorite topics, President Trump’s move to withdraw from the Trans-Pacific Partnership (TPP)....

Editorial / Wall Street Journal

“American farmers are suffering the lost economic opportunities from President Trump’s withdrawal... Since the 11-member deal took effect in December, other countries have been taking America’s market share.  After Japan dropped its tariff on beef to 26.6% from 38.5%, imports from Canada and New Zealand soared 345% and 133%, respectively.  If the import surge triggers Japan’s safeguard tax, the tariff on U.S. beef will increase to 50% but will remain at 26.6% for its 10 Pacific Rim partners.

“California vintners are also getting crushed in Japan. Napa Valley exporters pay a 15% tariff while wine from Australia slides in at 5.6% and European winemakers get tariff-free access under Japan’s pact with the European Union, which entered into force in February.”

But there is hope the United States and Japan can reach a bilateral agreement, especially if President Trump drops his 25% auto-tariff threat.

Europe and Asia

Lots of data on the eurozone this week, with Eurostat announcing GDP for the first quarter came in at 0.4% over Q4’s 0.2%, though still just 1.2% growth year-over-year for the euro area (EA19).

Italy’s GDP, significantly, rose 0.2% over Q4, according to government statistics agency Istat, a much-needed boost to the populist government in Rome, with industrial production up in Jan. and Feb.

IHS Markit released its manufacturing PMI data for April, with the final reading for the EA19 coming in at 47.9, still in contraction mode but up from March’s 47.5.

Germany was at 44.4; France 50.0; Italy 49.1; Spain 51.8; and the Netherlands at 52.0, a 34-month low.

But the big gainer was Greece, 56.6, it’s best in nearly 19 years (226 months).

[In the UK, the manufacturing PMI was 53.1, non-manufacturing 50.4 for April.  The euro area service sector readings will come in Monday.]

Chris Williamson / IHS Markit

“The manufacturing sector remained deep in decline at the start of the second quarter. Although the PMI rose for the first time in nine months, the April reading was the second-lowest seen over the past six years, signaling a deterioration of overall business conditions for a third successive month.  The surveys output index is indicative of factory production falling at a quarterly rate of approximately 1%, setting the scene for the goods-producing sector to act as a major drag on the economy in the second quarter.

“The downturn remains the fiercest in Germany, with Italy and Austria also in decline and France stagnating.  Spain’s expansion remains only modest.

“Some encouragement can be gained from the PMIs having risen in all four largest euro member states in April, and forward-looking indicators such as future expectations, new order inflows and orders-to-inventory ratio having all come off their lows.  But it remains too early to call a turning point, especially as future sentiment remains around its lowest level since the end of 2012, hinting that the manufacturing downturn will persist in the coming months.

“The surveys continue to see widespread concerns over weak global demand as well as reports of businesses struggling amid rising trade protectionism, Brexit and the subdued auto sector.”

Eurostat also announced the unemployment rate in March for the EA19 was 7.7%, the best since Sept. 2008, though still more than twice the rate in the United States.  The 7.7% also compares with 8.5% March 2018.

Individually...Germany 3.2%, Netherlands 3.3%, France 8.2%, Italy 10.2%, and Spain 14.0%.

A flash estimate for euro area inflation for April came in at 1.7%, which was greater than the 1.4% reading in March, but still just 1.3% ex-food and energy. So no new concerns for the European Central Bank.

Brexit: There was no direct news on this front, and with a Brexit deal that would pass Parliament nowhere in sight, the UK will have to participate in European parliamentary elections May 23-26.

But in local elections in Britain this week, the two main parties, Prime Minister Theresa May’s Conservatives (Tories) and Jeremy Corbyn’s Labour faced a big backlash over the Brexit deadlock, with smaller parties and independents winning seats.

The Tories lost 1,334 councillors, while Labor lost 82 seats.  Theresa May said voters wanted the main parties to “get on” with Brexit.

The strongly pro-EU Liberal Democrats were the big winners, gaining 703 seats, with leader Sir Vince Cable calling every vote received “a vote for stopping Brexit.”

The Greens and independents also made gains, as UKIP lost seats.

Northern Ireland hadn’t reported as yet.  No elections were being held in Scotland and Wales.

Separately, Prime Minister May abruptly fired her defense secretary, Gavin Williamson, who was blamed for a leak that suggested she would give a role in designing a British telecommunications network to a Chinese company considered a security risk by the U.S. and others, Huawei; a report in the Daily Telegraph saying Mrs. May was considering allowing Huawei to build selected elements of Britain’s next-generation 5G network.

The government later said no decision had yet been made.

Williamson denied he was the source of the leak to the paper, which appeared within hours of a National Security Council meeting.

Britain’s top intelligence officials have said any security risks posed by Huawei can be mitigated with strong oversight.

But decisions on Huawei are highly sensitive not just in the UK, but throughout Europe.

IF Williamson was responsible, Mrs. May was in her right to fire him.

Spain: The Socialist Party of Spanish Prime Minister Pedro Sanchez emerged the big winner in Sunday’s snap election that will determine the future of legislation in a moment of bitter polarization.

Sanchez, in office just nine months, gambled on a snap vote after he was unable to secure a budget in Spain’s parliament and the move paid off.  The Socialists won 123 of 350 seats in the Congress of Deputies, but he will be able to form a governing coalition with the far-left, anti-austerity Podemos faction, and a number of Basque regional parties.

But all is not well.  Spain is divided, many angered over the Catalan independence crisis, which critics said Sanchez’ left-wing government hasn’t handled well.  Far-right Vox, for one, took advantage of the frustrations to garner enough of the vote to enter parliament for the first time; the first far-right party to do so since the country’s transition to democracy in the late 1970s.  But it had been expected to win nearly twice the 24 seats it ended up with.

No party performed as poorly as the Popular Party, which won 66 seats – a major defeat for a venerable institution that has governed Spain on and off since the transition.

Centrist party Ciudadanos picked up votes, winning 57 seats.

--Finally, since I mentioned May Day last ‘Week in Review,’ I do have to note that there were indeed violent protests in parts of Paris, with well over 200 arrested, masked protesters clashing with police at the starting point of the main march, near a key train station.

As for far-right leader Marine Le Pen, she did not lead a march in Paris, but gave a campaign speech, ahead of the European Parliament elections, in Metz.

Turning to Asia...

China reported its official manufacturing PMI for April came in at 50.1, down from the March reading of 50.5, which was a disappointment, though still technically growth, while the services reading was 54.3, down from 54.8 the prior month.

The private Caixin reading on manufacturing was 50.2, down from March’s 50.8. [The services data comes this weekend.]

So what this really means is the May numbers will be important in discerning whether China is in recovery mode or stagnating.

I haven’t seen Japan’s final reading on manufacturing in April, a preliminary figure having come in at 49.5.

In South Korea, the April PMI was 50.2 vs. 48.8 in March.

Taiwan’s April manufacturing number was 48.2 vs. 49.0.

Taiwan earlier reported first-quarter GDP was 1.7% annualized, the slowest since Q2 2016.  But Taiwan-owned businesses are increasingly shifting production from the mainland to the island to avoid higher potential tariffs imposed by Washington on Chinese exports.  This is a controversial topic, as you can imagine, Beijing always threatening to take over Taiwan, so the island’s big conglomerates are reluctant to spell out specifics.

Street Bytes

--The old saw is “sell in May and go away” (until November) and history does kind of bear this out, but for now, we closed out April on Tuesday and the Dow Jones, up 14% for the first four months, was off to its best start  since 1999, while the S&P 500’s 18% gain was its best opening four months since 1987.  The Nasdaq’s 22% advance represents its best start since 1991.  [Michael Wursthorn  / Wall Street Journal]  Tech stocks were up 27%, the most of any sector in the S&P.

For the full week, the Dow Jones fell 0.1% to 26504, while the S&P 500 rose 0.2%, hitting a record high Tuesday and Friday, 2945, while Nasdaq also closed the week at a new high, 8164, up 0.2%.  Thankfully, earnings season will begin to wind down.  Your editor hates it.

--U.S. Treasury Yields

6-mo. 2.45%  2-yr. 2.33%  10-yr. 2.53%  30-yr. 2.92%

--Warren Buffett’s Berkshire Hathaway Inc. announced it was throwing its weight behind the effort by Occidental Petroleum Corp. to acquire Anadarko Petroleum, with Berkshire saying it was buying $10 billion of Occidental preferred stock. The move positions Oxy CEO Vicki Holub to win one of the most heated takeover battles in years, a contest with Chevron Corp., which had previously struck a deal to buy Anadarko for $33 billion, Oxy’s hostile bid of $38bn.

So Chevron CEO Mike Wirth has to decide whether to significantly raise their offer or walk away.

As usual, Buffett’s / Berkshire’s backing doesn’t come cheap, the preferred stock with a coupon of 8% a year should the company succeed in its pursuit of Anadarko, and its prized assets at the heart of the oil boom in West Texas and New Mexico.

[Separately, Berkshire Hathaway took a stake in Amazon.com, Warren Buffett told CNBC on Thursday.  Buffett said he hadn’t personally decided upon the investment but that one of his portfolio managers – either Ted Wechsler or Todd Combs – made the move.  Buffett takes the stage to answer shareholder questions at the company’s widely attended annual meeting in Omaha, Neb., Saturday.]

As for the price of crude this week, it plummeted, largely after the Energy Information Administration revealed that oil inventories jumped significantly last week – by 10 million barrels.  The total is nearly 35 million barrels more than the level of inventories last year at this time, and the highest level since September 2017, according to the EIA.  An all-time record high for domestic crude production last week – at 12.3 million b/d – contributed to the substantial growth in U.S. crude stocks.

--Apple Inc. on Tuesday forecast stronger-than-expected third-quarter revenue and CEO Tim Cook said iPhone sales had started to stabilize in China, a sign that Apple’s price cuts there are helping limit sales declines. But iPhone sales marked their steepest decline ever, falling 17% in the fiscal second quarter from a year earlier and slightly missing analyst expectations.

Apple, however, said  a pickup in iPhone sales toward the end of the fiscal second quarter, along with growth in sales of services and wearable devices, made them optimistic about the current quarter.

Apple beat expectations for its wearable business, with revenue of $5.13bn vs. the consensus view of $4.79bn, according to FactSet.  Wearables include the Airpods wireless headphones and the Apple Watch.

Overall, Apple said it expects revenue between $52.5bn and $54.5bn for the current quarter ending in June, above current estimates.

CEO Tim Cook said that iPhone sales started to strengthen during the last few weeks of the quarter.  “As we look at the iPhone results through (fiscal) Q2, the results were stronger on a year-on-year basis for the last few weeks of the quarter. We also saw a similar result in China,” Cook said in an interview.  These, along with the continued success with wearables and so forth, give us some confidence that things are getting a bit better.”

Services revenue, which includes sales from Apple Music, the App Store and other businesses, reached $11.45 billion, above forecasts.

Apple has been wrestling with the slowdown in iPhone sales in key markets such as China and saw its first year-over-year decline in iPhone revenue for the holiday shopping season.  Competition from rivals such as Huawei, Xiaomi, Oppo and Vivo – all of which sell cheaper phones with features similar to the iPhones – doesn’t help.  But Cook said price adjustments and the trade-in and financing deals Apple offered, helped iPhone sales start to recover toward the end of the quarter.  Cook also said he was “optimistic” the U.S. and China would reach a trade deal.

The shares rose sharply, however, mostly because of the news on share buybacks and dividends.  During the fiscal second quarter, the company spent $27 billion on the two, and Apple said the board had authorized an additional $75 billion in share repurchases and raised the dividend another 5 percent.

But while investors loved this, the $75 billion for buybacks exposes Apple to justified criticism that the tax cuts it received have mostly benefited investors and executives.

--Alphabet Inc.’s Google reported highly-disappointing revenue in the first quarter and the shares fell hard, 8%.  Major competitors for ad spending such as Facebook, Snap, Amazon and Twitter all reported quarterly revenue above or in line with expectations, but Alphabet’s revenue, up 17% from a year ago to $36.3 billion, compared with Wall Street’s consensus of $37.3 billion.  The 17% was the slowest in three years and compared with 26% for the same quarter a year earlier.  [Google’s ad revenue rose 15% from a year ago, slower than the 24% pace in last year’s first quarter.]

The company also said paid clicks on its properties fell 9% compared with the previous quarter.  About 84.5% of Alphabet’s revenue came from Google’s ad business.  Its 3 billion users help make it the world’s largest seller of internet ads, capturing a third of all revenue, according to research firm eMarketer. Facebook is at about 20%.

Alphabet’s adjusted earnings, accounting for a $1.7 billion fine from the European Commission for having placed anticompetitive advertising restrictions on websites using its searches, were $8.3 billion.

On the spending side, Google added another 18,000 jobs, crossing the 100,000 figure for full-time employees.

[If you read just one news release on Google’s / Alphabet’s earnings, you may be missing the full picture.  It’s confusing, because some releases reported only parent Alphabet’s, while others only wrote of Google’s.  I’ve done my best to combine them.]

--Tesla’s financial results released last week didn’t mention that the automaker’s revenue included $200 million collected from regulatory credits.  When CEO Elon Musk answered questions from analysts, he didn’t mention this.  It was just buried in a regulatory filing known as the 10-Q filed with the SEC.

Without this spike, the loss for the first-quarter, reported as $702 million, would have been much deeper.

Key Bernstein analyst Toni Sacconaghi, when notified of this, responded, “Egad,” in a note to investors.

But then Tesla announced it was looking to raise as much as $2.3 billion through a bond and stock sale after last week’s loss heightened concerns about its dwindling reserves of cash.

Musk had said Tesla didn’t need to seek new financing, but after last week’s earnings report, he said there was “merit to the idea” of raising money.

Tesla said Thursday it expects to bring in $642 million in net proceeds from a public offering of about 2.7 million shares, while Musk signaled his intent to buy about $10 million of those shares.

Tesla also said it is offering $1.35 billion in convertible senior notes, due in five years.

Shares jumped 4% on the news.

But wait, there’s more!  This afternoon, Tesla said it was increasing the ‘raise’ to $2.7 billion in a record-setting capital raising for the electric carmaker, as investors scooped up a mix of new stock and convertible notes.  So owing to the buoyant interest, the stock rose another 2%.

--General Motors reported an 11% drop in quarterly profits, though its headline numbers were boosted by the company’s stakes in Lyft and Peugeot owner PSA.

Revenues fell 3.4% to $34.9 billion, missing expectations.

In North America, earnings fell to $1.9bn from $2.2bn a year earlier as planned downtime in the production of its SUVs was partly offset by rising sales of high-margin pick-up trucks.

The International division struggled as profits slowed in China because of falling sales and losses racked up in its other markets.  CEO Mary Barra said she sees “more downside than upside risk in the near term” for China, where industrywide sales remain in their first protracted decline in decades.  Barra added it wasn’t clear if Beijing would be offering new incentives to stoke new-vehicle demand.

Sales in China fell 3% in 2018 and were down 11% in the first quarter.

Re PSA, GM sold its European Opel arm to it in 2016.

--General Electric shares rallied as the industrial conglomerate reported first-quarter earnings that were well ahead of analysts’ expectations, even as revenue came in slightly below consensus.

Adjusted earnings of $0.14 a share beat the $0.09 the Street forecast, but revenue was down 2% to $27.3 billion, shy of expectations.

CEO Larry Culp said, “We expect our performance for the year to be in line with our previous commentary...this is one quarter in what will be a multi-year transformation, and 2019 remains a reset year for us. We continue to focus on reducing leverage and improving the underlying performance of our businesses to create sustainable, long-term value for our customers, employees, and shareholders.”

--Boeing Co. said on Monday that certain safety alerts on its 737 MAX jets didn’t operate as airlines would have anticipated because of a previously undisclosed error on its part.

The alerts, intended to tell cockpit crews if sensors are transmitting errant data, had been standard on earlier 737 models.  Officials at airlines around the world, including Southwest Airlines Co., the largest 737 MAX customer, assumed the alerts remained standard until details of the Lion Air crash emerged, and at that point, the industry and FAA inspectors realized the alerts hadn’t operated on most MAX aircraft, including Southwest’s.

For the year of MAX operations, only those airlines that paid extra for certain associated features had the alerts operational.

Boeing, in a statement Monday, said the alert “was intended to be a standard, stand-alone feature on MAX airplanes.”  But the company went on to say the goal wasn’t achieved “because the feature was not activated as intended” when the jets rolled out of the factory.

But I seem to recall that we already long knew airlines had to pay extra for the feature, yet now we are being told Boeing will make the alerts standard.  I mean, what the heck?

Monday’s statement raises new questions about what Boeing told customers, pilots, regulators and others in the wake of the first MAX crash in October.  According to documents revealed by the Wall Street Journal, FAA inspectors shared concerns with each other about a month after the accident: “Did Boeing foul up on the MAX by not ensuring” the alerts would operate even “if the customer chose not to pay for” associated safety features?  Such issues, however, didn’t become public at the time.

Boeing Chairman and CEO Dennis Muilenburg gave unsatisfactory answers at a shareholder meeting the day the above came out in news reports.

--Last weekend, CoreLogic reported on the six-county Southern California home market, the median price dipping 0.1% in March from a year earlier, the first annual decrease since 2012 and a sign of a downshift in this once-sizzling housing market.

Given a pullback in previous months, prices are $18,500 off their June 2018 peak.

The median price for new and resale houses and condos was $518,500 in March, off the all-time high of $537,000 reached in June.

But economists note there is still plenty of demand in a state where developers can’t easily ramp up construction.  Unemployment is 4.3%, near a record low and down from 12.3% at the height of the Great Recession.

In Orange County, the median price dropped 0.7% to $720,000, while sales fell 22.8%, the price $20,000 below its all-time high of $740,000 in May, June and September of last year.

--I’ve written of FoxConn Technology Group and its much-ballyhooed $10 billion liquid-crystal-display factory in Mount Pleasant, Wis., a number of times since President Trump and Foxconn Chairman Terry Gou hatched the factory plan in 2017, both attending last summer’s gold-shovel groundbreaking in Mount Pleasant, 20 miles south of Milwaukee. 

Thus far, little has been done, and now we’ve learned that Foxconn, famous as an Apple supplier, had spent only $99 million, or 1% of its pledged investment, according to its latest state filings.  The company had projected as many as 2,080 in-state employees by the end of 2019 but had fewer than 200 at last year’s end. 

Meanwhile, the village of Mount Pleasant, which saw 75 homes bulldozed and hundreds of farmland acres turned over to Foxconn, has borrowed around $350 million to buy land and make infrastructure improvements.

Needless to say, Mount Pleasant has seen its debt rating slip, with neighbors falling out over land seizures.  Foxconn better step up soon in its activity.

As for Chairman Gou, he is running for president of Taiwan, and he’s assured President Trump that Foxconn’s plans in Wisconsin remain on schedule.

--One of my favorite barometers for the health of the Chinese economy, casino revenue in Macau, fell the most in almost three years as China’s sluggish economy continued its chilling effect on high-end customers.  Analysts, however, believe the world’s largest gaming hub has seen the worst of the recent slowdown.

Gross gaming revenue for Macau’s operators was $2.9 billion in April, down 8.3 percent from a year earlier.  Last year, Macau reported double-digit growth for the month.

The mainland accounts for 2/3s of Macau’s visitors.

--McDonald’s Corp. said renovated restaurants and new promotions helped boost U.S. sales in the first quarter, with comp-store sales up a solid 4.5%, 5.4% globally, the latter far exceeding expectations of 3.4%.

According to industry research firm the NPD Group Inc., visits to all quick-service burger restaurants declined 1% in the quarter, but spending rose 3%.

For its part, McDonald’s said promotions such as free bacon, a deal to buy two items for $5 and stick-shaped doughnuts helped bring in customers.

CEO Steve Easterbrook is continuing with his strategy of selling off more company-owned stores to franchisees, which means less direct revenue, but improved profits for MCD through lower capital expenses.

McDonald’s has been focused on closing underperforming U.S. stores in malls, airports and retail locations.

If there’s a problem at McDonald’s, it’s still wait time at drive-thrus, Easterbook said.  At the same time, all-day breakfast, fresh-beef burgers and new digital ordering tools have increased sales, though competition remains fierce at breakfast.

Lastly, McDonald’s said it raised prices 2% on average in the first quarter to compensate for higher costs.

--Qualcomm Inc. recently reached agreement with Apple Inc. on a longstanding legal dispute that resulted in Qualcomm receiving $4.5 million+ for selling chips to Apple and collecting royalty payments in exchange for licensing its technology. 

But Wednesday, Qualcomm disappointed the Street when it gave a lackluster forecast for the current quarter, citing weaker demand for smartphones in China.  CEO Steve Mollenkopf said in an interview with the Los Angeles Times, “You’re going to see Chinese weakness reflected in the next couple of quarters.”

The stock fell a bit on this news, but it had rallied more than 50% since the Apple deal was announced.

--Facebook CEO Mark Zuckerberg, at an annual developers conference Tuesday, was chuckling onstage as he referred to the social network’s abysmal reputation for protecting user privacy.

“I know that we don’t exactly have the strongest reputation on privacy right now, to put it lightly,” a grinning Zuckerberg said, receiving crickets from the audience.  “I get that a lot of people aren’t sure that we are serious about this,” he continued, finally getting a laugh.

Zuckerberg unveiled the company’s new “privacy-focused vision,” as Facebook battles criticism for security hacks, misuses of users’ data, peddling in hate speech and fueling misinformation.

The company’s redesign is supposedly geared toward encouraging users to spend more time in small, intimate groups – including through Facebook’s various messaging apps.  It’s also going to discourage users from competing for likes on Instagram.

“We don’t want Instagram to feel like a competition,” Instagram head Adam Mosseri said.  “We want people to worry a little bit less about how many likes they’re getting on Instagram and spend a bit more  time connecting with the people that they care about,” Mosseri added.

Facebook also announced Thursday that it had designated some high-profile people, including Nation of Islam leader Louis Farrakhan, who’s notorious for using anti-Semitic language, and right-wing conspiracy theorist Alex Jones, as “dangerous” and said it will be purging them from its platforms.

Jones and his media outlet InfoWars had previously been banned from Facebook in Aug. 2018, but had maintained a presence on Instagram, where Jones and InfoWars will now be banned as well.  Other fringe media personalities are being banned, including Milo Yiannopoulos.

--CVS Heath reported solid earnings for the first quarter, with same-store sales growth of 3.8%, which topped analyst expectations.  And the company boosted guidance, as the shares rallied.

CVS had lost about a fifth of its value over the past six months as the company confronts a host of challenges, including a proposed rule from the Trump administration to overhaul Medicare drug pricing, while Medicare for All proposals from the Democratic presidential candidates could damage CVS’ insurance operation.

--Royal Caribbean Cruises Ltd. announced it expects to report results that are even better this year than last due to ongoing strong demand for cruises, higher booking prices and higher guest spending.  [I’m guessing some folks are ‘over-served.’]

The cruise-ship operator said it had a record wave season, the peak January to March booking period for cruises.

For the full year, Royal Caribbean expects net yield – a closely watched metric that reflects pricing performance – to rise 7.5% to 9% from a year earlier excluding currency fluctuations, above its previous guidance of 6.5% to 8.5%.

The shares rose sharply even though its full-year earnings forecast was reduced due to a shipyard accident last month in the Bahamas, when two construction cranes toppled onto the company’s Oasis of the Seas, which was undergoing maintenance.  The cruise ship was taken out of service and three sailings were canceled last month, but it is expected to return for a scheduled May 5 sailing.

--Institutional Investor’s annual “rich list” was published Tuesday and Ray Dalio, the co-founder of Bridgewater Associates, who has recently been raising the alarm about income inequality, topped the list, II estimating his 2018 earnings at $2 billion, an improvement on the $1.3 billion he made in 2017.

Last year’s top finisher, James H. Simons of Renaissance Technologies, who made $1.5 billion, earned $1.7 billion the year before.

Institutional Investor calculated the managers’ income by adding what they received in management and performance fees to the earnings on their investments in the funds they oversee.

--Interest in Impossible Foods’ plant-based meat alternative is growing so much, the company announced it was struggling to keep up.

The acknowledgment comes after the company expanded its partnership with Burger King, with the fast food chain announcing plans to sell the meatless patty as a Whopper at all of its U.S. locations by the end of the year.  Restaurant Brands International, which owns Burger King, said a St. Louis test of the Impossible Whopper went “exceedingly well.”

A nationwide rollout by BK would essentially double the amount of restaurants that Impossible works with, or over 14,000 in total.  Demand in the 7,000 locations where Impossible currently has its products has more than doubled, Impossible Foods CFO David Lee said the other day.

Impossible added it is not facing a shortage of the ingredients it uses to make the plant-based meat, but “we are facing short-term ramp-up challenges resulting from demand greatly outstripping supply,” the company said.

Meanwhile, rival Beyond Meat launched its IPO on Thursday and the share price surged 163 percent in its first day of trading, signaling surprising interest in this new generation of companies that are creating alternatives to meat.

McDonald’s said it is following developments closely.

Tyson Foods said it sold its early stake in Beyond Meat, in part because it is developing its own plant-based protein.

The ICU, the International Cattle Union, has hired an attorney, Bevo Steerbinski, though it’s complicated when you are slaughtered one way or another.

--With Uber slated to launch its IPO next week, New York drivers for both Uber and Lyft and other ride-sharing apps will be joining colleagues from across the globe by briefly going on strike Wednesday to demand better job security, higher wages and a guaranteed 80 percent cut of all fares.

New York Taxi Workers Association Executive Director Bhairavi Desai said: “Wall Street investors are telling Uber and Lyft to cut down on driver income, stop incentives, and go faster to driverless cars.  With the IPO, Uber’s corporate owners are set to make billions, all while drivers are left in poverty and go bankrupt.”

--Kellogg Co. said first-quarter sales in North America fell amid weaker demand for cereals and a recall of protein bars.  Comp sales in the U.S. and Canada fell 1.5% in the quarter vs. last year, cereal sales declining 4.4% compared with last year.

Overall, Kellogg reported sales of $3.52 billion, up 4%, while earnings fell 37% to $282 million.

--TV-giant Sinclair Broadcast Group Inc. has struck a deal valued at more than $10 billion to acquire 21 regional sports networks from Walt Disney, according to people familiar with the matter.

For Sinclair, which is already the nation’s biggest owner of local television stations, the acquisition would make it a force in cable programming.  Among the properties it is acquiring are sports channels in Los Angeles and Detroit.

Disney, which acquired the sports networks as part of its purchase of entertainment assets of 21st Century Fox, agreed to sell them to pave the way for government approval of the deal.

But the price tag for the regional sports networks is less than what was initially expected... somewhere between $16bn and $20bn.

Sinclair separately partnered with the New York Yankees to acquire the YES Network, another of the networks once controlled by Fox, in a deal valued at $3.45 billion, according to the Wall Street Journal.  The sale, which hasn’t been finalized, apparently includes Amazon.com as a partner.

--CBS Corp. reported first-quarter earnings that were in line with expectations, while revenue fell short, despite CBS having the Super Bowl.

The importance of live sports was never more apparent, with executives already starting to negotiate a new deal with the NFL even though its current deal runs through 2022.

CBS also said revenue from its direct-to-consumer streaming services reached a record level, with subscribers to its CBS All Access product and its Showtime streaming service growing 71% from a year earlier.

But while advertising revenue rose 18%, driven by the Super Bowl in February, revenue in the company’s cable networks business declined 3%.

Overall, first-quarter revenue increased 11% from a year earlier to $4.17 billion.

Separately, Norah O’Donnell is officially out as co-host for CBS’ struggling morning show, “CBS This Morning,” a move demanded by Gayle King, who has just signed a new massive contract.

O’Donnell is being replaced by “CBS This Morning Saturday” co-anchor Anthony Mason and CBS News correspondent Tony Dokoupil.

But O’Donnell is now going to slide into the anchor position for “CBS Evening News,” a position currently held by Jeff Glor.

According to the New York Post, which first reported on the moves, what’s kind of stunning is it seems no one likes O’Donnell, so why the move to the Evening News?

As for “CBS This Morning” current co-host John Dickerson, he will move to “60 Minutes” in a political role.

--“Avengers: Endgame” arrived to record-breaking opening-weekend sales of $350 million in the U.S. and Canada, according to Comscore, which easily beat “Star Wars: The Force Awakens” (2015), which had opening-weekend sales of $248 million (or $270 million in today’s dollars).

“Avengers: Endgame” took in an astounding $1.2 billion worldwide, arriving as the No. 1 movie in 54 countries.  Disney said last Sunday that the flick set a record for the largest opening weekend in 44 overseas markets, with Imax theaters contributing an outsized portion of ticket sales, particularly in China.

Foreign Affairs

Venezuela: Tuesday, Venezuelan opposition leader Juan Guaido called for a military uprising to oust President Nicolas Maduro and armed factions exchanged gunfire outside a Caracas air base as the country hit a new crisis point after years of political and economic chaos.

Secretary of State Mike Pompeo said that Maduro had been expected to flee the country, but Russia convinced him to stay, which the Kremlin strongly denied.  “He had an airplane on the tarmac, he was ready to leave this morning as we understand it and the Russians indicated he should stay,” Pompeo said on CNN.

Guaido, the president of the opposition-controlled National Assembly, is recognized as Venezuela’s legitimate head of state by the United States, the European Union and others, while Maduro is backed by Russia, China, and Cuba, as well as Turkey.  He’s been calling on the country’s military to back him ever since he declared himself interim president in January.

The Trump administration has imposed severe sanctions on the Maduro government and refused to rule out military intervention.

Secretary Pompeo said, “Military action is possible.  If that’s what’s required, that’s what the United States will do.” 

But the U.S. has been repeating this theme since the crisis began months ago...and nothing.

Maduro is backed by thousands of Cubans from their army and intelligence services, as well as Russia, which has assets on the ground, including missiles and 100 troops.

Russian Foreign Minister Sergei Lavrov told Pompeo that further “aggressive steps” in Venezuela would have grave consequences.

U.S. national security adviser John Bolton said Moscow’s involvement was not welcome.

“This is our hemisphere,” he told reporters Tuesday.  “It’s not where the Russians ought to be interfering.  This is a mistake on their part.  It’s not going to lead to an improvement in relations.”

Wednesday, Maduro, in a televised address, said the government would go after those behind the coup plot.  “Justice is looking for them, and sooner or later they will pay in prison for their treason and crime.”

The same day, Venezuelans heeded Guaido’s call to take to the streets, but there was little concrete sign of change.

Guaido had called for the “largest march” in Venezuela’s history and said on Twitter that “millions of Venezuelans” were in the streets in “this final phase” of his move to oust Maduro, but by late afternoon, many of the protesters in Caracas had drifted home.

By Thursday, the government began going after opposition leaders, ordering several of them arrested – including the vice president of the National Assembly – as antigovernment protests died down.

A Caracas court ordered Leopoldo Lopez to be jailed in the notorious Ramo Verde military prison, where he spent 3 ½ years before being remanded to house arrest in 2017.

Lopez, the political mentor to Juan Guaido, took refuge in the Spanish embassy on Tuesday after he surprised Venezuelans in an early-morning video that showed him standing outside the air base in Caracas, with Guaido, as they called for troops to rise up.  Lopez had been released by sympathetic members of the intelligence services, whose director turned against the government.

Also yesterday, Maduro held a march with military officers Thursday at the capital’s main military base in a show of loyalty.

As I go to post, the whereabouts of Guaido are not known, along with many of his top aides.  It is also unclear what more Guaido can do at this point.

The number of Venezuelans fleeing across the border to Brazil this week increased by three-fold

China: Chinese state media has been going after FBI Director Christopher Wray, calling him “vulgar,” “arrogant,” “mentally challenged,” and a “low life.”

It’s all because of Wray’s scathing critique last week of what he called China’s attempts to “steal its way up the economic ladder” at the United States’ expense – “stealing innovation in any way it can, from a wide array of businesses, universities and organizations” – which quickly drew fire from nationalist voices, such as in an editorial in the Global Times, which is published by Chinese Communist Party mouthpiece People’s Daily.

Wray’s accusations displayed an “undisguised contempt for the whole of Chinese society” and threatened to lead U.S. understanding of China “into the gutter,” the editorial said.

“People like Wray emanate the kind of vulgarity shown by history’s career low-lifes. That vulgarity floods the U.S. administration today.”

In a speech to the Council on Foreign Relations, Wray said:

“Russia is in many ways fighting to stay relevant after the fall of the Soviet Union.  They’re fighting today’s fight.

“China is fighting tomorrow’s fight, and the day after tomorrow, and the day after that.  And it affects every sector of our economy, every state in the country, and just about every aspect of what we hold dear.”

No argument here.  I’ve seen firsthand what China is capable of.

Wray added that following the September 11 attacks, the FBI concentrated resources on counterterrorism programs, creating a “void” that China took advantage of.

Some say Wray is trying to sabotage U.S.-China trade talks, but he’s part of a new U.S. hawkishness and realism as to the threats we face.

Aruna Viswanatha and Dustin Volz / Wall Street Journal

“Chinese spies are increasingly recruiting U.S. intelligence officers as part of a widening, sustained campaign to shake loose government secrets.

“Senior U.S. law enforcement and intelligence officials have escalated their warnings characterizing Chinese espionage as the single most significant long-term strategic threat, encompassing both spycraft intended to steal government secrets and the sustained heist of intellectual property and research from the corporate and academic worlds....

“Senior U.S. officials have publicly warned with increasing frequency about the national and economic security implications of China’s multi-pronged spying operations, describing it as a whole-of-society challenge....

“American officials have spoken in dire terms about China’s cybertheft of national-security secrets, including a persistent effort to breach the Navy and its contractors, which threatened the U.S.’s standing as the world’s top military power, according to a recent internal review.  Senior Justice Department officials have said more than 90 percent of economic-espionage prosecutions over the past decade – many of them cyber-enabled – have involved China....

“ ‘Russia is the hurricane: It comes in fast and hard,’ Rob Joyce, senior cybersecurity adviser at the NSA, told reporters.  ‘China is climate change: long, slow, pervasive.’”

Patrick Tucker / Defense One

“China is becoming a rising power not only in consumer technology and artificial intelligence but also in Arctic military operations and nuclear submarine construction, according to a new report from the Pentagon.

“ ‘Arctic border countries have raised concerns about China’s expanding capabilities and interest in the region,’ noted the report, ‘Military and Security Developments Involving the People’s Republic of China 2019,’ published today.  Often called the ‘China Military Power’ report, it’s required annually by Congress.  This year, it highlights the country’s prowess in the Arctic.  In 2018, China completed its ninth Arctic expedition, published its first Arctic strategy document, and launched its second icebreaker, the Xuelong 2.  The ship, capable of breaking 1.5 meters of ice, is the first polar research vessel that ‘can break ice while moving forwards or backwards,’ according to the report.

“The  warming Arctic might also cool, or at least complicate, Beijing’s budding friendship with Moscow.  The Pentagon has watched growing Sino-Russia cooperation with concern.  In September, China joined Russia as it held its annual strategic Vostok wargame for the first time – but there are limits to what can be shared.  Russia sees possession of the Northern Sea Route that runs along its coast as critical to national security.  ‘In September 2018, a Russian expert at the Russian International Affairs Council stated the Russian Federation was strongly opposed to foreign icebreakers operating on the Northern Sea Route, including U.S. and Chinese icebreakers,’ says the report.

“Still, the region offers considerable scope for commercial cooperation.  The two nations are building a pipeline to bring liquefied natural gas from Russia to China. They’ve also been working out details and divisions of shipping and joint commercial activity.”

But another possibility for Chinese use of the Arctic, the report said, “is as a place to deploy its burgeoning fleet of ballistic missile submarines. China now has six Jin-class SSBNs, the report says, up from the five identified by open-source methods in November.”

Finally, on a lighter note, it seems that both President Xi Jinping and Premier Li Keqiang are big fans of “Game of Thrones.”  Last weekend, in a speech to world leaders in Beijing that included Vladimir Putin and Pakistan’s Imran Khan defending China’s Belt and Road Initiative, a scheme that seeks to build a modern version of the Silk Road to link China with Asia, Europe and beyond through large-scale infrastructure projects, Xi told his guests:

“We must all make sure the world we live in does not descend into the chaotic warring seven kingdoms of Westeros.”

Speaking at a separate forum in Dubrovnik, the medieval Croatian city that doubles as King’s Landing, the capital of the Seven Kingdoms, in the show, Li Keqiang also made references to GoT.

North Korea:  Bret Stephens / New York Times

“As deal-making goes, Donald Trump’s approach to negotiating with North Korea has resembled nothing so much as his purchase, in 1988, of New York’s Plaza Hotel: Rely on personal chemistry, ignore the advice of experts, neglect due diligence and then overpay for an investment that delivers no returns.

“As with the Plaza, the result is about the same: a fiasco.  Trump only avoided personal bankruptcy over the hotel thanks to the indulgence of his creditors.  Who will bail out the United States – and at what price – for a bankrupt policy on the Korean Peninsula?

“Vladimir Putin, maybe?

“The Russian strongman certainly seemed to be angling for the role when he hosted Kim Jong Un at a summit in Vladivostok this week.  ‘Kim himself asked me that I inform the U.S. side of his position about questions he has regarding what’s happening on the Korean Peninsula,’ Putin said after the meeting, with about as much sincerity – and the same serpentine intent – as Kaa the python from ‘The Jungle Book.’

“Russia is too cash-strapped to provide North Korea with much economic aid, which is what Kim badly needs now. But it already helps the North evade the UN sanctions, and it can easily serve as Pyongyang’s protector on the Security Council, just as it does for Bashar al-Assad’s Syrian regime.

“Moscow also wants to build a gas pipeline through North Korea to feed the energy needs of the South – all the better to open a new market, corrupt a few middlemen, weaken the U.S., and, should need arise, use energy for strategic blackmail.

“It’s too soon to say whether Putin’s gambits will succeed.  But it’s a measure of the scale of the administration’s failure that the Russian is in a strong position to try.  At his February summit with Kim in Hanoi, Trump failed to get the deal that he unwisely hankered for, which was all-too predictable given the history and ambitions of the North Korean regime.

“Trump then followed up that failure by continuing to coddle and flatter Kim.  In March, he suspended large-scale military exercises with the South. Then he publicly canceled a package of tough North Korea-linked sanctions proposed by his own administration.

“Weeks later, he tweeted: ‘I agree with Kim Jong Un of North Korea that our personal relationship remains very good, perhaps the term excellent would be even more accurate, and that a third Summit would be good in that we fully understand where we each stand.’  On Friday, he thanked Putin for his mediation, adding: ‘I think we’re doing very well with North Korea.’

“The result is a visible series of gaps, all of them exploitable by America’s adversaries: the gap between the president and his advisers; between Washington and Seoul; between the existing sanctions regime and the will to enforce them.

“Also, the gap between Trump’s fantasies and the facts.

“ ‘Pyongyang is growing bolder in its sanctions evasion in part because many countries – and their banks, insurers and commodities traders – have long failed to properly enforce the measures,’ the Washington Post’s Jeanne Whalen reported this week.  ‘And some sanctions specialists worry that mixed signals from the Trump administration may further undermine global enforcement.’....

“And another crisis seems to be coming. Satellites have found secret North Korean missile bases, and there are new indications of reprocessing activities at a nuclear site.  Pyongyang has also test-fired a new weapon, started rebuilding a missile test site it had previously begun dismantling, demanded Mike Pompeo’s removal from nuclear talks and issued a year-end deadline for the U.S. to meet its terms.

“This is not the behavior of a regime that thinks it has much to fear from the American president.  It’s the behavior of a regime that has his number....

“There may be no good answer to the challenge of North Korea, but there are plenty of bad ones. Trump seems eager to grasp them all.  And unlike the bomb that was the Plaza deal, these ones could detonate.”

Russia: President Putin signed a law on Wednesday that intends to give the country a “sovereign internet” the Kremlin could disconnect from the global web.

Moscow says the move is to “ensure the safe and sustainable functioning” of Russia’s internet in the event that hostile powers attempt to switch it off from abroad.  But critics say the move is intended to further clamp down on dissent amid already-tightening restrictions on freedom of speech.

The bill goes into effect November 1, and requires internet service providers to filter all traffic through special nodes under the control of Roscomnadzor, the Kremlin’s internet censor. 

Though it remains largely unclear how – or even whether – the disconnect would work, theoretically, it makes it easier for Roscomnadzor to enforce its highly inefficient blocks of banned websites, messaging app Telegram, and non-compliant VPN services.

In the same vein...Editorial / Washington Post

“The number of political prisoners – people incarcerated just for expressing views or beliefs, or for political motivations of the jailer – has risen sharply in Russia.  According to authoritative lists maintained by the Memorial Human Rights Center, the number of political prisoners in Russia has jumped from 46 in 2015 to 278 today.  These cases are a strong indicator of how far Mr. Putin has strayed from the ideals of democracy and rule of law enshrined in Russia’s 1993 constitution....

“Russia’s constitution guarantees basic rights that were violated in the Soviet Union, including freedom of expression, religious belief and assembly.  Article 31 (reads): ‘Citizens of the Russian Federation shall have the right to assemble peacefully, without weapons, hold rallies, meetings and demonstrations, marches and pickets.’  The increasing number of political prisoners is a sign that such guarantees mean nothing to Mr. Putin and his cohorts.”

Iran: With the reinstatement of U.S. sanctions last year, Iran’s GDP contracted 3.9% in 2018, according to the International Monetary Fund, but it’s expected to shrink by 6% in 2019, though this projection preceded the expiration of the sanctions waivers.

At the start of 2018, Iran’s crude oil production reached 3.8 million barrels per day, according to OPEC, with the country exporting about 2.3 million bpd, most of that bought by the eight countries that were granted six-month waivers by the U.S. when sanctions on the Iranian energy sector took effect.

By March 2019, Iran’s oil exports had fallen to 1.1 million bpd on average, with the two biggest buyers – China and India – having reduced their imports by 39% and 47%, respectively, according to consulting firm SVB Energy International.  It was estimated that Iran’s government had lost more than $7.7bn in revenue as a result.

But it’s not clear how much further Iranian oil sales will drop as China has said its trade with Iran is perfectly legal and that the U.S. has no jurisdiction to interfere.  Turkey has said it cannot cut ties with a neighbor.

But there are signs Iran will struggle to find buyers, with the U.S. now estimating Iranian exports will collapse to 300-400,000 barrels a day this summer.

While the United States can pick up some of the slack from Iran’s production cuts, all eyes are on Saudi Arabia.  Russian President Putin said he hoped Iranian oil exports would continue despite Washington’s efforts to stop them, but that he was also unaware of any Saudi intention to increase production, Russia now part of OPEC+, and its global output cut plan.

One thing is for sure...with reduced Iranian production, coupled with the chaos in key exporter Venezuela, someone has to make up the difference to prevent an eventual price spike, despite this week’s downturn in the price of crude.

Iraq: Prime Minister Adel Abdul Mahdi said this week that Islamic State remains a potent threat around the world despite reduced capabilities, Abdul Mahdi adding its leader, Abu Bakr al-Baghdadi, had made his latest video appearance in a “remote area.”

A video showed a man it said was Baghdadi in what would be his first appearance since he declared the jihadists’ now-defunct “caliphate” five years ago in Mosul.  The authenticity and date of the recording could not be independently verified, but Baghdadi mentions recent events.

“Your brothers in Sri Lanka have pleased the hearts of the believers with their [suicide] attacks,” he said. “This is only part of the revenge awaiting the crusaders.”

Baghdadi acknowledged ISIS’ defeat at Baghouz, saying IS had carried out 92 attacks in eight countries in response, and that jihadists would continue “a war of attrition.”

Baghdadi, an Iraqi, is believed to be hiding out in an isolated area of either Iraq or Syria, part of vast desert regions ISIS once held and from where it is thought the jihadists are now waging regular insurgent-style attacks against security forces in both countries.

Egypt: President Abdel Fattah el-Sisi met with President Trump at the White House on April 9, and now the administration is pushing to issue an order that would designate the Muslim Brotherhood a foreign terrorist organization, the Brotherhood with millions of members across the Middle East, and a source of political opposition in Egypt.  El-Sisi urged Trump to take the step in joining Egypt in branding the movement a terror group.

While national security adviser John Bolton and Secretary of State Mike Pompeo support the idea, the Pentagon has voiced legal and policy objections.

The Muslim Brotherhood was founded in 1928 in Egypt, and for decades it used violence as a means to pursue its goal of a society governed by Islamic law.  It renounced violence in the 1970s and embraced democracy instead, though some offshoots have carried out terror attacks.

Recently, the administration abruptly pushed through the terrorist designation for Iran’s Revolutionary Guards Corps, announcing sanctions on the Iranian military arm on April 8, the day before el-Sisi visited the White House.

Afghanistan: Hy Rothstein and John Arquilla / Wall Street Journal

“The U.S. no longer sees a victory as a possibility in Afghanistan.  Political and military leaders are now focused on getting out with a façade of honor. This has created a surreal situation: The U.S. is negotiating directly with the Taliban, the enemy it sought to remove from power almost 18 years ago.  These ‘peace’ talks are going on even as the Taliban has started its spring offensive. To add to the absurdity, the Afghan government, America’s own creation, has been excluded from the negotiations because the Taliban, our common enemy, demanded it.  American leaders seem oblivious to their culpability for the deteriorating situation....

“American naivete is now leading to another grave mistake in Afghanistan. The U.S. is trying to make peace with the Taliban, but why would a negotiating partner who is serious about peace restart the fighting?  The answer is simple – the Taliban isn’t serious about peace. And why would it be?  It controls more territory today than it did in 2016, the Afghan government is losing control, and the U.S. seems to want out.

“Thus the government America helped create is on the sidelines while the U.S. envoy, Zalmay Khalilzad, praises the Taliban’s representative as a patriot. When Hamdullah Mohib, the capable, Western educated, U.S.-friendly Afghan national security adviser, expressed Afghan officials’ legitimate frustration at this state of affairs, he was declared persona non grata by U.S. diplomats.

“American diplomacy now implicitly seconds the Taliban’s claim that Afghan President Ashraf Ghani’s government is a ‘puppet regime.’  This dishonors the sacrifice of Americans and Afghans who have been fighting for decades for a better Afghanistan.

“What is to be done?  First, the U.S. should stop direct negotiations with the Taliban.  Under current conditions, negotiations won’t bring peace.  Second, scrap the long-held assumption that Afghanistan can be governed by day-to-day control from Kabul. Stability and legitimacy in Afghanistan requires decentralization of security, governance, and justice structures.  The central government is not capable of controlling rural areas and populations.

“The Taliban currently enjoys the luxury of seizing the military offensive and engaging in negotiations on its own terms.  If Afghanistan is to be saved, the U.S. must stop coddling this terrorist organization, then convince Kabul – and many at State and the Pentagon – to embrace a decentralized approach to Afghan security and governance.”

Today, the Taliban rejected calls for a Ramadan ceasefire and attacked the traditional council, or loya jirga, which made the proposal.

President Ashraf Ghani, addressing the 3,200 religious leaders at their grand tribal council, said: “Let us prove that only Western countries cannot solve this conflict.  There is also human civilization here.”

As a goodwill gesture, demanded by the loya jirga, Ghani agreed to release 175 Taliban prisoners.

Japan: Emperor Akihito became the first Japanese monarch to stand down in more than 200 years this week, the 85-year-old abdicating after saying he felt unable to fulfil his role because of his age and failing health.

Akihito’s eldest son, Crown Prince Naruhito, ascended the throne on Wednesday.  While the emperor holds no political power, he serves as a national figurehead.

Random Musings

--Presidential tracking polls....

Gallup: 46% approve of Trump’s job performance, 50% disapprove; 91% of Republicans, 37% of Independents (May 3). The 46% approval is the highest yet in this survey. Trump’s first week in office it was 45%.
Rasmussen: 50% approval, 47% disapproval.

In a new Washington Post/ABC News poll, President Trump’s job approval is 39%, a tick up from January’s 37%.  But among registered voters, his approval rating is 42%.  His disapproval rating among all adults (as well as registered voters) is at 54%, down from 58% in January.  The January poll was shaded by discussion on funding for a border wall.

In a new Quinnipiac University National Poll released Thursday, President Trump received a 41% approval rating, 55% disapproval, compared to 38-55 March 5, before the release of the Mueller Report.  But there is a wide gender gap as women disapprove 62-34, while men approve, 48-46.

[In the Quinnipiac survey, Trump’s approval rating has been between 38 and 41 percent going back to last August.]

--In the Post/ABC News survey, 44 percent of Americans say Trump’s handling of illegal immigration makes them more likely to oppose his reelection, versus 31 percent who say it makes them more likely to support him, while 24 percent say it won’t be a factor.

Among college educated whites, 45 percent say Trump’s handling of the issue makes them more likely to oppose his reelection, versus 34 percent who say the opposite.  Among college educated white women, it’s more pronounced, 48-31.

Among rural voters, 45 percent say Trump’s handling of the issue makes them more likely to support his reelection, versus 29 percent who say it makes them less likely.

White voters without a college degree say the same by 43 percent to 34 percent.

And among white evangelical Christians, that breakdown is an overwhelming 63-16.

--In the above-mentioned Quinnipiac national poll, by a 57-28 percent margin, American voters say President Trump committed crimes before he became president. Before release of the Mueller Report, the margin was 64-24.

By 66-29, Americans believe Congress should not begin impeachment proceedings against Trump, with opposition to impeachment being 95-3 among Republicans, and 70-27 among independents (56-38 ‘for’ among Democrats).

Voters say by 72-18 that Robert Mueller conducted a fair investigation, including 65-25 among Republicans.

Voters say 51-38 percent that the Mueller Report did not clear President Trump of any wrongdoing.

66 percent say the news media is an important part of democracy, while 23 percent say the media is the “enemy of the people.”  Republicans say 49-36 percent that the news media is the enemy of the people.

52 percent of voters oppose making all public colleges in the U.S. free, with 45 percent in support.

By a 65-31 margin, voters oppose allowing prison inmates to vote.

--In a new CNN poll conducted by SSRS after Joe Biden’s formal announcement last Thursday that he was running for president, 39% of voters who are Democrats or Democratic-leaning independents say he is their top choice for the nomination, up from 28% who said the same in March.

So Biden starts out well ahead of Sen. Bernie Sanders, who garners 15% in the poll, and Sen. Elizabeth Warren (8%).  Then you have Mayor Pete (7%), former Rep. Beto O’Rourke (6%) and Sen. Kamala Harris at 5%.

In the Quinnipiac national survey, Biden receives 38%, followed by 12% for Elizabeth Warren and 11% for Sanders.  Mayor Pete gets 10%, Harris 8% and O’Rourke 5%.

52% of all U.S. voters say they definitely will not vote for Trump if he is the Republican nominee, while 33% say they definitely will vote for him and 13% say they will consider voting for Trump.

Among all voters, 70%, including 46% of Republicans, say they are open to electing a president who is a gay man.

But voters say 52-36 percent the U.S. is not ready to elect a gay man as president.

--Daniel Henninger / Wall Street Journal

“Joe Biden entered elective politics as a councilman in New Castle County, Del., in 1970, just this side of a half-century ago.  Remember the Sony Walkman?  Mr. Biden, now 76, was in politics for nearly a decade before it was introduced.

“The Biden presidential campaign resembles one of those elegiac Western movies set around 1913, with weather-beaten men on horseback trying to pull off one last bank heist before getting run off the range by the arrival of motorcars on Main Street.

“To accomplish this improbable feat, Mr. Biden is refashioning himself mainly as two things – the anti-Trump candidate and the second coming of Barack Obama.

“The substance of Mr. Biden’s anti-Trump pitch strikes me as mysterious. The main argument for choosing him over the 20 or so Democrats running is that the ‘Scranton Scrapper’ will win back the blue-collar voters in Pennsylvania, Michigan and Wisconsin who gave Donald Trump his margin of victory over Hillary Clinton.

“But since last week’s announcement video, one of Mr. Biden’s signature lines has become that Donald Trump poses ‘a threat to this nation...unlike any I had ever seen in my lifetime.’  How weird is it to insult your target audience by suggesting their Trump vote was an act of unprecedented stupidity?

“Conventional wisdom rightly argues that many of these people voted against Mrs. Clinton. But her ‘deplorables’ comment doesn’t explain everything. The defecting Democrats also voted against the previous eight years of the Obama-Biden economy, from which these voters had seen little or no benefit.

“Mr. Biden may think their vote for Donald Trump was moronic, but many of them would respond: It was the economy, stupid....

“Across eight years of Mr. Obama’s presidency – during which he and Vice President Biden gave speech after speech about helping the middle class – the economy grew annually by about 2%. The two-year-old Trump economy is growing at nearly 3%.

“With a little effort, one can discover the meaning of 3% growth for average people.  This newspaper’s reporters have done that in a series of stories the past year about the tight U.S. labor market.  This week the Journal reported in ‘Women Wanted’ how working-class women are finding good-paying jobs in formally all-guy lines of work, such as long-haul trucking and electrical trades.

“To attract workers, employers are creating or expanding benefits.  For all the soaring rhetoric of Mr. Obama and now Mr. Biden, that didn’t happen in their two terms.

“The irony of the $2 trillion Trump-Pelosi-Schumer infrastructure gesture is that there aren’t enough construction workers in the U.S. to do the work available right now, partly because more young men are choosing college over construction.  This suggests a need for more immigrant labor, but we won’t get into that.

“We’ll leave it to Donald Trump to defend his private jobs economy against the Obama-Biden-Sanders piñata economy.  But the dismissal of this long-hoped-for reality of expanding opportunity across all income classes and races as a ‘sugar high’ or ‘unequal’ is cynicism on a grand scale.”

--We note the passing of a great Republican senator, Richard Lugar (Ind.), at age 87.  No doubt, the likes of Lugar wouldn’t survive the primary process these days, in the time of Trump, and that’s sad.

Lugar, on one paramount issue, has left a lasting legacy and I believe the following Washington Post editorial summed it up well.

“In autumn 1991, after seeing the chaos in the imploding Soviet Union, a nuclear superpower, Sen. Sam Nunn (D-Ga.), chairman of the Senate Armed Services Committee, returned from Moscow and proposed legislation to deal with the crisis.  Along with another leading Democrat, Rep. Les Aspin of Wisconsin, he got nowhere.  The nation’s political mood was turning inward, and some Republicans said the United States should not give the Soviet Union a dime.  Reluctantly, Mr. Nunn pulled his bill from the Senate on Nov. 13, lamenting that ‘we are going to sleep’ about the dangers.

“Then Mr. Nunn invited Sen. Richard G. Lugar (R-Ind.) to a lunch at his office with visiting Soviet officials, who warned that, in a ‘worst-case’ scenario, nuclear weapons could be caught up in a devastating power struggle.  A Harvard physicist, Ashton B. Carter, reinforced the warning, saying in another meeting that ‘never before has a nuclear power disintegrated.’  Mr. Lugar, alarmed, on Nov. 20 announced his support for immediate action to meet a ‘strategic danger.’  His decision galvanized Congress, and soon legislation was approved to begin dealing with the Cold War’s legacy of thousands of nuclear warheads and other weapons of mass destruction.

“What became known as the Nunn-Lugar Cooperative Threat Reduction program ranks as among the most successful congressional foreign policy initiatives in a generation.  It would not have happened but for Mr. Lugar, who died Sunday at 87.  Mr. Lugar was an accomplished politician, but he did not see every day in the Senate as another round of partisan jockeying. Rather, he wanted to solve the big problems of the era.  His was a voice of reason and bipartisanship during six terms in the Senate, including two stints as chairman of the Foreign Relations Committee.  In today’s environment of ‘weaponizing’ every issue to advance party and ideology, Mr. Lugar’s example should remind all that public service ought to mean rising above personal consideration in the interests of the country and the world.

“In 1991, Mr. Lugar disagreed with those who said the Soviet Union should be left in ‘free fall’ to cope with its own problems.  In the years after the Nunn-Lugar legislation was passed, he doggedly stayed with the program, visiting remote factories and missile sites as weapons were destroyed.  Once he took a young Senate colleague to a facility in Ukraine, walking down dark corridors, stepping over puddles and finally coming across women at a worktable with piles of old artillery shells, taking them apart.  ‘By hand,’ recalled Barack Obama, the younger senator.  ‘Slowly.  Carefully.  One by one.’  It took decades to build up those weapons, and it was not a sure thing that they would be taken apart without grave consequences. Thanks to Mr. Lugar’s example and commitment, in the twilight of the Cold War, the world was made safer.”

Under Nunn-Lugar, about 7,600 nuclear warheads were deactivated, 2,300 missiles destroyed and 24 nuclear weapons storage sites secured by the time Lugar’s Senate career ended.  He was 80 years old and the senior most Republican in the Senate when he left in January 2013.

--Patti Davis, daughter of former President Ronald Reagan, tore into Republicans who remain silent about President Trump in an open letter published in the Washington Post.

In a blistering missive, titled “Dear Republicans: Stop using my father, Ronald Reagan, to justify your silence on Trump” – Davis noted how Republicans have claimed her father’s legacy and “exalted him as an icon of conservatism and used the quotes of his that serve your purpose at any given moment.”

“Yet at this moment in America’s history when the democracy to which my father pledged himself and the Constitution that he swore to uphold, and did faithfully uphold, are being degraded and chipped away at by a sneering, irreverent man who traffics in bullying and dishonesty, you stay silent,” she added.

“You stay silent, when President Trump speaks of immigrants as if they are trash, rips children from the arms of their parents and puts them in cages,” she wrote.

“If you are going to stand silent as America is dismantled and dismembered, as democracy is thrown onto the trash heap of yesterday, shame on you,” she wrote.  “But don’t use my father’s name on the way down.”

--A group of Chicago high school students filmed themselves driving around in blackface and harassing staff at a McDonald’s drive-thru, sparking outrage from community members and calls for a walk-out, according to local reports.

Photos and videos shared on social media over the weekend show at least three white Homewood-Flossmoor students riding in a car with their faces painted black and ordering from the drive-thru window while making derogatory remarks about African American women, ABC7 reported.

Administrators met with the families of the students involved on Sunday, but wouldn’t say what actions had been taken, citing confidentiality laws.

So then the mother of one of the sophomore students told the local Patch her son and his friends didn’t know what blackface was and he’s been receiving death threats since the incident. 

Ah, Mother? Your sweet little boy was driving around making derogatory remarks about black women.  End of story.

And then WGN9 in Chicago interviewed some of the students at the school, which is nearly 70 percent African American, and they all said they learned about blackface in middle school.

I hope by now the kids have been expelled...and the parents eventually forced to move.  That would be good.

We are dealing with ugly stuff in my home town of Summit, N.J., these days.  Six cases of anti-Semitism at the middle school and high school.  I have seen nothing on whether anyone has been identified as yet, but it’s sickening.  One or two cases, you’re tempted to say it was a stupid prank, born of ignorance.  But when it gets to six cases of swastikas being scrawled in the schools, months after the first community meetings on same, there’s something wrong.

Summit was a super place to grow up, but you talk about income inequality, that’s Summit to the extreme these days, as tons of immigrants have moved in amongst the Wall Street titans and their families.

Sorry, but I’m on the side of the immigrants, who when I’m getting my coffee at Dunkin’ Donuts downstairs at 5:00 a.m., are walking up the street to go to work (and it’s not a short walk where they are going).

--Finally, we note the heroism of University of North Carolina at Charlotte student Riley Howell, who when a gunman rushed into a classroom Tuesday and opened fire, with 30 students there, Howell ran at the gunman and knocked him off his feet – something that eventually helped police arrest the suspect.

Charlotte-Mecklenburg Police Department Chief Kerr Putney said Howell is “an athletically built young man and he took the fight to the assailant.  Unfortunately, he had to give his life to do so but he saved lives doing so.”

Howell, who was the “first and foremost hero” on Tuesday, did exactly what law enforcement recommends people do in an active shooter situation, Putney said.

“You’re either going to run, you’re going to hide and shield, or you’re going to take the fight to the assailant.  Having no place to run or hide, he did the last.”

Another student was also killed, four injured.

In a statement, Howell’s family said he always stood up for what he believed and didn’t hesitate to help those in need.

---

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

God bless America.

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Gold $1280
Oil $61.86

Returns for the week 4/29-5/3

Dow Jones  -0.1%  [26504]
S&P 500  +0.2%  [2945]*
S&P MidCap  +0.4%
Russell 2000  +1.4%
Nasdaq  +0.2%  [8164]*

*New high...technically, the S&P’s high from Tuesday, 2945.83 is the mark.  Today we closed at 2945.64.

Returns for the period 1/1/19-5/3/19

Dow Jones  +13.6%
S&P 500  +17.5%
S&P MidCap  +19.1%
Russell 2000  +19.7%
Nasdaq  +23.0%

Bulls 56.4
Bears 17.8

Dr. Bortrum posted a new column!

Have a great week.

Brian Trumbore

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