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Week in Review

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12/28/2019

For the week 12/23-12/27

[Posted 11:30 PM ET, Friday]

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

Special thanks to Dr. W. for his ongoing support.

Edition 1,080

The year isn’t officially over so I’m holding off on a yearend review until next time.  We still have two more trading days on Wall Street, and we need to see if North Korea is going to deliver a holiday gift as promised, President Trump not having delivered a new proposal for denuclearization talks as yet per Pyongyang’s yearend deadline.

Meanwhile, the stock market rockets higher.  Trump tweeted today:

“ ‘Trump Stock Market rally is far outpacing past U.S. presidents’ @CNBC.  With new trade deals, and more, THE BEST IS YET TO COME!”

On this front he has a lot to crow about.  But so does just about every other major market around the world this year, including, yes, Mr. President, China.  [If you happen to attend or watch a Trump rally, and he states that China has “lost $30 trillion in value” since he’s become president, as I’ve pointed out in the past few months, that’s as big a bald-faced lie as any of Trump’s 10,000+ tall-tales.]

We stick to the facts here at StocksandNews and just be prepared next week for a ton of data on 2019.  And then in the following weeks we’ll have scads of figures on earnings, monthly, quarterly and annual economic numbers, and much more to warm the cockles.

But I do have to note the following on the exploding budget deficit, a major promise of President Trump’s not kept.

Editorial / Wall Street Journal

“Congress has left town for the year but alas not before another bipartisan spending party that has typified the Trump Presidency. The numbers deserve notice because they are likely to have more long-term impact than impeachment.

“Lawmakers whooped through $1.4 trillion in discretionary spending for the rest of the fiscal year with little debate or objection.  A bipartisan deal on the budget outlines in August was supposed to give Congress time to negotiate 12 individual spending bills, but as usual they couldn’t agree so they piled it all into two bills totaling more than 2,300 pages on Monday.  A day later they added a list of tax subsidies, and by Friday it was law.  Congress can act fast when it is greasing its own wheels.

“The political secret to this bipartisan blowout is that the Republicans get more for defense in return for giving Democrats more for social welfare.  An $860 billion national security bill gave President Trump $1.375 billion for his border wall – despite Democratic vows that he’d get none – and modest flexibility in where the wall can be built.  The White House also won $738 billion for defense, $22 billion more than last year, and funding to create Mr. Trump’s Space Force.

“Democrats cashed in with $555 billion for domestic priorities.  They scored $25 million for ‘gun violence research,’ $425 million in election security grants, and more money for Head Start and early childhood education....

“Farm state Members added $1.5 billion in disaster relief, on top of the $3 billion Congress passed earlier this year.  GOP Senator Chuck Grassley delivered a big tax break for Iowa’s biodiesel blenders, and the tax bill also showers largesse on distilleries, race-horse and NASCAR owners, short-line railroads, and renewable energy.  In return, Republican tax writers were able to pass a small list of ‘corrections’ to their 2017 tax reform.

“The only good tax news was agreement to repeal, permanently, three tax increases that Democrats had passed to make the phony ObamaCare numbers look real in 2010.  Democrats were keen to repeal the co-called Cadillac tax on high-cost health plans.  Unions have neogitated rich benefits and don’t want to be taxed on them.  Republicans in turn were able to repeal permanently the taxes on medical devices and health insurance....

“The Club for Growth notes that the bills increase discretionary outlays by more than $175 billion over last year, and budget watchdogs estimate the higher spending caps Congress agreed to this summer will add $1.7 trillion to the national debt over 10 years.  Debt held by the public sa a share of GDP is close to 80% and rising, 10 years into an economic expansion.

“The budget problem isn’t a shortage of revenue.  CBO says tax receipts grew 4% last fiscal year, through September, and 3% in the first two months this year.  Economic growth is feeding the Treasury.  But spending is growing much faster: 8% last fiscal year, more than four times the inflation rate, and 6% in October and November this year.

“In addition to the latest discretionary bills, spending on Social Security (6%), Medicare (6.1%) and Medicaid (9.2%) continue to soar this year.  Neither party shows any inclination to do anything about those programs, except expand them.  Mr. Trump may yet join Barack Obama in the spending record books.”

More on this topic next week.

But I also can’t help but note that in the column I posted last Friday night, at 9:30 p.m. eastern, I wrote that Russian President Vladimir Putin was supporting Trump, weighing in on the impeachment, saying Democrats had impeached Trump for “fabricated” reasons in order to reverse his 2016 election victory.  I noted that Putin, speaking at his annual yearend news conference, also said, “This is simply a continuation of the (U.S.) intra-political battle where one party that lost an election, the Democratic Party, is trying to achieve results using other methods and means.  They first accused Trump of a conspiracy with Russia.  Then it turned out there wasn’t a conspiracy and that it couldn’t be the basis for impeachment.  Now they have dreamt up (the idea) of some kind of pressure being exerted on Ukraine.”

Total propaganda from the former KGB officer.

So what does President Trump do, about one hour after I had posted, around 10:30 p.m. eastern time Friday night?

He puts out a tweet, citing an AP story on Putin’s press conference saying Trump’s impeachment is far-fetched and predicts the U.S. Senate will reject it, Trump adding, “A total Witch Hunt!”

Right in front of our faces, again.  I was floored this wasn’t the top story the rest of the week.  Donald Trump continues to attempt to impeach himself.

Lastly, it was kind of comical that the president’s Christmas message to all of us spoke of “fostering a culture of deeper understanding and respect,” as he then spent the next few days trashing House Speaker Nancy Pelosi, calling her everything in the book.

Trump World

--Marc A. Thiessen / Washington Post

“In his third year in office, President Trump continued to deliver an extraordinary list of accomplishments.  Today, I offer my annual list of the 10 best things Trump did this year (my next column will list the 10 worst):

“10. He continued to deliver for the forgotten Americans.  Unemployment is at record lows; this year the number of job openings outnumbered the unemployed workers to fill them by the widest gap ever; wages are rising, and low-wage workers are experiencing the fastest pay increases.  Fifty-seven percent of Americans say they are better off financially since Trump took office.

“9. He implemented tighter work requirements for food stamps.  With unemployment at historic lows, there is no reason more people should not be earning their success through productive work.  The rules apply only to able-bodied, childless adults....

“8. He has got NATO allies to cough up more money for our collective security....

“7. He stood with the people of Hong Kong.  He warned China not to use violence to suppress pro-democracy protests and signed the Hong Kong Human Rights and Democracy Act.  Hong Kong people marched with American flags and sang our national anthem in gratitude.

“6. His withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty is delivering China and North Korea a strategic setback.  The United States is now testing new, previously banned intermediate-range missiles.  These weapons will allow us to compete with China’s massive investment in these capabilities, and also provide a fallback in the likely case negotiations with North Korea fail – obviating the need for temporary deployments of U.S. carrier battle groups and allowing us to put North Korea permanently in our crosshairs.

“5. His ‘maximum pressure’ campaign is crippling Iran.  Iran’s economy is contracting, inflation is spiraling and the regime has been forced to cut funding for its terrorist proxies, including Hezbollah and Hamas, the Iranian military and the Islamic Revolutionary Guard Corps.  And now the Iranian people are engaged in the largest popular uprising since the 1979 revolution.

“4. His tariff threats forced Mexico to crack down on illegal immigration.  Mexico is for the first time in recent history enforcing its own immigration laws – sending thousands of National Guard forces to its southern border to stop caravans of Central American migrants.  Plus, Congress is poised to approve the U.S.-Mexico-Canada free-trade agreement, which would not have been possible wihtout the threat of tariffs.

“3. He delivered the biggest blow to Planned Parenthood in three decades.  Thanks to Trump’s Protect Life Rule that prohibits Title X family planning funds from going to any clinic that performs on-site abortions – Planned Parenthood announced this year that it is leaving the Title X program barring a court victory.  This is a major pro-life victory and another reason Christian conservatives continue to support him.

“2. He ordered the operation that killed Islamic State leader Abu Bakr al-Baghdadi.  It was a high-risk mission that required U.S. forces to fly hundreds of miles into terrorist-controlled territory.  If things had gone horribly wrong, Trump would have been blamed.   That risk is why former vice president Joe Biden advised President Barack Obama not to carry out the raid that killed Osama bin Laden.  Trump did not hesitate the way Biden did.

“1. He has continued to appoint conservative judges at a record pace....

“There are many other significant achievements that did not make the top 10. Despite an inexcusable 55-day delay, he gave Ukraine the lethal aid that the Obama-Biden administration refused to deliver.  He secured the releases of additional American citizens held abroad. He launched cyberattacks on Iran, approved a major arms sale to Taiwan, imposed visa restrictions on Chinese officials over Beijing’s oppression of the Uighurs, and refused to make major concessions to North Korea.

“So does the good outweigh the bad?  In the next column, we’ll review the 10 worst things Trump did in 2019.”

And I will pass that on to you as well, wrote the editor.

--Jonathan Turley, a prominent law professor who was called as a Republican witness during the House impeachment proceedings, threw cold water Thursday on the notion that President Trump isn’t technically impeached until Speaker Nancy Pelosi sends the passed articles to the Senate.

Turley responded to a witness for Democrats, Harvard law professor Noah Feldman, who wrote in Bloomberg last week that the impeachment might not be legit because of Pelosi’s move.

“If the House does not communicate its impeachment to the Senate, it hasn’t actually impeached the president.  If the articles are not transmitted, Trump could legitimately say he wasn’t truly impeached at all,” Feldman wrote.

So Turley responded in a Washington Post op-ed.

“Last Saturday in West Palm Beach, Fla., in remarks to a group of young supporters, President Trump road-tested a talking point that appeared to be aimed at changing the narrative around his December impeachment: ‘You had no crime.  Even their people said there was no crime,’ he said of congressional Democrats, before adding: ‘In fact, there’s no impeachment.  There’s no – their own lawyers said there’s no impeachment,’” Turley wrote.

“But while this theory may provide tweet-ready fodder for the president to defend himself and taunt his political adversaries, it’s difficult to sustain on the text or history or logic of the Constitution....

“Congressional Democrats’ current posture may be too cute by half, and is perhaps politically ill-advised, but any argument that they’ve entered a legal limbo by stalling the delivery of articles to the Senate falls flat,” Turley wrote, adding that the Constitution requires both a House vote and a Senate trial to try to prevent an overtly political outcome.

“The Framers set a two-thirds requirement for conviction, because it knew that some impeachments might be pure political exercises.

“The House calls out president transgressions that meet the standard of ‘Treason, Bribery, or other high Crimes and Misdemeanors.’  That is not an ultimate finding of guilt, and alone can’t effect a president’s removal.  But make no mistake, the House speaks in its own voice and in its own time.  It did so on Dec. 18, 2019.”

Speaker Pelosi remains in no rush to send the articles to the Senate because Majority Leader Mitch McConnell had not revealed how a trial would be conducted.

McConnell has said he was working hand-in-glove with the White House while devising strategy for a Senate trial, rejecting Minority Leader Sen. Chuck Schumer’s call for top administration officials to testify.

Meanwhile, Republican Sen. Lisa Murkowski (Alaska) said she was “disturbed” by McConnell’s approach to working with White House counsel on the impeachment trial, saying there should be distance between the two.

In comments Tuesday with an Alaska-based NBC News affiliate, Murkowski said, “To me it means that we have to take that step back from being hand-in-glove with the defense.  I heard what McConnell said.  I happened to think that has further confused the process.”

While the Senate would need a two-thirds majority vote for a conviction of the president, more importantly in the short run, 51 votes are needed to pass a set of rules for the Trump trial.  With 53 Republicans in the Senate, that means Democrats need to peel off a few if some Republicans, perhaps a Murkowski, want to hear from key witnesses, for example.  That’s going to be the interesting element come early January, after Pelosi no doubt sends the articles to the Senate.

--Philip Bump / Washington Post

“Twenty-nine times in the past three months, President Trump has used Twitter to implore the country to read the rough transcript of his July 25 call with Ukrainian President Volodymyr Zelensky.

“To hear Trump tell it, the rough transcript itself proves that there was no effort to pressure Zelensky to launch investigations that would benefit Trump politically.  Instead, it was just two guys talking, with one, the president of the United States, suggesting that Ukraine should launch the investigation and the other readily agreeing.  It was, in Trump’s abbreviated assessment, ‘perfect.’

“Even when the rough transcript was first released, that assertion was dubious.  Since then, we’ve learned a lot about the context in which the conversation took place, context that makes clear that Ukraine was well aware of what Trump sought and what it was expected to do. That context became more obvious over the weekend with the release of emails showing discussion of the hold on aid to Ukraine immediately after Trump and Zelensky hung up the phone....

“We’ve known for some time that the formal order to hold the aid came late in the day July 25, sometime around 6:45 p.m.  Emails released to the Center for Public Integrity and published over the weekend show additional conversations that same day centered on the hold in aid.

“About 11 a.m. - some 90 minutes after Trump and Zelensky got off the phone - (Mike) Duffey, (a political appointee in the Office of Management and Budget) emailed staffers at the Defense Department.

“ ‘Based on guidance I have received and in light of the Administration’s plan to review assistance to Ukraine,’ Duffey wrote, ‘including the Ukraine Security Assistance initiative, please hold off on any additional DoD obligations of these funds, pending direction from that process.’  Later, he added, that ‘[g]iven the sensitive nature of the request, I appreciate your keeping that information closely held to those who need to know to execute the direction.’”

Philip Bump’s report goes on at further great lengths and is yet another example why there is far more to come on the story, and the need for witnesses at a Senate trial, including Mr. Duffey, is critical to the public learning the truth.

--President Trump’s interference in the case of Special Operations Chief Edward Gallagher on war crimes charges, and his subsequent demotion, which at Trump’s order was overturned, will boomerang on Trump at some point next year, especially if he carries through with his plan to have Gallagher campaign with him in places.

Friday the New York Times released a report with detailed interviews with the Navy SEALs who served with Gallagher, and, on the record, they said things like “The guy is freaking evil.”  “The guy was toxic.”  “You could tell he was perfectly O.K. with killing anybody that was moving.”

Such descriptions are in stark contrast to President Trump’s portrayal of Gallagher as one of “our great fighters.”

I do have to add, though, the thoughts of a good friend of mine, high school classmate, a Marine, Naval Academy grad, fighter pilot (now flying for Southwest), who I get together with about four times a year over beers to discuss the world scene.

Bobby C. told me just about ten days ago that the real crime in the Gallagher case was that he was on his eighth tour of duty, which Bob thought was in itself criminal.

--President Trump in a speech to a pro-Trump youth group on Saturday, went off on the following rant:

“We’ll have an economy based on wind.  I never understood wind.  You know, I know windmills very much. I’ve studied it better than anybody. I know it’s very expensive. They’re made in China and Germany mostly – very few made here, almost none.  But they’re manufactured tremendous – if you’re into this – tremendous fumes.  Gases are spewing into the atmosphere.  You know we have a world, right?  So the world is tiny compared to the universe. So tremendous, tremendous amount of fumes and everything.  You talk about the carbon footprint – fumes are spewing into the air.  Right?  Spewing. Whether it’s in China, Germany, it’s going into the air.  It’s our air, their air, everything – right?  So they make these things and then they put them up.”

Trump went on to complain about how wind turbines are aesthetically unappealing, expensive, lower property values and kill birds.  Yes, windmills kill birds, but far more birds are killed by glass-covered buildings and skyscrapers.

--Trump tweets:

"Despite all of the great success that our Country has had over the last 3 years, it makes it much more difficult to deal with foreign leaders (and others) when I am having to constantly defend myself against the Do Nothing Democrats & their bogus Impeachment Scam.  Bad for USA!”

“Crazy Nancy should clean up her filthy dirty District & help the homeless there.  A primary for N?”

“Nancy Pelosi’s District in California has rapidly become one of the worst anywhere in the U.S. when it comes to the homeless & crime.  It has gotten so bad, so fast – she has lost total control and, along with her equally incompetent governor, Gavin Newsom, it is a very sad sight!”

“Why should Crazy Nancy Pelosi, just because she has a slight majority in the House, be allowed to Impeach the President of the United States?  Got ZERO Republican votes, there was no crime, the call with Ukraine was perfect, with ‘no pressure.’  She said it must be ‘bipartisan....

“...& overwhelming,’ but this Scam Impeachment was neither. Also, very unfair with no Due Process, proper representation, or witnesses.   Now Pelosi is demanding everything the Republicans weren’t allowed to have in the House.  Dems want to run majority Republican Senate. Hypocrites!”

“California leads the nation, by far, in both the number of homeless people, and the percentage increase in the homeless population – two terrible stats.  Crazy Nancy should focus on that in her very down district, and helping her incompetent governor with the big homeless problem!”

“Everything we’re seeing from Speaker Pelosi and Senator Schumer suggests that they’re in real doubt about the evidence they’ve brought forth so far not being good enough, and are very, very urgently seeking a way to find some more evidence.  The only way to make this work is to...

“...mount some kind of public pressure to demand witnesses, but McConnell has the votes and he can run this trial anyway he wants to.”

Wall Street and Trade

The market continued with its melt-up, credit given to the easing of trade tensions, decent economic data and the midyear rate cuts by the Federal Reserve.  After next Tuesday we’ll know if we’ve had our best year with regards to the S&P 500 since 2013, or as far back as 1997. Strange things can happen the last few days of the year, witness the final weeks of 2018, when for the four weeks in December, looking at the Dow Jones, we had weekly returns of –4.5%, -1.2%, -6.9% and +2.8%, with the huge reversal occurring after the Christmas Eve bloodbath.

This year the action the past four weeks has been more muted, but the tone positive, as we hit one new high after another.

Personally, I wrote in this space on 11/16, “lighten up” when it came to stocks, with the S&P at 3120, and I am hardly embarrassed by this.  I also said it wasn’t an outright “sell,” but that I would do so at the appropriate time.  I’ve only done that about three other times in the history of this column and have been right when I did.

2019 will go down as a super year for equities around the world, despite punk growth in Asia and Europe, and, let’s face it, a pretty mediocre 2.2%-2.3% growth rate in the U.S. when the fourth-quarter data comes in and we look at the entire year.

Importantly, there has also been no earnings growth in the U.S., and if stocks are to continue to rally, I don’t care what happens on the trade front of a positive nature, the Street will need to see it.  Right now the call is for 10% earnings growth, according to FactSet, and we’ll need to see at least that for stocks to rise by any significant margin, in my humble opinion.

I’ll get into it more next time, but it’s about consumers continuing to spend at a solid clip, and some kind of improvement on the capital spending side on the part of corporations, which will only come about if CEOs are confident about the post-election future.

In the here and now, Monday we had a little economic data, as November new-home sales came in less than expected, and durable goods orders for November were well below forecast, -2.0% when a gain was expected, but ex-transportation it was unchanged, while the core capital goods component was up 0.1%.

The Atlanta Fed’s GDPNow barometer for fourth-quarter GDP is 2.3%, which would follow 2.0% and 2.1% rates for Q2 and Q3.  [3.1% Q1]

More importantly, we received our first extensive look at holiday shopping sales, the period six days shorter than normal due to the calendar this season.

Recall, back on 11/9/19 in this space, I wrote that the National Retail Federation’s official forecast was for growth of 3.8% to 4.2%, but that I said it would be more like “3.5%.”

Well, according to Mastercard Spending Pulse, overall retail sales rose 3.4%, with the Commerce Department releasing the official data for December on Jan. 16.  [The National Retail Federation will also weigh in later.]

I mean if when we average all the various surveys, 3.4%-3.5% is the number, that’s good.  Last year it was 3.0% (2.9% by most accounts).

Online spending, according to Mastercard, rose 18.8% (vs. 18.4% in 2018), compared with 1.2% for in-store sales.  Department store sales fell 1.8% (though their online sales rose 6.9%).  Online overall accounted for 14.6% of all retail sales, a new high.

Among the best-selling items online was apparel, up 17%, and electronics, up 11%.

Super Saturday, Dec. 21, set an all-time sales record of $34.4 billion, which is compared to Black Friday, $31.2bn, per Customers Growth Partners.

Foot traffic at the malls, while down, at least has had a better conversion rate, which is up; meaning the percentage of people who go to malls and make a purchase.

Globally, while growth has been minimal, equity returns have been solid across the board. All assets classes are up, including oil, gold and bonds.

I’ll get into it more next week after we close the year, but Europe’s equivalent of the S&P 500, for instance, the Stoxx Europe 600, is up a solid 24.3% thru today.

As for the trade deal between the U.S. and China, details are yet to be finalized, with the deal requiring structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.  How much of this actually shows up in the written agreement remains to be seen and will offer clues as to the potential for ‘phase two.’

While the details are being worked out, China is to reduce tariffs on more than 850 goods including frozen pork, hi-tech components, and vital medicines, in a move billed at opening the economy to freer international trade.

The reduction has been approved by the State Council and will go into effect January 1.  While there has been no new tariff rate announced for the products, a statement from the State Council’s Tariff Commission said that it will bring them below the “most favored nation” rates at which China now trades with many of its partners.

A reduction in the pork tariff is hardly surprising, given the fact that African swine fever has decimated China’s own reserves of the country’s most popular meat.

While the United States is not mentioned specifically in the statement, the language used evokes an earlier statement on December 13, at which senior officials announced the phase one trade deal with the U.S.

Monday’s statement said that “the above-mentioned adjustment measures are conducive to reducing import costs, promoting the orderly and free flow of international and domestic trade, and promoting the establishment of a new system of a higher level, open economy.”

Monday’s announcement also came after China had announced further progress in reaching a trilateral trade agreement with Japan and South Korea.

On Tuesday, President Trump said from Mar-a-Lago that he and Xi Jinping would have a signing ceremony for phase one.

“We will be having a signing ceremony, yes,” Trump told reporters.  “We will ultimately, yes, when we get together.  And we’ll be having a quicker signing because we want to get it done.  The deal is done, it’s just being translated right now.”

It is said to be 85 pages, vs. the 150 for last May’s scuttled agreement.

But China does have a problem, one I’ve mentioned in weeks past.  It has to be careful to ensure that a deal with Washington is in line with global trade rules to avoid damaging ties with other key trading partners, such as Brazil, Argentina and the European Union.  It’s not just keeping relations solid with its other partners, but it also must weigh domestic sentiment.  China has worried it won’t be able to meet its reported commitment to increase purchases of American products by $200 billion within two years from 2017 levels.  The U.S. has publicly used this figure, but China has deliberately avoided specifying purchase targets.

For example, purchases of U.S. soybeans did increase considerably in October and November, with November’s figure the best to China in two years, but in looking at the future order book, at least as of today, the numbers are nowhere near last month’s.  That doesn’t mean they won’t be, but there is only so much China can buy...and needs to buy.

In the end, it’s all going to be about implementation and monitoring same.

Finally, remember.  Due to Trump’s trade war, Chinese imports of American farm products fell by 32.7 percent to $16bn in 2018 from the previous year and by a further 30.8 percent to $10.4bn in the first 10 months of this year, according to official Chinese data, as reported on by the South China Morning Post.

President Trump will be fiercely touting his trade “successes” when he’s in the key farm belt, in terms of his reelection, but just understand, if we’re lucky, we’ll just be getting back to 2017 benchmark levels, maybe a little higher.  Scores of farmers, in the meantime, have been royally screwed during the trade war.

Europe and Asia

There was literally no Eurozone economic news on the week worth passing on.  All eyes for now remain on....

Brexit: British Prime Minister Boris Johnson and parliament are in the midst of their holiday breaks, before getting down to the business of wrapping up Brexit by Jan. 31, in terms of putting together the final legislation required to formally exit the European Union.

But then we have this 11-month rush to finalize an actual trade agreement with the bloc and anyone with half a brain knows this will be virtually impossible to accomplish in that time period.  Boris Johnson himself no doubt understands the difficulties of the task ahead and no one will be surprised if he breaks another promise and seeks an extension once Brexit itself is finalized.

The EU’s negotiator, Michel Barnier, wrote in a piece on the Project Syndicate website dated Dec. 20 that the European Union would seek to make the most of the short time available.

“But like the UK, we will keep our strategic interests in mind,” Barnier wrote.  “We know that competing on social and environmental standards, rather than on skills, innovation, and quality, leads only to a race to the bottom that puts workers, consumers, and the planet on the losing side.”

Any free trade agreement with Britain would then have to ensure a level playing field on standards, state aid and tax matters, Barnier wrote, adding that any new economic agreement forged by the end of 2020 would most likely have to be expanded in the years to come.

Separately, Black Friday discounts and bad weather were blamed for a decline in Boxing Day shoppers, with retail analysts reporting a fall in the number of people heading for the sales.  Springboard, which analyzes customer activity in stores, said foot traffic has seen the largest decline since 2020, dropping by 10.6%.

I was watching Premier League football all day and the weather across England indeed looked lousy.  I would have stayed home myself had I lived across the pond.

Germany: I have a note below on the Nord Stream 2 natural gas pipeline from Russia to Germany that the Trump administration is trying to block and this is going to be a growing issue in some German political circles in 2020, with Berlin this week accusing Washington of interfering in its internal affairs.

But at the same time, Chancellor Angela Merkel has already admitted that she sees little point in trying to retaliate against Washington’s move.  The European Commission may yet however weigh in as various European companies are impacted.  To be continued....

Turning to Asia, also zero specific data to report on, save for China’s announcement industrial firms’ profits rose 5.4% in November, the best performance in eight months.  But looking ahead to 2020, with the trade truce between China and the United States, most experts believe Beijing will be able to achieve growth of 6%, which is expected to be the official target when it’s released at an annual session of parliament in March.

At a seminar Thursday with researchers at the Chinese Academy of Social Sciences, Tsinghau University and think tanks affiliated with the Ministry of Finance and the State Council, the conclusion was uncertainty is declining with the U.S.-China breakthrough.

“If the phase one deal is signed, private investors will be more confident and investment will bottom out.  Next year will be no worse than this year, and the GDP growth could be around 6 percent or a little bit higher,” said Liu Shangxi, head of the ministry’s Chinese Academy of Fiscal Sciences.

China’s GDP slumped to 6% in the third quarter, its slowest pace in nearly three decades.

Street Bytes

--The Dow Jones and Nasdaq rose for a third straight week, but it’s five straight up weeks for the S&P 500; the Dow up 0.7% to a record 28645, Nasdaq up 0.9% to 9006, having hit a record close of 9022 the day before, and the S&P up 0.6% to a record 3240.

So we’ll see what happens the final two days of the year.  Up 29.3% for the year, the S&P has its best return since 2013, but a big two-day push Monday and Tuesday could put it with a return not seen since 1997 (up 31.0%).

--U.S. Treasury Yields

6-mo. 1.57%  2-yr. 1.58%  10-yr. 1.88%  30-yr. 2.32%

--The Boeing story just goes on and on.  CEO Dennis Muilenburg was fired Monday amid the crisis over the handling of the aftermath of two fatal crashes of the 737 MAX aircraft in Indonesia and Ethiopia within five months that killed 346 people.

The Boeing board announced that chairman David Calhoun, 62, a former General Electric executive who has been on the board since 2009 would take over from Muilenburg as CEO and president from Jan. 13.

The board said it had “decided that a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders.”

Families of the victims welcomed Muilenburg’s resignation but questioned how the naming of a long-time board member would be committed to change.

Then we had the story, also Monday, where a new batch of Boeing internal documents related to the 737 MAX paint “a very disturbing picture” regarding employees’ concerns about safety.

The latest documents were revealed by both the Federal Aviation Administration and the House Transportation and Infrastructure Committee, which has held a series of hearings about the MAX. 

While the House didn’t disclose the contents, the Seattle Times reported the documents include more internal communications involving former Boeing 737 chief test pilot Mark Forkner, who, in records previously disclosed, described problems in the development of the flight-control system blamed in the two crashes, MCAS.  His 2016 missive to a colleague also talked of “basically” but unknowingly, lying to regulators.

Boeing acknowledged the latest documents could prove damaging, saying in a statement that it “proactively brought these communications to the FAA and Congress as part of our commitment to transparency with our regulators and the oversight committees.”

But major questions remain about how a seemingly flawed aircraft was allowed into service in the first place, and why it was allowed to continue flying after the first accident.  There have been claims – emphatically denied by the company – that it prioritized profits and speed of production over safety.

The company has been rewriting software to give pilots more direct control over MCAS, but the changes are yet to be approved by the FAA, with airlines repeatedly pushing back the plane’s projected return to service.

David Calhoun faces a myriad of challenges, to say the least.  Last week’s NASA space capsule (Starliner) failure to dock with the International Space Station didn’t help matters.*  It’s all about winning back the confidence of government officials, suppliers, airlines and the traveling public.

*At least Starliner softly touched down in New Mexico early Sunday, the first time an American capsule touched down on land, thanks to three parachutes, and six airbags.

But longer term, perhaps the main issue is Boeing is falling behind European rival Airbus.    The race to keep pace contributed to the MAX being rushed into service.  Now, it is losing future orders to Airbus and in this game, it could take a decade, at least, to catch up.

--Amazon reported “record-breaking” holiday season sales and the stock rose 4.5% on Thursday, helping lift Nasdaq above 9,000.  The company ritually issues a press release touting its sales the day after Christmas without providing dollar amounts or comparable sales data.  Nonetheless, it was cause for investors to celebrate in this melt-up market.  And Amazon did say “billions of items were ordered” by Amazon customers this holiday season while “tens of millions” of Amazon devices were sold.  It also added more than 250,000 full- and part-time seasonal workers and now employs more than 750,000 people world-wide.

Then again, Amazon is all about online sales which as noted above were up strongly.

--Tesla shares continued to rocket higher, surpassing the $420 mark – more than a year after regulators fined CEO Elon Musk for a misleading, marijuana-laced tweet about taking the electric car maker private at that price.  The number ‘420’ is commonly used as slang for marijuana use.

Musk tweeted Monday: “Whoa...the stock is so high lol.”

The shares continued to rise Thursday and Friday to $435, before closing at $430, on Wall Street’s projections for strong U.S. consumer demand for the Model 3 sedan, and then today, Tesla announced it would start delivering the Model 3 from its Shanghai factory on Dec. 30, after starting production in October.

The facility was built in January to produce 250,000 vehicles annually in a move to boost the car maker’s presence in the world’s largest auto market.

Tesla stock has surged since Oct. 25, when it surprised Wall Street by delivering a small profit in its latest earnings report instead of an expected loss.

--Huawei lashed out at a Wall Street Journal story alleging the company became one of the world’s leading telecom companies thanks in part to $75 billion worth of loans, tax breaks and other Chinese government financial support over the last two decades.

Huawei said the story was based on “false information and poor reasoning,” adding that it may take legal action following several “disingenuous” articles in the paper.

“This article speculates wildly about how Huawei has become what it is today,” the company said in a lengthy statement. “...The Wall Street Journal is a professional media outlet, so we have to question its motives and purpose for publishing this article.”

The U.S. Department of Commerce put Huawei on a trade blacklist in May over national security concerns.

The Journal reported roughly $46 billion of China’s support for Huawei has come from state lenders in the form of credit lines, loans and other help.  The paper said its findings were based on public documents and company statements.

Huawei did not specify what parts of the Journal report were false, but said it applies for government subsidies just like any other firm.

--Uber co-founder and ex-CEO Travis Kalanick is leaving the board after being sidelined and selling most of his shares.  Kalanick was chief executive until June 2017, when he resigned after pressure from major shareholders and directors amid a series of scandals ranging from a toxic workplace culture to a federal inquiry into software that helped avoid law enforcement to an intellectual-property lawsuit with Alphabet’s self-driving unit Waymo.

Kalanick has sold more than $2.5 billion worth of his stake in Uber since the company went public in May, according to regulatory filings.  He now owns shares worth ‘just’ $177 million.

--Alphabet (the parent company of Google) CEO Sundar Pichai has the potential for a whopping $240 million pay package in stock grants that will be awarded over three years if Pichai hits performance targets, including Alphabet’s shares outperforming the S&P 100 index, according to Bloomberg.

The package was approved by the board to recognize Pichai’s expanded role at Alphabet following the announcement that Google co-founders Larry Page and Sergey Brin were stepping down.

--WeWork’s ex-CEO Adam Neumann – whose $1.7 billion exit package in October sparked protests from thousands of workers who are facing pink slips as the company implodes – quietly negotiated deals this summer that could enlarge his severance beyond $2 billion, according to documents seen by the Financial Times.

A corporate restructuring this summer ahead of WeWork’s botched IPO attempt quietly reclassified the company as an LLC, protecting Neumann’s future shares from taxes at the expense of creating value for future shareholders.

Basically, the switch entitled Neumann to a class of stock that amounts to free shares if a public company’s value hits a pre-set target known as a “catch-up price.”

The bottom line is that after aggressively slashing costs under new management, some insiders believe WeWork could yet go public, which in turn could give Neumann the new stock (called “profits interests”) that would give him an additional $300 million+ worth.

Yeah, it’s complicated.

--I missed last time that U.S. Steel announced it is idling its giant plant outside Detroit and laying off as many as 1,545 workers.  So much for President Trump’s vaunted steel import tariffs helping America’s producers.

When they were first implemented less than two years ago, U.S. Steel CEO David Burritt hailed them, and the company responded by restarting two blast furnaces and rehiring steel workers.

But the company faced slowing demand for its products, and U.S. Steel has been hard hit because of aging plants that are less efficient than rivals’ with newer technology.

--Banks around the world have announced the biggest round of job cuts in four years, with more than 50 lenders having plans to cull a combined 77,780 jobs, the most since 91,448 in 2015, according to filings by the companies and labor unions.  Banks in Europe, which face the added burden of negative interest rates, account for almost 82% of the total, according to Bloomberg.

Over the last six years, the industry has lost more than 425,000 jobs.

Morgan Stanley is the latest to make a year-end “efficiency push,” slashing about 1,500 jobs.

Germany’s biggest lender, Deutsche Bank AG, is planning on cutting 18,000 employees through 2022 as it retreats from a big part of its investment banking business.

--According to the New Jersey Division of Gaming Enforcement, online sports wagering in the state has been soaring, including for virtual casino games like roulette and blackjack on mobile phones.

As a result, Atlantic City casinos and their online partners generated $433 million from such virtual games through November and could reach $460 million by year end, which would be a 66% increase from last year, when internet gambling generated $277 million in revenue.

Only six states, including New Jersey, have legalized online casinos.  Meanwhile, 1 ½ years after the U.S. Supreme Court cleared the way for sports wagering on a state-by-state basis, 20 states and the District of Columbia have legal sports betting.

In New Jersey, apps such as FanDuel and DraftKings are now attracting virtual-casino customers who otherwise wouldn’t seek out such games, according to analysts.

In 2013, the administration of New Jersey’s then-governor Chris Christie, forecast annual tax revenue would reach as high as $180 million. The state quickly lowered that estimate to between $35 million and $50 million.  This year, tax revenues are projected to total nearly $80 million, according to the Division of Gaming Enforcement.

--Every three years the Fed conducts a survey of consumer finances, the last update being in 2016, and as Lisa Beilfuss of Barron’s noted, in 2016, the top 10% of American households held 93.2% of all stock and mutual fund assets, up from 91.2% in 2010 and 86% in 1989.  When you figure in indirect ownership, which would include 401(k) plan exposure, the top 10% holds 84% of investment assets.

Just something to consider when you look at the impact the stock market could have on the 2020 election.  How many voters actually care and make that part of their equation?

--Disney’s “Star Wars: The Rise of Skywalker” took in an estimated $175.5 million in the U.S. and Canada over the weekend, the lowest opening of the trilogy, with theater owners hoping it would debut north of $200 million.  The $175.5m is 29% below the 2015 installment “The Force Awakens” and 20% below “The Last Jedi” from 2017.

“Skywalker” has received a highly-mixed reaction from fans and critics alike.

A big-screen adaptation of Andrew Lloyd Webber’s musical “Cats” grossed just $6.5 million amid dreadful reviews said to be among the most critical in recent history.

The Lions Gate Entertainment Corp. dramatization of the sexual-harassment crisis at Fox News, “Bombshell,” bombed, collecting just $5.1 million.

But back to “Skywalker,” it did gross another $198 million overseas, though only $12.1 million in China.

It’s too early to know how Universal Pictures’ “1917” did, having opened on Christmas Day.

Foreign Affairs

Iran / Iraq / Syria:  Iranian Supreme Leader Ayatollah Ali Khamenei has been ruthless in crushing the unrest that started on Nov. 15 with a surprise increase in the price of gasoline that quickly spread into one of the biggest challenges for Iran’s clerical rulers since the 1979 Islamic Revolution.  Just two days into it, the protests had reached Tehran, with people calling for an end to the Islamic Republic and the downfall of its leaders.

So Khamenei, according to an extensive Reuters report I read this week, expressed his severe displeasure over the handling of the unrest, being particularly angered by the burning of his image and the destruction of a statue of the republic’s founder, Ayatollah Khomeini.

“The Islamic Republic is in danger. Do whatever it takes to end it.  You have my order,” Khamenei told senior officials, as a source told Reuters.

Well the result was 1,500 dead, senior officials said, which is a death toll higher than Amnesty International’s 304, last I saw, but a Dec. 3 report on Iran’s state television confirmed that security forces had fatally shot citizens.

The commander-in-chief of the elite Revolutionary Guards Corps, Hossein Salami*, said last month, “The aim of our enemies was to endanger the existence of the Islamic Republic by igniting riots in Iran.”

A mother of a 16-year-old boy described to Reuters that she was holding his body, “drenched in blood, after he was shot during protests in a western Iranian town on Nov. 19.”

“I heard people saying: ‘He is shot, he is shot,’ said the mother.  ‘I ran toward the crowd and saw my son, but half of his head was shot off.’”

*Salami is not to be confused with Revolutionary Guards Corps Quds Force commander, Qasem Soleimani.  Soleimani is the one making hay in Iraq, and Syria.  Anyway, moving along....

Anti-government protesters marched Wednesday in southern Iraq to mourn the death of an activist after a night during which the headquarters of two pro-Iran militias were set on fire.

Thaer al-Tayeb, a prominent activist from the city of Diwaniya, went of Baghdad’s Tahrir Square, the epicenter of the movement to bring down the government, and a suspicious explosion hit Tayeb’s car on December 15, badly wounding him.  Tayeb died days later, and when word got out, crowds rushed to the two local headquarters of the pro-Iran militias and torched them.

Estimates on the number killed in nearly three months of anti-government protests range from 460 to 500, with 25,000 wounded.

The rallies have continued despite a campaign of intimidation, including targeted killings, that the UN blames on the militias.

There is still no replacement for outgoing Premier Adel Abdel Mahdi, who quit in November in the face of the demonstrations, but he remains in power as negotiations to fill his post are deadlocked.

Iran supposedly wants to install an education minister, Qusay al-Suhail, who served in the Mahdi government.  But Iraq’s parliament speaker vetoed the proposed appointment.

Then Thursday, Iraqi President Barham Salih refused to designate the nominee of an Iran-backed parliamentary bloc for PM, Basra Governor Asaad al-Edani.

But then Salih said in a statement, as reported by Reuters, that he knew appointing Edani would not placate protesters demanding an independent prime minister with no party affiliation or help calm the unrest that has rocked the country.  He said that because the constitution does not give him the right to reject nominees for the premiership, he was ready to quit.

Well that sucks...as in it only complicates matters further. Like if he has truly resigned (I can’t begin to know the rules in this respect, as I’m sure most of official Washington doesn’t), it seems that lawmakers must first nominate a new president, a replacement for Salih must be named first, and then that person would nominate a prime minister.

But according to the constitution, as I drag you all into this mess, the speaker becomes the president on an interim basis. 

[Similar to Lebanon, since Saddam Hussein was toppled, power in Iraq is shared along ethno-sectarian lines.  The most powerful post, prime minister, goes to a Shiite, the speaker of parliament is a Sunni, and the presidency is held by a Kurd.  Lebanon is in the midst of its own crisis of government as it tries to change this longstanding division of offices.]

Meanwhile, there are growing indications that the Islamic State group is re-organizing in Iraq, two years after losing the last of its territory in the country.

Kurdish and Western intelligence officials have told the BBC that the ISIS presence is a sophisticated insurgency and attacks are increasing.

According to a top Kurdish counter-terrorism official, Lahur Talabany, the militants are now more skilled and more dangerous than al-Qaeda.  They also seem to have a lot more money at their disposal.

“They are able to buy vehicles, weapons, food supplies and equipment. Technologically they’re more savvy.  It’s more difficult to flush them out.  So, they are like al-Qaeda on steroids,” said Talabany.

Talabany says a different kind of Islamic State has emerged, which no longer wants to control any territory to avoid being a target.  Instead – like their predecessors in al-Qaeda – they have gone underground, in Iraq’s mountains, a territory difficult for the army to control, “lots of hideouts and caves.”

Any political unrest in Iraq, as we currently have, plays right into ISIS’ hands.

In Syria, a missile struck a school building in the northwestern part of the country Tuesday, the last rebel stronghold, killing eight civilians.  Activists blamed Russia.

Syrian government forces launched a ground offensive last week after weeks of bombardment displaced tens of thousands of people in Idlib province (the UN first estimated over 60,000), sending them fleeing both to the Turkish border, as well as south.  

Bashar Assad, with Russia’s support, has vowed to retake Idlib completely, but this is already creating a humanitarian crisis that will grow far worse.  The situation was further threatened by Russian and Chinese vetoes last week of a UN Security Council resolution to allow cross-border aid deliveries into Syria from Turkey and Iraq.

Thursday, President Trump tweeted:

“Russia, Syria, and Iran are killing, or on their way to killing, thousands of innocent civilians in Idlib Province.  Don’t do it!  Turkey is working hard to stop this carnage.”

Editorial / Washington Post

“Syrian dictator Bashar al-Assad and his Russian and Iranian allies have for years pursued a bloody but systematic strategy for regaining control over rebel-held areas.  The regime launches brutal assaults aimed at driving out civilians, deliberately bombing hospitals, schools and markets. After gaining some ground, it responds to international pressure by agreeing to a cease-fire.  Then, after a few weeks or months of respite, it repeats the process.

“Thus it was that Syrian and Russian forces began a new offensive in the northern province of Idlib last week, once again targeting civilians and, according to humanitarian aid groups, driving more than 100,000 people toward the border with Turkey. The attack is the resumption of a push into the province that began last April and displaced more than 500,000 people before an August cease-fire.  Humanitarian aid groups say the current offensive could soon double that number, leaving tens of thousands of people living in the open in harsh winter conditions.  Turkey long ago sealed its border with Syria, meaning the refugees have no safe place to go.

“Idlib has long posed a complex problem for Turkey and Western governments.  Its population of some 3 million people, including many thousands of refugees from other parts of Syria, is controlled by an extremist offshoot of al-Qaeda, Hayat Tahrir al-Sham.  But the Syrian and Russian tactics for reconquering the province are aimed mostly at innocent civilians.  According to the Syrian Observatory for Human Rights, more than 5,000 have been killed since April.

“Turkey promised last year to disarm the extremists but, while it has set up its own military outposts in Idlib and backed other rebel forces, it has failed to deliver.  This week, its diplomats once again were reduced to pleading with Russia to stop the offensive.  The United States, which once did the bargaining with Moscow, has become an impotent observer.  ‘Russia, Syria, and Iran are killing, or on their way to killing, thousands of innocent civilians in Idlib Province. Don’t do it!’ President Trump tweeted Thursday.  he responded to the last offensive with a similar tweet – and nothing else.

“As Mr. Trump’s tweet indicated - ‘Turkey is working hard to stop this carnage’ - President Recep Tayyip Erdogan has the best chance of preventing the looming humanitarian catastrophe.  He seems to be trying: The Syrian Observatory for Human Rights reported that scores of Turkish military vehicles crossed into Syria on Wednesday night.  The Turks, at best, could use diplomacy and reinforcement of their existing outposts to curtail the offensive, while doing more to neutralize extremist forces.

“Still, it should be clear who is responsible for the latest wave of Syrian suffering: the Assad regime and Russian President Vladimir Putin.  Congress recently approved new legislation sanctioning the Syrian government and all who do business with it, including Russia; legislators should insist that it be rigorously enforced.”

The Post editorial mentioned 100,000 displaced recently in Idlib, and then today, Friday, the UN announced its revised figure was 235,000 over the past two weeks!

Citing heightened Russian attacks, the UN said the mass displacement between Dec. 12 and 25 has left the violence-plagued Maaret al-Numan region in southern Idlib “almost empty.”

Meanwhile, China, Iran and Russia started joint naval drills today in the Indian Ocean and Sea of Oman.  The exercises are due to last until Monday and are meant to deepen cooperation between the three countries’ navies, according to a Chinese defense ministry spokesman.

Turkey: The government said it won’t bow to the threat of crippling U.S. sanctions or trade its new Russian missile defense, the S-400, for an American system to avoid the sanctions.

A spokesman for President Erdogan said Tuesday after a cabinet meeting, “They said they would not sell Patriots unless we get rid of the S-400s.  It is out of the question for us to accept such a precondition.”

Turkey, which has NATO’s second-largest military, denies it is walking away from the alliance, but its row with the U.S. over the S-400 is escalating, with Congress pushing for sanctions over the objection of President Trump, who says such a move could drive Turkey closer to Moscow.

Turkey plans to acquire a second S-400 battery, while pursuing a joint-development agreement with Moscow in order to produce its own sophisticated ballistic missiles.

Now isn’t that special.

Separately, in a conflict we’ll no doubt be talking more about in 2020, Libya, Turkey announced it is sending troops there at the request of the recognized government in Tripoli as soon as next month, thus putting the country’s conflict at the center of wider regional frictions.

Libya’s internationally recognized Government of National Accord (GNA) has been fending off a months-long offensive by General Khalifa Haftar’s forces in eastern Libya, which have been supported by Russia, Egypt and the UAE.  Last month, Ankara signed two separate accords with the GNA, led by Fayez al-Serraj, one on security and military cooperation and the other on maritime boundaries in the eastern Mediterranean.

Erdogan has also said Turkey will not stay silent over mercenaries from the Kremlin-linked Wagner group supporting Haftar.

Saudi Arabia: A Saudi court on Monday sentenced five people to death and three to jail in the death of Saudi journalist Jamal Khashoggi.

Khashoggi disappeared after going to the Saudi consulate in Istanbul on Oct. 2, 2018, to obtain documents for his planned wedding.  His body reportedly was dismembered and removed from the building and his remains have not been found.

The fiancee of Khashoggi, Hatice Cengiz, described the sentencing of the five to death in relation to the killing as unfair and invalid, adding that their execution would further conceal the truth.  Cengiz was waiting outside the consulate when he went inside to retrieve the documents.  She said the trial did not reveal why those convicted had killed Khashoggi because it was held behind closed doors.

“If these people are executed without any chance to speak or explain themselves, we might never know the truth behind this murder,” she said.  “I’m calling upon every authority in the world to condemn this kind of court decision and urgently prevent any execution, because this would just be another step in concealing the truth.”

A UN investigator accused Riyadh of making a “mockery” of justice by exonerating senior figures who may have ordered the killing.  The presiding Saudi court rejected the findings of a UN inquiry by ruling that the killing was not premeditated, rather carried out “at the spur of the moment.”

Turkey said on Monday the trial outcome fell far short of serving justice, and on Tuesday the communications director, Fahrettin Altun, slammed the verdict as an “insult to the intelligence of any fair observer.”

“The international media must pursue the case of Khashoggi until there is true accountability ...Those responsible must face justice sooner or later,” Altun tweeted, calling the case a “sham trial.”

Editorial / Washington Post

“Saudi Arabia has delivered a shameful travesty of justice in the murder of journalist Jamal Khashoggi...None (of those sentenced to death, or given prison sentences) were named.  But two men who are known to have directed the operation, former deputy chief of intelligence Ahmed al-Assiri and Saud al-Qahtani, a top aide to Crown Prince Mohammed bin Salman, were exonerated.  Most likely they were excused at the direction of the crown prince, who, according to the CIA, is the real author of the crime.

“The result is an insult to Khashoggi’s family and to all those, including a bipartisan congressional majority, who have demanded genuine accountability in the case.  International acceptance of the result would not only be morally wrong but dangerous, too: It would send the reckless Saudi ruler the message that his murderous adventurism will be tolerated....

“A spokesman for the Saudi public prosecutor said Monday ‘there was no prior intention to kill’ Khashoggi and the murder was ‘a snap decision.’ That’s a documented lie: An investigation by a UN envoy, Agnes Callamard, heard audiotapes in which the doctor and the head of the hit team discussed Khashoggi’s dismemberment before he entered the consulate.

“ ‘According to my sources, the prosecutor had argued that the killing of Mr. Khashoggi had been premediated.  The Crown Prince had argued that this was an accident against the evidence,’ Ms. Callamard tweeted Monday.  ‘Guess who the judge followed?’

“It’s unlikely Mohammed bin Salman would have so brazenly obstructed justice if not for the support of President Trump.  Incredibly, the White House issued a statement Monday calling the verdict ‘an important step in holding those responsible for this terrible crime accountable.’  Republicans in Congress who vowed to insist on consequences for the murder quietly folded this month, stripping a sanctions provision from this year’s Defense Department authorization act because of Mr. Trump’s opposition.

“One surviving provision is a requirement that the director of national intelligence submit a report to Congress within 30 days of identifying any Saudi implicated in ‘the directing, ordering or tampering of evidence’ in the Khashoggi case.  It would be hard for acting director of national intelligence Joseph Maguire to comply without naming Mohammed bin Salman, since the CIA is known to have concluded that he ordered the killing.  Perhaps that’s why the Saudis suddenly announced a verdict in their sham trial: to provide the Trump administration with a pretext to exclude the crime’s real authors.  Congress must demand that the DNI’s report is comprehensive and honest – and that all those named suffer consequences.”

Israel: Prime Minister Benjamin Netanyahu successfully beat back a Likud leadership challenge from Gideon Saar on Thursday, receiving 72.5% to Saar’s 27.5%.  Saar said he would now back Netanyahu in a general election due in March.

Netanyahu, 70, still faces trial on bribery and corruption charges, as well as a third national election within a year.  Previous elections in April and September resulted in a deadlock with the centrist Blue and White party – with neither able to form a government.

Separately, the head of the Israel Defense Forces (IDF), Chief of Staff Lt.-Gen. Aviv Kochavi warned:

“There is a possibility that we will face a limited confrontation with Iran and we are preparing for it,” Kochavi said at a conference.

The IDF, he said, is carrying out operations both publicly and below the radar, to prevent the enemy from obtaining precision missiles, even if those operations bring about a confrontation.

“We will not allow Iran to entrench itself in Syria, or in Iraq,” Kochavi said, publicly acknowledging for the first time that Israel’s Air Force has launched attacks against Iranian targets in Iraq.

“Iraq is undergoing a civil war, when the Quds Force is operating there on a daily basis, when the country itself has turned into an ungoverned area.  Advanced weapons are being smuggled by the Quds Force in Iraq on a monthly basis and we can’t allow that,” he said.

Afghanistan: Afghan President Ashraf Ghani has won another five-year term in office, according to preliminary results released by the country’s election commission on Sunday, nearly three months after votes were cast in an election tarnished by a record low turnout.

Ghani won 50.6% of the 1.82 million votes cast in the Sept. 28 poll, barely exceeding the threshold needed to avoid a runoff against his top rival, Abdullah Abdullah, who picked up 39.5%.

Under Afghanistan’s electoral laws, the preliminary results can be appealed, and with Ghani barely above 50%, there will no doubt be numerous challenges that could go on and on.  Abdullah signaled he would challenge the count.

If the results stand, it would be the second time Ghani defeated Abdullah in a presidential race, and the third time Abdullah has been a runner-up.

Allegations of widespread fraud and fears of election-related violence in the last presidential poll, in 2014, forced the U.S. to intervene and broker a national unity government under which Ghani served as president and Abdullah as chief executive, the rough equivalent of a prime minister.

Due to threats of Taliban violence and voter apathy, turnout was fewer than 19%.

Speaking of the Taliban, they ambushed a peace convoy in western Afghanistan and abducted 26 activists, members of a peace movement, a police spokesman said on Wednesday.

The Taliban forced the six-vehicle convoy to a halt, got into their cars and drove the activists to an unknown location.  The convoy had been going village-to-village to rally for peace.  [Past activists abducted in such situations were normally released.]

The Taliban control at least half of Afghanistan today and are at their strongest since the 2001 U.S. invasion.

It’s a joke that they hold peace talks with a U.S. envoy while staging near-daily attacks.

Separately, an American service member was killed in combat Monday, Sgt. 1st Class Michael Goble of New Jersey, which brings the total of U.S. deaths in Afghanistan this year to 20.  There have also been three non-combat deaths.  More than 2,400 Americans have died in the nearly 18-year conflict.

And lastly, Islamic State in Afghanistan has now become the strongest branch of the militant group outside of Iraq and Syria, according to U.S. officials.

As reported by the Wall Street Journal, “The branch has received a stream of funding from Islamic State in Iraq and Syria, a sign of the group’s importance to its leadership.  The group, known as ISIS-Khorasan and infamous for its violent attacks on civilians, has as many as 2,000 fighters and seeks to target the West, according to a June Pentagon report.  It also has developed the most effective network of foreign fighters in terms of training, organization and recruitment, U.S. officials said.”

Very similar to the above comments from the Kurdish counter-terrorism official on ISIS in Iraq.

China / Hong Kong / Taiwan: Last Saturday, President Trump said he had a call with China’s President Xi Jinping and Trump tweeted after: “Had a very good talk with President Xi of China concerning our giant Trade Deal.”

Chinese state broadcaster China Central Television said the phone call was at Trump’s request.

China’s Xinhua News Agency then added that during the call Xi told Trump that China is deeply concerned about “negative words and actions” by the U.S. on issues relating to Taiwan, Hong Kong, Xinjiang and Tibet.

“Xi noted that the U.S. behaviors have interfered in China’s internal affairs and harmed China’s interests, which is detrimental to the mutual trust and bilateral cooperation,” Xinhua said.

Speaking of Hong Kong, anti-government protests intensified again over the Christmas holiday, with demonstrations at shopping malls Christmas Day, confronting police who used tear gas and pepper spray, after a previous night of mob violence and vandalism.

The city’s embattled leader, Chief Executive Carrie Lam, expressed her frustration at the behavior of radicals on Christmas Eve, saying many people as well as tourists coming to Hong Kong were disappointed that their festive celebrations had been ruined by “a group of reckless and selfish rioters.”

Hong Kong’s hotels were half empty for Christmas, despite plunging room rates.

Meanwhile, on Taiwan, the critical presidential election is coming up Jan. 11, with polls showing President Tsa Ing-wen and her ruling Democratic Progressive Party (DPP) running ahead of opposition candidate Han Kuo-yu, mayor of the southern Taiwanese city of Kaohsiung, and leader of the Kuomintang (KMT) party.

Han is being criticized for his friendlier stance towards Beijing and the perception he has “abandoned” Kaohsiung in his pursuit of the presidency.

Tsai has benefited from the Hong Kong protests, as Taiwanese worry ‘that could be them.’  Prior to the protests, she was going to lose.

North Korea: We didn’t receive a Christmas gift from Kim Jong Un, as he had threatened, and in recent days, the U.S. flew four surveillance planes over the Korean Peninsula amid the heightened tensions.

It is unusual for so many American surveillance planes to conduct missions around the peninsula at the same time, an indication that the U.S. is taking the situation rather seriously.

So are we going to get a New Year’s surprise?  President Trump said at his Mar-a-Lago resort the other day, “We’ll find out what the surprise is, and we’ll deal with it very successfully.  Everybody’s got surprises for me, but let’s see what happens. I handle them as they come along.  Maybe it’s a nice present.  Maybe it’s a present where he sends me a beautiful vase as opposed to a missile test.  I may get a vase.  I may get a nice present from him.  You don’t know.  You never know.”

Kim’s deadline for Washington to come up with a new proposal to restart stalled nuclear talks was the end of the year.  It was 16 months ago that the president tweeted, “There is no longer a Nuclear Threat from North Korea.”

Trump had earlier warned Kim not to interfere with his re-election, saying the communist nation could lose “everything” if it did.

Former National Security Adviser John Bolton told news service Axios that President Trump’s approach to end North Korea’s nuclear arms program has “failed.”

Bolton suggested the Trump administration is bluffing about stopping Kim’s nuclear ambitions and it would be “very unusual” for the president to say that he got it wrong, he said in an interview on Monday.

Bolton said the U.S. could be doing more to tighten sanctions choking North Korea’s economy, which would force the hand of Kim.  “The idea that we are somehow exerting maximum pressure on North Korea is just unfortunately not true,” he told Axios.

Bolton said he doubted the administration “really means it” when Trump and top officials pledged to stop North Korea from having deliverable nuclear weapons - “or it would be pursuing a different course,” he said.

Bolton also mocked Deputy Secretary of State Stephen Biegun for saying North Korea’s missile launches and belligerent statements were not helping bring peace on the Korean Peninsula, calling the comments a “clear winner in the Understatement of the Year Award contest.”

As nuclear talks have sputtered, North Korea has been building its weapons arsenal, Bolton told Axios.

“We’re now nearly three years into the administration with no visible progress toward getting North Korea to make the strategic decision to stop pursuing deliverable nuclear weapons,” Bolton said.

Meanwhile, South Korean President Moon Jae-in, Japanese Prime Minister Shinzo Abe and Chinese Premier Li Keqiang had a trilateral meeting in China last weekend that focused on North Korea, but yielded nothing of substance on the topic.  Xi Jinping participated, expressing his concerns over the rising tensions between the North and the U.S.

Last week, Beijing, jointly with Russia, proposed that the UN Security Council lift some sanctions on Pyongyang in an attempt to break the current deadlock.  But as of now, Seoul and Tokyo remain on the side of Washington.

Last weekend, North Korea lashed back at the U.S. for taking issue with its human rights record, saying Washington’s “verbal abuse” would only aggravate tensions and warning Washington would “pay dearly” for the criticism.

As for the status of North Korea’s arsenal, one expert, Siegfried S. Hecker, the former head of the Los Alamos National Laboratory and one of the few Westerners who has seen the North’s uranium production facilities, says he believes the country has fuel for about 38 warheads – well beyond an earlier low-end estimate that he and other scientists and intelligence analysts had issued.

Russia: Swiss-Dutch company Allseas said it had suspended work on building a major Russia-to-Germany natural gas pipeline in order to avoid U.S. sanctions contained in legislation signed by President Trump last weekend.

The move throws into doubt the completion date of the $11 billion project that Moscow had said would be ready in months, jeopardizing plans to quickly expand Russian sales of natural gas to Europe via pipeline.

The participation of privately-held Allseas, a specialist in subsea construction and laying underwater pipeline, is integral to the completion of Nord Stream 2, led by Russia’s state energy company Gazprom.

Nord Steam 2 would allow Russia to bypass Ukraine and Poland to deliver gas under the Baltic Sea to Germany.

Gazprom is taking on half of the project’s planned costs and the rest is divided between five European energy companies, including Royal Dutch Shell.

The Trump administration, like the Obama administration before it, opposes the project on the grounds it would strengthen Vladimir Putin’s economic and political grip over Europe.

The administration has touted U.S. liquefied natual gas as “freedom gas” that gives Europe an alternative to Russian supply.

Washington says that Nord Stream 2 would also deprive Ukraine of billions of dollars in gas transit fees.

Germany says it needs the gas as it weans itself off coal and nuclear power.

On a totally different issue, today, the Russian military said it had deployed a hypersonic weapon that flies at superfast speeds and can easily evade American missile defense systems, potentially setting off a new chapter in the arms race.

American officials said today they have little doubt that the Russians do indeed have a working hypersonic weapon, which is capable of carrying a nuclear warhead at speeds faster than 3,800 miles per hour.  The U.S. plans to deploy its own hypersonic weapons by 2022, but some experts believe that schedule may prove optimistic.

India: Prime Minister Narendra Modi has defended the government’s new citizenship law, despite the major ongoing protests against it.

“We passed this bill to help the persecuted,” he said at a rally in Delhi.  “We need to respect India’s MPs and its parliament.”

More than 20 have died in ten days of clashes sparked by the bill, which critics see as anti-Muslim.

The bill offers amnesty to non-Muslim illegal immigrants from three neighboring countries.

Modi accused political parties of “telling lies and spreading misinformation” about the bill, while insisting India’s Muslims – one in seven of India’s 1.35bn population - “don’t need to worry.”

Editorial / Washington Post

“India has earned itself a dubious distinction: It has imposed the longest-ever Internet shutdown by a democracy.

“Prime Minister Narendra Modi’s government abruptly revoked the autonomy of Kashmir this summer, and access to the digital realm disappeared along with the area’s statehood. Authorities claimed the blackout, coupled with the rest of the repressive measures put into place in Kashmir, was necessary to usher in an era of prosperity in a society rent by sectarian conflict – and that it would be temporary, until the national security and safety dangers posed by mass communication have passed.

“Four-and-a-half months later, 7 million people remain cut off from the Web and, by extension, the world.

“Kashmiris in the capital city of Srinagar, The Post reports, crowd into a train that takes them 70 miles away to wait in hours-long lines of people suddenly stranded in the analog area.  They’re trying to send emails, register for exams, consult colleagues on medical cases or save businesses that are dying with no way to reach their customers.  The disruption has lasted so long that many accounts have disappeared from WhatsApp for inactivity.

“India’s shutdowns across its territory are already the most frequent of any country in the world, with excuses ranging from quashing dangerous viral rumors to preventing cheating on exams.  The measures more often appear as a tool to quiet political protest than an unbiased attempt to protect people; there is evidence in any case that yanking away the Internet during violence only begets more violence.

“But the Kashmir blackout is noteworthy for its duration, its scale and its obvious place in a toolbox of repression India has used to crack down on the civil liberties and basic dignity of its Muslim population.  The government has ordered at least three more statewide shutdowns recently in response to protests over the country’s new citizenship law that promises to further marginalize the minority.

“It’s telling who approves: An article published this week in the Chinese Communist Party newspaper, the People’s Daily, bears the chilling headline ‘India’s internet shutdown shows normal practice for sovereign countries.’

“No wonder.  India would be a valuable ally in the global realignment China hopes to effect, where countries emulate its freedom-crushing system of intense Internet control, censorship and surveillance.  India may have earned the distinction of longest shutdown by a democracy, but the better question is how long a country that follows this sinister path can truly be called a democracy at all.”

Mali / Burkina Faso (West Africa): Islamist militants killed 35 civilians, 31 of them women, in an attack on a military base and a town in Burkina Faso Tuesday.  Seven soldiers and 80 militants were also killed as the army repelled the attack.

The violence in the region has continued despite Western efforts to help regional governments deal with the insurgency.  Last Saturday, French forces killed 33 militants in Mali near the border with Mauritania.  Separately, France announced it had carried out its first armed drone strike, killing another seven Islamic extremists in central Mali, thus joining a tiny group of countries who have employed armed drones in the field.

In November, 13 French troops died in a helicopter collision during an operation in southern Mali, near the border with Burkina Faso.

Random Musings:

--Presidential tracking polls....

Gallup: 45% approve of Trump’s job performance, 51% disapprove; 89% of Republicans, 42% of independents [Dec. 2-15]
Rasmussen: 46% approve, 53% disapprove (Dec. 27...kind of surprising, a decline from 50/48 the prior week).

--According to data compiled by the Center for Responsive Politics, Pete Buttigieg has collected more campaign cash from donors and political action committees tied to the financial, insurance and real estate sector than any other White House hopeful; $3.06 million in contributions compared to $2.8 million for Joe Biden and $2.03 million for Cory Booker (because of his home state’s strong ties to Wall Street).

--Rep. Adam Kinzinger (R. Ill.) was being interviewed this week and I do wish, like him, Americans would “stop thinking the other party is the enemy when they’re not...the enemy is Russia, China, North Korea...”

--Kathleen Parker / Washington Post

“No news here, but the president of the United States is a sick human being – charitably speaking.  His recent behavior at a campaign rally in Michigan on the very night of his impeachment was several notches below even his usual flair for giving offense.

“His attempt at whateverthatwas – sadistically relating a telephone exchange he had in February with Democratic Rep. Debbie Dingell of Michigan after the death of her husband – was the verbal effluent of a twisted mind.

“According to Trump’s rendering, Debbie Dingell called him in desperation, beseeching him to provide official honors for her late husband, Rep. John D. Dingell, the longest-serving congressman in U.S. history, with 59 years under his belt....

“However, Debbie Dingell said she never called the president.  He called her, she said, to tell her he was lowering the flags, for which she expressed gratitude.  To his audience, Trump said he didn’t have to be so nice, and insinuated that John Dingell might be in hell, ‘looking up,’ rather than down from heaven.

“Why would he make up such a mean-spirited lie?  Ah, you had to ask. Revenge.  Trump no doubt expected Debbie Dingell to reward his beneficence by voting ‘no’ on impeachment, which didn’t happen.  He was angry. But Trump’s is no ordinary anger. When he lashes out, he goes for the kill.  He clearly wants to inflict pain and then spit on his prey’s grave.

“The problem for supporters involuntarily exposed to such meanness is that Trump corrals all bystanders into his madness and makes them complicit.  It was apparent that many in the audience were uncomfortable with his remarks, even as some laughed or applauded.  Given the season, one may also charitably concede that sometimes folks don’t know what to do when they’re suddenly participating in something untoward.   Maybe they laughed out of nervousness – or fear.

“Immediate condemnation followed Trump’s tale, including from another widow, Cindy McCain, whose late husband, Sen. John McCain, also was mocked by the president.  It’s apparent by now that Trump has a problem with men who are his superiors and, in Debbie Dingell’s case, he relishes torturing their spouses.  One needn’t be a psychologist to sort out such odious, misogynist behavior.

“For the record: John Dingell is widely considered one of the finest public servants ever elected to office.  And Debbie Dingell has picked up where he left off.  Two more decent people you’re unlikely to meet.  Debbie tweeted directly to Trump that she was hurt by his remarks, which is understandable, but, frankly, Trump isn’t worthy of her thoughts, much less her pain....

“In an email to me, (Debbie Dingell) passed along an op-ed her husband had written for the Detroit News upon the death of former president George H.W. Bush, his longtime friend from the other side of the political aisle.  John Dingell’s words provide a stark contrast to this president and this time.

“Dingell and Bush were both World War II veterans, among the last politicians of their kind.  Dingell wrote: ‘We were from a political generation that understood delivering for the American people was more important than political wins....Remember the note he left President Clinton on inauguration day:  ‘You will be our president when you read this note.  Your success now is our country’s success.  I will be rooting hard for you.’’

“Imagine Trump writing any of that....

“ ‘President Bush always cared about people,’ (John Dingell) wrote.

“The same can be said about both Dingells but surely not about Trump.  What a shame that cruelty isn’t an impeachable offense.”

--Former Republican Sen. Jeff Flake (Arix.) / Washington Post...addressing his former Republican Senate colleagues as they approach the impeachment trial.

In part:

“The willingness of House Republicans to bend to the president’s will by attempting to shift blame with the promotion of bizarre and debunked conspiracy theories has been an appalling spectacle.  It will have long-term ramifications for the country and the party, to say nothing of individual reputations.

“Nearly all of you condemned the president’s behavior during the 2016 campaign.  Nearly all of you refused to campaign with him.  You knew then that doing so would be wrong – would be a stain on your reputation and the standing of the Republican Party, and would do lasting damage to the conservative cause.

“Ask yourself today: Has the president changed his behavior? Has he grown in office?  Has the mantle of the presidency altered his conduct? The answer is obvious.  In fact, if the president’s political rally in Michigan on Wednesday (Dec. 18) is any measure, his language has only become more vulgar, his performance cruder, his behavior more boorish and unstable.

“Next ask yourself: If the president’s conduct hasn’t changed, has mine? Before President Trump came on the scene, would I have stood at a rally and cheered while supporters shouted ‘lock her up’ or ‘send them back’?  Would I have laughed along while the president demeaned and ridiculed my colleagues?  Would I have ever thought to warm up the crowd for the president by saying of the House speaker: ‘It must suck to be that dumb’?

“As I said above, I don’t envy you.  You’re on a big stage now.  Please don’t accept an alternative reality that would have us believe in things that obviously are not true, in the service of executive behavior that we never would have encouraged and a theory of executive power that we have always found abhorrent.

“If there ever was a time to put country over party, it is now.  And by putting country over party, you might just save the Grand Old Party before it’s too late.”

--From the Jerusalem Post:

“The world may be inching closer to an era where a Terminator-style apocalyptic nuclear war could be possible due to yielding control over nuclear weapons to artificial intelligence (AI), according to publications by nuclear scientists and defense experts.

“While numerous AI experts have told the Jerusalem Post over the years that people worried about AI turning on humanity as in the famous ‘Terminator’ movies simply misunderstand the technology, the likelihood of AI making a catastrophic mistake with nuclear weapons is no fairytale.

“A recent article in the Bulletin of the Atomic Scientists, a top group of nuclear scientists, as well as other recent publications by defense experts have said that Russia may already be integrating AI into a new nuclear torpedo it is developing known as the Poseidon, to make it autonomous.

“According to the Atomic Scientists report, the U.S. and China are also considering injecting AI deeper into their nuclear weapons’ programs as they modernize and overhaul their nuclear inventory....

“Some studies have shown that AI and automated evidence in general can reinforce bubble-style thinking and make it more difficult for analysts to entertain alternate narratives about what might be occurring in murky and hi-stress situations.

“An example that the article gives of human judgment’s importance was a 1983 incident when a Soviet officer named Stanislav Petrov disregarded automated audible and visual warnings that U.S. nuclear missiles were inbound.

“The systems were wrong and had Petrov trusted technology over his own instincts, the world might have gone to nuclear war over a technological malfunction.”

All the more reason why my New York Mets need to go for it all this year...cuz you never know if there will be a 2021.

--The catastrophic wildfires in Australia have burned 7.4 million acres of land nationwide, killing nine people and destroying more than 800 homes.  Temperatures last weekend in western Sydney hit 115 degrees.

Prime Minister Scott Morrison is feeling the heat, receiving criticism for going on a family vacation in Hawaii during the crisis.  Morrison cut it short to return home.

But debate has reignited on whether Morrison’s conservative government has taken enough action on climate change.  Australia is the world’s largest exporter of coal and liquefied natural gas

--From the Washington Post:

Deforestation and other fast-moving changes in the Amazon threaten to turn parts of the rainforest into savanna, devastate wildlife and release billions of tons of carbon into the atmosphere, two renowned experts warned Friday.

“ ‘The precious Amazon is teetering on the edge of functional destruction and, with it, so are we, Thomas Lovejoy of George Mason University and Carlos Nobre of the University of Sao Paulo in Brazil, both of whom have studied the world’s largest rainforest for decades, wrote in an editorial in the journal Science Advances.  ‘Today, we stand exactly in a moment of destiny: The tipping point is here, it is now.’

“Combined with recent news that the thawing Arctic permafrost may be beginning to fill the atmosphere with greenhouse gases, and that Greenland’s ice sheet is melting at an accelerating pace, it’s the latest hint that important parts of the climate system may be moving toward irreversible changes at a pace that defies earlier predictions.”

The Amazon is 17 percent deforested, but for the large portion of it inside Brazil, the figure is closer to 20 percent.  At a certain level the trees, which not only soak up enormous quantities of rainwater but also give off mist that aids agriculture and sustains innumerable species, won’t be able to recycle enough rainfall.

“At that point, much of the rainforest could decline into a drier savanna ecosystem.  Rainfall patterns would change across much of South America.  Several hundred billion tons of carbon dioxide could wind up in the atmosphere, worsening climate change. And such a feedback loop would be tough to reverse.”

Back to Greenland, the ice sheet losses have accelerated from 33 billion tons lost per year in the 1990s to a current average of 254 billion tons annually, according to the work of nearly 100 scientists.

And a separate report from the National Oceanic and Atmospheric Administration laid out evidence suggesting that the global Arctic already has become a net emitter of carbon dioxide because of the thawing permafrost.

--We lost two American icons today.  The first radio shock jock, Don Imus, 79, a true New York institution who had his turn in the national media spotlight with a syndicated program on MSNBC for a long spell, Imus on radio for 50 years in all.

And Lee Mendelson, 86.  It’s only appropriate that this prolific producer died during the Christmas holidays, doing so on Christmas Day, because it was he who produced “A Charlie Brown Christmas” and guided it to television, where it became an instant classic in 1965.

Every single year for the past 50+ years, if I don’t watch the entire show, I YouTube the first ten minutes or so, as I did on Christmas Eve the other day, because quite simply, you have to.

It was a true gift that Lee Mendelson and Charles Schulz left us.  But understand it was Mendelson who convinced the skeptical and publicity shy Schulz to adapt his beloved characters for television.

Mendelson also wrote the lyrics to the iconic song “Christmastime is Here,” which I know will be in my brain the next few weeks all over again.  And that’s not a bad thing.  Hell, it can be July and it will just pop into your head.

I’ll have more on both passings in my next Bar Chat column, though I have a lot on Mendelson as part of my annual Bar Chat Christmas special that is up now.

--Finally, we had this terrific story from Michael Elsen-Rooney of the New York Daily News:

Tamara Darnley leafed through the well-worn blue book holding her medical records, only to spy something new amidst the familiar documents.

“The 24-year-old plucked the folded piece of paper from the lone repository of links to her mysterious birth to find a name and a place: Father Edmund Brady, St. Margaret Mary Church, Queens.

“She found the church’s number, called and asked for the priest. After bouncing between extensions, Darnley heard the thick Queens accent of long-time church employee Denise Dollard.

“ ‘Excuse me,’ Tamara began, ‘but I am the baby that was found there.’

“There was a pause before Dollard replied.

“ ‘Well excuse me,’ she said.  ‘I am the woman who found you.’”

Tamara was the “miracle baby” found on a cold January morning in 1995 that made headlines in the last millennium, when a group of strangers gave shelter to an abandoned child.  But Darnley knew nothing of her dramatic rescue by Dollard.

That day nearly 25 years ago, church secretary Dollard arrived at work to find a plastic bag outside the church doors. That wasn’t unusual, Dollard said, as the church was collecting clothing donations and received occasional drop-offs.

“Without a second look, Dollard placed the bag in a basement storage closet with other donated items.  And there, for two days, the bag with its precious occupant sat in a plastic milk crate against a radiator.

“Things changed during Saturday Mass, when Frances DeCarlo – a retired pediatric nurse and 74-year-old church volunteer – heard a faint whimper from the storage closet.

“ ‘She said, ‘Father, you have to stop the Mass.  That’s a child,’ recalled (Father) Brady.

“A small search party quickly zeroed in on the white shopping bag.  They peered inside, and saw something move; Dollard suspected a rat. But DeCarlo reached inside and pulled out an infant, wrapped tightly in pink and white sheets.

“ ‘She opened her eyes,’ recounted Brady.  ‘She had this beautiful face. She was very determined.  I think that’s part of why she was still alive.’

“They rushed the little girl to the hospital, where she received intravenous fluids and was soon good as new.  Brady said doctors told him that newborn babies can shut down bodily functions and survive for days at a time without food or water.”

Well, Tamara was taken in by a foster mother, with Brady and Dollard hosting her for regular visits at the church.  Tamara and her family left New York City when she was four, eventually moving upstate.

As the years passed, Brady and Dollard lost touch with Tamara, though she was never far from their hearts.

Tamara enjoyed a happy childhood with a loving foster mom, but there was a lingering sense she was “kind of different.”

When Darnley was 11, her foster mom produced a newspaper clipping about the church’s “bundle of joy” and explained the whole story.

But it wasn’t until last Saturday, Dec. 21, 2019, in Queens, New York, that Tamara returned.

“Darnley had a vague sense that the people in the church cared for her, and were important parts of her history. But she didn’t know if they’d want to talk to her – or if they were even still alive....

“Brady, now 86, is officially retired but still regularly visits the church, leading services occasionally....Darnley accepted his invitation to return to the place where they first met.”

And so Darnley last Saturday had a chance to clear up misconceptions about her origin story, including a rumor that she was dumped inside a garbage bag.

“ ‘When I got her alone in a corner I said, ‘Let me tell you something right now,’’ Dollard recalled.  ‘I said right into her face, ‘You were never in a garbage bag.  Never.’  Because I saw the way she was prepared, in a clean white bag with clean white sheets...She needed to hear that.”

For years Dollard herself was agonized by thoughts about how she initially missed the baby’s presence inside the bag.

“But now, she couldn’t help but see the many ways she’d been lucky.  She decided, for some unknown reason, to gently place the bag with the infant in the storage closet – snugly pressed against the radiator, a decision that likely saved Darnley’s life.

“ ‘There’s too many things I used to think were just fortunate,’ said Brady.  ‘But I now think it’s a little more.’”

---

Pray for the men and women of our armed forces...and all the fallen.  We remember Sgt. 1st Class Michael Goble.

God bless America.

---

Gold $1515
Oil $61.69

Returns for the week 12/23-12/27

Dow Jones  +0.7&  [28645]
S&P 500  +0.6%  [3240]
S&P MidCap  -0.1%
Russell 2000  -0.1%
Nasdaq  +0.9%  [9006]

Returns for the period 1/1/19-12/27/19

Dow Jones  +22.8%
S&P 500  +29.3%
S&P MidCap  +24.0%
Russell 2000  +23.8%
Nasdaq  +35.7%

Bulls 57.7
Bears 17.3...ratio from the previous week; holidays will impact the schedule of the release.

Have a good week.  And Happy New Year!  2020 is here...whether we’re ready for it or not, sports fans.

And Happy Birthday to our own Dr. Bortrum!

Brian Trumbore



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Week in Review

12/28/2019

For the week 12/23-12/27

[Posted 11:30 PM ET, Friday]

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

Special thanks to Dr. W. for his ongoing support.

Edition 1,080

The year isn’t officially over so I’m holding off on a yearend review until next time.  We still have two more trading days on Wall Street, and we need to see if North Korea is going to deliver a holiday gift as promised, President Trump not having delivered a new proposal for denuclearization talks as yet per Pyongyang’s yearend deadline.

Meanwhile, the stock market rockets higher.  Trump tweeted today:

“ ‘Trump Stock Market rally is far outpacing past U.S. presidents’ @CNBC.  With new trade deals, and more, THE BEST IS YET TO COME!”

On this front he has a lot to crow about.  But so does just about every other major market around the world this year, including, yes, Mr. President, China.  [If you happen to attend or watch a Trump rally, and he states that China has “lost $30 trillion in value” since he’s become president, as I’ve pointed out in the past few months, that’s as big a bald-faced lie as any of Trump’s 10,000+ tall-tales.]

We stick to the facts here at StocksandNews and just be prepared next week for a ton of data on 2019.  And then in the following weeks we’ll have scads of figures on earnings, monthly, quarterly and annual economic numbers, and much more to warm the cockles.

But I do have to note the following on the exploding budget deficit, a major promise of President Trump’s not kept.

Editorial / Wall Street Journal

“Congress has left town for the year but alas not before another bipartisan spending party that has typified the Trump Presidency. The numbers deserve notice because they are likely to have more long-term impact than impeachment.

“Lawmakers whooped through $1.4 trillion in discretionary spending for the rest of the fiscal year with little debate or objection.  A bipartisan deal on the budget outlines in August was supposed to give Congress time to negotiate 12 individual spending bills, but as usual they couldn’t agree so they piled it all into two bills totaling more than 2,300 pages on Monday.  A day later they added a list of tax subsidies, and by Friday it was law.  Congress can act fast when it is greasing its own wheels.

“The political secret to this bipartisan blowout is that the Republicans get more for defense in return for giving Democrats more for social welfare.  An $860 billion national security bill gave President Trump $1.375 billion for his border wall – despite Democratic vows that he’d get none – and modest flexibility in where the wall can be built.  The White House also won $738 billion for defense, $22 billion more than last year, and funding to create Mr. Trump’s Space Force.

“Democrats cashed in with $555 billion for domestic priorities.  They scored $25 million for ‘gun violence research,’ $425 million in election security grants, and more money for Head Start and early childhood education....

“Farm state Members added $1.5 billion in disaster relief, on top of the $3 billion Congress passed earlier this year.  GOP Senator Chuck Grassley delivered a big tax break for Iowa’s biodiesel blenders, and the tax bill also showers largesse on distilleries, race-horse and NASCAR owners, short-line railroads, and renewable energy.  In return, Republican tax writers were able to pass a small list of ‘corrections’ to their 2017 tax reform.

“The only good tax news was agreement to repeal, permanently, three tax increases that Democrats had passed to make the phony ObamaCare numbers look real in 2010.  Democrats were keen to repeal the co-called Cadillac tax on high-cost health plans.  Unions have neogitated rich benefits and don’t want to be taxed on them.  Republicans in turn were able to repeal permanently the taxes on medical devices and health insurance....

“The Club for Growth notes that the bills increase discretionary outlays by more than $175 billion over last year, and budget watchdogs estimate the higher spending caps Congress agreed to this summer will add $1.7 trillion to the national debt over 10 years.  Debt held by the public sa a share of GDP is close to 80% and rising, 10 years into an economic expansion.

“The budget problem isn’t a shortage of revenue.  CBO says tax receipts grew 4% last fiscal year, through September, and 3% in the first two months this year.  Economic growth is feeding the Treasury.  But spending is growing much faster: 8% last fiscal year, more than four times the inflation rate, and 6% in October and November this year.

“In addition to the latest discretionary bills, spending on Social Security (6%), Medicare (6.1%) and Medicaid (9.2%) continue to soar this year.  Neither party shows any inclination to do anything about those programs, except expand them.  Mr. Trump may yet join Barack Obama in the spending record books.”

More on this topic next week.

But I also can’t help but note that in the column I posted last Friday night, at 9:30 p.m. eastern, I wrote that Russian President Vladimir Putin was supporting Trump, weighing in on the impeachment, saying Democrats had impeached Trump for “fabricated” reasons in order to reverse his 2016 election victory.  I noted that Putin, speaking at his annual yearend news conference, also said, “This is simply a continuation of the (U.S.) intra-political battle where one party that lost an election, the Democratic Party, is trying to achieve results using other methods and means.  They first accused Trump of a conspiracy with Russia.  Then it turned out there wasn’t a conspiracy and that it couldn’t be the basis for impeachment.  Now they have dreamt up (the idea) of some kind of pressure being exerted on Ukraine.”

Total propaganda from the former KGB officer.

So what does President Trump do, about one hour after I had posted, around 10:30 p.m. eastern time Friday night?

He puts out a tweet, citing an AP story on Putin’s press conference saying Trump’s impeachment is far-fetched and predicts the U.S. Senate will reject it, Trump adding, “A total Witch Hunt!”

Right in front of our faces, again.  I was floored this wasn’t the top story the rest of the week.  Donald Trump continues to attempt to impeach himself.

Lastly, it was kind of comical that the president’s Christmas message to all of us spoke of “fostering a culture of deeper understanding and respect,” as he then spent the next few days trashing House Speaker Nancy Pelosi, calling her everything in the book.

Trump World

--Marc A. Thiessen / Washington Post

“In his third year in office, President Trump continued to deliver an extraordinary list of accomplishments.  Today, I offer my annual list of the 10 best things Trump did this year (my next column will list the 10 worst):

“10. He continued to deliver for the forgotten Americans.  Unemployment is at record lows; this year the number of job openings outnumbered the unemployed workers to fill them by the widest gap ever; wages are rising, and low-wage workers are experiencing the fastest pay increases.  Fifty-seven percent of Americans say they are better off financially since Trump took office.

“9. He implemented tighter work requirements for food stamps.  With unemployment at historic lows, there is no reason more people should not be earning their success through productive work.  The rules apply only to able-bodied, childless adults....

“8. He has got NATO allies to cough up more money for our collective security....

“7. He stood with the people of Hong Kong.  He warned China not to use violence to suppress pro-democracy protests and signed the Hong Kong Human Rights and Democracy Act.  Hong Kong people marched with American flags and sang our national anthem in gratitude.

“6. His withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty is delivering China and North Korea a strategic setback.  The United States is now testing new, previously banned intermediate-range missiles.  These weapons will allow us to compete with China’s massive investment in these capabilities, and also provide a fallback in the likely case negotiations with North Korea fail – obviating the need for temporary deployments of U.S. carrier battle groups and allowing us to put North Korea permanently in our crosshairs.

“5. His ‘maximum pressure’ campaign is crippling Iran.  Iran’s economy is contracting, inflation is spiraling and the regime has been forced to cut funding for its terrorist proxies, including Hezbollah and Hamas, the Iranian military and the Islamic Revolutionary Guard Corps.  And now the Iranian people are engaged in the largest popular uprising since the 1979 revolution.

“4. His tariff threats forced Mexico to crack down on illegal immigration.  Mexico is for the first time in recent history enforcing its own immigration laws – sending thousands of National Guard forces to its southern border to stop caravans of Central American migrants.  Plus, Congress is poised to approve the U.S.-Mexico-Canada free-trade agreement, which would not have been possible wihtout the threat of tariffs.

“3. He delivered the biggest blow to Planned Parenthood in three decades.  Thanks to Trump’s Protect Life Rule that prohibits Title X family planning funds from going to any clinic that performs on-site abortions – Planned Parenthood announced this year that it is leaving the Title X program barring a court victory.  This is a major pro-life victory and another reason Christian conservatives continue to support him.

“2. He ordered the operation that killed Islamic State leader Abu Bakr al-Baghdadi.  It was a high-risk mission that required U.S. forces to fly hundreds of miles into terrorist-controlled territory.  If things had gone horribly wrong, Trump would have been blamed.   That risk is why former vice president Joe Biden advised President Barack Obama not to carry out the raid that killed Osama bin Laden.  Trump did not hesitate the way Biden did.

“1. He has continued to appoint conservative judges at a record pace....

“There are many other significant achievements that did not make the top 10. Despite an inexcusable 55-day delay, he gave Ukraine the lethal aid that the Obama-Biden administration refused to deliver.  He secured the releases of additional American citizens held abroad. He launched cyberattacks on Iran, approved a major arms sale to Taiwan, imposed visa restrictions on Chinese officials over Beijing’s oppression of the Uighurs, and refused to make major concessions to North Korea.

“So does the good outweigh the bad?  In the next column, we’ll review the 10 worst things Trump did in 2019.”

And I will pass that on to you as well, wrote the editor.

--Jonathan Turley, a prominent law professor who was called as a Republican witness during the House impeachment proceedings, threw cold water Thursday on the notion that President Trump isn’t technically impeached until Speaker Nancy Pelosi sends the passed articles to the Senate.

Turley responded to a witness for Democrats, Harvard law professor Noah Feldman, who wrote in Bloomberg last week that the impeachment might not be legit because of Pelosi’s move.

“If the House does not communicate its impeachment to the Senate, it hasn’t actually impeached the president.  If the articles are not transmitted, Trump could legitimately say he wasn’t truly impeached at all,” Feldman wrote.

So Turley responded in a Washington Post op-ed.

“Last Saturday in West Palm Beach, Fla., in remarks to a group of young supporters, President Trump road-tested a talking point that appeared to be aimed at changing the narrative around his December impeachment: ‘You had no crime.  Even their people said there was no crime,’ he said of congressional Democrats, before adding: ‘In fact, there’s no impeachment.  There’s no – their own lawyers said there’s no impeachment,’” Turley wrote.

“But while this theory may provide tweet-ready fodder for the president to defend himself and taunt his political adversaries, it’s difficult to sustain on the text or history or logic of the Constitution....

“Congressional Democrats’ current posture may be too cute by half, and is perhaps politically ill-advised, but any argument that they’ve entered a legal limbo by stalling the delivery of articles to the Senate falls flat,” Turley wrote, adding that the Constitution requires both a House vote and a Senate trial to try to prevent an overtly political outcome.

“The Framers set a two-thirds requirement for conviction, because it knew that some impeachments might be pure political exercises.

“The House calls out president transgressions that meet the standard of ‘Treason, Bribery, or other high Crimes and Misdemeanors.’  That is not an ultimate finding of guilt, and alone can’t effect a president’s removal.  But make no mistake, the House speaks in its own voice and in its own time.  It did so on Dec. 18, 2019.”

Speaker Pelosi remains in no rush to send the articles to the Senate because Majority Leader Mitch McConnell had not revealed how a trial would be conducted.

McConnell has said he was working hand-in-glove with the White House while devising strategy for a Senate trial, rejecting Minority Leader Sen. Chuck Schumer’s call for top administration officials to testify.

Meanwhile, Republican Sen. Lisa Murkowski (Alaska) said she was “disturbed” by McConnell’s approach to working with White House counsel on the impeachment trial, saying there should be distance between the two.

In comments Tuesday with an Alaska-based NBC News affiliate, Murkowski said, “To me it means that we have to take that step back from being hand-in-glove with the defense.  I heard what McConnell said.  I happened to think that has further confused the process.”

While the Senate would need a two-thirds majority vote for a conviction of the president, more importantly in the short run, 51 votes are needed to pass a set of rules for the Trump trial.  With 53 Republicans in the Senate, that means Democrats need to peel off a few if some Republicans, perhaps a Murkowski, want to hear from key witnesses, for example.  That’s going to be the interesting element come early January, after Pelosi no doubt sends the articles to the Senate.

--Philip Bump / Washington Post

“Twenty-nine times in the past three months, President Trump has used Twitter to implore the country to read the rough transcript of his July 25 call with Ukrainian President Volodymyr Zelensky.

“To hear Trump tell it, the rough transcript itself proves that there was no effort to pressure Zelensky to launch investigations that would benefit Trump politically.  Instead, it was just two guys talking, with one, the president of the United States, suggesting that Ukraine should launch the investigation and the other readily agreeing.  It was, in Trump’s abbreviated assessment, ‘perfect.’

“Even when the rough transcript was first released, that assertion was dubious.  Since then, we’ve learned a lot about the context in which the conversation took place, context that makes clear that Ukraine was well aware of what Trump sought and what it was expected to do. That context became more obvious over the weekend with the release of emails showing discussion of the hold on aid to Ukraine immediately after Trump and Zelensky hung up the phone....

“We’ve known for some time that the formal order to hold the aid came late in the day July 25, sometime around 6:45 p.m.  Emails released to the Center for Public Integrity and published over the weekend show additional conversations that same day centered on the hold in aid.

“About 11 a.m. - some 90 minutes after Trump and Zelensky got off the phone - (Mike) Duffey, (a political appointee in the Office of Management and Budget) emailed staffers at the Defense Department.

“ ‘Based on guidance I have received and in light of the Administration’s plan to review assistance to Ukraine,’ Duffey wrote, ‘including the Ukraine Security Assistance initiative, please hold off on any additional DoD obligations of these funds, pending direction from that process.’  Later, he added, that ‘[g]iven the sensitive nature of the request, I appreciate your keeping that information closely held to those who need to know to execute the direction.’”

Philip Bump’s report goes on at further great lengths and is yet another example why there is far more to come on the story, and the need for witnesses at a Senate trial, including Mr. Duffey, is critical to the public learning the truth.

--President Trump’s interference in the case of Special Operations Chief Edward Gallagher on war crimes charges, and his subsequent demotion, which at Trump’s order was overturned, will boomerang on Trump at some point next year, especially if he carries through with his plan to have Gallagher campaign with him in places.

Friday the New York Times released a report with detailed interviews with the Navy SEALs who served with Gallagher, and, on the record, they said things like “The guy is freaking evil.”  “The guy was toxic.”  “You could tell he was perfectly O.K. with killing anybody that was moving.”

Such descriptions are in stark contrast to President Trump’s portrayal of Gallagher as one of “our great fighters.”

I do have to add, though, the thoughts of a good friend of mine, high school classmate, a Marine, Naval Academy grad, fighter pilot (now flying for Southwest), who I get together with about four times a year over beers to discuss the world scene.

Bobby C. told me just about ten days ago that the real crime in the Gallagher case was that he was on his eighth tour of duty, which Bob thought was in itself criminal.

--President Trump in a speech to a pro-Trump youth group on Saturday, went off on the following rant:

“We’ll have an economy based on wind.  I never understood wind.  You know, I know windmills very much. I’ve studied it better than anybody. I know it’s very expensive. They’re made in China and Germany mostly – very few made here, almost none.  But they’re manufactured tremendous – if you’re into this – tremendous fumes.  Gases are spewing into the atmosphere.  You know we have a world, right?  So the world is tiny compared to the universe. So tremendous, tremendous amount of fumes and everything.  You talk about the carbon footprint – fumes are spewing into the air.  Right?  Spewing. Whether it’s in China, Germany, it’s going into the air.  It’s our air, their air, everything – right?  So they make these things and then they put them up.”

Trump went on to complain about how wind turbines are aesthetically unappealing, expensive, lower property values and kill birds.  Yes, windmills kill birds, but far more birds are killed by glass-covered buildings and skyscrapers.

--Trump tweets:

"Despite all of the great success that our Country has had over the last 3 years, it makes it much more difficult to deal with foreign leaders (and others) when I am having to constantly defend myself against the Do Nothing Democrats & their bogus Impeachment Scam.  Bad for USA!”

“Crazy Nancy should clean up her filthy dirty District & help the homeless there.  A primary for N?”

“Nancy Pelosi’s District in California has rapidly become one of the worst anywhere in the U.S. when it comes to the homeless & crime.  It has gotten so bad, so fast – she has lost total control and, along with her equally incompetent governor, Gavin Newsom, it is a very sad sight!”

“Why should Crazy Nancy Pelosi, just because she has a slight majority in the House, be allowed to Impeach the President of the United States?  Got ZERO Republican votes, there was no crime, the call with Ukraine was perfect, with ‘no pressure.’  She said it must be ‘bipartisan....

“...& overwhelming,’ but this Scam Impeachment was neither. Also, very unfair with no Due Process, proper representation, or witnesses.   Now Pelosi is demanding everything the Republicans weren’t allowed to have in the House.  Dems want to run majority Republican Senate. Hypocrites!”

“California leads the nation, by far, in both the number of homeless people, and the percentage increase in the homeless population – two terrible stats.  Crazy Nancy should focus on that in her very down district, and helping her incompetent governor with the big homeless problem!”

“Everything we’re seeing from Speaker Pelosi and Senator Schumer suggests that they’re in real doubt about the evidence they’ve brought forth so far not being good enough, and are very, very urgently seeking a way to find some more evidence.  The only way to make this work is to...

“...mount some kind of public pressure to demand witnesses, but McConnell has the votes and he can run this trial anyway he wants to.”

Wall Street and Trade

The market continued with its melt-up, credit given to the easing of trade tensions, decent economic data and the midyear rate cuts by the Federal Reserve.  After next Tuesday we’ll know if we’ve had our best year with regards to the S&P 500 since 2013, or as far back as 1997. Strange things can happen the last few days of the year, witness the final weeks of 2018, when for the four weeks in December, looking at the Dow Jones, we had weekly returns of –4.5%, -1.2%, -6.9% and +2.8%, with the huge reversal occurring after the Christmas Eve bloodbath.

This year the action the past four weeks has been more muted, but the tone positive, as we hit one new high after another.

Personally, I wrote in this space on 11/16, “lighten up” when it came to stocks, with the S&P at 3120, and I am hardly embarrassed by this.  I also said it wasn’t an outright “sell,” but that I would do so at the appropriate time.  I’ve only done that about three other times in the history of this column and have been right when I did.

2019 will go down as a super year for equities around the world, despite punk growth in Asia and Europe, and, let’s face it, a pretty mediocre 2.2%-2.3% growth rate in the U.S. when the fourth-quarter data comes in and we look at the entire year.

Importantly, there has also been no earnings growth in the U.S., and if stocks are to continue to rally, I don’t care what happens on the trade front of a positive nature, the Street will need to see it.  Right now the call is for 10% earnings growth, according to FactSet, and we’ll need to see at least that for stocks to rise by any significant margin, in my humble opinion.

I’ll get into it more next time, but it’s about consumers continuing to spend at a solid clip, and some kind of improvement on the capital spending side on the part of corporations, which will only come about if CEOs are confident about the post-election future.

In the here and now, Monday we had a little economic data, as November new-home sales came in less than expected, and durable goods orders for November were well below forecast, -2.0% when a gain was expected, but ex-transportation it was unchanged, while the core capital goods component was up 0.1%.

The Atlanta Fed’s GDPNow barometer for fourth-quarter GDP is 2.3%, which would follow 2.0% and 2.1% rates for Q2 and Q3.  [3.1% Q1]

More importantly, we received our first extensive look at holiday shopping sales, the period six days shorter than normal due to the calendar this season.

Recall, back on 11/9/19 in this space, I wrote that the National Retail Federation’s official forecast was for growth of 3.8% to 4.2%, but that I said it would be more like “3.5%.”

Well, according to Mastercard Spending Pulse, overall retail sales rose 3.4%, with the Commerce Department releasing the official data for December on Jan. 16.  [The National Retail Federation will also weigh in later.]

I mean if when we average all the various surveys, 3.4%-3.5% is the number, that’s good.  Last year it was 3.0% (2.9% by most accounts).

Online spending, according to Mastercard, rose 18.8% (vs. 18.4% in 2018), compared with 1.2% for in-store sales.  Department store sales fell 1.8% (though their online sales rose 6.9%).  Online overall accounted for 14.6% of all retail sales, a new high.

Among the best-selling items online was apparel, up 17%, and electronics, up 11%.

Super Saturday, Dec. 21, set an all-time sales record of $34.4 billion, which is compared to Black Friday, $31.2bn, per Customers Growth Partners.

Foot traffic at the malls, while down, at least has had a better conversion rate, which is up; meaning the percentage of people who go to malls and make a purchase.

Globally, while growth has been minimal, equity returns have been solid across the board. All assets classes are up, including oil, gold and bonds.

I’ll get into it more next week after we close the year, but Europe’s equivalent of the S&P 500, for instance, the Stoxx Europe 600, is up a solid 24.3% thru today.

As for the trade deal between the U.S. and China, details are yet to be finalized, with the deal requiring structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.  How much of this actually shows up in the written agreement remains to be seen and will offer clues as to the potential for ‘phase two.’

While the details are being worked out, China is to reduce tariffs on more than 850 goods including frozen pork, hi-tech components, and vital medicines, in a move billed at opening the economy to freer international trade.

The reduction has been approved by the State Council and will go into effect January 1.  While there has been no new tariff rate announced for the products, a statement from the State Council’s Tariff Commission said that it will bring them below the “most favored nation” rates at which China now trades with many of its partners.

A reduction in the pork tariff is hardly surprising, given the fact that African swine fever has decimated China’s own reserves of the country’s most popular meat.

While the United States is not mentioned specifically in the statement, the language used evokes an earlier statement on December 13, at which senior officials announced the phase one trade deal with the U.S.

Monday’s statement said that “the above-mentioned adjustment measures are conducive to reducing import costs, promoting the orderly and free flow of international and domestic trade, and promoting the establishment of a new system of a higher level, open economy.”

Monday’s announcement also came after China had announced further progress in reaching a trilateral trade agreement with Japan and South Korea.

On Tuesday, President Trump said from Mar-a-Lago that he and Xi Jinping would have a signing ceremony for phase one.

“We will be having a signing ceremony, yes,” Trump told reporters.  “We will ultimately, yes, when we get together.  And we’ll be having a quicker signing because we want to get it done.  The deal is done, it’s just being translated right now.”

It is said to be 85 pages, vs. the 150 for last May’s scuttled agreement.

But China does have a problem, one I’ve mentioned in weeks past.  It has to be careful to ensure that a deal with Washington is in line with global trade rules to avoid damaging ties with other key trading partners, such as Brazil, Argentina and the European Union.  It’s not just keeping relations solid with its other partners, but it also must weigh domestic sentiment.  China has worried it won’t be able to meet its reported commitment to increase purchases of American products by $200 billion within two years from 2017 levels.  The U.S. has publicly used this figure, but China has deliberately avoided specifying purchase targets.

For example, purchases of U.S. soybeans did increase considerably in October and November, with November’s figure the best to China in two years, but in looking at the future order book, at least as of today, the numbers are nowhere near last month’s.  That doesn’t mean they won’t be, but there is only so much China can buy...and needs to buy.

In the end, it’s all going to be about implementation and monitoring same.

Finally, remember.  Due to Trump’s trade war, Chinese imports of American farm products fell by 32.7 percent to $16bn in 2018 from the previous year and by a further 30.8 percent to $10.4bn in the first 10 months of this year, according to official Chinese data, as reported on by the South China Morning Post.

President Trump will be fiercely touting his trade “successes” when he’s in the key farm belt, in terms of his reelection, but just understand, if we’re lucky, we’ll just be getting back to 2017 benchmark levels, maybe a little higher.  Scores of farmers, in the meantime, have been royally screwed during the trade war.

Europe and Asia

There was literally no Eurozone economic news on the week worth passing on.  All eyes for now remain on....

Brexit: British Prime Minister Boris Johnson and parliament are in the midst of their holiday breaks, before getting down to the business of wrapping up Brexit by Jan. 31, in terms of putting together the final legislation required to formally exit the European Union.

But then we have this 11-month rush to finalize an actual trade agreement with the bloc and anyone with half a brain knows this will be virtually impossible to accomplish in that time period.  Boris Johnson himself no doubt understands the difficulties of the task ahead and no one will be surprised if he breaks another promise and seeks an extension once Brexit itself is finalized.

The EU’s negotiator, Michel Barnier, wrote in a piece on the Project Syndicate website dated Dec. 20 that the European Union would seek to make the most of the short time available.

“But like the UK, we will keep our strategic interests in mind,” Barnier wrote.  “We know that competing on social and environmental standards, rather than on skills, innovation, and quality, leads only to a race to the bottom that puts workers, consumers, and the planet on the losing side.”

Any free trade agreement with Britain would then have to ensure a level playing field on standards, state aid and tax matters, Barnier wrote, adding that any new economic agreement forged by the end of 2020 would most likely have to be expanded in the years to come.

Separately, Black Friday discounts and bad weather were blamed for a decline in Boxing Day shoppers, with retail analysts reporting a fall in the number of people heading for the sales.  Springboard, which analyzes customer activity in stores, said foot traffic has seen the largest decline since 2020, dropping by 10.6%.

I was watching Premier League football all day and the weather across England indeed looked lousy.  I would have stayed home myself had I lived across the pond.

Germany: I have a note below on the Nord Stream 2 natural gas pipeline from Russia to Germany that the Trump administration is trying to block and this is going to be a growing issue in some German political circles in 2020, with Berlin this week accusing Washington of interfering in its internal affairs.

But at the same time, Chancellor Angela Merkel has already admitted that she sees little point in trying to retaliate against Washington’s move.  The European Commission may yet however weigh in as various European companies are impacted.  To be continued....

Turning to Asia, also zero specific data to report on, save for China’s announcement industrial firms’ profits rose 5.4% in November, the best performance in eight months.  But looking ahead to 2020, with the trade truce between China and the United States, most experts believe Beijing will be able to achieve growth of 6%, which is expected to be the official target when it’s released at an annual session of parliament in March.

At a seminar Thursday with researchers at the Chinese Academy of Social Sciences, Tsinghau University and think tanks affiliated with the Ministry of Finance and the State Council, the conclusion was uncertainty is declining with the U.S.-China breakthrough.

“If the phase one deal is signed, private investors will be more confident and investment will bottom out.  Next year will be no worse than this year, and the GDP growth could be around 6 percent or a little bit higher,” said Liu Shangxi, head of the ministry’s Chinese Academy of Fiscal Sciences.

China’s GDP slumped to 6% in the third quarter, its slowest pace in nearly three decades.

Street Bytes

--The Dow Jones and Nasdaq rose for a third straight week, but it’s five straight up weeks for the S&P 500; the Dow up 0.7% to a record 28645, Nasdaq up 0.9% to 9006, having hit a record close of 9022 the day before, and the S&P up 0.6% to a record 3240.

So we’ll see what happens the final two days of the year.  Up 29.3% for the year, the S&P has its best return since 2013, but a big two-day push Monday and Tuesday could put it with a return not seen since 1997 (up 31.0%).

--U.S. Treasury Yields

6-mo. 1.57%  2-yr. 1.58%  10-yr. 1.88%  30-yr. 2.32%

--The Boeing story just goes on and on.  CEO Dennis Muilenburg was fired Monday amid the crisis over the handling of the aftermath of two fatal crashes of the 737 MAX aircraft in Indonesia and Ethiopia within five months that killed 346 people.

The Boeing board announced that chairman David Calhoun, 62, a former General Electric executive who has been on the board since 2009 would take over from Muilenburg as CEO and president from Jan. 13.

The board said it had “decided that a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders.”

Families of the victims welcomed Muilenburg’s resignation but questioned how the naming of a long-time board member would be committed to change.

Then we had the story, also Monday, where a new batch of Boeing internal documents related to the 737 MAX paint “a very disturbing picture” regarding employees’ concerns about safety.

The latest documents were revealed by both the Federal Aviation Administration and the House Transportation and Infrastructure Committee, which has held a series of hearings about the MAX. 

While the House didn’t disclose the contents, the Seattle Times reported the documents include more internal communications involving former Boeing 737 chief test pilot Mark Forkner, who, in records previously disclosed, described problems in the development of the flight-control system blamed in the two crashes, MCAS.  His 2016 missive to a colleague also talked of “basically” but unknowingly, lying to regulators.

Boeing acknowledged the latest documents could prove damaging, saying in a statement that it “proactively brought these communications to the FAA and Congress as part of our commitment to transparency with our regulators and the oversight committees.”

But major questions remain about how a seemingly flawed aircraft was allowed into service in the first place, and why it was allowed to continue flying after the first accident.  There have been claims – emphatically denied by the company – that it prioritized profits and speed of production over safety.

The company has been rewriting software to give pilots more direct control over MCAS, but the changes are yet to be approved by the FAA, with airlines repeatedly pushing back the plane’s projected return to service.

David Calhoun faces a myriad of challenges, to say the least.  Last week’s NASA space capsule (Starliner) failure to dock with the International Space Station didn’t help matters.*  It’s all about winning back the confidence of government officials, suppliers, airlines and the traveling public.

*At least Starliner softly touched down in New Mexico early Sunday, the first time an American capsule touched down on land, thanks to three parachutes, and six airbags.

But longer term, perhaps the main issue is Boeing is falling behind European rival Airbus.    The race to keep pace contributed to the MAX being rushed into service.  Now, it is losing future orders to Airbus and in this game, it could take a decade, at least, to catch up.

--Amazon reported “record-breaking” holiday season sales and the stock rose 4.5% on Thursday, helping lift Nasdaq above 9,000.  The company ritually issues a press release touting its sales the day after Christmas without providing dollar amounts or comparable sales data.  Nonetheless, it was cause for investors to celebrate in this melt-up market.  And Amazon did say “billions of items were ordered” by Amazon customers this holiday season while “tens of millions” of Amazon devices were sold.  It also added more than 250,000 full- and part-time seasonal workers and now employs more than 750,000 people world-wide.

Then again, Amazon is all about online sales which as noted above were up strongly.

--Tesla shares continued to rocket higher, surpassing the $420 mark – more than a year after regulators fined CEO Elon Musk for a misleading, marijuana-laced tweet about taking the electric car maker private at that price.  The number ‘420’ is commonly used as slang for marijuana use.

Musk tweeted Monday: “Whoa...the stock is so high lol.”

The shares continued to rise Thursday and Friday to $435, before closing at $430, on Wall Street’s projections for strong U.S. consumer demand for the Model 3 sedan, and then today, Tesla announced it would start delivering the Model 3 from its Shanghai factory on Dec. 30, after starting production in October.

The facility was built in January to produce 250,000 vehicles annually in a move to boost the car maker’s presence in the world’s largest auto market.

Tesla stock has surged since Oct. 25, when it surprised Wall Street by delivering a small profit in its latest earnings report instead of an expected loss.

--Huawei lashed out at a Wall Street Journal story alleging the company became one of the world’s leading telecom companies thanks in part to $75 billion worth of loans, tax breaks and other Chinese government financial support over the last two decades.

Huawei said the story was based on “false information and poor reasoning,” adding that it may take legal action following several “disingenuous” articles in the paper.

“This article speculates wildly about how Huawei has become what it is today,” the company said in a lengthy statement. “...The Wall Street Journal is a professional media outlet, so we have to question its motives and purpose for publishing this article.”

The U.S. Department of Commerce put Huawei on a trade blacklist in May over national security concerns.

The Journal reported roughly $46 billion of China’s support for Huawei has come from state lenders in the form of credit lines, loans and other help.  The paper said its findings were based on public documents and company statements.

Huawei did not specify what parts of the Journal report were false, but said it applies for government subsidies just like any other firm.

--Uber co-founder and ex-CEO Travis Kalanick is leaving the board after being sidelined and selling most of his shares.  Kalanick was chief executive until June 2017, when he resigned after pressure from major shareholders and directors amid a series of scandals ranging from a toxic workplace culture to a federal inquiry into software that helped avoid law enforcement to an intellectual-property lawsuit with Alphabet’s self-driving unit Waymo.

Kalanick has sold more than $2.5 billion worth of his stake in Uber since the company went public in May, according to regulatory filings.  He now owns shares worth ‘just’ $177 million.

--Alphabet (the parent company of Google) CEO Sundar Pichai has the potential for a whopping $240 million pay package in stock grants that will be awarded over three years if Pichai hits performance targets, including Alphabet’s shares outperforming the S&P 100 index, according to Bloomberg.

The package was approved by the board to recognize Pichai’s expanded role at Alphabet following the announcement that Google co-founders Larry Page and Sergey Brin were stepping down.

--WeWork’s ex-CEO Adam Neumann – whose $1.7 billion exit package in October sparked protests from thousands of workers who are facing pink slips as the company implodes – quietly negotiated deals this summer that could enlarge his severance beyond $2 billion, according to documents seen by the Financial Times.

A corporate restructuring this summer ahead of WeWork’s botched IPO attempt quietly reclassified the company as an LLC, protecting Neumann’s future shares from taxes at the expense of creating value for future shareholders.

Basically, the switch entitled Neumann to a class of stock that amounts to free shares if a public company’s value hits a pre-set target known as a “catch-up price.”

The bottom line is that after aggressively slashing costs under new management, some insiders believe WeWork could yet go public, which in turn could give Neumann the new stock (called “profits interests”) that would give him an additional $300 million+ worth.

Yeah, it’s complicated.

--I missed last time that U.S. Steel announced it is idling its giant plant outside Detroit and laying off as many as 1,545 workers.  So much for President Trump’s vaunted steel import tariffs helping America’s producers.

When they were first implemented less than two years ago, U.S. Steel CEO David Burritt hailed them, and the company responded by restarting two blast furnaces and rehiring steel workers.

But the company faced slowing demand for its products, and U.S. Steel has been hard hit because of aging plants that are less efficient than rivals’ with newer technology.

--Banks around the world have announced the biggest round of job cuts in four years, with more than 50 lenders having plans to cull a combined 77,780 jobs, the most since 91,448 in 2015, according to filings by the companies and labor unions.  Banks in Europe, which face the added burden of negative interest rates, account for almost 82% of the total, according to Bloomberg.

Over the last six years, the industry has lost more than 425,000 jobs.

Morgan Stanley is the latest to make a year-end “efficiency push,” slashing about 1,500 jobs.

Germany’s biggest lender, Deutsche Bank AG, is planning on cutting 18,000 employees through 2022 as it retreats from a big part of its investment banking business.

--According to the New Jersey Division of Gaming Enforcement, online sports wagering in the state has been soaring, including for virtual casino games like roulette and blackjack on mobile phones.

As a result, Atlantic City casinos and their online partners generated $433 million from such virtual games through November and could reach $460 million by year end, which would be a 66% increase from last year, when internet gambling generated $277 million in revenue.

Only six states, including New Jersey, have legalized online casinos.  Meanwhile, 1 ½ years after the U.S. Supreme Court cleared the way for sports wagering on a state-by-state basis, 20 states and the District of Columbia have legal sports betting.

In New Jersey, apps such as FanDuel and DraftKings are now attracting virtual-casino customers who otherwise wouldn’t seek out such games, according to analysts.

In 2013, the administration of New Jersey’s then-governor Chris Christie, forecast annual tax revenue would reach as high as $180 million. The state quickly lowered that estimate to between $35 million and $50 million.  This year, tax revenues are projected to total nearly $80 million, according to the Division of Gaming Enforcement.

--Every three years the Fed conducts a survey of consumer finances, the last update being in 2016, and as Lisa Beilfuss of Barron’s noted, in 2016, the top 10% of American households held 93.2% of all stock and mutual fund assets, up from 91.2% in 2010 and 86% in 1989.  When you figure in indirect ownership, which would include 401(k) plan exposure, the top 10% holds 84% of investment assets.

Just something to consider when you look at the impact the stock market could have on the 2020 election.  How many voters actually care and make that part of their equation?

--Disney’s “Star Wars: The Rise of Skywalker” took in an estimated $175.5 million in the U.S. and Canada over the weekend, the lowest opening of the trilogy, with theater owners hoping it would debut north of $200 million.  The $175.5m is 29% below the 2015 installment “The Force Awakens” and 20% below “The Last Jedi” from 2017.

“Skywalker” has received a highly-mixed reaction from fans and critics alike.

A big-screen adaptation of Andrew Lloyd Webber’s musical “Cats” grossed just $6.5 million amid dreadful reviews said to be among the most critical in recent history.

The Lions Gate Entertainment Corp. dramatization of the sexual-harassment crisis at Fox News, “Bombshell,” bombed, collecting just $5.1 million.

But back to “Skywalker,” it did gross another $198 million overseas, though only $12.1 million in China.

It’s too early to know how Universal Pictures’ “1917” did, having opened on Christmas Day.

Foreign Affairs

Iran / Iraq / Syria:  Iranian Supreme Leader Ayatollah Ali Khamenei has been ruthless in crushing the unrest that started on Nov. 15 with a surprise increase in the price of gasoline that quickly spread into one of the biggest challenges for Iran’s clerical rulers since the 1979 Islamic Revolution.  Just two days into it, the protests had reached Tehran, with people calling for an end to the Islamic Republic and the downfall of its leaders.

So Khamenei, according to an extensive Reuters report I read this week, expressed his severe displeasure over the handling of the unrest, being particularly angered by the burning of his image and the destruction of a statue of the republic’s founder, Ayatollah Khomeini.

“The Islamic Republic is in danger. Do whatever it takes to end it.  You have my order,” Khamenei told senior officials, as a source told Reuters.

Well the result was 1,500 dead, senior officials said, which is a death toll higher than Amnesty International’s 304, last I saw, but a Dec. 3 report on Iran’s state television confirmed that security forces had fatally shot citizens.

The commander-in-chief of the elite Revolutionary Guards Corps, Hossein Salami*, said last month, “The aim of our enemies was to endanger the existence of the Islamic Republic by igniting riots in Iran.”

A mother of a 16-year-old boy described to Reuters that she was holding his body, “drenched in blood, after he was shot during protests in a western Iranian town on Nov. 19.”

“I heard people saying: ‘He is shot, he is shot,’ said the mother.  ‘I ran toward the crowd and saw my son, but half of his head was shot off.’”

*Salami is not to be confused with Revolutionary Guards Corps Quds Force commander, Qasem Soleimani.  Soleimani is the one making hay in Iraq, and Syria.  Anyway, moving along....

Anti-government protesters marched Wednesday in southern Iraq to mourn the death of an activist after a night during which the headquarters of two pro-Iran militias were set on fire.

Thaer al-Tayeb, a prominent activist from the city of Diwaniya, went of Baghdad’s Tahrir Square, the epicenter of the movement to bring down the government, and a suspicious explosion hit Tayeb’s car on December 15, badly wounding him.  Tayeb died days later, and when word got out, crowds rushed to the two local headquarters of the pro-Iran militias and torched them.

Estimates on the number killed in nearly three months of anti-government protests range from 460 to 500, with 25,000 wounded.

The rallies have continued despite a campaign of intimidation, including targeted killings, that the UN blames on the militias.

There is still no replacement for outgoing Premier Adel Abdel Mahdi, who quit in November in the face of the demonstrations, but he remains in power as negotiations to fill his post are deadlocked.

Iran supposedly wants to install an education minister, Qusay al-Suhail, who served in the Mahdi government.  But Iraq’s parliament speaker vetoed the proposed appointment.

Then Thursday, Iraqi President Barham Salih refused to designate the nominee of an Iran-backed parliamentary bloc for PM, Basra Governor Asaad al-Edani.

But then Salih said in a statement, as reported by Reuters, that he knew appointing Edani would not placate protesters demanding an independent prime minister with no party affiliation or help calm the unrest that has rocked the country.  He said that because the constitution does not give him the right to reject nominees for the premiership, he was ready to quit.

Well that sucks...as in it only complicates matters further. Like if he has truly resigned (I can’t begin to know the rules in this respect, as I’m sure most of official Washington doesn’t), it seems that lawmakers must first nominate a new president, a replacement for Salih must be named first, and then that person would nominate a prime minister.

But according to the constitution, as I drag you all into this mess, the speaker becomes the president on an interim basis. 

[Similar to Lebanon, since Saddam Hussein was toppled, power in Iraq is shared along ethno-sectarian lines.  The most powerful post, prime minister, goes to a Shiite, the speaker of parliament is a Sunni, and the presidency is held by a Kurd.  Lebanon is in the midst of its own crisis of government as it tries to change this longstanding division of offices.]

Meanwhile, there are growing indications that the Islamic State group is re-organizing in Iraq, two years after losing the last of its territory in the country.

Kurdish and Western intelligence officials have told the BBC that the ISIS presence is a sophisticated insurgency and attacks are increasing.

According to a top Kurdish counter-terrorism official, Lahur Talabany, the militants are now more skilled and more dangerous than al-Qaeda.  They also seem to have a lot more money at their disposal.

“They are able to buy vehicles, weapons, food supplies and equipment. Technologically they’re more savvy.  It’s more difficult to flush them out.  So, they are like al-Qaeda on steroids,” said Talabany.

Talabany says a different kind of Islamic State has emerged, which no longer wants to control any territory to avoid being a target.  Instead – like their predecessors in al-Qaeda – they have gone underground, in Iraq’s mountains, a territory difficult for the army to control, “lots of hideouts and caves.”

Any political unrest in Iraq, as we currently have, plays right into ISIS’ hands.

In Syria, a missile struck a school building in the northwestern part of the country Tuesday, the last rebel stronghold, killing eight civilians.  Activists blamed Russia.

Syrian government forces launched a ground offensive last week after weeks of bombardment displaced tens of thousands of people in Idlib province (the UN first estimated over 60,000), sending them fleeing both to the Turkish border, as well as south.  

Bashar Assad, with Russia’s support, has vowed to retake Idlib completely, but this is already creating a humanitarian crisis that will grow far worse.  The situation was further threatened by Russian and Chinese vetoes last week of a UN Security Council resolution to allow cross-border aid deliveries into Syria from Turkey and Iraq.

Thursday, President Trump tweeted:

“Russia, Syria, and Iran are killing, or on their way to killing, thousands of innocent civilians in Idlib Province.  Don’t do it!  Turkey is working hard to stop this carnage.”

Editorial / Washington Post

“Syrian dictator Bashar al-Assad and his Russian and Iranian allies have for years pursued a bloody but systematic strategy for regaining control over rebel-held areas.  The regime launches brutal assaults aimed at driving out civilians, deliberately bombing hospitals, schools and markets. After gaining some ground, it responds to international pressure by agreeing to a cease-fire.  Then, after a few weeks or months of respite, it repeats the process.

“Thus it was that Syrian and Russian forces began a new offensive in the northern province of Idlib last week, once again targeting civilians and, according to humanitarian aid groups, driving more than 100,000 people toward the border with Turkey. The attack is the resumption of a push into the province that began last April and displaced more than 500,000 people before an August cease-fire.  Humanitarian aid groups say the current offensive could soon double that number, leaving tens of thousands of people living in the open in harsh winter conditions.  Turkey long ago sealed its border with Syria, meaning the refugees have no safe place to go.

“Idlib has long posed a complex problem for Turkey and Western governments.  Its population of some 3 million people, including many thousands of refugees from other parts of Syria, is controlled by an extremist offshoot of al-Qaeda, Hayat Tahrir al-Sham.  But the Syrian and Russian tactics for reconquering the province are aimed mostly at innocent civilians.  According to the Syrian Observatory for Human Rights, more than 5,000 have been killed since April.

“Turkey promised last year to disarm the extremists but, while it has set up its own military outposts in Idlib and backed other rebel forces, it has failed to deliver.  This week, its diplomats once again were reduced to pleading with Russia to stop the offensive.  The United States, which once did the bargaining with Moscow, has become an impotent observer.  ‘Russia, Syria, and Iran are killing, or on their way to killing, thousands of innocent civilians in Idlib Province. Don’t do it!’ President Trump tweeted Thursday.  he responded to the last offensive with a similar tweet – and nothing else.

“As Mr. Trump’s tweet indicated - ‘Turkey is working hard to stop this carnage’ - President Recep Tayyip Erdogan has the best chance of preventing the looming humanitarian catastrophe.  He seems to be trying: The Syrian Observatory for Human Rights reported that scores of Turkish military vehicles crossed into Syria on Wednesday night.  The Turks, at best, could use diplomacy and reinforcement of their existing outposts to curtail the offensive, while doing more to neutralize extremist forces.

“Still, it should be clear who is responsible for the latest wave of Syrian suffering: the Assad regime and Russian President Vladimir Putin.  Congress recently approved new legislation sanctioning the Syrian government and all who do business with it, including Russia; legislators should insist that it be rigorously enforced.”

The Post editorial mentioned 100,000 displaced recently in Idlib, and then today, Friday, the UN announced its revised figure was 235,000 over the past two weeks!

Citing heightened Russian attacks, the UN said the mass displacement between Dec. 12 and 25 has left the violence-plagued Maaret al-Numan region in southern Idlib “almost empty.”

Meanwhile, China, Iran and Russia started joint naval drills today in the Indian Ocean and Sea of Oman.  The exercises are due to last until Monday and are meant to deepen cooperation between the three countries’ navies, according to a Chinese defense ministry spokesman.

Turkey: The government said it won’t bow to the threat of crippling U.S. sanctions or trade its new Russian missile defense, the S-400, for an American system to avoid the sanctions.

A spokesman for President Erdogan said Tuesday after a cabinet meeting, “They said they would not sell Patriots unless we get rid of the S-400s.  It is out of the question for us to accept such a precondition.”

Turkey, which has NATO’s second-largest military, denies it is walking away from the alliance, but its row with the U.S. over the S-400 is escalating, with Congress pushing for sanctions over the objection of President Trump, who says such a move could drive Turkey closer to Moscow.

Turkey plans to acquire a second S-400 battery, while pursuing a joint-development agreement with Moscow in order to produce its own sophisticated ballistic missiles.

Now isn’t that special.

Separately, in a conflict we’ll no doubt be talking more about in 2020, Libya, Turkey announced it is sending troops there at the request of the recognized government in Tripoli as soon as next month, thus putting the country’s conflict at the center of wider regional frictions.

Libya’s internationally recognized Government of National Accord (GNA) has been fending off a months-long offensive by General Khalifa Haftar’s forces in eastern Libya, which have been supported by Russia, Egypt and the UAE.  Last month, Ankara signed two separate accords with the GNA, led by Fayez al-Serraj, one on security and military cooperation and the other on maritime boundaries in the eastern Mediterranean.

Erdogan has also said Turkey will not stay silent over mercenaries from the Kremlin-linked Wagner group supporting Haftar.

Saudi Arabia: A Saudi court on Monday sentenced five people to death and three to jail in the death of Saudi journalist Jamal Khashoggi.

Khashoggi disappeared after going to the Saudi consulate in Istanbul on Oct. 2, 2018, to obtain documents for his planned wedding.  His body reportedly was dismembered and removed from the building and his remains have not been found.

The fiancee of Khashoggi, Hatice Cengiz, described the sentencing of the five to death in relation to the killing as unfair and invalid, adding that their execution would further conceal the truth.  Cengiz was waiting outside the consulate when he went inside to retrieve the documents.  She said the trial did not reveal why those convicted had killed Khashoggi because it was held behind closed doors.

“If these people are executed without any chance to speak or explain themselves, we might never know the truth behind this murder,” she said.  “I’m calling upon every authority in the world to condemn this kind of court decision and urgently prevent any execution, because this would just be another step in concealing the truth.”

A UN investigator accused Riyadh of making a “mockery” of justice by exonerating senior figures who may have ordered the killing.  The presiding Saudi court rejected the findings of a UN inquiry by ruling that the killing was not premeditated, rather carried out “at the spur of the moment.”

Turkey said on Monday the trial outcome fell far short of serving justice, and on Tuesday the communications director, Fahrettin Altun, slammed the verdict as an “insult to the intelligence of any fair observer.”

“The international media must pursue the case of Khashoggi until there is true accountability ...Those responsible must face justice sooner or later,” Altun tweeted, calling the case a “sham trial.”

Editorial / Washington Post

“Saudi Arabia has delivered a shameful travesty of justice in the murder of journalist Jamal Khashoggi...None (of those sentenced to death, or given prison sentences) were named.  But two men who are known to have directed the operation, former deputy chief of intelligence Ahmed al-Assiri and Saud al-Qahtani, a top aide to Crown Prince Mohammed bin Salman, were exonerated.  Most likely they were excused at the direction of the crown prince, who, according to the CIA, is the real author of the crime.

“The result is an insult to Khashoggi’s family and to all those, including a bipartisan congressional majority, who have demanded genuine accountability in the case.  International acceptance of the result would not only be morally wrong but dangerous, too: It would send the reckless Saudi ruler the message that his murderous adventurism will be tolerated....

“A spokesman for the Saudi public prosecutor said Monday ‘there was no prior intention to kill’ Khashoggi and the murder was ‘a snap decision.’ That’s a documented lie: An investigation by a UN envoy, Agnes Callamard, heard audiotapes in which the doctor and the head of the hit team discussed Khashoggi’s dismemberment before he entered the consulate.

“ ‘According to my sources, the prosecutor had argued that the killing of Mr. Khashoggi had been premediated.  The Crown Prince had argued that this was an accident against the evidence,’ Ms. Callamard tweeted Monday.  ‘Guess who the judge followed?’

“It’s unlikely Mohammed bin Salman would have so brazenly obstructed justice if not for the support of President Trump.  Incredibly, the White House issued a statement Monday calling the verdict ‘an important step in holding those responsible for this terrible crime accountable.’  Republicans in Congress who vowed to insist on consequences for the murder quietly folded this month, stripping a sanctions provision from this year’s Defense Department authorization act because of Mr. Trump’s opposition.

“One surviving provision is a requirement that the director of national intelligence submit a report to Congress within 30 days of identifying any Saudi implicated in ‘the directing, ordering or tampering of evidence’ in the Khashoggi case.  It would be hard for acting director of national intelligence Joseph Maguire to comply without naming Mohammed bin Salman, since the CIA is known to have concluded that he ordered the killing.  Perhaps that’s why the Saudis suddenly announced a verdict in their sham trial: to provide the Trump administration with a pretext to exclude the crime’s real authors.  Congress must demand that the DNI’s report is comprehensive and honest – and that all those named suffer consequences.”

Israel: Prime Minister Benjamin Netanyahu successfully beat back a Likud leadership challenge from Gideon Saar on Thursday, receiving 72.5% to Saar’s 27.5%.  Saar said he would now back Netanyahu in a general election due in March.

Netanyahu, 70, still faces trial on bribery and corruption charges, as well as a third national election within a year.  Previous elections in April and September resulted in a deadlock with the centrist Blue and White party – with neither able to form a government.

Separately, the head of the Israel Defense Forces (IDF), Chief of Staff Lt.-Gen. Aviv Kochavi warned:

“There is a possibility that we will face a limited confrontation with Iran and we are preparing for it,” Kochavi said at a conference.

The IDF, he said, is carrying out operations both publicly and below the radar, to prevent the enemy from obtaining precision missiles, even if those operations bring about a confrontation.

“We will not allow Iran to entrench itself in Syria, or in Iraq,” Kochavi said, publicly acknowledging for the first time that Israel’s Air Force has launched attacks against Iranian targets in Iraq.

“Iraq is undergoing a civil war, when the Quds Force is operating there on a daily basis, when the country itself has turned into an ungoverned area.  Advanced weapons are being smuggled by the Quds Force in Iraq on a monthly basis and we can’t allow that,” he said.

Afghanistan: Afghan President Ashraf Ghani has won another five-year term in office, according to preliminary results released by the country’s election commission on Sunday, nearly three months after votes were cast in an election tarnished by a record low turnout.

Ghani won 50.6% of the 1.82 million votes cast in the Sept. 28 poll, barely exceeding the threshold needed to avoid a runoff against his top rival, Abdullah Abdullah, who picked up 39.5%.

Under Afghanistan’s electoral laws, the preliminary results can be appealed, and with Ghani barely above 50%, there will no doubt be numerous challenges that could go on and on.  Abdullah signaled he would challenge the count.

If the results stand, it would be the second time Ghani defeated Abdullah in a presidential race, and the third time Abdullah has been a runner-up.

Allegations of widespread fraud and fears of election-related violence in the last presidential poll, in 2014, forced the U.S. to intervene and broker a national unity government under which Ghani served as president and Abdullah as chief executive, the rough equivalent of a prime minister.

Due to threats of Taliban violence and voter apathy, turnout was fewer than 19%.

Speaking of the Taliban, they ambushed a peace convoy in western Afghanistan and abducted 26 activists, members of a peace movement, a police spokesman said on Wednesday.

The Taliban forced the six-vehicle convoy to a halt, got into their cars and drove the activists to an unknown location.  The convoy had been going village-to-village to rally for peace.  [Past activists abducted in such situations were normally released.]

The Taliban control at least half of Afghanistan today and are at their strongest since the 2001 U.S. invasion.

It’s a joke that they hold peace talks with a U.S. envoy while staging near-daily attacks.

Separately, an American service member was killed in combat Monday, Sgt. 1st Class Michael Goble of New Jersey, which brings the total of U.S. deaths in Afghanistan this year to 20.  There have also been three non-combat deaths.  More than 2,400 Americans have died in the nearly 18-year conflict.

And lastly, Islamic State in Afghanistan has now become the strongest branch of the militant group outside of Iraq and Syria, according to U.S. officials.

As reported by the Wall Street Journal, “The branch has received a stream of funding from Islamic State in Iraq and Syria, a sign of the group’s importance to its leadership.  The group, known as ISIS-Khorasan and infamous for its violent attacks on civilians, has as many as 2,000 fighters and seeks to target the West, according to a June Pentagon report.  It also has developed the most effective network of foreign fighters in terms of training, organization and recruitment, U.S. officials said.”

Very similar to the above comments from the Kurdish counter-terrorism official on ISIS in Iraq.

China / Hong Kong / Taiwan: Last Saturday, President Trump said he had a call with China’s President Xi Jinping and Trump tweeted after: “Had a very good talk with President Xi of China concerning our giant Trade Deal.”

Chinese state broadcaster China Central Television said the phone call was at Trump’s request.

China’s Xinhua News Agency then added that during the call Xi told Trump that China is deeply concerned about “negative words and actions” by the U.S. on issues relating to Taiwan, Hong Kong, Xinjiang and Tibet.

“Xi noted that the U.S. behaviors have interfered in China’s internal affairs and harmed China’s interests, which is detrimental to the mutual trust and bilateral cooperation,” Xinhua said.

Speaking of Hong Kong, anti-government protests intensified again over the Christmas holiday, with demonstrations at shopping malls Christmas Day, confronting police who used tear gas and pepper spray, after a previous night of mob violence and vandalism.

The city’s embattled leader, Chief Executive Carrie Lam, expressed her frustration at the behavior of radicals on Christmas Eve, saying many people as well as tourists coming to Hong Kong were disappointed that their festive celebrations had been ruined by “a group of reckless and selfish rioters.”

Hong Kong’s hotels were half empty for Christmas, despite plunging room rates.

Meanwhile, on Taiwan, the critical presidential election is coming up Jan. 11, with polls showing President Tsa Ing-wen and her ruling Democratic Progressive Party (DPP) running ahead of opposition candidate Han Kuo-yu, mayor of the southern Taiwanese city of Kaohsiung, and leader of the Kuomintang (KMT) party.

Han is being criticized for his friendlier stance towards Beijing and the perception he has “abandoned” Kaohsiung in his pursuit of the presidency.

Tsai has benefited from the Hong Kong protests, as Taiwanese worry ‘that could be them.’  Prior to the protests, she was going to lose.

North Korea: We didn’t receive a Christmas gift from Kim Jong Un, as he had threatened, and in recent days, the U.S. flew four surveillance planes over the Korean Peninsula amid the heightened tensions.

It is unusual for so many American surveillance planes to conduct missions around the peninsula at the same time, an indication that the U.S. is taking the situation rather seriously.

So are we going to get a New Year’s surprise?  President Trump said at his Mar-a-Lago resort the other day, “We’ll find out what the surprise is, and we’ll deal with it very successfully.  Everybody’s got surprises for me, but let’s see what happens. I handle them as they come along.  Maybe it’s a nice present.  Maybe it’s a present where he sends me a beautiful vase as opposed to a missile test.  I may get a vase.  I may get a nice present from him.  You don’t know.  You never know.”

Kim’s deadline for Washington to come up with a new proposal to restart stalled nuclear talks was the end of the year.  It was 16 months ago that the president tweeted, “There is no longer a Nuclear Threat from North Korea.”

Trump had earlier warned Kim not to interfere with his re-election, saying the communist nation could lose “everything” if it did.

Former National Security Adviser John Bolton told news service Axios that President Trump’s approach to end North Korea’s nuclear arms program has “failed.”

Bolton suggested the Trump administration is bluffing about stopping Kim’s nuclear ambitions and it would be “very unusual” for the president to say that he got it wrong, he said in an interview on Monday.

Bolton said the U.S. could be doing more to tighten sanctions choking North Korea’s economy, which would force the hand of Kim.  “The idea that we are somehow exerting maximum pressure on North Korea is just unfortunately not true,” he told Axios.

Bolton said he doubted the administration “really means it” when Trump and top officials pledged to stop North Korea from having deliverable nuclear weapons - “or it would be pursuing a different course,” he said.

Bolton also mocked Deputy Secretary of State Stephen Biegun for saying North Korea’s missile launches and belligerent statements were not helping bring peace on the Korean Peninsula, calling the comments a “clear winner in the Understatement of the Year Award contest.”

As nuclear talks have sputtered, North Korea has been building its weapons arsenal, Bolton told Axios.

“We’re now nearly three years into the administration with no visible progress toward getting North Korea to make the strategic decision to stop pursuing deliverable nuclear weapons,” Bolton said.

Meanwhile, South Korean President Moon Jae-in, Japanese Prime Minister Shinzo Abe and Chinese Premier Li Keqiang had a trilateral meeting in China last weekend that focused on North Korea, but yielded nothing of substance on the topic.  Xi Jinping participated, expressing his concerns over the rising tensions between the North and the U.S.

Last week, Beijing, jointly with Russia, proposed that the UN Security Council lift some sanctions on Pyongyang in an attempt to break the current deadlock.  But as of now, Seoul and Tokyo remain on the side of Washington.

Last weekend, North Korea lashed back at the U.S. for taking issue with its human rights record, saying Washington’s “verbal abuse” would only aggravate tensions and warning Washington would “pay dearly” for the criticism.

As for the status of North Korea’s arsenal, one expert, Siegfried S. Hecker, the former head of the Los Alamos National Laboratory and one of the few Westerners who has seen the North’s uranium production facilities, says he believes the country has fuel for about 38 warheads – well beyond an earlier low-end estimate that he and other scientists and intelligence analysts had issued.

Russia: Swiss-Dutch company Allseas said it had suspended work on building a major Russia-to-Germany natural gas pipeline in order to avoid U.S. sanctions contained in legislation signed by President Trump last weekend.

The move throws into doubt the completion date of the $11 billion project that Moscow had said would be ready in months, jeopardizing plans to quickly expand Russian sales of natural gas to Europe via pipeline.

The participation of privately-held Allseas, a specialist in subsea construction and laying underwater pipeline, is integral to the completion of Nord Stream 2, led by Russia’s state energy company Gazprom.

Nord Steam 2 would allow Russia to bypass Ukraine and Poland to deliver gas under the Baltic Sea to Germany.

Gazprom is taking on half of the project’s planned costs and the rest is divided between five European energy companies, including Royal Dutch Shell.

The Trump administration, like the Obama administration before it, opposes the project on the grounds it would strengthen Vladimir Putin’s economic and political grip over Europe.

The administration has touted U.S. liquefied natual gas as “freedom gas” that gives Europe an alternative to Russian supply.

Washington says that Nord Stream 2 would also deprive Ukraine of billions of dollars in gas transit fees.

Germany says it needs the gas as it weans itself off coal and nuclear power.

On a totally different issue, today, the Russian military said it had deployed a hypersonic weapon that flies at superfast speeds and can easily evade American missile defense systems, potentially setting off a new chapter in the arms race.

American officials said today they have little doubt that the Russians do indeed have a working hypersonic weapon, which is capable of carrying a nuclear warhead at speeds faster than 3,800 miles per hour.  The U.S. plans to deploy its own hypersonic weapons by 2022, but some experts believe that schedule may prove optimistic.

India: Prime Minister Narendra Modi has defended the government’s new citizenship law, despite the major ongoing protests against it.

“We passed this bill to help the persecuted,” he said at a rally in Delhi.  “We need to respect India’s MPs and its parliament.”

More than 20 have died in ten days of clashes sparked by the bill, which critics see as anti-Muslim.

The bill offers amnesty to non-Muslim illegal immigrants from three neighboring countries.

Modi accused political parties of “telling lies and spreading misinformation” about the bill, while insisting India’s Muslims – one in seven of India’s 1.35bn population - “don’t need to worry.”

Editorial / Washington Post

“India has earned itself a dubious distinction: It has imposed the longest-ever Internet shutdown by a democracy.

“Prime Minister Narendra Modi’s government abruptly revoked the autonomy of Kashmir this summer, and access to the digital realm disappeared along with the area’s statehood. Authorities claimed the blackout, coupled with the rest of the repressive measures put into place in Kashmir, was necessary to usher in an era of prosperity in a society rent by sectarian conflict – and that it would be temporary, until the national security and safety dangers posed by mass communication have passed.

“Four-and-a-half months later, 7 million people remain cut off from the Web and, by extension, the world.

“Kashmiris in the capital city of Srinagar, The Post reports, crowd into a train that takes them 70 miles away to wait in hours-long lines of people suddenly stranded in the analog area.  They’re trying to send emails, register for exams, consult colleagues on medical cases or save businesses that are dying with no way to reach their customers.  The disruption has lasted so long that many accounts have disappeared from WhatsApp for inactivity.

“India’s shutdowns across its territory are already the most frequent of any country in the world, with excuses ranging from quashing dangerous viral rumors to preventing cheating on exams.  The measures more often appear as a tool to quiet political protest than an unbiased attempt to protect people; there is evidence in any case that yanking away the Internet during violence only begets more violence.

“But the Kashmir blackout is noteworthy for its duration, its scale and its obvious place in a toolbox of repression India has used to crack down on the civil liberties and basic dignity of its Muslim population.  The government has ordered at least three more statewide shutdowns recently in response to protests over the country’s new citizenship law that promises to further marginalize the minority.

“It’s telling who approves: An article published this week in the Chinese Communist Party newspaper, the People’s Daily, bears the chilling headline ‘India’s internet shutdown shows normal practice for sovereign countries.’

“No wonder.  India would be a valuable ally in the global realignment China hopes to effect, where countries emulate its freedom-crushing system of intense Internet control, censorship and surveillance.  India may have earned the distinction of longest shutdown by a democracy, but the better question is how long a country that follows this sinister path can truly be called a democracy at all.”

Mali / Burkina Faso (West Africa): Islamist militants killed 35 civilians, 31 of them women, in an attack on a military base and a town in Burkina Faso Tuesday.  Seven soldiers and 80 militants were also killed as the army repelled the attack.

The violence in the region has continued despite Western efforts to help regional governments deal with the insurgency.  Last Saturday, French forces killed 33 militants in Mali near the border with Mauritania.  Separately, France announced it had carried out its first armed drone strike, killing another seven Islamic extremists in central Mali, thus joining a tiny group of countries who have employed armed drones in the field.

In November, 13 French troops died in a helicopter collision during an operation in southern Mali, near the border with Burkina Faso.

Random Musings:

--Presidential tracking polls....

Gallup: 45% approve of Trump’s job performance, 51% disapprove; 89% of Republicans, 42% of independents [Dec. 2-15]
Rasmussen: 46% approve, 53% disapprove (Dec. 27...kind of surprising, a decline from 50/48 the prior week).

--According to data compiled by the Center for Responsive Politics, Pete Buttigieg has collected more campaign cash from donors and political action committees tied to the financial, insurance and real estate sector than any other White House hopeful; $3.06 million in contributions compared to $2.8 million for Joe Biden and $2.03 million for Cory Booker (because of his home state’s strong ties to Wall Street).

--Rep. Adam Kinzinger (R. Ill.) was being interviewed this week and I do wish, like him, Americans would “stop thinking the other party is the enemy when they’re not...the enemy is Russia, China, North Korea...”

--Kathleen Parker / Washington Post

“No news here, but the president of the United States is a sick human being – charitably speaking.  His recent behavior at a campaign rally in Michigan on the very night of his impeachment was several notches below even his usual flair for giving offense.

“His attempt at whateverthatwas – sadistically relating a telephone exchange he had in February with Democratic Rep. Debbie Dingell of Michigan after the death of her husband – was the verbal effluent of a twisted mind.

“According to Trump’s rendering, Debbie Dingell called him in desperation, beseeching him to provide official honors for her late husband, Rep. John D. Dingell, the longest-serving congressman in U.S. history, with 59 years under his belt....

“However, Debbie Dingell said she never called the president.  He called her, she said, to tell her he was lowering the flags, for which she expressed gratitude.  To his audience, Trump said he didn’t have to be so nice, and insinuated that John Dingell might be in hell, ‘looking up,’ rather than down from heaven.

“Why would he make up such a mean-spirited lie?  Ah, you had to ask. Revenge.  Trump no doubt expected Debbie Dingell to reward his beneficence by voting ‘no’ on impeachment, which didn’t happen.  He was angry. But Trump’s is no ordinary anger. When he lashes out, he goes for the kill.  He clearly wants to inflict pain and then spit on his prey’s grave.

“The problem for supporters involuntarily exposed to such meanness is that Trump corrals all bystanders into his madness and makes them complicit.  It was apparent that many in the audience were uncomfortable with his remarks, even as some laughed or applauded.  Given the season, one may also charitably concede that sometimes folks don’t know what to do when they’re suddenly participating in something untoward.   Maybe they laughed out of nervousness – or fear.

“Immediate condemnation followed Trump’s tale, including from another widow, Cindy McCain, whose late husband, Sen. John McCain, also was mocked by the president.  It’s apparent by now that Trump has a problem with men who are his superiors and, in Debbie Dingell’s case, he relishes torturing their spouses.  One needn’t be a psychologist to sort out such odious, misogynist behavior.

“For the record: John Dingell is widely considered one of the finest public servants ever elected to office.  And Debbie Dingell has picked up where he left off.  Two more decent people you’re unlikely to meet.  Debbie tweeted directly to Trump that she was hurt by his remarks, which is understandable, but, frankly, Trump isn’t worthy of her thoughts, much less her pain....

“In an email to me, (Debbie Dingell) passed along an op-ed her husband had written for the Detroit News upon the death of former president George H.W. Bush, his longtime friend from the other side of the political aisle.  John Dingell’s words provide a stark contrast to this president and this time.

“Dingell and Bush were both World War II veterans, among the last politicians of their kind.  Dingell wrote: ‘We were from a political generation that understood delivering for the American people was more important than political wins....Remember the note he left President Clinton on inauguration day:  ‘You will be our president when you read this note.  Your success now is our country’s success.  I will be rooting hard for you.’’

“Imagine Trump writing any of that....

“ ‘President Bush always cared about people,’ (John Dingell) wrote.

“The same can be said about both Dingells but surely not about Trump.  What a shame that cruelty isn’t an impeachable offense.”

--Former Republican Sen. Jeff Flake (Arix.) / Washington Post...addressing his former Republican Senate colleagues as they approach the impeachment trial.

In part:

“The willingness of House Republicans to bend to the president’s will by attempting to shift blame with the promotion of bizarre and debunked conspiracy theories has been an appalling spectacle.  It will have long-term ramifications for the country and the party, to say nothing of individual reputations.

“Nearly all of you condemned the president’s behavior during the 2016 campaign.  Nearly all of you refused to campaign with him.  You knew then that doing so would be wrong – would be a stain on your reputation and the standing of the Republican Party, and would do lasting damage to the conservative cause.

“Ask yourself today: Has the president changed his behavior? Has he grown in office?  Has the mantle of the presidency altered his conduct? The answer is obvious.  In fact, if the president’s political rally in Michigan on Wednesday (Dec. 18) is any measure, his language has only become more vulgar, his performance cruder, his behavior more boorish and unstable.

“Next ask yourself: If the president’s conduct hasn’t changed, has mine? Before President Trump came on the scene, would I have stood at a rally and cheered while supporters shouted ‘lock her up’ or ‘send them back’?  Would I have laughed along while the president demeaned and ridiculed my colleagues?  Would I have ever thought to warm up the crowd for the president by saying of the House speaker: ‘It must suck to be that dumb’?

“As I said above, I don’t envy you.  You’re on a big stage now.  Please don’t accept an alternative reality that would have us believe in things that obviously are not true, in the service of executive behavior that we never would have encouraged and a theory of executive power that we have always found abhorrent.

“If there ever was a time to put country over party, it is now.  And by putting country over party, you might just save the Grand Old Party before it’s too late.”

--From the Jerusalem Post:

“The world may be inching closer to an era where a Terminator-style apocalyptic nuclear war could be possible due to yielding control over nuclear weapons to artificial intelligence (AI), according to publications by nuclear scientists and defense experts.

“While numerous AI experts have told the Jerusalem Post over the years that people worried about AI turning on humanity as in the famous ‘Terminator’ movies simply misunderstand the technology, the likelihood of AI making a catastrophic mistake with nuclear weapons is no fairytale.

“A recent article in the Bulletin of the Atomic Scientists, a top group of nuclear scientists, as well as other recent publications by defense experts have said that Russia may already be integrating AI into a new nuclear torpedo it is developing known as the Poseidon, to make it autonomous.

“According to the Atomic Scientists report, the U.S. and China are also considering injecting AI deeper into their nuclear weapons’ programs as they modernize and overhaul their nuclear inventory....

“Some studies have shown that AI and automated evidence in general can reinforce bubble-style thinking and make it more difficult for analysts to entertain alternate narratives about what might be occurring in murky and hi-stress situations.

“An example that the article gives of human judgment’s importance was a 1983 incident when a Soviet officer named Stanislav Petrov disregarded automated audible and visual warnings that U.S. nuclear missiles were inbound.

“The systems were wrong and had Petrov trusted technology over his own instincts, the world might have gone to nuclear war over a technological malfunction.”

All the more reason why my New York Mets need to go for it all this year...cuz you never know if there will be a 2021.

--The catastrophic wildfires in Australia have burned 7.4 million acres of land nationwide, killing nine people and destroying more than 800 homes.  Temperatures last weekend in western Sydney hit 115 degrees.

Prime Minister Scott Morrison is feeling the heat, receiving criticism for going on a family vacation in Hawaii during the crisis.  Morrison cut it short to return home.

But debate has reignited on whether Morrison’s conservative government has taken enough action on climate change.  Australia is the world’s largest exporter of coal and liquefied natural gas

--From the Washington Post:

Deforestation and other fast-moving changes in the Amazon threaten to turn parts of the rainforest into savanna, devastate wildlife and release billions of tons of carbon into the atmosphere, two renowned experts warned Friday.

“ ‘The precious Amazon is teetering on the edge of functional destruction and, with it, so are we, Thomas Lovejoy of George Mason University and Carlos Nobre of the University of Sao Paulo in Brazil, both of whom have studied the world’s largest rainforest for decades, wrote in an editorial in the journal Science Advances.  ‘Today, we stand exactly in a moment of destiny: The tipping point is here, it is now.’

“Combined with recent news that the thawing Arctic permafrost may be beginning to fill the atmosphere with greenhouse gases, and that Greenland’s ice sheet is melting at an accelerating pace, it’s the latest hint that important parts of the climate system may be moving toward irreversible changes at a pace that defies earlier predictions.”

The Amazon is 17 percent deforested, but for the large portion of it inside Brazil, the figure is closer to 20 percent.  At a certain level the trees, which not only soak up enormous quantities of rainwater but also give off mist that aids agriculture and sustains innumerable species, won’t be able to recycle enough rainfall.

“At that point, much of the rainforest could decline into a drier savanna ecosystem.  Rainfall patterns would change across much of South America.  Several hundred billion tons of carbon dioxide could wind up in the atmosphere, worsening climate change. And such a feedback loop would be tough to reverse.”

Back to Greenland, the ice sheet losses have accelerated from 33 billion tons lost per year in the 1990s to a current average of 254 billion tons annually, according to the work of nearly 100 scientists.

And a separate report from the National Oceanic and Atmospheric Administration laid out evidence suggesting that the global Arctic already has become a net emitter of carbon dioxide because of the thawing permafrost.

--We lost two American icons today.  The first radio shock jock, Don Imus, 79, a true New York institution who had his turn in the national media spotlight with a syndicated program on MSNBC for a long spell, Imus on radio for 50 years in all.

And Lee Mendelson, 86.  It’s only appropriate that this prolific producer died during the Christmas holidays, doing so on Christmas Day, because it was he who produced “A Charlie Brown Christmas” and guided it to television, where it became an instant classic in 1965.

Every single year for the past 50+ years, if I don’t watch the entire show, I YouTube the first ten minutes or so, as I did on Christmas Eve the other day, because quite simply, you have to.

It was a true gift that Lee Mendelson and Charles Schulz left us.  But understand it was Mendelson who convinced the skeptical and publicity shy Schulz to adapt his beloved characters for television.

Mendelson also wrote the lyrics to the iconic song “Christmastime is Here,” which I know will be in my brain the next few weeks all over again.  And that’s not a bad thing.  Hell, it can be July and it will just pop into your head.

I’ll have more on both passings in my next Bar Chat column, though I have a lot on Mendelson as part of my annual Bar Chat Christmas special that is up now.

--Finally, we had this terrific story from Michael Elsen-Rooney of the New York Daily News:

Tamara Darnley leafed through the well-worn blue book holding her medical records, only to spy something new amidst the familiar documents.

“The 24-year-old plucked the folded piece of paper from the lone repository of links to her mysterious birth to find a name and a place: Father Edmund Brady, St. Margaret Mary Church, Queens.

“She found the church’s number, called and asked for the priest. After bouncing between extensions, Darnley heard the thick Queens accent of long-time church employee Denise Dollard.

“ ‘Excuse me,’ Tamara began, ‘but I am the baby that was found there.’

“There was a pause before Dollard replied.

“ ‘Well excuse me,’ she said.  ‘I am the woman who found you.’”

Tamara was the “miracle baby” found on a cold January morning in 1995 that made headlines in the last millennium, when a group of strangers gave shelter to an abandoned child.  But Darnley knew nothing of her dramatic rescue by Dollard.

That day nearly 25 years ago, church secretary Dollard arrived at work to find a plastic bag outside the church doors. That wasn’t unusual, Dollard said, as the church was collecting clothing donations and received occasional drop-offs.

“Without a second look, Dollard placed the bag in a basement storage closet with other donated items.  And there, for two days, the bag with its precious occupant sat in a plastic milk crate against a radiator.

“Things changed during Saturday Mass, when Frances DeCarlo – a retired pediatric nurse and 74-year-old church volunteer – heard a faint whimper from the storage closet.

“ ‘She said, ‘Father, you have to stop the Mass.  That’s a child,’ recalled (Father) Brady.

“A small search party quickly zeroed in on the white shopping bag.  They peered inside, and saw something move; Dollard suspected a rat. But DeCarlo reached inside and pulled out an infant, wrapped tightly in pink and white sheets.

“ ‘She opened her eyes,’ recounted Brady.  ‘She had this beautiful face. She was very determined.  I think that’s part of why she was still alive.’

“They rushed the little girl to the hospital, where she received intravenous fluids and was soon good as new.  Brady said doctors told him that newborn babies can shut down bodily functions and survive for days at a time without food or water.”

Well, Tamara was taken in by a foster mother, with Brady and Dollard hosting her for regular visits at the church.  Tamara and her family left New York City when she was four, eventually moving upstate.

As the years passed, Brady and Dollard lost touch with Tamara, though she was never far from their hearts.

Tamara enjoyed a happy childhood with a loving foster mom, but there was a lingering sense she was “kind of different.”

When Darnley was 11, her foster mom produced a newspaper clipping about the church’s “bundle of joy” and explained the whole story.

But it wasn’t until last Saturday, Dec. 21, 2019, in Queens, New York, that Tamara returned.

“Darnley had a vague sense that the people in the church cared for her, and were important parts of her history. But she didn’t know if they’d want to talk to her – or if they were even still alive....

“Brady, now 86, is officially retired but still regularly visits the church, leading services occasionally....Darnley accepted his invitation to return to the place where they first met.”

And so Darnley last Saturday had a chance to clear up misconceptions about her origin story, including a rumor that she was dumped inside a garbage bag.

“ ‘When I got her alone in a corner I said, ‘Let me tell you something right now,’’ Dollard recalled.  ‘I said right into her face, ‘You were never in a garbage bag.  Never.’  Because I saw the way she was prepared, in a clean white bag with clean white sheets...She needed to hear that.”

For years Dollard herself was agonized by thoughts about how she initially missed the baby’s presence inside the bag.

“But now, she couldn’t help but see the many ways she’d been lucky.  She decided, for some unknown reason, to gently place the bag with the infant in the storage closet – snugly pressed against the radiator, a decision that likely saved Darnley’s life.

“ ‘There’s too many things I used to think were just fortunate,’ said Brady.  ‘But I now think it’s a little more.’”

---

Pray for the men and women of our armed forces...and all the fallen.  We remember Sgt. 1st Class Michael Goble.

God bless America.

---

Gold $1515
Oil $61.69

Returns for the week 12/23-12/27

Dow Jones  +0.7&  [28645]
S&P 500  +0.6%  [3240]
S&P MidCap  -0.1%
Russell 2000  -0.1%
Nasdaq  +0.9%  [9006]

Returns for the period 1/1/19-12/27/19

Dow Jones  +22.8%
S&P 500  +29.3%
S&P MidCap  +24.0%
Russell 2000  +23.8%
Nasdaq  +35.7%

Bulls 57.7
Bears 17.3...ratio from the previous week; holidays will impact the schedule of the release.

Have a good week.  And Happy New Year!  2020 is here...whether we’re ready for it or not, sports fans.

And Happy Birthday to our own Dr. Bortrum!

Brian Trumbore