Week in Review

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Week in Review

10/12/2019

For the week 10/7-10/11

[Posted 10:00 PM ET, Friday]

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Edition 1,069

WIR / Posted Fri. p.m., Oct. 4, 2019

“I’m sorry to repeat myself but I told you since day one of the Trump presidency that to me it is all about foreign policy.  This nation is headed for tragic times, in more ways than one.  Our foreign policy is in tatters....

“But now we have a situation where it’s also clear that [Trump’s] not only openly soliciting election interference from foreign nations, he’s going to be making moves that will trouble far more than his political opponents.

“Vast numbers of American lives are increasingly at risk by the actions of our reckless leader.”

And last Friday night, I also wrote the following:

“Turkey announced on Thursday that it did not think its efforts with the United States to form a ‘safe zone’ in northeast Syria will yield results it is looking for and is ready to take action itself, Foreign Minister Mevlut Cavusoglu was quoted as saying....

“Turkey has accused the United States, which supports the YPG-led force that defeated ISIS in Syria, of moving too slowly to set up the zone.  The two sides disagree also over how far the zone should extend into Syria and who should control it....

“President Tayyip Erdogan said on Tuesday that Turkey had no choice but to act alone given the lack of progress made with the U.S.

“The United States cannot let the Kurds down yet again, but that is exactly what we will do if Turkey mounts a major incursion.  The Trump administration will withdraw all remaining U.S. forces in the country to avoid a conflict....

“That would be a tremendous tragedy and further cement the U.S. reputation in the region as one whose word can’t be trusted.”

I told you exactly what would happen.  On Sunday, President Trump greenlighted Turkey’s invasion, days later, of northern Syria after a phone call with Erdogan.  The Pentagon expressed surprise.  I wasn’t surprised. You, dear readers, shouldn’t have been surprised.

Wednesday, with the Turkish attack underway, Trump said it would be “easy” for the United States to form new alliances if Syrian Kurds leave the fight against ISIS to fend off Turkey.  Then he said of the Kurds, “they didn’t help us in the Second World War, they didn’t help us in Normandy” and were only interested in fighting for “their land.”

I watched this live. I mean, what do you say when you hear a stable genius utter these thoughts.  Yes, he has the nuclear codes.

I agree with Republican Sen. Lindsey Graham, who in the past few hours tweeted some of the following.

“Every concern I had about President Trump’s Syria decision is coming true in spades.”

“The ability to recruit partners to fight radical Islam in the future has been virtually destroyed.  Mr. President: change course while you can.”

“We are witnessing ethnic cleansing in Syria by Turkey, the destruction of a reliable ally in the Kurds, and the reemergence of ISIS.”

More on Syria below.

Trump World

I said last week that the first polls on impeachment were worthless because we didn’t know any facts yet.  But now the story is beginning to fill in.

A Quinnipiac University national poll of registered voters had 45% saying Trump should be impeached and removed from office, with 49% opposing the idea.   Last week the numbers were 47-47.  In a poll on Sept. 25, before any major news about impeachment, voters were against 37-57.

While nearly half of all voters do not currently back impeachment, a majority, 53%, still approve of the impeachment inquiry being conducted by the House in order to determine whether or not to bring impeachment charges against the president.

Republicans say the inquiry is a witch hunt 88-8 percent.  [Democrats by a 92-5 margin say it is a legitimate investigation.]

48% say that asking a foreign leader to investigate a political rival is a good enough reason to impeach a president and remove them from office, while 42% say that it is not a good enough reason for impeachment.

A new Fox News poll of registered voters nationwide has a new high of 51% who want Trump impeached and removed from office, another 4% want him impeached but not removed, and 40% oppose impeachment altogether.    In July, 42% favored impeachment and removal, 5% said impeach but don’t remove, and 45% opposed impeachment.

A Wall Street Journal/NBC News poll found 55% say Congress should take up the Ukraine matter, while 39% said Congress shouldn’t hold an impeachment inquiry and allow Trump to finish his term.

A Washington Post/Schar School poll found 58% say the House was correct to undertake the impeachment inquiry, 38% say it was not.

--President Trump suffered a serious defeat in the U.S. Court of Appeal in Washington, D.C., as a three judge panel voted 2-1 to uphold a subpoena ordering his accountants, Mazars USA LLP, to provide Congress with his financial records.  So Trump will lose control of his long-secret tax and other business papers unless the full court reconsiders the decision or the U.S. Supreme Court blocks it.

You cannot overstate the seriousness of this for the Trump team, as the papers would show if there were any secret payments to the likes of Russia or Ukraine, for example, or maybe not, to the president’s benefit.

At the same time, however, the appeal process could yet drag this issue out for a long, long time, with the obvious goal on the part of the Trump team to block the order through the election.

--President Trump said he would participate in the House impeachment probe if the investigation was authorized by a House vote and if Democrats commit to following rules he views as fair, a sign of potential cooperation a day after the White House said the inquiry was unconstitutional.

Asked if he would participate in the proceedings if the House voted and followed the same rules as when Congress has previously charged sitting presidents with wrongdoing, Mr. Trump said, “Yes, if the rules are fair....If the Republicans get a fair shake,” he said.

--Federal prosecutors unsealed charges on Thursday against two men who were associates of Rudolph Giuliani and who have aided President Trump’s efforts to gather dirt in Ukraine about his political opponents.

The indictment of Lev Parnas and Igor Fruman (both U.S. citizens but born in the former Soviet Union) directly connected the two to a key element of the pressure campaign, an effort to recall the United States ambassador to Ukraine, Marie L. Yovanovitch, after she became a key focus of criticism from many of President Trump’s allies.  The two were charged with making illegal campaign donations.

So today Yovanovitch told lawmakers in closed-door testimony that there was a “concerted campaign” against her, noting she didn’t know why she was targeted by Trump allies outside the administration, including his personal lawyer, Giuliani.  But she drew a link to Parnas and Fruman, saying she suspected the men stood to benefit financially by sidetracking an ambassador who had spoken out against corruption in Ukraine.

In the July 25 phone call between Trump and Ukrainian President Zelensky, Trump called Yovanovitch “bad news” and told Zelensky that “she’s going to go through some things,” according to the rough transcript by the White House.  The White House didn’t want her to testify today, but she did anyway, having been subpoenaed multiple times by House Democrats.

--Former Rep. Trey Gowdy has stepped into a familiar role on Wednesday as President Trump tapped him to join his outside legal team to battle the Democrats’ impeachment inquiry.  But there’s late word, from the president himself, that Gowdy may not be available until January due to lobbying rules.

It’s also a trip through the looking glass for Gowdy, who will go from demanding information on Congress’ behalf (see the Benghazi investigation) to backing a White House that is refusing to cooperate with what it calls an “illegitimate, unconstitutional” congressional probe.

It was Gowdy who said in 2012, “The notion that you can withhold information and documents from Congress no matter whether you are the party in power or not in power is wrong,” as a House committee in 2012 voted along party lines to hold an Obama administration official in contempt of Congress.  “Respect for the rule of law must mean something, irrespective of the vicissitudes of political cycles.”

--Trump tweets:

“From the day I announced I was running for President, I have NEVER had a good @FoxNews Poll.  Whoever their Pollster is, they suck.  But @FoxNews is also much different than it used to be in the good old days.  With people like Andrew Napolitano, who wanted to be a Supreme....

“....Court Justice & I turned him down (he’s been terrible ever since), Shep Smith, @donnabrazile (who gave Crooked Hillary the debate questions & got fired from @CNN), & others, @FoxNews doesn’t deliver for US anymore.  It is so different than it used to be.  Oh well, I’m President!”

“Impeached for what, having created the greatest Economy in the history of our Country, building our strongest ever Military, Cutting Taxes too much?”

“The Whistleblower’s facts have been so incorrect about my ‘no pressure’ conversation with the Ukrainian President, and now the conflict of interest and involvement with a Democrat Candidate, that he or she should be exposed and questioned properly.  This is no Whistleblower....

“....The Whistleblower’s lawyer is a big Democrat.  The Whistleblower has ties to one of my DEMOCRAT OPPONENTS.  Why does the ICIG allow this scam to continue?”

“I would love to send Ambassador Sondland, a really good man and great American, to testify, but unfortunately he would be testifying before a totally compromised kangaroo court, where Republican’s rights have been taken away, and true facts are not allowed out for the public....

“....to see.  Importantly, Ambassador Sondland’s tweet, which few report, stated, ‘I believe you are incorrect about President Trump’s intentions.  The President has been crystal clear: no quid pro quo’s of any kind.’  That says it ALL!”

“Somebody please wake up Mitt Romney and tell him that my conversation with the Ukrainian President was a congenial and very appropriate one, and my statement on China pertained to corruption, not politics.  If Mitt worked this hard on Obama, he could have won.  Sadly, he choked!”

“Mitt Romney never knew how to win.  He is a pompous ‘ass’ who has been fighting me from the beginning, except when he begged me for my endorsement for his Senate run (I gave it to him), and when he begged me to be Secretary of State (I didn’t give it to him). He is so bad for R’s!”

--Opinion

Marc A. Thiessen / Washington Post

“President Trump has defended his shameful abandonment of our Kurdish allies in Syria, declaring that ‘I was elected on getting out of these ridiculous endless wars’ that have left America ‘bogged down, watching over a quagmire.’  Listening to the president, Americans might think that we still have large numbers of U.S. troops fighting on fronts across the Middle East. We do not.

“The days when we deployed hundreds of thousands of troops in the Middle East are long gone. Today, we have 14,000 troops in Afghanistan, about 5,000 in Iraq and just 1,000 in Syria.  That is a grand total of about 20,000 troops in all three countries.  By contrast, we have about 37,950 U.S. troops in Germany, 12,750 in Italy, 53,900 in Japan, and 28,500 in South Korea – a total of over 133,000.  In fact, we now have three times more troops deployed in Spain (3,200) that we do in Syria.

“Moreover, the vast majority of these U.S. forces are engaged in a noncombat mission known as ‘train, advise and assist.’  U.S. allies do most of the fighting, while American troops provide intelligence, operational planning, fire support and airstrike coordination from behind the front lines.  We have helped train and equip about 174,000 Afghan troops, 64,000 Iraqi troops and 60,000 Syrian Democratic Forces (SDF) troops, made up predominantly of Kurdish fighters.  They are the ones engaged in ground combat with America’s enemies.

“We are also depending on the Kurds to guard about 10,000 captured Islamic State fighters held in prisons in Syria – including 2,000 extremely dangerous foreign fighters.  If the Kurds have to divert forces to defend against Turkey, they will be less able to guard those prisons, making it more likely that dangerous terrorists escape. If even one of these terrorists carries out an attack in the West, Trump will own it.

“It gets worse. Without U.S. support, the Kurds will have no choice but to turn to Russia, Iran and the regime of Syrian President Bashar al-Assad for protection.  As a result, Iran will own all of Syria – giving it a strategic anchor in the Middle East and a base from which to attack Israel.  Trump has made containing Iran’s expansion a centerpiece of his Middle East policy.  Abandoning the Kurds will empower Iran as never before....

“The cry that America is fighting ‘endless wars’ is a canard.... But after watching Trump abandon our allies in Syria to be slaughtered, why would anyone step forward to help America in the fight against Islamist radicalism?  The president can’t have it both ways.  If you don’t want American forces fighting ‘endless wars,’ then you can’t betray your allies.”

George F. Will / Washington Post

“Donald Trump, an ongoing eruption of self-refuting statements (‘I’m a very stable genius’ and ‘a very good brain’), is adding self-impeachment to his repertoire. Spiraling downward in a tightening gyre, his increasingly unhinged public performances (including the one with Finland’s dumbfounded president looking on) are as alarming as they are embarrassing. His decision regarding Syria and the Kurds was made so flippantly that it has stirred faint flickers of thinking among Congress’ vegetative Republicans.

“Because frivolousness and stupidity are neither high crimes nor misdemeanors, his decision, however contemptible because it betrays America’s Kurdish friends, is not an impeachable offense.  It should, however, color the impeachment debate because it coincides with his extraordinary and impeachment-pertinent challenge to Congress’ constitutional duty to conduct oversight of the executive branch.

“Aside from some rhetorical bleats, Republicans are acquiescing as Trump makes foreign policy by and for his viscera.  This might, and should, complete what the Iraq War began in 2003 – the destruction of the GOP’s advantage regarding foreign policy....

“Trump’s gross and comprehensive incompetence now increasingly impinges upon the core presidential responsibility. This should, but will not, cause congressional Republicans to value their own and their institution’s dignity and exercise its powers more vigorously than they profess fealty to Trump.  He has issued a categorical refusal to supply witnesses and documents pertinent to the House investigation of whether he committed an impeachable offense regarding Ukraine. This refusal, which is analogous to an invocation of the Fifth Amendment protection against self-incrimination, justifies an inference of guilt.  Worse, this refusal attacks our constitutional regime.  So, the refusal is itself an impeachable offense....

“Trump is not just aggressively but lawlessly exercising the interests of his place, counting on Congress, after decades of lassitude regarding its interests, being an ineffective combatant. Trump’s argument, injected into him by subordinates who understand that absurdity is his vocation, is essentially that the Constitution’s impeachment provisions are unconstitutional.

“The canine loyalty of Senate Republicans will keep Trump in office. But until he complies with House committee subpoenas, the House must not limply hope federal judges will enforce their oversight powers.  Instead, the House should wield its fundamental power, that of the purse, to impose excruciating costs on executive branch noncompliance. This can be done....

“If congressional Republicans continue their genuflections at Trump’s altar, the appropriate 2020 outcome will be a Republican thrashing so severe – losing the House, the Senate and the electoral votes of, say, Georgia, Arizona, North Carolina and even Texas – that even this party of slow-learning careerists might notice the hazards of tethering their careers to a downward-spiraling scofflaw.”

Editorial / USA TODAY

“Ukraine is far from perfect.  A string of inept governments and widespread corruption have enabled Russian intervention.  But the nation needs American help, including military assistance. And it is clearly in America’s security interests to provide such help.

“Trump’s effort to subordinate these vital U.S. interests to his desire to smear a potential 2020 political rival is by far the most troubling aspect of what appears to be a global campaign to misuse U.S. government resources and lean on foreign powers to do Trump’s political bidding.

“No less than the U.S. attorney general, William Barr, was dispatched to roam the world trying to convince foreign governments of investigative aspects of the 2016 election.  Trump is trying to advance a bogus narrative that Russia’s well-documented meddling in the election was minimal, and that the real story is that U.S. intelligence services were conspiring against Trump.

“In a matter of a few short weeks, so many damning disclosures of malfeasance by Trump and his administration have emerged that they are hard to keep track of.  The evidence of the president’s misuse of his powers is extensive, well-documented and growing by the day.”

Wall Street and the Trade War

It was a week of stark contrasts.  Early on, there was nothing but increased tensions on the U.S.-China trade front, while on Brexit, the European Union told British Prime Minister Boris Johnson to stop playing his “stupid blame game.”

But then things turned around on both fronts, so after a market swoon Monday and Tuesday, stocks surged the rest of the week, breaking a three-week losing streak in the process for both the Dow Jones and S&P 500.

The only economic news of import was on the inflation front, with September producer prices coming in far less than expected, -0.3%, and -0.3% ex-food and energy.  Year-over-year, the PPI is just 1.4%, 2.0% on core, the latter nonetheless the 26th consecutive month at 2% or higher.

Consumer prices were unchanged for last month, 0.1% on core; year-over-year, 1.7% and 2.4%, respectively, both unchanged over August’s annualized pace.

The Atlanta Fed’s GDPNow for the third quarter ticked down to 1.7%.

But earnings season begins in full next week and estimates have been falling, with most expecting eps for the S&P 500 to decline 3-4 percent in the quarter.

Regarding the Federal Reserve, Chairman Jerome Powell said on Tuesday that the central bank would again begin expanding its balance sheet and continued to leave the door open to another interest rate cut this month at the Oct. 29-30 meeting.

While “policy is not on a preset course,” Powell said, the Fed will “act as appropriate to support continued growth.”

Powell, speaking at a conference in Denver, emphasized that with the next Fed meeting still weeks away, officials would continue to monitor all the data and weaker global growth and uncertainties on the trade front, as well as Brexit.

Turning to Trade....this afternoon, President Trump announced that the U.S. and China had agreed in principle on the first phase of a trade accord that seeks to de-escalate tensions between the two sides, while the United States will not increase tariffs on $250 billion in Chinese imports on Oct. 15 from 25% to 30%, though a new tariff of 15% on various consumer products could be levied Dec. 15, depending on what transpires over the coming weeks.

China agreed to purchase between $40 billion and $50 billion in U.S. agricultural products and a commitment to open itself further to international financial services, with the pact to be put into writing over the coming month or so.

Trump and his Chinese counterpart, Vice Premier Liu He, cited progress on other matters without offering any specifics, including the potential for agreement on intellectual property protections and currency manipulation, but these are for down the road, and in the case of the former, the most difficult issue to address.  There were also discussions on the topic of forced transfer of technology in China.

Bottom line, today’s agreement was limited, but better than nothing and the markets liked the more positive tone.  The really big issues could still be a long time in coming, however.  There was no talk of real structural reform, for example.

One item that wasn’t covered today was the issue of Chinese telecom giant Huawei Technologies, which U.S. Trade Representative Robert Lighthizer said would be considered separately.

As for the agricultural purchases, there was no time frame.

And existing tariffs from both sides remain in place with no mechanism to unwind.

We need more details.  The markets, after the initial relief, will also be anxious to see more progress come November and December.

Europe and Asia

After last week’s flood of economic data for the eurozone, there was little of substance this past week, save for a report on German exports and imports for the month of August; the former down 3.9% from a year earlier, the latter down 3.1% yoy.  Just a continuation of the sick economy there.

Brexit: At last there appears to be movement in the Brexit negotiations as the critical EU summit of Oct. 17-18 approaches.  The 27 countries staying in the European Union after Britain leaves gave the go-ahead today for their chief negotiator, Michel Barnier, to hold another round of intense and secret negotiations with London in a bid to secure a deal.

Barnier and his British counterpart, Stephen Barclay, held what both sides called a “constructive” meeting in Brussels as the U.K.’s Oct. 31 departure date nears.

The meeting followed a burst of optimism following talks between British Prime Minister Boris Johnson and Ireland’s Leo Varadkar, who said on Thursday they had found “a pathway” to a possible deal.

The intense talks will go through the weekend and possibly into early next week, per the latest reporting.  EU ministers convene in Luxembourg on Tuesday for a last preparatory meeting prior to the summit Thursday and Friday.

Barnier gave few details today on the negotiations but said Britain was “more open” to address Irish concerns over its border arrangement with Northern Ireland.  Barnier told reporters, “Be patient... Brexit is like climbing a mountain. We need vigilance, determination and patience.”

Varadkar told reporters after his meeting with Johnson on Thursday: “I think it is possible for us to come to an agreement, to have a treaty agreed, to allow the U.K. to leave the EU in an orderly fashion and to have that done by the end of October.”

In a joint statement, the two leaders said they could “see a pathway to a possible deal,” though both sides yielded zero details on any compromises that would undoubtedly have to be made.

Johnson must still overcome the complexities of the Irish border before getting the approval of Europe’s biggest players, and then sell it to Parliament, which has already passed a law saying that Britain can’t leave the EU without a deal.  Johnson insists Britain is leaving with or without one on Oct. 31, though he has yet to offer an explanation of how he could defy Parliament in doing so.

So despite all the seeming optimism as we head into the weekend (especially given the bitter tone on both sides earlier in the week), who the heck knows what the next week will bring.  The details of any deal on the Irish backstop will not be easy to be hammered out to the satisfaction of all the parties most impacted.

But the sudden change in tone between Johnson, Varadkar and the EU is a positive.

Italy: Parliament approved plans to cut the number of lawmakers by more than a third, a big victory for the antiestablishment 5 Star Movement and a move that eliminates a potential source of friction within Prime Minister Conte’s new government.

For 5 Star, the idea of cutting a bloated government has been at the center of its agenda in forming a new coalition with the center-left Democratic Party last month after the leader of the far-right League party, Matteo Salvini, pulled out of the previous government.

The Democrats had opposed the proposal to cut the number of members of the lower house to 400 from 630, and those in the Senate to 200 from 315.  But the party agreed to the change if it received concessions on the electoral law. 

Reducing the number of parliamentarians has been a key to 5 Star’s plan to reduce public spending ever since the party’s birth as a grass-roots protest movement against the elite.  5 Star has also been seeking to reduce salaries of legislators but doesn’t have enough support for that move as yet.

Turning to Asia....

Like with Europe, virtually no data of substance this week, with China’s private Caixin reading on the service sector coming in at 51.9 for September vs. 51.6 in August (50 representing the dividing line between growth and contraction). Previously, the manufacturing number for the month came in at 51.4 per the Caixin survey.

Sunday night / Monday we will receive key data on China’s exports, industrial production and retail sales for September.

In Japan, household spending rose for a ninth straight month in August, offering some relief for the export-dependent economy as it confronts softer global demand and the protracted U.S.-China trade war.  But separate data showed wages fell for an eighth consecutive month in August, adding to consumer pain as the government’s latest sales tax hike went into effect this month.  Household spending rose 1.0% from a year earlier.

Street Bytes

--The Dow Jones and S&P 500 rose for the first time in four weeks, the Dow up 0.9% to 26816, while the S&P gained 0.6%.  Nasdaq rose 0.9%.  What started out as a real downer ended up on the aforementioned positive news on the China trade front and Brexit.

But now it’s earnings, earnings, earnings the next three weeks in particular.

--U.S. Treasury Yields

6-mo. 1.66%  2-yr. 1.59%  10-yr. 1.73%  30-yr. 2.19%

Yields soared as the safe-haven trade came off amid the positive news on trade and the rally in stocks.  But it has been a helluva run for the 10-year. These are the weekly closes in yield the last five weeks.

1.56%, 1.90%, 1.72%, 1.68%, 1.53%, 1.73%

You never get volatility like this over such a sustained period.  And it’s likely to continue.

--What a week for the NBA and their efforts to build the brand in China.  It all started when Houston Rockets General Manager Daryl Morey tweeted his support for Hong Kong protesters.  “Fight for Freedom.  Stand with Hong Kong.”

Several Chinese companies immediately began to cut ties with the Rockets, as did the Chinese Basketball Association, which is led by former Houston star Yao Ming.  On Sunday, the league issued a written statement that was roundly condemned by several politicians in the United States, both Republicans and Democrats.  The league called the reaction to Morey’s tweet “regrettable” and said that “the values of the league support individuals’ educating themselves and sharing their views on matters important to them.”  Critics then pounced on the NBA for caving to an authoritarian government.

Sen. Ted Cruz (R., Tex.) accused the NBA of “shamefully retreating” and said on Twitter that “human rights shouldn’t be for sale” and “the NBA shouldn’t be assisting Chinese communist censorship.”

Morey wrote in response on Sunday: “I did not intend my tweet to cause any offense to Rockets fans and friends of mine in China.  I was merely voicing one thought, based on one interpretation, of one complicated event.  I have had a lot of opportunity since that tweet to hear and consider other perspectives.

“I have always appreciated the significant support our Chinese fans and sponsors have provided and I would hope that those who are upset will know that offending or misunderstanding them was not my intention.  My tweets are my own and in no way represent the Rockets or the NBA.”

Brooklyn Nets owner and Alibaba executive chairman Joe Tsai said: “The hurt that this incident has caused will take a long time to repair.”

Tsai, Chinese, and having spent a good part of his professional life in China helping Jack Ma build Alibaba, wrote what he described as an open letter to NBA fans around the world, laying out a historical perspective to explain why hundreds of millions of fans were upset with Morey, noting that all Chinese citizens stand united when it came to territorial integrity given their strong sense of shame and anger from their country’s history of foreign occupation.  The Chinese psyche held “heavy baggage” when it came to any threat, domestic or foreign, to carve up Chinese territory, he said.

Tsai said freedom of expression is an inherent American value and the NBA has been very progressive in allowing players and other constituents a platform to speak out on issues.

But he said there are “third-rail issues” in certain countries, societies and communities.

“Supporting a separatist movement in a Chinese territory is one of those third-rail issues, not only for the Chinese government, but also for all citizens in China,” he said.

“The one thing that is terribly misunderstood, and often ignored, by the western press and those critical of China is that 1.4 billion Chinese citizens stand united when it comes to the territorial integrity of China and the country’s sovereignty over her homeland. This issue is non-negotiable.”

Tsai was just towing the Communist Party line.

Tuesday, NBA Commissioner Adam Silver issued a new statement and spoke at a news conference in which he stood firmly behind Morey, saying the league would not hinder the free speech rights of players and employees, even if it meant consequences for the sport.

Rich Lowry / New York Post

“The words (Morey) associated himself with – ‘Fight for Freedom. Stand with Hong Kong’ – would seem uncontroversial.  Who doesn’t hope for the best for plucky demonstrators trying to advance democracy against an overweening imperial dictatorship?

“Morey, though, failed to adequately account for the feelings of the dictatorship.  ‘I was merely voicing one thought,’ he said in a groveling tweet after deleting his original offending one, ‘based on one interpretation, of one complicated event.  I have had a lot of opportunity since that tweet to hear and consider other perspectives.’

“The ‘other perspectives’ are those of people supporting a regime that is determined to crush Hong Kong under foot, maintain a one-party state that stifles all internal dissent, brutally repress Uighur Muslims, grab the South China Sea, build up its military with an eye to a future confrontation with the United States and rewrite the rules of the international order to its liking.

“But who’s to judge?

“In its own lickspittle statement, the NBA said that Morley’s views ‘have deeply offended many of our friends and fans in China, which is regrettable.’....

“If you follow the NBA and missed the part where Red China stole the league’s soul, it’s only because you haven’t paid enough attention to the international business.  China is a huge and growing market for the NBA. When Chinese sponsors and partners of the Rockets began to pull out, the team and the league buckled....

“The joke of it is that here at home, the league flaunts its woke social conscience.

“The NBA used the leverage of its All-Star Game coming to Charlotte to force changes to a North Carolina bathroom bill, in the name of ‘equality.’

“One would think that re-education camps for a million Uighurs – to pick just one of China’s human rights abuses – are much worse than any choice North Carolina makes about its restrooms.

“Even if all that the league cares about is LGBTQ issues, it should be repelled by Communist China’s policies, which run counter to everything that the NBA purports to stand for.

“This episode exposes the league’s gutless hypocrisy.  So long as social activism is costless – or enhances its reputation among the right people in the United States – the NBA is all about its values.  But as soon as there is any price, the league is willing to salute smartly at the dictates of one of the most cynical, self-interested regimes on Earth.

“Of course, any profit-generating enterprise is going to care about its bottom line most of all.  That shouldn’t efface all sense of decency and self-respect, though.  James Harden, the Houston Rockets star, has grown very rich and famous playing an American game in an American league. His reaction to Morey’s tweet was unequivocal:  ‘We apologize.’

“He thus neatly encapsulated the willingness of a segment of the American business elite to express a kind of national loyalty to a nation that isn’t its own.”

At week’s end, however, the Chinese government was reassessing its hardline stance and attempting to tamp down public anger at the league as concerns spread the rhetoric was damaging China’s interests and image around the world.

--Apple Inc. removed a smartphone app Thursday from its online store that allowed Hong Kong activists to report police movements after an official Chinese newspaper accused the company of facilitating illegal behavior.

The company said in a statement that HKmap.live was removed from its store because the app “has been used to target and ambush police” and “threaten public safety.”  It said that violated local law and Apple guidelines.

The day before the Communist Party’s People’s Daily said the app “facilitates illegal behavior.”  The newspaper asked, “Is Apple guiding Hong Kong thugs?”

First the NBA, now Apple.

--General Motors Co. said it sold 689,531 cars in China in the September quarter, a drop of 17.5% from the same period a year ago.  GM attributed the decline to the “continued soft vehicle market” exacerbated by the ongoing trade dispute between the world’s two largest economies.

The Baojun brand registered sales of 122,900 vehicles, down nearly 35% from a year ago.

Meanwhile, the strike at General Motors is now estimated to have hit 150,000 workers in the auto industry, according to a report from consulting firm Anderson Economic Group.  The strike began on Sept. 16, with GM’s 48,000 members of the United Auto Workers union seeking higher pay, greater job security, protection of health benefits and a greater share of the profits.

But about 75,000 employees of auto parts suppliers have either been temporarily laid off or have seen their wages shrink due to the slump in demand from GM, according to AEG.

As of today, it was estimated the strike had cost GM $1 billion, with more than $450 million in direct wage losses for all employees.

At last report, negotiations have not been going well. The union in particular is pressing GM to move some production from Mexico to the idled U.S. plants, such as at Lordstown, Ohio. The automaker has said it plans to build a battery plant near Lordstown to take in some of the displaced union workers.

--What a week for California power giant PG&E Corp. and its customers.  The company was stripped of its right to exclusively pitch a reorganization plan in court, escalating an already heated battle over the largest utility bankruptcy in U.S. history.  The shares plunged 30% in response as the judge said bondholders including PIMCO and Elliott Management Corp. could pitch their own restructuring plan alongside PG&E’s.

At the same time, Pacific Gas & Electric was shutting off power to hundreds of thousands of homes and businesses Wednesday to avert wildfires in Northern and Central California.

The outages didn’t just impact rural areas in the foothills of the Sierra Nevada mountains, but also California wine country.

Sonoma County officials said they were bracing for nearly half of the area’s half-million residents to potentially lose power.  A county spokeswoman said, “We are encouraging people to keep their cellphones charged, have gas in their cars, cash on hand and nonperishable food.”

In 2017 and 2018, PG&E admits its equipment sparked 19 major wildfires that collectively killed more than 100 people.

--A Philadelphia jury on Tuesday ordered Johnson & Johnson to pay $8 billion in damages to a Maryland man who said his use of J&J’s antipsychotic Risperdal as a child caused enlarged breasts and the company failed to properly warn of this risk.  This was easily the largest award to date among 13,000 lawsuits alleging Risperdal caused a condition called gynecomastia in boys, which involves the enlargement of breast tissue.  The lawsuits allege J&J knew of the risk, but didn’t properly notify doctors.

J&J has been fighting a slew of lawsuits in the opioid crisis, as well as a prior suit last year when a St. Louis jury found J&J should pay $4.69 billion in damages to 22 women and their families who blamed ovarian-cancer causes on the company’s baby powder.

J&J is appealing the baby-powder and opioid decisions, while last week the company settled with two Ohio counties on the opioid epidemic for $20.4 million without admitting liability.

On the Risperdal verdict, initially a court had awarded a compensatory award of $680,000, and J&J is confident the $8 billion award will be overturned.

--Two of Boeing’s 737 NG aircraft were grounded by Southwest Airlines.

“During our inspections of the high-cycle NGs, we did not find abnormalities on the vast majority of our inspected fleet but did identify signs of pickle fork cracking on two aircraft,” Southwest spokesman Brian Parrish said.  “Southwest has removed the two aircraft from our operation and reported the findings to Boeing and the FAA.”

The grounding follows reports of a crack in certain Boeing airplanes that were followed by an airworthiness directive from the Federal Aviation Administration, going back to Oct. 3.

Separately, the union for Southwest Airlines Co. pilots sued Boeing Co., saying the manufacturer rushed output of the 737 MAX jets to stay competitive, withholding key information about the MCAS feature (Maneuvering Characteristics Augmentation System) that contributed to the two fatal crashes within five months.

The Southwest suit said in part: “Boeing made a calculated decision to rush a re-engineered aircraft to market to secure its single-aisle market share and prioritize its bottom line.” The union is seeking at least $115 million for damages sustained through the end of this year, primarily for lost pay and legal expenses.

Parking its 34 MAX planes and failing to get new ones on order have cut at least $225 million from Southwest’s operating income and caused tens of thousands of flight cancellations.  The jet has now been pulled from Southwest’s schedule through Jan. 5.

Boeing has said there was no breakdown in the design, testing and Federal Aviation Administration approval of the MAX.

American Airlines, however, saw its shares jump nearly 6% today as the airline said it plans to return its fleet of grounded MAX jets to service in mid-January; American saying it expects FAA “recertification of the aircraft later this year and resumption of commercial service in January 2000.”

--Delta Air Lines announced it would accelerate hiring to avoid a repeat of the squeeze that impacted operations during the summer.  The airline reported a 13% rise in quarterly profits that easily beat expectations, but investors were worried about rising costs.

Delta doesn’t fly the 737 MAX planes and now it wants to keep passengers it won over from rivals, hiring about 6,000 new staff as it looks to boost its number of flights by 3% to 4%.  The airline also has to deal with contract talks with its pilots.  The union wants Delta to hire 900 more pilots by next summer.

--Oracle announced Tuesday that it plans to hire nearly 2,000 employees worldwide to work on its Oracle Cloud Infrastructure business. The move comes as the company rolls out new products and “rapidly opens cloud regions around the globe.”

Oracle has a two-pronged approach, both hosting its own applications and database software while bulking up to better compete with the leaders in the public cloud market – Amazon.com’s Amazon Web Services, Microsoft’s Azure, and Alphabet’s Google Cloud.  AWS is by some estimates worth $500 billion alone.

Oracle said it now operates in 16 regions globally, with plans to add 20 more regions by the end of 2020.

--Bloomberg reported that Deutsche Bank’s retail operations in its home market in Germany will bear the brunt of the planned 18,000 job cuts as part of the lender’s ongoing restructuring efforts, at least 9,000 of the total.

--Meanwhile, HSBC has embarked on a cost-cutting drive that could result in the loss of 10,000 jobs, as interim CEO Noel Quinn makes his mark on the bank.  The Financial Times reported from various sources inside the bank that the ‘modelling’ is questioning why there are so many people in Europe “when we’ve got double-digit returns in parts of Asia.”

Any job cuts would come on top of 4,700 previously announced.

--Personal-computer makers had their best third quarter since 2015, up 4.7% over a year earlier, the highest growth rate since the first quarter in 2012 (according to preliminary data from Canalys), as buyers rushed to upgrade machines to run Microsoft’s latest Windows software and dodge looming tariffs that could drive up prices.

--Shares in Bed Bath & Beyond surged over 20% on Thursday after the company hired former Target and Nordstrom executive Mark Tritton to lead the struggling home-furnishings retailer.

Tritton, a three-decade retail veteran, was credited with launching Target’s private label development, which included more than 30 new brands in just 2 ½ years, and helped the group grow same-store sales for eight consecutive quarters.

The move to bring in Tritton comes just a week after BBBY trimmed its full-year profit guidance following weaker-than-expected comp sales for its fiscal second quarter.

“There is immense opportunity ahead for Bed Bath & Beyond, which remains one of the most recognizable and best loved retailers in the country today,” Tritton said.

Hey, I’ve always loved the place.  This is going to be interesting to see what he can do.

--The 68 million Americans who rely on Social Security will receive a 1.6% bump in their benefits next year, the Social Security Administration announced Thursday.  For an average retiree who gets a monthly check of $1,460, that adds up to an additional $23.40 a month.

--Domino’s Pizza missed Wall Street estimates for quarterly same-store sales and profit on Tuesday, hurt by growing competition from third-party delivery services and small pizzerias, sending the pizza chain’s shares down 6 percent initially, but then they rallied back on word of a large share buyback program.

The company now expects same-store sales at its U.S. stores to rise 2 to 5 percent and its international segment to grow 1 to 4 percent in the next two to three years, compared with a previous estimate of 3 to 6 percent growth at either segment over three to five years.

Domino’s is facing aggressive promotions and wider range of food offered by the likes of Uber Eats, Postmates and GrubHub.  At the same time it has opted to stay off third-party delivery apps altogether.

The company has been aggressively opening new restaurants in a move it calls “fortressing” to facilitate faster delivery to locations beyond homes and offices, ranging from bus stops to beaches.

In the recent quarter, same-store sales in the U.S. rose 2.4 percent, its slowest growth in at least 15 quarters, below analysts’ estimates.  International same-store sales grew just 1.7 percent, also missing expectations.

Net income fell short of the Street as well, while total revenue rose 4.4 percent to $820.8 million.

At least the company now has 34 consecutive quarters of positive U.S. comp sales and 103 straight quarters of positive international comps.

Foreign Affairs

Syria / Turkey: Sunday, President Trump gave his endorsement for a Turkish military operation that would sweep away American-backed Kurdish forces near the border in Syria.  Trump’s decision went against the recommendations of top officials in the Pentagon and the State Department who have sought to keep a small troop presence in northeast Syria to continue operations against Islamic State, and to act as a critical counterweight to Iran and Russia.

Last December, Trump had called for a complete U.S. withdrawal from Syria, but ultimately reversed himself after a backlash from Pentagon, diplomatic and intelligence officials, as well as allies in Europe and the Middle East.

Ankara has said it intends to create a “safe zone” in order to return millions of refugees to Syrian soil, but the scheme has alarmed some Western allies as much as the risks posed by the military operation itself.

Turkey views Kurdish YPG fighters in northeast Syria as terrorists because of their ties to militants waging a decades-long insurgency inside Turkey.

The Kurdish administration said Wednesday it would hold its U.S. ally and the whole international community responsible for any “humanitarian catastrophe” that unfolds in the territory under its control.

An estimated 11,000 Kurdish fighters lost their lives in the battle against ISIS in Syria which they spearheaded, with U.S. support.

After Turkey formally launched the invasion, Trump declared, “The United States does not endorse this attack and has made it clear to Turkey that this operation is a bad idea.

“There are no American soldiers in the area,” Trump added.  “Turkey has committed to protecting civilians, protecting religious minorities, including Christians, and ensuring no humanitarian crisis takes place – and we will hold them to this commitment.  In addition, Turkey is now responsible for ensuring all ISIS fighters being held captive remain in prison and that ISIS does not reconstitute in any way, shape, or form. We expect Turkey to abide by all of its commitments, and we continue to monitor the situation closely.”

Secretary of State Mike Pompeo denied the U.S. gave Turkey a “green light” for its offensive.

Critics say the operation could lead to ethnic cleansing of the local Kurdish population in northern Syria and a revival of ISIS.

The above is nothing but B.S.  Such is the mind of one with self-described “infinite wisdom.”

Republican Sen. Lindsey Graham was livid, along with many of his colleagues, saying the Kurdish fighters had been “shamelessly abandoned by the Trump administration” in its sudden decision to pull U.S. troops from northern Syria, leaving America’s longtime allies in the fight against the Islamic State exposed to an attack by Turkey.

“I hope he’s right – I don’t think so.  I know that every military person has told him don’t do this,” Graham said on ‘Fox & Friends.’  “If he follow through with this, it’d be the biggest mistake of his presidency.”

And: “The Kurds have been good allies.  And when Turkey goes into Syria they’re not going to fight ISIS, they’re going in to kill the Kurds, because in their eyes they’re more of a threat to Turkey than ISIS.”

Graham added: “We can’t abandon the Kurds now.  We can’t turn it over to Turkey.  To think that would work is really delusional and dangerous.”

But even as Turkey launched its offensive, Trump on Wednesday continued to stand by his decision to pull out U.S. troops, tweeting Wednesday morning that Turkey should be responsible for guarding all ISIS fighters captured in the area and reiterating, in follow-up tweets, his belief that “going into the Middle East is the worst decision ever made in the history of our country!”

Graham, reacting to these comments, characterized them as “a pre-9/11 mentality that the Middle East is no concern to us” that “paved the way for 9/11.”

Republican Rep. Liz Cheney (Wy.): “News from Syria is sickening.  Turkish troops preparing to invade Syria from the north, Russian-backed forces from the south, ISIS fighters attacking Raqqa.  Impossible to understand why @realDonaldTrump is leaving America’s allies to be slaughtered and enabling the return of ISIS.”

And: “Terrorists thousands of miles away can and will launch attacks against America, as the United States learned on September 11, 2001.”

“Pulling out of northern Syria ignores that painful lesson, represents an abandonment of our Kurdish allies despite their vital contributions to the fight against ISIS, emboldens Iran, and serves as an undeserved gift to the Erdogan regime, which has only continued its steady march toward Moscow,” Cheney added.

Earlier, Cheney called Trump’s decision “a catastrophic mistake.”

Republican Rep. Adam Kinzinger (Ill.): “This is heartbreaking to see from those who fought ISIS with us and suffered over 10,000 deaths.  The (preventable) disaster appears to be underway.”

Former UN Ambassador Nikki Haley tweeted: “We must always have the backs of our allies, if we expect them to have our back.  The Kurds were instrumental in our successful fight against ISIS in Syria.  Leaving them to die is a big mistake. #TurkeyIsNotOurFriend”

Senate Majority Leader Mitch McConnell (R., Ky.) told reporters that “a precipitous withdrawal of U.S. forces from Syria would only benefit Russia, Iran” and the Syrian regime. 

“As we learned the hard way during the Obama administration, American interests are best served by American leadership, not by retreat or withdrawal,” McConnell added.

Trump, taken aback by the criticism, then warned Ankara.  “If Turkey does anything that I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy and obliterate the Economy of Turkey,” he tweeted.

Brett McGurk, Trump’s former top diplomat in the war against Islamic State, savaged his former boss.

“The value of an American handshake is depreciating. Trump today said we could ‘crush [ISIS] again’ if it regenerated.  With who?  What allies would sign up? Who would fight on his assurances?”

Details in the first few days of the invasion have been a bit murky, with the death toll estimated to be around 100, when you try to make sense of all the reporting, with the UN saying today that 100,000 have already fled their homes.

The Syrian Democratic Forces (SDF) that are holding the thousands of ISIS fighters in prisons, and tens of thousands of their relatives in detention centers, are increasingly sending troops to the northern border to fight the Turks and thus won’t be able to secure the prisoners.

Turkey has said thus far it would take responsibility for the Islamic State captives as part of the “safe zone” it aims to form. The United States has said it would penalize Turkey if it engages in any “inhumane and disproportionate” moves against civilians.  That would include “ethnic cleansing, it would include in particular indiscriminate artillery, air and other fires directed at civilian population,” an official told Reuters.

Thursday, Rep. Cheney said the House would introduce legislation to impose sanctions against Turkey in response to its offensive against the Kurds.

Trump tweets:

“Fighting between various groups that has been going on for hundreds of years.  USA should never have been in Middle East.  Moved our 50 soldiers out.  Turkey MUST take over captured ISIS fighters that Europe refused to have returned.  The stupid endless wars, for us, are ending!

“The United States has spent EIGHT TRILLION DOLLARS fighting and policing in the Middle East.  Thousands of our Great Soldiers have died or been badly wounded.  Millions of people have died on the other side.  GOING INTO THE MIDDLE EAST IS THE WORST DECISION EVER MADE....

“....IN THE HISTORY OF OUR COUNTRY!  We went to war under a false & now disproven premise, WEAPONS OF MASS DESTRUCTION.  There were NONE!  Now we are slowly & carefully bringing our great soldiers & military home.  Our focus is on the BIG PICTURE!  The USA IS GREATER THAN EVER BEFORE!”

“Turkey has been planning to attack the Kurds for a long time.  They have been fighting forever.  We have no soldiers or Military anywhere near the attack area.  I am trying to end the ENDLESS WARS.  Talking to both sides.  Some want us to send tens of thousands of soldiers to....

“....the area and start a new war all over again.  Turkey is a member of NATO.  Others say STAY OUT, let the Kurds fight their own battles (even with our financial help).  I say hit Turkey very hard financially & with sanctions if they don’t play by the rules!  I am watching closely.”

“We defeated 100% of the ISIS Caliphate and no longer have any troops in the area under attack by Turkey, in Syria.  We did our job perfectly!  Now Turkey is attacking the Kurds, who have been fighting each other for 200 years....

“....We have one of three choices: Send in thousands of troops and win Militarily, hit Turkey very hard Financially and with Sanctions, or mediate a deal between Turkey and the Kurds!”

Russian Foreign Minister Sergei Lavrov warned of the risks of Washington sending mixed signals on an American withdrawal from northern Syria.

“(U.S. actions in Syria) are full of contradictions and reflect our American colleagues’ inability to reach agreements,” Lavrov said.  “Americans have violated their promises many times.”

The SDF halted its operations against ISIS in Syria.

“The SDF stopped the anti-ISIS operations because it’s impossible to carry out any operation while you are being threatened by a large army right on the northern border,” a Kurdish official said.

Katie Bo Williams / Defense One

“President Donald Trump’s unpopular and apparently precipitous decision to upend his administration’s Syria strategy this week shows a president acting alone, unfettered by standard policymaking processes, and unmoved by the advice of senior national security leaders, multiple administration officials say.

“ ‘This isn’t new – Trump has been Trump in foreign policy – but the safety nets are gone,’ a senior national security official told Defense One, speaking on the condition of anonymity.  ‘Mattis could get him back in.  Bolton could get him back in.  I’ve seen this at least 50 times before, and there’s been the senior officials to get the policy back on track.’

“Others say it’s more than the departure of those respected early advisors: The system designed to inform and, often, purposefully slow national security decisions as sober as war is broken under Trump.  And the president has grown more impatient with cautious advisors and more comfortable with his own instincts.”

David Ignatius / Washington Post

“By acquiescing to Turkey’s invasion of northeastern Syria on Wednesday, President Trump has opened the door to what could become a genuine nightmare for the United States and its allies: the revival of the deadly terrorist organization that called itself the Islamic State.

“The danger lies not simply in the group’s sleeper cells that are still active – and that detonated three suicide bombs in the terrorists’ former capital of Raqqa on Wednesday. The larger risk comes from about 11,000 Islamic State fighters who have been detained by the Syrian Democratic Forces (SDF), the Kurdish-led militia that Trump is abandoning, and who may now try to flee.

“As the SDF mobilizes to combat the Turks, security at nearly 20 makeshift prisons is likely to deteriorate, U.S. officials said. The U.S. military has said that it won’t take control, nor will European allies.  Turkey’s claim that it can police the camps is hollow, given that many of these terrorists arrived in Syria after passing through Turkey.

“The cascade of bad events could get worse if action isn’t taken quickly.  U.S. officials fear that as security deteriorates, U.N. relief agencies may abandon control of a camp called al-Hol, which holds more than 70,000 refugees, more than 25 percent of whom are relatives of killed or captured Islamic State fighters.  Riots have rocked al-Hol in recent days, and visitors say that some areas are too dangerous to enter.

“U.S. analysts said Wednesday afternoon that the Turkish air attacks were broader and deeper than many had initially expected, striking targets farther east and south than the objectives Turkey had indicated to U.S. officials.  Kurdish civilians were said to be fleeing Kobani after heavy shelling there, and shelling was also reported in the eastern city of Qamishli.

“Here’s the appalling scenario that U.S. officials fear could unfold if the Turkish invasion isn’t a quick, limited operation, as Trump apparently hopes: As security collapses in northeastern Syria, hardened Islamic State fighters could escape the prisons, storm the al-Hol camp to reunite with their families and then renew the terrorist assault against the West that they began in 2014.

“A revived Islamic State would pose a threat to the U.S. homeland – but probably a greater one to Europe, Russia and regions where the ‘foreign fighters’ originated....

“This frightening risk of ‘snatching defeat from the jaws of victory’ against the Islamic State is a result of the Trump administration’s chronic policy breakdown.  This begins with Trump himself, whose erratic swings on Syria have appalled some of his closest political allies.  But it extends to an interagency process so enfeebled under Trump that it has failed for months to generate clear plans for dealing with a possible Islamic State resurgence if U.S. troops should leave, as Trump demanded in December.

“European nations have been nearly as guilty as the Trump administration.  As I explained in May, they have refused U.S. and Kurdish pleas to repatriate some of their nationals held in the SDF-controlled prisons, or even to pay the SDF for holding them.  ‘The European Union is in denial,’ one official told me, noting that the refugee issue was so toxic politically that no European government dared touch it....

“For Trump, what’s unfolding now in Syria is largely a self-inflicted wound. It will be politically costly for him, but there’s a deeper problem.  U.S. successes in the Middle East are too rare and precious to be squandered. But that’s what appears to be happening now in this grotesque coda to the war against the Islamic State.”

Gen. Joseph Votel (ret.) and Elizabeth Dent / Defense One...Votel having recently served as commander of U.S. Central Command (CENTCOM), during which he oversaw military operations across the region, including the campaign against ISIS in Iraq and Syria.

“The abrupt policy decision to seemingly abandon our Kurdish partners could not come at a worse time. The decision was made without consulting U.S. allies or senior U.S. military leadership and threatens to affect future partnerships at precisely the time we need them most, given the war-weariness of the American public coupled with ever more sophisticated enemies determined to come after us.

“In northeastern Syria, we had one of the most successful partnerships.  The Islamic State was using Syria as a sanctuary to support its operations in Iraq and globally, including by hosting and training foreign fighters.  We had to go after ISIS quickly and effectively.  The answer came in the form of a small band of Kurdish forces pinned up against the Turkish border and fighting for their lives against ISIS militants in the Syrian town of Kobane in 2014....

“Over four years, the SDF freed tens of thousands of square miles and millions of people from the grip of ISIS. Throughout the fight, it sustained nearly 11,000 casualties.  By comparison, six U.S. service members, as well as two civilians, have been killed in the anti-ISIS campaign.  Key to this effective relationship was mutual trust, constant communication, and clear expectations....

“But the damage may already be done, because it appears the Turks have taken the shift to signal a green light for an attack... This policy abandonment threatens to undo five years’ worth of fighting against ISIS and will severely damage American credibility and reliability in any future fights where we need strong allies.”

Iran: An Iranian oil tanker was on fire in the Red Sea early Friday, and state media reported that the vessel had been hit by missiles that struck its two major tanks, causing oil to spill into the sea and raising fears about increasing tensions in the region.

The National Iranian Oil Company, which owns the tanker, said the ship had been struck at 5 a.m. and again at 5:20 a.m., state-run news outlets reported.  The crew members were safe and the ship in stable condition, though the hull was damaged. 

Iraq:  The death toll in anti-government protests climbed to well over 100, with 6,000 wounded – by gunfire, snipers, grenades and tear gas.  In response the government finally presented an economic plan to ease poverty, including the promise to build 100,000 low-cost apartments, and establish a high court to handle corruption cases.  But the demonstrations continue.

Israel: Prime Minister Benjamin Netanyahu was not notified of Donald Trump’s withdrawal from northern Syria in advance.  Earlier, Trump put up with the attack on Saudi Arabian oil facilities allegedly by Iran.  As in Israel now knows where Donald Trump stands when it comes to Israel’s best interests.

China: Secretary of State Mike Pompeo said in an interview on PBS that China’s treatment of Muslims, including the Uighurs in western China, was an “enormous human rights violation” and Washington will continue to raise the issue.  Asked whether President Xi Jinping was responsible, Pompeo said: “Xi Jinping leads the country just like the leader of a tank platoon, a small business or a country is responsible for things that happen in your name.”

Punishing Beijing for its treatment of Muslim minorities, the U.S. widened its trade blacklist to include some of China’s top artificial intelligence startups* and announced visa restrictions on Chinese government and Communist Party officials it believes are responsible for the detention of Muslim minorities in Xinjiang province.

*China is staking its future on artificial intelligence and the processor chips used to train AI algorithms are currently dominated by American firms like Intel and Nvidia.  U.S. moves to restrict American tech available to Chinese companies, though, is prompting China Inc. to accelerate its desire for self-sufficiency.

On Taiwan, President Tsai Ing-wen called on the island’s people to draw lessons from the violent protests in Hong Kong and pledged to defend Taiwan’s sovereignty.

Speaking on the self-governed island’s National Day, Ms. Tsai said the Hong Kong protests illustrated the failure of Beijing’s “one country, two systems” governance of the Chinese special administrative region.  She said Taiwan had to stand up and defend itself against Beijing’s goal of one day putting the island under a similar system.

“We are witnessing China’s rise and expansion, as they challenge free, democratic values,” said Tsai. “Taiwan has become the first line of defense for democratic values.”

Tsai is gearing up for January’s presidential election, and the Taiwanese people can’t help but watch the events in Hong Kong with trepidation, fearing they may face a similar future.

Ms. Tsai said she would stand firm against China and dismissed opponents’ charges that she is the one provoking Beijing.

“As president, standing up to protect national sovereignty is not a provocation – it is my fundamental responsibility,” she said.

The opposition Kuomintang party attacked Tsai’s speech, as it favors warmer relations with Beijing.

Chinese President Xi has long signaled his patience for negotiations with Taiwan was finite, saying that unification was the ultimate goal for any talks.  Xi has said China would maintain the Taiwanese people’s legal freedoms under a “one country, two systems” framework.

Tsai’s own hard-liners in the party want her to push back even harder against President Xi and are threatening to back a pro-independence, third-party candidate in January.  [Eva Dou / Wall Street Journal]

In Hong Kong, the violent protests continued, especially last weekend, with the Chinese People’s Liberation Army warning protesters they could be arrested for targeting its barracks with laser lights; the first direct threat from the PLA itself, which is significant.

North Korea: The first nuclear discussions between the U.S. and North Korea in eight months went nowhere, with Pyongyang’s envoy Kim Myong Gil saying on Monday that the U.S. had arrived “empty-handed” for the talks in Stockholm over the weekend.  He hinted at Kim Jong Un’s threat to take the nuclear stalemate on a “new path” if the Trump team doesn’t ease up on sanctions choking the economy by the end of the year.

“It’s up to the U.S. whether to hold talks later on,” Kim Myong Gil told reporters in Beijing.  “If the U.S. is not well prepared, who knows what terrible incident could happen. Let’s wait and see.”  He was in Beijing for meetings with Chinese officials, with the two countries vowing to continue strengthening their ties that have “stood the test of time,” President Xi congratulating Kim Jong-Un on the 70th anniversary of diplomatic ties.  North Korea was one of the first countries to recognize the People’s Republic of China 70 years ago.

Russia: The Justice Ministry on Wednesday formally labelled opposition leader Alexei Navalny’s anti-corruption group a “foreign agent,” a move the Kremlin’s critics said was part of a coordinated government attack on the group.  Navalny and his allies led political protests this summer over a local election in Moscow that grew into the biggest sustained protest movement in the Russian capital in years, peaking at around 60,000 people before appearing to lose steam.

Friday, Navalny said Russian prosecutors had asked a court to seize his Moscow apartment as collateral in a lawsuit over opposition protests he helped organize.

Random Musings

--Presidential tracking polls....

Gallup: 40% approval of Trump’s job performance, 56% disapproval; 87% of Republicans approve, 36% of independents (Sept. 16-30).
Rasmussen: 49% approval, 50% disapproval (Oct. 11).

A Quinnipiac University national poll has President Trump with a 40% approval rating, 54% disapproval, smack in the same range it has been in all year for this survey.

A Fox News poll has Trump with a 43% approval rating, 55% disapprove.  Last month it was 45-54.  86% of Republicans approve in this one.

Separately, 55% of voters think President Trump is just out for himself, 39% think he puts the country first.

[House Speaker Nancy Pelosi has a 42% favorability rating, which is a new high for the Fox News poll.]

An NBC News/Wall Street Journal survey has 43% approving of Trump’s performance, 53% disapproving.

A Reuters/Ipsos poll gave Trump a 39% approval rating, 55% disapproval.

--Bernie Sanders, recovering from his heart attack back home in Vermont, said that he plans to scale back his campaign.

“I think we’re going to change the nature of the campaign a bit,” he told reporters after a visit to a cardiologist.  “I’ll make sure I have the strength to do what I have to do.”

Sanders acknowledged that voters will likely take his age and health into account when they vote.

“Look, everything that happens every day weighs on how people feel about you,” the 78-year-old said.  “You look at the totality of who a candidate is.  You look at what that candidate stands for, the integrity of that candidate, the history of that candidate.  I have been fighting for working families for my entire adult life.”

So this was Tuesday.  By Thursday, Sanders was trying to walk back the tone of his ‘scaling back’ comment, to reassure his supporters it would still be a vigorous campaign.  But he’s toast.

He will be on Tuesday’s debate stage.

--Elizabeth Warren, tied or slightly ahead of Joe Biden in the latest national surveys, is catching heat for her oft-repeated tale that her dream job of becoming a special needs elementary school teacher in the early ‘70s was derailed because she was pregnant.  As she herself explained in a taped 2007 interview at the Cal-Berkeley, she didn’t have the necessary education courses to continue as a special needs teacher, so she returned to graduate school.  She wasn’t fired.

--Joe Biden for the first time Wednesday said that President Trump should be impeached, having “indicted himself,” with Trump believing the entire government can be used for his own political and personal needs.

“With his words and his actions, President Trump has indicted himself by obstructing justice, refusing to comply with the congressional inquiry.  He’s also convicted himself in full view of the world and the American people,” the 2020 Democratic candidate said during a campaign speech in Rochester, New Hampshire.

“Donald Trump has violated his oath of office, betrayed this nation and committed impeachable acts.  To preserve our Constitution, our democracy, our basic integrity, he should be impeached.”

“Impeachment isn’t only about what the president’s done.  It’s about the threat the president poses to the nation if allowed to remain in office,” he said.

“One thing about this president is absolutely clear and I don’t think anyone can contradict this.  He has seen no limits to his power regardless of what the Constitution says.  He believes the entire United States government can be corrupted into furthering his personal political needs,” Biden said.

Trump responded to Biden within minutes on Twitter.

“So pathetic to see Sleepy Joe Biden, who with his son, Hunter, and to the detriment of the American taxpayer, has ripped off at least two countries for millions of dollars, calling for my impeachment – and I did nothing wrong.  Joe’s Failing Campaign gave him no other choice!”

--Peter Schweizer / New York Times

“In 2016, JPMorgan Chase agreed to pay $264 million as part of a settlement with the federal government.  The reason?  An Asian subsidiary of the company had hired the children of Chinese government officials in the hopes of currying favor with their powerful parents – a violation of the Foreign Corrupt Practices Act.

“Had the same thing happened with a foreign company and an American politician’s family, however, no violation would have occurred – because no equivalent American law prevents a foreign company or government from hiring the family members of American politicians.

“This glaring loophole provides political families with an opportunity to effectively ‘offshore’ corruption and cronyism.  It gives the politically connected class enormously tempting opportunities for self-dealing, the sort of thing that is blatantly illegal in almost any other context....

“With the Russian invasion of Crimea in 2014, Joe Biden became point person in Ukraine as well.  That same year, Hunter Biden landed a board position with the Ukrainian energy giant Burisma Holdings.  Despite having no background in energy or Ukraine, the vice president’s son was paid as much as $50,000 a month, according to financial records.  (He left the board in early 2019.)....

“The Bidens are hardly alone.  President Trump’s transportation secretary, Elaine Chao, and her husband, Mitch McConnell, are being accused of having profited from their commercial ties to Beijing.  In 2004, the two had a net worth of about $3.1 million, according to public disclosures.  Three years later, the range was $3.1 million to $12.7 million.  The next year, their net worth rocketed to $7.3 million to $33.1 million.

“What changed?  In 2008, Ms. Chao’s father, James Chao, gave the couple a ‘gift’ of  $5 million to $25 million (politicians are required to report money in ranges, not exact amounts).  Certainly, their wealth has continued to grow.

“Mr. Chao’s generosity was made possible by the fortune he has amassed through his shipping company, Foremost Group, which has thrived in large part because of its close ties with the Chinese government.  In late 1993, Mr. Chao and his son-in-law, Mr. McConnell, traveled to China as guests of the state-owned shipyard conglomerate and military contractor, China State Shipbuilding Corporation.  There they met with an old classmate of Mr. Chao’s, the former Chinese president Jiang Zemin.

“Mr. McConnell’s once hard-line condemnation of China softened in the years to follow.  For example, as The New Republic has noted, Mr. McConnell went from telling University of Louisville students that America would never forget Tiananmen Square, in the late 1980s, to hosting the Chinese ambassador at the same school several years later, even as the ambassador publicly defended the regime’s suppression of the Falun Gong.

“All along, the Chaos continued to gain influence....

“Last month, the House Oversight and Reform Committee started an investigation into whether Secretary Chao has leveraged her government positions to benefit her family.  But so far there is no investigation into Joe and Hunter Biden.  Defenders claim there must first be proof that a law was broken to open an investigation.  That’s exactly backward.  Congress can and should conduct an inquiry to determine whether anything illegal occurred....

“At a minimum, we need to strengthen American disclosure rules.  Joe Biden and Elaine Chao have to report when someone sends them a $500 campaign donation, or when they make a $5,000 investment in a stock. But when their family members strike lucrative deals with a foreign government or oligarch, the reporting requirements are vague....

“To the public, closing a loophole this glaring seems anodyne, a no-brainer.  But lawmakers set the system up this way for a reason; they will not stop the foreign cash influence game voluntarily. That’s why we need a Washington Corrupt Practices Act, one that clearly shuts down foreign influence and self-enrichment for some of America’s most powerful families on both sides of the aisle.”

--The number of deaths related to a mysterious lung illness and vaping has risen to 26 across 21 states.

--According to a report from the National Audubon Society, about two-thirds of America’s birds will be threatened with extinction if global warming rises by 5.4 degrees Fahrenheit by 2100.

A report last month had North America already losing nearly a third of its birds.

--American John Goodenough became, at 97, the oldest winner of a Nobel prize in sharing the award in Chemistry, along with Stanley Whittingham from Britain, and Japan’s Akira Yoshino, for their work on lithium-ion batteries.

The Royal Swedish Academy of Sciences Nobel committee said: “Lithium-ion batteries have revolutionized our lives since they first entered the market in 1991.  They have laid the foundation of a wireless, fossil fuel-free society, and are of the greatest benefit to humankind.”

Our own Dr. Bortrum knows the players well, very well in the case of Goodenough, with the wives going off together during the many conferences Dr. Bortrum and Goodenough were speaking at.

In Bortrum’s archives are many stories of the era when the three winners were doing their research, Bortrum making his own significant contributions to the field in his work at Bell Labs.

--Ethiopian Prime Minister Abiy Ahmed won the Nobel Peace Prize for his efforts to achieve peace and international cooperation, and in particular his decisive initiative to resolve the border conflict with neighboring Eritrea.  Ahmed was cited for ending the nation’s long-running conflict with Eritrea within months of coming to office in 2018.

--Finally, the Wake Forest Magazine had some bits from past speeches on campus, including this from a May 2004 commencement address from then-Secretary of State Colin Powell:

“In my profession, soldiering, character is perhaps the most important trait we seek and expect in our leaders.  Character which inspires trust in others, character which gives confidence to others to follow you into the darkest night. Character which keeps you pointed toward true north no matter what winds or waves come to try to push you off course onto the shoals of doubt, dishonesty and despair.  Character which always presses you to do the right thing. ...Do the right thing, even when you get no credit for it, even if you get hurt by doing the right thing.  Do the right thing when no one is watching or will ever know about it.  You will always know.”

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Gold: $1493
Oil: $54.91

Returns for the week 10/7-10/11

Dow Jones  +0.9%  [26816]
S&P 500  +0.6%  [2970]
S&P MidCap  +0.7%
Russell 2000  +0.8%
Nasdaq  +0.9% [8057]

Returns for the period 1/1/19-10/11/19

Dow Jones  +15.0%
S&P 500  +18.5%
S&P MidCap  +15.3%
Russell 2000  +12.1%
Nasdaq  +21.4%

Bulls N/A
Bears N/A  [55.3 / 17.1 prior week]

Have a great week.

Brian Trumbore

 

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