Wednesday, April 6, 2016

Inventergy Global -- Symbol INVT -- seems poised for a nice afternoon rally and is an Intraday Buy @ $2.065; +/- .05

And closing out the morning session, take the 5%+ gain on IPI and sell @ $.93; +/- .0125

It is best to be safe with SunEdison -- Sell SUNE and make a decent 5-8% gain @ $.40; +/- .0175

MNKD is likely to go higher, but Id play it safe and take the 5% gain and sell $1.44; +/- .02

Intrepid Potash -- Symbol IPI -- has likely bottomed out for the day and should recover nicely. Buy IPI Intraday @ $.86; +/- .02

MannKind has reached a low and MNKD is an Intraday Buy @ $1.33; +/- .03

Stone Energy has delivered a solid 5-8% gain this morning, Sell SGY @ $.67; +/- .0125

SunEdison -- Symbol SUNE -- has reached a low point, and is an Intraday Buy @ $.34; +/- .02

Stone Energy -- Symbol SGY -- is a solid Intraday Buy @ $.60; +/- .0175

Today's Stock In Play is C&J Energy Services -- Stock Symbol CJES

Will a Two-State Solution Be Announced in November?

The US administration is discreetly testing Israeli and Palestinian reactions to three options it is currently contemplating to advance the two-state solution.

April 6, 2016

Over the past century, the month of November has seen a slew of ground-breaking events in the annals of the Jewish state. There was the Balfour Declaration, the British Empire’s declaration of support for the establishment of a national home for the Jewish people in the Land of Israel (November 1917); the UN resolution on the establishment of a Jewish state (November 1947); the visit by Egyptian President Anwar Sadat to Jerusalem (November 1977); and the Annapolis Conference, which launched the important negotiations between Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas on a permanent status arrangement (November 2007).

In between, following the Palestine Liberation Organization’s declaration of an independent state and its recognition of the State of Israel, US President Ronald Reagan decided to launch an official dialogue with the organization on reaching a peace arrangement with Israel. He made his move in November 1988, after the presidential elections and before George H.W. Bush was sworn in as the 41st president of the United States. The outgoing president, who had completed two terms in office, was no longer under pressure from Jewish voters. The incoming president, who inherited the PLO, was no longer under pressure from Jewish lobbyists. Before the Reagan-Bush handover, the right-wing government of the "Greater Land of Israel" led by Prime Minister Yitzhak Shamir was struck a crippling blow.

Prime Minister Benjamin Netanyahu is very familiar with the maneuver of taking on a difficult resolution at the end of a term. In 1988, he wrapped up four years in New York as head of the Israeli delegation to the United Nations. Before that he served as deputy chief of mission at the Israeli Embassy in Washington. These days he is busy preparing for a possible diplomatic tsunami to hit at some point between Nov. 8, 2016, and January 2017. A senior diplomatic source in Jerusalem who asked to remain anonymous told Al-Monitor this week that Israel is operating on the assumption that President Barack Obama will not leave the White House with a failing grade in resolving the Israeli-Palestinian conflict. Based on that assumption, the question is not whether Obama will make a diplomatic move, but what kind it will be.

The answer to this intriguing question is clutched tightly to the president’s chest. Obama learned the hard way that any hint of a measure that could threaten the status quo in the occupied territories will immediately provide fodder for Republican propaganda. According to a diplomatic source familiar with the hectic deliberations conducted recently by the Mideast Quartet, including a March 28 meeting in Jerusalem, Obama is weighing three formulas. One possibility is to support a proposed UN Security Council resolution recognizing a Palestinian state based on the 1967 borders. The second is pushing through a decisive resolution against the settlements. The third option is a combination of the two.

When the time comes to decide, shortly before Obama clears off his desk in the Oval Office, he will be handed a document summing up each of the three alternatives. The National Security Council and the State Department are cautiously examining how the sides involved will react to each move. The way it looks on the surface, the Israeli side is expressing vehement opposition to any move that is not tiny baby steps, such as pulling Israeli military forces out of the West Bank Palestinian towns of Jericho and Ramallah and allowing more Palestinians to work in Israel.

But Netanyahu knows this won’t cut it. Therefore, the National Security Council in Jerusalem is formulating alternative proposals to an international initiative. Netanyahu, too, is keeping his cards close to his chest. If he veers slightly away from the radical right, for instance by even temporarily expressing reservations about an Israeli soldier's execution of a wounded Palestinian, he risks the wrath of his coalition partners from HaBayit HaYehudi and from his own political home, the Likud.

The Palestinians are adopting the defensive tactics of a tennis player who waits patiently for his opponent to make a mistake and tries to avoid making any himself. They don't budge from their demand for a Palestinian state based on the 1967 borders, the release of Palestinian prisoners from Israeli jails and a resolution of the Palestinian refugee problem in the spirit of the 2002 Arab Peace Initiative. These principles are accepted by a decisive majority of the international community. Netanyahu is lobbing hollow balls into the Palestinian court in an attempt to score public opinion points. But Israel anticipated that Abbas would contemptuously reject the offer to pull troops out of Jericho and Ramallah. Accepting it would have been interpreted as agreeing to the continued presence of the Israel Defense Forces in Area A, in violation of the Oslo Accord.

Attempting to counter accusations that the Palestinian Authority incites terror, Abbas is once again proposing to reconvene the joint Israeli-Palestinian-American committee on the prevention of incitement. Netanyahu is once again ignoring the suggestion. With nothing to lose, Abbas tried to address the Israeli public over the heads of its leaders. In an interview with journalist Ilana Dayan on the popular program "Uvda," aired March 31 on Channel 2, Abbas said that the PA’s security forces go into schools to search for knives in the children’s schoolbags. According to him, at one school they found 70 boys and girls carrying knives and confiscated them, with the message that “We want you to live, and for the other side to live as well.”

In consultations ahead of the November decision, the United States is reserving a special role for Egypt. In addition to Cairo’s traditional role as conciliator/mediator in the Israeli-Palestinian conflict, as of January, Egypt is a member of the UN Security Council. Its vote could tip the scales in favor of a proposed Obama resolution on resolving the conflict or a resolution that Obama will not veto.

Cairo also has a symbolic value. In June 2009, five months after being sworn into office, Obama delivered a speech in Cairo in which he pledged to “personally” bring about the implementation of the two-state solution. He promised that “America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity and a state of their own.” He added, “It is time … for all of us to live up to our responsibilities.” The last chance to live up to his promise to the Israelis and the Palestinians will come on Nov. 8, 2016, the day of the US presidential elections, and expire on Jan, 20, 2017, when the newly elected president and vice president are sworn in.

Article Link to Al-Monitor:

Will a two-state solution be announced in November?

The War on Tax Inversions and the Middle Class

By Lawrence Kudlow
Real Clear Politics
April 06, 2016

Does the U.S. government want to help American business? Does the administration want to help middle-income wage earners? Does team Obama want to grow the American economy at its historic 3.5 percent long-term trend? Apparently, President Obama's answer to all three questions is "no."

Those are the real issues behind the Treasury's latest militant attack on so-called tax inversions, where a U.S. company merges with a foreign firm in order to take advantage of the foreign firm's lower corporate tax rate. In this case, the attack is aimed at Pfizer, pending the $160 billion takeover of Allergan. Allergan is based in Ireland, which has a 12.5 percent corporate tax rate. Pfizer is based in New York. So the new combined entity will pay the Irish corporate rate, which is nearly three times less than the 35 percent U.S. federal corporate rate -- obviously, a huge savings.

The answer here is simple: Slash the U.S. corporate tax rate and then the problem goes away. It's by far the highest of the major countries worldwide. We are not competitive. Canada's is 15 percent; China's is 25 percent, and Europe averages 25 percent. These companies owe it to their shareholders and their work forces to act in a financially responsible manner. But no, Team Obama wants to wage war against them.

So here's a question: Why does Obama want to punish business, rather than reward it? Why doesn't this administration want America to be the top global destination for investment? Why not have the U.S. win the global race for capital instead of losing? President Obama always gives lip service to lowering the corporate tax rate, but he never specifies a particular rate or an overall plan. What's more, he is trying to force U.S. multinational cash abroad to pay taxes as high as 19 percent even if they don't bring the money home. And then, they'd still be taxes at 35 percent for the repatriation of their foreign profits. This is insane.

Many liberals argue that big U.S. companies don't really pay the top corporate rate. While this is sometimes true, it's mainly because, during recessions, companies lose money and get a tax loss carryforward that temporarily reduces their effective rate. But during economic expansions, when profits rise, companies then do pay the top rate. So, it's a bogus argument. General Electric, for example, may not have paid taxes for a couple of years following the Great Recession. But during the recovery, their effective rate was near 35 percent.

Then progressives argue that the corporate-tax cut is a rich person's tax cut. Utterly untrue. Numerous studies have shown that the biggest beneficiary of corporate tax cuts is the middle-income wage earner.

By the same token, companies don't just pay corporate taxes out of their own pockets. They pass them along in the form of lower wages and benefits to the work force, higher prices for consumers and lower stock valuations for investors. Again, the data show that wage earners get the biggest benefit, consumers second and shareholders third. One key reason why average wage earners have had virtually no pay increases in the past 15 years is the high corporate tax rate. That is why so many Americans are so angry with Washington: They want big change.

Corporate tax reform should include not just large C-corps but also smaller business S-corps and LLC pass-throughs. And nearly as important as cutting business tax rates is the need to simplify the inexplicably opaque and complex system. Big firms can afford tax accountants to avoid all the K-street cronyism and corporate welfare. Smaller firms cannot: They get the short end of the stick.

Corporate share prices should not be driven by political tax games. Profits, not Washington shenanigans, should be the mother's milk of stocks. And this shouldn't be a partisan political issue. Either we want to make America great again or not. Unfortunately, democratic candidates Hillary Clinton and Bernie Sanders oppose significant business tax relief. Much more promising: Leading GOP candidates Donald Trump, Ted Cruz, and John Kasich favor slashing corporate taxes.

Fortunately, nine months is all we have left before this tax nonsense comes to an end.

Article Link to Real Clear Politics:

Trump's Wall plan could actually increase crime

What's really going to happen if he stops Mexicans from sending money home?

By Danny Vinik
April 6, 2016

Last August, Donald Trump said he would get Mexico to pay for a wall along the U.S.-Mexico border by, among other things, stopping Mexican nationals in the U.S. from sending money back to their relatives back home. Such an idea was widely mocked by immigration experts as both unworkable and ineffective.

Undaunted, Trump filled in more details about how it would work on Monday, in a memo first sent to the Washington Post. Essentially, he wants to use the $24 billion flow of remittances from the U.S. to Mexico every year as leverage. He would use an obscure section of the Patriot Act to propose a rule that would prevent money lenders like Western Union from executing wire transfers for anyone who cannot prove that they are legally in the United States. If Mexico refused to pay for the wall, he would implement the rule.

At first glance, that seems like a perfect dealmaker’s move: Use a big bargaining chip and a clever reading of a law to threaten your counterpart and force them to the table. But as policy it might actually be illegal—and experts on the huge remittance economy suggest it would have huge unintended consequences, the kind a real-estate dealmaker doesn’t have to think about, but a president does. If financial institutions stopped allowing remittances—which they might do on their own, if Trump spooked them with a potential Patriot Act violation—the money wouldn’t stop. It would just be driven underground, into the hands of money launderers and other criminals, boosting the fortunes of the exact people Trump wants to build a wall against.

“If you’re driving business away from Western Union, where’s that business going—and how do we track it?” said Dennis Lormel, who spent 28 years working as a special agent for the FBI and finished his career as chief of the agency’s financial crimes section.

Those aren’t the only questions it raises. We ran a few of them by experts.

Is it legal?

The first question, of course, is whether a president could do this at all. Section 326 of the Patriot Act requires American financial institutions to collect certain information on their customers so that the banks and, if needed, law enforcement can identify them. But money transfer companies like Western Union and their primary business model—wire transfers—were exempted from the rule because such restrictions were deemed overly burdensome for one-off transactions. Trump intends to eliminate both of those exemptions and “include in the proposed rule a requirement that no alien may wire money outside of the United States unless the alien first provides a document establishing his lawful presence in the United States.”

Would that be legal? It’s hard to say. Experts say the law give regulators wide breadth to implement the rule in whatever way they want. “But it’s not clear that something like that would withstand a court review,” said Timothy Ogden, the managing director of the Financial Access Initiative at NYU. He added that the courts could deem it unconstitutional, saying it violates property rights.

The legality might not matter, however, if it spooks the banks enough. Banks are already worried about facing regulators’ wrath for failing to abide by anti-money laundering rules; in recent years, such fears have led most U.S. banks to stop processing remittances to Somalia, where they can’t be sure money isn’t falling into the hands of bad actors, like terrorists and pirates. Regulators have responded by trying to clarify to banks what actions are permissible, but banks have still largely not re-entered the market. The same could happen with Mexico.

“[Banks] would totally get out of that business,” said John Byrne, the executive vice president of the Association of Certified Anti-Money Laundering Specialists, “because there is no way to determine with any certainty whether a transaction is illegal, suspicious, or what have you.” He added, “From a compliance standpoint, this would be a nightmare.”

Whether money lenders like Western Union would get out of the business is a tougher choice, Byrne said, since wire transfers effectively make up money lenders’ entire business. (Western Union did not respond to a request for comment.) If the rule eventually was upheld on the courts, it could have devastating effects for the firms.

“He would probably kill the industry,” said Don Semesky, who spent 30 years with the IRS criminal investigation unit and another five years running the DEA’s Office of Financial Investigations. “They would lose more jobs than they’d save.”

Is it just Mexico?

Trump’s proposal, as it is written, is not limited to remittances to Mexico or for only Mexican nationals in the United States. Is that deliberate—does he want it to apply to immigrants across the board? We emailed Hope Hicks, his campaign’s communications manager, who responded to additional questions with “The plan speaks for itself.” Taken as its written then, the rule would apply to all people trying to remit money to any country. In 2012, remittances from the U.S. totaled $123 billion. Ogden said it would be hard to limit the rule to just Mexico, no matter how it was written, as people could remit the money to another country and then send it to Mexico to circumvent the U.S. law.

“The reasonable comparison to make is Cuba, because we do have something that is very specifically targeted at Cuba that the rest of the world ignores,” he said. “The net consequence is not that there are not dollars in Cuba and it’s not that there is not money from the United States going to Cuba. It’s just that that money is expensively going to Mexico, Canada or the UK first.”

Who really gains?

Security and money-laundering experts who watch the underground financial economy say that in all likelihood, such a rule would not stop the remittances: It would simply send them into the underground economy. Couriers or others will help facilitate money transfers across the border; Mexican nationals could also transfer money through a digital currency like Bitcoin.

“I guarantee you, before the wall has five bricks in it,” said Semesky, “there would be an informal black market.”

Either way, the result would be devastating for law enforcement: they’d lose a powerful tool to trace dubious money tied to drug-runners, terrorists, or human traffickers.

Trump’s wall-funding scheme proposes a number of other policies to pressure the Mexican government to pony up, including raising tariffs, cancelling visas and increasing the fees on visas. Essentially, he’d risk a trade war against our next-door neighbor to get it built, with consequences to our closely linked economies that economists say could send both countries into a recession. But all signs coming from Mexican officials are they will not pay for the wall under any circumstance. On Tuesday, Mexico named a new ambassador to the United States—who has experience “defending the interests of Mexico abroad.”

Of course, that could just be a bargaining position too—leaving Trump with two options: Follow through on his threat or get caught bluffing. If Trump’s bravado is any indication, he would not allow himself to get caught bluffing. He would attempt to stop remittances. And experts have come to the same conclusion now as they did back in August when he initially suggested blocking remittances as a wall-building negotiation tactic.

“It should be filed under ludicrous pipedreams,” said Ogden.

Article Link to Politico:

Trump's Wall plan could actually increase crime

The Soviet Union Is Falling Apart Again

By Leonid Bershidsky
The Bloomberg View
April 6, 2016

Armenia and Azerbaijan have announced a truce after three days of fierce fighting in the secessionist region of Nagorno-Karabakh, but the flare-up is proof that the post-Soviet frozen conflicts are not really frozen. At any moment, they can be ignited by the realignment of international alliances and loyalties, and people will start dying again.

There are four post-Soviet frozen conflicts. Three smolder around the Black Sea: Transnistria, a separatist region of Moldova, the Georgian regions of Abkhazia and South Ossetia, and, since last year, eastern Ukraine. The first two started in the early 1990s, the third one in 2014, as Russia attempted to destabilize an anti-Moscow government in Kiev. The Nagorno-Karabakh conflict, a territory disputed by Armenia and Azerbaijan, is the oldest.

In 1988, the legislature of this region of Azerbaijan, populated mostly by ethnic Armenians, voted to secede and join Armenia. That country's current president, Serzh Sargsyan, was among the local activists pushing for such a move. Azerbaijan objected and fought a bloody war against Armenia, marked by massacres as both sides attempted ethnic cleansing, the interference of Soviet troops on the Azeri side and the participation of ferocious volunteers from the Russian part of the Caucasus. Armenia won the war, and by the time an internationally brokered cease-fire came into effect in 1994, Nagorno-Karabakh had an almost exclusively Armenian population and was run by a pro-Yerevan government. About 1 million people were displaced.

The cease-fire has held for more than two decades despite intermittent border clashes. It's not clear who started the hostilities last weekend that caused dozens of casualties on either side: Armenia and Azerbaijan blame each other. Last fall, Azerbaijan's foreign minister, Elmar Mammadyarov, threatened to attack Nagorno-Karabakh unless Armenia unconditionally withdrew its troops.

Azerbaijan's new decisiveness may stem from the open backing the Muslim country receives from Turkey. Recep Tayyip Erdogan, the Turkish president, has vowed to "support Azerbaijan to the end." This isn't just words: Since turning into a bitter enemy of Russian President Vladimir Putin of Russia after Turkey downed a Russian warplane on the Syrian border last year, Erdogan is eager to let Putin know that he's not afraid. Armenia is a close ally of Russia, part of its flailing Eurasian Economic Union with several other post-Soviet countries, but it's not Russia itself, making it a tempting target for Erdogan. Putin hasn't come out unequivocally in support of Armenia, instead calling on both sides to respect the cease-fire.

Azerbaijan, however, cannot afford to break away completely from Russia and join Turkey's orbit. Its traditional economic ties with Moscow have weakened, and it does more trade with the U.S. and major EU countries, but Russia could be a fearsome enemy. So Azerbaijan is hoping for a negotiated solution to the conflict that would curb Armenia's gains.

The frozen conflicts tend to reignite when the external influences that keep the situation in balance realign. In Nagorno-Karabakh's case, the new enmity between Turkey and Russia likely became the catalyst. When fighting resumed in South Ossetia in 2008 and Russia invaded Georgia, that was a direct result of a policy of toughness regarding the secessionist regions on the part the U.S.-backed president of Georgia, Mikheil Saakashvili. He believed -- mistakenly -- that U.S. support would make him less vulnerable to Russia's ire.

It's conceivable that Saakashvili may be instrumental in rekindling the Transnistria conflict, too. As the current governor of the Odessa region in Ukraine, he has worked to cut smuggling from the secessionist, pro-Russian region, a major source of income for its rulers. For its part, Moldova has also fought to stem the flow of illegal trade. If Transnistria is choked by its two neighbors, it may resume fighting, and 1,500 Russian troops are stationed there.

Saakashvili himself has blamed the new fighting in Karabakh on Russia. "A conflict now is of no benefit to either Armenia or Azerbaijan," he wrote on Facebook. "What happened a couple of days ago looks very much like a Putin provocation against Azerbaijan and Turkey that is also damaging to Armenia." Saakashvili contends that Russia's goal is to weaken Azerbaijan as an alternative energy exporter to Europe.

He's probably wrong: Russia likes the frozen conflicts because they undermine the governments in former Soviet countries, sap the morale and provide Moscow with economic inroads. The Kremlin sees the secessionist regions as tools of managed instability that don't much hurt Russia's status with the international community. That's probably the reason Putin chose not to expand the conflict in Ukraine but to freeze it. He didn't want the Karabakh eruption, either: His propaganda machine didn't attempt to whip up a frenzy about the latest incidents.

These conflicts stay frozen thanks to such a delicate balance of forces that they can flare up even when no one wants tension. As the Romanian political scientist Filon Morar wrote in an article for the German Marshall European Center for Security Studies,

The term frozen conflicts is deceiving; it erroneously suggests that a conflict could be put on hold as one could press the pause button of a remote control. Nothing remains unaltered ad infinitum in either the physical world or in the political world, either in a home refrigerator or in the Black Sea-South Caucasus area.

For safety's sake, the West, and Europe in particular, shouldn't assume the conflicts are deep-frozen. Each situation is complex and evolving, as are the goals and relationships of outside players. The goal probably should be to foster some kind of resolution, even if it means granting a measure of legitimacy for the secessionists who have held on to their tenuous statehood for 20 years in three of the four cases. Any kind of finality is better than the endless precariousness of what Morar calls "protracted," not frozen conflicts.

Article Link to the Bloomberg View:

The Odds Rise of a Democratic Victory

The U.S. economy and Obama’s approval rating are improving. Bad signs for the GOP.

By William A. Galston
The Wall Street Journal
April 5, 2016

While all eyes have been turned toward the dramatic nominating contests in both political parties, the fundamentals that will shape the general-election contest have been shifting toward the Democrats.

Candidates seeking to succeed a two-term incumbent of their own party face an uphill battle. All other things being equal, political scientists find, such candidates can expect to fall short of the incumbents’ re-election vote share by at least 4 percentage points. Applied to the 2012 results, this metric would yield a 47% share for this year’s Democratic nominee.

On the other hand, demographic trends favor the Democrats. As the nonwhite share of the electorate increases, Democrats can expect their baseline to shift upward by 1 or even 2 percentage points in each four-year cycle—a significant gain, but not enough to counter the third-term disadvantage.

It is at this point that factors specific to 2016 come into play. To begin, the American people’s assessment of Barack Obama’s performance as president has been rising steadily. From a low of 43% approval as recently as December, it has increased to an average of 49% today. After nearly three years in which his net standing (approval minus disapproval) was negative, it now stands in positive territory.

This makes a big difference: According to Emory University political scientist Alan Abramowitz, the incumbent president’s job approval has more impact on the vote share of his party’s nominee than does any other variable. If Mr. Obama’s average approval were to rise by an additional point to 50%, Mr. Abramowitz calculates, the Democratic nominee could expect to win a narrow victory in the popular vote—again, with all else equal.

Another potential plus for the 2016 Democratic nominee is the economy’s improving condition. Compared with other postrecession periods since World War II, the recovery from the Great Recession was slow and halting. It took more than six years to regain the jobs lost during the plunge, and median household income did not reach its prerecession level until a few months ago. That’s the bad news, and just about everyone is aware of it.

Recently, however, the experience of recovery has begun to outweigh the memory of decline. Since its recessionary low, the economy has added more than 13 million jobs, and the unemployment rate has fallen by half. Since Sept. 15, as once-discouraged workers have begun to seek employment, the share of adult Americans in the labor force has risen to 63% from 62.4%. The Pew Research Center reports that Americans are more positive about the job market than they were before the Great Recession began. Between March 2010 and last month, the share of Americans reporting that “plenty of jobs” are available in their communities rose to 44% from 10%, reaching its highest level in the past 15 years. Wages adjusted for inflation are finally rising.

Meanwhile, Sentier Research reports, median household income in February was 3.7% higher than the same month a year earlier, and 10.2% higher than its recessionary low in August 2011. A finer-grain analysis by economist Robert Shapiro shows that the majority of U.S. households have experienced “healthy” income gains since the end of 2011. Household incomes of millennials and Gen-Xers did well, with younger Hispanics scoring wide gains. Even Americans in the late-40s to mid-50s age bracket gained a bit, although not enough to compensate for their 2009-12 losses.

Trends in party affiliation also favor Democrats. As recently as last fall, Republicans and Americans leaning toward the GOP stood tied with Democrats and Democratic leaners at 42% of the electorate. Today, according to Gallup, Democrats have opened a six-point edge, 46% to 40%. Given how closely voting tracks partisanship in this polarized era, the shift bodes ill for the GOP’s 2016 presidential nominee.

Although these fundamentals shape national elections, candidates and campaigns matter as well. But here again, Republicans stand at a disadvantage. Donald Trump, the current GOP front-runner, is hugely unpopular with important sectors of the electorate, including minorities and women, and his positions on the economy and foreign policy trouble many traditional conservatives.

But as things now stand, the remainder of the primary season can yield only two possible outcomes—an outright Trump victory or the first genuinely open and contested nominating convention in nearly seven decades.

If Mr. Trump prevails, many Republicans are likely to stay home on Election Day, and more than a few will quietly support the Democratic nominee. If he falls short on the first ballot and is denied the nomination, he and his supporters will cry foul, and a formal party split would be likely.

It is too soon for Hillary Clinton, a candidate with vulnerabilities of her own, to start measuring the drapes for the Oval Office. But Republicans who fear massive Senate and House losses as well as another term for a Democratic president are not exaggerating the risks they face.

Article Link to the Wall Street Journal:

John Kasich: The Candidate Who Wouldn’t Leave

By Jonah Goldberg
The National Review
April 6, 2016

There was an old Saturday Night Live fake movie trailer narrated by horror-movie veteran Christopher Lee. John Belushi played a houseguest who couldn’t take a hint from a couple who just wanted to go to bed. The husband tells Belushi, “Look, I don’t want to be rude, but my wife isVery tired!” Belushi responds by picking up the TV Guide and saying dismissively, “Yeah. . . . Hey, there’s a good movie on tonight! I think I’ll call up some friends and watch it over here!”

Then came Lee’s creepy voiceover: “It came without warning! They were just being Polite! They didn’t realize that they’d be stuck with . . . The Thing That Wouldn’t Leave”!

John Kasich is this election season’s The Thing That Wouldn’t Leave.

After investing everything in New Hampshire, Kasich came in second, doing worse than Jon Huntsman had in his race-ending performance in 2012. Kasich’s response? He didn’t just declare victory, he proclaimed, “Tonight, the light overcame the darkness.”

Since then, Kasich has lost some 30 contests and won one — in his home state of Ohio. But still, he just won’t go.

It’s not just that Kasich can’t take a hint, it’s that he appears to be living in a kind of fantasy world, largely defined by three myths or delusions.

The first is the most endearing. Kasich has the best résumé of the remaining candidates. Heck, he arguably had the best résumé of the entire 2016 field, if by “best” you mean the longest and deepest government experience. He’s not delusional about that.

What he is confused about is the idea that a lot of people care that he was, say, the chairman of the House Budget Committee two decades ago. According to legend, a supporter once shouted at Adlai Stevenson, “Governor Stevenson, all thinking people are for you!” Stevenson shot back, “That’s not enough. I need a majority!” Even if Kasich is right that his résumé makes him the best qualified to be president — a debatable proposition — the simple fact is that after nearly three dozen contests, relatively few voters agree with him.

Ah, but what about the delegates? If it’s a contested convention and neither Donald Trump nor Ted Cruz has enough delegates to lock up the nomination, won’t they turn to Kasich?

Not necessarily. But don’t tell that to the Ohio governor, who goes from interview to interview insisting that he’d be the natural choice for the convention. Why would he be? Well, that answer varies.

Kasich’s most frequently stated reason is that delegates will choose him because he beats Hillary Clinton in the polls. And it’s true that Kasich does marginally better than Cruz in hypothetical matchups against Clinton — and a lot better than Trump.

Left unanswered is why the delegates — many of them loyal to Trump and Cruz — would gamely back The Thing That Wouldn’t Leave. After the second or third round of voting, delegates are free to cast their ballots for whomever they want. There’s little evidence that they’d want Kasich, and they’d be under no obligation to vote for him over, say, Paul Ryan or Marco Rubio — or, for that matter, Rush Limbaugh or Shaquille O’Neal. Indeed, for many delegates, it would seem either unfair or downright crazy to skip over bigger vote-getters and back Kasich just because he won his home state of Ohio.

Of course, what that leaves out is the fact that Kasich is running as a hopeful, positive, uplifting champion of light over darkness. That brings us to yet another Kasich delusion, and this one is shared by many of his backers as well. Call it the myth of Kasich the hugger.

In South Carolina, a college student asked the Ohio governor for one of his supposedly famous hugs. It wasn’t until later that we learned the huggee worked for the hugger’s super PAC. More to the point, Kasich is simply not the touchy-feely guy he’s pretending to be or that he perhaps thinks he is.

The man is famously irascible, pugnacious, and sanctimonious. He’s prone to defending his policies, such as his expansion of Medicaid under Obamacare in Ohio, by insinuating that he cares more about his eternal soul than his critics. A lot of people talk about how unlikeable Cruz is. Well, I’ve met both men, and I’d much rather have a beer with Cruz.

Maybe Kasich’s denial stems from the fact that he has never lost a race and can’t contemplate failing this time. I really have no idea. All I know is that it’s time for him to go.

Article Link to the National Review:

The Anatomy of a Trump Defeat

By Eliana Johnson 
The National Review
April 6, 2016

Last Friday, four days before Wisconsinites would cast their ballots, Ted Cruz, John Kasich, and Sarah Palin headlined an event for the Milwaukee County Republican party. Donald Trump, whose unconventional campaign rests almost entirely on his public appearances, had left it to Palin to carry the banner for him while he jetted off to Washington, D.C. There, he would cap a dismal week by sitting down with Republican National Committee chairman Reince Priebus for a remedial lesson in delegate allocation.

It’s looking as if he will need it. Cruz trounced him in Tuesday’s Wisconsin primary, 50 to 33 percent, with 73 percent reporting, making a contested convention more likely in July. The results were significant in another way, too. Trump has mostly over-performed, astounding political onlookers at every turn. Wisconsin marks the first contest in which he has, arguably, underperformed, ceding to Cruz what had been an eleven-point lead in late February, as measured by a Marquette University poll, for a 28-point reversal over the course of just five weeks.

“I think Wisconsin is significant because it’s the first state that he was on track to win that he is going to lose as a result of his demeanor, temper, and comportment as a presidential candidate,” says Steve Schmidt, who managed John McCain’s presidential campaign in 2008.

Wisconsin was always going to be difficult terrain for Trump. Though the state has plenty of rural areas populated by the sorts of lower middle-class voters who have fueled Trump’s campaign, and hosts an open primary, in which Democrats and independents are free to cast ballots, it also has an unusually unified, politically sophisticated Republican electorate thanks to the bruising battles its governor, Scott Walker, has led it through in recent years. And, as Walker demonstrated on a national level, Wisconsinites are mild-mannered, potentially less inclined than others to an outsized personality such as Trump’s. The businessman finished third in neighboring Minnesota behind Marco Rubio and Cruz.

“There’s a certain cultural flavor that doesn’t react well to that New York braggadocio,” says Wisconsin-based talk-radio host Charlie Sykes, who opposes Trump’s candidacy and who conducted a bruising interview with him last week.

Nonetheless, the way in which Trump was defeated at a crucial juncture will become the subject of intense interest not only for Trump and his opponents, but also for the confluence of outside interests aligned against him. “It’s like the Spanish Civil War,” says Sykes. “Both sides are trying out their military tactics, and whatever happens to have worked or not worked will be applied in other war zones.”

Many of Trump’s Republican foes have argued for months now that defeating him would require a sort of all-hands-on-deck effort: opposition from elected officials, the conservative media, and top-dollar donors. While there has been much talk about an anti-Trump movement — the Twittersphere has branded it #NeverTrump — its components have rarely worked in tandem. The literary critic Lionel Trilling wrote in 1950 that conservatism was less a body of ideas than a series of “irritable mental gestures”; its expression in the form of a movement to destroy Trump, and to save itself, has been similarly disjointed. Independent parts have operated without a central-command system.

In Wisconsin, though, the stars aligned. A super PAC funded by Republican mega-donors sent an ad attacking Trump viral. After a self-imposed hibernation following his withdrawal from the presidential race, Walker emerged as a vociferous spokesman for Cruz. The state’s conservative talk-radio hosts, Sykes chief among them, hammered Trump relentlessly, unlike many of their national counterparts.

And under pressure, the real-estate mogul made unforced errors, from sending an ill-advised tweet featuring an unflattering picture of Cruz’s wife to giving an answer on abortion that managed to upset conservatives and liberals alike. By the end, even many of his most ardent supporters had become critics, and both groups were further convinced that the Republican nomination would be decided at the convention in Cleveland.

But, more than a loss for Trump, it was a galvanizing moment for the forces aligned against him, who emerged from Wisconsin more convinced than ever that a unified effort could slay the beast.

* * *

Back in Milwaukee last Friday, surrogates for each of the campaigns introduced the presidential candidates to a crowd of approximately 750 voters in Milwaukee County. Walker opened for Cruz. Former governor Tommy Thompson ushered Kasich on stage.

Trump has run a campaign with virtually no organizational footprint, and here it showed: His team couldn’t find anybody to introduce Palin. They reached out at the last minute to Milwaukee County GOP chairman David Karst. He’s not a Trump supporter, and, reached on the eve of the primary, he didn’t even think Trump had run a particularly good campaign in the state. “It would’ve been nice if Mr. Trump would’ve reached out to more Republicans,” Karst says. (He claims Trump spent more time wooing Democratic and independent voters, who were free to vote in the state’s open primary.)

Karst delivered his introduction with all the enthusiasm of a non-supporter. Palin, for her part, was met with a combination of stone-faced silence and muted applause as she threw out puzzlers such as “green and gold till I’m dead and cold,” her version of a Green Bay Packers cheer.

“There was a time in Wisconsin when she was a rock star, and then last night she’s there for Donald Trump, and it was truly horrible,” Sykes says. Her appearance served as the denouement of a two-week stretch, beginning in mid March, that left Trump battered, his weakness on policy and his campaign’s infrastructural frailty not just apparent but actually taking a toll.

That stretch began on March 14, when the super PAC funded by TD Ameritrade founder Joe Ricketts, Our Principles PAC (OPP), put up a seven-figure sum to air a television ad featuring a series of actresses reading some of Trump’s most offensive and eye-popping statements about women. (“You know, it really doesn’t matter what they write as long as you’ve got a young and beautiful piece of a**.”)

“We were really looking to hit him in a way that would kind of feel like a kick in the gut,” says Katie Packer Gage, the executive director of the PAC. Produced by Larry McCarthy, who created the famed Willie Horton ad that helped sink Michael Dukakis in 1988, the spot garnered a million views on YouTube within the first 48 hours. “We just dominated cable news with it,” Packer Gage says.

And then, Trump started playing into the caricature. On March 24 he blasted out a now infamous Tweet featuring an unflattering picture of Cruz’s wife, Heidi, next to a glamorous professional shot of his own wife, Melania, a former model. “The images are worth a thousand words,” he wrote, after threatening to “spill the beans” on Mrs. Cruz the previous day.

The move predictably sent his critics into a frenzy, but it also riled some of his most ardent supporters. There has been a lot of talk about Trump’s “hard floor” of support, but for the first time, it looked as if that was beginning to crack. “Our candidate is mental. Do you realize our candidate is mental?” Ann Coulter, a diehard Trump booster, asked Breitbart News’s Milo Yiannopoulos. “It’s like constantly having to bail out your 16-year-old son from prison.”

Former House speaker Newt Gingrich, who has yet to endorse a candidate — he remains close to Kasich from their shared time in Congress but has made clear that he is open to supporting Trump — called Trump’s actions “utterly stupid.”

“It has frankly, weakened everything that Trump ought to be strengthening,” Gingrich told Fox News’s Sean Hannity. “It sent a signal to women that is negative, at a time when his numbers with women are already bad. It sent a signal of instability to people who may be beginning to say, ‘Maybe I’ve got to get used to it, maybe I’ve got to rely on him, maybe he could be presidential.’”

When OPP aired its attack, it was actually targeting the latter group, which consists mostly of men, not women. Trump’s approval rating among women, which has lately fluctuated between 30 and 40 percent, was already abysmal. It is men who will ultimately lift or sink his campaign. “It was sort of seen as this ad targeting women, but we were actually targeting men,” says Packer Gage, who talks of the ad’s “slow seepage” into the culture and perhaps into Trump’s head, too.

As of Tuesday, the ad had been viewed nearly 3.5 million times on YouTube. More important, the portrayal of Trump as a foe of women had made its way into popular culture. The weekend before the primary, Saturday Night Live opened with a skit featuring a news anchor interviewing a female Trump supporter.

“Well, it’s been another bad week for Donald Trump with women,” the anchor declares.

“Okay,” her guest responds. “As a woman, I like Donald Trump, but as a full-blown nut job, I frickin’ love him.”

Conservative talk radio has, for the most part, been a great friend to Donald Trump. Conservative talk radio in Wisconsin? Not so much.

While hosts from Rush Limbaugh to Sean Hannity to Laura Ingraham have given Trump both airtime and cover, with Limbaugh in particular vowing to maintain a policy of neutrality in the Republican primaries, Trump ran blindly into a talk-radio buzzsaw in Wisconsin.

“How do we get to April of 2016 and nobody got in his face before?” says Sykes, the king of the medium in Wisconsin. Mostly, it has been Trump and his security team getting in the face of critics, both real and perceived, but when Trump appeared on Sykes’s show last Monday, Sykes turned the tables on him.

“Well, welcome to Wisconsin,” Sykes said. “I know you realize that here in Wisconsin we value things like civility, decency, and actual conservative principles, so let’s make some news.” He went on to challenge Trump to say that the wives of the candidates are off limits, and to apologize for tacitly mocking Heidi Cruz’s appearance. Trump refused, saying, essentially, that Cruz had started it. “I expect that from a twelve-year-old bully on the playground,” Sykes told him. “Not somebody who wants to hold the office held by Abraham Lincoln.”

He went on to play OPP’s attack ad, and to ask Trump to respond to it. “I never thought I would run for office,” Trump said. Sykes pointed out that he’s said similar things to women on the campaign trail, from Megyn Kelly to Carly Fiorina.

The reviews came in swiftly. The conservative website RedState: “Charlie Sykes Just Destroyed Donald Trump.” The New York Times: “Wisconsin Radio Host’s Combative Interview Surprises Donald Trump.” Mashable: “Donald Trump Meets His Match in Wisconsin Radio Interview.”

The following day, Scott Walker joined Sykes’s show to announce that he was endorsing Ted Cruz. Walker bowed out of the presidential race in September, urging others to do the same so that the GOP could focus its resources on defeating Trump. As it turned out, his endorsement wasn’t merely a lukewarm one intended to block Trump’s advance. He went out of his way to help Cruz, cutting television ads for him and appearing alongside him at events.

“I was surprised by how strongly Walker came out for Cruz,” Sykes says.

The move proved yet another trap for Trump, who had assailed Walker’s governance while he was an active presidential candidate. In the wake of Walker’s endorsement, Trump revived the shtick on the ground in a state where Walker remains popular, and where he has won three elections in the past five years. “Wisconsin is doing very poorly,” Trump said, criticizing Walker for his failure to raise taxes. “I wouldn’t exactly say that things are running smoothly.”

David Karst, the Milwaukee County GOP chairman who introduced Palin on the Trump campaign’s behalf last Friday, called Trump’s decision to attack Walker “a very poor mistake.”

Wisconsin Republicans, are “the ones that have elected [Walker] three times in the last five years, and we’re the reason why Governor Walker was not recalled, so we have a lot of loyalty to Governor Walker,” he says. “So I was kind of surprised about that.”

On Trump’s end, the self-inflicted damage continued. The day after Walker endorsed Cruz, and two days after his disastrous interview with Sykes, he appeared in primetime at an MSNBC town hall, where he told host Chris Matthews that women who receive illegal abortions should be punished.

The slip-up, which even Trump uncharacteristically copped to, once again turned friends into foes. “What happened last night on MSNBC is huge,” Limbaugh told his audience. “I’m telling you what happened last night was huge in terms of rejuvenating the Democrats.” Trump, he argued, had given the Democrats ammunition to revive their assertion that Republicans are engaged in a “war on women.”

“None of the mistakes have been forced, and nobody forced him to react negatively,” Gingrich told the New York Times. “I think he has a real possibility of, having surged amazingly, to miss the golden ring.”

* * *

Yes, Trump’s errors were, strictly speaking, unforced, and Wisconsin was never a gimme. But his foes will argue that the results there are definitive proof not only that the race is headed to a convention but also that if conservatives mount a collective offensive on the front-runner, he can be defeated there, too. “I think that what shifts now, and we’ve been saying that all along, is that if we can win Wisconsin, then this is going to Cleveland, and so, this is going to Cleveland,” says Packer Gage.

The top GOP strategist notes that, thanks in part to the outside pressure brought to bear on Trump in Wisconsin, the mogul is “literally now, I think, one Megyn Kelly tweet away from this being over, one Heidi Cruz tweet away from this not being recoverable.”

His foes, who until the Wisconsin battle had been unable to mount a credible offensive, are crossing their fingers.

Article Link to the National Review:

Next Stop, Pyongyang? Obama's Diplomatic Trifecta

After Iran and Cuba, diplomacy with North Korea could be next.

By Eric R. Terzuolo
The National Interest
April 6, 2016

North Korea was not officially on the agenda of the just-completed Nuclear Security Summit in Washington. The absence of any reference to North Korea in the summit communiqué is no surprise. But President Obama used the occasion to restate his objectives vis-à-vis Kim Jong-un’s regime, and to signal that the Chinese president and the prime ministers of Japan and South Korea, with whom he met on the margins of the summit for some joint hand-wringing, shared those objectives.

In a scene-setting Washington Post op-ed, the President described his aim as “the complete and verifiable denuclearization of the Korean Peninsula in a peaceful manner.” The phrasing is, to say the least, diplomatic. It sidesteps the nasty issue of North Korea’s work on intercontinental ballistic missiles. The inclusive reference to the “Korean peninsula” presumably is designed to avoid pointing fingers, even though South Korea has been militarily denuclearized since late 1991, thanks to then president George H. W. Bush’s decision to remove all U.S. nuclear weapons. And the emphasis on “a peaceful manner” is probably welcome in Pyongyang, after calls in the United States for clearer threats of use of force to deter North Korean acquisition of nuclear weapons capable of threatening the U.S. homeland. The president is leaving open the door to a negotiated solution with the North Koreans, even though the history of past attempts is a chronicle of frustration.

I already had been wondering, in fact, whether the administration, with almost ten months left to go in office, would try a dramatic shift in course vis-à-vis North Korea, along the lines of our new relationships with Iran and Cuba. As a devoted fan of Cuban cuisine, I appreciated the President’s reference to ropa vieja in his speech at Havana’s Gran Teatro on March 22. But my thoughts went immediately to bulgogi and kimchi. (I admit my ignorance of specifically North Korean cuisine, assuming such a thing exists.) It struck me that much of what the President had to say in Havana could serve as a blueprint for reconciliation with North Korea as well. One totalitarian state ruled by a family dynasty is much like another, after all.

In Havana, the president admitted the failure of long-standing U.S. policy, an uncharacteristic move for a U.S. political leader: “What the United States was doing was not working. We have to have the courage to acknowledge that truth.” He had taken much the same approach in selling the Iran nuclear deal to the U.S. and international publics. Why shouldn’t we “own” our failure vis-à-vis North Korea in the same way? Is it some sort of second-rate pariah state? After all, unlike the Iranians, the North Koreans actually have gotten all the way to nuclear weapons, and they seem to have missiles with longer ranges. And Cuba had to content itself merely with hosting Soviet nuclear weapons at one point. I’m sure the North Koreans feel some credit is due to them.

Perhaps what was lacking in our approach to North Korea was respect and reassurance. Already in his Havana speech, Obama stated clearly that President Castro “need not fear a threat from the United States,” and implied respect for Cuban sovereignty and self-determination. One could build an argument that we have exaggerated both the Cuban and North Korean threats to us, leading us inter alia to maintain in the Korean Peninsula a vast arsenal of landmines, at considerable political cost to us, since the overwhelming majority of countries have banned them as especially heinous. From 1988 to 2008, we listed North Korea as a “state sponsor of terrorism,” though it actually was not known to have sponsored any terrorist acts during that period. From 1982 to 2015, Cuba was on the same list, similarly with no real impact. (Of course, the state sponsors listdoes not have all that much to do with terrorism.) At times, we have accused both Cuba and North Korea of possessing or intending to acquire biological weapons, though always inconclusively. Something else that Cuba and North Korea have in common, though, is a history of being unable to feed their people, and frankly neither has a viable economy. That doesn’t add much to their scariness quotient.

Admittedly, unlike Cuba, North Korea has the largest army relative to population of any country on earth, routinely attacks the territory and vessels of another state, and issues thoroughly over-the-top threats. But perhaps we just need to “contextualize” North Korea’s hostile gestures correctly, and try to view things from their perspective. True, it was the North that invaded the South in 1950, initiating three years of fighting. But isn’t that piece of history much more “ancient” than Iran’s taking of U.S. hostages in 1979, which we managed to set aside? From Pyongyang’s perspective, it was only trying to reunite the Korean people, who had been divided during the Second World War by circumstances beyond their control. And when it comes to perpetuating an unstable situation on the Korean Peninsula, without an actual peace treaty, the finger pointing is mutual.

In Havana, on the other hand, President Obama emphasized the need to put the past behind us, and to find common ground between erstwhile adversaries. He described his objective in visiting Cuba as “bury[ing] the last remnant of the Cold War in the Americas” (a major applause line). Reconciliation with North Korea could just as easily be portrayed a way of “burying the last remnant of the Cold War in Asia.” To be fair, when it comes to political and economic systems, it’s hard to find two countries less compatible than North Korea and the United States. But why should that be an obstacle to constructive relations? For the moment, at least, we still lack a religious police like Saudi Arabia’s, but that doesn’t mean we can’t be friends.

Obama’s visit to Cuba paved the way. By focusing there on reconciliation “despite. . . differences” in political and economic systems, the president set a precedent that could work vis-à-vis Pyongyang as well. It also had the important diplomatic virtue of clarity, indicating that matters such as human rights and freedom of expression would not be high-profile concerns in bilateral relations. (The fact that North Korea has an even broader definition of “dissident” than the Cuban regime, and does not dawdle in physically eliminating such elements, will help reduce occasions for pointed questions regarding definitions and lists of “political prisoners.”)

The administration could pivot from focusing on a common “American” identity between the United States and Cuba, and instead suggest a common “Asian-Pacific” identity for the United States and North Korea. In his Havana speech, the president boiled down the shared history of the Americas to European colonialism and slavery. It’s hard, admittedly, to find such a simple formula for the Asia-Pacific region. I just hope we don’t dredge up the period in which the United States and the Korean Communists, to some degree, shared a common adversary (Japan) during the Second World War. But it would not be the first case in recent times of our “disrespecting” an important ally in making nice to a long-time adversary.

In Havana the president spoke—one must admit, eloquently—of “barriers of pain and separation.” Such barriers are no less real in the Koreas than they are in our own hemisphere. Even though the main barrier in the former case is between North and South Korea, it is objectively a barrier the United States helped create. Of course, if we had left the whole Korean peninsula to Soviet occupation at the end of World War II, we now would have a gigantic version of North Korea to deal with. Between 1945 and 1953, an estimated nine hundred thousand people (10 percent of the North Korean population) moved to the South, with negligible movement from the South to the North. Once again, a striking analogy with the Cuban situation, just with the compass points reversed.

The point from the Havana speech about how the president “believe[s] in the Cuban people,” which garnered thunderous applause, admittedly would need some careful phrasing for use with Pyongyang. Stressing our belief specifically in the North Korean people might help avoid having our reconciliation efforts interpreted as a green light for another attempt to unify the Korean people, i.e. the populations of North and South, along the lines of 1950.

As with Cuba, we should be able to find something positive to accentuate in our discussions with Pyongyang. The “sense of patriotism and a sense of pride” that the President found in Cuba appear to be strongly enforced in North Korea as well. The “commitment to. . . education” found in Cuba is strong in North Korea too. Indeed, the CIA World Factbook reports a literacy rate of 100 percent for both males and females, along with a fertility rate (1.97 percent) much higher than that of our West European allied countries, coupled with easy access to contraception. As noted in Cuba, love of family is clearly strong. It may be best to stay away from religion, however, since North Korea does not practice separation of church and state. The government actually sponsors religious groups, though we may find them somewhat eccentric.

In Havana, the president made it clear that he heard Raúl Castro’s criticisms of the United States, and somewhat indirectly suggested agreement with the Cuban president’s point about economic inequality here and the persistent “legacy of slavery and segregation.” He highlighted how democracy can be “frustrating” and stated clearly that we have “too much money in American politics.” All of this would go down well with Pyongyang, too. Our interlocutors might delude themselves, however, that we were talking about moral equivalence, so some careful wordsmithery would be in order.

North Korea, fortunately to my mind, is much more than ninety miles away from U.S. territory, but that doesn’t make a constructive relationship with the United States any less valuable to the North Korean leadership than to the Cuban one. It was only through U.S.-North Korean bilateralnegotiation, for example, that it was possible in 1994 to delay, though not definitively block, North Korea’s withdrawal from Nuclear Nonproliferation Treaty. For all its crazed bluster, Pyongyang has continued to communicate in many ways in the subsequent twenty-plus years that a new relationship with the United States is the “carrot” it really craves. (I hope the implied analogy to a mule does not land me on the North Korean enemies list.)

Would reconciliation with North Korea really be any more unexpected, in the context of U.S. diplomatic history, than the rapprochements with Iran and Cuba? In Obama’s 2009 inaugural address, he offered an outstretched hand to those who were prepared to unclench their fists, and expectations were high that he might try a bilateral approach to North Korea. Pyongyang’s 2009 nuclear and missile tests effectively scuttled that prospect, and the North Koreans have continued to clench their fists even as other approaches have seemed on the verge of success. But the president’s desire to break with the decades-long, confrontational approaches to what were once termed “rogue states” remains evident, and he has pursued this path with undeniable determination. Iranian missile tests prior to implementation of the July 2015 nuclear deal were not allowed to derail the deal. And there seems little reason to believe that Fidel Castro’s denunciation of Obama’s “sweetened words” in Havana will have any impact on the U.S.-Cuba rapprochement. At the risk of sounding flippant, a reconciliation “trifecta” would seem consistent with the president’s vision, and his obvious desire to get past foreign policy “old-think.”

For a U.S. foreign policy that looks to the future, the youthful, dynamic leadership in North Korea may be an even better bet than Cuba’s geriatric Castro brothers or the mullahs in Iran, who certainly are graying, albeit elegantly (and admittedly are better dressed than their counterparts in Havana or Pyongyang). How many guys, like Kim Jong-un, get to be Supreme Leader before their twenty-ninth birthday? And he’s doing a bang-up job getting rid of the dead wood, although even the staunchest U.S. advocates of cleaning up the bureaucracy might find antiaircraft-gun firing squads a little extreme.

If Kim Jong-un starts eating healthy salads and going to the gym, we may have to deal with him for a long time to come. Perhaps, to quote the immortal words of the late Marion Barry, often referred to as Washington, DC’s “mayor-for-life,” we should just “get over it.”

Article Link to National Interest:

Obama Should Return His Nobel Peace Prize

The president's record on nuclear disarmament falls short.

By Barry M. Blechman
The National Interest
April 6, 2016

President Obama claims undue credit for progress toward eliminating nuclear dangers. In fact, in nearly eight years, his administrations have taken only a few small steps toward limiting these risks, while launching a nuclear weapons modernization program of unprecedented scope and expense.

The president’s 2009 speech in Prague committing the United States to seeking the peace and security of a world without nuclear weapons excited us all—and garnered him the Nobel Peace Prize. Alas, the president neglected to figure out how this lofty goal was to be achieved. Should the United States continue along the bilateral path with Russia or perhaps it would be more effective to move toward a multilateral negotiation? If the latter, should it be under UN auspices or some new forum? Absent such strategic analysis, the bureaucracy took the default pathway—continued bilateral talks with Russia—which resulted eventually in the New Start agreement. That was a modest achievement, demanding slightly lower caps on American and Russian deployed, long-range weapons, but omitting other classes of nuclear weapons and doing nothing about nuclear arsenals in other nations.

A second opportunity was missed in September 2009, when the president convened the UN Security Council and persuaded the presidents of each member state to attend. The UNSC passed a resolution committing all members to the U.S. goal, “the peace and security of a world without nuclear weapons,” but again, without any tangible follow-up. The resolution could have established a working group to develop a plan to achieve that goal, with specified milestones and reporting deadlines and so forth, but the president again settled for fine words and no concrete actions.

A third and fourth opportunity came with Washington’s own Nuclear Posture Review (NPR) and the follow-on implementation study. In his op-ed, the president says that he reduced the role of nuclear weapons in U.S. national-security strategy. The NPR did that, but it did not reduce those roles nearly as far as many have suggested—to the single purpose of deterring the use of nuclear weapons against the United States and its allies. U.S. nuclear policy still permits first use of nuclear weapons in certain circumstances. Nor did the implementation study call for changes in so-called “requirements” for prompt response, a key factor determining how many weapons must be kept on alert and therefore how many must be in the arsenal. Nor did it reduce the number of warheads kept in reserve. These reductions are all sensible unilateral measures that would have no effect on our ability to deter an enemy attack, but would have reduced the size and cost of the now blossoming modernization program.

A fifth opportunity was missed in 2010, when many members of NATO were calling for the removal of the 180 U.S. nuclear bombs still kept in Europe, ostensibly for delivery by U.S. and allied fighter aircraft. Some of these weapons are stored at Kleine Brogel air field in Belgium, a facility that was repeatedly broken into by protesters in 2008, as was its Dutch counterpart. Other U.S. tactical nukes are located at the Incirlik air base in Turkey, less than seventy miles from the Syrian border, and a base from which the dependents of U.S. airmen and women have just been ordered to evacuate. Instead of supporting calls for nuclear withdrawals, the U.S. delegation sided with NATO nuclear hawks. The statement issued in Lisbon that year as well as the three subsequent NATO summit statements, have reaffirmed the role played by nuclear weapons as part of the alliance’s overall strategy.

To his credit, the Iran nuclear deal concluded last year was a huge accomplishment for the president and his administration, and the Nuclear Security Summits have made progress in reducing stocks of fissile materials around the world, as well as in strengthening the security of those that remain. Against these gains, however, must be weighed the missed opportunities mentioned above and the nuclear modernization program now underway.

Under his watch, President Obama has authorized programs to replace all U.S. strategic submarines and the missiles they carry, to build a new penetrating bomber and a long-range nuclear-armed cruise missile with which it will be armed, and to replace existing Minuteman ICBMs with a new land-based missile—one which in principle could be deployed on some sort of mobile platform. In addition, he is modernizing existing bombs to be used by fighters and long-range bombers, as well as warheads for submarine-launched missiles. And finally, he has authorized rebuilding the nuclear infrastructure—the facilities that produce and maintain the materials and components used in nuclear weapons. If fully implemented, this program will dwarf President Reagan’s nuclear build-up.

No, Mr. President, your nuclear record has not been impressive. Decency demands you return your Nobel Peace Prize.

Article Link to the National Interest:

Wednesday, April 6, Morning Global Market Roundup: Dollar and shares lick wounds ahead of Fed minutes


April 6, 2016

The dollar edged up from a 17-month low against the yen on Wednesday and buffeted European share prices latched on to a rebound in oil to move off their lowest level in over a month.

Asian trading had been subdued and the mood persisted in Europe as share prices.FTEU3 struggled to build on some early momentum provided by oil's biggest rise in three weeks and takeover talk in the pharmaceuticals sector.

Attention was also turning to the release later of the minutes from last month's U.S. Federal Reserve monetary policy meeting to look for any clues on how many interest rate hikes might be expected this year, following some mixed signals from some of its officials in recent weeks.

The dollar nudged off lows in Europe having been knocked back again overnight by comments from Japanese Prime Minister Shinzo Abe that countries should avoid trying to weaken currencies with "arbitrary intervention."

The yen remained in bullish form, down less than 0.1 percent against the dollar at 110.43 yen JPY=, still within striking distance of 109.92, its lowest level since October 2014.

"I think the market is trying to find an equilibrium here," said National Australia Bank FX strategist Gavin Friend.

"The dovishness of Janet Yellen has pushed rate hike pricing right out, so every time you get stronger data or stronger comments from the Fed you have this push-me, pull-me situation that buffets markets."

The dollar was making better headway against other currencies. It pushed both the euroEUR= and the pound GBP= down 0.3 percent to $1.1350 and 1.1412 respectively and was up 0.2 percent on a broader basket of currencies. .DXY

German data showing a fall in German industrial output didn't help the euro either, though the fall in the figures was smaller than economists had been expecting, a relief after February orders data dissapointed the day before.

Central Europe was also in focus too, with traders waiting to see what Poland does with its lending rates after seeing the ECB ramp up its stimulus efforts and nearby Hungary join the negative rates club last month.

In bond markets, the bounce in oil and modest lift in risk appetite halted German Bund yields' recent push towards zero. [GVD/EUR]

"Bond strength looks set to run into resistance with 10-year yields approaching last year's memorable tipping point," Commerzbank rate strategist Rainer Guntermann said.


MSCI's broadest index of Asia-Pacific shares outside Japan had ended the day barely in positive territory after falling to its lowest level since March. 16.

While global risky assets have staged a smart recovery since February's lows, led by Chinese stock markets on hopes that Beijing can successfully avert a sharp slowdown, policymakers and investors are worried the recovery may be at best bumpy and at worst, short-lived.

Alex Wolf, emerging markets economist at Standard Life Investments said it was still too early to call an economic stabilization in China because property inventories are still very high and much of the recent economic activity was driven by quasi-fiscal spending.

Wall Street futures pointed to a modest bounce later. The S&P 500 .SPX lost 1.01 percent on Tuesday as investors took profits on recent gains ahead of a quarterly reporting season that is expected to reveal sharply lower earnings. [.N]

In addition, the U.S. trade deficit widened more than expected in February in the latest indication that economic growth in the world's largest economy weakened further in the first quarter.

The 10-year U.S. Treasuries yield had also dropped to a five-week year low of 1.715, but like Bunds were nudged up in European trading and was last at 1.7497 percent.

Oil was the principle driver. Prices extended their rebound after Kuwait insisted major producers will agree to freeze output later this month even though key player Iran continues to baulk at the plan.

The market was also helped by data on U.S. crude supply-demand for last week from industry group American Petroleum Institute (API) showing a surprise fall of 4.3 million barrels in inventories in the week to April 1, versus an expected weekly increase of 3.2 million barrels.

Brent crude futures LCOc1 jumped 2.5 percent to $38.80 per barrel, off a one-month low of $37.27 hit on Tuesday, while U.S. crude futures rose 3.2 percent to $37.05 a barrel, the biggest rise since March 22.

Article Link to Reuters: