Tuesday, April 19, 2016

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Ryan's 2016 Role: GOP Frontman, Rainmaker

By James Arkin
Real Clear Politics
April 19, 2016

Paul Ryan may not be running for president this year, but he’ll still play a critical role in GOP election efforts this fall, and events last week provided the script.

In a hastily scheduled press conference at the Republican National Committee headquarters last Monday, the House speaker attempted to permanently stamp out rumors Republicans might draft him as their presidential nominee at the convention this summer. He then quickly pivoted back to where he’s been for months, talking about his policy vision for the Republican Congress and his wish to be an “optimistic party” that is “defined by our solutions.”

“This job provides a platform to communicate a conservative vision for our country, and I’m intent on using it,” said the Wisconsin Republican. “Not for me, but for my House colleagues and for all those who believe that conservatism holds the key to a more confident America.”

Two days later, Ryan’s political team announced the speaker raised $17 million in the first quarter – $11 million of it given to House Republicans’ campaign committee – including $6 million in March alone, a monthly record for the committee.

The events showcased the ways Republicans think Ryan will be essential this fall: raising record sums while providing a policy blueprint and traveling the country to provide a spark to down-ballot campaigns as Republicans seek to hang onto their congressional majorities in a tumultuous and unpredictable election cycle. This may prove particularly important – and increasingly necessary – should Donald Trump or Texas Sen. Ted Cruz, both of whom have high unfavorability ratings, win the nomination.

Brian Walsh, a GOP operative and former communications director for Senate Republicans’ campaign committee, said he thinks Ryan will offer an “alternative face” to a potentially unpopular nominee, and that he expects the speaker to be “in high demand” among congressional candidates.

“I do not think [incumbents] would want to be seen with Donald Trump or Ted Cruz, and so to the extent that you have other Republican leaders who are widely respected, that’s only a net benefit this fall in what I expect will be a tough political environment for Republicans,” Walsh said.

Indeed, Ryan’s political workload as speaker has already been considerable, with appearances at more than 40 events in Washington for House Republicans and nearly 100 events on the road this year. He’s shown up at events in Washington with almost every Republican in the Patriot Program – a group of nearly two-dozen GOP lawmakers facing competitive re-elections. He’s stumped in Utah for Rep. Mia Love and in Texas for Rep. Will Hurd, two Republicans seen as top targets for Democrats this year.

Some GOP leaders worried that Ryan’s decision to spend most weekends with his family in Wisconsin would cut into his fundraising time, compared to his predecessor, John Boehner, but so far Ryan has nullified that concern.

“People don’t fundraise on weekends; the only reason Speaker Boehner did is because he likes to golf,” said one GOP operative. “Fundraising primarily happens Monday through Friday, so it was just trying to get people off of this mindset that weekends matter.”

The speaker’s job as rainmaker and campaign surrogate for his colleagues in Congress isn’t exactly novel. Boehner, who was forced out of the House last year amid conservative unrest, was a prolific fundraiser and played a critical part in helping Republicans gain the majority in 2010. Across the aisle, Democratic Leader Nancy Pelosi is one of her party’s top fundraisers and campaign operatives – she raised $16 million in the first quarter this year, including $14 million for the House Democrats’ campaign committee.

For Ryan, the difference will be his experience campaigning for Republicans when he was the party’s vice presidential nominee four years ago. Ryan’s team sees him as effective at fundraising, nimble in intimate campaign settings and able to spark energy at large rallies in a variety of districts.

Ryan has also called on his House colleagues to focus heavily on policy heading into this election year, creating groups of lawmakers to craft policy positions on issues ranging from national security to welfare reform, and they also hope to draft an outline for an Affordable Care Act replacement, which Republicans have struggled to produce for years. Ryan’s goal is to give his colleagues a set of ideas to run on this fall.

Rep. Carlos Curbelo, a freshman from Florida facing one of the most competitive House elections this year, called Ryan the “most well-rounded speaker in modern history.” He pointed to Ryan’s fundraising numbers and his ability to work with people across the spectrum as key reasons he thinks the speaker would be a helpful presence this fall.

“I really don’t know how he’s done it,” Curbelo said of Ryan’s fundraising. “He really is the unifying force right now in the Republican Party. He’s trusted by all members of the conservative coalition in the United States, and I think he also inspires young people. He’s just a very compelling figure in our political system today."

Democrats, however, see Ryan’s role in the campaign as an opportunity to link Republican candidates to his past budget blueprints, which would have dramatically cut federal spending and changed entitlement programs, as well as to highlight the fact that Ryan lost nationally in 2012.

"To campaign with Paul Ryan is to wear the anti-women, anti-senior and anti-family Ryan budget and agenda as an albatross around your neck, which is why voters resoundingly rejected him in 2012,” said Meredith Kelly, a spokeswoman for the Democratic Congressional Campaign Committee. “Given desperate House Republicans' open panic about having Trump or Cruz atop their ticket, this false hope for a Ryan bailout is not shocking, but it is delusional."

In past cycles, Democrats have used similar language to tie GOP candidates to Ryan in a critical way. In 2014, for example, Ryan co-hosted a Texas fundraiser for Hurd, who was challenging then-Democratic Rep. Pete Gallego. A spokesman for Democrats’ campaign committee used the visit to attack Hurd, saying the candidate and Ryan “share a dangerous agenda that would jeopardize Medicare and Social Security for seniors, slash benefits for veterans and make dramatic cuts to education programs, all in order to protect tax breaks for the ultra-wealthy.”

Gallego is challenging Hurd in a rematch this year, and analysts consider the race a toss-up.

While the focus may be on maintaining the Republican majority in the House, Ryan will also likely be in high demand among the party’s incumbent senators facing competitive elections in states like Ohio, Illinois, New Hampshire and Pennsylvania. Some of the swing House districts fall in states with competitive Senate elections, which could allow Ryan to kill two birds with one stone. He campaigned with Ohio Sen. Rob Portman last fall, for example, and cut a video touting his support for Portman’s re-election.

“He’s one of the most admired people in the Republican Party today and he’s popular really across the board, so I think he could be an invaluable surrogate for Senate candidates,” said Sen. John Cornyn, Republican whip and former chairman of the Senate GOP’s campaign committee. Cornyn pointed to Ryan’s home state of Wisconsin, and incumbent Sen. Ron Johnson, as one race where the speaker would be particularly helpful.

Johnson and Ryan have often campaigned together in the Badger State, including at local Republican Party dinners and events, and are working on future events for the two to appear together. A source close to the speaker’s political operation said he is “all in” on getting Johnson re-elected.

On Ryan, Johnson said, “We all view him as a person of integrity, intelligence, ideas and courage. I’m pleased to do anything I can with Speaker Ryan.”

Other Senate campaigns also see Ryan as a powerful surrogate to bring energy to their campaigns this fall.

“He’s one of the leaders and the superstars of the Republican Party, so I think almost any campaign would love to campaign with him,” said an aide to a Republican senator in a competitive race, who requested anonymity because his office had not yet coordinated an official schedule with Ryan.

But just like their House counterparts, Senate Democrats see Ryan’s involvement in these races as a chance to both invoke his past budget plans and to point out Trump’s success in the GOP primary.

“Republicans are grasping for any sign of hope they can offer embattled incumbents and candidates stuck running in the party taken over by Trump and leading an unprecedented obstruction of the U.S. Supreme Court,” said Lauren Passalacqua, spokeswoman for the Democratic Senatorial Campaign Committee. “It’s telling that in their desperation, they’ve settled on the architect of the disastrous Ryan budget.”

Article Link to Real Clear Politics:

Iran demands new bribes — and Obama rushes to deliver

By NY Post Editorial Board
The New York Post
April 19, 2016

Just how far will President Obama go to protect the nuclear deal with Iran — which he sees as central to his legacy? We’ll be finding out soon.

Tehran is loudly threatening to pull out of the accord unless it gets access to the US financial system. It would have to settle for the measly $150 billion in cash it’s already pocketed, plus the end of global sanctions.

Valiollah Seif, head of Iran’s central bank, charged last Friday that Washington isn’t living up to its part of the deal because “we are not able to use our frozen funds abroad.” Unless that’s resolved, he said, “the deal breaks up on its own accord.”

Don’t expect Team Obama to even think about calling Iran’s bluff.

In fact, the State Department has already written all 50 governors asking them to reconsider their states’ sanctions on Iran.

Yet most of those sanctions aren’t about Iran’s nuclear program but its support of terrorism, its missile program, its general oppression of its own citizens, etc.

And the Financial Action Task Force, a global body that combats money-laundering and terror-financing, just declared it remains “exceptionally concerned” about Iran’s continued financial support for international terrorism.

Indeed, FATF urged all members to “apply effective counter-measures” to protect their financial sectors against “risks emanating from Iran.”

Yet the administration is reportedly moving to do the opposite — looking to let Iran access dollars via a Hong Kong clearinghouse.

It’s one reason this rancid deal was never submitted to Congress as a treaty: Obama keeps having to change the terms to please Tehran. As things stand, he’ll likely keep on with it until Iran gets everything it wants.

Article Link to the New York Post:

What Were You Thinking, North Carolina?

By Matthew A. Winkler
The Bloomberg View
April 19, 2016

Why would a state making big recent strides in improving its economic health want to be on the wrong side of Google, American Airlines, Apple, Bank of America, Deutsche Bank, Duke University, Facebook, Lowes, Marriott, Microsoft, PayPal, the National Basketball Association, Wells Fargo and Bruce Springsteen?

I didn't get the chance to put that question to the governor of that state, Pat McCrory of North Carolina, when I interviewed him in Raleigh last month to discuss the resurgent Tar Heel economy. Since he took office in 2013, North Carolina has moved past most other states in the accelerating pace of its annual economic performance improvement. That's as measured by a Bloomberg index of economic health based on employment, personal income, home prices, mortgage delinquency, tax revenues and the equity of the state's companies.

North Carolina picked up the pace of improvement faster than any state except Oregon during the first three quarters last year. That's much better than its corresponding gain during 2013 or 2014, when the growth in North Carolina's economic health index ranked 30th and 37th respectively. As the ninth-largest state, with a population of more than 10 million, North Carolina is the fourth-largest U.S. manufacturer and a magnet for corporations.

Until now. The outlook suddenly darkened when the 59-year-old McCrory bowed to his Republican-controlled legislature and signed a law preventing local governments from extending civil rights protections to gay and transgender people while banning transgender people from using public bathrooms according to their gender identity.

Corporate America considers diversity good for growth and discrimination bad for business. PayPal, among more than 80 companies decrying the law (including Bloomberg LP), abandoned plans for a new global operations center with 400 hundred jobs in Charlotte. Deutsche Bank, the largest in Germany, also canceled its expansion for 250 new positions in a technology development center outside of Raleigh.

Anyone wondering what's happening to the Republican Party, led by Donald Trump and Ted Cruz in the presidential primaries, will get more than a clue from the North Carolina governor's predicament. McCrory earlier this month justified his decision as protecting "basic guidelines of privacy." PayPal Chief Executive Officer Dan Schulman wasn't persuaded. "The new law perpetuates discrimination, and it violates the values and principles that are at the core of PayPal's mission and culture," he said.

Springsteen said on his website that "some things are more important than a rock show and this fight against prejudice and bigotry -- which is happening as I write -- is one of them." He cancelled a performance in Greensboro.

Governor McCrory, who was locked in a tight race for reelection withAttorney General Roy Cooper before he signed the new law, is the perfect example of the paradox of the pro-business, free-trade Republicans undermined by conservative social agendas eschewed by America's biggest companies. McCrory was elected to a record seven terms as mayor of Charlotte, the state's largest city with a successful light-rail system he initiated. McCrory said he plans to support the eventual party nominee for president even if it's Trump, who said he won't hesitate to wage trade wars while punishing Mexicans, Muslims and anyone else he considers a threat to the U.S.

Until he agreed with his legislature's prohibition against local governments' banning transgender discrimination, McCrory seemed to have everything his constituents could wish for in an elected official. "I'm a very strategic guy," he said in the interview. "I made a point to be a reformer and not accept the status quo and I've stepped on the toes of both the right and the left to do it."

At this point, he should be a shoo-in for a second term. Instead, the booming McCrory economy is compromised by companies reconsidering their commitments to North Carolina just when the governor could be taking credit for his state's accelerating prosperity.

Article Link to the Bloomberg View:

Is There an Obama Doctrine?

The result is that the leader of the free world has abnegated his responsibility and put America and its allies in great danger.

By Shmuley Boteach 
The Jerusalem Post
April 19, 2016

For seven years observers have attempted to discern what President Barack Obama’s foreign policy is, since the closest he has come to articulating one was the simplistic declaration he made to reporters on Air Force One: “don’t do stupid stuff.”

The result is that the leader of the free world has abnegated his responsibility and put America and its allies in great danger.

President Obama viewed George W. Bush as a menace and was determined to show the world he was the anti-Bush. Whatever one may think of president Bush, he was a man of action and his sins were those of commission. Obama’s sins, however, have been of omission. His fear of doing anything stupid has paralyzed his foreign policy for much of his presidency.

Paradoxically, his first foray into foreign policy did little to inspire confidence. He decided to put Israelis in their place in the naïve belief that sympathizing with the Palestinians would somehow bring about peace. Instead, he succeeded in creating distrust among Israelis, which has only grown worse during his tenure, and the Palestinians made a mockery of his pressure on Israel by refusing to engage in negotiations and rejecting his envoys’ peace initiatives.

Worse, the Palestinian Authority openly defied the president, demonstrating from his first year in office that he was weak.

About the same time, President Obama did something equally misguided by going to Cairo and speaking of a Jewish claim to Israel that was based primarily on the Holocaust rather than more than 3,000 years of history. In the speech, Obama also pleaded with the Muslim world to accept his promise that America did not see Islam as the enemy and promised his friendship, as if a nation that buried 10,000 soldiers over the past decade to liberate Muslim men and women could possibly be Islamophobic.

In addition to looking weak by reversing his predecessor’s policy, he made the mistake of speaking in a country run by a dictator known for abusing human rights and muzzling his Muslim opponents.

The message he unintentionally sent was that he would be no different than his predecessors when it came to allying with Arab autocrats so long as they were pro-American.

When the Arab Spring shocked the Obama administration, he also did something that Middle East experts knew would be disastrous, namely siding with the radical Muslims of the Muslim Brotherhood.

President Hosni Mubarak was a terrible autocrat and the Egyptian people deserve to be free.

But the Brotherhood is one of the region’s original terrorist groups and the inspiration for many of the radical Muslim groups we are fighting today.

While many Americans applauded his evacuation of troops from Iraq, President Obama failed to see the bigger picture in the region. Yes, lives of soldiers were saved in the short run, but the absence of US forces left a vacuum that is now being filled by Iran, al-Qaida, Islamic State (ISIS), Kurds, Turks and others. So long as our troops were in Iraq, Iran had to worry about the possibility that they would turn toward Tehran and use force to stop its nuclear program. Once that threat was gone, and Obama’s seeming desperation for a nuclear agreement on any terms became clear, the Iranians knew they had nothing to fear from this president.

The Iranians, the Russians and the radical Muslims also were quick to fill the vacuum created by the dissolution of Syria. They were emboldened by another demonstration of Obama’s weakness when he announced that the use of chemical weapons by the Assad regime was a red line that would trigger a military response and then did nothing when the evidence of their use was presented to him.

Russian President Vladimir Putin took the measure of Obama, and demonstrated the absurdity of Hillary Clinton’s notion of “resetting” US-Russia relations, when he convinced Obama to abandon Bush’s plan to build a missile defense system in Europe.

Like a grandmaster playing a novice in chess, Putin checkmated Obama in Eastern Europe and, seeing his naiveté, invaded Ukraine, defended Iran and is now wreaking havoc in Syria.

President Obama’s most glaring omission was on display in the carnage in Paris last November. His stubborn refusal to acknowledge that a war is being fought between radical Muslims engaged in a holy war against non-Muslims has allowed this cancer to metastasize around the world. Denying Islamist terrorism is as extreme as blaming innocent Muslims for that same terrorism.

After doing everything possible to avoid entanglement in Syria, and refusing to use America’s might to destroy ISIS, the people of Syria, Iraq, France and Belgium have reaped a terrible whirlwind. Even now, President Obama is reluctant to take the necessary measures to defeat not only ISIS, but the Iranian-sponsored Shi’ite terrorists who are no less dangerous than the radical Sunnis.

The killing of Jews in the West Bank, as well as the atrocities in Paris at the kosher market, are not “random” incidents, as described by our president.

They were intentional murders. When Palestinian Authority President Mahmoud Abbas calls on Palestinians to defend the Aksa mosque against the fictional Jewish threat to destroy it, he is inciting Muslims to murder non-Muslims. Still, the president cannot muster an unambiguous condemnation of this evil.

George Bush had a straightforward worldview that identified our enemies. Even the president of France and the prime minister of Great Britain openly acknowledge the war with radical Islam. The pope put it best when he said the attacks in France last year are part of a Third World War and that the international community would be justified in using force to stop “unjust aggression” by ISIS militants.

President Obama’s policy has been weak and vacillating.

He still has a few months as commander- in-chief to lead the free world from the front rather than from behind.

Article Link to the Jerusalem Post:

Want to Change the System, Trump and Sanders Supporters? Learn How It Works First.

Our democracy has rules for a reason. And ignorance of them is damaging our democracy.

By Tara Setmayer
The Daily Beast
April 19, 2016

“In a time of universal deceit, telling the truth is a revolutionary act.” — George Orwell

Civic participation is one of the most important responsibilities of being an American. I’m old enough to remember when being selected to lead your homeroom class in the daily Pledge of Allegiance was a source of great pride. As kids, with our hands over our hearts, shoulders squared, we’d recite those venerable words, “…and to the republic, for which is stands…” with purpose. Unfortunately, the moral imperative of being a good steward of this great nation and understanding what it takes to preserve life, liberty and the pursuit of happiness, is an afterthought for many, if any thought at all.

Without question, the insurgent candidacies of Donald Trump and Bernie Sanders have jolted many Americans out of their normal political malaise. Bringing more citizens into the political fold is a good thing. But, what many of them are now realizing is that it takes more than just rolling out of bed to rage against the machine at big political rallies to select the next leader of the free world.

Surprise! There are rules involved. Rules governing the presidential election date back to our founding and the establishment of Electoral College. The Constitution also gives latitude to the states in how to structure their nominating process. Electing the president wasn’t necessarily meant to be easy. Nothing worth safeguarding usually is. The founders deliberately designed our constitutional republic that way to avoid the tyrannical pitfalls of past societies like ancient Greece or the monarchies of Europe.

The Framers wanted multi layered stakeholders invested in the best interest of the republic making it less vulnerable to the rash whims of a majority. They understood how pure democracy without checks and balances historically led to the subjugation of minority voices. It was true then and still rings true today. That’s why our constitution does not allow for direct voting to elect the president.

The inconvenient truth is it’s our responsibility as citizens to be informed and understand how our voting laws work. And it’s the responsibility of any serious candidate for President to do the same. In this day and age, when the answers to almost anything are no more than a Google search or Siri question away, there’s no excuse for ignorance of the law/rules. With freedom comes responsibility by each and every one of us to pay enough attention to make sure those freedoms are protected.

The act of voting is one of the most fundamental rights and privileges of being an American, yet millions take it for granted and seemingly can’t be bothered to learn how their state voting procedures and deadlines work. i.e. Colorado or even New York for that matter. Just ask Trump’s own children.

It’s typical of not only Donald Trump’s personality to shift blame onto everyone and thing other than himself when he fails miserably, but it’s a growing characteristic of our society. Perhaps many are victims of their own uninformed apathy.

Perhaps there’s a lack of emphasis on the importance of civic engagement and what that entails.

Which brings me to a story shared with me by a former elementary school teacher of a charter school in a Maryland suburb of Washington, DC. She wanted to incorporate lessons on World War II into her curriculum. When she approached the principal about her plan, the principal scoffed and said, “What do we need to know about World War II for?” Seriously? If this is the attitude of some educators
no wonder it’s so easy to throw slogans around like Make American Great Again when so many don’t even understand what made America great in the first place.

Unfortunately, this teacher’s experience is not isolated. It’s going on in school districts around the country. Federal education policies like No Child Left Behind and Race to the Top have shifted emphasis away from social studies and history to a focus on standardized testing. In 2012, 21 states required testing in history and only 9 of them required it to graduate. Only one-third of Americans can name the three branches of government, much less say what each does.

As a result of this disheartening trend, the Civics Education Initiative was born. It seeks to require high school students, as a condition for graduation, to pass a test on 100 basic facts of U.S. history and civics similar to the United States Citizenship Civics Test. The national effort is gaining traction with Arizona, Utah, and the Dakotas now requiring the civic proficiency test for graduation. A dozen other states are considering the same. It’s a start.

A dumbed down electorate is more susceptible to the manipulation of charismatic figures willing to allegedly “tell it like it is” while preying on their fears and ignorance of the history and framework of the country. It allows for someone like Donald Trump or Bernie Sanders for that matter, to whip mobs of people into a frenzy believing they’ve been disenfranchised by a system they don’t even understand.

Scores of folks on both the Left and the Right complain that “This is not how democracy works!” They are right. This is how a constitutional republic works.

Is our system infallible? Of course not. Various changes have been made from the enactment of the 12th Amendment to the creation of the McGovern Frasier Commission after the tumult of the 1968 Democratic National Convention. If people are unhappy with the current rules, then by all means work to improve them.

However, the time to do that is not in the middle of an election cycle when the rules have already been set and agreed upon by all campaigns involved. There’s no whining in politics.

Albert Einstein famously said “First you learn the rules of the game. Then you play better than everyone else.” Prior to running for president, Trump retweeted that very quote in 2014. Too bad in 2016 he’s chosen to kvetch about allegedly “rigged” rules instead of putting in the campaign work to finish the job and win. It’s much easier to play the victim than take responsibility. Nowadays, it’s always someone else’s fault.

It takes effort to become President of the United States. Just like it takes effort to be a good citizen. When something is important enough, we make it a priority. It’s not the government’s job to compel us to pay attention.

How far we’ve come from President Kennedy’s decree to “ask not what your country can do for you but what you can do for your country.”

Let’s start by learning how it works.

Article Link to the Daily Beast:

Tuesday, April 19, Morning Global Market Roundup: Stocks rise as oil prices shrug off Doha failure

By Nigel Stephenson
April 19, 2016

European shares hit three-month highs on Tuesday following gains on Asian bourses as a rise in oil prices, partly due to a workers' strike in Kuwait, boosting investors' appetite to take on risk.

Oil prices had already shrugged off the weekend failure of producers to agree to freeze output at a meeting in Doha, but Tuesday's gains drove the commodity-linked Australian dollar to a 10-month high against its U.S. counterpart.

Brent crude LCOc1, the international benchmark, last traded at $43.27 per barrel, up nearly 40 cents. Kuwaiti output fell to 1.1 million barrels a day on Sunday from 2.8 million bpd in March due to the strike, although analysts expect the impact to be brief.

"It is quite amazing how oil prices have recovered from Monday's lows. That is shoring up risk appetite and pushing up commodity-linked currencies," said Niels Christensen, FX strategist at Nordea. "As long as oil remains above $43 a barrel we think commodity currencies will remain supported."

Oil's rise from lows around $27 touched in February, along with signs of an improving U.S. economy and the U.S. Federal Reserve's cautious approach to raising interest rates, have helped lift stocks on Wall Street and elsewhere in recent weeks.

The pan-European FTSEurofirst 300 share index .FTEU3 rose 1.3 percent, led higher by gains in basic resources stocks .SXPP, oil and gas .SXEP and travel and leisure .SXTP.

The FTSEurofirst is up 14 percent from February lows.

Britain's FTSE 100 .FTSE added 0.5 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 1 percent, after touching its highest intraday levels since November.

Tokyo's Nikkei .N225 gained 3.7 percent, Australian shares hit their highest since early 2016 while New Zealand shares .NZ50 hit a new record high.

In China, both the CSI 300 .CSI300 and the Shanghai Composite .SSEC indexes closed 0.3 percent higher.

Emerging market stocks measured by MSCI .MSCIEF rose 0.7 percent and EM currencies broadly gained. Oil exporter Russia's rouble RUB= gained 1 percent to 65.50 per dollar.

The Australian dollar AUD= rose 0.5 percent to $0.7782, having earlier hit its strongest since June at $0.7803. The Canadian dollar CAD= hit its highest since July.

The U.S. dollar edged 0.1 percent lower against a basket of currencies .DXY. The euroEUR= was up 0.1 percent to $1.1328 but the safe-haven yen, which last week hit 17-month highs around 107.61 per dollar, fell 0.3 percent to 109.14.

Assurances from Fed Chair Janet Yellen that the central bank would be cautious in raising rates have held the dollar in check lately. The Fed meets next week and while no move is expected, investors will be on the look-out for signs of a hike in June.

European Central Bank policymakers meet on Thursday.

Government bond yields rose with stocks. In the euro zone, Italian yields rose before a hefty auction and Spanish 10-year yields ES10YT=TWEB rose 3 basis points to 1.53 percent after political parties' latest failure to form a government since an inconclusive election in December.

"It looks like the (Italy) announcement came as a surprise ... and now the market is preparing for that supply," Mizuho strategist Peter Chatwell said. "We've also got all of these political factors building up ... and the sentiment is going to be towards spreads widening from here."

Copper prices CMCU3, which have benefited from signs of economic recovery in China in recent weeks, dipped 0.4 percent to $4,809 a tonne.

Gold XAU= rose as the dollar weakened. It last traded at around $1,242 an ounce.

Article Link to Reuters:

Oil rises as Kuwaiti oil workers strike cuts output for third day

By Karolin Schaps
April 19, 2016

Oil prices rose on Tuesday as an oil workers strike in Kuwait nearly halved crude production from the OPEC member, overshadowing bearish sentiment following Sunday's failure by oil producers to agree to freeze output levels.

Thousands of Kuwaiti oil workers downed tools for a third day on Tuesday to protest against planned public sector pay reform, cutting crude output to 1.5 million barrels per day (bpd), according to an oil spokesman cited by news agency KUNA.

That is little more than half of Kuwait's average output of 2.8 million bpd in March.

"The Kuwaiti strike is supporting prices," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.

Brent crude futures, the global benchmark, traded at $43.31 a barrel at 0828 GMT, 40 cents above Monday's close. U.S. crude futures were up 33 cents at $40.11 a barrel.

However, analysts said Kuwait's disruption would likely be brief and that investors would soon again focus on the market's oversupply given the failure of major exporters on Sunday to agree to freeze output to avoid worsening the glut.

"In the coming days oil production is likely to partially recover from its initial drop as non-striking staff is redistributed and inventories drawn upon, avoiding a force majeure on loadings," policy risk consultancy Eurasia Group said.

A deal to freeze oil output by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia demanded that Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices.

After failed negotiations, exporters have shifted attention back to their own interests.

Russia's Deputy Energy Minister Kirill Molodtsov said on Tuesday the country was considering raising oil production this year, possibly targeting a level of 540 million tonnes of crude. Russia produced 534 million tonnes of oil last year.

OPEC member Venezuela said it hoped to raise oil exports this year to 2.3 million bpd.

Additional barrels threaten to boost a global supply glut that has brought prices to multi-year lows as 1-2 million barrels of crude are pumped every day in excess of demand.

Article Link to Reuters:

Trump’s Success In New York Is Unlikely To Be Repeated Elsewhere

By Michael Barone 
The National Review
April 19, 2016

Noo Yawk. That’s the state with this week’s presidential primary, in which candidates who have spent time in New York recently are currently running ahead, according to polls.

Hillary Clinton, who as a resident of Chappaqua in suburban Westchester County was elected the state’s junior senator in 2000 and 2006, leads Bernie Sanders, who left his native Brooklyn for Vermont in 1968, 48 years ago. And on the Republican side, Donald Trump, who grew up in Jamaica Estates, Queens, and lives in a pseudonymous Manhattan skyscraper, has a “yuuge” lead over John Kasich, native of McKees Rocks, Penn, and Ted Cruz, who grew up and lives in Houston.

Trump’s lead in his home state is indeed enormous. He hasn’t gotten 50 percent of the vote in any primary or caucus held so far. But he has been getting over 50 percent in every poll of New York Republicans conducted since March 2015, three months before he declared his candidacy. The only state where he has comparable poll numbers is neighboring Connecticut.

In a recent column, I advanced the thesis that Trump tends to run best among voters with little social connectedness — that is, involvement in community activities. But New York, according to Harvard sociologist Robert Putnam, is not a state with particularly low social connectedness; it’s roughly around the national average.

So New York tends to disprove my theory, unless there’s something else involved — which I think there is. Call it New York exceptionalism.

It’s something that goes back to colonial America. In his 1988 book, Albion’s Seed, historian David Hackett Fischer showed how different parts of the British colonies were settled by people from different parts of the British Isles with distinctly different folkways: New England by Calvinists from East Anglia; the Delaware Valley by Quakers and dissenting Protestants from the English Midlands; Virginia by Anglicans from England’s West Country; and the Appalachian chain by Scots-Irish from Northern Ireland and Scotland.

Their folkways have persisted to this day and still are traceable in political choices. New Englanders felt the allure of Barack Obama to which the Scots-Irish were entirely immune. Virginians have been readier than Pennsylvanians to support military actions.

But, as Fischer admits, his four categories don’t include all Americans. African Americans have obviously developed their own folkways. Another exception was New Netherland, now known as New York, which “combined formal toleration, social distance, and inequality in high degree.” He adds, “The peculiar texture of life in New York City today still preserves qualities that existed in seventeenth-century New Amsterdam — and Old Amsterdam as well.”

New York has always believed in commerce and in tolerance but has had little use for principle. Like Amsterdam in the age of Rembrandt, it is the greatest trading and finance system in the world, with a taste for high art and low life. In New York, you are considered “old money” if you have held your fortune for ten minutes.

New York was Loyalist during the Revolutionary War and pro-South in the Civil War. (Mustn’t let principle get in the way of making money.) In the first half of the 20th century, it was the fulcrum point of American politics, a target state in any close election, and split about equally between upstate Protestant Republicans and downstate Catholic Democrats, with key votes cast by Jewish immigrants to the left of both parties on both economic and cultural issues. This gave both parties an incentive to champion liberal policies not just in New York but nationally.

But by the 1960s, New York had become less pivotal. The state was overtaken in population by California (it now ranks fourth, behind Texas and Florida, too), and Jewish New Yorkers were solid Democrats, making New York’s reduced number of electoral votes safely Democratic in any close election. New York is still a major media center, but it doesn’t drive American politics as it did in the days of the two Roosevelts and Nelson Rockefeller.

It’s a city that, like its son Donald Trump, loves winners — winners such as the New York Yankees, hated in much of America but loved in New York. Longtime Yankees owner George Steinbrenner and on-and-off manager Billy Martin may have been brash and boorish, but they were loved in New York. Hey, they were winners.

Trump speaks in the accents and cadences of New York — not of the ancestral rich in Manhattan but of the upward strivers and figure-out-the-angles rich in the outer boroughs and Long Island suburbs. He talks of people “waiting on line” for his rallies — a phrase that may have puzzled most listeners who thought he was referring to computers. That’s New York talk: Sophisticated New Yorkers of my acquaintance are not aware that the phrase in the rest of America is “waiting in line.”

Only 23 percent of New York state voters are registered Republicans, less than half the 49 percent who are registered Democrats. Perhaps this relatively small slice of the total electorate has less social connectedness than the average New Yorker; there’s not enough data to be sure.

An Optimus robocall poll of 14,000 New Yorkers broke down the vote by congressional district. New York awards 14 statewide and 81 congressional-district delegates by winner-take-all if a candidate gets 50 percent in each unit. The results suggest Trump would get 82 of the state’s 95 delegates.

That’s a good haul for Trump, but it’s probably not replicable outside New York, other than in Connecticut and New Jersey. Contrary to the song, if you can make it there, you may not be able to make it anywhere else.

Article Link to the National Review:

Forget ISIS: Al Qaeda Is Back

The stage is set for a reawakening.

The National Interest
April 19, 2016

In Islamic State, the world has encountered the most brutal jihad syndicate it’s ever faced. But brutality has its limits.

The mass graves, the crucifixions, the suffocating tyranny have earned ISIS an unprecedented array of enemies—from the United States, to Sunni powers like Jordan, to Shiite militias, to the Kurds—who together have forced it off 40 percent of its territory in Iraq and 20 percent in Syria. Its ruthlessness has emptied cities: Ramadi lost almost 98 percent of its population by the time it was retaken by the Iraqi army, and half a million people have fled Mosul. Having alienated Sunnis and jeopardized its own territory, the safest bet is that the Islamic State will eventually fade into some dark alcove of history, or at least see its power seriously diminished.

But even if ISIS is rolled back, sophisticated Sunni jihadism won’t be. There’s another terrorist organization that’s making inroads in the Middle East. This enemy is an old one: Al Qaeda.

To understand why the group that bombed the Twin Towers is staging a comeback, you have to examine the schism between Al Qaeda and ISIS. Al Qaeda’s operating procedure—and the reason for much of its success—is its focus on the distant enemy: the “crusaders,” that is, the United States and its Western allies. Attacks on fellow Muslims were downplayed. This has solid backing in Islam itself, from Muhammad’s proscription on killing innocents to both sides’ hesitation to spill Muslim blood before the Battle of the Camel.

Islamic State exercised none of this restraint. Though it wants to draw the Western powers into a ground war, its more immediate concern is cleansing Islam of apostates and arresting the rise of Shiite power. In 2006 ISIS, then Al Qaeda’s franchise in Iraq, bombed the Al-Askari shrine in Samarra, one of Shiite Islam’s holiest sites. The goal was to fan an internecine sectarian war that would lead to the extirpation of the Shias. This became even more transparent in 2012, when the group flat-out declared war on Iraq’s entire Shiite population. Such savagery strained its Al Qaeda membership until it was officially expelled by the central office in 2014. Since then, some of ISIS’s bloodiest attacks have been against Shia in Yemen and Iraq.

ISIS eventually eclipsed Al Qaeda, but it also presented its older cousin with an opportunity. ISIS might be able to splatter gore across the news cycle, but Al Qaeda could win the hearts-and-minds battle, which, as those who cringed through the Iraq War understand, is often more important than the military campaign. It was a strategy that originated at the top. In 2005, Al Qaeda leader Ayman al-Zawahiri wrote a letter to the then head of his Iraq affiliate, Abu Musab al-Zarqawi, arguing that “the strongest weapon which the mujahedeen enjoy—after the help and granting of success by God—is popular support from the Muslim masses.”

“In the absence of this popular support,” Zawahiri continued, “the Islamic mujahed movement would be crushed in the shadows.” Zarqawi rejected this logic, but it continues to inform Al Qaeda’s thinking today. As a result, Al Qaeda has ingratiated itself to local populations, and sought to win over Muslims through charity rather than fear.

This is best demonstrated by Jabhat al-Nusra, Al Qaeda’s affiliate in Syria. When the Syrian Civil War tore open a vacuum, Nusra slithered in, both to fight the Alawite regime and to assist beleaguered locals. It opened Qism al-Ighatha, a “Relief Department” through which it provides services from food convoys to health care clinics and playground games for children. The group also likes to boast about the availability of basic services like water and electricity in areas under its control. “For Nusra,” conclude Daveed Gartenstein-Ross and Phillip Smyth, “public opinion is paramount.”

In Yemen, a Saudi-led coalition has been bombing the Iran-linked Houthis for over a year, shattering civil society and leaving half the country on the precipice of starvation. Enter Al Qaeda in the Arabian Peninsula (AQAP), which has exploited the crisis to expand its territory, including into the key port city of Al Mukalla, where the group stole an estimated $100 million from the central bank. But rather than invest its fortune in terror attacks on Shiite mosques, as ISIS has done, AQAP repaired infrastructure, dug wells, and canceled payroll taxes. “I prefer for Al Qaeda to stay here, not for Al Mukalla to be liberated,” one Yemeni told Reuters. Given his nation’s desperate plight, it’s easy to understand why.

Al Qaeda’s enmity for America hasn’t been lost in its community service. Nusra has coordinated with the Khorasan Group of northwestern Syria, which is believed to be plotting an attack on the United States, and AQAP issued two communiqués just last year calling for more jihad against the West. Whatever the outcomes of Syria’s and Yemen’s wars, the aftermaths could see their respective Al Qaeda franchises emerge as Sunni-flavored Hezbollahs, militias with charitable arms that maintain power by smiling inwards and shaking their fists outwards. Despite a recent backlash against Nusra, both groups are far better positioned than they were five years ago.

As we learned in Iraq, jihadist fighters are tough to root out when they enjoy local Sunni support. And by arming the Al Qaeda–allied rebels in Syria and aiding the Al Qaeda–enabling Saudis in Yemen, we’ve only contributed to our own problem. Once again, America looks down and realizes it’s unloaded an entire armory’s worth of ammunition into its own foot. The inevitable result will be a deadlier Al Qaeda—and what then?

Article Link to the National Interest:

The Underground War Between Israel and Hamas Heats Up

The IDF exposed an attack tunnel dug by Hamas, which reached Israeli territory.

April 19, 2016

Another battle in the “tunnel brain war” being waged in the recent year between Hamas and Israel ended April 18, when Israel removed the gag order from the great drama that had been unfolding on the Gaza Strip border over the last two weeks. During the recent weekend, the entire area was placed under alert. The Palestinians reported heightened activity of the Israel Defense Forces (IDF) along the border of the Strip and an enormous amount of heavy engineering equipment operating in the zone. The IDF concentrated large forces in the region, local residents were ordered to remain alert and rumors spread throughout the length and breadth of the zone, from the Gaza Strip to Israel and back.

On April 18 before noon, the gag order was lifted. News reports were released that the IDF had located, uncovered and neutralized a cross-border Hamas attack tunnel dozen of meters long into Israeli territory in the southern Gaza Strip sector. This was the first tunnel uncovered by Israel since the conclusion of the Protective Edge campaign in the summer of 2014.

Ever since the tunnel was located about two weeks ago, a heavy news blackout was imposed on the entire area. The Israeli media was not allowed to report about it in light of the fact that IDF soldiers had penetrated the tunnel and were working around the clock to neutralize it, including within Palestinian territory. Only after the tunnel was sealed off was the gag order on the story lifted.

This discovery shows the tremendous efforts that Israel is investing in its attempt to solve the tunnel conundrum via innovative Israeli technology. The technology, nicknamed “Iron Dome for tunnels” (in reference to the Iron Dome air defense system), has also been under a severe media ban. In recent months, the Gaza Strip border has been humming with dozens of IDF bulldozers and hundreds of drillers who drilled to a depth of dozens of meters in hundreds of spots the length of the Israel-Gaza Strip border. Israel’s Engineering Corps uses technological tools, and this technological network allows the IDF to pinpoint the location of cross-border attack tunnels that penetrate Israeli territory. Thus far, Israel has invested about 300 million shekels ($80 million) in this technology.

In the current year, quite a number of Hamas tunnels have collapsed while they were being dug. Rumors and urban legends spread throughout the Strip that Israel had developed the ability to blow up tunnels under construction, by “remote control.” All the Israeli spokesmen denied the existence of such a capability, but Defense MinisterMoshe Ya’alon made the following statement after the affair was publicized, “In recent months, Hamas has suffered from the collapse of a number of tunnels, many diggers were killed during their work. And now a tunnel has been detected. Nevertheless, we do not delude ourselves that Hamas will draw the lesson and stop dealing with this [i.e., tunnels] … or tend to the welfare of residents there."

Ya’alon’s broad hint reveals a bit of the brain war being waged between Israel and Hamas since the conclusion of Operation Protective Edge. Mohammed al-Deif, commander of Hamas' military wing, is viewed as the “father of the tunnels.” His supreme strategic goal now is the reconstruction of the tunnel network in order to allow Hamas to strike Israel’s homefront by surprise.

Hamas understands that it is decisively outflanked by the IDF in land, sea and air. The only advantage that Deif succeeded in achieving for his fighters is in the subterranean space, where the IDF is not accustomed to fighting and cannot actualize its superiority. That is the reason Hamas invests all its energies in reconstructing the tunnels. Past experience has shown that the only way to bring Israel to its knees is to abduct an Israeli soldier, a la Gilad Shalit, who was captured in 2006 and released in 2011.

In order to carry out such a kidnapping, Hamas needs a tunnel that will penetrate the Israeli homefront and allow its “Nokhba” fighters, Hamas’ elite unit, to carry out a surprise attack on the IDF and drag one or two live Israeli soldiers into the Strip. Israel, on its side, understands the situation and invests all its energies in attempts to neutralize the tunnel challenge.

Simultaneously, acute political struggles are being waged within Hamas, and also among decision-makers in Israel. Amos Gilad, director of the Political-Military Affairs Bureau at Israel's Defense Ministry, said April 13 that there is a conflict in Gaza between two echelons. “The diplomatic echelon [in Gaza] has seniority and priority over the terror echelon,” Gilad said. “But Mohammed Deif couldn’t care less about diplomatic policy, he does what he feels like and all his people follow him accordingly. … Therefore, there are, in effect, two entities [of Hamas in Gaza]. One works with Iran and one works ‘as if’ diplomatically. It conducts negotiations with Egypt and [also] cooperates with Islamic State."

Gilad’s words reveal only the tip of the iceberg of the struggle taking place in Gaza since the conclusion of Protective Edge, between the various Hamas camps. The bottom line is that Deif, who survived an assassination attempt by the IDF toward the end of the Protective Edge campaign, has declared his independence. He no longer obeys directives of Hamas’ internal political entity — senior Hamas leader Ismail Haniyeh — or the external diplomatic entity in the form of Khaled Meshaal, head of Hamas' political bureau.

Hamas’ military wing, which faces competition from quite a number of Salafist organizations and Islamic State sources for popularity among the Palestinian rank and file, makes its own agenda. “Even though Hamas understands that it cannot allow itself another round of fighting against Israel at the current stage,” a high-ranking Israeli intelligence source told Al-Monitor on the condition of anonymity, “the military wing is capable of anything, including a comprehensive, surprise escalation vis-a-vis Israel and another round [of fighting] even in the foreseeable future.”

Things have been getting even clearer, as Deif now realizes that Israel is on the verge of a technological breakthrough that will neutralize the tunnel threat. He invested all the resources of the organization in tunnel digging and employed hundreds of diggers at a time when Hamas is barely able to pay salaries to its people. “Again, he finds himself with his back to the wall,” an Israeli senior defense source told Al-Monitor on condition of anonymity. He and his colleagues worry that Deif and his deputy, Mohammed Sanwar, are racing toward the Iranians.

Within Israel, one old argument is heating up again. This is the one between Knesset member and head of Yisrael Beitenu Party Avigdor Liberman from the opposition and Education Minister Naftali Bennett from the coalition versus Prime Minister Benjamin Netanyahu, Defense Minister Moshe Ya’alon and the entire military establishment. Immediately after the tunnel discovery was publicized, Bennett said that this constituted an offense on Israel’s sovereignty that justifies any response. And Liberman has been demanding for quite some time that the Hamas regime in Gaza should be brought down and terror should be routed.

For the time being, Netanyahu and Ya’alon’s approach has been winning out, but unrest within the Israeli public continues. The summer of 2016 is approaching, and no one — not in Israel and probably not in Gaza either — wants to return to the summer of 2014.

Article Link to Al-Monitor: