Tuesday, April 26, 2016

Tuesday, April 26, Night Wall Street Roundup: S&P 500 index buoyed by commodity sectors; Apple drags futures lower

By Rodrigo Campos
Reuters
April 26, 2015


The S&P 500 stock index ticked up on Tuesday, buoyed by gains in the energy and materials sectors, even though lackluster economic data weakened the U.S. dollar, thereby giving support to oil and gold prices.

After the closing bell, however, S&P500 futures pared gains and Nasdaq added to losses following a more than 6.0 percent fall in Apple's shares after the company reported earnings below expectations.

Earlier, the U.S. Commerce Department reported U.S. durable goods orders recovered far less than expected in March as demand for cars, computers and appliances slumped, dragging down the U.S. dollar. Consumers also appeared slightly pessimistic on the economy's short-term outlook and sent a measure of confidence lower in April.

The data came as Federal Reserve officials started a two-day policy meeting in Washington, D.C. Policymakers are expected to hold interest rates steady but may be more upbeat on the economic outlook, leaving the path open for future interest rate rises.

"Commodities and oil are up, the dollar trending lower, the things that started this rally are still there but there's a pause on temporary uncertainties," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.

"Technical resistance, weaker data, uncertainty about the Fed, weak earnings numbers are giving people pause."

He said it is encouraging for market bulls that the S&P500 index is holding near the record high it set almost a year ago after a 15 percent rally from the lows in February.

The Dow Jones industrial average rose 13.08 points, or 0.07 percent, to 17,990.32, the S&P 500 gained 3.91 points, or 0.19 percent, to 2,091.7 and the Nasdaq Composite dropped 7.48 points, or 0.15 percent, to 4,888.31.

The S&P 500 has ended little changed since last Thursday, with sector gains and losses hinging on the direction of oil prices each day. The energy sector, up 1.4 percent on Tuesday, posted the session's biggest gains, tracking a 3.3 percent increase in the price of U.S crude oil futures.

Apple shares dropped almost 7.0 percent to $97.31 after the bell as its earnings fell below expectations and its outlook also disappointed. Shares were down 0.7 percent at $104.35 at the end of the regular session.

Twitter shares lost more than 10 percent in late trading after it reported lower-than-expected revenue for the first quarter, hurt by weaker spending by big advertisers.

During the regular session DuPont rose 2.4 percent to $67.55 as the largest gainer on the Dow industrials after it said it is aiming to buy back $2 billion in shares this year.

Dow components 3M and Procter & Gamble were down 1.3 percent and 2.3 percent respectively after reporting declining sales.

Advancing issues outnumbered declining ones on the NYSE by a ratio of 3.4-to-1 and on the Nasdaq a 1.7-to-1 ratio favored advancers.

The S&P 500 posted 18 new 52-week highs and 1 new low; the Nasdaq recorded 60 new highs and 24 new lows.

About 6.5 billion shares changed hands on U.S. exchanges, compared to the 6.9 billion average over the past 20 sessions.


Article Link to Reuters:

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Tuesday, April 26, Morning Pre-Wall Street Rumblings: Futures higher; earnings, data in focus

By Katy Barnato
CNBC
April 26, 2016


U.S. stock-index futures traded higher on Tuesday, amid a busy day for earnings and the start of a Federal Reserve policy meeting.

Companies that posted quarterly results included 3M, Eli Lilly, Fiat Chrysler and Lockheed Martin. Apple will post earnings on Tuesday after Wall Street closes, along with AT&T, eBay and Twitter.

Earlier in the day, oil major BP reported a pretax loss of $865 million for the first quarter of 2016.

The U.S. Federal Open Market Committee (FOMC) will start its two-day meeting on Tuesday. It is not expected to raise interest rates, but may signal the possibility of doing so in June.

"The recent drift higher in 10-year Treasury yields (to 1.9 percent) and in breakeven rates (to 1.66 percent) just might prompt a marginally less dovish message than in March; a possibility which will probably give markets a slightly risk-off sense today," Kit Juckes, a strategist at Societe Generale, said in a note on Tuesday.

In economic news, durable goods orders rose a less-than-expected 0.8 percent in March after a downwardly revised 3.1 percent decline in February.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, were unchanged after a downwardly revised 2.7 percent decline in the prior month. These so-called core capital goods orders were previously reported to have decreased 2.5 percent in February, Reuters said.

Other data scheduled for release include the Case-Shiller 20-city index and the consumer confidence index for April.

Crude futures rose on Tuesday, helped by the weaker dollar.

Saudi Arabia, OPEC's de facto leader, announced a plan on Monday to diversify its economy away from oil production.


Article Link to CNBC:

Today's Stock In Play is AK Steel (Symbol #AKS)

Curt Schilling the Science Guy

From climate change to restrooms, Democrats are increasingly the anti-science party.


By William McGurn
The Wall Street Journal
April 26, 2016


Let us stipulate that ESPN, as a private institution, was entirely within its rights to have sacked Curt Schilling for his combative Facebook post on the continuing national saga that is North Carolina restrooms. Let’s stipulate too that the way the former Red Sox pitcher advanced his case—sharing a meme featuring a grotesque fat man in a blonde wig pretending to be a woman—was not the line of argument that, say, William F. Buckley would have chosen.

But let us also note the irony. Mr. Schilling’s main contention—“a man is a man no matter what they call themselves”—is supported by DNA and those pesky X and Y chromosomes. In short, in this fight between science and authority, Mr. Schilling is in the amusing position of being the Galileo, with ESPN filling in for the Holy Office.

Paul McHugh, former psychiatrist in chief for Johns Hopkins Hospital, puts it this way: “Curt Schilling is of course correct with the science in saying that claiming to be a woman when you have the chromosomal and anatomical structures of a man does not make you such. You’re still a man no matter what you think or how you dress.”

It’s an interesting detail that has gone largely unaddressed since Mr. Schilling delivered his knuckleball. Nor is it hard to see why. For it contradicts the dominant narrative in which Democrats take their positions from a clear-eyed look at the science while Republicans are blinded by their religious, social and economic orthodoxies.

This was the trope Barack Obama invoked in his maiden inaugural address, when he promised to “restore science to its rightful place.” Well, the American people have now had almost eight years of it. Turns out that restoring-science-to-its-rightful-place comes with its own set of dogmas and orthodoxies.

It’s not just letting men into women’s restrooms, either. On a host of issues, upholding the progressive catechism these days apparently requires seeking out and punishing heretics too.

Start with climate change. It may well be, as Barack Obama declared in Paris in December, when he committed the U.S. to the global war on temperature, that “99.5 percent of scientists and experts” believe man-made climate change a fact and that “we have to do something about it.” His eventual presidential successor, he suggested, must never question this consensus.

Is there anything more inimical to the spirit of science than the idea of squelching further inquiry, freezing our existing understanding in place and silencing opposition? Because this is precisely what such phrases as “settled science” or “scientific consensus” are designed to do.

Indeed, in this climate (pun intended), we now have moves to criminalize scientific dissent. Only last month, a collection of state attorneys general met with activists to discuss ways to go after Exxon for its alleged heterodoxy on global warming.

Which hints at the real game, which is less about the earth’s warming than the hope that green enthusiasms can be used to push through a progressive economic and regulatory agenda with few questions asked. As Ottmar Edenhofer, the then co-chairman of Working Group III of the U.N.’s Intergovernmental Panel on Climate Change, put it a few years back: “We redistribute de facto the world’s wealth by climate policy.”

Or take abortion. In progressive dogma, the right to abort a fetus is not only settled science but settled law, which means you’re not only not allowed to question it, you must not stray from the approved vocabulary.

For example, if a couple is happy about a pregnancy, the two are perfectly free to share sonograms with friends and relatives and celebrate the pending arrival of their unborn child. But if this child is to be aborted, any talk of “person” or “child” becomes verboten, lest folks get too accurate an idea of what is happening.

Alas, even the truest believers slip up. So it was earlier this month on NBC’s “Meet the Press” when Hillary Clinton—who has in this election dumped the word “rare” from the earlier “safe, legal, and rare” Clinton formula on abortion—referred to the “unborn person” as having no constitutional rights.

Pro-lifers condemned her, as expected. As perhaps unexpected, she was also attacked by her pro-choice allies for uttering the words “unborn person.” Whatever position one takes on abortion, to say that the fetus is a person if the mother wants it and it’s not if she doesn’t is not science. It’s spin.

Each election season, the American people are treated to Republican candidates who fumble badly when challenged on, say, evolution or abortion. Fair enough. But the president and his allies also have orthodoxies that limit their openness to free inquiry and objective reality. The difference is these go largely unchallenged outside the conservative press.

Wouldn’t it be entertaining if someone would ask President Obama if Curt Schilling is right or wrong about the science?


Article Link to the Wall Street Journal:

Is Marco Rubio the key to Donald Trump’s demise?

By Carl Campanile
The New York Post
April 26, 2016


Donald Trump could face a stiffer challenge securing 1,237 delegates to win the GOP presidential nomination and avoid a brokered convention because forces close to Marco Rubio are involved in the Ted CruzJohn Kasich alliance to block his path, sources said Monday.

“Little Marco ain’t so little anymore,” one Rubio insider told The Post, referring to Trump’s derisive nickname for the Florida senator.

When he was still in the race, Rubio collected 171 delegates — which he can now withhold from Trump at the GOP convention.

A GOP strategist who backed Rubio was involved in talks that led to the alliance between Cruz and Kasich to derail Trump, the source said.

Kasich has agreed not to campaign in the May 3 Indiana primary to give Cruz a better chance. In return, Cruz is sitting out primaries in New Mexico and Oregon.

“It’s now going to be a more interesting fight. Cruz still has a shot to win if he can deny Trump triumphs in Indiana, Nebraska, Oregon and New Mexico,” said political analyst Dick Morris.

Pro-Cruz and anti-Trump super PACs, including the Club for Growth, are spending at least $2 million combined in ads in Indiana, which has 57 delegates. The winner of the primary gets 30 delegates, with the rest allocated by congressional district.

“It is very significant Kasich is pulling out of Indiana,” Cruz said on “The Laura Ingraham Show” Monday.

But others, including Trump, said the gambit is politics at its worst.

“How do you nominate a guy who lost [to me] by 4 to 5 million votes? We’re gong to pick a guy who got creamed? . . . You would have a revolt,” Trump said while stumping at West Chester University in Pennsylvania.

“Collusion is often illegal in many other industries and yet these two Washington insiders have had to revert to collusion in order to stay alive,” Trump added in a statement.

Pennsylvania GOP chairman Rob Gleason called the Cruz-Kasich alliance a “weak move” that was “too little, too late.”

“It’s going to be Hillary vs. Trump in the general election. That’s what the people want,” Gleason said.


Article Link to the New York Post:

What to Watch for at the Fed Meeting

By Mohamed A. El-Erian
The Bloomberg View
April 26, 2016


Here are three things to know about Wednesday's meeting of the Federal Open Market Committee, the Federal Reserve's closely watched policy-making body.

1. Fed officials are likely to set the stage for a possible interest rate hike at their next meeting, in June. They mainly will be motivated by three factors: a further strengthening in labor market conditions that also improves the outlook for wage growth; the recent significant easing in financial conditions, including easier access to borrowing for corporate and mortgage financing; and, more generally, the central bank's eagerness to continue the process of careful monetary-policy normalization after so many years of experimentation.

Nonetheless, the Fed will not close off any policy options at this point. Officials will make clear that their decisions, including whether to raise rates in June, remain "data dependent." As a result, they will signal that a June hike is not a certainty, but only has evolved from less likely to more likely.

2. Such a conditional policy stance on the part of the Fed is less dependent on the domestic context than it is on events in the rest of the world -- such as economic slowing, as well as non-economic uncertainties, including the U.K. referendum on exiting from the European Union scheduled for June 23. The "old" Fed -- an institution that was both more domestically oriented and willing to lead markets -- would decide to raise rates at this meeting. In fact, some officials (but not the majority) might already be amenable to doing so on Wednesday.

But high international uncertainty and some excessive valuations mean the Fed is reluctant to surprise markets -- especially with memories of the market disruptions in January and early February still fresh.

3. Although the Fed will draw the attention of market participants, the most interesting event this week may be the Bank of Japan's meeting on Thursday. That central bank faces an extremely tricky policy decision, amplified by downward pressures on inflationary expectations and the recent appreciation of the currency. Both accentuate the threat of a deepening deflationary trap. Yet, judging from the responses to the bank's previous dramatic policy actions -- including a surprise reduction to negative nominal rates --- it seems to be the monetary institution that has moved closest to the danger point where its policy intervention is not just becoming ineffective but even counter-productive. As a result, its actions will be closely watched by others, particularly the European Central Bank, whose officials are correctly concerned about heading down a similar road when expanding their unconventional policies.


Article Link to the Bloomberg View:

U.S. Fears New Missile Race in Syria Would Help ISIS

Rebels may turn to the black market for weapons that could take out Syrian, Russian, American aircraft—then there would be no stopping who gets them or what gets shot out of the sky.


By Shane Harris and Nancy A. Youssef
The Daily Beast
April 25, 2016


With an already tenuous ceasefire in Syria on the brink of collapse, U.S. officials are concerned that rebel groups could make a new push to acquire shoulder-fired missiles, which could then fall into the hands of ISIS and threaten U.S. and coalition aircraft.

The lightweight missiles, which are easy to use and transport, also could cross Syria’s borders and threaten civilian aircraft in Jordan and in Egypt, where ISIS is expanding its presence, three officials said. ISIS claimed responsibility for the downing of a Russian jetliner over the Sinai last November. While U.S. intelligence agencies concluded that the group had brought down the plane with a crude bomb, the attack demonstrated ISIS interest in targeting civilian aviation.

The missiles, known as man-portable air-defense systems, or MANPADs, have introduced an unpredictable and hard-to-defend element to the battlefield. U.S. officials have long resisted arming the rebels with MANPADs, fearing they’ll be obtained by Islamic militants in a country where the U.S. has little ability to control the flow of weapons.

The CIA believes rebels have obtained a small number of MANPADs, but some fear the prospect of Russian resurrecting its air campaign against Assad’s opponents will push desperate rebels to look for MANPADs anywhere they can find them—including the black market.

“There is definitively concern about it,” one defense official told The Daily Beast of the ISIS potential to acquire the weapons, either from Syrian regime stockpiles or rebel groups that have been weakened by Russian airstrikes. “If they were to be introduced, there is a real worry that ISIS would target the coalition and eventually target civilian aircraft.”

Gulf countries, led by Saudi Arabia, have pushed for giving more MANPADs to the rebels, arguing that they would reduce the efficacy of not only the Syrian and Russian air forces. In general, the Russians have targeted rebel forces trying to overthrow Syrian President Bashar Al-Assad, rather than focusing their fire on ISIS.

Calls to further arm the rebels quieted once the cessation of hostilities took effect two weeks ago and Russian airstrikes against rebel forces decreased. Now, with the ceasefire collapsing, U.S. officials said they’re concerned rebels will try to acquire more MANPADs through the black market. Or worse, coalition partners in the Gulf could try to help arm the rebels, fraying tensions between the U.S. and its allies in the region.

“Either the coalition or the rebels could get frustrated and reach out to other channels,” a second defense official explained.

Officials have long been concerned about the proliferation of the weapons in Syria.

“The place is awash in MANPADs,” Director of National Intelligence James Clapper told reporters in Washington on Monday. Clapper said that an “active procurement network,” as well as a “black market” were responsible for many of the weapons that have ended up in the country.

“Syria is indeed a hotbed of illicit MANPADS activity and has been for several years now,” Matt Schroeder, a senior researcher with the Small Arms Survey, which tracks the movement and use of the weapons, told The Daily Beast. “We have identified eight different models of MANPADs in Syria since 2012, including recent-generation systems not previously seen outside of government control. Some of these MANPADS are significantly more capable than the missiles most commonly found on the black market.”

Most of the weapons in Syria are of Russian, Chinese, or Soviet design, the group reports.

Schroeder said current evidence shows that armed groups are getting the weapons from domestic sources, including looted Syrian government depots, as well as from external sources.Determining precisely where the MANPADs have come from has been difficult, though, because rebels or others along the supply chain have painted over markings on the launch tubes, which is what researchers use to trace the illicit weapons, Schroeder said.

“The danger that some of the MANPADS currently in Syria could end up in other countries is very real,” Schroeder said. “Most MANPADS are about five feet long and weigh less than 50 pounds—small enough to fit in a small boat, the bed of a pick-up truck, or even the backseat of a car. Preventing their movement across borders in a place like Syria is nearly impossible.”

As of 2011, the U.S. government had identified 40 civilian aircraft struck by MANPADs, causing 28 crashed and more than 800 deaths, according to the Small Arms Survey.

So far, U.S. officials believe only a handful of MANPADs have been used in Syria. The Small Arms Survey says there are more than 1 million of the systems have been produced since the late 1960s, by manufacturers in more than two dozen countries.

“Video footage featuring stockpiles of multiple launch tubes reveals that anti-government forces have acquired at least dozens of MANPADS, but existing data sources do not permit extrapolation beyond this rough minimum estimate,” the group said in a 2014 report.

But even the relatively small number used in Syria have had a significant effect. In the last month alone, Syrian opposition forces have brought down two Syrian warplanes, in attacks that the Syrian army blamed on MANPADs.

The Syrian government air campaign, while deadly, has been smaller than Russia’s and used mostly helicopters and cluster bombs. But in the early years of the war, the rebels were able to bring down Syrian aircraft, even if just occasionally, which gave a huge morale boost to the forces fighting Assad.

The most commonly used MANPAD in Syria is the Chinese-developed FN-6, which first appeared in the country in 2013 when a Syrian Air Force M-18 was shot down near Aleppo. The Free Syrian Army also has used the FN-6 to bring down regime helicopters.


Article Link to the Daily Beast:

America Is Now A Liberal Nation

Most of us agree that the game is rigged— and about what needs to happen to make it fair again.


By Michael Tomasky
The Daily Beast
April 26, 2016


I keep hearing Joe Scarborough go off on how the great unwritten story of this election season is how far left the Democratic Party has moved—a drum he’s been beating for months now. The idea, I suppose, is that this will be the Democratic Achilles Heel this fall; that the whole topic is one huge Drudge siren that no one has bothered to look or listen for because everyone is so fixated on the Republican chaos.

Nonsense. To the extent that the Democratic Party has moved left, it’s mostly as a consequence of following, not leading, public opinion. So if the Democratic Party is left wing, then the American people are too.

Let’s start with some of Bernie Sanders’s positions. Sanders is in all likelihood not going to be the nominee, but a reasonably high percentage of rank-and-file Democrats support him (although not that high—remember that much of his support is from independents). So what are the main things he’s saying?

1. That the system is rigged in favor of the 1 percent. That’s not left wing, that’s just a statement of the obvious. Everyone agrees with that; not least the 1 percent themselves, who are investing billions of dollars in this election in the hope that things stay that way. Anyway, for those who need such things, here’s a poll result from this month. Is the system rigged? Saying yes, 85 percent. Saying no, 4 percent. Supporting the GOP position that the 1 percent needs more tax breaks so they can trickle it down to the rest of us? Well, they didn’t even ask that one.

2. That Citizens United is corrupt and should be overturned. Here, the Sanders position (really the Democratic Party position, since virtually the whole party holds it) doesn’t fare as well. I mean, only 78 percent of America thinks Citizens United was a bad decision; 17 percent take the Republican view that it was well decided.

3. That the minimum wage should be $15 an hour. Here’s one poll of many showing high support for that—63 percent. Also, 82 percent support indexing it to inflation. The Republican position that any increase is a job killer isn’t even asked, but based on those who “strongly” oppose an increase, it would seem to be a view held by around 10 percent of Americans.

4. Free college tuition. This one’s tighter, but even here, a poll last year showed people supporting it by 46-41 percent. That same poll showed more generally that people agreed with the idea, much more broadly reflective of the position of the Democratic Party, that no one should have to go into debt to attend a public university, by 62 to 29 percent. Radicals!

5. Free health care. This does less well, but still wins a plurality of 39-33, with the rest undecided.

Again, Bernie Sanders isn’t a Democrat, the Democratic Party isn’t going to be nominating him. But I use his positions because generally speaking they’re to the left of Hillary Clinton’s, and large majorities and pluralities support even them. Levels of support for Clinton’s versions of the above policies run higher. For example, she gets attacked from the left for saying the minimum wage could be $12 in rural and less expensive areas. Well, fully 75 percent support that, 12 points higher than the 63 percent who back a $15 minimum.

What about some of Clinton’s signature proposals? Paid family leave, is that radical? If so,185 countries are left wing. Chad—Chad—gives mothers 14 weeks, paid at 100 percent! As for the polls, 79 percent of America is irresponsibly left wing on this question.

I could go on and on. I don’t want to turn the whole column into the March of the Poll Numbers. But okay, here’s one more. Marijuana legalization—maybe that’s radical? I mean, after all, it’s drugs. Nope, sorry; 58 percent support legalizing pot. The story is the same on same-sex marriage, contraceptive rights, and a whole bushelful of things.

Here’s what I’m getting at: The Democrats’ new positions look radical if you can only look at the world through a Beltway-specific, and indeed Capitol Hill-specific, lens.

Because if Congress is what you see when you see America, then you see a place where roughly half—no, more than half—of the people think that raising the minimum wage is radical, or that health care is a privilege you have to earn, or that climate change is a fantasy (or a Chinese conspiracy, as Donald Trump has been telling it), or that everyone up to and including school teachers ought to carry loaded guns.

Out in the real country, only crackpots think these things. As I’ve shown above, 70 percent of Americans agree with these non-left-wing, common sense positions. But the crackpot community is dramatically overrepresented in Washington and skews the way all these things are discussed and described on shows like Morning Joe.

So no, these positions aren’t radical. Or come to think of it, if they are, then it is because the American middle class has been somewhat radicalized. After the meltdown and the good-but-not-good-enough recovery, the people in the middle, making from $35,000 to $70,000 or thereabouts, said “we’ve had it.” They’ve spent 35 years treading water, watching the rich have a party while listening to politicians tell them that the money for their needs just wasn’t there. They’re sick of it. There’s a lot about Sanders I’m not crazy about, but it’s obvious why he’s struck such a nerve.

And this fall, Clinton can’t succumb to this “radical Democratic Party” frame for a second. It’s not radical to tell the 1 percent the party’s over. It’s radical—in the other, malevolent direction—not to.


Article Link to the Daily Beast:

Trump and the First Stone

There are many reasons to oppose Trump. But those aren’t the reasons being cited.


By Victor Davis Hanson 
The National Review
April 26, 2016


Count the reasons to oppose Donald Trump’s candidacy for the Republican nomination for president. His conservative credentials are thin, recent, and often haphazard. His brash style will likely alienate more voters than it will attract. What he calls being “direct” translates as gratuitously mean-spirited, rude, and even cruel. His knowledge of the issues, at least in traditional terms or compared with that of his Republican rivals, varies from spotty to nonexistent. And Trump often, like Hillary Clinton (e.g., dodging bullets in the Balkans) or Barack Obama (cf. themythoi of his “memoir”), seems to make up details about his long business career.

All that said, there are two strains of opposition to Trump that seem incoherent. First is the suggestion that the majority of his supporters, the “Trumpsters,” are deluded — the naïve fooled by a buffoon. The second is the suggestion that the Trump candidacy marks a new low in American politics, in terms of decency and competence.

Let us quickly dispense with the second writ. Trump is a reflection of, not a catalyst for, a dishonest age. To illustrate my point, take a few of our contemporary public figures who are running for office on their assumed superior character and ethics. There is no need to dwell on the inveterate dissembler Hillary Clinton, with her labyrinth of e-mail, Benghazi, Clinton Foundation, and Wall Street speaking-fees deceit. Bernie Sanders, the archetypal socialist, calls for the wealthy to pay exorbitant income-tax rates. Yet Sanders himself paid an effective rate of about 13 percent, after taking thousands of dollars of itemized deductions, including a mortgage-interest deduction on a second home — all legal, and all just the sort of self-interested tax planning routinely embraced by Americans in the upper brackets, whose resulting reduced taxes the socialist Sanders is on record as abhorring. In recent interviews, the supposedly cerebral Sanders proved himself a veritable dunce, clueless about the U.S. banking system, current U.S. financial statutes, and the basics of how the U.S. criminal- and civil-justice systems work. I suppose if he were Trump, Sanders would argue that he was too busy making “huge” profits to sweat such details, but what is Sanders’s excuse for being so ill-informed? That he was too occupied as a U.S. senator to learn anything about the nation’s banking and legal systems?

Would Trump mar the protocols of the White House? Perhaps. But that is another horse that long ago left the barn. Barack Obama has recently invited a number of rap artists, with long pedigrees of extremist and racialist rhetoric, to the White House. One, Kendrick Lamar (said to be Obama’s “favorite rapper”), has a current album whose cover shows a number of African-American males on the White House lawn, boozing, holding wads of cash, and celebrating, while the body of a dead white judge — black crosses mutilating his eyes — lies before them. Deep, profound, heavy symbolism? Switch the ancestries of the album’s corpse and its celebrants, and the Southern Poverty Law Center would be all over it.

The other White House guest rapper, Rick Ross — does life really replicate album covers? — had his ankle-bracelet alarm go off following a presidential chat. A judge had it clapped on Ross’s ankle because he is currently on bail facing charges of kidnapping, aggravated assault, and aggravated battery (how does one get through the White House metal detector with a court-imposed ankle bracelet on — did someone pass him through with a wave of the hand?). Obama has praised Beyoncé as a role model for his own daughters. The singer’s just-released video shows her destroying cars with a baseball bat as she promises to exact revenge on rivals, or, more specifically, “I’m gonna f— me up a bitch.”

We could, of course, beat another presidential dead horse in Bill Clinton, a figure who makes Petronius’s Trimalchio appear staid and well-mannered. Is there a chance that a President Donald Trump would hire an intern and engage in oral intercourse with her in the Oval Office bathroom, after enduring a long string of complaints from a variety of women that he had variously grabbed their breasts in a White House hallway, pulled out his phallus in an Arkansas hotel room, and sexually assaulted a nursing-home operator? In Clinton’s case, this was all contextualized by his feminist wife — and current likely Democratic nominee — who now supports recalibrating sexual-assault laws on the premise that the allegations of female accusers “deserved to be believed.” I doubt that even the most imaginative writer on The Apprentice could top that. By “that,” I mean behavior that was once at least tsk-tsked by the Washington elite establishment, and that would easily get a teacher fired in Fresno or a fork-lift driver sent home in Akron.

But these are merely distractions in the age of the new normal, in which a president has ignored the Constitution, rendered immigration law null and void, doubled the U.S. debt, crashed U.S. foreign policy, and left us facing Armageddon from Iraq to the nation’s health care.

The moral corruption of our elites predated and transcends Donald Trump, and is second nature to many of his likely critics. Take one example from our premier legal institution, Harvard Law School, steward of America’s jurisprudence. Recently at a Law School panel on the Middle East, a young Harvard law student, Husam El-Qoulaq, asked visiting Israeli dignitary Tzipi Livni, a former foreign minister and a center-left representative in the Israeli Knesset, a simple question: “OK, my question is for Tzipi Livni. Um, how is it that you are so smelly?”

Aside from the anti-Semitic pedigree of the slur about “smelly” Jews and the crassness of the question, what was the reaction of Harvard Law School? It refused to release the name of the questioner, and in Orwellian fashion edited his question out of a video altogether (in the same manner that the White House initially edited out from its official video French president Hollande’s reference to “Islamic terrorism”). El-Qoulaq so far faces no disciplinary action, and thus apparently is emblematic of the values of Harvard Law School. But were he Jewish and were the visiting dignitary a Palestinian, he would have been expelled or become persona non grata on campus.

Harvard Law School and its aptly named Dean Minow are just coming off another “teachable moment,” in which it is likely that the supposedly racist defacing of the photos of African-American law professors was not the work of white racists at all, but yet another campus example of supposed anti-racists seeking to concoct micro-aggressions to justify their own advocacy existence — again, to the silence of Dean Minow. But it’s not just Harvard. Few administrators at Duke, Yale, the Clinton Foundation, or the United Nations Intergovernmental Panel on Climate Change would have the requisite moral fides to accuse Trump of either lying or corruption.

Back to the first charge. In fact, Trump’s supporters are not nativists, xenophobes, and veritable nihilists. They represent instead a mass revolt against insanity of the sort that we have grown accustomed to assume is normal.

Consider that almost half of all traffic accidents in Los Angeles these days are hit-and-run. Has Jeb Bush or John Kasich or, for that matter, Jorge Ramos been hit by a driver who left the scene of an accident, and who was without car registration or insurance? I have twice — and on four occasions I have had a driver veer off the road onto my property, destroy numerous grape vines, ditch his wrecked auto, and flee. The government response was not to help track down the fleeing criminal in order to allow compensation. Instead, on one of those occasions, an officer warned me that if I were to tow the abandoned car away for salvage fees to set against the damage I would be arrested. The tragic and needless death of Kate Steinle is, for those at ground zero of illegal immigration, a “There but for the grace of God go I” moment that thousands share.

Who is the more ethically bankrupt: those who in Confederate, John Calhoun style promote sanctuary-city nullification of federal laws — as in San Francisco’s refusal to turn the seven-time felon and five-time deported murderer of Kate Steinle over to the immigration authorities — or those “radicals” who simply wish to enforce existing federal law? And who are the insurrectionists: those who call for federal law to be honored, or the members of the Obama administration who, in emulation of South Carolinians circa 1861, insist that local communities and federal officials can ignore federal laws as they see fit?

What the elites now consider normal and standard seems, to a growing minority of Americans, aberrant and unhinged — and they are looking for a remedy, even if it is mostly rhetorical and chimerical.

Members of the so-called establishment do not fear receiving a memo announcing that an immigrant technician on a work visa will be taking their place or that their jobs will be outsourced overseas. For that matter, I don’t expect that my employer, the Hoover Institution, will move to Mexico to cut costs, or that National Review will hire a foreign national to write this column for 40 percent of what it currently pays.

When the son or daughter of someone in New York or Washington who despises the symbolism of the Trump candidacy does not quite top out on the SAT, or does not make it to Ghana for his or her cultural-diversity summer internship, or does not earn a prep school’s full recommendation, and so does not get into Yale or Princeton, does the parent happen to know a powerful public figure, an Ivy League insider, or a rich donor who might wish to call and put in a good word for an underappreciated but talented white male? If so, then that parent is navigating around affirmative action rather than upholding it. Meanwhile, the 18-year-old son of a truck driver in Grand Rapids, of the wrong sex and color, is out of luck. I can attest to that from teaching thousands of students for 21 years in the California State University system. An Ivy League grandee once called me about potential graduate students and noted, “You have great minority applicants — any more of them?” When I said, “And equally good white males too,” He said, “Oh.” And that was that.

These are just a few of the goads that drive legitimately angry voters to prefer Trump to the far more sober and judicious Cruz, who would more likely translate their anger into concrete change.

Trump is certainly not the answer for our mess, but he is not the cause of it either. His supporters are not saints, but they embrace the argument that elites promote policies in the abstract whose negative consequences in the concrete always fall on someone else less wealthy and well-connected. Their anger at those hypocrisies deserves to be heard with respect. For the most part, they are supporting a candidate who, by the standards of a debased age, is no more disingenuous or disreputable than he who currently sits in the White House or she who will likely sit there in 2017.


Article Link to the National Review:

Time to Get Serious about Puerto Rico

By Evan Berquist 
The National Review
April 26, 2016


On May 1, the pace of Puerto Rico’s financial and humanitarian crisis will pick up considerably, as a $423 million loan payment comes due to creditors. Puerto Rico’s Government Development Bank (GDB) — the island’s main financing vehicle — is expected to default rather than pay. This default will probably send shock waves through the island’s financial system and government and unleash a new wave of litigation against theGDB, as nervous creditors try to recoup their money.

#adThe effects of this default will be severe for Puerto Rico’s citizens and its creditors. The government depends on the GDB and a constant stream of new loans to finance its daily operations. If the GDB is unable to go back to the debt markets, the government will have little choice but to slash essential services such as police, firefighters, and hospitals. An already desperate situation on the island will become that much worse.

Even after the May 1 default, there will be no clear path ahead for the island or its creditors. Because of Puerto Rico’s status as a commonwealth, it does not have the ability to put its municipalities or other debt-issuing entities (of which there are 18) into bankruptcy. Instead, all of the island’s creditors will exercise whatever remedies they have under the terms of their agreements. The unfolding litigation in Puerto Rico’s courts will be nothing less than chaos.

To its credit, under the leadership of Speaker Paul Ryan, Republican members of the Committee on Natural Resources in the House of Representatives have been working diligently to put new legislation in place before the crisis on May 1. It now seems highly unlikely that Congress will pass a law before then. The draft legislation released by the House Committee — H.R. 4900, or PROMESA (Puerto Rico Oversight, Management, and Economic Stabilization Act) — has met opposition from diverse groups including Senate Republicans, the White House, members of Congress from both parties, and certain financial institutions.

Some of the opposition to the bill is legitimate. For example, as Senator Orrin Hatch has argued, the bill must do more to protect the guarantees made to certain senior debtholders. The three most commonly heard objections to the bill are that it amounts to a “bailout,” that it is an unacceptable intrusion on Puerto Rico’s sovereignty, and that American voters on the mainland have little reason to care about events in Puerto Rico. Each of these is mistaken.

While imperfect, PROMESA largely fulfills what Ryan called Congress’s “constitutional and financial responsibility to bring order to the chaos unfolding in Puerto Rico.” Congress should revise the parts of PROMESA that need fixing but retain much of the bill’s fundamental character. And it must do so quickly, because time is running out.

1. First, this is not a bailout.

Opponents of PROMESA (the acronym means “promise” in Spanish) have attempted to label it a “bailout” of Puerto Rico. This is a dishonest characterization that could hardly be further from the truth. The bill commits zero taxpayer dollars to pay back Puerto Rico’s obligations or its creditors.

What PROMESA will do is establish a new federal oversight board for Puerto Rico, loosely modeled on the board that Congress set up for Washington, D.C., in the 1990s, when that city was financially insolvent. The board’s key powers would be to 1) to impose fiscal discipline and transparency on spending decisions and 2) impose mandatory restructuring plans for Puerto Rico’s $72 billion of debt. Both of these are sorely needed.

As Ryan has argued, this legislation is likely our country’s best hope of avoiding an expensive bailout later on. If Congress does nothing now, and Puerto Rico is plunged into a full-blown crisis, the federal government will have little choice but to intervene. Our government will not stand by and watch as events on the island become much worse. Congress can either act now to bring some order to the chaos, or face a much more costly intervention down the road.

A related objection to these “bailout” concerns has been expressed by conservative lawmakers who worry that the legislation would serve as a precedent for other financially troubled states, such as California or Illinois. This argument ignores the crucial difference between Puerto Rico and U.S. states. States are protected from federal government interference by the Tenth and Eleventh Amendments. Puerto Rico, as a U.S. territory, enjoys no such protections. The federal oversight board applied to Puerto Rico would never pass constitutional muster if applied to a U.S. state.

2. Second, the bill strikes an appropriate balance between the need for oversight and concerns about Puerto Rico’s sovereignty.

Some members of Congress object to the plan because it interferes with Puerto Rico’s ability to govern itself. Congresswoman Nydia Velazquez called the bill “insulting,” saying it treats Puerto Rico as if it is “a colony in the Caribbean.”

Both practically and legally, this position is untenable. The bill has the tentative support of the two highest-ranking elected officials in Puerto Rico’s government: Governor Alejandro Garcia-Padilla and Resident Commissioner Pedro Pierluisi, Puerto Rico’s non-voting member of Congress. Both officials signaled that they generally supported the latest version of PROMESA, after rejecting an earlier draft that took too much power away from San Juan.

More fundamentally, these objections are out of touch with the reality of Puerto Rico’s legal status. For more than 100 years, beginning with the so-called Insular Cases, the Supreme Court has held that the Territory Clause of the U.S. Constitution gives Congress the right to legislate for Puerto Rico. Found in Article IV, Section 3, Clause 2 of the Constitution, the clause provides that “Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.”

In lay terms, this means that Congress has power to govern Puerto Rico as essentially a territorial possession of the U.S., acquired in the Spanish-American War. (The technical word for Puerto Rico’s status is either a “commonwealth” or a “free associated state.”) Although Congress granted citizenship to Puerto Ricans and introduced a modicum of self-government in 1917 and 1953, the ultimate sovereign of Puerto Rico is still the U.S. Congress.

To be sure, this arrangement is both anachronistic and embarrassing. For the U.S. to govern Puerto Rico as essentially another modern-day colony in the year 2016 is almost incredible. But the only real solution to this problem is to redefine the political status of Puerto Rico. This is a long-term process that has vexed policymakers for years. One hopes that Congress takes up that process soon with renewed vigor and urgency. But that task should not deter Congress from addressing the immediate emergency before it.

3. Third, this bill reflects the solidarity and interconnectedness between Puerto Rico and the United States.

Many lawmakers might ask why their constituents should care about what happens in Puerto Rico. Here are just a few of the vital connections binding Puerto Rico and the United States.

The Centers for Disease Control calls Puerto Rico the front lines of the Zika virus in the U.S., estimating that infection levels on the island could hit 80 percent within the year. Puerto Rico’s high poverty rate, tropical climate, and deteriorating public services have all contributed to the virus’s rapid spread. Imagine how much worse the situation could become for both Puerto Rico and the U.S. if the island’s health-care system and economy were to collapse entirely. The U.S. should do all it can to shore up Puerto Rico’s essential services. Anything less would jeopardize the health of our citizens on the mainland and in Puerto Rico.

Fortunately, there are also tremendously positive ties linking Puerto Rico and the U.S. We had a powerful reminder of these earlier this month, when, after decades of being ignored, a regimen of Puerto Rican soldiers known as the Borinqueneers received the Congressional Gold Medal. (The regimen gets its name from “Borinquen,” the pre-Columbian indigenous word for the island.) The Borinqueneers showed incredible bravery and heroics in World War I and World War II and the Korean War, even as they faced brutal discrimination within their own country. We must always remember that Puerto Ricans are our fellow citizens, many of whom have fought and died in American wars, even before they enjoyed full equality.

Finally, it is worth pointing out that many of the holders of Puerto Rican bonds are retail investors like you and me. Because many Puerto Rico bonds have a triple tax advantage under U.S. law (they are subject to no local, state, or federal tax), they have been a favorite of mutual-fund managers for many years. An orderly restructuring would serve the interests not only of opportunistic hedge funds, but also the retirement accounts of thousands of Mom and Pop investors.

What happens in San Juan will not stay in San Juan. The time for Congress to act is now.


Article Link to the National Review:

How to Get Tough with China

America has given Beijing a pass for 45 years. Time to get it right.


The National Interest
April 26, 2016


The United States’ approach to dealing with China from the Nixon-Kissinger era onwards resembles a forty-five-year science experiment—an experiment that has failed.

The underlying hypothesis was that an accommodating approach to the PRC would inevitably lead to a more liberal China that followed the established rules of the international system. It seemed so logical, as it was under that system that China would so handsomely benefit.

After four-plus decades, there is scant evidence this hypothesis is correct. In fact, the PRC’s relentless effort to create what might cheekily be called a “Greater South China Sea Co-Prosperity Sphere” belies any notion this view was ever correct. China’s island-building expansion across the South China Sea is just the latest evidence that most of the “experts” got China wrong.

Fortunately, the South China Sea is now properly getting attention. But the PRC’s objective is, at a minimum, regional hegemony. While the United States must hold the line in the region and make clear it won’t be bullied out of East Asia, the South China Sea problem will not be resolved in the South China Sea itself.

Rather, a successful approach must also involve simultaneously applying pressure elsewhere on the PRC—and particularly on the ruling elite in the Communist Party of China (CPC).

Ultimately, the United States must take the lead and develop a comprehensive strategy, similar in its broad scope to the strategy used to protect U.S. interests when dealing with the Soviet Union. Although it will be useful to involve other countries in this effort, there is no single country or combination of countries in Asia that by themselves can restrain the PRC. Like it or not, it’s up to the Americans, and an effort to hold the line might include the following components.

Establish That the United States Has Its Own Core Interests

Just as China demands respect for its “core interests”—as if stating them as a core interest automatically makes them unassailable—the United States should declare publicly and privately that it possesses its own core interests in Asia, and will defend them.

This requires more than just talk and furrowed-brow pronouncements of concern—or even of “grave concern.” U.S. forces need to maintain a constant, credible, and obvious presence on, below and above the South (and East) China Sea, regardless of cost.

Establish a Permanent, Serious Presence in the South China Sea


There should be no more half-hearted FONOPs broadcast in advance, as if seeking Chinese acquiescence. This sheepish approach has had minimal effect. The United States should broadly publicize and criticize Chinese military provocations. Don’t hush them up, always respond and be prepared to “bump back” when Chinese vessels use a favored method to impede U.S. ships.

Clarify and Strengthen U.S.-Japan Bonds

Solidly link U.S. and Japanese forces, with the “unsplittable” political linkage that comes with it. This linkage will present People’s Liberation Army (PLA) planners with their most difficult challenge. Neither the United States nor Japan can maintain its position in the Asia-Pacific without the other’s fullest support.

The United States and Japan should continue to better integrate their military capabilities, to include contingency planning, joint training and patrols, and interoperable command-and-control systems. Build camaraderie and interoperability along the lines of the U.S.-UK military relationship, back when bilateral relations were at their peak. A compelling reason for Japan to seek this interoperability is that, once China has the South China Sea “locked up,” the East China Sea is next.

Better alignment of U.S. forces and Japan Self-Defense Forces will also have a bracing effect on other regional nations that are nervously watching the PRC—and just as nervously watching whether the U.S. can and will still lead.

Although ASEAN will never take a unified stance toward PRC territorial aggression, it is possible to encourage a handful of ASEAN nations to do more. For those countries, doing more includes joining multilateral patrols and exercises in the South China Sea and surrounding waters. This, of course, requires convincing these nations that they will not be left hanging due to the United States once again displaying temerity and ambiguity about challenging PRC domination of the region.

Kill “Engagement for Engagement’s Sake”

The United States should restrict engagement with the PLA to what is professional and essential. The longstanding policy of engagement for engagement’s sake has not produced a less belligerent Chinese military, nor has it deterred the PRC. More to the point, it makes the United States appear to be a supplicant, clearly the more interested in developing military-to-military relations, and provides Beijing with a point of leverage where one need not exist. Pending sudden improvement in PRC behavior, the United States should withdraw the PRC’s invitation to the July 2016 RIMPAC exercise in Hawaii.

While “holding the line” in the South China Sea area is essential, pressure needs to be applied elsewhere via a number of different lines of effort.

Implement the Taiwan Relations Act as Originally Intended

The United States should make it clear that it backs Taiwan against any coerced change in the status quo. This means the United States should provide requested high-tech arms, and even submarines. The United States might even push Japan to sell its older subs to Taiwan, keying this to Chinese behavior towards both Japan and Taiwan.

This is not a change from the United States’s longstanding “One China” policy. Yes, the United States recognizes only one China—and a “One China” that looks like Taiwan would not be a bad thing. Taiwan is a priceless reminder that Chinese people can govern themselves in a consensual manner, and have a free press, a full range of individual liberties and a functioning legal system.

Taiwan belies the CPC’s claims that stability and prosperity in China requires repression. This argument recalls apartheid-era Afrikaners insisting that black Africans were a unique race that demanded a boot on the neck, and were happy to have it.

Apply Meaningful Economic Pressure

It is long past time that the PRC follow its World Trade Organization commitments. Rather than continue to allow exceptions, the United States should insist on the simple—but apparently radical, by Washington standards—approach that China obey trade laws.

Also, the Americans might require the PRC to allow reciprocal treatment and market access for U.S. and foreign companies. China’s serial, decades-long record of hacking and intellectual property theft needs to be punished with real sanctions. There are many opportunities for punishing sanctions that would be effective.

The U.S. government’s recent harsh sanctions on Chinese electronics maker ZTE, for illegal dealings with Iran and other sanctioned countries, were a good example of what can be done. Still, it might have been more useful if these sanctions had been kept in place longer than two weeks before the United States backed down.

The United States might also apply pressure of the sort that will squeeze China’s ruling class by upsetting the money-making machine, centered on manufacturing and exports, that is the source of its power. Start taking thirty days to clear Chinese ships entering the United States, rightfully justified by the need to check carefully for counterfeits and unsafe products. Delayed cargo clearance and Lloyd’s of London raising insurance rates would potentially apply more pressure on PRC elites than the U.S. Air Force could dream of inflicting.

Use International Law to Challenge the PRC

The United States should energetically seek to bring territorial and other disputes to international forums for resolution—and support countries that do likewise. Further, in these legal forums, condemn and respond forcefully to the environmental damage foisted on the global commons by unbridled Chinese island building and its rapacious commercial fishing fleet.

This is helpful, but will not be decisive. International law has its limits, and the PRC will either ignore it or absorb whatever criticism ensues from unfavorable court rulings. In the PRC’s view, criticism is a small price to pay for gaining domination of the South China Sea and other useful territory.

Get Beyond Sophomoric Strategic Communication: Develop a Useful U.S. Narrative


In the absence of a clear national strategy for confronting the PRC’s bullying behavior and expansionism, it’s no surprise that what passes for U.S. strategic communication regarding the threat is not working. There is no “whole-of-government” communication approach to the threat, and a lack of useful synchronicity in messaging between the National Security Council, State Department and Department of Defense.

On this point, America should take bold action: it can tell the truth about the PRC.

Further, the United States can aggressively and unapologetically speak up for the system of rights, freedoms and accepted rules of international behavior that, in fact, has been largely responsible for the PRC’s development over the last forty years.

From senior U.S. officials down to the wide range of U.S. influencers, constantly challenge and expose false Chinese claims of the South China Sea being “historically Chinese” and transparently false statements of “non-militarization” of the islands. And go after China’s willful ecological destruction of the reefs and natural habitat of the South China Sea.

Exploit existing cultural exchanges and journalist programs to bring in emerging leaders, journalists and other influentials from like-minded nations in the Pacific to examine such topics as the likely future impact of PRC hegemony on the Asia-Pacific region.

These are simply a few strategies and tactics. There is much more that should be done. But the United States must quickly get beyond its often confusing, timorous statements suggesting “grave concern” from State Department spokesmen or other U.S. government officials. The United States must begin to speak firmly, clearly and consistently.

Meanwhile, in the existing vacuum, the Chinese position is heard repeatedly from multiple channels, as if playing on a loop. The PRC’s claims may be nonsense, but if they unchallenged or inconsistently opposed, the relentless claims tend to reinforce the Chinese position and create a sense of inevitability.

Stop Abetting—and Publicize—Corruption by China’s Elite


Public anger over corruption is probably what scares the Communist Party of China’s leadership the most. The CPC has outdone the old pre-1949 KMT in terms of corruption. One may be skeptical of President Xi’s selective efforts to punish corruption—until, perhaps, he arrests a relative. Regardless, the problem is too deep-seated in the nature of the Communist system for Xi to fix.

The United States should stop abetting the illegal capital outflows that constitute one of the biggest thefts in history. CPC efforts to suppress the recent Panama Papers reports that included evidence of leading CPC families’ involvement in secret offshore companies, and its harassment of theNew York Times and Bloomberg several years ago for reporting ruling-class corruption, show how this issue frightens the Chinese leadership.

Expose ruling-class corruption—perhaps starting with the top fifty CPC leaders and their families—and trumpet it repeatedly and widely. The United States is aware of part of the problem, but it can uncover much more with proper effort. Simply requiring Chinese investors in the United States to prove their money was lawfully exported from the PRC would be useful.

For those already here, selectively place liens on real estate and finances. And suspend green cards, until the card holders provide a note from the PRC government verifying and explaining how the money to make their grand purchases was lawfully exported from China. This may resemble “Chicago politics,” but that is sometimes appropriate, and something the current U.S. administration is presumably familiar with.

The PRC routinely claims its actions are just a response to mistreatment (past and present) by foreigners. This is debatable, but CPC corruption is unquestionably a homegrown phenomenon that’s hard to blame on outsiders.

America must develop and implement a comprehensive strategy to stop PRC aggression. Until such a strategy is developed, though, it is imperative that the U.S. begin demonstrating real resolve, and impose meaningful costs on the PRC for its actions.

The point of the recommendations made herein is not to “bully” the People’s Republic of China. Indeed, there is something depressing about all this, as there has never been a country more welcomed and encouraged to become a responsible member of the world community. Nevertheless, it is past time to begin actively deterring the PRC from its increasingly brazen and dangerous actions.

By deterring China, the United States defends its interests and the free world’s interests in respect for the rule of law, and the notion that big nations cannot take by force what they want from little nations.

Conversely, by failing to deter China, America acquiesces to the belligerence of an authoritarian regime whose stated intent is regional domination. This failure will prove devastating for the United States’ friends and allies in Asia, and for America’s future regional and global prospects.


Article Link to the National Interest:

Are Syria's Alawites turning their backs on Assad?

Some Alawite leaders are challenging the intent and legitimacy of a document leaked to Western media, presumably issued by Alawite notables, that proclaims an independent Alawite identity and breaking all ties with the Assad regime.


Al-Monitor
April 26, 2016


Earlier this month, The Telegraph news daily and the BBC website published excerpts from a document they said was prepared by religious Alawite leaders claiming the sect is dissociating itself from the Syrian regime and from President Bashar al-Assad, himself an Alawite. Al-Monitor perused the main text of the document, “The Alawites in Syrian Society: Loud Silence in a Declaration of Identity Reform,” which is thought to have been issued by undisclosed Alawite notables.

The 12-page document consists of an introduction and three chapters: The Alawites, The Alawites and Syria, and The Alawites and God. It is written in Arabic as a religious philosophical abstract, using complicated language including terms referring to advanced modernism concepts.

The document was criticized, especially by opponents of the Syrian regime, for not being signed and dated and for including several grammatical and spelling mistakes, all of which challenges its credibility, they said. Nevertheless, the Western media gave it political dimensions that it did not initially have regarding the Alawite sect’s disassociation from the regime and the Assad family.

According to The Telegraph article, the document “was smuggled out of the country amid extreme secrecy and shown to The Sunday Telegraph and a handful of other European journalists.”

“The authors, acting anonymously out of fear for their security once back in the country, said they had been forced to act because of the extreme danger the sect was now facing," the newspaper said.

BBC News religious affairs correspondent Caroline Wyatt wrote that the authors of the document claim it is supported by 25% of those representing Alawites.

However, Sheikh Ahmad Bilal, an official representative of the clergy of Syrian Alawites and director of the Syrian Institute of Theology, denied in an exclusive statement April 6 to Sputnik News that the document was issued on the part of Alawite clerics. He suggested the document was falsified and part of a “media war on Syria.”

Perhaps what provoked the Alawite supporters of the Syrian regime is what Wyatt reported in her article. “Those behind the document said that they hoped it would ‘liberate’ the Alawite community, who made up around 12% of Syria's pre-war population of 24 million, and that their declaration of identity would cut the link or ‘umbilical cord’ between the Alawites and the Assad regime.”

She also stated, “The Alawites, they pointed out, existed before the Assad regime ‘and will exist after it.’”

Bilal said, “This is completely untrue. We view the state as an institution that embraces all spectra of this people. We see President Bashar al-Assad as a symbol of Arab nationalism.”

However, according to the Telegraph article, the Alawite sheikhs from among the authors of the document said they are not calling on Assad to step down, and some favor him staying.

The article also indicated that the sheikhs said they wanted to "forge a new relationship with Syria's Sunni majority and had reached out to its religious representatives — though they would not identify who.”

Syrian religious researcher Ahmad Adib Ahmad, an Alawite professor at Damascus University, told Al-Monitor, “Any real document must be attributed to a real, known person, not an anonymous one.”

The document indicates that Alawi Islam is not a branch of Shiism but a third model of Islam, within the Irfan order. But Ahmad said, “This information is unfounded because Alawites are Muslims who are truly committed to Islam and who have acknowledged the Wilayat of Imam Ali, the Commander of the Faithful.”

“This document is a farce and does not represent the Alawites who are defenders of Syria and the righteous issues in the country. Our approach is that of the eternal leader [former President] Hafez al-Assad and that of the steadfast leader Bashar al-Assad,” he added. The late Hafez al-Assad was Bashar al-Assad's father.

A US-based academic who specializes in Syrian affairs told Al-Monitor on condition of anonymity, “The document is real, and there are secular elites and Alawite clerics behind it. They confirm the independence of their sect by declaring it with transparency. They are calling for a mutual forgiveness with the Sunnis. They have forgiven the fatwas — issued by Ibn Taymiyyah and his successors [in 1263-1328] in Damascus, which viewed the Alawites as infidels and persecuted them — provided that the Sunnis forgive the Alawite authority’s violence over the past four decades. These Alawites are distinguishing themselves from the regime, without opposing it.”

A Syrian Alawite journalist residing in Latakia told Al-Monitor on condition of anonymity that he does not know who is behind the document and that the signatories’ names were not leaked. He explained that the document does not reflect a particular inclination within the Alawite community. “Due to the repercussions of the war, no one needs to be involved in doctrinal debates,” he said.

“Since the issuers of the document did not reveal their identities, they have no power to determine a sect’s identity," he added. "Yet the document may as well be a dream of a person or a group of persons who intended to leak it to feel the pulse of the Alawite public. The public turned out to be preoccupied and made no reaction to the document, which has only reached the elite.”

On whether the Alawite community feels it is different from Shiites at the religious level or resents being viewed as Shiites, the Syrian journalist said that ties between the Alawites and the Shiites were mended in the 1950s by prominent Alawite religious authority Allamah Suleiman Al-Ahmad. Ahmad made great strides in bringing the two parties closer together, although he could not reconcile all their differences, and so some "contradiction remained and is reflected in the doctrinal and political relations.”

The Syrian journalist added, “If the document aimed to cause a rift between the Syrian regime, Hezbollah and Iran, it would be a naive attempt, since on the ground these parties face a common existential challenge. They are fighting by each other’s side, setting aside their ideological differences. This confirms that the relation between them is purely political and that ideology has nothing to do with it. Otherwise, the ideological differences between the Shiites and Alawites are not less important than the ideological differences between the Shiites and the Sunnis.”

Yet does the document address the Alawite masses, since it is announcing on their behalf an identity reform and declaring them as an independent sect, which has historically been mysterious? Does it call for stopping all manifestations of religious prudence imposed by the historical persecution they had faced, abandoning their inclination to isolate themselves and invoke with exaggeration the affliction they had endured? Does it address the Sunnis, who make up the majority of the Syrian people, and the greater part of the opposition against whom they are fighting a fierce civil war? Does it address the West and the international community sponsoring a political settlement in the Geneva talks?

Indeed, it does not appear to be addressing the Alawite or Sunni masses; otherwise, it would have been drafted in a simple political and religious language. It seems to be addressed to the West in particular, since it was leaked first to two British media outlets and included political concepts that were very liberal and progressive, acknowledges the values ​​of democracy and secularism, confirms the Alawite community’s independence from Shiism and political Islam, and calls for a regime based on the principles of citizenship, equality, freedom and religious tolerance. It rejects Islam as the state religion and source of legislation, instead acknowledging Islam, as well as Christianity, to be a source of values ​​and principles.

What remains to be seen is why this document was issued now, at the moment when the Syrian state is being restructured, amid calls for a federal regime and concerns of division into several small states. Does this document reveal the desire of an elite group to form an independent region, like the Kurds, or to have an independent state, as was the case during the Alawite State between 1920 and 1936?


Cracks in Cruz-Kasich Alliance

By Caitlin Huey-Burns & David Byler
Real Clear Politics
April 26, 2016


No one had more fun with the news of the unusual alliance between Ted Cruz and John Kasich than the Republican front-runner himself, Donald Trump.

During rallies in Rhode Island and Pennsylvania Monday, the businessman used the term “collusion” to describe his rivals’ coordinated effort against him as conspiratorial and scheming. Colluding is illegal in business but allowed in the “rigged system” of politics, he told the crowd. "Actually I was happy, because it shows how weak they are, it shows how pathetic they are," he said.

Trump had a right to be gleeful – this partnership is far from perfect. The Cruz and Kasich campaigns had announced their alliance less than 24 hours earlier, and both candidates were already having trouble coordinating their message and working as a team. That said, the delegate math indicates the alliance may be the only way to keep Trump from securing the nomination.

The strategy so far involves Kasich backing out of Indiana’s winner-take-most primary on May 3 to pave the way for Cruz, and the Texas senator reciprocating in Oregon (May 17) and New Mexico (June 7), where delegates are awarded proportionally. With both candidates mathematically eliminated from clinching the nomination before the party’s July convention, each is staying in the race with the sole purpose of stopping Trump from becoming the standard-bearer.

The deal announced late Sunday night started to show cracks by Monday morning. Kasich declined to direct Indiana voters away from him and toward Cruz. "I've never told them not to vote for me – they ought to vote for me," he told reporters while campaigning in Pennsylvania, which hosts its primary on Tuesday. “But I'm not over there campaigning and spending resources; we have limited resources.”

Kasich scrapped an event in Indiana slated for Tuesday, but is still planning on attending a fundraiser in the state. Their campaign staffs struck the deal; the two candidates have not spoken directly to one another about the strategy and don’t have plans to do so. There is not a binding contract either, of course, so each candidate could step away at his convenience.

Both Kasich and Cruz tried to downplay the politics involved in the decision to form an alliance and were mindful of the appearance of telling voters what to do. “The voters in these states are very smart: they understand what the two campaigns are saying when you explain to them the resource allocation, and that the reason we came to this one-time agreement, which is to get to a convention,” Kasich chief strategist John Weaver told RCP. “The goal here is to ensure Donald Trump doesn’t get anywhere near 1,237.”

For his part, Cruz made it seem as though the plan came about more organically. “John Kasich has decided to pull out of Indiana, to give us a head-to-head contest with Donald Trump,” he said. “It’s good for the country to have a clear and direct choice.”

This development will add to the pressure facing the anti-Trump movement. Both Cruz and Kasich have called each other spoilers in their efforts to peel away delegates. If Kasich leaves Indiana, Cruz will be left without an excuse if he loses there.

The announcement of the alliance seems to suggest Cruz was concerned about his chances in the Hoosier State. Three polls last week found Trump leading the field by an average of six points. Cruz would easily close that gap if he won all of Kasich’s voters. But the math isn’t quite that simple. Some of Kasich’s voters might go to Trump and others might stay home. Also, some Kasich supporters might have already cast their ballots for him – early voting started on April 5.

But perhaps most importantly, if Kasich fails to coordinate effectively with Cruz (for example, if Kasich continues to tell Indiana constituents to vote for him despite saying he’s pulled out of the Indiana primary), it could confuse voters and make strategic voting more difficult. And while this alliance might be designed to more effectively marshal outside resources for both campaigns, the success of the partnership will ultimately hinge on whether enough voters coalesce around Cruz.

Despite all of the hurdles, the alliance is, from a delegate math perspective, probably the right course for anti-Trump forces. If this deal works and Cruz wins in Indiana, Cruz and Kasich will still be on track to keep Trump under the 1,237 bound delegates needed to guarantee nomination on the first ballot in Cleveland.

The math runs something like this: Trump will likely sweep Tuesday’s Northeastern primaries and net roughly 100 delegates. If he gets about two-thirds of the delegates in West Virginia (where the poorly designed ballots could keep his count down); roughly 45 percent of the delegates in proportional New Mexico, Oregon and Washington (which is a bit generous to Trump); and romps in winner-take-all New Jersey, he’ll have somewhere around 1,060 bound delegates.

It's easy to fiddle with this scenario and make it more or less favorable to Trump. But it demonstrates that Trump has three options to get to 1,237: upset Cruz in states where he’s favored, win both Indiana and California, or achieve an unlikely New York-scale delegate sweep in the Golden State. And if Cruz wins Indiana, where 57 delegates are at stake, he’ll knock Trump off track and force him to either attempt to win upsets in unfavorable upcoming states or try for very difficult margins in California.

Cruz would also get a solid delegate haul from winning Indiana – 30 delegates go to the statewide winner, and three go to the winner of each congressional district. Kasich arguably gets the worst end of this deal. Oregon and New Mexico award a total of 52 delegates, and both states are proportional. Kasich’s delegate share will closely track his vote share in Oregon (the same is true in New Mexico if all three candidates get over the 15 percent threshold). But if Cruz wins Indiana, those “winner-take-most” rules will likely give the Texan a disproportionate share of the state’s delegates.

If Cruz loses Indiana, it becomes much more difficult to stop Trump from getting to 1,237. If one adds 51 delegates from Indiana to the roughly 1,060 delegates cited above, it would put Trump somewhere around 1,110 delegates. If Trump were to win about two-thirds of the delegates in California, he would be within spitting distance of the 1,237 mark.

If Trump does win Indiana, it’s still possible to keep him from 1,237. But Cruz, Kasich and the anti-Trump forces would need to run an almost error-free campaign. Cruz would likely need to successfully defend all of the winner-take-all states where he’s favored (including Nebraska, Montana, South Dakota), while making sure Trump doesn’t win in California.

Indiana will likely then be the first – and potentially last – test for the Cruz-Kasich alliance and whether Trump can be stopped.

“We will know whether Donald Trump is the presumptive nominee on the evening of May 3rd or the morning of May 4th,” says Pete Seat, a Republican strategist in Indiana.

“We’re so close to the end that we should have as crystal clear of a picture as we can get in this election cycle of whether he is going to be the nominee on the first ballot.”


Article Link to Real Clear Politics:

Give Trump Backers What They Want

Commentary
April 26, 2016


It is a reflection of the desperation that has taken hold of the right’s anti-Trump forces that a new nonaggression pact between Senator Ted Cruz and Governor John Kasich initially moved some to irrational exuberance. As our Jonathan Tobin observed, the deal between the two campaigns is much more circumspect than early reports suggested. What’s more, it’s not at all clear that the deal’s signatories will abide by its terms or that it’s not already too late to prevent Donald Trump from winning the party’s nomination outright. The least compelling argument against the Cruz-Kasich alliance, though, is the notion that it would somehow be affirming the conspiratorial inclinations of the Trumpian fringe. To that concern, the response should be: so what?

Ahead of the critical March 15 primaries, it was Marco Rubio’s team that demonstrated what true collusion aimed at blocking Donald Trump looked like when they explicitly advised their supporters to back Kasich in Ohio over their own candidate. The Kasich campaign declined to return the favor. “We were going to win in OH without his help, just as he’s going to lose in Florida without ours,” wrote Kasich campaign spokesman Rob Nichols. “At the end of the day, how do you tell your people that are for you to go vote for somebody else?” Governor Kasich added. “I’m not into a stop-Trump as much as I am be-for-Kasich movement.” This leopard’s spots remain frustratingly static.

Asked if his pact, in which Kasich agreed to cede the state of Indiana in exchange for a free hand in New Mexico and Oregon, extends to advising his supporters to back Cruz, Kasich essentially said it did not. “I’ve never told them not to vote for me,” the Ohio governor said. “They ought to vote for me.” It’s one thing to withhold campaign advertising or to signal to supportive outside groups that they should do the same, but these efforts don’t matter much if the candidates are still indicating to their supporters that nothing should change.

The terms of this confused and loose alliance are clearly still being worked out. It would, therefore, serve the public if the political press declined to make too much out of this early and tentative coordination. But to display this kind of circumspection would rob Donald Trump of a preferred narrative – one that he has been employing for weeks and which holds unique appeal to his supporters, in particular. That is the notion that he, and they, have been robbed.

It is the central conceit of the Trump campaign’s pitch to his supporters. He contends that their woeful lots in life are not of their own making. They have been sold out by selfish politicians in Washington, displaced economically by unfair competition from China and cheap labor from Mexico, and marginalized by a culture that values “political correctness” above “telling it like it is.” It only makes sense that Trump would ape the sense of victimization he encourages in his supporters.

Trump has signaled for weeks that the process of securing delegates at the convention is “rigged,” and that his imaginary delegate stores are being raided in places like Georgia, Louisiana, and Colorado. The truth is that the rules of the delegate selection process were written months ago, and all the campaigns agreed to them. Trump has simply been outmaneuvered. As metaphors go, this is an especially apt one. Even as Team Trump tries to correct for their early errors, they continue to behave in a self-defeating manner. Ahead of Delaware’s primary on Tuesday, the Trump campaign’s delegate outreach coordinator was apparently so threatening and heavy-handed that he created antipathy toward Trump among local GOP officials that did not previously exist.

Trump wasn’t a victim then, and he’s not a victim now. It remains to be determined whether or not the Cruz-Kasich pact will yield results for the Stop Trump movement, but the celebrity candidate isn’t waiting for results to feign great grievance. Those in the candidate’s core following who believe themselves to be persecuted would, of course, find this dubious narrative attractive. It is for that reason that some in political media see this maneuver as a fatal one for both Cruz and Kasich.

“‘Cruz and Kasich declare themselves establishment axis in an effort to confirm Trump conspiracy theories,’” observed the columnist Matt Bai. “Doesn’t seem brilliant to me.” “In the meantime, the new Cruz-Kasich-#NeverTrump united front gives Trump the opportunity not just to slam the system as rigged, but to offer the only positive message in the campaign at this moment,” observed the Washington Examiner’s Byron York. Here’s the thing: They were going to believe that with or without a Cruz-Kasich coordination effort.

Trump is right, in a way. The process is rigged; it’s rigged to favor the system’s winners. This is why it is Trump who controls 49 percent of the bound delegates so far despite winning just 38 percent of the popular vote. A movement that believes that 40 percent is a majority, or that they are being robbed out of their due because they don’t understand the process is – and there is no way to put this delicately — paranoid.

This process was designed to facilitate the ascension of a Mitt Romney-type candidate to the nomination in a manner that allowed the nominee to avoid a prolonged primary fight. If Trump had invested the time and capital necessary to create an organization aimed at securing the nomination at the earliest stages of this process, that nomination would have already been his. Even without the architecture of a real campaign, Trump may only just narrowly be prevented from winning the delegates necessary to secure the nomination outright. For this set of circumstances, Donald Trump has only one person to blame. But he, like his supporters, have declined the opportunity to engage in some rather unforgiving introspection.

Only Donald Trump has a pathway to the nomination now prior to a second ballot on the floor of the Cleveland convention. Unless Cruz or Kasich intend to concede the nomination to Trump, they only have one way to force that outcome, and that is to coordinate their efforts. If that engenders in Trump supporters an even more aggravated sense of alienation and victimization, then so be it. Neither Trump nor his supporters are entitled to a particular outcome in this life – they must work for and earn their achievements. Conservatives used to understand that.


Article Link to Commentary:

Tuesday, April 26, Morning Global Market Roundup: Asian stocks retreat ahead of Fed, BOJ meetings

By Hideyuki Sano and Nichola Saminather
Reuters
April 26, 2016


Asian stocks retreated on Tuesday as investors braced for central bank policy meetings in the United States and Japan this week.

European markets were poised to fare better, with financial spreadbetters expecting Britain's FTSE 100 .FTSE to start the day up 0.2 percent, Germany's DAX .GDAXI to gain 0.2 percent, and France's CAC 40 .FCHI to open flat.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.5 percent, while Japan's Nikkei .N225 closed down 0.5 percent.

Hong Kong's Hang Seng index .HSI slid 0.8 percent. In China, both the CSI 300 .CSI300and the Shanghai Composite .SSEC were down 0.4 percent.

Investors are cautious about buying riskier assets ahead of the U.S. Federal Reserve's two-day policy meeting starting later on Tuesday.

A surprise drop in new U.S. home sales data for March supported a view of anemic U.S. economic growth, which may keep the Fed from raising interest rates.

In fact, markets see no chance of a rate increase at this week's meeting and are pricing in just about a one in five chance of a move at the next meeting on June 14-15.

Yet, Fed officials have repeatedly said a hike in June is on the cards.

"Even dovish policy makers such as (Boston Fed President Eric) Rosengren are saying market expectations are too low. And it is not hard to imagine many at the Fed feel current market rates are too low," said Tomoaki Shishido, fixed income strategist at Nomura Securities.

"So the Fed may try to urge markets to price in higher rates. On balance, we are more likely to have a hawkish surprise than a dovish surprise," he added.

Ahead of the Fed's meeting, the 10-year U.S. Treasuries yield US10YT=RR stood at 1.8986 percent, easing from a four-week high of 1.914 percent seen on Monday.

U.S. stocks fell on Monday as weaker oil prices weighed on energy shares, with the S&P 500 .SPX dipping 0.18 percent to 2,088, slipping further from a 4-1/2-month closing high of 2,102 hit last Wednesday. [.N]

Oil prices recovered on Tuesday, pushed up by a weaker dollar and a flood of new cash into the market, but analysts warned of further weakness as producers continue to battle for customers.

"The biggest bear risk to the oil market right now is that Iran's ramp-up accelerates and then Saudi Arabia does the same," analysts at Citibank said.

U.S. crude CLC1 rose 0.3 percent to $42.77 per barrel but remained down 2.2 percent this week.

Brent crude LCOc1 advanced 0.3 percent to $44.62 per barrel, but is still 1.1 percent below its closing price on Friday.

Both remained off five-month highs hit last week.

On Monday, Saudi Arabia unveiled ambitious plans to transform its oil-dependent economy, centering on a partial privatization of state oil company Saudi Aramco SDABO.UL, which has crude reserves of more than 15 percent of global oil deposits.

The company is expected to be valued at over $2 trillion, more than five times the size of Exxon Mobil (XOM.N), ahead of the sale of less than 5 percent of it through an initial public offering (IPO).

In the currency market, the dollar retreated against many major currencies while keeping its upper hand against emerging economy currencies.

The dollar index, which tracks the greenback against a basket of six major currencies, slid 0.1 percent to 94.74, extending a 0.3 percent loss in the previous session.

The dollar also slipped to 110.88 yen JPY= from three-week high of 111.90 touched early on Monday.

The yen weakened sharply on Friday on a report that the BOJ is considering cutting rates at which the central bank lends money to banks. But doubts are growing about how effective such a measure would be in lifting the moribund economy.

The Bank of Japan will make its policy announcement on Thursday.

The euro held steady at $1.1265 EUR=.

The British pound held near a 10-week high as bets on a Brexit eased after U.S. President Barack Obama voiced his support for Britain's staying in the European Union.

The pound last stood at $1.4490 after climbing as high as $1.4520 GBP=D4 on Monday, its highest since mid-February.