Wednesday, May 18, 2016

Wednesday, May 18, Night Wall Street Roundup: Bank Shares Buoy Wall Street As Fed Signals Possible June Hike

By Lewis Krauskopf
Reuters
May 18, 2016

Wall Street closed flat on Wednesday after a volatile session, supported by bank shares, as the minutes from the Federal Reserve's April meeting signaled a potential interest rate increase in the near term.

Officials from the U.S. central bank said it would be appropriate to raise interest rates in June if economic data points to stronger second-quarter growth as well as firming inflation and employment, according to the minutes.

Following the release of the minutes, traders were projecting a 34 percent chance the Fed would raise rates in June, up from 15 percent on Tuesday, according to the CME FedWatch tool. For July, traders see a more than 50 percent chance of rates rising.

"It did catch the market by surprise," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. "The discussion going forward will be, is the economy strong enough to take another rate hike, how do the markets respond between now and the June meeting."

The Dow Jones industrial average .DJI fell 3.36 points, or 0.02 percent, to 17,526.62, the S&P 500 .SPX gained 0.42 points, or 0.02 percent, to 2,047.63, and the Nasdaq Composite .IXIC added 23.39 points, or 0.5 percent, to 4,739.12.

The S&P and Dow, which had been solidly higher ahead of the minutes, turned negative after their release before recovering somewhat.

Financials .SPSY, seen benefiting in a rising rate environment, were the best-performing sector, closing up 1.9 percent for their best single-day session in a month. JPMorgan (JPM.N) gained 3.9 percent and Bank of America rose (BAC.N) rose 4.9 percent.

Utilities .SPLRCU, a high-dividend-paying group that tend to be sold when the expectation of higher rates increases, were the biggest laggards as seven of the 10 sectors ended in the red.

Fed policymakers said recent data made them more confident inflation was rising toward the Fed's 2 percent target, and that they were less concerned about a global economic slowdown, according to the minutes of the April 26-27 meeting. The Fed increased rates in December for the first time in nearly a decade.

"I think it is high time that the Federal Reserve starts to normalize policy. We’ve tried this for seven years; let’s try something new," said Jim Paulsen, chief investment strategist with Wells Capital Management in Minneapolis. "I really think markets are going to be OK with this."

The S&P 500 is little changed for 2016. While the benchmark index has risen about 13 percent since February lows, the rally has fizzled out in the last few weeks amid mixed corporate earnings and economic data.

Retail stocks, which were roiled last week by poor results from department stores, remained under pressure after Target Corp (TGT.N) fell 7.6 percent to $68 as its quarterly sales missed expectations.

About 8 billion shares changed hands on U.S. exchanges, above the nearly 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Declining issues outnumbered advancing ones on the NYSE by 1,989 to 1,043, for a 1.91-to-1 ratio on the downside; on the Nasdaq, 1,636 issues rose and 1,170 fell for a 1.40-to-1 ratio favoring advancers.

S&P 500 companies posted eight new 52-week highs and seven new lows; the Nasdaq recorded 23 new highs and 55 new lows.


Article Link to Reuters:

Fed Signals Interest Rate Hike Firmly On The Table For June

By Jason Lange and Lindsay Dunsmuir
Reuters
May 18, 2016


Federal Reserve officials felt the U.S. economy could be ready for another interest rate increase in June, according to the minutes from the central bank's April policy meeting released on Wednesday.

Most participants in the policy-setting committee's April 26-27 meeting said they wanted to see signs that economic growth was picking up in the second quarter and that employment and inflation were firming, the minutes showed.

"Then it likely would be appropriate for the committee to increase the target range for the federal funds rate in June," according to the minutes.

The suggestion that a rate increase in June is firmly on the table suggests the Fed is closer to tightening monetary policy again than Wall Street had expected. The Fed lifted rates in December for the first time in nearly a decade.

Prices for futures contracts on the Fed's benchmark overnight lending rate implied that investors saw a 34 percent chance of a rate increase next month, up from 19 percent shortly before the release of the minutes, according to CME Group.

U.S. stocks fell and the dollar .DXY extended gains against a basket of currencies after the minutes were released. Treasury yields rose, with the yield on 30-year U.S. government debt rising to a two-week high.

"They are ready to pull the trigger on a rate increase in June," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

Robust Job Growth


Recent data has made policymakers more confident that inflation is rising toward the Fed's 2 percent target and they also expressed fewer concerns about a global economic slowdown, according to the minutes.

Some policymakers at the meeting were worried about a slowdown in U.S. economic growth during the first quarter, when gross domestic product expanded at an annual rate of 0.5 percent, a two-year low.

But others argued that ongoing robust job growth suggested the economy had not gone off the track and that the growth data could be flawed.

"Most pointed to the steady improvement in the labor market as an indicator that the underlying pace of economic activity had likely not deteriorated," according to the minutes.

Data since the end of April has pointed to a pickup in consumer spending and manufacturing output, bolstering the view that economic growth was accelerating after stalling in the first quarter. Several Fed officials in recent weeks have stressed that a rate increase might be warranted in June.

Some policymakers at the April meeting said they were concerned financial markets could be roiled by a possible British exit from the European Union in a vote next month or by China's exchange rate policies.

The Fed last month kept its target overnight interest rate in a range of 0.25 percent to 0.50 percent.

A global equities sell-off and the tightening of financial markets earlier this year largely due to concerns of a slowdown in China prompted the Fed in March to dial back rate increase expectations for the year.

Even so, the Fed signaled at that time that it would likely lift rates twice this year. Investors have been betting on just one hike.


Article Link to Reuters:

Today's Stock In Play Is MGT Capital Investments (Symbol MGT)

Republicans Hit A New Low

By fighting Zika funding, they're showing their true values.


By David Dayen
The New Republic
May 18, 2016

Politicians on the left like to say that budgets are “moral documents.” As Vice President Joe Biden has said, “Don’t tell me what you value. Show me your budget and I will tell you what you value.” Conservatives, on the other hand, consider more spending than they deem prudent to be a moral crime. At his presidential campaign website, Senator Ted Cruz features a chart showing the burden of debt on a child born today at each stage of their life. “No responsible parent would leave their children with hundreds of thousands of dollars in debt,” Cruz writes. “We should not allow the government to do this to our children and grandchildren either.”

This concern for the well-being of future generations, and the appeal to reduce the deficit in terms of fundamental values, doesn’t hold up in the face of Republicans’ recent fight to shortchange an urgent effort to protect children from birth defects.

After months of delays, the Senate finally voted this week on federal funding to combat the mosquito-borne Zika virus, which causes microcephaly, a condition where babies are born with abnormally small heads. Zika is responsible for “other severe fetal brain defects,” according to the Centers for Disease Control, which is studying the links between the virus and afflictions in adults like Guillain-Barré syndrome, which causes temporary paralysis.

President Barack Obama first asked for $1.9 billion in Zika funding in early February, when the virus had already spread to 26 countries in Latin America. Congress sat for months on the request, which would go toward mosquito control, research into vaccines, and public education programs to fight contraction of the virus.

Since then, the first case of microcephaly caused by the Zika virus within the United States has been confirmed in Puerto Rico, and the CDC predicts that 20 percent of the island’s 3.5 million residents will contract the virus this year. (How thatfinancially battered island is going to deal with a crippling virus outbreak is a whole other story.) More than 500 American travelers have contracted the disease—48 of them pregnant women—and 2.2 billion of the global population lives in “at risk” Zika areas. Mosquitoes carrying Zika are expected to reach the continental U.S. this summer.

The Senate put three proposals on the floor Tuesday, as amendments to a transportation and housing appropriations bill. The proposal that passed only offers $1.1 billion in new funding, part of a compromise hammered out by Republican Roy Blunt and Democrat Patty Murray. Senate Majority Leader Mitch McConnell also gave Democrats a vote on the full $1.9 billion request, knowing that it would fail to reach the 60-vote cloture threshold amid Republican opposition (which it did, 50-47).

So Senate Republicans were only willing to cough up a little more than half of what public health agencies say is necessary to fight Zika. The third proposal would have also offered $1.1 billion, but pay for it with money from the Affordable Care Act’s Prevention and Public Health Fund, making some people sicker to make other people well. That failed cloture as well, but received 52 votes, more than the president’s full funding request.

That inadequate Senate plan is an improvement on House Republicans’ plan. On Monday, they announced a $622 million package, less than one-third of Obama’s request. Appropriations Committee Chair Hal Rogers claimed that the White House didn’t adequately explain what the Zika funding would be used for, leading them to make their own determination. The House bill would not be “emergency” funding, meaning that it would have to be incorporated into the overall funding process for the next fiscal year. So not only would Zika funding have to be offset by eliminating spending elsewhere in the budget, but it wouldn’t be available until October of this year.

The mosquitoes carrying Zika aren’t likely to stop infecting people in the intervening five months.

The Obama administration last month did transfer $589 million to Zika response from an account earmarked for emergency response to the Ebola virus. However, the White House has called this insufficient and also dangerous, since the money was still being used to fully eradicate Ebola and generate a vaccine.But cutting the fund before the virus has been eradicated reduces preparedness for another Ebola outbreak, to which Republicans will presumably react by raiding a future Zika fund, as the cycle repeats itself.

A spokesperson for Speaker Paul Ryan said that the House’s $622 million offer and the $589 million already transferred for Zika response should be considered in tandem as their overall commitment. But that still puts the House well short of the president’s request.

Speaking on the Senate floor Tuesday, Senator Elizabeth Warren warned that such budget games are a risk to U.S. public health. “It is not possible to nickel and dime a health emergency without consequences,” Warren said. “As Republicans embrace this irrational anti-spending ideology, this country is put in greater and greater danger.”

That’s the real irony here. Republicans like to make the budget deficit a moral question about the hazards of unsustainable debt. But the hazards of hundreds of babies born with birth defects are far more immediate. And that leads you to this bizarre logic that America must allow children to suffer with potential ailments in order to express their values of fiscal responsibility.

It’s also a myopic way to look at the deficit. Investing money in public health today means not having to spend more in palliative care tomorrow. Stopping the Zika threat with $2 billion means not spending $3 or $4 billion to care for the deformities that would arise in children if nothing is done.

Senator Marco Rubio, whose home state of Florida is in the line of fire of the virus, has broken with his colleagues in demanding the full $1.9 billion request. “I don’t think we want to be halfway through the summer and wake up to the news that hundreds and hundreds of Americans in multiple states have been infected and we did nothing,” Rubio said last month.

Rubio is virtually alone in this concern among his colleagues. They would rather boast about saving a buck or two, regardless of how that decision puts the public at risk. Republicans claim to be the party of family values. But now we’ve seen their budget, and seen what they value.


Article Link To The New Republic:

How Isolation Is Bringing China and Israel Together

By Stratfor
May 18, 2016

Summary


A China-Israel free trade agreement (FTA) makes a lot of economic sense. China is one of the world's leading manufacturing markets, while Israel is among the leaders in research and development (R&D). The Chinese want Israeli technology, and the Israelis want the cheaper consumer goods that the Chinese can make. The countries' economic relationship has expanded, with bilateral trade climbing to nearly $11 billion in 2015 from $50 million in 1992, and an FTA would accelerate the process.

It is no surprise, then, that the two recently launched formal negotiations on such a deal. Fewer trade barriers would be good for both sides, but there are also political and supply chain concerns pushing them together.

Analysis

An FTA between China and Israel would enable Israel to import cheap consumer goods from China such as machinery and electronics, and China would be encouraged to purchase more of Israel's high-end goods. Under an FTA, it is estimated that exports of Israeli goods to China would be 39 percent higher than in 2015, and China would be expected to export 24 percent more goods to Israel for a total trade increase of almost 30 percent. Israel would see the most immediate benefit because of the difference in scale between the countries' economies. Israeli gross domestic product would increase by 0.13 percent from 2015 numbers, whereas it would increase the Chinese GDP by only 0.003 percent.

China is eager, though, to benefit from Israeli water technology. Northern China is facing mounting water scarcity over the next several decades because of chronic overuse, mismanagement and uneven geographic distribution. This could hinder Chinese agricultural output. As a world leader in water management technology, including recycling, irrigation and desalination technologies, Israel is well-equipped to help China mitigate the issue both by creating new sources of fresh water through desalination and by helping to make water use more efficient. This relationship has already begun, and in 2013 the Dowell Technological and Environmental Engineering Co. started constructing a Sino-Israeli Water Treatment Innovative Industrial Park within the city of Dongguan.

Far more important than the boost to trade would be the influence that closer economic relations would have on Chinese investment in Israel, particularly in R&D. Chinese venture capital investments in Israel, predominantly in the tech sector, are about $1.77 billion, which constitutes 40 percent of total venture capital investments in Israel in 2015. By comparison, Israeli national expenditure into R&D during the same year was just under $11 billion. This investment is enormously important for Israel, and there are several R&D investment programs to encourage it, including the 2010 China-Israel Cooperation Program for Industrial R&D as well as other geographically targeted R&D cooperation programs. In addition, in 2015 China invested some $500 million in local Israeli startups, and Chinese companies have bought several Israeli companies; this kind of investment will continue to grow.

Besides the economic benefits of an FTA, for Israel the deal is also about diversifying its political relationships. The West is becoming more politically distant from Israel, and the Boycott, Divestment and Sanctions movement, which calls for economic actions in what it says is a nonviolent struggle against Israeli occupation, is gaining prominence in Europe. Israel is looking to work more closely with other partners and move away from its reliance on the United States. The process is already underway: Last year, two Chinese companies won tenders to build a port in Ashdod and operate another port in Haifa.

A similar urge is motivating China. Looking out into the South China Sea, Beijing sees a U.S. effort to physically contain China's expansion. To reach China's ports, seaborne trade must pass through chokepoints such as the Strait of Malacca — separating the Malay Peninsula and the Indonesian island of Sumatra — which are secured by the United States. One part of China's counter to that effort has been to make itself indispensable to countries that could help exert political pressure on the United States. China is also worried about the extent to which Taiwan, South Korea and other U.S. allies in Asia dominate its supply chain for electronics and high-tech goods. Removing trade barriers and increasing its imports of Israeli high-tech products would gradually lessen those countries' influence on China.

Article Link to Statfor:

Nuclear Terrorism And ISIS: How Scared Should We Be?

Though a massive attack with a full-fledged nuclear weapon is highly unlikely, a so-called "dirty bomb" scenario is not out of the question.


By Nathalie Guibert 
Worldcrunch
May 18, 2016


PARIS — The Islamic State (ISIS) wants us to believe that terrorists will soon be equipped with nuclear weapons. Authorities in Washington, where a recent series of four summits on nuclear security was held, have expressed concern about the Syrian-Iraqi situation. And Western intelligence services know that jihadists have been trying to lay their hands on radioactive material.

There is, however, no serious precedent of nuclear terrorism. In 1995, in a Moscow park, Chechen rebels planted an unactivated device containing dynamite and caesium. In 1998, near Grozny, other Chechens made a bomb containing unidentified radioactive substances. In 2003, British intelligence services found evidence suggesting that al-Qaeda, in Afghanistan, was able to produce a small dirty bomb, but no such device was ever found.

Faced with this threat, experts advise common sense. They dismiss, for example, the possibility of terrorists capturing an existing nuclear missile, given how complex the access and the use of these weapons are. Nor do they believe that terrorist groups can manufacture a military-grade weapon — not without support of a state.

"If you're the glass-half-full type, you can take some solace in knowing that the most dire scenario is also the least probable," writes Elisabeth Eaves, a columnist for the Bulletin of the Atomic Scientists.

But what about an attack on a power station? "That risk is real," U.S. specialists Graham Allison and William Tobey wrote in an April op-ed piece published by The New York Times. Such an attack "wouldn’t set off a mushroom cloud or kill hundreds of thousands of people," they explained. "But it would spew large amounts of radiation, spark a mass panic and render vast swaths of land uninhabitable."

An even more credible threat, experts warn, is a so-called dirty bomb, made of radioactive components used in civilian contexts. The device would combine explosives and material collected from research reactors, medical facilities or industrial plants.

"This is one of the biggest concerns, even if the ultimate probability of use is very low," says Benjamin Hautecouverture, a researcher at the Foundation for Strategic Research, a Paris-based think tank. If such an attack did occur, "It would mostly lead to a panic reaction, in a limited area, and not to mass destruction," he adds. "Human damage would be less significant than what Kalashnikovs or a conventional bomb could do."

The International Atomic Energy Agency (IAEA) keeps a close watch on any incident, criminal or otherwise, related to the handling or transport of radioactive material. The list is alarming in its length: 2,734 cases noted between 1993 and 2014. Of those, however, only 442 are considered criminal acts involving illegal possession or suspicious movements in preparation for trafficking nuclear and radioactive matter. Truly troubling cases, involving highly enriched uranium (13 incidents) or plutonium (three incidents), for example, were fewer still.

Experts believe this type of trafficking isn't driven so much by organized demand as it is by supply-side interests. Such cases, in other words, involve individuals trying to cash in on their privileged access to radioactive material.

The other thing to keep in mind is the quantity involved in these cases. While a few incidents involved seizures of kilogram quantities of potentially weapons-grade nuclear material, according to the IAEA, most involved far smaller amounts — not enough, in other words, for effective use as a weapon component. "Great quantities are required to efficiently disperse radioactive matter through explosion," notes Hautecouverture.

In reality, say experts, dozens of kilograms would be needed — much more than the "apple-sized" amount that President Barack Obama made in remarks made recently in Washington. "The smallest quantity of plutonium — about the size of an apple —could kill and injure hundreds of thousands of innocent individuals."

Since the collapse of the Soviet bloc, states have remained very alert to the nuclear threat, and made concerted efforts to reduce the risk. Russia and the U.S. have taken a number of initiatives aimed at preventing nuclear terrorism. France has also made decisions accordingly, repatriating research reactors, for example, from places like Kinshasa, in the Democratic Republic of Congo, and Cocody, in Ivory Coast.

At last month's summit in Washington, Obama said global efforts to improve nuclear security have removed from circulation material that is equivalent to 150 nuclear weapons, safeguarding it from extremists. "That's material that will never fall into the hands of terrorists," he said.

The most fearsome impact of a dirty bomb, say experts, would be its economic costs — cleaning of an area, neutralization of a vital installation — and psychological toll. Will that alone be enough to motivate terrorist groups given their demonstrated interest in sowing fear through high-profile displays of violence? That is precisely the question political leaders, desperate not to be caught off guard, are grappling with right now.


Article Link to Worldcrunch:

Nuclear Terrorism And ISIS: How Scared Should We Be?

A Revolt Against the Double Standard

By Noah Rothman
Commentary
May 17, 2016


With both the Democratic and Republican primaries all but settled (don’t tell Bernie), we’ve reached the stage of the election cycle in which both sides of the political divide loudly profess that just cannot believe their luck. Republicans and Democrats claim with reasonable certainty that the opposition party’s nominee is hopelessly flawed and headed toward inevitable defeat.

Democrats take solace in polling which so far mirrors the trajectory of the 2008 and 2012 races, but not everyone on the left is taking 2016 for granted. Hillary Clinton’s opening salvo against Donald Trump was wide of the mark, designed to ding a different kind of Republican, and prompted nervous rebukes from her liberal allies. Republicans who backed Trump must be pleased with his initial attacks on Clinton. His brazen assault on her character and record is exactly what the right has wanted to see from their representatives for decades. Trump’s approach to the general election represents a valid critique of Republican timidity and the rules of political discourse, which appear rigged to favor the left. Trump’s methods, however, will also help Clinton to right her own ship.

According to the presumptive GOP nominee, the traditional trappings of a national presidential campaign – data analytics, micro-targeting strategies, and state-level grassroots organizations – are highly overrated. The candidate confessed that he would prefer to invest primarily in himself; namely, in his outsize persona and in massive outdoor rallies where he can practice his brand of extemporaneous riffing on his opponents’ flaws. On Monday, the New York Times gave Republicans a window into the content of those forthcoming riffs. “Donald J. Trump plans to throw Bill Clinton’s infidelities in Clinton’s face on live television during the presidential debates this fall,” the Times reported, “questioning whether she enabled his behavior and sought to discredit the women involved.”

The Times noted that Trump will seek to hold Clinton accountable for her role in the Benghazi attacks, her conspicuously profitable investments in cattle futures in the 1970s, and the evolving scandal surrounding her emailing practices at the State Department. These leaks about Trump’s approach to debates nearly five months prior to those engagements is probably less a shot across Democrats’ bow and probably more an attempt to comfort of the type of Republican who reads the New York Times. Trump’s strategy is questionable and probably deeply ill fated, but it is also precisely why Trump’s supporters within the GOP adore him and believe he can win in November.

As I wrote late last month, Trump-backing Republicans are inclined to dismiss the polls that suggest a head-to-head matchup with Clinton will not be a close race in November precisely because of the candidate’s brash and unapologetic attacks on Clinton’s personal and professional record. They believe that Clinton, like Barack Obama, has had an easy go of it, in part because her Republican opposition is too cowed by a double standard promoted in the political press that holds Republicans to a more sophisticated code of conduct than Democrats. To some extent, they have a point.

These Republicans have watched the President of the United States refer to them as “crazies,” the “enemies” of Latino voters, and skinflints who would rather “tank the entire economy” than see the uninsured receive health care. This is a president whose senior advisors have compared congressional Republicans to suicide bombers, arsonists, and hostage takers. This is a party led in the U.S. Senate by a lawmaker who called private citizens with whom he disagreed “un-American” from the floor of the upper chamber of Congress. This is a party led in the House by a figure who insisted that racism among her Republican colleagues is all that stands in the way of a consensus solution to the issue of illegal immigration. Meanwhile, even obscure Republicans who make ill-advisedly controversial observations about abortion rights, Medicaid benefits, or the president’s daughter’s style of dress at public events are pilloried and often forced to resign after they become the subject of national media attention.

For a certain segment of the GOP, the outcry over Donald Trump’s acerbic rhetorical attacks on Democrats is overwrought and disingenuous. They think the rules of the game are rigged, and they’re glad that someone has finally agreed to stop playing by them – even if he isn’t a consistent conservative.

This reaction may not be entirely unjustified, but it is entirely self-defeating. The notion that Hillary Clinton has not been held to account by Republicans over the last quarter-century is, to put it mildly, is deluded. The whiff of scandal surrounding Clinton’s personal investments, the revelation of which coincided with the White Water investigation, has been the subject of numerous GOP and press inquiries since 1994. Hillary Clinton’s role in the Benghazi attacks has been litigated again and again, and she has been grilled over it in testimony before both House and Senate Republicans. In October of 2015, Clinton spent over ten nearly consecutive hours enduring withering inquiry from GOP lawmakers on the subject, and Clinton came out looking better for it. What’s more, the hearings and Clinton’s display of transparency eased voters’ concerns about the still-evolving scandal regarding her mishandling of classified information in a “homebrew” email server, too.

Furthermore, the notion that Trump will erode support for Clinton by shaming her on live television over her decision to stand by her cheating husband is indescribably foolish. Aside from titillating the converted, for whom the notion that Clinton’s fealty to her husband was the calculation of a power-obsessed aspiring politician is an obvious and accepted fact, what will this approach accomplish? While the celebrity candidate’s tactical approach to campaigning against Clinton might provide Republicans who are still bitter over the lost battles of the 1990s a brief but satisfying moment of catharsis, it is unclear what adopting the ethos of the talk radio will achieve beyond that. Will it win new converts, or is it more likely to alienate those who take a more suspect view toward the Trump campaign, particularly the seven in ten women who already have an unfavorable view of the candidate? While the benefits of this idea are dubious, the course is a fraught one, and the risks far outweigh the potential rewards.

Republicans who have turned to Trump to litigate the case against Clinton in the harshest possible terms have every right to feel embittered by what appears to be a double standard when it comes to appropriate political discourse. Anger, however, clouds judgment and the GOP primary electorate’s judgment appears substantially impaired. Hillary Clinton thrives when she can portray herself as persecuted, and she will revel in her opponent’s abuse. For some, the celebrity candidate will provide a release for their frustration with Clinton, political media, and a popular culture that mocks and denigrates their values. As the polls look now, that’s about all the benefits that Donald Trump’s candidacy will yield them. There are better ways to invest $700 million.


Article Link to Commentary:

Megyn Kelly Doesn't Exactly Grill Donald Trump

By Ben Schreckinger and Hadas Gold
Politico
May 18, 2016

Even Donald Trump’s innovation of live-tweeting his own interview couldn’t rescue his primetime network encounter with Megyn Kelly from its lack of substance.

Nixon-Frost it was not, with Kelly serving up softball after softball in an encounter that was, for all the hype, ultimately unrevealing.

The real star on screen was Kelly, who used the platform of her hour-long special to tease the November release of her book, which she promised would reveal the intimate details of her experience on the receiving end of Trump’s insults — a topic she nodded at but did not fully explore in the Fox special.

For Kelly, the interview was one of her first real crossover tests. The Fox News anchor has repeatedly said in interviews her dream job lies somewhere along the lines of the gigs held by Charlie Rose, Oprah and Barbara Walters (the executive producer of the special had previously been Walters'). Whether her style will translate to the glossier world of primetime broadcast specials will be closely examined. But it's almost guaranteed to be a ratings hit regardless of what was said -- or wasn't.

Rumors in Washington and New York abound as to where Kelly, whose contract with Fox is up in about a year, may choose to go next or how much Fox is willing to put on the table to keep her. Beyond the broadcast specials, Kelly has also expanded into other arenas. She has signed on to help produce a Fox drama series with Kevin Spacey along with the forthcoming book, titled "Settle for More."

Though Kelly at one point in the interview referred to being bullied “when you’re 45,” her current age, and gestured at herself, the portion of the interview dedicated to her back-and-forth with Trump did not reveal much about either participant.

“Let’s talk about us,” Kelly said pivoting to ask about her exchange with Trump during the first Republican debate and Trump’s subsequent lashing out at her.

Confronted by Kelly for referring to her as a "bimbo," Trump asked, "Did I say that?"

"Many times," Kelly responded.

“Excuse me” he said awkwardly, then sought to minimize the transgression. “Over your life, Megyn, you’ve been called a lot worse,” he said.

Kelly, though, soon demurred. “It’s not about me,” she said. “It’s about the messaging to young girls and other women,” she said.

Trump made a couple of flirtations with self-revelation during the course of the interview -- citing the death of his oldest brother Freddy from complications related to alcoholism when asked if he had ever been emotionally wounded -- but he did not commit.

“Well, I think the big thing would be maybe the death of my brother. That was, you know, the hardest thing for me, uh, to take. That was very tough because it’s, you know, unnatural …. I never had a drink. But you know, people can have a drink and they can do it socially.”

Kelly, sensing an evasion, interjected, “I feel like you are trying to get out of bounds on the emotional question to the subject of alcoholism, which we discussed.”

Asked again if somebody had ever inflicted an emotional wound on him, Trump said he would have to think about it and get back to her.

Trump told Kelly that though he has never imbibed alcohol, he has “other problems,” but declined to discuss what those problems are. “That I can’t talk about,” he said. “That would be too good.”

Trump also reflected on his self-proclaimed role as a “counter-puncher” in conflicts, telling Kelly, “when I am wounded, I go after people hard, OK? And I try and unwound myself.”

The format was a departure for Kelly, with softer questions that focused less on policy and more on personality. And some media critics were not pleased, clearly yearning for the Kelly who grilled Trump at the presidential debates.

"If it had been any softer, it would come on a cone (with) a swirl,” tweeted television critic Bill Carter.

"So THIS is what Megyn Kelly went to Trump Tower to set up?” tweeted the Washington Post’s Erik Wemple as part of an extended screed about the show. “Now it appears Megyn Kelly is asking Trump to 'have some fun.' So appropriate for her misogynist-in-chief.”

Isaac Chotiner of Slate of was similarly unimpressed. “This Megyn Kelly interview of Trump is so bad and so soft that if I were Fox News I would worry about CNN trying to poach her,” he tweeted.

Fox got to edit the interview, but Trump made sure he got the first word and the last word and the other words in between by deciding to live-tweet the interview, which was taped last week -- before Trump denied posing as his own spokesman in a taped 1991 conversation with a People Magazine and ahead of the weekend publication of an unflattering New York Times story about his relationship with women.

The live-tweeting represents something of a watershed in both the New York billionaire’s dominance of the 11 months of election coverage and the history of political media – with Trump taking to both of the mediums of his favored mediums, TC and Twitter. Mostly, he retweeted praise for himself and some plaudits for Kelly from his supporters.

“I love Michael Douglas!” he tweeted during the penultimate segment, an interview with the actor.

The special then returned to Trump, who revealed his favorite movie (“Citizen Kane”), his favorite book (“All’s Quiet on the Western Front”), and the fact that he has not had much time to read or watch baseball during presidential run because he’s watching Fox News personalities, including Megyn Kelly, “all the time.”

Kelly then plugged her book and, a few minutes later, Trump weighed in with his own final thought on Twitter: “Well, that is it. Well done Megyn --- and they all lived happily ever after! Now let us all see how ‘THE MOVEMENT’ does in Oregon tonight!”


Article Link to Politico:

Germany Is Very, Very Tired

By John Micklethwait
The Bloomberg View
May 18, 2016


Over the past few days the Brexit referendum has taken a nasty turn, with Boris Johnson, the former mayor of London and a prominent “leaver,” comparing the European Union to Adolf Hitler and complaining about Germany’s growing power in the EU. He should visit Berlin, which I did last week. Far from wanting to rule Europe, Germany’s leaders seem increasingly worn out by its endless crises and, from their point of view, downright ingratitude. This growing fatigue in the continent’s already reluctant hegemon could spell as much trouble for the EU as Brexit does.

Postwar Britain famously lost an empire but couldn’t find a role; now, Germany has acquired an empire of sorts but can’t work out how to run it. All of Europe’s problems -- the flood of Syrian refugees, the euro crisis, Vladimir Putin’s belligerence, the euro zone’s anemic growth, Eastern Europe’s drift toward rampant nationalism, Brexit -- keep landing in Angela Merkel’s lap. Germany’s chancellor has usually found some way to cope, most obviously by kicking each problem down the autobahn. But she lacks the power (and too often the inclination) to lead Europe, while her partners, even when they don’t obstruct her, do very little to help. So the problems drift, and frustration in Berlin mounts.

Look, for instance, at Europe’s two main enduring crises. On Sunday the Greek parliament is supposed to approve another package of structural reforms, prior to a meeting of euro-zone finance ministers in Brussels on May 24. Greece needs another dollop of aid to meet its July interest payments, but the International Monetary Fund has been (rightly) worried that the country’s debt burden is too big and it will miss its target of a 3.5 percent primary surplus in 2018. A Merkellian fudge has been readied: In return for the new reform package, Germany and the IMF will accept some of Greece’s more heroic forecasts and stretch out debt repayments.

Default has thus probably been skillfully averted again. But nobody in Berlin believes Greece will ever be able to pay off its debts. “It is really an emerging economy, not a developed one,” says one senior German, adding wryly that the Greeks should be dealing with the World Bank, not the IMF.

Worse, from Germany’s perspective, the lack of progress in Greece is symptomatic of the whole continent’s uncompetitive economy. Six years into the euro crisis, France has barely started structural reform (German ministers roll their eyes whenever you mention “Francois Hollande” and “reform” in the same sentence), and Italy is still trying to fix its banking system. The single market is worryingly incomplete. Very few of the structural underpinnings of a successful single currency are in place.

This contempt comes with a hefty dose of hypocrisy and self-delusion. Merkel has done few structural reforms herself; the hard work was done by her predecessor, Gerhard Schröder. Content in their prosperous economic bubble, German voters have condemned the rest of Europe to needless austerity, resisted liberalization (notably in the country’s lackluster service industries), and refused to stomach common Eurobonds and other long-term solutions to preserving the single currency. So the Germans are not the thrifty saints they imagine themselves to be. But, as they endlessly point out, they are the ones who write the checks every time there is a bailout -- and they don’t feel as if they get a lot in return.

Germans have more justification for their resentment when it comes to Europe’s other main crisis: the flood of Syrian refugees. On the plus side, Merkel has found a way to stem the flow of people that threatened to overrun her country (and her chancellorship). Turkey has agreed to hold refugees within its borders in exchange for 6 billion euros in aid from the EU, while Italy and Greece are also getting help in exchange for not letting refugees who land on their coasts surge northward.

These deals have brought some relief in Merkel’s court -- but not without nervousness and reproach. Nervousness, because the deals are fragile: Turkey’s President Recep Tayyip Erdogan is already howling about the terms of his (“Since when are you controlling Turkey?”). Reproach, because when Merkel pleaded for help, she got precious little assistance. While Germany has taken in perhaps 1 million refugees, Britain and France have each absorbed a fraction of that. Eastern Europe, which Germany helped rebuild, was more rudely uncooperative. And what, Merkel’s lieutenants wonder, will happen if the refugees start coming again?

So it is no wonder that Germany feels fatigue. A decade into her chancellorship (a somewhat tiring milestone for any government), Angela Merkel must have found Boris Johnson’s remarks ironic. Rather than dominating Europe, she has merely the same sort of negative clout that Barack Obama has over much of the rest of the world: She can often stop things, but rarely cause them to happen. Part of that is her fault: If she had dared to get ahead of the euro crisis, rather than sticking various Band-Aids on it, she might have staunched it. But Germany is reluctant to lead, and the rest of Europe is reluctant to follow.

Domestic politics don’t make this any easier: The rise of the Alternative for Germany party, Germany’s version of euroskepticism, is partly based on its claim to tell the harsh truths about the European Union that Merkel keeps papering over. If Merkel, who is still trusted, were to leave, chances are that her successor would have far less leeway to negotiate on Germans’ behalf.

The overriding worry is that a vicious cycle has begun: As Germany gets ever more frustrated with Europe’s inability to change, it gets ever less likely to lead, so the change it wants becomes ever less likely to happen. In a strange way, Brexit might alter this dynamic. Merkel is desperate to keep Britain within Europe because she sees David Cameron, for all his Little Englander elements, as a voice for reform.

Yet if Britain were to opt to leave and other countries threatened to hold referendums, then even the cautious Merkel might be forced to seize the moment and bully reforms through Brussels to create a more cohesive, modern euro zone with a deeper single market. Hence an irony for Johnson and his fellow Brexiters: The dominant Germany they fear is more likely to come into being if Britain votes to leave the union.


Article Link to the Bloomberg View:

Hillary Clinton's Joyless Victory

Her narrow Kentucky win is a temporary comfort in a week that exposed a deep Democratic rift.


By Gabriel Debenedetti
Politico
May 18, 2016


Hillary Clinton’s supporters breathed a heavy sigh of relief on Tuesday night when news finally landed that she eked out a win over Bernie Sanders in Kentucky. It’s not that she needed the delegates. The result simply ensured that the likely Democratic nominee wouldn’t lose the two states voting Tuesday, which would have opened her up to weeks of second-guessing and nit-picking from Democrats concerned about her inability to put Sanders away.

But Clinton’s narrow Kentucky win — her lone state victory in the month of May, and one that ensured she wouldn't go five weeks without winning a state — is a temporary comfort. It was paired with a loss in Oregon during a week when Sanders supporters appeared more emboldened and committed than ever, despite the senator’s all-but-impossible path to the nomination. And there are few signs that the party is ready to fully unite behind its frontrunner: In the wake of Nevada’s chaotic state Democratic convention Saturday and the ensuing sniping between the Sanders camp and the Democratic establishment, the prospect of a messy national convention in July is no longer unthinkable.

Now, eyeing a two-and-a-half week lull before the next Democratic contests, Clinton faces the task of erasing the perception that she is a wounded front-runner while at the same time competing with presumptive GOP nominee Donald Trump for a bite of the news cycle.

“It’s a delicate time and she does have the challenge of the two-front campaign, one with Trump and the other where she really has to give room and respect to Sanders and his supporters,” explained veteran Democratic strategist Bob Shrum, who played leading roles in the presidential campaigns of John Kerry, Al Gore, and Ted Kennedy. “Because she needs them in the fall. She needs him in the fall."

Recognizing Sanders’ surging strength in Kentucky earlier this month, Clinton’s campaign switched gears and decided to spend more time in the state and direct more resources there. After appearing to stop investing in television advertising in the primary contests, Clinton returned to the airwaves. She also kept an atypically heavy campaign schedule there. The late push paid off against Sanders, who campaigned in Kentucky but also spent recent days criss-crossing the country to hit states with upcoming primaries.

With at least Kentucky in her pocket, Clinton is now able to turn her attention to the states and territories voting June 5 and 7 — when she is likely to pass the delegate threshold to claim the nomination, counting super delegates. With few public events and a trove of private fundraisers on her current schedule for the coming stretch, Clinton is likely to focus on restocking her campaign treasury while her campaign and outside groups formally intensify their general election assault on Trump in the swing states.

Yet Clinton still must now wrestle with the question of how to bring Sanders’ supporters into the fold after the Nevada’s Democratic Party convention fallout exposed deep intra-party rifts around the country.

It’s a task that Clinton has long expected, but one that was made all the more urgent after Sanders himself appeared to fan the flames on Tuesday with a defiant statement that challenged the Democratic Party to change its ways. The Nevada discord echoed earlier disagreements in Colorado and Iowa, and Sanders’ icy relationship with the Democratic National Committee shows no signs of thawing.

If anything, Sanders’ contentious relationship with the DNC appears to be getting worse, with the Vermont senator releasing a letter earlier this month accusing the national committee of stacking the deck against him in convention standing committee assignments and DNC Chairwoman Debbie Wasserman Schultz asserting Tuesday night in a CNN interview that Sanders’ response to reports of violence in Nevada was “anything but acceptable.”

Supporters of the former secretary of state say the coming weeks should involve some initial steps at rapprochement — or at least first attempts to near harmony.

“We’re entering the home-stretch, but it’s important for Hillary not to be overconfident,” warned former New Mexico Gov. Bill Richardson, a Clinton backer who ran against her for president in 2008, recommending that she place Sanders backers on convention committees and consult with him when selecting a running mate. “There should be an effort to reach out to Sanders no matter how painful it is, and no matter how negative it’s gotten. We’ve got the delegates, but we need the votes in the general."

It’s a stark turn of events for a party that was eager to use its summer showcase as a contrast to Republican disarray.

But after his Oregon win, Sanders can point to 22 victories – with the possibility of a few more to come – providing him with more bargaining power than any runner-up in recent history as he looks to shape the party platform and reform the nominating process.

As such, Clinton is likely to build a brisk campaign schedule for the coming stretch, hoping to minimize her opponent’s delegate count on the last big day of primary elections on June 7. The best case scenario for Clinton is that such a series of public events gets her supporters energized in the absence of any big event before then, such as a debate.

“Her big concern,” explained Shrum, “is that she doesn’t want to limp to the nomination."


Article Link to Politico:

Hillary Clinton's Joyless Victory

Hillary Is Running A Painfully Stupid Campaign

By John Podhoretz
The New York Post
May 18, 2016

Another primary night for the Democrats and another difficult night for Hillary Clinton, who’s almost certainly going to be the Democratic nominee even though a great many Democrats are determined to make that as difficult as possible for her.

She squeaked out a victory over Bernie Sanders in Kentucky — a state she won by 35 points in 2009 —before losing by a significant margin to Sanders in Oregon.

Many Democrats are disenchanted with her ideologically, but that’s not the only reason she’s suffering. Hillary is a politician in the John Kerry mold — she does inexplicably self-destructive things without actually having an impetuous, id-driven self-destructive streak.

Who else but a tone-deaf bumbler would have spoken the insanely infelicitous words — “we are going to put a lot of coal miners and coal companies out of business” — that destroyed her in West Virginia and made Kentucky so hard for her Tuesday night?

We all know she wanted to sell herself to environmentalists, but surely she could havefound a way to do so without celebrating the elimination of working-class jobs during the Populist-Resentment Olympics that constitute the 2016 election cycle. Surely this has to be counted among the dumbest self-inflicted political errors of our time.

But forget that recent boner. How about the fact that she took giant speaking fees from banks and hedge funds and Wall Street in 2013 and 2014 knowing full well she was about to run for president in a party that hates banks and hedge funds and Wall Street?

And did so, moreover, when it was money she didn’t need, given that her family net worth was north of $100 million when she did so?

Just imagine if she had denied Sanders that issue by never having taken the dough in the first place; his candidacy might never have taken off had it not been for the way he hammered her over her refusal to release the texts of her Goldman Sachs speeches.

Call it greed if you like, but idiocy is another suitable word for it.

Look, the least damning theory anyone can come up with about the decision to shield her emails from public view by setting up a private server is that it was an act of paranoid stupidity.

Her uncommonly gifted husband was always getting himself into trouble, but at least it was fun trouble. Her trouble is boring, plodding, unimaginative, ill-considered trouble. Bill Clinton is larger than life. Hillary Clinton is smaller than the office she’s trying so hard to occupy.

But before those of us who run the anti-Hillary gamut — from Hillary skeptics to Hillary cynics to Hillary haters — dance a celebratory jig around her troubles, we’d better sober up and consider the cold hard truth about the results.

Across all 48 contests thus far, Mrs. Clinton has racked up 56 percent percent of the Democratic Party vote as against Sanders’ 41 percent. (By contrast, Donald Trump has received 41.2 percent of the GOP vote.) Two million more people have cast their votes for her than for Trump, and that margin is unlikely to close by the end of the primary season precisely because Sanders is making her work for every vote.

In some sense, Hillary may be a victim of her own early success and the monumental victories in the South that basically gave her an insuperable lead.

Once it became clear there was no stopping her, and that Sanders was just more fun to vote for, many Democratic voters surely felt like they could cast a young, free, happy-go-lucky vote for the cute old socialist.

And there’s precedent for a successful Democratic nominee struggling to seal the deal with the party.

Jimmy Carter finished with only 40 percent of the overall Democratic vote in 1976 and didn’t secure the nomination until the very end of the process — and he won the presidency.

There’s also precedent for a candidate to struggle in the late states and lose. Again, that would again be Jimmy Carter. He lost five of the last eight primaries to Ted Kennedy — a mark of his own party’s distaste for him — and went on to lose in November.

What we don’t know is this. Will she be the 1976 Carter in this scenario — or the 1980 Carter?


Article Link to the New York Post:

Putin’s Dirty Game In The U.S. Congress

The Kremlin wants to get rid of the Magnitsky Act that fingers some of its state-approved gangsters, and it’s using desperately needy children as pawns.


By Michael Weiss
The Daily Beast
May 18, 2016


The Russian government and its sympathizers have embarked on a concerted campaign to keep ill-gotten Russian money, and the crooks behind it, in business in the United States.

To do that, they want to rewrite the history of one of the most notorious corruption scandals of the Putin era. And, strangely, some members of the U.S. Congress and European Parliament seem to be playing along.

It all dates back to the passage of the Sergei Magnitsky Rule of Law Accountability Act on Dec. 14, 2012. This landmark piece of U.S. legislation, named for a tax lawyer in Moscow who uncovered massive corruption and allegedly died for that sin, sought to sanction and bar from entry into the United States dozens of Russian officials and mobsters implicated in a $230 million tax fraud and its murderous cover-up.

Since then, the Kremlin has tried every trick in its playbook to have the law repealed.

Early on, it promoted a series of “counter-Magnitsky” measures. One of these was a vindictive satire on the original law, barring certain U.S. citizens from traveling to Russia (not that the blacklisted U.S. senators or federal prosecutors of Russian arms traffickers had much of a desire to visit in the first place).

Another, crueler “counter-Magnitsky” measure prevented Americans from adopting Russian orphans, many of whom are disabled or stricken with debilitating illnesses and languishing in substandard state institutions.

Jo Becker, the children’s rights advocacy director for Human Rights Watch, denounced the anti-adoption law for making “vulnerable children pawns in a cynical act of political retribution.”

But to the Kremlin’s enormous frustration, the U.S. law stayed on the books.

In four years, the Magnitsky Act has not been repealed. The Obama administration, which treats Russia as a kind of frenemy that’s potentially useful in some areas even when it’s criminal in others, has enforced the law only fitfully, but a handful of Russian officials have been publicly named and shamed by Congress.

Meanwhile, efforts to have the law replicated in other democratic jurisdictions, including the European Parliament, have gained momentum, thanks largely to the relentless activism of one American financier.

William Browder is the CEO of the Hermitage Fund, a one-time Moscow-based investment firm whose offices were raided and whose subsidiaries were stolen and re-registered for use in dummying up tax liabilities in 2007.

Sergei Magnitsky was Browder’s tax lawyer, a Russian everyman who uncovered the fraud and took his findings to the authorities, expecting them to be relieved at the prospect of recovering money effectively stolen from the state.

Instead, Magnitsky was accused of plotting and perpetrating the crime himself. He was arrested by some of the same Interior Ministry officials he’d implicated in the Hermitage fraud, and there is strong evidence—corroborated by Russia’s Presidential Council on Human Rights, no less—to suggest that he was deprived of life-saving medical treatment for gallstones and acute pancreatitis while in pretrial detention.

There is further evidence that Magnitsky was handcuffed to a bed and beaten by truncheon-wielding guards who left him to die in an isolation cell in Matrosskaya Tishina prison in Moscow.

Browder has spent nearly a decade promoting Magnitsky’s investigative work about the fusion between organized crime and the state in Putin’s Russia. Burdened by an enormous sense of guilt about the death of his attorney, Browder has become a full-time flame tender for the Magnitsky legacy, vowing to bring to justice those who took part in the frame-up job of an innocent man.

Now permanently based in London, Browder has come under unremitting vilification and legal attack from Moscow.

In 2013, a Moscow court put Browder on trial in absentia alongside the dead Magnitsky in the first posthumous prosecution in the history of Russia.

Browder has since defeated efforts to use an Interpol Red Notice to have him extradited back to Russia to face trial for what he insists are bogus tax evasion charges.

Since the passage of the Magnitsky Act, much of the looted $230 million has been found or frozen. Some was in Swiss and Latvian bank accounts; some was in offshore companies technically “owned” by Russian concert cellist Sergei Roldugin (who happens to be Putin’s best friend), and some was even in six-figure condos in Manhattan.

About $14 million of these assets, including cash deposited in U.S. bank accounts controlled by a Cyprus-registered company called Prevezon Holdings, Ltd., was confiscated by the U.S. Department of Justice.

As the investigations and asset seizures have begun to bite, a lobbying effort has gotten under way to try once again to have the Magnitsky Act repealed.

As before, disadvantaged Russian children are being dangled as bait, with a wink-and-a-nudge promise to have the Russian law rescinded if the American law is taken off the books.

As one U.S. official put it privately, the current messaging is being “led by ogres out of central casting. They’re saying, ‘You repeal Magnitsky and we’ll let go of the kids.’ And it’s not even American kids. It’s their own. And they’re kids with Down Syndrome and spina bifida.”

In February, an organization calling itself the Human Rights Accountability Global Initiative Foundation, an obvious echo of the full name of the Magnitsky Act, was registered in Washington, D.C. Little trace of the activities or provenance of this organization exist online, apart from its “under construction” website, whose homepage is written in ungrammatical English.

HRAGIF claims to be “working on analyzing legal and legislative options to help overturn this adoption ban,” according to its site. “We would like to present our findings to the members of U.S. Congress, Administration and U.S. public and is planning to brief them on possible ways of resolution of this stalemate on adoptions.”

The Daily Beast has seen an email sent to the Open Dialogue Foundation, a Poland-based NGO, from a man named Anatoli Samochornov, who claimed to “represent” HRAGIF along with Natalia Veselnitskaya, identified in the email as “a Russian lawyer who conducted an extensive investigation of the Magnitsky case.”

Both Samochornov and Veselnitskaya were seeking press accreditation to attend an event last month at the Open Dialogue Foundation where Browder was slated to speak.

They were denied accreditation.

The Russian-born, partly U.S.-educated Samochornov is a former project manager at the Meridian International Center at the U.S. State Department where, according to his LinkedIn profile, he worked on programs to “establish an understanding of U.S. foreign policy goals and objectives for current and future international leaders,” and served as an interpreter at “high level UN and private sector meetings for the Secretary of State and other VIPs.”

Samochornov was also apparently a “program officer” at the FBI’s field office in New York, according to an FBI press release.

The Daily Beast spoke briefly to Samochornov last week. He confirmed the authenticity of his email to the Open Dialogue Foundation and his and Veselitskaya’s involvement in the setting up of HRAGIF. But he asked to be interviewed on the record alongside his colleague, who was not, at the time of the call, available to speak.

Then, after agreeing to such an interview, neither Samochornov nor Veselitskaya responded to The Daily Beast’s follow-up inquiries, and neither was available in time for the publication of this story.

Their silence may owe to the fact that, unmentioned in Samochornov’s email to the Open Dialogue Foundation and nowhere apparent on HRAGIF’s website, is Veselitskaya’s role as the family attorney for the owner of Prevezon Holdings, Ltd., the company accused in U.S federal court of money-laundering.

Veselitskaya is not shy about her opinions of the Magnitsky Act, about Browder, or about journalism aimed at uncovering Russian corruption. Her Twitter feed and interviews on Russian state television reveal her to be a staunch adherent of the Kremlin’s position on all of the above.

For instance, after the so-called Panama Papers disclosures about Putinist cronies stashing billions in offshore companies, Veselitskaya tweeted that the Organized Crime and Corruption Reporting Project, one of the partner organizations investigating the leaks, is a “cistern earning serious investments from Western investors in the sewer wars.”

In an appearance on Russia’s RBK TV on Dec. 12, 2014, Veselitskaya said “there is no Magnitsky case, as such. There is Mr. Browder’s case who used the death of this poor boy in his own personal interests.” And: “Sergei Magnitsky did not uncover any theft referred to in the Magnitsky Act…No one tortured him and no one killed Sergei Magnitsky as it is stated in the Magnitsky Act.”

HRAGIF was founded in February. Two months later, when four U.S. representatives took part in a congressional delegation to Moscow, they were given a letter marked “confidential” that makes much the same case as Veselitskaya does about this notorious affair.

The delegation featured Rep. Dana Rohrabacher (R-CA), a member of the House Foreign Affairs Committee, a longtime admirer of Putin (they once arm-wrestled in a Washington, D.C., bar), an opponent of U.S. sanctions on Russia, and an outspoken advocate of closer bilateral cooperation between the two former Cold War enemies, particularly in the realm of combating Islamic terrorism.

The confidential letter given to Rohrabacher, a copy of which The Daily Beast has reviewed, carries a litany of serious allegations against Browder, Magnitsky, the Hermitage Fund, and one of its U.S. investors, which the letter accuses of committing securities and tax fraud in the United States.

Browder, the letter states, is guilty of “an illegal scheme of buying up Gazprom shares without permission of the Government of Russia” between 1999 and 2006, Gazprom being Russia’s state-owned gas company. “There is not a jot of truth in Browder’s story, but this is the doctrinal essence of the story known as the ‘Magnitsky case’ put in as a basis for the U.S. Act that caused the most severe damage to the U.S.-Russian relations in recent years,” the letter reads. Then its authors offer to bring the “collected evidence” before the House Subcommittee on Oversight and Investigations and “other concerned U.S. government agencies.”

The document ends with a conspicuous quid pro quo enticement: “Changing attitudes to the Magnitsky story in the Congress, obtaining reliable knowledge about real events and personal motives of those behind the lobbying of this destructive Act, taking into account the pre-election political situation may change the current climate in interstate relations. Such a situation could have a very favorable response from the Russian side on many key controversial issues and disagreements with the United States, including matters concerning the adoption procedures.” (Emphasis added.)

Rohrabacher’s press secretary, Ken Grubbs, told The Daily Beast that the letter “came from the Russian government itself, as indeed most information from Russia comes from the government itself,” but declined to specify who, exactly, in the Russian government presented the document to the California congressman and his colleagues.

As for the letter’s contents, wherein a U.S. company is implicated in securities and tax crimes and the founding premise for a four-year-old U.S. law is deemed illegitimate, Grubbs did not wish to comment beyond saying: “The congressman simply wants to give [the document] careful consideration. He recognizes that various partisans are impatient for a conclusion, but he wants intellectual honesty to prevail, which requires some patience.”

Careful consideration of these accusations was the stated reason for Rohrabacher’s participation, three weeks ago, in temporarily deferring the markup of a new and expanded draft bill that would apply the economic measures of the Magnitsky Act on a global scale, making gross human rights abusers from any country susceptible to U.S. asset freezes and visa bans.

That deferral more or less coincided with the scheduled debut in the European Parliament of a two-hour documentary, The Magnitsky Affair—Behind the Scenes, reiterating many of the accusations made in the Russian government letter Rohrabacher received.

The documentary was directed by famed Russian filmmaker Andrei Nekrasov, who has a reputation as a critic of the Russian government. The documentary’s debut was canceled at the last minute, however, owing to legal pressure brought by Browder, who considers it morally squalid in tone and libelously wrong on the facts, and also by the public outcry of several MEPs who agree with him.

But how did Nekrasov’s work get to be slated for exhibition in Europe’s legislature? Here the story gets even weirder. Heidi Hautala, a Finnish MEP from the Greens voting bloc whom Browder once considered to be a stalwart proponent of Magnitsky sanctions in Europe, hosted the abortive screening. (She is reportedly dating Nekrasov.)

Also in attendance were two invited guests whose presence raised eyebrows among those familiar with the real Magnitsky affair. The first was Maj. Pavel Karpov, one of the Interior Ministry policemen the lawyer identified as an accomplice to the Hermitage fraud and one of the first state officials to be sanctioned under the U.S. law.

The second was Natalia Veselitskaya, who told state-controlled Russian television channel NTV from Brussels: “We have not yet unraveled the chain of all those nuances with which Mr. Browder has lived and keeps living. He alone knows for sure the reason for Magnitsky’s death.”

When the film was ultimately yanked, Veselitskaya was incensed: “We are deeply outraged and…feel a sense of disgust. Withdrawal of the film from the premiere shows that freedom of speech in the European Parliament is granted only to one side.”

Browder believes that Veselitskaya played an integral role in the Nekrasov documentary. “The Russian press referred to her as one of its organizers and the person who provided input for this anti-Magnitsky film,” he said. “It is certainly consistent with their own anti-Magnitsky sentiments.”

Among the more contentious claims in The Magnitsky Affair is the suggestion that the lawyer was not really a lawyer (despite the fact that even Putin’s presidential website describes him as such) and was never beaten by prison guards, despite postmortem photographs showing bruises about his arms and legs, an official death certificate that refers to a suspected cerebral cranial injury, and a Russian government forensic team’s findings that he suffered from blunt force trauma consistent with that inflicted by rubber truncheons.

Nekrasov also claims that Magnitsky never uncovered any involvement by Russian Interior Ministry officers in the theft of Hermitage subsidiaries and the subsequent tax heist, despite complaints that Magnitsky prepared and testimony he personally gave to Russia’s FBI-like Investigative Committee outlining his findings in great detail.

Nekrasov’s film, following the Kremlin’s line, also blames Magnitsky and Browder for stealing the $230 million.
Rohrabacher appears to find that allegation persuasive. On May 4, the congressman tweeted: “Don’t ignore courageous Ru journalist who exposes Putin’s sins, Andrei Nekrasov. He reports Magnitsky case is a lie. Open Ur mind.”

Many more tweets in a similar vein preceded and followed this one.

Curiously enough, as this article was being edited Tuesday, The Daily Beast learned about a further development in the the Global Magnitsky Human Rights Accountability Act, which is due to be marked up Wednesday in the House Foreign Affairs Committee.

According to a U.S. congressional staffer, former California Rep. Ron Dellums and someone named Rinat Akhmetshin showed up Tuesday without an appointment.

“They said they were lobbying on behalf of a Russian company called Prevezon and asked us to delay the Global Magnitsky Act or at least remove Magnitsky from the name,” the staffer said. “Mr. Dellums said it was a shame that this bill has made it so Russian orphans cannot be adopted by Americans.”

Rinat Akhmetshin was identified in February 2015 by the New York Times as the “director of a Washington think tank called the International Eurasian Institute.”

Late Tuesday evening, The Daily Beast obtained a copy of Rep. Rohrabacher’s proposed amendment to the bill for Wednesday’s markup session. On Page 2, line 2, the congressman instructed the Foreign Affairs Committee, “Strike Magnitsky.”


Article Link to the Daily Beast:

Everybody Has A Sex Gap

And a racial gap, too


By Kevin D. Williamson 
The National Review
May 18, 2016


The NBC headline read, “Why Trump Must Make Gains Among Women Voters to Win the White House,” which brought to mind two things: First, native speakers of English, including professional writers, remain confused about when to use “women” (noun) and when to use “female” (adjective).

Second, O. J. Simpson was guilty.

Of course Donald Trump is doing poorly with female voters. Trump is a man who, despite his vast inherited wealth and celebrity, is so insecure in his relations with women that he invented an imaginary friend to lie to reporters about his love life (Carla Bruni? Sure, Donald) and set up a modeling agency to import a dating pool. His first wife accused him, in formal legal proceedings, of raping her, and he boasted of sharing with his buddy Jeffrey Epstein — of “Pedophile Island” fame, now a registered sex offender – a taste for women “on the younger side.” He’s a Class A weirdo and a creep.

Mrs. Clinton is a Class A weirdo and a creep of a different sort. And, just as Trump does poorly with female voters, Mrs. Clinton does poorly with male voters. In a CNN poll, Clinton beat Trump among women 62 percent to 34 percent; Trump beat Clinton among men 54 percent to 41 percent. That same poll found that in the early Democratic-primary states, Clinton’s overperformance with women/underperformance with men widened over 2008, going from a 7.5 percent difference to a 10.5 percent difference.

Democrats have won the female vote in every presidential election from 1992 forward; Republicans have won the male vote in every election from 1968 forward. Even in the landslide Republican victory in 1988, President George H. W. Bush carried women by only 4 points. In 1988, it was Morning in America, but Reagan carried women by only 55–45, compared to his 64–36 margin with men.

This isn’t explained by the so-called women’s issues, a term that largely functions as a euphemism for abortion regulation. As my colleague Ramesh Ponnuru has shown, sex correlates only loosely with having liberal views on abortion, and views on abortion correlate only loosely with voting. There isn’t very much evidence at all that abortion is what drives women’s preference for Democratic presidential candidates.

The “women’s issues” error is a version of the plantation fallacy, the belief among some conservatives that black voters prefer the Democratic party because they are more likely to have low incomes and therefore prefer the party that is more enthusiastic about welfare programs for low-income people. But that isn’t true, either: African Americans’ preference for the Democratic party is strong even among those voters who have a low view of our welfare system, and, perhaps more tellingly, identification with the Democratic party and preference for progressive policies increases slightly as black voters’ incomes increase. The strongest African-American support for the Democratic party and the welfare policies associated with it is found among the high-income voters least likely to ever take recourse to such programs.

In fact, the evidence suggests that voter self-interest is a weak force when it comes to party identification and candidate preferences. The high-income voters who would most benefit from Republican preferences for lower personal and corporate taxes do not lean strongly Republican, and do not lean any more Republican than their middle-income counterparts. No Republican presidential candidate has won the black vote since Herbert Hoover (black voters embraced the Democratic party a generation before Lyndon Johnson got religion on civil rights), and as African Americans’ incomes have risen, their identification with the Democratic party has deepened rather than the opposite.

Likewise, no Democratic presidential candidate has won the white vote since the 1960s. All that happy talk about a new era of racial unity in the age of Barack Obama is hogwash: White Americans voted for John McCain and Mitt Romney, with the latter winning nearly 60 percent of the white vote. As Jon Weiner pointed out in The Nation, Romney enjoyed an absolute blockbuster in the white election, winning every state save Massachusetts, Connecticut, New Hampshire, and Iowa. In terms of states, Romney did better against Obama than Johnson did against Goldwater in 1964, an election that was heralded as the ruination of the Republican party. Even Jimmy Carter managed to carry six states plus the District of Columbia in 1980.

As I argue at some length in a recent edition of National Review, ideas, issues, ideology, and philosophy do not really matter very much when it comes to short-term politics, in which voter behavior is dominated by political loyalties typically acquired in the home early in life. That is not to say these loyalties are immutable: There was a time when black voters overwhelmingly preferred the party of Lincoln (it took the disaster of the Great Depression and the New Deal to change that) and when women were in lockstep with the party of Herbert Hoover. (In a letter to Elizabeth Cady Stanton, the great civil-rights leader Susan B. Anthony boasted that she had “positively voted the Republican ticket — strait.”) There was a time when low-income whites in the South were loyal Democrats.

The usual story told to explain these realignments is one that flatters Democrats (all the mean meanies in the South jumped ship, as one white man, after LBJ came out for civil rights), but that isn’t really true. In fact, the United States is not unusual; women and members of minority groups do not tend to identify strongly with conservative parties in most countries, and the GOP is a much more conservative party today than it was in Nelson Rockefeller’s day. That was a long time coming, and if you look at the preferences of black and white voters both, it is difficult to avoid the conclusion that the New Deal, which set the parties on their respective paths of polarization, was the most important event. Black voters flipped very quickly (they’ve voted Democratic from Franklin Roosevelt on and abandoned the GOP in congressional elections in the 1940s), while white voters in the South did not really go Republican until the midterm election of 1994.

And 1994 was a funny year for race in these United States. The O. J. Simpson trial got under way that year, and a year later white Americans were looking at their black neighbors and wondering what the hell they could be thinking, so clearly guilty was the man. Black Americans considering Newt Gingrich, sworn in as speaker nine months before Simpson was acquitted, probably were asking a very similar question about their white neighbors.

We Americans are an individualistic people (what a funny thing to write), and that is to be celebrated, but we also are members of families, professions, communities, and races and sexes, too. White Americans sometimes complain that black Americans, not a living one of whom lived under slavery, need to let go of the past. In a few years, there will be a variation on that theme: “No American living today suffered under Jim Crow.” There are not very many women alive who knew a time when American women were not permitted to vote. There will come a day when no living American Jew remembers when numerus clausus kept Jews out of the Ivy League. But the things that happened to us are not the only things we remember.

It is fairly easy for me to imagine why women would not be eager to vote for Donald Trump. (Indeed, it is very difficult for me to imagine why a man would vote for him.) It is less easy to consider what the Democratic party, both its policies and its personnel, has done to places such as the South Bronx and Philadelphia (and, Lord have mercy, Detroit) and understand why black Americans at large — and the black Americans in those cities! — continue pulling the “D” lever.

Part of the value of an education in literature is the exercise one gets imagining life inside the experiences of someone utterly alien, completely different from oneself. But never mind the Count of Monte Cristo. Vibe, a hip-hop magazine, used to inhabit the same building as National Review, a few floors down. There was rarely any question about who was going to which floor. My next-door neighbor in New York was a young black man — and a libertarian who read Lysander Spooner and co-hosted a Fox Business program. Even when we inhabit the same space (literally and intellectually), there is a distance there, one that may not be, in the end, bridgeable.

I do not like to make predictions about elections, but I’ll make an exception — two, in fact: First: In November, white men mostly will vote for the Republican, while other people mostly won’t. Second: There will be many very detailed explanations of why that happened, and they will be mostly wrong.


Article Link to the National Review:

Trump Doesn't Need A Neocon Running Mate

He has no reason to dilute a successful formula.


The National Interest
May 17, 2016


Few voters will make final decisions over whether or not Donald Trump pretended to be his own publicist or carried on like a rich playboy between marriages a generation ago. But his vice presidential selection is enormously important, both in terms of whether Trump can gather the GOP behind him, and whether he can be perceived broadly as a plausible president.

Trump’s own comments have been down the middle—he has specified that he wants someone with government experience who will help him cement the fissures in the GOP. But as if to demonstrate how broad such guidelines are, last week two surprising suggestions from serious Washington journalists were injected into the conversation.

One, by TNI editor Jacob Heilbrunn, was that Trump could calm the party’s troubled waters by selecting Marco Rubio as his veep—which would “enable a Trump-neocon rapprochement. . . [and] go a long way towards ending the schism created by his rise.”

Others nearer the Trump sphere have mentioned Rubio too, with an eye towards softening Trump’s perceived anti-Latino image and appealing to moderate or establishment Republicans. Political comics might have a field day riffing off Rubio’s campaign comments about the size of Donald Trump’s hands, and by every seeming indication Rubio is a long way from being ready to join such a ticket. Still, Heilbrunn is probably correct that a Rubio selection would considerably soften the neoconservative resistance to Trump.

A variant on this idea was put forth by Eli Clifton on Lobelog, this time by recommending Arkansas Senator Tom Cotton. Like Rubio, Cotton is a neocon protégé, a foreign-policy hawk who has recently been busying himself in the Senate trying to put barriers in the way of successful implementation of the Iran deal. Unlike Rubio, the young senator seems to be actually lobbying for the role, pouring cold water on Bill Kristol’s plans to run someone as an anti-Trump third-party candidate, and letting it be known that he would welcome being chosen by Trump.

If you consider these suggestions from Trump’s perspective, it’s clear that bringing on board a young U.S. senator, either Rubio or Cotton, who is very well thought of by the hawkish wing of the party, would probably bring him some favorable comment in the Weekly Standard and Washington Post editorial pages, as well as other venues. That would be helpful, to a point.

But Trump would then lose at least some of those who supported him because he was the least neoconservative candidate in the GOP field. Trump, the guy who said he could at least try to get along with Putin; Trump, who regularly answered questions about how he would stabilize the Middle East by pointing to America’s massive infrastructure decay and debt; Trump, who didn’t run shrieking from the slogan “America First;” Trump, who emphatically denounced the Iraq war and claimed with some plausibility to have opposed it from the outset—that part of Trump’s appeal to voters would vanish. Of course it’s difficult to estimate how much Trump’s margin of victory came from those stands, but it can’t have been negligible. He was, after all, the sole Republican who regularly promised a change in direction from the Bush/Cheney foreign policy. In a general election, he would be able to make Hillary’s support for wars destabilizing the Middle East (Iraq, Libya) a live issue—an area where, as Bernie Sanders has shown, the Democratic front-runner hasn’t even begun to find a way to defend her record. The choice of Rubio or Cotton would, in a single stroke, forfeit such lines of attack.

But there’s another equally vital reason not to choose Rubio or Cotton: what if Trump wins? A hold on the vice presidency would bring the neoconservatives back into the center of executive decision making. A vice president hires a staff of about two hundred—ample opportunity to bring into the administration a new tier of aspiring Douglas Feiths and Paul Wolfowitzes. The vice presidency would become, under such circumstances, a competing power center within the Trump administration, its staffers awaiting eagerly Trump’s retirement from the scene. They would be clearly next in line behind a president in his seventies. The substantial neoconservative media echo chamber would ensure that it would be Rubio’s or Cotton’s aides who were quoted, or received favorable profiles—not Trump’s. The neocons would have the capacity to oppose any unwanted Trump diplomatic initiatives from inside, leveraging exponentially their effectiveness. Meanwhile neoconservative maneuvering for the “next” administration would begin on day one of a Trump presidency. Neither Trump nor the country needs that.

There’s no reason Trump should treat Rubio or Cotton as enemies; in all likelihood, they have long political careers ahead of them, and won’t necessarily be neoconservatives forever. History is instructive on this point: for quite a while in the early seventies, Daniel Moynihan was Norman Podhoretz’s closest political and intellectual friend and a leading neoconservative; they grew apart a few years after Moynihan’s first senate election, and the New York senator emerged eventually as an unpredictable and eclectic centrist voice, disappointing the neocons by favoring arms control with the Soviet Union, and later opposing the expansion of NATO towards Russia’s borders.

In a decade, Cotton or Rubio or both might wind up in an analogous posture. But for the moment, the two are among the leading Senate representatives of a bellicose intellectual faction which rejects everything Donald Trump stands for, and their selection would rip up the coalition he has cobbled together. Their ideas about foreign policy—no matter how much media power is arrayed behind them—are failed ones, and are widely understood to have failed. Trump should do some ideological outreach with his veep selection, but Rubio or Cotton would be a bridge too far.


Article Link to the National Interest: