Tuesday, June 28, 2016

Today's Stock In Play Is Immune Pharmaceuticals (Symbol #IMNP)

Tuesday, June 28, Morning Global Market Roundup: World Stocks, Sterling Try To Shake Off Brexit Blues

By Saikat Chatterjee
June 28, 2016

Asian stocks rose for the first time in three days on Tuesday while sterling and other currencies advanced as investors scooped up beaten down assets after Britain's vote to exit the European Union stunned financial markets.

European markets looked set to follow Asian stocks higher, according to financial bookmakers, and U.S. stock futures ESc1 rose 0.8 percent, suggesting a stronger opening on Wall Street after a brutal two-day slide. [.N]

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.1 percent but the tiny gain belied an impressive turnaround which saw the Japanese stocks.N225 rally more than 3 percent from the day's lows, pulling other Asian markets higher. The Nikkei was up 0.6 percent by early afternoon.

But in a sign that investors remained extremely nervous, trading volumes were light and price action was choppy across markets.

"Short-covering in the currency market and U.S. futures market is limiting selling," said Yutaka Miura, senior technical analyst at Mizuho Securities. "But overall sentiment remains fragile."

"Friday's Brexit jump scare has faded, but markets are still worried" about its possible effect on global demand, SLW brokerage trader João Paulo de Gracia Corrêa said.

Policymakers from Japan to China vowed to protect their economies and markets from the destabilizing impact of Brexit.

"It's hard to avoid short-term volatility in China's capital markets, but we won't allow roller-coaster rides and drastic changes in the capital markets," Premier Li Keqiang said at the World Economic Forum (WEF) in the city of Tianjin.

In currency markets, sterling GBP=D4 was changing hands at $1.3291, after falling to a three-decade low of $1.3122 on Monday, its weakest since 1985.

Against the yen, sterling rose 1 percent to 135.54 GBPJPY=R, not far from Friday's 3-1/2 year low of 133.18. The euro stood at 82.93 pence EURGBP=R after scaling a two-year peak of 83.79 pence on Monday.

The euro edged down slightly to $1.1060 EUR=, not far above Friday's three-month low of $1.0912 after the British vote.

"In the near term, risk aversion and market uncertainty makes the euro less attractive to investors," Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in a note to clients.

"In the long run, Brexit also raises questions about the Eurozone's viability because if major countries like Britain start dropping out the EU, nationalism could drive smaller Eurozone nations to exit out of the euro," she said, adding that she expects the euro to "make another run" for the $1.0900 level.

Early signs of a cautious return in demand for riskier assets were evident in the high-yielding Aussie AUD=D3 and the New Zealand dollar NZD=, which helped put a floor under other emerging market currencies in Asia.

Anticipating yet another round of global policy easing by major central banks, government bond yields pushed deeper into negative territory. Yields on ten-year and 20-year Japanese debt plunged to fresh record lows.

Gold XAU=, one of the rare outliers in global financial markets in the last few days, came in for a bit of profit taking with the precious metal down 0.7 percent. Silver XAG= fell 0.3 percent.

Crude oil prices regained some of their overnight losses after tumbling nearly 3 percent on Monday. [O/R]

U.S. crude CLc1 added 1.7 percent to $47.11 a barrel after shedding 2.8 percent on Monday, while Brent LCOc1 rose 1.6 percent to $47.89 after skidding 2.6 percent and touching seven-week lows overnight.

Article Link to Reuters;

U.S.-UK Alliance Seen Outweighing Brexit Trade Concerns

By David Lawder
June 28, 2016

The United States looks unlikely to follow through on a threat to relegate Britain to second-class trade status once its ally leaves the European Union, as it weighs the potential costs of undermining the countries' close diplomatic and military ties.

President Barack Obama had warned ahead of Thursday's "Brexit" referendum that Britain would move to the back of the queue on U.S. trade priorities if it voted to leave the bloc, well behind a much-larger U.S.-European trade deal now under negotiation.

But in the face of a severe financial market reaction to the vote to leave the EU, U.S. officials are making more supportive statements about the strength of the U.S.-U.K. "special relationship" and stressing that they are still analyzing the impact of "Brexit" on the European trade talks.

Security and trade experts said Washington is wary of adding to Britain's economic pain, which could hamper its ability to maintain its commitments to NATO and U.S.-led efforts to fight terrorism. A poorer Britain may not be able to afford its pledge to spend 2 percent of its GDP on defense at a time of increasing threats from Russia, nor a new fleet of nuclear submarines that form a key part of the West's nuclear missile deterrent.

"The U.K. could become smaller and weaker. If that happens, then you wonder if they can sustain the defense spending and the effort to be globally oriented," Nicholas Burns, a former U.S. ambassador to NATO, told reporters after an Atlantic Council event on Monday.

"That's what we worry about with Britain leaving. Britain was the strongest American partner inside the EU."

Some trade experts also said that a deal on the U.S.-European Trans-Atlantic Trade and Investment Partnership (TTIP) was unlikely for years now without Britain at the table, which could open an opportunity for a separate deal with the U.K.

"The 'back of the queue' statement will be forgotten by the next administration, if not sooner," said Gary Hufbauer, a senior fellow at the Peterson Institute of International Economics. "In my view, TTIP is either dormant or dead in the wake of Brexit."

It may be easier for Washington to negotiate a bilateral trade deal with Britain, a "like-minded" country that is more open to free trade than the 27 remaining EU members, said Miriam Sapiro, a former deputy U.S. Trade Representative.

"A U.S.-UK agreement could create leverage to get TTIP done more quickly, and it's an easier agreement to do," Sapiro said.

Calming Words

As U.S. Treasury Secretary Jack Lew and Secretary of State John Kerry sought to contain the damage from Brexit in public appearances on Monday, they both refrained from repeating Obama's trade warning.

Lew told CNBC that a trade deal with the EU remains a priority because it has been under negotiation for several years, but he did not rule out the possibility of separate talks with Britain once Europe and the UK agree on separation terms.

"Any separate negotiation with the U.K. will have to take a course in part determined by what happens between the U.K. and EU," Lew said. "So it is, I think, very much in the interest of all parties to maintain open trade relationships. The U.S. and the UK have a special, deep relationship that will continue."

White House spokesman Eric Schultz added that the administration was "working through" how the "Brexit" vote would affect the TTIP talks.

"If we have to start negotiating separately with the United Kingdom, that's going to start from a different vantage point, especially because we've had years of progress."

Schultz said that U.S.-U.K. economic ties "remain strong and vibrant as they have been, and the special relationship had not suffered because of the vote.

The more conciliatory tone "is about stabilizing the economic situation," said Heather Conley, European Program Director at the Center for Strategic and International Studies, a Washington think tank. She added that since markets were "already punishing" Britain for the vote, there was no need for the Obama administration to pile on.

Recession Threatens Defense Budget

Goldman Sachs' top economists told clients that they expect Britain to enter a recession within the next year as investment plans shrink and credit tightens in the vote's wake..

Both Standard and Poor's and Fitch Ratings cut their credit ratings for Britain, anticipating damage to its economy from Brexit, while the shares of British homebuilders have tumbled as much as 40 percent in two days.

The British government is scheduled to make a final decision this year on replacing the four aging submarines that carry its Trident intercontinental nuclear ballistic missiles, a program that could cost as much as $167 billion.

British Defense Minister Michael Fallon told parliament on Monday that the government maintains its commitment to the BAE Systems program and hoped a vote on the decision would be held “shortly.”

In another twist, Britain's submarine fleet is based at Faslane on Scotland's west coast. Should Brexit prompt Scotland to make a second, successful bid for independence, Britain may be faced with having to spend billions to build a new submarine base.

Britain's departure from the EU -- which could take several years to negotiate -- risks undermining Europe's new defense strategy, days before NATO and EU governments sign a landmark pact to confront a range of threats from Russia to the Mediterranean, officials say.

NATO allies will be looking for reassurances on Britain's commitments to the group at a summit in Warsaw in July.

"Things are going to be a lot harder," said a senior Western defense official involved in EU-NATO cooperation. "NATO planned on linking itself up to a stronger European Union, not being the default option for a weakened, divided bloc."

Another U.S. official played down any near-term security concerns saying: "I don’t think the sky is falling here."

Article Link to Reuters:

Oil Prices Rise On Looming Norway Strike, But Brexit Still Weighs

By Henning Gloystein
June 28, 2016

Oil prices rose on Tuesday as a looming strike in Norway threatened to cut output in western Europe's biggest producer, although Britain's vote to leave the European Union was still weighing on markets.

About 755 Norwegian workers on seven oil and gas fields could go on strike from Saturday, hitting output from the North Sea's top producer, if a new wage deal is not agreed before a Friday deadline.

A final round of mandatory talks will be hosted by a state mediator on June 30 and July 1 in an effort to avoid disruption that could start the following day.

The affected fields account for nearly 18 percent of Norway's oil output and a little more than 17 percent of its natural gas, Reuters calculations show.

Combined oil output was about 285,000 barrels per day in the first four months of the year, with natural gas output at 48.5 million cubic meters (mcm) per day.

London Brent crude futures were trading up around 1.5 percent, or 70 cents, at 0651 GMT at $47.86 per barrel.

U.S. West Texas Intermediate (WTI) futures were up 78 cents, or 1.68 percent, at $47.11 a barrel.

But the price rises came after oil fell to 7-week lows in the previous session on the back of market turmoil over Britain's vote to leave the EU, reducing investor appetite for volatile commodities like oil.

"Crude oil led the sector lower as investors continued to dump risky assets," ANZ bank said on Monday.

Consultancy Energy Aspects said Brent was "under pressure as timespreads continued to weaken amidst a complete collapse in bids for crude".

It added that refinery run cuts in Asia, which use physical crude oil as their main feedstock and crude futures for hedging purposes, were also dragging on markets.

Markets were also weighed by news that a successful ceasefire in Nigeria had allowed repairs to oil pipelines that had restricted the country's ability to export oil, ANZ Bank said.

Oil production in Nigeria has risen to about 1.9 million bpd from 1.6 million bpd due to repairs and more than a week having passed since a major pipeline attack in the Niger Delta, a state oil company spokesman said on Monday.

Article Link to Reuters:

The Speech That Elected Trump

Trump hasn’t disclosed his taxes. He hasn’t even paid them, as best we know. Here’s how he could make political lemonade from those lemons.

By David Cay Johnson
The Daily Beast
June 28, 2016

Donald Trump, breaking with an American political tradition that began when President Richard Nixon and Vice President Spiro Agnew were revealed to be criminal tax cheats, refuses to has so far refused to disclose his tax returns.

One massively plausible explanation: He hasn’t paid taxes—or not very often. As I showed in a previous Daily Beast column, there is strong evidence that Trump cheated on his 1984 tax return. And that he paid no taxes at all in at least four other years.

Hillary Clinton, who has released her complete tax returns back to when she lived in Arkansas, and her surrogates are going to pound Trump at every turn for not releasing his tax returns. They will also likely suggest he is a tax cheat, perhaps drawing on my previous column citing strong evidence that Trump cheated on his 1984 tax return, and other official reports establishing he has had tax-free years.

But there is a way for Trump to turn this political liability into a vote-generating asset.

The first step is to tell people he’s going to reveal how much he paid in income taxes, being careful not to say “tax returns,” going back to 1978.

Next, Trump attacks, railing against Congress doing tax favors for donors. He could single out Mitt Romney, who probably paid little or no federal income taxes during the decade when he was not just the manager of Bain Capital Management, but its sole owner.

Then Trump tells people to look at their paychecks and dream about what they could do with all the money the IRS takes. To bring their paychecks to rallies and he could hold one up and ask why working people get paid only after Uncle Sam, but hedge and private equity fund managers delay paying their taxes for years and years.

After a week or so of this, Trump asks the networks for live prime time to deliver “the most important announcement ever,” daring them to air summer reruns instead.

Speaking, with a teleprompter, from one of the symbols of his wealth—Trump Tower, Mar-A-Lago or inside his Boeing 757—Trump speaks. Here’s my draft of his address:

"I’m going to tell you one of the great secrets of America. It’s a secret the politicians in Washington are never going to tell you because, folks, they don’t know what’s going on. They are passing laws and they don’t even know what they are doing. They don’t even read them.

Those reporters aren’t going to tell you, either. Because they don’t know anything except how to make me look bad when I’m trying to help you because those reporters, a few are good, most of them don’t care about you. The lyin’ press.

And Hillary, Lyin’ Crooked Hillary, for sure is never going to tell you the truth. You know why? Because if she told you the truth I’m about to tell you she’d never get another million from Goldman Sachs. They paid her millions and millions and millions of dollars for speeches and she won’t even show you the transcripts.

Now let me tell you this secret that the politicians and the press and especially Lyin’ Hillary are keeping from you: Many, many rich people in America don’t pay income taxes. They don’t. Or they pay almost nothing, almost nothing.

It’s true. Now some rich people pay lots of taxes. They’re losers, rich losers like Mark Cuban and Martha Stewart. But many rich people don’t pay income taxes. They’re the winners, but they win only because Lyin’ Hillary and her friends won’t tell you the truth.

They don’t pay taxes because they get little changes in the law so they don’t have to. All legal. A few words here, some mumbo jumbo there. Ol’ Mitt was never going to show you what he paid in taxes because he paid next to nothing or maybe nothing at all when he was in private equity.

Private equity, those guys who send our jobs to China, and Congress lets them make millions and pay nothing in taxes. Nothing. They send our jobs to China and they don’t even have to pay income taxes.

It’s terrible folks, it’s just terrible—and we have to stop it.

Why do you think Goldman paid Lyin’ Hillary all that money? Do you think she knows anything about business? She couldn’t even run the State Department without getting our people killed. Do you think she told Goldman freaking Sachs anything they didn’t already know? Folks, they were buying her, buying her silence just like her silence on those missing emails. Well, maybe they were just renting her, I don’t know.

Now I’m telling you this because I’m going to change that. The very first thing I’m going to do in January is make your taxes so small you won’t mind the little tiny bit Uncle Sam takes. Most of you paying taxes aren’t going to pay one dollar anymore, not a cent.

You’re going to be winners. It’s going to feel good. It’s going to feel so good you won’t be able to stand it. Your kids are going be happy. You’re going be happy, It will feel so, so good.

Now for me, well, it’s going to hurt. It is really going to hurt. But you know what it’s the right thing to do. And I can afford it. I’ve 10 billion dollars—actually, folks, it’s more than that. More than 10 billion dollars, so I can afford it. Believe me, folks, I can afford it.

And you know how I got 10 billion dollars? Well not paying any income taxes for almost 40 years helped a lot.

And, folks, it was legal. It was all perfectly legal. That’s because Lyin’ Hillary’s friends in Washington, they put in all these tax rules and laws and regulations that destroy small businesses, that punish you for working hard. Hillary wants to keep things that way. She wants to squeeze you and squeeze you and make you pay more and more.

Now the truth, the awful terrible truth, is that I haven’t paid income taxes in years. I haven’t had to, just like so many of my richest friends. They haven’t had to, either. And it’s all legal, folks. It’s all perfectly legal. It really should be a crime.

Now that’s wrong. It is absolutely wrong. I should have to pay taxes. And I will pay taxes, lots and lots and lots of taxes. Do you have any idea how much in taxes I’m going to have to pay? A lot, let me tell you, a lot.

You know that picture I put on Twitter of me signing my tax return? When I sat down I had to look up to see the top of the pile. So much paperwork. We’ve got to take our country back.

Now I’m not going to show all those papers because they wouldn’t tell you anything. There’s nothing there, folks. But I will tell you this and you can believe me. You can believe me:

I have not paid income taxes in almost 40 years. Not one dollar.

And it was all legal and it’s got to stop. It’s going hurt me. It’s going hurt a lot of people at Goldman Sachs and Ol’ Mitt and a lot of other people. But you’ll feel so good when your taxes are less, so much less.

Think about all the taxes you’ve paid. Look at your paycheck. Get good and mad. Really mad. Show you aren’t going to take it anymore. Just give me your vote and I’ll stop this and you will all be such winners, such winners. And you’ll feel so good, I promise you, that you won’t be able to stand it."

A speech like that, after laying the groundwork, could turn Trump from what the the polls indicate today will be a big-time loser in November into the next president of the United States.

And if he actually fulfilled that promise, it would make for a healthier economy, too.

Article Link to The Daily Beast:

They Survived ISIS, Then Disappeared

Hundreds of residents of Fallujah have gone missing—taken away by the paramilitaries fighting ISIS.

By Jonathan Krohn and Nancy A. Youssef
The Daily Beast
June 28, 2016

The way Rasool Abdullah remembers it, he was in a hall with dozens of other men in an abandoned house outside Fallujah.

He was thirsty, as he had barely any water to drink for the past two days. The heat from the summer sun made the cramped quarters unlivable. His hands were tied tightly with zip ties, and from the rooms off the hallway, where he says people were being tortured, all he could hear was screaming.

“Ahmed is dead!” someone cried.

Rasool added Ahmed to his mental count. By the time he left 11 hours later, he says he’d lost the exact number of those who had fallen around him.

“Twelve or 13 people in the hall I was in died. I’m not including the people in the rooms,” he told The Daily Beast. “I don’t know their [full] names, only the number of people who are dead.”

While the recent liberation of Fallujah is being celebrated by governments from Washington to Baghdad, hundreds of civilians like those who were arrested with Rasool remain missing. The problem is that, unlike those taken by ISIS, these civilians were arrested by Shiite pro-government militant groups operating as representatives of the Iraqi government.

In a list shared exclusively with The Daily Beast, the Anbar Provincial Council says it has identified 49 deaths carried out by pro-government paramilitary forces during the liberation of Fallujah, which Iraqi officials say has been completed today. Forty-six of them are listed with names, while three are simply identified by the Council as “Unidentified Body in the Amiriyat Fallujah Hospital.”

The Anbar Provincial Council has also publicly released a list of 643 names of those whose whereabouts are unknown, having been taken from the town of Saqliwia outside Fallujah.

“This list we have is the primary count of the people who are missing,” said a council member who asked to remain anonymous due to the sensitivity of the issue, “And we’re [still] counting.”

Claims of sectarian brutality by members of the government’s Popular Mobilization Units (PMUs)—an umbrella organization of pro-government militias that worked alongside the Iraqi Security Force to rid Fallujah of ISIS—are not just the one-time costs of liberating the Sunni-dominated city. Suggestions of the killing of innocents by Shiite groups within the PMUs potentially lay the seeds for continued anti-government anger in Fallujah, something U.S. officials fear could lead to a return of extremist groups like ISIS.

U.S. officials openly celebrated “progress in freeing” Fallujah, as Secretary of Defense Ash Carter said in a statement. Officials believe the campaign helps the Iraqi government and embattled Iraqi Prime Minister Haider al-Abadi. Privately, the reaction was tepid. There are fears among defense officials that ISIS made a calculated decision to abandon fighting against an armed force, backed with daily U.S.-led coalition airstrikes since the offensive began May 21. ISIS, the officials fear, plans eventually to return.

As one U.S. official told The Daily Beast: “If this is a rope-a-dope, then [ISIS] hopes we are George Foreman.” In other words, ISIS is banking on Iraqi forces, and their American partners, tiring of fighting for stability in Fallujah.

There are reasons to for U.S. officials to be nervous. The last time the Shiite-led government was responsible for security in Fallujah, sectarian tensions emerged and Fallujah became, in early 2014, the first Iraqi city where ISIS gained control of territory.

Even as Fallujah was falling again out of extremist hands, the finger-pointing over who was responsible for the death of Sunnis already had begun. While the militia responsible is officially unknown, survivors interviewed by The Daily Beast repeatedly pointed the finger at Kataib Hezbollah, one of the strongest Shiite-dominated militias in Iraq and the only such militia listed as a terrorist organization by the State Department. (Abu Mahdi al-Mohandis, the group’s commander, also happens to be a deputy chairman of the PMUs.)

In response, Kataib Hezbollah spokesman Jaffar al-Hussaini told The Daily Beast: “The government of Anbar knows that Kataib Hezbollah is in charge of killing more than 10,000 ISIS members. So the government of Anbar is trying to take revenge on Kataib Hezbollah, so they are claiming that Kataib Hezbollah did that [the Saqliwia disappearances] so they can take revenge for the 10,000 ISIS fighters.”

Hezbollah’s alleged framing by Anbaris and the Iraqi government at large goes further, Hussaini said, referencing two more cases where Kataib Hezbollah is allegedly responsible for the disappearance of hundreds: People “have been sold as detainees or missing people by the government so they can claim civil rights for them, actually they are ISIS fighters killed during battles.”

Asked for a copy of this list of fake detainees who were really dead ISIS fighters to compare it with the lists provided by the Anbar Council, Jaffar replied, “We cannot share it with you because it is not for media.”

For survivors of disappearances like Rasool, however, the memories are very real and very fresh.

“I saw a guy tortured with my own eyes. [The torturer] called him a pimp and [for that] he gets horns in his head. So he screwed a screw with a screwdriver into his head, like an inch or an inch and a half. He stomped on his head with his boot where he put the screw, and then he screwed the screw into his head with a screwdriver,” he said, “He hit me on the back with sticks and iron, and on the head with an iron tube. He put two cigarettes out in my left ear. When I was almost unconscious, he burned my knee with a piece of iron.”

Mohammad Falah, another survivor, remembered that “from morning until night they kept beating us with iron tubes, thick wires, and sharp objects. They killed some people with sharp objects…they hit the head and the kidney.”

When asked if he saw anyone die, Falah said he remembers three, reciting their names with no hesitation.

“Shakir Kamal Hais was killed. Subhaib Najam Abdullah Abd was killed. Laith Ismael Ubayd was killed,” he said. The Daily Beast later found all three of these men on the Anbar Council’s list as well.

According to the Anbar Council and the mayor of Ramadi, Dr. Ibrahim al-Awsaj, however, in addition to the 643 missing from Saqliwia and the 49 deaths, about 1,200 civilians have gone missing over the past year from the Razaza Checkpoint, a key checkpoint that many internally displaced Anbaris have had to use to get to Baghdad during the military operations in Anbar over the past year.

Kataib Hezbollah was responsible for two checkpoints here, said Jaffar al-Hussaini, the Hezbollah spokesman. But “not all the people who go missing in that area will be blamed on Hezbollah,” he said, adding, “The army is there and the government forces are there, and they have a list of names which they use there now.”

For his part, Brigadier General Yahya al-Rasoul, the spokesman for the Joint Operations Command responsible for the Anbar operations, strongly denied that the army had any role in the Razaza disappearances: “We have no involvement with any detainees at all in that area.”

The prime minister of Iraq has set up a committee to investigate the events in Saqliwia.

The deputy governor of Anbar, who is on the PM’s investigative committee, refused to give a comment on the progress of the committee.

Asked, however, if the committee’s investigation would include delving into the records of the myriad paramilitary groups like Kataib Hezbollah that had been stationed around Saqliwia when the disappearances occurred, all he could muster was a deep sigh and a muttered statement about how the investigation will continue.

Kataib Hezbollah, meanwhile, told The Daily Beast that it has been working directly with the PM’s investigative committee.

“We’ve been a part of the investigation. Our job was to make it easy for the committee to visit the buildings under our control, make it easy to talk to the families, and listen to the testimony of the families who stayed,” said Jaffar al-Hussaini. “We delivered the committee a list of names of ISIS members. Their families claim they are innocent, but we claim they are armed.”

For his part, with the war against ISIS finished in the city of Fallujah and throughout Anbar Province, the member of the Anbar Council who shared the list with The Daily Beast predicted that, sadly, if someone isn’t held responsible for these crimes, anger in Anbar might boil over once more.

“It’s not going to be on as large a scale as 2013 and 2014 [when massive anti-government protests in Anbar galvanized the population], because Anbari people right now—with the fight against ISIS—a lot of people have been killed,” he said. “[They’ve] reached the level of exhaustion.”

Article Link to The Daily Beast:

The GOP Seeks Attacks On Trump

By Noah Rothman
June 28, 2016

The latest Washington Post/ABC News poll should send shockwaves throughout the American political environment, and not merely because of the radical shift in the topline results from a two-point Trump advantage to a 12-point Clinton lead in just one month. The most striking findings in that survey are those that suggest the GOP is joining the nation’s swing voters in souring on Trump.

With the nominating conventions just around the corner, this survey found that 62 percent of “Republican-leaning” voters want to hear Republican elected officials speak out against their party’s presumptive nominee when they believe he has crossed a line. Just 32 percent of GOP leaners surveyed disagree. Since a majority of voters in that poll said that they believe Trump was both biased against Muslims and women and that his comments about Judge Gonzalo Curiel were “racist,” voters don’t appear to think the GOP lacks for opportunities to distance themselves from Trump.

Finally, “there is evidence in the poll that Trump is pushing some GOP voters out of the fold,” the Washington Post write-up noted. Only 69 percent of Republicans who supported other candidates in the primaries—55 percent of the GOP primary electorate—still back Trump.

This is a nearly unprecedented level of disunion for the Republican Party on the eve of a presidential general election, and their apparent nominee isn’t making things any better.

So much for Ronald Reagan’s 11th Commandment.

A lazy and near ubiquitous media trope about the Republican Party’s perpetual “civil war” has finally come to fruition. Unremarkable tensions between constituent groups within the GOP’s coalition of voters that once were hyped unduly in the press as a great factional conflict with schismatic potential are starting to look like the harbingers of a breakup. With the Republican Party on the precipice of nominating a virtual insult comedian, it was only natural that the Reaganite proscription on letting intraparty conflicts spill out into the streets would fall by the wayside. But as anti-Trump Republicans openly plot a coup at the party’s nominating convention in Cleveland, grassroots party members do not appear to be recoiling from displays of intramural conflict. Indeed, they are asking for more.

Traditionally, a person in Donald Trump’s position would make an effort to heal bitter divisions behind closed doors and offer remaining holdouts a modest concession or two. Not this guy.

In a recent interview, Trump contended that he would not invite his two most potent rivals for the nomination—Governor John Kasich and Senator Ted Cruz—to speak at his nominating convention unless they provide him with their unqualified endorsement. The imprudence of Trump’s threat to bar these two key Republicans from the convention if they decline to kiss his ring is matched only by its pretension. Ted Cruz still commands the loyalty of 551 delegates. Kasich retains his 161 delegates and is the governor of the must-win state hosting the party’s nominating convention. They and other Republicans who have withheld their endorsement have fewer incentives to end this standoff than does Trump—that is, if he truly wants to unify his party and win the presidency in November.

If that is Trump’s objective, he has plenty of reason to worry that he is losing ground. As more voters come to regard the likely GOP nominee as a contagion, Republican elected officials are treating Cleveland like quarantine. Of the fifty Republican officeholders Politico surveyed, “only a few” said they planned to attend the convention. Fewer still appeared open to addressing the attendees. Considering how coveted a prime time speaking slot at a quadrennial national nominating convention is, the fact that so many GOP politicians are shunning the spotlight is astonishing.

If the presidential race in 2016 follows a predictable trajectory, Donald Trump should enjoy a bump in the polls following the nominating convention. But what if that gathering is characterized by civil discord and the proceedings more closely resemble a variety show? Will the party unity that traditionally fuels the anticipated post-convention spike in a presidential candidate’s polls materialize?

Can Trump win the presidency without the GOP? He certainly thinks he can. “Don’t talk. Please, be quiet,” the presumptive nominee informed the “leaders” of his adopted party. “[W]e have to have our Republicans either stick together or let me just do it by myself.” He has appealed to disaffected Bernie Sanders-voting independents and socialists to fill out the thinning ranks of his supporters, but they seem disinclined to heed his calls for unity. If Trump is to win the presidency, he will need more GOP unity than he has now. To earn it, the celebrity real estate developer seems uninterested in the compromises he will have to adopt. What’s more, many Republican voters don’t seem all that interested in being won over.

Article Link to Commentary:

Imagining The U.K. And The EU Three Years After Brexit

By Mohamed A. El-Erian
The Bloomberg View
June 28, 2016

It's the summer of 2019, three years after British voters stunned the world by voting to leave the European Union. The U.K. has regained its economic and financial footing, as well as its national confidence. A smaller and more unified European Union now functions in a more coherent fashion.

But the road has been bumpy and, as a result, the global economy came close to recession, financial instability and more isolationist policies. Meanwhile, the global standing and influence of both the EU and the U.K. are much reduced.

In the months after the referendum, the U.K suffered a series of political traumas. All attempts to bypass the referendum's verdict failed. The two major parties, the Conservatives and Labour, went through messy leadership contests, but still received a major rebuke from voters in the general election that followed. A new "national coalition" somehow managed to come together and negotiated a new Association Agreement with the EU that maintained most free trade of goods and services.

Even though the weaker pound brought a sharp increase in tourists,Britain's economy took a hit. Weaker business investment and subdued consumption tipped the country into recession, despite an interest rate cut by the Bank of England. The financial sector was damaged the most, shedding workers in response to earnings pressures caused by a lower and flatter yield curve, the deterioration in credit quality and the transfer of company operations and employees out of London, though this flight was less severe than some had predicted.

The EU experienced its own spasms. Emboldened anti-establishment movements had hoped that the victory of the Brexit camp in the referendum would translate into a generalized bounce in popularity with voters. Instead, they received only selective backing as citizens witnessed the buyers' remorse of their peers across the Channel. As a result, very few countries followed the U.K. out of the EU, and the biggest ones stayed.

With the end of the recurrent skirmishes and arguments with the U.K. over whether the EU should be much more than a free trade zone, Germany and France led a reinvigorated effort toward the "ever closer" union envisaged by the EU's founders. The regional economic architecture was strengthened, allowing Europe to finally have a realistic hope for a better sustained economic performance.

The referendum sparked three years of intense internal reflection in almost every European nation. Both the U.K. and EU stepped back from some of their traditional global roles. And with the U.S. hesitant to take on additional international responsibilities, the vacuum was filled in a haphazard manner by many other countries, further fragmenting the global system and accelerating its march to what Ian Bremmer has labeled the G-Zero world.

The rest of the global economy and financial markets also were affected. As hard as they tried, they could not fully avoid negative spillover from the instability in Europe. Financial markets went through a period of volatile recalibration, which contributed to the headwinds for global growth. It was only thanks to more enlightened political leadership in the U.S. and systemically important emerging countries -- triggered by a long-delayed economic "Sputnik Moment" -- that the world economy as a whole was able to avoid recession.

We are still living in messy 2016, however, and this scenario for 2019 is but one of the two major possibilities for the global economy as it gets nearer to the consequential T junction in the world economy's path that I detailed in "The Only Game in Town." The other outcome, which is equally probable, would be even worse political dysfunction, resulting in a global recession, intense financial instability, greater isolationist policies and worsening inequality of income, wealth and opportunity.

In a funny sort of way, the U.K. and the EU are leading indicators of how the world economy will fare as the current path comes to an end, and as more improbables and unthinkables become realities. Let's hope they are up to the challenge.

A lot is at stake.

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How Obama's Iran Policy Undermines Clinton's Campaign Message

By Eli Lake
The Bloomberg View
June 28, 2016

In a year when the GOP has grown increasingly fractured, it's easy to lose sight of a foreign-policy schism inside the other major party. After all, the presumptive Democratic nominee was the current president's first secretary of state. Her Republican opponent, on the other hand, now touts his opposition to a war his party's last president launched in 2003.

Yet despite their governing partnership, Hillary Clinton and Barack Obama have very different views of Iran following last summer's nuclear deal. Both support that pact and say that it makes the region and the world safer. But Obama has sought to integrate Iran into the community of nations, while Clinton promises to punish Iran's bad behavior.

This rift came to the fore last week at a conference in Washington hosted by the Truman National Security Project, a group that was formed after the Sept. 11 attacks to develop young progressive foreign policy leaders. At the conference, Jake Sullivan, Clinton's top national security aide, said it was time to "rebalance" the U.S. position in the Middle East and address the proxy war between Iran and America's traditional Sunni allies. "We need to be raising the costs to Iran for its destabilizing behavior and we need to be raising the confidence of our Sunni partners," he said. Sullivan said persuading Sunni allies the U.S. intended to remain engaged in the region would be a way to blunt their own dangerous "hedging behavior" against Iran.

Now, it should be said that Obama has sought to reassure the Gulf kingdoms, particularly since completing the Iran deal nearly a year ago. He has sold more arms to U.S. Gulf allies than any U.S. president before him. The U.S. quietly supports the Saudi-led war in Yemen against Iran's proxies with munitions, mid-air refueling and intelligence on targeting.

But Obama has also sought reconciliation with Iran since the nuclear deal. His administration approved a deal for Boeing to sell new commercial aircraft to Iran, despite evidence that Iran has used its commercial aircraft to arm the regime of Bashar al-Assad in Syria. In Iraq, the U.S. Air Force has supported military operations that include Shiite militias backed by Iran's Revolutionary Guard Corps.

Obama's secretary of state, John Kerry, has also tried to assure European banks that it's safe to invest in Iran's economy, even going so far as to propose ways for Iranian institutions to gain access to the U.S. dollar. Just last week, the White House endorsed a decision from the Financial Action Task Force, a governing body of the international banking system, to delay penalties on Iran's banks for money laundering and support for terrorism.

Mark Dubowitz, the executive director of the Foundation for Defense of Democracies and an expert in Iran sanctions, told me Monday that Sullivan's comments at the Truman conference were similar to what he has said to other experts. He said this Clinton policy would be one of "pushing back aggressively against Iran's malign behavior while reassuring fearful and anxious allies who are no longer confident about American leadership."

This approach veers away from Obama's. The president, for example, mused earlier this year to the Atlantic's Jeffrey Goldberg that Iran and Saudi Arabia must learn to share the Middle East and work towards a cold peace.

Clinton, on the other hand, has emphasized how she will be watching Iran like a hawk.

Speaking to the American Israel Public Affairs Committee (Aipac) in March, Clinton said, "The United States must also continue to enforce existing sanctions and impose additional sanctions as needed on Iran and the Revolutionary Guard for their sponsorship of terrorism, illegal arms transfers, human rights violations and other illicit behaviors like cyber-attacks."

Obama has been reluctant to punish Iran since the agreement. While his government belatedly imposed mild sanctions on Iran for its test of ballistic missiles, it has not sanctioned Iran for its support for terrorism or human rights violations since completing the nuclear agreement last July.

For now, many foreign policy progressives prefer Obama's Iran policy. After her Aipac speech, the National Iranian American Council issued a statement bemoaning Clinton's "containment" approach to Iran. "At a time when President Obama is seeking to make his historic Iran policy change as irreversible as possible," the statement said, "we are concerned by Secretary Clinton downplaying the possibility of a larger diplomatic opening."

Sometimes an outside group can say something a sitting president cannot. In this case, Obama's efforts to make his Iran policy "irreversible" could render Clinton's campaign promises hollow if she wins the election.

Article Link to The Bloomberg View:

Third Rome Rising: The Ideologues Calling For A New Russian Empire

The neo-Byzantines believe Moscow will save Christendom.

By Areg Galstyan
The National Interest
June 28, 2016

Russian society is actively discussing the recent visit of President Vladimir Putin to Greece, where he took part in the celebrations of the thousandth anniversary of Russian monks’ presence on Mount Athos. During his meeting with the clergy, the president said that Mount Athos is the source of society’s moral foundations. The leading Russian media, either on purpose or due to ignorance, embellished the ceremony at Mount Athos, claiming that Putin sat on the throne of the Byzantine emperors. In fact, Putin spent the service in a stasidion—a monastic chair with a folding seat designed for high-ranking honored guests in the temple. Nevertheless, Putin’s symbolic visit sparked joy among those conservatives in Russia who see this as a sign of ideological revival, under the slogan, “Moscow is the Third Rome.”

Many experts who are close to the Kremlin believe that Russian politics and diplomacy have led to a renewal of faith in great and mighty Russia. Thus, the well-known philosopher and writer Alexander Prokhanov states that since the collapse of the Soviet Union, Russia has begun the path to recovery by rejecting liberal Western civilization. Prokhanov identifies three characteristics of this revival: Russia’s victory in the war against Georgia in 2008, which led to the recognition of the independence of South Ossetia and Abkhazia; the return of Crimea which, according to Prokhanov, marks the beginning of the Russians’ union; and, finally, the third sign—a Eurasian Union. The Russian philosopher has written that the Eurasian Union would be Russia’s “fifth empire,” with several capitals and several control centers. In general, Prokhanov’s approaches are echoed in the works of many influential members of this community of conservative Russian experts.

The so-called Izborsk Club was established with the aim of unifying patriotic conservatives. Its main goal is to create and present analytical reports to the Russian authorities and society. All these works should contribute to creating a renewed public-oriented policy in all spheres of national life. The Izborsk Club’s ideological direction could be labeled social conservatism, which is a synthesis of the different views of Russian statesmen: starting from socialists and Soviet patriots to monarchists and Orthodox conservatives. Club members include the most prominent and influential politicians, such as Sergei Glazyev, the Russian president’s advisor on Eurasian integration; the Nobel-laureate scientist Zhores Alferov; popular writer Zakhar Prilepin; philosophers including Prokhanov and Alexander Dugin; the historians Natalia Narochnitskaya and Nikolai Starikov; and the journalists Maxim Shevchenko and Mikhail Leontyev.

In addition, in 2015, the Russian foreign ministry’s press center hosted a constituent assembly of the organization known as the Byzantine Club. Its founders say that the club’s goal is to claim Russia as the successor of the great Byzantine civilization. During the opening ceremony, the club’s president, a member of the Civic Chamber named Sergei Markov, said that Russia is another Europe, concerned not only with law and economics, but also with spirituality. Representatives of the Russian imperial-conservative movement believe that Russia should continue its special historic path that started with its adoption of Orthodox Christianity from the Byzantine Empire.

In his article entitled “Historical Perspective of Russian Foreign Policy,” Russian minister of foreign affairs Sergey Lavrov claimed that Russia did not break under the weight of the Mongol yoke and managed to emerge from this hardship as a united state. Subsequently, that government came to be regarded as a kind of heir to the Byzantine Empire in both the West and in the East. Mr. Lavrov also agreed with the philosopher Ivan Ilyin that great power is not determined by the size of a territory or the number of inhabitants, but by the capacity of the people and their government to take on the burden of huge international problems and cope with these issues creatively.

The idea of the Byzantine way as the ideology of the Russian state is not new. As already mentioned, Russia received Christianity from Constantinople (the “second Rome”), which became an undeniable global center after the schism of Western Christianity from Orthodoxy. Since the baptism of Rus’ in 988, the Ecumenical Patriarch of Constantinople was the canonical head of the Russian Church. Up until its fall, Rus’ was a part of Byzantium in terms of church governance. The marriage of Czar Ivan III to Sophia Palaeologus, the niece of the Byzantine emperor, was the first step on the way of Russia’s accession to the Byzantine heritage, establishing blood ties between the Russian sovereign and the Byzantine emperors.

Russia acquired not only its religion from Byzantium, but also its coat of arms: the double-headed eagle, which became a symbol of continuity. But the main thing that Russia inherited from the Byzantine Empire is its messianic consciousness. There have been three major national ideas in the history of Russia: “Moscow is the Third Rome,” “Orthodoxy, Autocracy, Nationality” and “Communism is the brightest future of all mankind.” Each emphasized the special mission of Russian civilization. Many Russian politicians and experts believe that it was a spiritual affinity with the Byzantine Empire that created Russian Christian civilization. Supporters of the Byzantine path to revival agree that both Russian and Western civilizations are Christian. However, according to today’s Russian ideologues, Russian Christian civilization is the last bastion of conservative values, whereas Western Christianity perished under the onslaught of immoral liberal ideas. Proponents also point out that Eastern Christianity, in contrast to the Western, proclaims loyalty to ancient times and unchanging ideals.

The importance of the Byzantine Empire to Russian civilization was highlighted during a conference called “The interpretation of the concept of ‘Moscow as the Third Rome’ in the East and in the West,” attended by members of both the Byzantine and Izborsk Clubs. Few argued with the speakers who said that Russia has its own historical path, which is the special mission of protecting moral values. Supporters of the “Moscow as the Third Rome” concept of revival are fully convinced that only Russia can liberate humanity from liberal ideology and demonstrate a new path of development.

At the same time, according to high-level Russian ideologues, the implementation of this particular mission is impossible without a strong leader, who is embodied by President Vladimir Putin. The conservative imperial elite sees Putin as a natural successor of the rulers of the Byzantine and Russian empires. He did not allow the destruction of Syria and Ukraine, and challenged the unipolar world. In this regard, it is not surprising that Putin’s visit to holy Mount Athos was received with special feelings among the Russian masses. It is not the throne that the Russian president sat on that matters. It is all about the symbolism, which emphasizes Russia’s special neo-Byzantine mission.

Article Link to the National Interest:

Brexit's Cautionary Tale For Trump Supporters

By Eugene Robinson
The Washington Post
June 28, 2016

WASHINGTON -- Here is the real lesson from the stunning Brexit vote: Throwing a tantrum at the polls is not liberating; it is self-defeating. Those tempted to vote for Donald Trump should pay very close attention.

Brexit was a big deal, but it is not the end of the world. Reeling financial markets should recover from the shock, which has been nowhere near as serious as the 2008 meltdown. There will be some political turmoil in Europe, but I believe it will abate as everyone sees the extent to which British voters were defrauded.

It is already clear that those who chose to leave the European Union will not reap the benefits they were promised. Great Britain, or what's left of it, will become a little poorer, less dynamic and less important. That's about it.

The working-class Britons who bought the Brexit snake oil likely will not see their incomes rise or their prospects brighten. Nor will they see their multicultural society become monocultural again. The whole thing was a fantasy, cynically concocted by ambitious politicians who apparently never thought the nation would take them seriously.

Boris Johnson, the former London mayor and one-time journalist who became the face of the Leave campaign, had the nerve to write an unctuous newspaper op-ed, published Monday, in which he counseled everyone to remain calm. Britain "is part of Europe, and always will be," wrote the man who did all he could to divorce his island nation from the continent.

Johnson was booed by onlookers as he left his home the morning after the vote. "We who are part of this narrow majority must do everything we can to reassure the Remainers," he wrote in his op-ed. Translation: Please don't throw things at me.

It turns out that the Leave proponents maybe didn't really want to leave -- that they still want the benefits of EU membership, but without the responsibilities. Britons will still be able to live and work throughout Europe, Johnson promised, and "there will continue to be free trade, and access to the single market." This all may turn out to be true -- but to keep these benefits, Britain will have to agree to most or all of the EU regulations that Brexit proponents deemed so suffocating.

Meanwhile, the other leading Brexiteer, U.K. Independence Party leader Nigel Farage, admitted that Britain won't actually see a savings of hundreds of millions of pounds that could be used to improve the National Health Service. Claims to that effect were a "mistake," he said. Sorry, old chap.

Some European leaders are calling for Britain to quickly take the formal steps that would begin the Brexit process. But Johnson maintains there is no hurry -- an odd stance, given how wonderful he told voters their lives would be as soon as they slipped the EU's oppressive yoke. Could he be experiencing seller's remorse, fearing the reaction when Britons realize the shiny new Rolex he sold them is a fake?

I hope U.S. voters are paying attention. The Brexit solution is pure counterfeit but the underlying issues are real. In Britain as in this country, working-class incomes are stagnant and immigration, to some, seems out of control. Globalization seems to benefit the well-off and well-educated at the expense of everyone else. The temptation is to take refuge in nationalism -- forget the rest of the world, take care of our own, fend for ourselves. Build a wall.

That is Trump's message. But the gap between what he promises and what he can possibly deliver is even wider than in the Brexit example.

It is a cliche to say that we live in an interconnected world, but that is the truth. Globalization is a fact and cannot be repealed by referendum -- or, for that matter, by slogans printed on baseball caps. Nor can technological progress be reversed by any amount of ranting and raving.

Most of the manufacturing jobs that have disappeared from developed countries are gone forever, shipped off to places where labor is cheaper or eliminated by the use of robots. Borders are necessarily porous because goods, services and people have to cross them. What we need are policy initiatives that seek to address the economic malaise in places like the north of England and the American Rust Belt. What we do not need are simplistic, jingoistic "solutions" that don't solve anything.

Brexit could end up breaking Britain into pieces -- without addressing any of the problems it was supposed to solve. I hope Trump supporters pay attention. Catharsis is not a plan.

Article Link to The Washington Post:

What Brexit-Bashing Elites Don’t Get About Democracy

By Rich Lowry
The New York Post
June 28, 2016

Democracy is too important to be left to the people.

That is the global elite’s collective reaction to Britain’s vote to exit the European Union, which is being portrayed as the work of ill-informed xenophobes who never should have been entrusted with a decision of such world-historical importance.

Judging by their dismissive tone, critics of Brexit believe that the European Union’s lack of basic democratic accountability is one of its institutional advantages — the better to insulate consequential decisions from backward and short-sighted voters.

The opiate of the Western political class is cosmopolitanism, making it almost impossible for it to understand the Brexit vote on its own terms.

Britain gave us the Magna Carta and such foundational thinkers on the road to democratic rule as John Locke, Algernon Sidney and John Milton. It resisted centralizing monarchs in the turbulence of the 17th century, and defeated continental threats to its sovereignty emanating from Spain (King Phillip II), France (Napoleon) and Germany (Hitler). Should it be shocking that it said “no thanks” to continuing to subsume itself in a budding European super-state?

Maintaining British sovereignty, broadly construed, was the overwhelming rationale for Brexit. According to a survey by Lord Ashcroft Polls, 49 percent of Leave voters said the biggest reason for exiting the European Union was “that decisions about the UK should be taken in the UK.”

Another 33 percent said it was the best way to regain power over UK borders and 13 percent said they worried the United Kingdom couldn’t control how the European Union “expanded its membership or its powers.”
All the critics of Brexit see in the vote, though, is hostility to immigrants.

There is no doubt that immigration played a large role. But a country controlling its own borders is a necessary element of sovereignty. The foreign-born population of Britain has doubled over the last 20 years, with the government powerless to stop much of the influx. It, self-evidently, should be the right of the British people to decide whether they want less or more immigration.

A constant refrain of Brexit critics is that leaving the European Union was much too complex and important an issue to put to a referendum. But at bottom the question was simple: Shall parliament remain the supreme law-making body in Britain or not? This is a foundational decision that it makes sense to put directly to the voters.

Princeton historian David Bell is a critic of government by referenda but has noted how referenda are appropriate when fundamental constitutional questions are at stake: “They represent instances when sovereign power, always ultimately held by the people, but mediated by constitutional structures, temporarily reverts to the people directly, so that they can modify or replace these structures.”

The British people voted to reject the EU super-structure that had been hoisted on top of their traditional political institutions.

The vote roiled the markets, and another theme of Brexit critics is that leave voters now regret their temper tantrum. But a poll for the Sunday Mirror newspaper found that 92 percent of Leave voters were happy with the outcome of the referendum.

There may indeed be an economic cost to Brexit, but politics isn’t reducible to a stock index — something that Americans, having once made their own tumultuous exit from an off-shore power, should reflexively understand.

“You are not to inquire how your trade may be increased, nor how you are to become a great and powerful people, but how your liberties can be secured,” Patrick Henry declared during a 1788 debate over ratifying the Constitution, “for liberty ought to be the direct end of your Government.”

In the Brexit vote, a free people insisted, despite the risks, that they will govern themselves. That is an admirable thing, made even more stirring by the fact that the great and good regard the move with such bemusement and derision.

Article Link to The New York Post:

A Rare Foreign Policy Success For Team Obama

By Benny Avni
The New York Post
June 28, 2016

President Obama’s foreign-policy successes are rare, but Monday’s qualifies: Israel and Turkey, with help from Washington, signed a reconciliation agreement.

Having America’s two most powerful regional allies work together, rather than fight each other, is good for everyone. Monday’s agreement will help the next president navigate an otherwise chaotic and dangerous region.

True, under the mercurial President Recep Tayyip Erdogan, Turkey is dashing hopes it would remain a model Muslim democracy. Yet, Ankara remains one of NATO’s strongest pillars, a Western-oriented economic powerhouse and a useful envoy to some in the region that America and Israel struggle to communicate with.

After initially announcing a policy of “zero problems with the neighbors,” Erdogan found himself fighting with every country on his border. In need of new friends, he’s intended to resume an alliance with Israel — a country that, as late as last year, he accused of committing war crimes and crimes against humanity.

To understand the significance of the move for Israel, let’s return to its infancy, when Israel’s first leader, David Ben-Gurion, developed a strategy for survival in a hostile region: Nurture relations with the main non-Arab powerhouses. This meant the Kurds, Persians, Turks. But after the 1979 revolution, Iran became a mortal enemy and, decades later, Erdogan turned Turkey into a foe.

Now Prime Minister Benjamin Netanyahu, in coordination with Washington, is updating Ben-Gurion’s alliance-seeking, this time with the region’s Sunni Arab powerhouses. Like Israel, Egypt, Saudi Arabia and the Gulf countries are challenged by Shiite Iran and by the Islamic State.

Turkey is now joining that alliance. “The Turks reject Iran’s aspirations for regional hegemony,” Dore Gold, the director of Israel’s Foreign Ministry, who conducted much of the negotiations with Ankara, told Israel Radio. “It doesn’t take a Henry Kissinger” to understand that the agreement “adds to our security and facilitates cooperation in other fields,” he added.

After approval in both capitals, Israel and Turkey will exchange ambassadors and renew military cooperation, which was suspended by Ankara after the 2010 “flotilla” incident in which armed activists on a Gaza-bound Turkish boat, the Mavi Marmara, attacked the Israeli soldiers who tried to inspect it, leaving 10 activists dead.

In 2013, Obama convinced Netanyahu to express “regret” over the incident in a phone call to Erdogan. Now Israel will set up a $20 million fund for the families of those who died on the Marmara and Turkey will refrain from trying to prosecute Israeli officials in international courts. Turkey will also start delivering humanitarian goods to Gaza through Israel’s port of Ashdod, where security officials will inspect them.

Israel has an interest in alleviating Gaza’s deep (and largely self-inflicted) hardships. Turkey can lean on its ally, Hamas, which rules the strip, to stop converting aid into arms and attack tunnels. Turkey’s also better funded and better equipped than the United Nations to rebuild hospitals and electric, water and sewer systems.

There’s also major economic business to be done. Israel, which in recent years has discovered large reserves of natural gas in the Mediterranean, now can send it via pipeline to Turkey and on through to Europe. That’ll help the Turks and Europeans during those cold winters when Russia threatens to cut them off. (Israeli officials, incidentally, say their budding Turkish romance won’t harm tightening relations with Russia, Greece, Cyprus and the Kurds.)

All this is good for America, which is why the Obama administration deserves credit. Vice President Joe Biden, reportedly, has helped along the negotiations and was deeply involved in the details. Secretary of State John Kerry was alongside Netanyahu in Rome Monday, when he announced the agreement.

Now let’s hope that Washington — and specifically Kerry — won’t use the opportunity for a clumsy relaunch of diplomacy between Israel and the Palestinian Authority. You’ll hear a lot about how such diplomacy can promote the budding Mideast alliances. True. But if unsuccessful (as is likely), it could also force the Sunni Arab states to cool off on Israel.

An alliance between Israel and its like-minded neighbors can help Hillary Clinton or Donald Trump as they attempt to clean up some of the Mideast messes their predecessor will leave behind. Obama’s finest contribution, after helping that alliance along, would be: Do it no harm.

Article Link to the New York Post: