Thursday, July 21, 2016

Why The Baltic States Are Where Nuclear War Is Most Likely To Begin

Simply stated, the United States seeks to deter aggression or blackmail against NATO allies from a nuclear-armed Russia by threatening to use atomic weapons.

By Loren B. Thompson
The National Interest
July 21, 2016

History may one day record that the greatest strategic blunder in history was the failure of U.S. leaders to take the possibility of nuclear war between America and Russia seriously once the Cold War ended.

Initially, U.S. leaders thought the ideological motivation for East-West nuclear tensions had disappeared with the collapse of communism. But even after Vladimir Putin began rebuilding Russia's military forces and signaling a desire to regain lost influence, Washington continued to treat the prospect of nuclear conflict as remote.

Successive administrations failed to take any steps toward providing the U.S. with active defense against even a modest Russian attack. Plans to replace aging deterrent forces were repeatedly deferred, until some portions of the nuclear complex had become decrepit. And Washington continued to make security commitments in Russia's "near abroad" areas -- countries once satellites or integral parts of the Soviet Union -- as if the likelihood of nuclear conflict was close to zero.

However, the possibility of nuclear war between America and Russia not only still exists, but is probably growing. And the place where it is most likely to begin is in a future military confrontation over three small Baltic states -- Estonia, Latvia and Lithuania. Since those nations and several other Eastern European states joined NATO in 2004, the United States has been committed to defending their freedom and territorial integrity under Article V of the North Atlantic Treaty.

Because NATO from its inception was aimed at containing the expansion of a nuclear country -- Russia -- a vital part of the U.S. security commitment to Europe consists of Washington's willingness to use its nuclear arsenal in defense of allies. The formal name for that strategy is "extended deterrence," and since 2004 it has included the Baltic states. Simply stated, the United States seeks to deter aggression or blackmail against NATO allies from a nuclear-armed Russia by threatening to use atomic weapons.

The Obama Administration's 2010 Nuclear Posture Review confirmed that extended deterrence remains a pillar of U.S. global strategy. Although the credibility of extended deterrence ultimately resides in the U.S. strategic "triad" of long-range bombers and missiles, the posture review explicitly stated that the U.S. would preserve the ability to deploy nuclear weapons with suitably equipped tactical fighters in places like Europe.

According to Hans Kristensen of the Federation of American Scientists, the U.S. currently deploys about 200 B61 nuclear gravity bombs in Europe for use by American or allied forces in a future East-West war. The weapons are receiving life-extension modifications that will allow their use for decades to come, first on F-16 fighters and later on the stealthy F-35 fighter. Russia also deploys a sizable number of so-called "non-strategic" nuclear weapons in the European theater, although like the U.S. it does not disclose numbers or locations.

While nuclear weapons could potentially be used in any number of future warfighting scenarios, there are multiple reasons to suspect that the greatest danger exists with regard to the three Baltic states. Here are eight of those reasons.

First, both Washington and Moscow assign high strategic significance to the future disposition of the Baltic states. From Moscow's perspective, the three states are located close to the centers of Russian political and military power, and therefore are a potential base for devastating attacks. For instance, the distance between Lithuania's capital of Vilnius and Moscow is less than 500 miles -- a short trip for a supersonic aircraft. From Washington's perspective, failure to protect the Baltic states from Russian aggression could lead to the unraveling of America's most important alliance.

Second, Washington has been very public about it commitment to the Baltic states. For instance, in 2014 President Obama stated during a visit to Estonia that defense of the three countries' capitals was "just as important as the defense of Berlin and Paris and London." That is an extraordinary assertion considering that the population of metropolitan London (about 8 million) is greater than that of all three Baltic states combined (about 6 million), and that the eastern coast of the Baltic Sea is so close to the Russian heartland.

Third, there is a disconnect between the rhetoric that Washington applies to Baltic security and the tactical situation that would likely obtain in a future war. Russia has massive local superiority in every form of military force, and the topography of the three states presents few obstacles to being quickly overrun. The RAND Corporation reported earlier this year that in a series of war games, Russian forces were always able to overcome indigenous defenders and reach Baltic capitals within a few days. The forces of other NATO nations had little time to respond.

Fourth, for all of its talk about reinforcing NATO at the recent alliance summit ("we will defend every ally" President Obama said), there is scant evidence the U.S. is willing to make the kind of commitment of conventional forces needed to blunt a Russian invasion in the Baltic region. The proposed placement of NATO-led battalions in each state totaling about 1,000 soldiers each is widely described as a "tripwire" defense, meaning it might trigger a bigger alliance response but would not be able to prevent Moscow from reaching its military objectives quickly.

Fifth, any counter-attack by NATO in the Baltics could easily be misconstrued by Moscow as a threat to its core interests, in part because some strikes against attacking forces would occur on Russian territory, and in part because Russia's fragile reconnaissance system would quickly be overwhelmed by the fog of war. Anthony Barrett of the RAND Corporation has recently produced a worrisome analysis detailing how an East-West conventional conflict along the Russian periphery could escalate to nuclear-weapons use through miscues or misjudgments.

Sixth, both sides in any such conflict would have military doctrine potentially justifying the use of nuclear weapons to prevent defeat. In the case of Russia, it has stated repeatedly that it needs non-strategic nuclear weapons to cope with the superiority of NATO conventional forces, that it would use such weapons in order to protect its core assets and values, and even that nuclear weapons might sometimes be useful tools for de-escalating a conflict. Successive U.S. administrations have stressed that nuclear weapons underpin alliance commitments.

Seventh, both sides have non-strategic nuclear weapons in theater ready for quick use if tactical circumstances dictate. For example, Hans Kristensen noted the presence of several nuclear-capable military systems in the Russian enclave of Kaliningrad located between Lithuania and Poland. Although the Russians have not disclosed whether nuclear warheads are also located in the district, there is little doubt that hundreds could quickly be deployed to areas around the Baltic states in an escalating conflict. Nuclear-capable NATO jets could reach the area within hours.

Eighth, new technologies are gradually being incorporated into forces on both sides that could accelerate the pace and confusion of a local conflict. For instance, the F-35 fighter that will replace F-16s in the tactical nuclear role cannot be tracked by Russian radar. The integrated air defenses that Russia has deployed in Kaliningrad and elsewhere on its territory could severely impede NATO use of local air space in support of ground forces, and Russian electronic-warfare capabilities could impede coordination of ground maneuvers.

The bottom line is that all the ingredients are present in the eastern Baltic area for an East-West conflict escalating to nuclear weapons use. Neither side understands what actions might provoke nuclear use by the other, and once war began both sides would likely have a tenuous grasp of what was happening. The high stakes assigned to the outcome of such a conflict and the ready availability of "non-strategic" nuclear weapons in a context where either side might view their use as strategic in consequences is a prescription for catastrophe.

This situation calls for a reassessment by Washington. While losing the Baltic states would undoubtedly be a blow to NATO, their location makes them of far greater importance to Russia than America. It simply makes no sense to tie America's security to countries of such modest importance that are situated in such unpromising tactical circumstances. If the Obama Administration took the threat of nuclear war more seriously, it would find a way of loosening the commitments it has made.

Article Link to the National Interest:

Will Failed Coup Push Erdogan Toward Iran, Russia?

The foiled coup in Turkey could lay the groundwork for closer ties with Russia and Iran, resulting in a Turkish turnabout in Syria.

July 21, 2016

Along with its many implications at home, the July 15 coup attempt in Turkey may have important repercussions on Ankara’s foreign policy, especially regarding Syria.

The apology Ankara extended to Moscow last month for the Nov. 24 downing of a Russian jet had already raised expectations that normalization with Moscow could facilitate Turkey's U-turn from its failed Syria policy. Indeed, Turkish Prime Minister Binali Yildirim soon made overtures to that effect, though he later attached strings related to Syrian President Bashar al-Assad’s departure.

A number of issues bear on Turkey’s Syria policy: Turkey’s perceived inadequate support for the international coalition against the Islamic State (IS); its hostile policy toward the Kurds in northern Syria; support for groups fighting the Syrian government; and disagreements on targeting Jabhat al-Nusra, al-Qaeda’s Syrian branch and other Salafi groups such as Ahrar al-Sham.

The signals of a policy shift may have irked Ankara’s friends in the Gulf, yet many players on the ground continue to count on President Recep Tayyip Erdogan, as evidenced by their reactions to the coup attempt. Ahrar al-Sham condemned the botched bid, while Syrian refugees joined anti-coup demonstrations in Turkey. In contrast to Egypt, which blocked a condemnation of the coup attempt at the UN Security Council, Qatar, the Muslim Brotherhood and Hamas expressed strong support for Erdogan, which should be seen as a message for him to stay on his current course.

At home, too, continued support for the Syrian rebels seems to be the prevailing sentiment of the pro-Erdogan masses, which figured prominently in foiling the coup attempt, heeding calls from mosque minarets to confront the putschists in the streets.

The real pressure for a policy shift comes from external factors, including terrorist attacks blamed on IS, the struggling revolution in Syria and the vital importance of economic and political ties with regional heavyweights such as Russia and Iran at a time when relations with the West have soured.

The coup turbulence is likely to affect the list of Erdogan’s foreign friends as he drags Turkey even faster down the road of an authoritarian, party-state rule. One should have no doubts that Erdogan this week kept a tally of which countries condemned the coup attempt, which kept silent and which waited to see who would prevail. The support of two countries — Russia and Iran, both Turkey’s rivals in Syria — must be thickly underlined in his book now.

Unlike Ankara’s Western allies, Iran did not wait for the coup’s failure to speak up. Foreign Minister Mohammad Javad Zarif voiced support for the government in Twitter messages in the early hours of the unrest. In a subsequent phone call, President Hassan Rouhani told Erdogan the coup attempt was “a test to identify your domestic and foreign friends and enemies.”

In contrast, Saudi King Salman bin Abdul-Aziz Al Saud, Turkey’s ally in Syria, congratulated Erdogan for suppressing the attempt — two days after it failed. Sources close to Iran are zestfully reporting claims that Saudi Arabia and the United Arab Emirates were involved in the coup attempt, in an apparent hope this might encourage Ankara to change its axis.

When it comes to Washington’s stance, Erdogan is less than satisfied. Senior members of his Justice and Development Party (AKP) have even charged that the United States backed the coup leaders. Speculation about covert US support is fanned by reports that Turkish tanker aircraft taking off from Incirlik Air Base, where US forces are also stationed, refueled the F-16 jets the putschists used, and that the base commander, now arrested, had approached US officials for asylum.

The United States denies backing the coup, but the controversy is now there as a new test area for Turkish-US ties.

The turmoil threatens to strain relations with the European Union, too, as the crackdown on suspected pro-coup forces looks likely to go beyond the bounds of law. Calls to reinstate the death penalty, the prospect of grave human rights violations and an all-encompassing witch hunt against government opponents emerge as potential issues of a showdown with European partners.

Regarding Syria, Turkish tensions with the United States and the EU stem mainly from their demands for a stronger Turkish role in the anti-IS coalition and their cooperation with the Syrian Kurds’ People’s Protection Units (YPG) and the Democratic Union Party (PYD), which Ankara sees as terrorist groups.

The lockdown of the Incirlik base, though temporary, has raised questions about the future of anti-IS operations. Despite all the friction, Ankara can ill afford to backpedal from its commitments to the international community while IS militants are stepping up their global campaign and risk reducing Turkey to a pariah state.

Moreover, Ankara’s “Incirlik card” is slowly losing leverage amid US efforts to reduce reliance on the southern Turkey base. Washington is already using a base in neighboring Iraqi Kurdistan. Also, a Kurdish source told an Iraqi news agency July 18 that the United States has plans to set up five more bases in the region under an unconfirmed military deal with the Kurdistan Regional Government earlier this month.

Europe, meanwhile, is not likely to ease pressure on Erdogan with respect to IS, no matter how strong he emerges from the coup clamor, which coincided with the carnage in Nice. French Foreign Minister Jean-Marc Ayrault has already warned that the coup attempt is no “blank check” for Erdogan to muzzle political opponents, and Ayrault questioned Ankara’s commitment to fight IS.

“There are questions that are being asked, and we will ask them,” Ayrault said. “[Turkey] is partly viable, but there are suspicions as well. Let's be honest about this.”

No matter how much it wrangles with the West, Turkey can ill afford the label of IS sponsor.

Another post-coup question is whether Erdogan could accommodate the Kurds now that he has significantly strengthened his hand at home. So far, Ankara has given no signal that it may change its hostile policy regarding the YPG and PYD in Syria, or end the war on the Kurdistan Workers Party (PKK) at home. True, the AKP government displayed some moderation toward the Kurdish-dominated Peoples’ Democratic Party (HDP), postponing the prosecution of HDP lawmakers, but that was because it needed a national consensus against the coup. Apart from that, the policy of conflict and polarization continues to be Erdogan’s driving force. After the June 7, 2015, elections, Erdogan successfully used escalation tactics to consolidate his nationalist-conservative base. With the botched coup, these popular masses have further closed ranks behind Erdogan and have to be kept satisfied, so it seems, until he pulls off his goal of installing a presidential regime.

On another note, PKK leaders had repeatedly accused Gulenist circles in the army and the police of sabotaging the peace process with Ankara. Fethullah Gulen is a now-US-based cleric whose followers are held responsible for the coup attempt. Now that a massive Gulenist purge is underway in all sectors of the state, one may wonder whether things could change in favor of the Kurds. An outright conclusion to that effect, however, would be naive, given that Kurd phobia is almost inherent in the institutional impulses of the Turkish state.

The most significant prospect in the coup aftermath is the possibility of further rapprochement with Russia and Iran to settle regional problems. The two Turkish pilots who downed the Russian jet are reportedly among the arrested putschists, which could help to expand the revived dialogue with Moscow.

In sum, Erdogan has two options on Syria: to maintain the status quo and ride the wave of solid nationalist-conservative support, or to take further steps toward change by boosting cooperation with Russia and Iran. The second option merits stronger consideration, given the additional external factors at play. Yet even an eventual policy shift would not necessarily mean a moderation in Turkey’s fierce objections to Kurdish autonomy in northern Syria. The institutional constituents of both the state and the government reject Kurdish self-rule on the other side of the border as long as the Kurdish problem at home remains unresolved.

The Dream Of Muslim Outreach Has Become A Nightmare

By Victor Davis Hanson
Investor's Business Daily
July 21, 2016

When President Obama entered office, he dreamed that his hope-and-change messaging and his references to his familial Islamic roots would win over the Muslim world. The soon-to-be Nobel Peace Prize laureate would make the U.S. liked in the Middle East. Then, terrorism would decrease.

But, as with his approach to racial relations, Obama's remedies proved worse than the original illness.

Obama gave his first presidential interview to Al Arabiya, noting that he has Muslims in his family. He implicitly blamed America's strained relations with many Middle Eastern countries on his supposedly insensitive predecessor, George W. Bush.

The new message of the Obama administration was that the Islamic world was understandably hostile because of what America had done rather than what it represented.

Accordingly, all mention of radical Islam, and even the word "terrorism," was airbrushed from the new administration's vocabulary. Words to describe terrorism or the fight against it were replaced by embarrassing euphemisms like "overseas contingency operations," "man-caused disaster" and "workplace violence."

In apology tours and mythological speeches, Obama exaggerated Islamic history as often as he critiqued America. He backed the Muslim Brotherhood in Egypt. He pushed America away from Israel, appeased Iran, and tried to piggyback on the Arab Spring by bombing Libya. He even lectured Christians on their past pathologies dating back to the Crusades.

Yet Obama's outreach was still interpreted by Islamists as guilt and weakness to be exploited rather than magnanimity to be reciprocated. Terrorist attacks increased. Obama blamed them on a lack of gun control or generic "violent extremism."

Careerist toadies in government parroted the party-line message and even tried to outdo their politically correct boss.

Former Homeland Security Secretary Janet Napolitano focused on returning veterans as terrorist risks. Obama and Secretary of State John Kerry said that global warming, not the Islamic State, was the real threat. NASA Administrator Charles Bolden said the president asked him to make Muslim outreach a top priority for the agency. CIA Director John Brennan said that jihad "is a holy struggle, a legitimate tenet of Islam." Director of National Intelligence James Clapper opined that the Muslim Brotherhood was largely secular.

The president often blamed the detention facility at Guantanamo Bay for needlessly provoking Islam. Obama said that terrorist dangers were no more deadly than falls in bathtubs. He wrote off the Islamic State as an inept jayvee squad, assuring that they posed no existential threat. He campaigned on the premise that al-Qaida was on the run. Obama pulled all troops out of Iraq, which instantly degenerated into chaos.

Obama kept insisting that guns, not Islamic terrorists, were the real danger -- even as assassins used bombs from Boston to Paris, knives from California to Oklahoma, and, most recently, a truck to run over innocents in Nice, France.

Intelligence and law enforcement agencies got the message and worried more about charges of "Islamophobia" than preempting deadly terrorist attacks. Authorities had either interviewed and then ignored the Boston, Fort Hood, San Bernardino and Orlando terrorists, or they had blindly ignored their brazen social media threats.

There was never cause for such weak-horse contrition.

Radical Islam never had legitimate grievances against the West. America and Europe had welcomed in Muslim immigrants -- even as Christians were persecuted and driven out of the Middle East.

Billions of dollars in American aid still flows to Islamic countries. The U.S. spent untold blood and treasure freeing Kuwait and later the Shiites of Iraq from Saddam Hussein. America tried to save Afghanistan from the Soviets and later from the Taliban.

For over a half-century, the West paid jacked-up prices for OPEC oil -- even as the U.S. Navy protected Persian Gulf sea lanes to ensure lucrative oil profits for Gulf state monarchies.

Osama bin Laden and Ayman al-Zawahiri, the original architects of al-Qaida, were so desperate to find grievances against the West that in their written diatribes they had to invent fantasies of Jews walking in Mecca. In Michael Moore fashion, they laughably whined about America's lack of campaign finance reform and Western culpability for global warming.

The real problem is that Islamic terrorism feeds off the self-induced failures of the Middle East. Jihadists try to convince the Arab street that returning to religious fundamentalism and exporting jihad will empower Muslims to recapture lost primacy over a decadent and guilty West, just as in the mythical glory days of the caliphate.

In truth, religious intolerance, gender apartheid, illiteracy, autocracy, statism, tribalism and religious fundamentalism all guarantee poverty, economic stagnation and scapegoating. While much of Asia and Latin America progressed through reform, the Middle East blame-gamed its miseries on affluent Western nations and on Israel.

More disturbing, millions of Middle Easterners fled to the safety of Europe and the United States -- but on occasion, only to resist assimilation and show ingratitude once they got there.

In short, the dreamy Obama approach to terrorism has proved a nightmare -- and it is not over yet.

Article Link to The Investor's Business Daily:

A Nation At Half-Mast

The torrent of tragedies before the GOP convention may affect the electorate’s choice of a president.

By Daniel Henninger
The Wall Street Journal
July 21, 2016

The Wall Street Journal/NBC News poll reports that 73% of the electorate believes the United States is on the wrong track, a level normally associated with national crises, such as the 2008 financial meltdown. Amid the GOP convention in Cleveland and with the Democratic mother ship landing next week in Philadelphia, one has to wonder: Are the campaigns of Donald Trump and Hillary Clinton also on the wrong track?

As recently as a week ago, the election’s narrative was set: Donald Trump, an apolitical outsider, represented the mad-as-hell vote—immigrants, trade, political correctness, whatever you’ve got.

Hillary Clinton, possessed with a lifetime of political experience, would not only extend the Obama presidency but expand the federal government’s hand of help to whatever problem you’ve got.

And for those done with the details, it’s simple: NeverTrump versus Crooked Hillary.

Then, just days before the GOP convention, the world snapped.

On Tuesday, President Obama and former President George W. Bush spoke at the memorial service for the five cops gunned down in Dallas.

Some 48 hours later, an Islamist terrorist in Nice, France, drove a tractor trailer across and over men, women and children, slaughtering 84 of them.

On Friday evening, a military coup erupted in Turkey, a nation of 78 million, NATO ally and key state in the war on Middle Eastern terror.

Sunday morning, a lone gunman shot to death three cops in Baton Rouge, La. Just the week before, two black men had been killed in separate incidents with the police.

The compression of these nearly unimaginable events is knocking the 2016 election off the familiar narrative of economic anxiety, terrorism, the border and Washington dysfunction.

Driving past a suburban city hall in Cleveland last weekend, a relative of mine said, “It seems like the flags are always at half mast now. They go up and then they come back down.” She’s right. The U.S. has become a nation at half-mast.

What the week’s events has pressed into people’s minds is the feeling, correct or not, of the absence of answers or explanation. Voters are starting to feel trapped with no apparent exit.

That was the silent scream discovered on the Facebook page of murdered Baton Rouge police officer Montrell Jackson, a 32-year-old black man: “I swear to God I love this city but I wonder if this city loves me. In uniform I get nasty hateful looks and out of uniform some consider me a threat. I’ve experienced so much in my short life and these last three days have tested me to the core. These are trying times.” Effectively speaking for the entire country, he wrote: “I’m tired physically and emotionally.”

I’m not suggesting people are looking for some sort of can’t-we-all-just-get-along moment from these two candidates or “toning down the rhetoric.” The word that comes to mind is gravitas—a candidate whose seriousness rises to the electorate’s.

Up to now, the content of these two campaigns, and that includes the unconventional Donald Trump’s, has been by the book: Divide the electorate with wedge issues—immigration on the right, police abuse on the left—and build from that base to victory.

At the GOP convention Monday night, Alabama’s Sen. Jeff Sessions, a key Trump adviser, delivered a base speech bleeding with red meat on the immigrant threat.

The Democratic convention has scheduled speeches by seven Mothers of the Movement, mothers whose children were killed in confrontations with the police. This notwithstanding the fact that the legal system has cleared the accused officers in several cases. In an open letter to the police Tuesday, Mr. Obama said, “We have your backs.” Too late. The politics of his party on the police has been set.

Inside both these issues one may find disagreements on substance, but let us be cynical: The politicians, pundits and activists have been scapegoating immigrants and cops to produce votes.

That strategy, kept aloft with populist demagoguery, always carried the risk that the reality might get worse than the rhetoric. Now, for the cops, it has.

Like Ted Cruz, originator of the anti-immigrant template, Donald Trump’s strategy has been to divide the electorate, animate his side and win. It is, or was, a plausible political calculation. I wonder, though, as last week’s numbing events settle into consciousness, whether enough voters in the decisive battleground states—Florida, Ohio, Virginia, Wisconsin, Colorado, Pennsylvania, North Carolina and the rest—will think the Trump strategy is still the basis for a presidency equal to the times.

It is impossible here not to note the obvious—that most voters find Hillary Clinton’s constant claims of presidential seriousness wholly implausible.

The acceptance speech Donald Trump will deliver Thursday night is his chance to rise from the level shared now in the public mind by both him and Mrs. Clinton. To date, the electorate has heard payback, blame and promises. After the events of the past week, they’ll be looking for something bigger than that.

Article Link to The Wall Street Journal:

Thursday, July 21, Morning Global Market Roundup: Asian Shares At Nine-Month Highs As Oil prices, Fed Hike Views Strengthen

By Saikat Chatterjee
July 21, 2016

Asian stocks climbed to nine-month highs on Thursday, helped by a recovery in global oil prices, while the dollar strengthened against the safe-haven yen on resurgent expectations of a U.S. interest rate hike this year.

European shares are expected to buck the trend and open lower before a European Central Bank meeting later in the day at which the ECB is expected to keep rates on hold.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.2 percent, its highest level since October 2015 after earnings overnight helped push both the Dow Jones Industrial Average .DJI and the S&P 500 .SPX to record highs. It has gained 10 percent over the last month.

Leading regional gainers was Japan's Nikkei stock index .N225, which rose 1 percent, aided by a weaker currency and growing expectations of fresh government stimulus.

Several media such as Mainichi Shimbun and Kyodo News Agency reported that the Japanese government is to compile a stimulus package of at least 20 trillion yen to help the economy emerge from deflation and fend off possible adverse effects of Brexit.

"What the market wants now is both fiscal and monetary policy and such expectations are getting higher," said Hikaru Sato, a senior technical analyst at Daiwa Securities.

Portfolio inflows to emerging market assets rose to the highest level in nearly three years last week, according to the latest survey by the Institute of International Finance.

Malaysian stocks .KLSE led the region's losers with a 0.4 percent decline following news the U.S. Justice Department filed lawsuits linked to scandal-ridden state fund 1MDB.

In currency markets, higher U.S. Treasury yields, particularly shorter-dated bonds, supported the dollar. Market expectations of a U.S. Federal Reserve rate hike this year dropped significantly after Britain's vote to leave the European Union but have since picked up again as market anxieties receded.

The two-year Treasury yield was 0.71 percent compared with 0.53 percent at the start of the month.

The dollar rose 0.2 percent to 107 yen JPY= after climbing as high as 107.460 earlier, its highest since June 7 and returning to levels seen before markets were roiled by Britain's vote last month to exit the European Union.

The dollar index, which tracks the greenback against a basket of six rival currencies, hit a peak of 97.323 .DXY on Wednesday, its highest level since March 10. It was last at 96.99, broadly steady.

The euro edged higher to $1.1032 EUR= after notching a near one-month low of $1.0980 overnight.

The European Central Bank will meet later in the session, and is expected to hold policy steady while perhaps addressing a scarcity of bonds for its 1.7 trillion euro stimulus program.

"The weakness of the euro provides automatic stimulus to the economy, which means the ECB can afford to wait," wrote Kathy Lien, managing director of FX strategy for BK Asset Management.

"So the potential for an initial short squeeze is high if the central bank stands pat and the outlook thereafter will depend on how strong of a message the ECB sends," she said.

Looking ahead, financial leaders from the world's biggest economies will meet in China this weekend, with Brexit fallout and dwindling policy options to boost global growth expected to dominate talks.

Crude oil extended gains in the Asian session. Brent crude LCOc1 was slightly higher in Asian trading at $47.35 a barrel, after settling up 1 percent, while U.S. crude CLc1 edged 0.4 percent higher at $45.86 after adding 0.7 percent overnight. Spot gold XAU= edged down 0.1 percent to $1,314.08 an ounce after plumbing three-week lows on Wednesday.

Article Link to Reuters:

Crude Oil Rises After Ninth Weekly Stock Drawdown In U.S.

By Aaron Sheldrick
July 21, 2016

Crude oil prices rose on Thursday after the U.S. Energy Department reported a ninth consecutive weekly drawdown of crude stocks, although a surprise build in gasoline supplies helped to cap the gains.

U.S. West Texas Intermediate crude for September delivery, the new front month contract from Thursday, was up 18 cents at $45.93 a barrel at 0042 GMT. The August contract expired on Wednesday after rising 29 cents, or 0.7 percent, to settle at $44.94 a barrel.

Brent crude's front-month contract LCOc1 was up 22 cents at $47.39 a barrel. The contract for September delivery had gained 51 cents, or 1.1 percent, to $47.17 the previous day.

"Many market participants had expected far larger crude stock draws during peak runs season in the United States. Clearly these expectations have not been met," Energy Aspects said in a note.

U.S. crude inventories USOILC=ECI fell 2.3 million barrels in the week ending July 15, data from the U.S. Energy Information Administration showed. [EIA/S]

But at 519.5 million barrels, inventories are at historically high levels for this time of year, the EIA said.

Gasoline stocks USOILG=ECI rose 911,000 barrels, against a forecast for remaining unchanged, and are well above the upper limit of the average range, the EIA said.

July is considered the peak of a summer when Americans were expected to take to the road and put in record miles with prices relatively low.

Stocks of the motor fuel rose in spite of gasoline output slipping by 168,000 barrels per day even as refinery crude runs USOICR=ECI rose 319,000 bpd as utilization rates edged up 0.9 percentage points to 93.2 percent of total capacity, the EIA data showed.

A glut of refined products has worsened the already-grim outlook for U.S. crude oil for the rest of the year and the first half of 2017, traders warned this week, as the spread between near-term and future delivery prices reached its widest in five months.

So too with Brent crude, a products glut is threatening to spill back into oil prices, BMI Research said in a note.

"An abundance of fuels threatens to dampen crude demand," it said. "The three North Asian powerhouses are also showing signs that their domestic fuels markets are oversupplied," BMI said, referring to South Korea, China and Japan.

Combined gasoline exports from the three countries have risen a combined 35 percent in the first five months of 2016 over a year earlier, it said.

Article Link to Reuters:

Musk 'Master Plan' Expands Tesla Into Trucks, Buses, And Car Sharing

By Joseph White and Paul Lienert
July 21, 2016

Tesla Motors Inc (TSLA.O) Chief Executive Elon Musk Wednesday unveiled an ambitious plan to expand the company into electric trucks and buses, car sharing and solar energy systems.

In a blog post titled "Master Plan, Part Deux," Musk sketched a vision of an integrated carbon-free energy enterprise offering a wider range of vehicles, and products and services beyond electric cars and batteries.

The newest elements of the strategy included plans to develop car and ride sharing programs as well as commercial vehicles - businesses where other companies already compete, and in some cases have ample head starts on Tesla.

The new vehicles range from a commercial truck called the Tesla Semi to a public transport bus, a "new kind of pickup truck" and a compact SUV. The vehicles will be unveiled next year alongside Tesla's existing fleet of electric cars.

Musk restated his argument that Tesla should acquire solar panel installer SolarCity Corp (SCTY.O), where he is a major shareholder, and said he aims to make Tesla’s Autopilot self-driving system 10 times safer than cars that humans drive manually.

The plan did not detail how the new projects would be financed at a time when Both Tesla and SolarCity are burning through cash.

Musk summarized the plan saying Tesla aimed to "create stunning solar roofs (for homes) with seamlessly integrated battery storage. Expand the electric vehicle product line to address all major segments. Develop a self-driving capability that is 10X safer than manual via massive fleet learning. Enable your car to make money for you when you aren't using it."

Musk said he envisions Tesla owners allowing others to use their vehicles through a smartphone application. He indicated there will be a "Tesla shared fleet," but did not offer details of how that fleet would be managed.

Rival automakers are pursuing some of these goals as well.

“In cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are,” he said. Such a service would put Tesla in competition with ride hailing services such as Uber UBER.UL or Lyft.

Musk said all future Tesla products will have fully self-driving capability, including trucks and buses.

He vigorously defended Tesla's decision to offer what he described as a "beta" system to allow partial autonomy in its vehicles, a system called Autopilot. Federal regulators are investigating Autopilot after a fatal accident involving a Tesla Model S operating with the system engaged.

"When used correctly, it (Autopilot) is already significantly safer than a person driving by themselves," he wrote.

Musk did not say when fully autonomous Teslas would be ready, but indicated it could require roughly five years of additional testing.

Most major automakers, as well as internet search company Alphabet Inc (GOOGL.O), are investing heavily in automated driving technology.

Germany's Daimler AG (DAIGn.DE) is working on automated heavy trucks and electric commercial vehicles. General Motors Co (GM.N) and Toyota Motor Corp (7203.T) are among the auto companies working on car sharing and forging alliances with ride hailing companies.

On June 21, Musk proposed Tesla buy SolarCity. He outlined a combined company that could provide consumers with the tools for a largely carbon-free lifestyle - electric cars recharged with electricity generated by SolarCity solar panel systems, or stored in the home using battery packs produced by Tesla's battery Gigafactory under construction near Reno, Nev.

Musk owns 22 per cent of SolarCity's shares, and has outlined plans to offer buyers of Tesla electric vehicles a solar power generation and battery storage system.

To fund projects Tesla in May sold about $1.7 billion in new shares. Much of that will be used to accelerate development of its new Model 3 car lineup and reach a production pace of 500,000 vehicles a year by 2018.

On Monday, SolarCity said it raised $345 million to fund projects, and increased its debt facility by $110 million.

Article Link to Reuters:

'We've Been Looking In The Wrong Place,' MH370 Search Team Says

By Jonathan Barrett and Swati Pandey
July 21, 2016

Top searchers at the Dutch company leading the underwater hunt for Malaysia Airlines jet MH370 say they believe the plane may have glided down rather than dived in the final moments, meaning they have been scouring the wrong patch of ocean for two years.

Flight MH370 disappeared in March 2014 with 239 passengers and crew onboard en route to Beijing from Kuala Lumpur. Searchers led by engineering group Fugro have been combing an area roughly the size of Greece for two years.

That search, over 120,000 square kilometers of the southern Indian Ocean off Western Australia, is expected to end in three months and could be called off after that following a meeting of key countries Malaysia, China and Australia on Friday. So far, nothing has been found.

"If it's not there, it means it's somewhere else," Fugro project director Paul Kennedy told Reuters.

While Kennedy does not exclude extreme possibilities that could have made the plane impossible to spot in the search zone, he and his team argue a more likely option is the plane glided down - meaning it was manned at the end - and made it beyond the area marked out by calculations from satellite images.

"If it was manned it could glide for a long way," Kennedy said. "You could glide it for further than our search area is, so I believe the logical conclusion will be well maybe that is the other scenario."

Doubts that the search teams are looking in the right place will likely fuel calls for all data to be made publicly available so that academics and rival companies can pursue an "open source" solution - a collaborative public answer to the airline industry's greatest mystery.

Fugro's controlled glide hypothesis is also the first time officials have leant some support to contested theories that someone was in control during the flight's final moments.

Since the crash there have been competing theories over whether one, both or no pilots were in control, whether it was hijacked - or whether all aboard perished and the plane was not controlled at all when it hit the water. Adding to the mystery, investigators believe someone may have deliberately switched off the plane's transponder before diverting it thousands of miles.

The glide view is not supported by the investigating agencies: America's Boeing Co, France's Thales SA, U.S. investigator the National Transportation Safety Board, British satellite company Inmarsat PLC, the U.K. Air Accidents Investigation Branch and the Australian Defence Science and Technology Organisation.

Carry On

The meeting between officials from China, Australia and Malaysia is expected to discuss the future of the search. The three governments have previously agreed that unless any new credible evidence arises the search would not be extended, despite calls from victims' families.

Any further search would require a fresh round of funding from the three governments on top of the almost A$180 million ($137 million) that has already been spent, making it the most expensive in aviation history.

Deciding the search area in 2014, authorities assumed the plane had no "inputs" during its final descent, meaning there was no pilot or no conscious pilot. They believe it was on auto-pilot and spiraled when it ran out of fuel.

But Kennedy said a skilled pilot could glide the plane approximately 120 miles (193 km) from its cruising altitude after running out of fuel. One pilot told Reuters it would be slightly less than that.

For the aircraft to continue gliding after fuel has run out, someone must manually put the aircraft into a glide – nose down with controlled speed.

"If you lose all power, the auto-pilot kicks out. If there is nobody at the controls, the aircraft will plummet down," said a captain with experience flying Boeing 777s - the same as MH370. Like all pilots interviewed for this story, he declined to be named given the controversy around the lost jet.

Fugro works on a "confidence level" of 95 percent, a statistical measurement used, in Fugro's case, to indicate how certain the plane debris was not in the area they have already combed, a seabed peppered with steep cliffs and underwater volcanoes.

"The end-of-flight scenarios are absolutely endless," Fugro managing director Steve Duffield said. "Which wing ran out of fuel first, did it roll this way or did it tip that way?"

The Australian Transport Safety Bureau (ATSB), the agency coordinating the search, has consistently defended the defined search zone. It did not immediately respond to questions over whether it was assessing the controlled glide theory.

Authorities used data provided by Inmarsat to locate the likely plunge point through communication between the plane and satellite ground station.

"All survey data collected from the search for missing flight MH370 will be released," an ATSB spokesman said.

Article Link to Reuters:

An Unconventional Disaster For Donald Trump

By Marc Ambinder
The Week
July 21, 2016

Republican presidential nominee Donald Trump promised us an unprecedented convention. Boy, has he delivered.

For three nights, speakers successfully prosecuted Hillary Clinton. For three nights, they failed to make the case that Trump is a credible commander in chief. The gap between these two threshold convention goals was stark early Wednesday; it blew apart with the force of a supernova when Ted Cruz, a vanquished opponent who refused to release his delegates and has his eyes set on the 2020 race, pointedly, unsubtly, and ungracefully declined to endorse him.

Even as Cruz made a powerful case against Clinton, he could not bring himself to say that Trump was the better choice. By implication, Cruz was leaning in to a Trump loss in November. The implication was not lost on the audience, who began to boo and jeer. It was not lost on Trump, who suddenly appeared in the convention hall, trying to placate the crowd with an upturned thumb.

Cruz's prepared remarks went for nine minutes. He spoke for 23. The wisdom of letting him speak at all was lost on me; has Cruz ever given anyone the impression that he's in it for anyone but himself? He outfoxed Donald Trump, clearly, and probably outfoxed himself; the reaction, even by his supporters, to his endorsement ghosting will probably hurt his chances in four years.

As the convention audience tried to digest all of this — surely, more drama than any convention in modern memory has given us — the clock hit 10 p.m., and tens of millions of more people tuned in. They heard Trump's son Eric speak movingly about his father. The nominee teared up at the end.

Then Newt Gingrich came on. He decided to lecture the audience. They misunderstood Cruz, he insisted. When Cruz said, "You can vote your conscience to anyone who will uphold the Constitution," Cruz meant, of course, that "in this election, there is only one candidate who will uphold the Constitution." Gingrich continued: "To paraphrase Ted Cruz, the only possible candidate this fall is the Trump-Pence Republican ticket."

But of course, Cruz did not say that. Gingrich's damage-control mind-reading could not bring back the oxygen that Cruz's selfish stand for principal had sucked out of the room.

No doubt true: A candidate with character flaws as large as Trump's needs to fully discredit Clinton in order to win in November. Negative energy is a better bet.

But Trump has not crossed the basic threshold of plausibility. He is not giving recalcitrant Republicans, or independents, really, a reason to go to the polls. He is giving Democrats plenty of reasons to turn out for Hillary Clinton.

Replicating the seat-of-his-pants scorched earth strategy that worked in the primaries gets him a plurality of a minority of the popular vote and delivers to Clinton a resounding victory in the electoral college. That's why a well-orchestrated convention, free of unforced errors, dynamic and interesting, is essential.

The Republican vice presidential nominee, Gov. Mike Pence, gave an acceptance speech as graceful as Cruz's was gauche. But it will be Cruz whose vignettes will go viral, not Pence's. The same media environment that Trump mastered to win the nomination will ensure that his foul-ups will loop endlessly while his good choices get mediocre notice.

On Tuesday, as the 10 p.m. super-primetime hour approached, I had the same feeling: It looked like Trump could pull himself out of the hole created by his wife Melania's plagiarism flap.

His two children delivered deftly constructed speeches. Tiffany Trump, 22, spoke of a doting father who cared less about her grades and more than his little girl was happy in school. Donald Trump Jr., a true conservative, spoke of the hard work and humility his "hero" Dad imparted to him. The latter managed to take up a good chunk of the 10 o'clock hour, when tens of millions of people tune in because the major networks begin their coverage. It was a good start.

But then Lucifer messed with the program. Inexplicably, a charged-up Dr. Ben Carson, a vanquished Trump rival with a narrow range of vision, was given prime time real estate to pull out phrases that meant something only to a slab of the Republican base. The man who Trump once mocked as having "lower energy than Jeb" spent two minutes on political correctness. "I hate political correctness. It is antithetical to the founding principals of this country." When the audience predictably cheered, he stepped on his own lines: "Don't eat up my time!" he implored.

He abandoned his prepared remarks. He implied that Hillary Clinton was in a league with the devil. Her hero, he said, was Saul Alinsky, dropping the name of an obscure socialist labor organizer as if he were Bono. And Alinsky "acknowledges Lucifer," Carson insisted.

Carson did not manage to make much of a case for Trump. He just wanted everyone to know how bad a Clinton administration would be.

That's not a bad message for a convention that is designed to cast Clinton as a crook more than it is to sell Trump as a president. But the messenger couldn't deliver. For some reason, organizers decided to fill the rest of the 10 o'clock hour with two ordinary people — a soap opera star and the founder of American Muslims for Trump. He delivered the final benediction. On television, delegates, wanting to get to those buses before big lines formed, were seen walking out. Not a good image.

Why didn't the younger Trump daughter, whose speech charmed everyone, get that time? For that matter, why didn't Chris Christie, who prosecuted a blistering case against Clinton when he spoke earlier, get a better speaking slot?

Christie had the audience cheering, over and over, "Lock her up, Lock her up." His speech was mean, and over the top, and it violated the norms of politics, but his party knows that the only way their nominee can win is if millions of Americans who plan to vote for her decide instead that her conduct in office disqualifies her from being president. For what Republicans needed to do, it was effective. And many, many fewer people saw it than who might have.

Trump has one more shot to put it all together.

Article Link to The Week:

An Unconventional Disaster For Donald Trump

2016: The Theory Behind A Very Bad Year (And It’s Only Half Over)

The pace of violent and chaotic events around the world is speeding up. That’s probably not a coincidence.

By David A. Bell
Foreign Policy
July 21, 2016

Back in the fall of 1989, as the Iron Curtain was crumbling country by country, some friends and I had an idea for a new college history course. It would be called “Europe Since Last Wednesday.”

There are moments in history when time itself seems compressed, when so many shocking and important events crowd together that it becomes almost impossible to keep track of them. Lenin supposedly said “there are decades where nothing happens, and weeks where decades happen.” (The remark, alas, is probably apocryphal.) Long before him, the French writer Chateaubriand quipped that during the quarter-century of the French Revolution and Napoleonic regime, many centuries elapsed. In late 1989, a single three-month period saw the end of communist power in Hungary, East Germany, Czechoslovakia, Bulgaria and Romania and the fall of the Berlin Wall, as well as the U.S. invasion of Panama, and the Malta summit meeting between Mikhail Gorbachev and U.S. President George H.W. Bush where the two leaders essentially announced that the Cold War had come to an end: many years’ worth of change crammed into a single season.

Are we now living in one of these periods of temporal acceleration? The past few weeks have certainly been vertigo-inducing. On June 23, the British shocked world opinion (and themselves) by voting to leave the European Union. On July 7, five police officers were shot dead in Dallas, prompting fears of widespread unrest in the United States. A week later the Islamic State took credit for the latest massacre to strike the West, a terrorist attack on France’s Bastille Day that killed scores in Nice, and before that event had even started to fade from the media, there was an attempted coup d’état in Turkey. Then came the police shootings in Baton Rouge, Louisiana. All this took place, moreover, against the background of a horrific sectarian war with no end in Syria, heightened tensions between NATO and Russia, and the greatest political upheaval in recent American history, as a populist candidate with no experience in government completed his successful insurrection against the Republican establishment and became the party’s 2016 presidential nominee. Populist authoritarianism is on the rise in many other countries around the world. To recall the famous Chinese curse (as apocryphal as Lenin’s remark), we seem to be living in “interesting times.”

To be sure, nothing in 2016 yet compares to the most truly “interesting” moments in world history. In 1940, in a span of less than three months, Nazi Germany conquered Norway, Denmark, the Netherlands, Belgium, and France, while the Soviet Union occupied Lithuania, Latvia, and Estonia. A year later, another three-month period saw the invading Nazis drive hundreds of miles into the USSR, concurrently beginning the systematic mass murder of Jews and other “undesirables.” During a single two-week period in August of 1945 there took place the end of the Allies’ Potsdam Conference, the atomic bombings of Hiroshima and Nagasaki, the Soviet declaration of war on Japan, and the Japanese surrender that brought World War II to an end. So far, 2016 has been less “interesting” than 1989, and, for that matter, than 1991. That year witnessed the Gulf War, the attempted coup against Mikhail Gorbachev, the dissolution of the Soviet Union, and the assassination of Indian Prime Minister Rajiv Gandhi. And then there was 2001, an altogether excessively interesting year for reasons that do not need repeating.

But 2016 is barely half-done, and it is entirely possible that the cascade of events we have been witnessing could accelerate, with unforeseeable consequences. It is worth remembering that disruptive events can trigger others in a variety of ways, even at a great distance. Sometimes the connections are clear; sometimes much less so.

Most obviously, a disruptive event can spark direct imitation. In 1848, after liberal revolutions took place in Sicily and France, a wave of uprisings at least partially inspired by them spread to Denmark, the Austrian Empire, Belgium, and several German and Italian states. In 1968, student rebellions moved across the Western world in open imitation of and cooperation with each other, with the climax reached in Paris in May, when an apparent collapse of order led French President Charles de Gaulle briefly to flee to a military base in Germany. In the late 1980s, cracks in the power structure in one part of the Soviet bloc repeatedly led reformers and dissidents in other parts to attempt the same, or to go further. In the fall of 1989, the satellite regimes fell like the proverbial dominoes, one after the other. More recently, similar patterns have been seen with the “color revolutions” in the former Soviet Union, and with the Arab Spring. And today, with each terrorist attack, groups like the Islamic State do their best to publicize what happened, glorify the perpetrators, and urge others to emulate these “martyrs.”

But disruption can also multiply because of the opportunities it creates. For instance, military aggression can seem particularly tempting when potential critics or adversaries are distracted by troubles elsewhere. It was hardly a coincidence that Stalin chose to start occupying the Baltic states on June 15, 1940, just one day after the German army had entered Paris. In August 1968, the fact that the United States was reeling from the assassinations of Martin Luther King, Jr. and Robert Kennedy, while mired in a frustrating war in Vietnam, encouraged the Soviet Union to end the “Prague Spring” by force with its invasion of Czechoslovakia. We still do not know the full story of this year’s attempted coup in Turkey, but it is at least conceivable that the plotters were emboldened to act because of the violent events taking place elsewhere in the world. Given the recent string of terrorist attacks, it would certainly have been more difficult than in previous years for the United States and its allies to take serious political action against a Turkish military government that pledged to oppose the Islamic State and to reverse President Erdogan’s Islamist reforms.

Conversely, anxieties about decline can lead to cascading disruption as well, driving groups or whole nations to take aggressive action in response to a violent event, for fear they will lose the chance to take any effective action at all if they wait much longer. Many historians believe that in 1914, Germany behaved aggressively following the assassination of Austrian archduke Franz Ferdinand, driving the outbreak of a general war, due to the belief among German elites that they were losing an arms race to Britain and France. Worse, such anxieties often have very little basis in fact. It is frequently forgotten that in the late 1970s and early 1980s, when the Soviet Union was already on life-support, a substantial portion of the American public believed that it was actually an unstoppable behemoth that would soon crush a weak, decadent West. With this diagnosis supposedly confirmed by exaggerated CIA estimates of Soviet capacities, even before Ronald Reagan’s election the U.S. began a large-scale military buildup. Today, although the American economy is in decent shape, and its military budget exceeds that of the next eight countries combined, fears of decline have returned with a vengeance, as exemplified by Donald Trump’s insistence that virtually every other country is supposedly “taking advantage of us.” It is all too easy to see how such largely spurious fears could, in the wrong circumstances, lead an American administration to take dangerously disruptive actions against supposedly ever-more-threatening adversaries.

Finally, widespread disruption, with the wild anxieties and hopes that it generates, can lead to a sense that ordinary rules of behavior are suspended, and that extreme measures must be taken. In the history of the Western world such patterns are linked to the most powerful of all Jewish and Christian prophecies: the coming of the Messiah; the Second Coming of Christ; Judgment Day. Since the beginning of the Christian era, hardly a year has gone by without some significant group of Christians insisting that the End Times have arrived. If such a conviction leads to aggressive action against supposed heretics or infidels, the resulting violence can lead others in turn to believe in Judgment Day’s nearness, in what amounts to a positive feedback loop of enormous destructive power. Some historians think that something of this sort happened during the Reformation, when Martin Luther’s break with Rome triggered widespread belief in the imminence of the Apocalypse, triggering violent conflict, triggering further apocalyptic belief, and so on. The result was years of bloody religious warfare that decimated much of Europe. Today, the fanatics of the Islamic State believe they are engaged in an apocalyptic battle between Muslims and non-Muslims for the future of the world, and with every atrocity they convince more people in the West that, on this point, they are right.

The pattern is not necessarily religious, however. There are also secular versions of the Apocalypse story. As the Marxist hymn “The Internationale” succinctly declared: “’Tis the final conflict.” A belief that a world-defining struggle has arrived can lead to a suspension of the ordinary rules just as surely as a belief that Christ has returned, and produce just as great a cascade of violent disruption from a single event. The 9/11 attacks arguably had such an effect in the United States, with the Bush administration coming to believe that it needed to provoke a major war against a state that did not attack us in order to remove what it saw as an existential threat to the world order.

It is not at all clear whether the volatile and anxious summer of 2016 will produce anything like the cascading upheavals seen in years like 2001 or 1989, and whether the current sense of accelerating time will persist. With luck, the current flood tide of bad news will in fact subside, and rest of this year will be remembered for placid dullness rather than bloody “interest.” We can hope that the year 2016 will not appear in the titles of the college history courses of the future. But as these historical examples suggest, there are all too many ways that the flames of violence and disruption can suddenly spread, and even whip up into a firestorm.

Article Link to Foreign Policy:

All Trump Has To Do Now Is Deliver The Speech Of His Life

By Michael Goodwin
The New York Post
July 21, 2016

Any mention of “the speech” at a GOP convention sends memories racing back to Ronald Reagan’s surprise address in 1976. He had lost the nomination in a bitter fight with President Gerald Ford, who hoped to unite the party by summoning Reagan to the podium for brief remarks.

The result was Reagan’s stirring, seven -minute address about securing individual liberty that left many delegates convinced they had, as author Craig Shirley wrote, “nominated the wrong man.”

Events would show they had, and the Reagan Revolution that was born that night and took root four years later made the speech the gold standard of convention addresses.

It’s a template for what Donald Trump must accomplish with his acceptance speech Thursday night. He needs to do something he’s never done, and that many people think he cannot do.

Before the red, white and balloons drop at the Quicken Loans Arena and his family joins him onstage for the celebratory photo ops, Trump must convince about 65 million Americans that he is ready and able to be president.

Establishing that belief in voters’ minds is the ultimate purpose of a convention. When it happens, the process is a quasi-religious conversion. Instead of a mere candidate, the nominee takes on the aura of a potential president-in-waiting. From that point on, the campaign is more of a quest than an experiment, and the possibility of victory becomes realistic.

That conversion is absolutely necessary in Trump’s case because of widespread doubts that he is fit for the Oval Office. His lack of experience, combined with missteps, misstatements and a tendency to shoot first and aim later, leave him with a steep hill to climb.

Although polls show that the race is tight and that Hillary Clinton is widely viewed as dishonest, she enjoys an Electoral College advantage, as well as a personal one. Her proximity to presidential power and decades in top government positions make it easier for many voters to at least imagine her sitting in the Oval Office.

More than a majority of voters say they simply cannot imagine Trump as president. His challenge, then, is to change millions of minds with the speech of his life.

He should not try to be all things to all people, but he must reveal a man fully ready to lead the nation for all occasions.

The effort to transform him already has started here. While rip-roaring speeches from Rudy Giuliani, Chris Christie and many others took the fight to Clinton, Trump’s wife and children used their time onstage to humanize him.

Their heartfelt testimonies to his love and kindness and seriousness of purpose aim to bathe him in a softer, warmer, light, while their well-received addresses also make him look good as the father of such smart and loving children.

Melania, too, did her part in remarks that were praised until the storm of charges over plagiarism drowned out what she said and how she said it.

Yet none of that will matter if Trump himself fails to meet the moment. The land mines are everywhere, and stepping on one or two could make his quest next to impossible.

For starters, this can’t be just another rambling speech about himself. At this point, nobody cares about his company and his wealth, and this is certainly not the time to settle scores and hurl insults.

This is the time to talk about America and his vision for guiding the nation through a forest of crises, foreign and domestic. It should emphasize principle over policy, and be uplifting.

Instead of talking about himself, he must show himself by talking about the people whose votes he already has and those he needs. He must speak to their concerns and their dreams in ways that demonstrate he will faithfully represent Americans of all tribes, beliefs and places.

He got to this remarkable station by earning the trust of millions and understanding they felt abandoned by both parties; now he must add to their confidence and numbers by pledging to work for them and them only. They must know that they will be his lodestar in the White House.

Above all, every word he says must come from the heart. Anything that doesn’t will clang like a loud warning signal that he’s not ready. Ad libs are dangerous at this stage.

The Clinton team is busy trying to paint him as toxic and dangerous and make him an unacceptable alternative. His mission is to peel off that paint and convince voters he is at least every bit as worthy of the office they both seek.

There is, of course, a vital difference between events of 1976 and Trump’s mission. Reagan was fighting for the future, Trump’s future is now. Whether he has one largely depends on how he handles his turn at “the speech.”

Article Link to The New York Post:

Ted Cruz’s Betrayal Of Donald Trump Was Brilliant

If his bet pays off, he'll be the presumptive frontrunner in the 2020 primary.

By Brian Beutler
The New Republic
July 21, 2016

Going in to Wednesday night, Ted Cruz intentionally left people wondering what the meaning and the subtext of his prime-time Republican National Convention speech would be: Would he endorse Trump? Come close to endorsing Trump? Or would he largely ignore Trump and talk about ideas he wants to see vindicated eventually in our politics?

In the end he did not endorse Trump, nor did he come particularly close. He did talk about some ideas (abstractions, mostly, but ideas nonetheless) that defined conservatism in the pre-Trump era. But none of these was his main objective.

Trump-skeptical Republicans have been despondent about the state of their party and their prospects for victory in 2016 for months now. It was no secret as the party convened in Cleveland that ambitious GOP up-and-comers would use the convention mainly as a platform to increase their own profiles ahead of 2020, while hedging their bets and endorsing Trump, in case he somehow wins in November.

Cruz was up to something different altogether. Like the other ambitious speakers, Cruz is still eyeing the presidency. Unlike any other speaker, though, Cruz enjoys the tacit support of a huge minority of assembled delegates. Many of them are Cruz people at bottom, and regret that Cruz isn’t the GOP nominee today. And so rather than hedge like they did, Cruz made a career-defining bet, not just that Trump will lose, but that Trump will lose badly.

In a way, Cruz seemed determined to use his moment in the spotlight to maximize the size of Trump’s defeat. If it pays off, Cruz will cement his status as the one Republican 2016 candidate who practices politics with an eye toward the horizon. He will spend the ensuing years as the presumptive frontrunner in the 2020 primary. But it will only work if Democrats humiliate Trump this fall.

Rather than placate Trump’s supporters, Cruz played both ends against the middle. If the purpose of the convention is to foster party unity, Cruz’s aim was to sow division. His bet isn’t just that Cruz will lose. He picked a fight with Trump’s supporters, knowing that it would pit many people in the room against them. Cruz told the crowd, and millions of people watching at home, not to vote for Trump, but to “vote your conscience.” When Trump supporters in the crowd started booing, he goaded them further, “I appreciate the enthusiasm of the New York delegation.” The New York delegation is filled with members of Trump’s family. He may as well have told Trump’s children to shut their mouths and show him some respect.

He also spoke in surprisingly tolerant (for him) terms about minority groups he has demagogued in the past. “Gay or straight, the Bill of Rights protects the rights of all of us,” he said. “Freedom means religious freedom, whether you are Christian or Jew, Muslim or atheist.”

Not in a million Republican primaries would Cruz have reached out to gays and lesbians and Muslims and atheists. But as a future presidential candidate, he might! And as Trump has proudly pandered to bigots to build his coalition, Cruz must have known that standing up for the rights of these disfavored minorities would provoke the crowd further.

Intuitively speaking, picking a fight with a plurality of the Republican electorate doesn’t make much sense. It’s why people like Marco Rubio, who is famous for engaging in the most expedient form of politics, held their noses and spoke positively on Trump’s behalf. If Trump wins, their place in the party is secure. If he loses, they haven’t alienated the base.

But that thinking only works if Trump loses narrowly, and his faction is still incumbent, still ascendant, still the party’s future; that is, if Republicans don’t collapse into recriminations, and tell themselves their failure was some kind of fluke. But what if they respond to defeat by descending into disarray, hungry for a new direction—perhaps a direction where they don’t foment anti-gay, anti-Muslim panic? Cruz’s bet is that the party will process a third straight presidential election defeat, and possibly a landslide, as a repudiation of Trumpism. Amid the rubble, Cruz will emerge as the leader of chaste conservatives who didn’t abase themselves by acquiescing to Trump. He will have an immediate leg up on Rubio and Paul Ryan and every other potential post-Trump savior who spoke on Trump’s behalf this week.

I’m not sure the forces of Trumpism can be so easily sidelined, and I’m not sure I can imagine holier-than-thou Cruz leading the party in a more moderate direction toward broader appeal. But he did something crucial Wednesday night at the Quicken Loans Arena that nobody else in Republican politics could survive. He told 20 million voters, disproportionately Republican, they don’t need to vote for Trump if they don’t want to; he stabbed Donald Trump in the front. And in the final analysis, he probably made the safe bet, too.

Article Link to the New Republic:

Pence Makes Forceful Case For Trump In Aftermath Of Cruz Snub

By Jonathan Easley
The Hill
July 21, 2016

Indiana Gov. Mike Pence forcefully made the case for a Donald Trump presidency in a highly anticipated speech to the Republican National Convention on Wednesday night that was overshadowed by a surreal incident involving Ted Cruz.

Pence, the GOP’s vice presidential nominee, thrilled the crowd with direct hits against Democrat Hillary Clinton and at times flashed a self-deprecating sense of humor.

He was confident and tan, standing easily against a light blue background that matched his tie and smiling as the crowd burst into chants of “We Like Mike!”

Speaker Paul Ryan (R-Wis.) introduced Pence with a glowing review of his time in Congress and executive experience in Indiana. Trump joined his running mate on stage as the crowd sent them off with massive applause and a standing ovation.

“We have but one choice and that man is ready, this team is ready, our party is ready, and when we elect Donald Trump the 45th president of the United States, together we will make America great again,” Pence said as he closed out his 30-minute speech.

It was a strong introductory speech for Pence, who is largely unknown outside of Indiana.

But Pence’s big moment was overshadowed to a large extent by the ugly scene that took place on the convention floor just an hour before.

The thousands of delegates who gathered in the Quicken Loans Arena booed Cruz off the stage after he declined to endorse Trump in the wake of a bitter primary battle between the two.

The speech had appeared to be building toward an endorsement until Cruz told the crowd to “vote your conscience.”

Delegates were stunned, and some began to shout and jeer. Cruz’s wife Heidi Cruz was escorted out the arena under the protection of security.

The Trump campaign is hoping Pence, a staunch social conservative who spent more than a decade on Capitol Hill, will help unify the party behind his candidacy.

Pence made the best case he could on Wednesday night, describing Trump as a man of character who is deeply committed to his family and those who rely on him as a businessman.

He argued that Trump had attracted millions of new voters to the party during the primary process and would make inroads among black and Hispanic voters.

And he struck the same populist tone that has helped propel Trump from political gadfly to GOP nominee.

“Donald Trump gets it, he’s the genuine article,” Pence said. “He’s a doer in a game reserved for talkers. He doesn’t tiptoe around the thousands of new rules of political correctness. He’s his own man and he’s distinctly American. Where else would an independent spirit like him find a following than in the land of the free and the home of the brave?”

Pence went hard after Clinton, framing her as a corrupt Washington insider who had cast the world into turmoil as secretary of State.

The crowd rolled as his description of her as the “secretary of status quo,” and recoiled at his warning that her policies would lead to decades of American decline.

“She’ll have the press doing half her work for her,” Pence said. “The good news is it won’t be nearly enough. Not with a candidate who has captured the attention of the country the way Donald Trump has. On issue after issue he and I will take our case to the voters, pointing out the failures of the Obama-Clinton agenda and pointing out a better way.”

The Indiana governor also spent a good chunk of time ticking through his biography. Many tuning in for his address were likely learning about him for the first time.

Pence talked about growing up in a small town in Southern Indiana with a cornfield in his backyard.

He acknowledged his affinity for former Democratic president John F. Kennedy, and introduced his mother, wife, and three children, who joined him on stage after the speech.

And Pence ticked through his record of accomplishments as governor of Indiana, saying he had produced a $2 billion surplus, spurred job growth, and cut taxes while investing in infrastructure and healthcare.

Pence used a line that he has used in Indiana for years and figures to be a go-to in his stump speech.

“I’m a Christian, a conservative and a Republican in that order,” Pence said. “Honestly I never thought I’d be standing here.”

Article Link to The Hill:

Ted Cruz Booed Off Stage in Cleveland

By Tim Alberta
The National Review
July 21, 2016

Cleveland — Ted Cruz walked onto the stage here Wednesday night to a standing ovation, but left to deafening boos.

It was the strangest, most surreal sequence of a Republican convention that has been defined by disorderly proceedings and dreamlike speeches from an odd collection of established politicians, conservative activists, and quasi-celebrities.

The Texas senator, who finished as the runner-up to Donald Trump after a prolonged, bruising primary contest, received a hero’s welcome here inside Quicken Loans Arena when he was introduced just after 9:30 p.m. The packed house delivered a lengthy, raucous salute to Cruz. He waved and nodded his head, basking in the moment.

“I congratulate Donald Trump on winning the nomination last night,” he said mere moments into his remarks, earning booming applause from an audience that seemed to anticipate a forthcoming endorsement of the presumptive nominee. (After all, it was inside this very arena last August where every Republican candidate on the main debate stage – Cruz included — agreed that they would support the eventual nominee.)

Instead, it was the only time Cruz mentioned Trump’s name.

Cruz’s address, which emphasized the theme of “freedom,” was sharp, steady, and well-received until its closing minutes. “We deserve leaders who stand for principle, unite us all behind shared values, cast aside anger for love. That is the standard we should expect from everybody,” Cruz said.

As the arena began to buzz, Cruz delivered two fateful lines.

First: “And to those listening, please, don’t stay home in November.” The audience erupted with applause, clearly expecting an endorsement of Trump.

Instead, Cruz then added: “Stand, and speak, and vote your conscience, vote for candidates up and down the ticket who you trust to defend our freedom and to be faithful to the Constitution.” Sections of the crowd began to boo loudly: “Vote your conscience” was the rallying cry of the anti-Trump mutiny that tried and failed to re-write the GOP’s rules and oust him as the party’s nominee. Cruz’s words, intentionally or not, seemed to salute those rebels — and Trump’s supporters inside the convention hall weren’t having it.

As delegates voiced their disapproval of Cruz, the booing was led by the enormous New York delegation, which sits front-and-center in the arena due to Trump’s native-son status. Visibly shaken by the protests, Cruz tried to put out the fire. “I appreciate the enthusiasm of the New York delegation,” he said, forcing a smile.

But things only got worse. Cruz had just four short paragraphs left in his speech — words that paid homage to his mother and father, and to a slain Dallas police officer. But they were difficult to hear. Chaos had broken out on the convention floor: The booing grew louder and nastier, and in response, pockets of Cruz loyalists began shouting back at the antagonists.

“You arrogant ass!” yelled Donald Hoffman, the former president of the American Nuclear Society, who was standing on the floor for Cruz’s remarks.

Cruz continued on, his voice shaky, as the noise from delegates on the floor — and attendees in the second and third decks of the arena — all but drowned him out.

The scene, watched by millions of people around the world, was an unmitigated nightmare for Cruz, who in many ways was using Wednesday’s speech as the unofficial kickoff of his 2020 campaign. Cruz knew that he was taking a risk by not endorsing Trump — yet never could have predicted the scope of vitriol his decision would elicit.

When he had uttered his final words — “Thank you, and may God bless the United States of America” — Cruz was showered with thunderous, cascading boos. He stepped away from the podium yet remained on the stage for several moments, waving and smiling uncomfortably, trying not to appear paralyzed by the moment.

Cruz’s top officials, who traveled here to put finishing touches on the speech and watch together, insisted that they were unfazed by the backlash. “I have never been more proud to work for Ted Cruz,” one lieutenant said in a text message.

Ken Cuccinelli, the former Virginia attorney general who advised Cruz’s campaign, said he didn’t think Cruz’s remarks were problematic. “I thought Ted, you know, spoke his own mind there, and I can’t quibble with that,” he said. “That’s what he’s done for years, it makes him unique among political figures.”

The episode is certain to harden perceptions on both sides of Cruz, who since his election to the Senate in 2012 has become the most polarizing Republican in Washington. Cruz’s critics will point to yet another example of self-promotion at the expense of party unity; his fans will see another instance of a steel-spined conservative standing on principle and defying the wishes of the Republican establishment.

Either way, it’s difficult to conclude that the optics — getting booed off stage during prime time of a party convention — are helpful to a politician positioning himself for another presidential run.

Cruz’s allies spoke incessantly in recent weeks of Ronald Reagan’s defeat in 1976 convention after a hard-fought primary against Gerald Ford, and how it positioned Reaganto capture the GOP nomination four years later. And while Reagan did not explicitly endorse Ford in his address to the 1976 convention, he praised the sitting president on a personal level and said, “We must go forth from here united.” The remarks were met with an overwhelmingly positive response — there were no boos — and helped Reagan begin to consolidate the support necessary to win the nomination in 1980.

In reality, Wednesday’s speech was never the one Cruz envisioned, especially after he won the Iowa caucuses on February 1 and grew convinced that he was in the driver’s seat to claim the GOP nomination.

That night, standing inside a pole barn at the Iowa state fairgrounds, Cruz previewed his acceptance speech: ”If the other states across the country follow the lead of the good men and women of Iowa, and support this campaign, then, I tell you this. This July, in Cleveland, you will hear these words spoken from the podium of the unified Republican convention: ‘Tonight, I want to say to every member of the Democratic party, who believes in limited government, in personal opportunity and the United States Constitution, and a safe and secure America, come home.’”

Six and a half months later, Cruz had the opportunity to heal divisions in the party and help create a ”unified Republican convention” on behalf of Trump. He declined. It’s a decision that Trump’s opponents — and his supporters — won’t soon forget.

Article Link to The National Review:

White House Hopefuls Court Early-State Kingmakers In Cleveland

Tom Cotton, Scott Walker and others are operating under the theory that it's never too early.

By Seung Min Kim and Kenneth P. Vogel
July 21, 2016

CLEVELAND — Tom Cotton joked that he wouldn’t pander to Iowans. Then, at a luncheon with the state’s convention delegates here this week, he proceeded to tip his hat to the “center of the political universe.”

“I’m just going to say that I am the only politician who will speak to you this week who loves Iowa so much that I married a girl born in Iowa,” the Republican senator from Arkansas told the crowd.

Even as Donald Trump was officially anointed the GOP nominee, a host of ambitious Republicans are using their time in Cleveland to snag face time with early-state kingmakers, court wealthy donors and raise their nationwide profile — all to lay the groundwork for a future national run.

And the future could mean as soon as the next presidential election in 2020, assuming Trump loses.

Ohio Gov. John Kasich, who lost badly to Trump in this year’s GOP primary and skipped the convention even though his state is hosting it, is meeting with New Hampshire voters and doing Facebook Live events with the U.S. Hispanic Chamber of Commerce.

Wisconsin Gov. Scott Walker, whose 2016 bid collapsed despite stellar fundraising, is doing his own tour of early state delegations, and meeting with some of the nation’s biggest GOP donors. Attendees at a Wednesday event sponsored by his political committee left with the impression that Walker was positioning himself for another White House run.

And Texas Sen. Ted Cruz, who mounted the most vigorous challenge to Trump this time, was scheduled to appear at a reception with major donors, but phoned in his regrets, saying he got stuck in traffic caused by protests.

But perhaps no other prospective presidential contender has been as aggressive publicly as the 39-year-old Cotton. He’s made the rounds at separate events with the Iowa, New Hampshire and South Carolina delegations — as well as appearing before influential Republicans from the critical swing states of Florida and Ohio.

“I’m not ruling out anything or ruling in anything,” Cotton said of his political ambitions Wednesday, after speaking to the New Hampshire GOP at a Carrabba’s Italian Grill in the Cleveland suburbs. “I’m just trying to make sure we elect more Republicans this fall.”

The positioning in Cleveland comes in a year when the bombastic Republican nominee is triggering much hand-wringing over the party’s prospects this fall. And that’s prompting the GOP’s rising stars — and its once-and-future candidates — to already start looking beyond this November.

In separate speeches to the Iowa and New Hampshire delegations, Cotton did not invoke Trump's name — instead training his fire on Hillary Clinton and Barack Obama. A favorite Cotton joke was that Democrats had a choice between two “socialists” for their presidential nominee, and “they chose the one under FBI investigation.” And to New Hampshire delegates, Cotton boasted about his love for the New England Patriots.

Cotton wasn’t the only freshman Senate Republican appearing before early-state audiences. Sen. Joni Ernst, who hails from the first-in-the-nation caucus state of Iowa, stoked speculation about a future national run when she, like Cotton, also spoke at a New Hampshire GOP breakfast.

Ernst insisted that her breakfast rendezvous with Granite State voters was solely on behalf of Republican Sen. Kelly Ayotte, a close friend of Ernst facing a tough reelection challenge rom Democratic New Hampshire Gov. Maggie Hassan.

Aside from the luncheon with Cotton, the Iowa delegation hosted a breakfast featuring Walker, and also met with former Sen. Rick Santorum of Pennsylvania, who ran for the GOP nomination both this year and in both 2012.

Delegates from South Carolina hosted Cotton and Walker for separate breakfasts this week. And other Republicans getting face time with New Hampshire Republicans include Kasich, scheduled to appear at a reception Wednesday, and Walker, who has his own breakfast with the delegation on Thursday.

Kasich took his defiance of Trump to a new level when he chose to appear before the U.S. Hispanic Chamber of Commerce literally as delegates inside Quicken Loans Arena were holding the roll call that would designate Trump as the nominee.

Kasich spoke about his support for free trade and a more inclusive immigration policy, an implicit rebuke of Trump.

“You know, I’m just disappointed that message didn’t take hold," Kasich said. “But it doesn’t mean I give up my message.”

Addressing a delegation of North Carolina Republicans over breakfast Wednesday morning, Walker didn’t allude much to his future ambitions. But he didn’t miss an opportunity to remind a battleground-state crowd of his own political successes in Wisconsin, which he noted hasn’t voted for a Republican presidential candidate since Ronald Reagan.

“Common-sense conservative reform works even in a blue state like Wisconsin,” he said.

One future presidential contender not making the early-state rounds in Cleveland is Cruz. He is spending most of his time with fellow Texans, though he has also scheduled events with major donors.

Walker, whose fight with public sector labor unions in Wisconsin made him a cause célèbre among the GOP’s elite donor class, appeared at several events that drew major donors.

A Wednesday afternoon cocktail reception sponsored by a nonprofit group called Our American Revival that helped lay the groundwork for his 2016 presidential campaign, drew some of the party’s most generous donors. In attendance were members of the Ricketts family, which owns the Chicago Cubs and donated $5 million to a super PAC supporting Walker’s 2016 bid (as well as $5.5 million to a super PAC opposing Trump); the Uihlein family, which gave $5 million to the Walker super PAC (and $2 million to the anti-Trump super PAC); and Wisconsin roofing magnate Diane Hendricks, who donated $5 million to Walker’s PAC.

One attendee said that during Walker’s remarks “he wasn't all that subtle about leaving the door open for 2020, and was pretty blunt about running for reelection as governor.”

Walker also spoke at a Tuesday school choice forum at the House of Blues sponsored by the American Federation for Children, a nonprofit group backed by Michigan’s billionaire DeVos family.

One future presidential contender not making the early-state rounds in Cleveland is Ted Cruz. The runner-up to Trump this year is spending most of his time with fellow Texans.

As for Cotton, it’s clear he has more to do to introduce himself to early-state power players. At the New Hampshire breakfast, Cotton was preceded by former New York City Mayor Rudy Giuliani, who was greeted by chants of “Rudy! Rudy! Rudy!” The response to Cotton was more restrained, though he did receive hearty applause.

Some early-state delegates made clear Cotton has more courting to do.

“He gives a speech, we’ll keep that in mind,” said David Barker, a delegate from Iowa City, Iowa. “And when he comes into our living rooms and during the caucus days, we’ll remember him for this and give him more of a thorough going-over.”

Iowa Gov. Terry Branstad said he was “very impressed” with Cotton, particularly his message of American exceptionalism and critiques of the Obama administration’s foreign policy. He said he wouldn't be surprised to see a lot more of Cotton.

“If I had those kinds of ambitions,” Branstad said, “I’d come to Iowa early and often and I’d try to do all I could to help other Republicans.”

Article Link to Politico:

White House Hopefuls Court Early-State Kingmakers In Cleveland