Wednesday, August 10, 2016

Trump And The Art Of The Squander

By Caitlin Huey-Burns
Real Clear Politics
August 10, 2016

Donald Trump's campaign reset was barely 24 hours old when he ventured off script and into the familiar territory of controversy, squandering his chances of changing the political conversation yet again.

The GOP presidential nominee passed up opportunities to capitalize on potentially damaging news for Hillary Clinton. Instead of focusing on the fact that the Orlando nightclub shooter's father attended her rally in Kissimmee, Fla., or that she campaigned for ousted Democratic National Committee Chairwoman Debbie Wasserman Schultz, Trump ignited a new firestorm with a comment that seemed to suggest violence or rebellion by gun rights activists against his political opponent.

"If she gets to pick her judges, nothing you can do, folks,” Trump said at a rally in Wilmington, N.C. “Though the Second Amendment people, maybe there is, I don’t know.”

The remarks fit neatly into Clinton campaign messaging that the GOP nominee lacks the temperament to serve, and Democrats pounced.

“What Trump is saying is dangerous. A person seeking to be the president of the United States should not suggest violence in any way,” Clinton Campaign Manager Robby Mook said in a statement.

Connecticut Sen. Chris Murphy, a strong supporter of gun control, said on Twitter: "Don't treat this as a political misstep. It's an assassination threat, seriously upping the possibility of a national tragedy & crisis."

The Trump campaign quickly clarified the comments. “It’s called the power of unification – 2nd Amendment people have amazing spirit and are tremendously unified, which gives them great political power,” said Senior Communications Adviser Jason Miller in a statement. “And this year, they will be voting in record numbers, and it won’t be for Hillary Clinton -- it will be for Donald Trump.”

The gaffe was the latest in a series by the nominee since the end of the party conventions: criticizing a Gold Star family, taunting the speaker of the House, and connecting his Democratic opponent to the execution of an Iranian scientist. The errors have helped erode Trump's poll numbers, which show him slipping behind Clinton nationally and in key battleground states.

His attempt to turn a new page with a speech Monday in Detroit about his economic vision was largely eclipsed by continued defections from Republicans, including 50 national security advisers arguing Trump would be the most “reckless president in American history.”

Republican strategists worry the GOP nominee has a lot of ground to make up before Election Day.

And while three months is thought to be an eternity in politics, Trump’s propensity for error and his campaign's sluggishness in mastering fundamental voter-turnout functions doesn’t calm many nerves.

“Primaries are the practice. Now he has to expand his base, turn these numbers around, and go after these coalitional groups that aren’t supporting him. And you can’t just go out and do big rallies or go on Fox and CNN and make that happen,” says Ed Rollins, a veteran GOP aide who is advising a pro-Trump super PAC. “That takes advertising and ground organization -- none of which he has at this point.”

Analysis by NBC News shows the Clinton campaign outspending Trump on ads $52 million to zero, even after a substantial fundraising haul by the GOP nominee last month. Trump won the most contested GOP primary in history without spending much money on campaigning or advertising, but that strategy so far isn’t paying off in the general election. During the Olympics, Clinton is running ads reaching millions of viewers, and they're unanswered by Trump. Even in a new media age, advertising in some way would help Trump alter course, some analysts say.

“Most people only see him through the rallies, and I think it scares some voters,” says Republican strategist John Feehery. “He’s got to have a different earned-media strategy. He made some progress with the economic speech, but the big issue hanging over his head is his temperament.”

The issue of temperament prompted Republican Sen. Susan Collins of Maine to write an op-ed in the Washington Post on Tuesday opposing Trump, saying he “lacks the temperament, self-discipline and judgment required to be president.”

Trump didn’t address the defection by Collins, who isn’t up for re-election like many of her colleagues, but he did strike back against the foreign policy experts -- many of whom served in senior security and intelligence roles in past Republican administrations -- who said the GOP nominee “would put at risk our country’s national security and well-being.”

Trump brushed off the criticism. “I don’t want them,” he told supporters in Wilmington, arguing that experts and political professionals helped cause the country's economic and security troubles.

For his part, Trump denies any issue with temperament, and instead characterizes Clinton as unfit for the presidency. In an interview with Fox Business on Tuesday, Trump argued there was no need to change his tune.

“I’ve always had a good temperament and it’s gotten me here. We beat a lot of people in the primaries and now we have one person left, and we’re actually doing pretty well there, but we’ll see how it all comes out,” he said.

“I certainly don’t think it’s appropriate to start changing all of a sudden when you’ve been winning.”

With just over 90 days until Election Day, Republican officials have tried to save their party by focusing on Clinton and GOP congressional majorities.

A memo sent Tuesday by Republican National Committee Chief Strategist Sean Spicer focused on Clinton.

“A presidential election is not just a decision about who will lead our nation right now, but the country we will be in the future. On both counts, America cannot afford Hillary Clinton in the White House,” Spicer wrote, pointing to the economy, the Iran nuclear deal, increased terrorism at home and abroad, controversy surrounding the Clinton Foundation finances and the candidate’s private email server as examples.

In Speaker Paul Ryan's fundraising appeal to Republicans last week, Trump’s name was nowhere to be found. Instead, the pitch could have been read as a backstop for an impending Trump loss: “If we fail to protect our majority in Congress, we could be handing President Hillary Clinton a blank check.”

Republicans aren’t yet ready to draw analogies between now and 1996, when Bob Dole’s loss was considered a foregone conclusion.

“Republicans can’t just throw in the towel on Trump, because there’s not anything they can do to strengthen themselves legislatively,” says Feehery. “They have to assume the top of the ticket is important. They can’t just run away from Trump. They have to make this an election about Hillary.”

Among the areas of opportunity Republicans see is the economy, an issue on which Trump either leads or runs close to Clinton. On Monday, Trump made an overture to his party colleagues by pledging to adopt the House Republicans’ tax plan. While Trump spoke of his economic vision during a subsequent rally and railed against Clinton and the politics of the past, he couldn’t help but digress, underscoring the difficulty he has staying on message.

Meanwhile, new rounds of polls continue to signal trouble for the GOP campaign. Surveys last week found Trump’s lead slightly shrinking among non-college educated whites, a core constituency of his. NBC/Wall Street Journal polls released Tuesday evening found Clinton leading by 4 points in Iowa, 5 points in Ohio, and 11 points in Pennsylvania, a battleground state Trump has hoped to flip in favor of Republicans given his working-class, populist appeal. GOP senators running for re-election in those states, however, ran ahead of their nominee.

A Quinnipiac University poll also released on Tuesday found Clinton leading by 4 points in Ohio and 9 points in Pennsylvania. Notably, though, Clinton and Trump are tied in the electorally rich state of Florida, where Democrats hope to take advantage of diverse demographics.

"It is not that her voters are in love with Secretary Clinton -- they just dislike her less than they disdain Trump,” said Peter A. Brown, assistant director of the poll. Roughly 40 percent of Clinton voters in those three battleground states based their support for the Democrat on their opposition to Trump. Among Trump supporters, over half said Clinton was the motivating factor.

Trump has a packed campaign schedule for the rest of the week, traveling to Virginia and Florida for events over the next two days, and Pennsylvania on Friday. Vice presidential nominee Mike Pence spent Tuesday in Pennsylvania and will hit Ohio and Wisconsin over the coming days. Clinton spent the early part of this week in Florida. She will host a rally in Iowa on Wednesday and will deliver a speech on the economy in Michigan on Thursday.

Article Link To Real Clear Politics:

The GOP Majority Could Get Wiped Out In November

By John Podhoretz
The New York Post
August 10, 2016

Three months before the election, the news is pretty much all bad for Republicans — so bad, in fact, that the question it raises is whether November is going to see a Democratic wave that not only washes Hillary Clinton into the White House but also secures majorities for Democrats in the Senate and even in the House of Representatives.

Clinton’s steady rise in the polls since the Democratic convention has solidified into a 7.5-point lead in the Real Clear Politics average — twice the margin enjoyed by Barack Obama over John McCain in 2008 and Mitt Romney at 2012 at roughly the same point in the cycle.

Her lead at the moment isn’t even remotely debatable. There are too many different pollsters with too many different agendas for it to be some kind of conspiracy. There isn’t a single national poll with Donald Trump out front; three have her ahead by double digits and only two have her on top by 3 or less.

The point here is that she’s on an upward trend after her convention bounce, and he’s fallen pretty vertiginously from his.

How about the state polls? In 2012 they were more predictive of Obama’s victory than the much closer national surveys. The news here is also lousy for Trump, though not as dreadful. In polling over the past two weeks in states in which there is any sort of contest, only one has Trump in the lead.

Yes, the margins tend to be closer than in the national polls (for example, a survey released yesterday had Clinton only up by 1 in Florida, though a different one a few days earlier had her up by 6).

But several eye-opening results should be scaring the Trump campaign — if there is a Trump campaign, that is, and if Trump can get scared, which doesn’t seem to be part of his make-up.

The two most recent polls in Georgia, which has gone Republican since 1996, have Clinton up by 4 and 7. The most reliable poll in Arizona, another GOP stronghold, has her up 3. And a poll this week in North Carolina, which Obama won in 2008 and lost in 2012, has Clinton ahead by two.

If these three states go for Clinton, and Trump doesn’t turn a single Democratic state from 2012 to his advantage, she’d outdo Obama’s 2012 total by 42 electoral-college votes — for a total of 374 to Trump’s 164. (You need 270 to win.) If Trump managed to win Florida and Ohio, he’d still lose about as badly as Romney.

Of course, if Hillary wins Georgia, Arizona and North Carolina, that would be indicative of a national “wave”— a win so broad and deep that it flips downballot races to the Democrats.

And this is what terrifies other Republicans — that a wholesale rejection of Trump will combine with the “brand” problems of the GOP to threaten anyone and everyone who might be vulnerable.

Democrats need to net four seats in the Senate to take control (assuming a Hillary victory). The GOP figures two are already gone (Mark Kirk in Illinois and Ron Johnson in Wisconsin). The popular former Democratic senator and governor of Indiana, Evan Bayh, seems likely to prevail in the Senate race there. Which means Democrats only need one or two more.

A terrific race in New Hampshire between the able freshman GOP Sen. Kelly Ayotte and the similarly able Democratic former Gov. Maggie Hassan is starting to look very good for Hassan — likely because Trump appears to have melted down in the polls there and is sucking Ayotte into his sinkhole.

In Pennsylvania, another impressive first-term Republican, Pat Toomey, is up against a pretty lousy Democratic candidate named Katie McGinty — but again all the signs are that Trump is now down double digits in the state and that McGinty is benefiting from his weakness. She’s pulled into a very narrow lead over Toomey.

There are other Republicans in tight races, like Richard Burr in North Carolina and John McCain in Arizona (assuming he survives a primary challenge from someone to his right). They can prevail if November is relatively normal — even if Hillary’s win is relatively modest in scope — but likely could not survive a wave.

The same is true in the House of Representatives: A wave could net Democrats the 32 seats they’d need to take control there.

Republican consultant Adrian Gray reports that in his modeling of the race, Hillary Clinton is ahead in 54 Republican-held House districts, while Trump is ahead only in 3 Democratic districts. If this persists, and is bolstered by a Clinton margin over Trump of greater than 8 points, it’s bye-bye House.

If this happens, the recriminations on the Republican side will be epic, and the “anger” unleashed by Trump and his supporters — anger we’ve all been told we must respect and understand — will be unleashed right back upon them, threefold.

Article Link To The New York Post:

How Your Tax Dollars Are Funding Hamas’ Next Terror War

By Benny Avni
The New York Post
August 10, 2016

What to do about Gaza?

Global do-gooders galore operate in the Hamas-ruled strip on Israel’s border, moved by the much publicized, but genuine, plight of its population. Yet Hamas does everything it can to turn ploughshares into swords.

As Israel has been proving this week by exposing illicit activities in an alphabet soup of international humanitarian bodies active in Gaza, many of them lavishly funded by American taxpayers.

On Tuesday, Israeli police announced the arrest of Waheed al-Bursh, a contractor for the United Nations Development Program and, according to Israel, a Hamas operative as well. Bursh was one of those lucky Gazans hired by the UN agency after the 2014 war. His task: demolish bomb-damaged houses and remove the rubble.

According to Israeli authorities, whenever munitions, arms or war tunnels were found in the rubble, Bursh let Hamas handle them rather than notify the United Nations, as his contract requires. He also used UNDP resources to help Hamas construct a naval base in northern Gaza.

Last week, Israel announced the arrest of Mohammad el-Halabi, the manager of Gaza operations of World Vision, a Christian charity operating in 100 countries around the world. According to Israeli authorities, Halabi funneled $50 million of World Vision funds to Hamas.

Israeli officials have indicated this is only the tip of the iceberg. During the investigation of Bursh, they say, they turned up other operatives of international organizations moonlighting for Hamas.

And remember, it was Hamas rocket attacks on Israeli towns that have led to these rounds of war with Israel. Aid meant to ease pain in the aftermath of such wars shouldn’t end up helping Hamas wage the next round.

Better throw your good money in the trash can.

And yes, we’re talking about good money. In 2014, the US government funded World Vision to the tune of nearly $200 million. That same year, the UNDP received nearly a half-billion dollars from American taxpayers. (And agency chief Helen Clark has been trying to garner United States support in her campaign to become the next UN secretary general.)

So it’s time to stop financing every new round of Hamas’ war on Israel.

Yet the most we’ve done so far is tut-tutting. The State Department is “following the Israeli investigation closely,” spokeswoman Elizabeth Trudeau said Monday, adding, “If confirmed, Hamas’ embezzlement of humanitarian assistance funds [intended for] some of the most vulnerable people would be reprehensible.”

While America is following, Australia is acting. Last week Canberra announced a suspension of all government aid to World Vision until the Israeli legal process is completed. The United States didn’t. It sounded like the United Nations, instead.

Israel has recently sped up the transfer of humanitarian goods to Gaza, according to a July report sponsored by the United Nations, the European Union, Russia and the United States. It clearly realizes that easing the dire needs of the strip’s 1.3 million people is to its advantage.

Yet Israel can’t compromise on its own security and allow the exploitation of world sympathy and taxpayer dollars to bolster the military capabilities of an organization sworn to annihilate the Jewish state.

So Israel is caught between a rock and a hard place. Hamas has complete control over goings-on inside Gaza.

Israel left the strip a decade ago (even as it’s still accused of being its “occupier”). Now all Israel can do is expose abuse when it finds it.

We can help by withholding funds from international aid groups facilitating such abuse, making sure that our money goes to helping Gazans in need, rather than terrorists.

Article Link To The New York Post:

As South Koreans Lose Faith In The U.S., They Want Nukes Of Their Own

Frustrated and frightened by North Korea’s nuclear arsenal, Seoul wants more protection. Trump says they should build their own nukes. Does that make sense?

By Gordon G. Chang 
The Daily Beast
August 10, 2016

Here’s an unsettling thought. “If North Korea conducts a fifth nuclear test, South Korea should immediately move to arm itself with nuclear capabilities,” Won Yoo-chul of the ruling Saenuri Party told Seoul’s semi-official Yonhap News Agency last week. “The existing policies are insufficient to stop the North’s technology development.”

Such sentiments are becoming commonplace. “Suppose you have a dangerous neighbor with a gun,” said Chung Mong-joon, when he was a ruling party lawmaker in 2013. “You have to take measures to protect yourself. And being a gun control advocate isn’t going to help you.”

A majority of South Koreans, living in a democratic state that looks peaceful, want the most destructive weapons on earth. Their dangerous neighbor across the Demilitarized Zone has had them for more than a decade, 54 percent of those questioned in a January Gallup Korea poll said they favored developing nuclear weapons. U.S. presidential candidate Donald Trump’s frequent calls this year for South Korea to arm itself with nukes have helped incite and ignite more demands that Seoul restart its nuclear weapons program.

And who can blame the South Koreans? Their desire to possess these devices, long predating Trump, is not just a reaction to the Republican candidate. The increasingly shrill calls for nukes are, more generally, a rebuke of continually ineffective U.S. policies seeking to contain Pyongyang, and they have implications for security far beyond North Asia.

This is not the first time that South Koreans have been thinking about a bomb of their own. Seoul secretly began a nuclear weapons program in the early 1970s during the rule of strongman Park Chung-hee, the father of the current president. The government ostensibly ended the effort, due in large measure to pressure from Washington, after Park’s assassination in 1979.

Then, in 2004 South Korea admitted it had, among other things, covertly enriched uranium from 1979 to 1981 and extracted plutonium in 1982. Both experiments with fissile material had only military applications and were clear violations of the Nuclear Non-Proliferation Treaty, the global pact that South Korea ratified in 1975.

The admissions early last decade were not entirely voluntary. Seoul made the disclosures only after the International Atomic Energy Agency, the U.N. nuclear watchdog, started asking pointed questions.

North Korea had been trying to weaponize the atom since at least the mid-1960s, and that was one of the reasons the South wanted its own bomb.

Katharine Moon, the widely followed Korea scholar at Wellesley College and Brookings, points out in comments to The Daily Beast that South Koreans are continually involved in competition with their cousins in the North—“whatever the NKs do, we will do better,” is how she characterizes the never-ending peninsular rivalry.

And Moon notes other factors: South Koreans live in “a highly militarized society,” they have “a fascination with technology and power,” they desire the status of a nuclear-armed state, and they are concerned America will not defend them.

In fact, Seoul started its first secret nuclear program as it became worried that Nixon, as the Vietnam War was ending, was leading America out of the region.

Now, the South Korean desire for a deterrent is spiking as North Korea, maybe the most destitute state today, continues bomb and missile programs while the U.S., perhaps the strongest nation in history, looks helpless to stop them. The popular attitude, therefore, is an implicit vote of no-confidence in the leadership of the world’s sole superpower, South Korea’s only protector.

Jean Lee, a Seoul-based journalist and global fellow of the Wilson Center, notes the high poll numbers for going nuke are “largely emotional” responses, and, indeed, specific nuclearization proposals from South Korea often lack logic.

For instance, Daesung Song of Seoul’s Konkuk University, while speaking at a conference in Georgetown University in June, outlined a four-stage ladder for his country. The first step is bringing back U.S. tactical nukes to Korea; second is borrowing a bomb; third is purchasing a nuke from abroad, including the U.S.; and fourth is “conducting self-production of nuclear weapons for survival.”

With regard to Song’s first step, the U.S. had tactical nuclear weapons—gravity bombs, artillery shells, and landmines—in the South until 1991, and then took them away to put them on platforms that were on, under, and over the sea.

“It makes no military sense to redeploy the tactical nuclear weapons from their hard-to-find sea, sub, and air platforms and put them into a bunker in South Korea,” Bruce Klingner of the Heritage Foundation told the Korea Times at the beginning of this month. The Washington-based analyst argues that bringing them back to the Korean peninsula would only increase the time to deploy these weapons and provide “a high value target for North Korea to preemptively attack during times of heightened tension.”

Song’s other ideas don’t work either. His concepts of renting or buying bombs are just plain silly, and developing one, his fourth stage, would be ultimately disadvantageous. True, the South, as a technical matter, could build its first nuclear device fast. South Korean military officials in 2013 said they would need only six months. That sounds about right because their country is awash in fissile material and technical expertise.

To develop an arsenal, however, would mean withdrawal from the non-proliferation treaty and accepting the global condemnation and punishment that would follow. Won Yoo-chul, the Saenuri figure, notes that North Korea withdrew from that treaty, but that is not a smart comparison. The North was and remains an isolated state and does not care if it is shunned, but South Korea is highly integrated into the international system and needs friends. The South, therefore, would lose its coveted place in global councils, and, more to the point, the sanctions that would inevitably follow could severely damage its export-dependent economy, now ranked the world’s 11th largest.

Plus, the U.S. would probably walk away from the South, making the country far more vulnerable than it is today. An already isolationist American public would ask why 28,500 Americans troops now in the South are needed when Seoul had its own nuclear deterrent. And this is not a theoretical concern, because Mr. Trump has questioned America’s pledge to defend South Korea and has implied there would be no need for the U.S. to stand with a nuked-up South.

Some South Koreans point out the U.S. has a strong friendship with nuclear-armed Israel, but the situations are different. Israel is not a signatory of the nonproliferation treaty, the U.S. does not base troops there, and Israel does not especially need outside help. South Korea, however, relies on the American “tripwire” force and the cooperation of American ally Japan.

Moreover, Seoul relies on American nukes. “South Korea already has the backing of the best nuclear force on the planet with its ally, the U.S.,” notes South Korea-based Robert Collins, who works closely with American forces on the Korean peninsula, in an e-mail to The Daily Beast.

Will the calls for Seoul to build the bomb eventually fade? The Wilson Center’s Jean Lee notes in an e-mail to The Daily Beast that support for nuclearization is weakest among those in younger age cohorts. “They clearly feel more removed from the issue than their parents and grandparents,” she notes of the 19-to-29-year-olds.

Yet South Korea’s desire to possess its own deterrent is likely to grow in the years immediately ahead. Sung-Yoon Lee of the Fletcher School of Tufts University tells The Daily Beast that the “nuclear taboo” is not that strong in the South.

And there is another issue. “Popular passions ebb and flow, yes,” he writes, “however the ominous trajectory of Pyongyang’s growing nuclear threat over the past quarter century can only impel South Korea to reassess its nuclear posture, perhaps as soon as some time in the coming decade.”

Washington, therefore, cannot maintain ineffective North Korean policies over the course of decades and hope to maintain a strong alliance with Seoul. And it is not only the South Koreans who are watching.

Unfortunately, the lack of confidence in Washington is increasingly shared across East Asia. American leadership is failing at a critical moment, dismaying friends, emboldening aggressors—and laying the groundwork for fast proliferation.

If South Korea goes nuke, Collins anticipates other nations will do the same. So in rapid fashion expect states to “break out” from the global non-proliferation treaty, spreading the bomb around the region, and probably beyond.

Article Link To The Daily Beast:

How A Putin ‘Surprise’ Could Rock The Election — And The Economy

By John Crudele
The New York Post
August 10, 2016

The financial markets should start preparing themselves for an October surprise.

October, of course, has always been a tricky month for Wall Street. But the markets would be wise to prepare ASAP for a surprise — because it could come in September or even this month, depending on when Russian President Vladimir Putin decides to make trouble.

But there’s so much more to this story and “the surprise” because there are, in fact, a number of surprises that are possible.

You’ve already heard stories — including one published recently by Politico — about how the Democrats are worried that Putin will try to interfere with the US presidential election by releasing the missing personal e-mails of Hillary Clinton.

But Putin and his gang of spies aren’t the only ones with those e-mails, according to a very reliable source of mine in the intelligence community.

The NSA — the National Security Agency — also has copies of Hillary’s private e-mails.

How did the NSA get them?

Earlier this year, the Russians hacked computers at the Democratic National Committee and the Republican National Committee. Neither party knew it had been hacked until the NSA alerted it.

Some e-mails from the DNC’s computer came out right before the Democratic convention in July and they created a stir, because they showed that forces aligned with Hillary did their best to deny the party’s nomination of Bernie Sanders.

So far, no Republican party e-mails have come out — and they aren’t likely to.

One reason may be that Putin — as others have said — seems to favor Donald Trump over Clinton. Another reason might be that the Republicans’ e-mails will likely show the party conspiring against Trump — which doesn’t matter much now that he’s the nominee.

The Russians got Hillary’s e-mail more easily. As I’ve written before, they stole the password for Madame Secretary’s BlackBerry probably during one of her 2012 trips to that country.

Once they had the password, the Russians could see everything that Hillary was e-mailing and could record every conversation on that non-secured line.

And the NSA, all along, was watching the Russians monitor Hillary. That’s how the Admiral Michael Rogers-led NSA, which specializes in global monitoring and collection of data, came to have Hillary’s e-mails, according to my source.

"What is in Hillary’s e-mails is anyone’s guess — except, of course, for the Russians and the NSA employees who have seen them."

The NSA even offered the e-mails to the FBI when it was conducting the probe that ultimately found that Hillary was “extremely careless” with sensitive government information. The FBI declined the NSA’s offer, I’m told. The e-mails, the FBI contended, would have been useless in court if Hillary had been indicted because of the way they were obtained.

The NSA would never officially release the e-mails, but that’s not to say a rogue agent might not leak ’em. There is, I’m also told, bad blood between Hillary and the NSA that goes back to her early days as secretary of state.

One of the NSA’s responsibilities is to make sure government agencies like the State Department have safe areas where sensitive and classified information can be discussed and stored. These are called Sensitive Compartmented Information Facilities, or SCIFs.

When a meeting is held inside one of these SCIFs, spies can’t snoop. And BlackBerrys don’t work inside a SCIF.

Hillary, my source says, requested that a non-secure room be built near the State Department’s Washington SCIF so that she could use her BlackBerry.

The request was approved — but against NSA protests. And that started a feud between Hillary and the NSA that only got worse with the Benghazi attack that killed Ambassador Christopher Stevens and a “foreign service information manager” — likely an NSA employee.

What is in Hillary’s e-mails is anyone’s guess — except, of course, for the Russians and the NSA employees who have seen them. But they probably include some very personal, embarrassing stuff as well as talks about Clinton Foundation donations.

Clinton has said her missing 30,000 e-mails were about yoga and a wedding. Maybe there’s some of the e-mail chatter that we all do with friends. But if that’s all, why were the e-mails erased in the first place?

If someone at the NSA decides to leak some of Hillary’s e-mails, it might not just be for revenge. There could also be a very reasonable concern that if she wins on Nov. 8, Hillary could be blackmailed by the Russians if those incriminating e-mails are still private.

The NSA could justify its actions — at least to itself — as having to get in front of a potential problem.

Call it “preventive leaking.”

There is also a surprise that the Democrats could pull on Trump.

For example, it wouldn’t be too shocking if the IRS suddenly finished up its inquiry of Trump’s taxes and put him on the spot.

Trump has refused to release his tax returns. And if they show, as some people think, that he’s not as rich as he claims or has evaded taxes, Trump will have issues to deal with.

But that wouldn’t really be a surprise for Wall Street in a negative sense since — if there’s no counter surprise against Clinton — that would merely confirm that Hillary is going to be our nation’s first woman president. And Wall Street seems to have accepted that already.

October has been full of market jolts — the 1929 crash, Black Monday in 1987, the mini-crash in 1989, etc. — and some Hillary news could rock stocks again.

That’s why they call them surprises.

Article Link To The New York Post:

Europol First In Line For Life After Brexit

Britain looks likely to decide that the political challenges of staying in Europol outweigh the security benefits.

Politico EU
August 10, 2016 

Europol is on track to become the first EU body to get a taste of life without the U.K. as a direct result of Brexit.

Britain must decide in the coming months if it wants to sign up to new rules expanding the European law enforcement agency’s powers to fight terrorism, or opt out — and lose access to hundreds of databases, which hold information ranging from vehicle license plates, guns and organized crime to foreign fighters and terrorism suspects.

“The choice to opt in or out of Europol will be a big political and constitutional test for the U.K., a sort of pre-Article 50 test,” said Claude Moraes, the British Labour MEP who chairs the European Parliament’s committee on civil liberties, justice and home affairs (LIBE).

Britain has been a vital contributor to Europol and the EU would be keen to retain its capabilities in intelligence and policing once Brexit is implemented. With the appointment last week of Britain’s Julian King as commissioner in charge of the security union, the Commission created a new portfolio specifically designed to play to the U.K.’s strengths in counter-terrorism.

The issue now is whether Britain returns the compliment by showing continued commitment to Europol, or would rather live in splendid isolation, “taking back control” — in the words of the Leave campaign — of security policy under the prime ministership of Theresa May, who was home secretary from 2010.

“Both King and May will want to remain part of Europol. However, leaving it might be part of the price we are paying for the profound and major referendum vote,” said Moraes.

“Cooperation is the way forward when it comes to counter-terrorism, so from a practical perspective it would make sense to be part of Europol” — Raffaello Pantucci, counter-terrorism expert at the Royal United Services Institute

Europol’s new powers, approved in the wake of the terror attacks in Paris and Brussels, take effect from May 2017. Agreed by EU countries and the European Parliament just before the U.K. referendum, these will give MEPs greater powers of scrutiny over Europol while encouraging national governments to share more information with the Hague-based agency.

In future it should be easier for Europol to set up specialized units, or focal points, to respond to emerging threats in terrorism and serious crime, making it faster “to get things done,” according to a Europol official.

Last year, U.K. authorities initiated 2,500 cases for cross-border investigation and operational support at Europol, according to data from the agency obtained by POLITICO — meaning Britain has one of the highest rates of engagement in the EU.

“The U.K. is also one of the leading sources of intelligence contributed to Europol’s databases on serious and organized crime,” said a spokesperson for the agency, adding that senior British law enforcement officers are leading key projects in a four-year action plan to improve cooperation between national agencies in this area, a project known as the EU Policy Cycle.

Europol’s British director, former MI5 intelligence analyst Rob Wainwright, argued repeatedly before and after Brexit that both the EU and the U.K. stand to benefit from maintaining this level of cooperation on security. He estimates that 40 percent of all Europol cases have some level of British involvement.

Follow The Danes

“Cooperation is the way forward when it comes to counter-terrorism, so from a practical perspective it would make sense to be part of Europol,” said Raffaello Pantucci, counter-terrorism expert at the Royal United Services Institute in London. “However, the agency became a feature of the Brexit debate, and I assume that the politics of it will be more complicated in the coming months.”

Despite Wainwright’s campaign, and a growing terrorism threat that is spreading across the 28-nation bloc, the most likely outcome is that the U.K. will seek an opt-out, according to POLITICO’s conversations with half a dozen senior officials in the security and home affairs sphere in London and on the Continent.

Following Britain’s vote to leave the EU in the June referendum, European justice and home affairs officials met in Brussels to discuss, among other topics, the future relationship between the U.K. and Europol.

“The Brits made it clear they have no intention of opting in, and that they will seek a special agreement like the Danes,” said a senior EU diplomat with knowledge of the meeting. The diplomat said that renewing the U.K.’s membership of an EU agency while preparing its withdrawal from the Union would send a contradictory message, in Britain and across the bloc.

Danes voted in a referendum last December to quit Europol from May 1, 2017, but the Danish government has since submitted a request to the European Commission for a special arrangement with Europol, as well as the judicial cooperation body Eurojust and the EU’s Passenger Name Record directive, to avoid being completely cut off from its European partners from next year.

“We’re clear though that while we are leaving the EU, cooperation on security and law enforcement with European (and global) allies will continue” — senior U.K. government official

More than three months after the request was sent the Danes are still waiting for a reply, according to a Danish official.

“The request is currently being reviewed,” said a Commission spokesperson.

If Brexit Means Brexit

So far, there is little consensus within the U.K. on the value of Europol.

Richard Dearlove, who ran the U.K.’s foreign intelligence agency MI6 from 1999 to 2004, attacked Europol in an op-ed ahead of the Brexit referendum, saying the 28 members of the EU had “vastly varying levels of professionalism in intelligence,” and that the agency’s meetings always had to accommodate the “slowest and leakiest ship.”

On the other hand, Lynne Owens, director-general of the National Crime Agency which deals with global and domestic crime threats, said ahead of the vote: “It would be more difficult if we could not share information in an agile way, and at the moment that happens within the European Union mechanism.”

Leaving aside the different perspectives among former and serving security officials, any decision to remain in Europol once its powers are expanded next year is bound to be problematic because it would implicitly challenge the premises of Brexit.

Once Article 50 is activated and Britain negotiates its departure from the EU, it will no longer recognize the European Parliament’s authority over its legislation and national policy, and will have no say in future changes to Europol’s powers and structure.

“The government has to still take a decision on this,” said a senior U.K. government official. “We’re clear though that while we are leaving the EU, cooperation on security and law enforcement with European (and global) allies will continue.”

“We’ll do what’s necessary to keep our people safe,” added the official.

Article Link To Politico EU:

Wednesday, August 10, Morning Global Market Roundup: Asian Shares Hit 1-Year High, Dollar Slips On Weak U.S. Data

By Nichola Saminather and Hideyuki Sano
August 10, 2016

Asian shares hit a one-year high on Wednesday while the dollar and Treasury yields slid on weak U.S. productivity data, while sterling inched up from a one-month low.

The Asian stocks rally is, however, unlikely to extend to Europe, with financial spreadbetter CMC Markets forecasting Germany's Dax .GDAXI will open down 0.1 percent, Britain's FTSE 100 .FTSE will fall 0.2 percent and France's CAC 40 .FCHI will start the day 0.4 percent lower.

MSCI's broadest index of Asia-Pacific shares excluding Japan .MIAPJ0000PUS rose 0.3 percent to the highest level since August 2015. Japan's Nikkei .N225 closed 0.2 percent lower, pulled down by a stronger yen.

Taiwanese shares .TWII ended the day up 0.5 percent and at their highest level in 13 months.

South Korean stocks advanced 0.15 percent to a nine-month high.

Hong Kong's Hang Seng index .HSI reversed earlier gains to trade down 0.1 percent, after earlier hitting its highest level since November.

Australian shares missed the rally. Commonwealth Bank of Australia (CBA.AX), the nation's second-largest lender, reported the slowest earnings growth since 2009 and a rise in loan impairments, despite posting a seventh-straight record profit.

The Australian index ended the day down almost 0.2 percent.

Wall Street eked out gains on Tuesday following a strong session for European stock markets, with Germany's DAX index .GDAXI jumping 2.5 percent to its highest of 2016 on strong earnings from reinsurer Munich Re (MUVGn.DE) and telecoms group Altice (ATCA.AS).

MSCI's world index .MIWD00000PUS covering 46 markets advanced 0.2 percent, close to the level that it hit on Tuesday - the highest in almost a year.

"Following strong U.S. payrolls data last week, we are in a sweet spot where the U.S. economy seems to be doing okay while the chances of a near-term Fed rate hike are still relatively small," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

"Earnings in the U.S., Europe and Japan are not bad. So we may be seeing something of a 'Goldilocks' market globally," he added.

But data showing weak U.S. productivity weighed on U.S. bond yields, with the 10-year notes yield US10YT=RR dipping to 1.5350 percent from Monday's two-week high of 1.616 percent.

"Low U.S. productivity growth could suggest the third quarter growth can't be fantastic. That in turn would mean the Fed will not need to raise rates," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

The dollar was weak against most other currencies. It slipped 0.5 percent to 101.395 yen JPY=, giving up most of its gains so far this week. The euro rose 0.3 percent to $1.1150 EUR=, extending its recovery from Friday's one-week low of $1.1046.

The dollar index, which tracks the U.S. currency against a basket of six peers, retreated 0.4 percent to 95.782.

Additionally, the Bank of England's reverse bond auction failed to meet its target on Tuesday, highlighting the scarcity of investors willing to sell from a quickly dwindling pool of long-term bonds with positive yields.

The 10-year UK gilts yield was at 0.577 after hitting a record low of 0.563 percent GB10YT=RR after the BoE fell 52 million pounds ($68 million) short of its target to buy more than 1 billion pounds of long-dated UK government debt. That was the first time it failed to find enough sellers since it started its quantitative easing program in 2009. nL8N1AQ4KQ

The British central bank announced last week that it would be increasing its bond buying in addition to cutting interest rates in the latest effort to stimulate the country's economy.

The British pound recovered 0.4 percent to $1.3055, after hitting a one-month low of $1.2956 GBP=D4 on Tuesday when Bank of England policymaker Ian McCafferty said the central bank will probably have to loosen monetary policy further if the UK economy worsens.

The dollar's weakness gave gold XAU= a leg up, with the precious metal gaining 1.1 percent to $1,354.30 an ounce.

Oil prices slipped after a surprise U.S. crude stockpile build rekindled worries about a persistent global glut.

Brent futures LCOc1 fell 0.2 percent to $44.90 per barrel, after losing 0.9 percent on Tuesday. U.S. crude CLc1 also slipped 0.3 percent to $42.64, extending Tuesday's 0.6 percent decline.

Article Link to Reuters:

Oil Falls On Oversupply; Calls For Producer Meeting Met With Scepticism

By Henning Gloystein
August 10, 2016

Oil prices fell on Wednesday as a global supply overhang weighed on markets, while talk of a potential producer meeting to discuss propping up prices was largely expected by analysts to have no impact on supplies.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $42.43 per barrel at 0657 GMT, down 34 cents from their last settlement, or 0.79 percent.

International Brent crude futures LCOc1 were at $44.62 per barrel, down 36 cents, or 0.8 percent.

Traders said that markets were being weighed down by an ongoing supply overhang in crude and refined fuel products, while a suggested meeting by oil producers was unlikely to result in a significant market tightening.

"Oil eased lower as another round of proposed production freeze talks by OPEC failed to excite investors. An upgrade in U.S. oil production forecasts by EIA also weighed on sentiment. EIA is now expecting U.S. output to reach 8.31 million barrels per day in 2017, up from its forecast of 8.2 million barrels per day in July," ANZ Bank said on Wednesday.

Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), is trying to drum up support for a producer meeting to decide measures that would buoy oil prices.

"We are actively promoting a meeting of producers, which we estimate could take place in the coming weeks, so that OPEC and non-OPEC countries can sit down to see what the scenario for the winter looks like," its oil minister Eulogio del Pino said this week.

The last time producers met to discuss measure to tighten oil supplies and prop up prices, in April, OPEC members were not able to agree on any measures.

Analysts said they did not expect more success from a potential future meeting.

"Renewed attempts at verbal intervention by OPEC will help bolster oil market sentiment, although the group will struggle to rebuild its role as a backstop to Brent," said oil analysts at BMI Research in a note to clients.

In the refining sector, Singapore's benchmark refining profits dropped to two-year lows on Wednesday, in the latest sign that the industry is pumping out too much fuel for the market to absorb, leaving storage tanks brimming with unsold fuels.

Asian benchmark Singapore refinery margins DUB-SIN-REF fell to $2.94 per barrel on Wednesday, down over 70 percent since January and its lowest level since August 2014.

The glut was triggered by oversupply of gasoline GL92-SIN-CRK and diesel GOSGCKMc1, but it has since spread to light distillates like naphtha NAF-SIN-CRK.

Article Link to Reuters:

Consumer Groups Press Yum's KFC To Tighten Antibiotic Rules

By Lisa Baertlein
August 10, 2016

Consumer groups on Wednesday will deliver a petition from more than 350,000 people to the KFC fried chicken chain, calling on the Yum Brands Inc unit (YUM.N) to stop the routine use of antibiotics by the companies that supply its poultry.

Several fast-food restaurants, which have been under fire for selling unhealthy meals, are assuming the role of public health change agent by forcing their respective meat suppliers to adopt new practices aimed at keeping vital antibiotics working.

KFC has said that by 2017, antibiotics important to human medicine will only be used to maintain chicken health and only under the supervision and prescription of a licensed veterinarian. But critics say that policy effectively allows for routine use of antibiotics by its chicken suppliers.

As per federal government guidance, KFC does not allow the use of such antibiotics for growth promotion. Medical experts warn that the routine use of antibiotics to promote growth and prevent illness in healthy farm animals contributes to the rise of drug-resistant "superbug" infections that kill at least 23,000 Americans each year and represent a "catastrophic threat" to global health.

More than 70 percent of medically important antibiotics in the United States are sold for use on livestock and poultry.

McDonald's Corp (MCD.N) last week said it switched to chicken raised without antibiotics important to human health, months ahead of schedule.

Chick-fil-A Inc, which has surpassed KFC to become the No. 1 U.S. fast-food chicken chain by revenue, has vowed to fully transition to chicken raised with any antibiotics by the end of 2019.

KFC 'Lagging'

"KFC is lagging woefully behind. Diners around the country want KFC to step up," said Lena Brook, food policy advocate with the Natural Resources Defense Council (NRDC), one of the groups delivering petitions to KFC's headquarters in Louisville, Kentucky.

Yum, which this year plans to spin off its China business that contributes roughly 40 percent of the company's overall operating profit, did not immediately respond to requests for comment.

Yum's Taco Bell and Pizza Hut restaurants have set 2017 deadlines for switching to chicken raised without antibiotics important to human health. KFC, which purchases more chicken than those two chains, has not matched that commitment.

"These lifesaving drugs should be used only when animals are sick," said Steven Roach, food safety program director at the Food Animals Concern Trust.

FACT and U.S. Public Interest Research Group Education Fund also sent representatives to deliver the KFC petitions. The Center for Science in the Public Interest and CREDO Action also collected signatures.

That action comes a day after Yum investors submitted a shareholder proposal requesting that the company quickly phase out harmful antibiotic use in its meat supply.

The World Health Organization has warned that the world is moving toward a post-antibiotic era in which many infections would no longer be treatable because of the overuse of antibiotics.

Two U.S. patients are known to have been infected with bacteria carrying the mcr-1 superbug gene that makes germs highly resistant to a last-resort class of antibiotics.

The mcr-1 gene has been found over the past six months in farm animals and people in about 20 countries, including China, Germany and Italy.

Health officials fear the mcr-1 gene will soon be found in bacteria already resistant to all or virtually all other types of antibiotics, potentially making infections untreatable.

Such discoveries have increased the urgency of calls to reduce antibiotic use in beef and pork production. In April, 54 large investors launched a campaign to curb the use of antibiotics in the meat and poultry served by 10 large U.S. and British restaurant groups, including Yum.

Article Link to Reuters;

Philippine Bank Says It Preserves Ties With Big U.S. Banks Despite Heist Role

By Krishna N. Das and Karen Lema
August 10, 2016

Rizal Commercial Banking Corp (RCBC) officials say they have preserved ties with major U.S. banks despite the use of one of its branches in Manila by cyber criminals to funnel $81 million stolen from the Bangladesh central bank’s account at the Federal Reserve Bank of New York.

The money was sent to RCBC by three of its so-called correspondent banks, Wells Fargo, Citigroup’s Citibank and the Bank of New York Mellon, in February, before mostly being laundered through the Philippines' casino industry. Only $18 million has been recovered.

"The relationships continue," Maria Celia Estavillo, RCBC's legal and regulatory affairs head, said in an interview at the bank's headquarters in Manila. "Ours is a very old bank and the relationships are long standing, so I don't foresee our relationships would be discontinued. I guess there were questions that we answered," she said in her first interview since a Philippines' senate hearing into the heist ended in May.

Spokespeople for Citibank, Wells and BNY Mellon all declined to comment.

A correspondent bank provides services, such as facilitating wire transfers or accepting deposits, on behalf of another bank.

RCBC was fined a record one billion pesos ($21 million) by the Philippine central bank on Friday, about one fifth of its net profit last year, for its failures in preventing the Bangladesh Bank money from being transferred through accounts at the bank. RCBC instituted "many changes" before holding review meetings with Wells, Citibank, and BNY Mellon a few weeks after the heist, according to Estavillo.

Dennis Bancod, operations head at RCBC, said the three banks had validated the new procedures.

Since the heist, RCBC has lowered the threshold level of remittances that trigger alerts and formed separate control units at its branches to double-check doubtful transactions, said the bank officials.

According to a former executive involved with security at a major U.S. bank it is rare for banks to sever ties with another institution over money laundering issues, provided security and oversight are improved. There is a bias toward continuing ties in the interests of customers, this source said.

RCBC has blamed a couple of "rogue" officials at its Jupiter Street branch in Manila for "lapses" that allowed the stolen money to leave the bank within a few days of being stolen from the account at the Fed.

But the Bangladesh central bank has alleged that the money disappeared because of systemic failures at RCBC and not just mistakes by individuals.

After a series of meeting with authorities in the Philippines last week, a delegation from Bangladesh Bank said that Philippine President Rodrigo Duterte had given a commitment that the stolen money would be returned.

Bangladesh Bank has said it may sue RCBC if other efforts to recover the money fail. Estavillo said there was no way RCBC would pay any money to Bangladesh Bank without a court order.

Article Link to Reuters:

In Recovering Housing Market, The Starter Home Remains Elusive

By David Randall and Nichola Groom
August 10, 2016

Seeking a yard for her two dogs and proximity to her new government job, Alison Owen set out to buy a home this spring in the hot market of Austin, Texas.

Owen's real estate agent warned the 28-year-old that she would face stiff competition in the market for entry-level homes - and he wasn't kidding.

Owen had to offer $215,000 for a property listed at $198,000 to fend off at least nine other bidders for the 1,200-square-foot home in the sought-after neighborhood of Wells Branch.

“I definitely spent a lot more than I thought I was going to spend,” Owen said.

Similar scenarios are playing out across the United States. Low interest rates and an improving job market have created a wave of prospective first-time home buyers, but they're being stymied by a dearth of available starter homes.

Nationwide, the inventory of homes costing $250,000 or less fell more than 12 percent between June 2015 and June 2016, according to the National Association of Realtors.

The shortage stems from higher labor, land and building permit costs that have caused construction companies to focus on higher-end homes that bring more profit. In addition, institutional investors are snapping up affordable homes by the thousands in select markets nationwide and converting them to rentals.

For a graphic showing the declining number of starter homes for sale in key markets, see:

The shrinking supply of affordable homes is one economic trend among many that is conspiring against younger workers and families in building wealth as their parents once did.

Real average hourly wages of often debt-laden college graduates fell between 2000 and 2014, according to the Economic Policy Institute, while the Case-Shiller U.S. National Home Price Index jumped more than 25 percent, adjusted for inflation, over the same period.

Younger workers who can afford to save for a down payment, meanwhile, are forced into bidding wars for the dwindling number of houses they can afford. Some decide instead to strain their budgets for a home that would have been traditionally considered a trade-up.

Over the past four years, the number of entry-level homes for sale – defined as those priced in the lower third of a local market – has fallen by 34 percent, according to a Reuters analysis of data compiled by listings firm Trulia.

The market is even tighter in many cities. In Salt Lake City the average number of starter homes on the market has fallen by 83% since 2012, and in San Diego by 71.5%. Cambridge, Mass. and Portland Ore. have both seen drops of more than 60%.

The New Renting Reality

Between 2006 and 2014, the number of single-family homes occupied by renters jumped by about 34 percent, according to the U.S. Census Bureau, a shift that had its roots in the subprime mortgage crisis.

After the housing crash, institutional investors rushed to buy undervalued and foreclosed homes and convert them to rentals.

Corporations or companies now own nearly one fifth of all homes priced under $300,000 that are not occupied by their owners, according to property data firm ATTOM Data Solutions, though investor purchases have slowed since peaking in 2013.

At least five publicly traded real estate investment trusts in the U.S. exclusively own single-family rental homes. American Homes 4 Rent - which began trading in 2012 and is currently the largest publicly-traded REIT dealing in single-family homes - owns nearly 38,000 properties in more than 20 states. Its shares have risen more than 40 percent in the last year.

The REIT was founded by self-storage billionaire B. Wayne Hughes, and top shareholders include The Vanguard Group and J.P. Morgan Asset Management, according to public filings.

Meanwhile, Blackstone Group in July announced plans for a public stock offering of Invitation Homes - now the largest U.S. single-family home rental company. Blackstone has invested $8.7 billion in its 45,000-home portfolio since founding it in 2012.

Large-scale investors often make all-cash offers when purchasing houses, and they can more easily outbid individual buyers.

Laura Medina, 25, a human resources manager who attended a recent grand opening of a starter-home community in Jurupa Valley, California, said she has lost bidding wars over six months of looking for a home for herself and her son.

“There are a lot of investors out there,” she said.

The promise of a stable income from increasing rents has also turned many individuals into "accidental landlords" who rent out their homes when they move rather than sell them, according to NAR economist Lawrence Yun.

The growing number of renters makes investing in rental housing attractive. Young adults aged 18 to 34 earn $2,000 less per year today than they did in 1980, after adjusting for inflation, according to the Census Bureau, and they have amassed record levels of student debt.

Outstanding student loan debt totaled $1.2 trillion in the fourth quarter of 2015 - trailing only mortgage debt among all consumer debt categories, according to the New York Fed. The average student loan monthly payment has jumped 50 percent in constant dollars, to $351, over the last 10 years.

Both factors have contributed to young people entering the housing market later. A survey released in June by the NAR found that 71 percent of non-homeowners who carry student debt said it had delayed them from buying a home.

Slow Construction 

As individual and institutional landlords have siphoned off rentals at the low end of the market, new construction has been slow to meet the demand from homebuyers.

As of June, housing starts on single-family homes were on track to hit 778,000 this year, far below levels of more than a million starts per year during the 1990s and early 2000s.

That's in part because new home construction remains depressed coming out of the recession, when builders retreated and many construction workers found other lines of work.

The resulting labor shortage continues, and is one factor slowing builders, along with higher land costs and tight construction financing, said National Association of Home Builders economist Rob Dietz.

Average residential land values are up about 79 percent over the last four years, to a level last seen when the housing market peaked in 2007 and 2008, according to the Lincoln Institute for Land Policy.

The cost of building a new home, including permit fees, labor and materials, meanwhile, has jumped to 61.8 percent of the cost of an average single-family home, compared with 48.1 percent in 2007.

Atlanta-based PulteGroup Inc, one of America’s largest home construction firms, says that market forces have pushed it into building more expensive homes.

First-time buyers make up 32 percent of Pulte’s business today, down from 40 percent just five years ago. And the company has refocused its entry-level homes at a higher average price of about $350,000, targeting more affluent, urban buyers.

“We don’t see a lot of value today in running out into the exurbs and buying a lot of lots,” PulteGroup Chief Financial Officer Bob O’Shaughnessy said at an investor conference in May.

If there's another housing downturn, he said, “that is the stuff that will shut down first.”

Article Link to Reuters:

Can Iran Go Around Turkey To Reach Europe?

The regional turmoil, and particularly the unstable situation in Turkey, is prompting Iran to speed up plans to establish alternative trade routes to Europe.

August 10, 2016

Iran's geostrategic location, along with its historic role as a conduit for the exchange of goods — especially its position on the ancient Silk Road — has made the country one of the most active transportation hubs in the world.

Through both its northern land borders and the Caspian Sea, Iran has access to Central Asia, the Caucasus and Russia. To its south, it is connected to international waters through the Persian Gulf and the Sea of Oman. Iran's unique access to landlocked countries and its exceptional location make it an ideal transit hub — both in terms of cost and time efficiency.

This position has so far granted Iran membership in several international corridors with multiple transport routes passing through the country. These corridors include the North-South Transport Corridor, East-West Transport Corridor (the ancient Silk Road), South Asia Corridor and the Transport Corridor of Europe-Caucasus-Asia.

In recent years, and especially since Hassan Rouhani was elected president in 2013, the number of international flights that have crossed Iranian air space has tripled, while the volume of goods transiting through Iranian railways has doubled. Yet despite this increasing interconnectivity, Iranian officials say the country is still using only half of its total transit capacity, which is around 10 million tons per year.

Cognizant of the important role it can play in the transportation of goods in the region, and also aware of the economic benefits that can be reaped — such as job creation and increased earnings — Iran has sought to diversify its transit routes.

Given Europe's stated desire to become Iran’s largest trading partner once again with the lifting of sanctions, and considering the recent turmoil in Turkey, Tehran has sped up efforts to establish new routes to Europe.

For years, Turkey has been the best conduit for the transportation of Iranian goods to reach Europe. Yet in terms of transit, things have turned ugly between the two countries in recent years. Attacks against Iranian trucks and drivers on Turkish soil, rows over fuel prices and tariffs imposed on Turkish drivers in Iran — not to mention the frequent Turkish border closures, which greatly impact Iranian trucking, have been among the main sources of friction between Tehran and Ankara.

These issues, coupled with the worsening security situation in Turkey, have prompted Iran to seek alternative transit routes to Europe on the ground that relying solely on its western neighbor does not, and will not, benefit the Iranian transportation system. In this regard, Iran has moved to revive its decade-old plan to connect to Europe via a new multimodal route.

The Persian Gulf-Black Sea corridor, which involves road, rail and sea transport, begins from the Persian Gulf to the south of Iran, stretches to the north of the country and then goes to Armenia and Azerbaijan, from where it reaches the Georgian ports of Poti and Batumi in the Black Sea. In this vein, Bulgarian ports also play a role via roll-on/roll-off ships used to get trucks to Greece. Trucks that head to Italy can also depart from southern Greek ports using these kinds of ships.

Indeed, Iran, Armenia, Azerbaijan, Georgia, Bulgaria and Greece recently agreed on a draft plan to press ahead with the project, which is expected to be finalized by the end of 2016.

To learn more about the significance of this corridor, Al-Monitor spoke with Homayoun Karimi, head of the International Agreements Group at Iran's Road Maintenance and Transportation Organization. Karimi, who attended the first of several rounds of talks between the involved countries, told Al-Monitor, "The political and international aspects of this multimodal corridor is of high importance as it will further increase the importance of our transit position in the region and globe alike."

The Persian Gulf-Black Sea corridor holds numerous economic advantages for participating countries as it helps them facilitate trade. On the European side, the project is also regarded as significant because it facilitates European states' access to the Persian Gulf, which in turn provides them with a shorter route to the Indian and Pacific oceans.

"Having a safe, cost-effective and fast route is of high importance for transportation companies, forwarders and owners of the cargo. We need to have good marketing of the corridor to further inform business owners and transportation companies about the benefits of this new route," said Karimi.

Akbar Khodaei, senior expert at the Economic Cooperation Organization, believes that Iran has a unique position as far as geopolitics is concerned. "By participating in the Persian Gulf-Black Sea Corridor, Iran is actually utilizing its geopolitical position in global interactions, something that definitely rebuilds the country's ability to play roles in the economic arena," Khodaei told Al-Monitor.

Khodaei added that the project has already turned global, as other countries — including Persian Gulf and Indian Ocean littoral states as well as European nations — are expected to join the corridor. Of note, Romania has requested to join the Persian Gulf-Black Sea corridor.

Iranian officials have stated that this corridor is not meant to replace the trans-Turkish route to Europe. Rather, Iran says it will provide the country with an additional route, which will give it the upper hand in case of any obstruction by Turkey.

While security and ease of transportation plays a crucial role in global trade, Iran, which unlike many of its neighbors enjoys a high level of stability, is expected to play a much greater role as a transit hub that bridges the East with the West and the North to the South.

As such, with more countries discovering this significant potential, and as Iran continues its efforts to become a regional transit hub, experts like Karimi believe that the new corridor will play an important role. According to Karimi, the multimodal approach to trade with Europe "would further increase Iran's transit importance and pave the ground for greater foreign investments in the country's transportation infrastructures."

Article Link To Al-Monitor:

What Happened To All Netanyahu’s Men?

More and more of his friends have been hired to junior-level positions in the Prime Minister’s Office.

By Gil Hoffman
The Jerusalem Post
August 10, 2016

It should come as no surprise that on a day when the press dealt with a bill designed to prevent prime ministers from being investigated, Channel 10 led the news with a headline that Prime Minister Benjamin Netanyahu’s son Yair would soon be questioned.

It was as if the police were signaling to Netanyahu: If you think you can find a way to get yourself immunity, we will find another way to get at you. It is no wonder Netanyahu’s office, which does not respond to every private member’s bill, made a point of releasing a statement that the prime minister was not aware of the legislation that would prohibit the investigation of a sitting prime minister for minor crimes, and that it would not apply to the current investigations against him.

Yair, who is 25, has become increasingly powerful in Netanyahu’s inner circle.

More and more of his friends have been hired to junior-level positions in the Prime Minister’s Office, and he was more involved in the Likud’s 2015 campaign than ever before.

When times are tough, Netanyahu knows he can rely only on his family – his diplomatic arm is his cousin, Isaac Molcho, while his political and legal arms are David Shimron, also a relative.

The role of Netanyahu’s wife Sara in his office also cannot be underestimated.

Multiple people who have worked for Netanyahu said getting along with her is a prerequisite for the job, and most of the remaining aides in his office have some kind of connection to her.

The report about Yair Netanyahu came after a day in which Netanyahu basically pushed his chief of staff, David Sharan, out the door.

Sharan is not a household name around the world or in Israel, but he should be. Until Tuesday, he would have been an obvious choice for The Jerusalem Post’s annual list of the 50 most powerful Jews.

He controlled Netanyahu’s schedule and supervised all of his advisers, working around the clock, seven days a week, spending more time with Netanyahu than anyone – Sara included.

Sharan hoped to shift to the post of cabinet secretary, which is as equally senior as chief of staff but involves much less dirty work and creates fewer enemies; three recent cabinet secretaries used the post as a launching pad to the Knesset.

Chiefs of staff to the prime minister have not made that jump in recent years.

Netanyahu agreed to give him the job months ago, but never followed through. When the prime minister told Sharan he had changed his mind, he packed up and quit immediately.

A confidant of Sharan who spoke to him on Tuesday said he wasn’t completely surprised, but was very disappointed that he did not receive what the confidant called “a prestigious post without the crap.”

Sharan will be replaced by the former head of Avis Israel, Yoav Horowitz, but he had filled at least two posts and will need at least two replacements.

There also are several other key posts in Netanyahu’s office that are still vacant, such as national security adviser and cabinet secretary.

It may be hard to run a country that way, but Netanyahu is known for saying he does not need advisers or aides, only secretaries. A recurring statement he has told his staff is: “I need someone to help me, not advise me.”

His former advisers say Netanyahu thinks he is the best adviser to himself, and they know that because he told them so repeatedly.

Netanyahu eventually will find more aides to fill the vacancies because there are enough people who want to be near the driver’s seat. Whoever does enter that office must be careful, however, because an eventual interrogation by police is almost inevitable.

Article Link To The Jerusalem Post:

WSJ: Hillary Needn’t Apologize For Welfare Reform

The bipartisan welfare-reform legislation of 1996 seems otherworldly in today’s political climate.

By Jason L. Riley
The Wall Street Journal
August 10, 2016

The bumper sticker I saw the other day read: “Work harder: Millions of welfare recipients are depending on you.”

I chuckled, but the quip seemed slightly dated. Two decades ago this month, after all, Hillary Clinton’s husband teamed up with a Republican Congress to implement historic welfare-reform legislation. Around half of the Democrats supported it, along with nearly all of the Republicans. It was a truly bipartisan effort, one that looks otherworldly in today’s political environment.

The reform had flaws, and not everyone got everything they wanted. The food-stamp program was trimmed, while Medicaid coverage for children was expanded. Cash benefits for drug addicts were cut, as were most welfare benefits for noncitizens.

The final product was a compromise, which is how major legislation used to get done. During his 1992 campaign Bill Clinton had pledged to “change welfare as we know it,” and with some nudging from the GOP—which controlled the House and Senate after the 1994 midterm elections—he finally did.

The goal was to preserve the safety net while also reducing dependency and rewarding work. What had been an entitlement—simply giving people cash without expecting anything in return—became a program that stipulated time limits and job requirements. But what works in Wisconsin and Florida might not work in California and Tennessee, so states were given money and freedom to innovate and craft welfare policies to their liking.

In the late-1980s and early ’90s, welfare dependency rose by a third. Polls showed strong public support for reforms that favored work over handouts, but the political left was divided. Donna Shalala,secretary of the Department of Health and Human Services at the time, urged the president to veto the bill, as he’d done twice before, and several high-ranking HHS officials quit in protest when Mr. Clinton signed it.

Leading Democrats predicted doom. Sen. Pat Moynihan declared that “those involved will take this disgrace to their graves.” Rep. Dick Gephardt said, “more than one million children could be forced into poverty because of this bill.” The New Republic magazine told readers that “wages will go down, families will fracture, millions of children will be more miserable than ever.”

None of this came to pass. Between 1995 and 2000 welfare rolls declined by 53% nationwide. California, the nation’s most populous state, had 2.7 million welfare recipients in 1995. Five years later the number was 1.5 million, a 44% decline. The majority of welfare recipients are white, but the welfare use rate is higher among blacks, who have more of the female-headed families that characterize most of the welfare population.

So it’s significant that by the end of the 1990s black poverty, black child poverty and poverty in female-headed families had reached their lowest levels ever, while employment rates for single mothers rose. Even today, after two recessions, black poverty and child poverty in the U.S. remain lower than in the early 1990s, the high-water mark for welfare caseloads.

So welfare reform, in the main, succeeded on its own terms. On balance the system is better than it used to be, even if that hasn’t stopped progressives from trying to turn back the clock. States have loosened work requirements, increased exemptions and even broadened the definition of “work” to include merely searching for a job.

The Obama administration eased eligibility requirements for food stamps with predictable results. Between 2008 and 2013, the number of recipients grew by nearly 69% nationwide. Incentives matter. When welfare pays significantly more than an entry-level job, the rational choice is unemployment.

Still, government policy has its limits, and no one knows this better than those who work with the poor. At a Manhattan Institute symposium on welfare reform earlier this year, Bishop Shirley Holloway, who runs a nonprofit organization in Washington, D.C., that helps people recover from alcohol and drug addiction, explained where welfare reform came up short.

“We talked about getting people off of welfare but what we didn’t talk about is changing the . . . mindset that got them on welfare,” she said. “When you talk about somebody who runs into hard times because they got laid off, but they have the foundation to pick themselves back up . . . that’s one thing. But when you talk about generations that have only known welfare. Their mother was on welfare. And their mother was on welfare—now you’re talking about a way of life.” Social policy can’t cure dysfunction, but it can certainly exacerbate it.

Hillary Clinton has tried to distance herself from her husband’s achievements on crime and trade to accommodate a party that has moved further left in the Obama era. So far, however, she’s stood by welfare reform. Bully for her.

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What Does The Foreign Policy Elite Do In A Time Of Anti-Elitism?

By David Ignatius
The Washington Post
August 10, 2016

ASPEN, Colo. -- For 32 years, a group of Republican and Democratic foreign-policy experts has gathered here each summer to debate strategic issues facing the country. This year the bipartisan group had a strange imbalance: None of the Republicans was prepared to argue the case of the GOP nominee, Donald Trump.

Trump would probably be pleased to know that he failed to muster support from the Aspen Strategy Group, as this gathering is known. In a sense, he's running against the elite foreign policy establishment that the group represents. He is happy to lose the Aspen primary if that strengthens his populist appeal in November.

Trump's shadow hung over this week's meeting here. Fifteen prominent Republicans who had served in past GOP administrations met Sunday for a private soul-searching session that one attendee described as "painful and empathetic." The next day, eight of them joined in signing the public declaration by 50 top GOP former national-security officials warning that Trump would be "the most reckless president" in U.S. history.

"We're seeing a mass exodus of senior and experienced Republicans from Trump on national security. They are deserting him because he has denigrated NATO, appeased [Russian President Vladimir] Putin and shown little faith in American power," argued Nicholas Burns, director of the Aspen Strategy Group, who served as undersecretary of state under President George W. Bush. Burns had earlier announced that he would support Hillary Clinton for president.

Trump seemed to relish this defection by the establishment. He described the 50 signers of the declaration as "nothing more than the failed Washington elite looking to hold onto their power," and thanked them "for coming forward so everyone in the country knows who deserves the blame for making the world such a dangerous place."

What does the foreign policy elite discuss in a time of anti-elitism? Partly, this year's Aspen gathering (of which I'm a member, along with several other journalists) explored why experts had missed early warnings of public anger over trade and immigration that have fueled Trump.

But the conversation focused mostly on the technical details of strategic planning: How should the National Security Council staff be organized to give better foresight and efficiency? How can U.S. technology be leveraged to deter Russia and China? A convention of machinists likes to talk about its tools; so too with this collection of experts.

What's unusual about the Aspen group is that in a time of deep political polarization, it struggles for bipartisan consensus. Explains Peter Feaver, a Duke professor who served on Bush's NSC staff: "Principled disagreement of the sort that happens in the ASG opens the door to both pragmatic compromise ... and persuasion, where you actually learn from the other side." However elitist this may sound, such a consensus-building process is part of what makes American democracy work.

Stephen Hadley, who served as national security adviser during Bush's second term, is a prime example of quiet, principled, bipartisan public service. He didn't sign the letter denouncing Trump, and he cautioned me here that foreign policy experts should pay careful attention to the growing public anger that "globalization was a mistake" and that "the elites have sleep-walked the country into danger."

"This election isn't just about Donald Trump," Hadley argued. "It's about the discontents of our democracy, and how we are going to address them. The genius of our political system is that these discontents are being worked out this year within our political parties. Whoever is elected will have to deal with these discontents. If not, the anger against the system may be played out next time in the streets, as in the 1960s."

Philip Zelikow, a University of Virginia professor who also served in the Bush State Department, argues that the global engagement Trump resists can be summed up in two simple sentences: "The future of America depends on partners and friends in the world. The future of America depends on doing business in the world." Most Americans, even Trump supporters, would endorse these principles if they could be articulated more clearly, he says.

With Trump running so hard against the traditional foreign policy consensus, there's an unusual opportunity for Clinton to rebuild this framework in a way that speaks to the voters' discontent -- and also reweaves the narrative of American power for the 21st century.

Prominent Republicans are helping Clinton make her argument. But she has to make the case that updated global engagement on trade, security and economic issues as discussed by this group of professors and diplomats in a pristine mountain resort will benefit the average citizen.

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The College Formerly Known As Yale

Any renaming push on the Ivy campus should start at the top—with Elihu Yale, slave trader extraordinaire.

By Roger Kimball
The Wall Street Journal
August 10, 2016

The English novelist Kingsley Amis once observed that much that was wrong with the 20th century could be summed up in the word “workshop.” On American campuses today, I suspect that the operative word is “committee.”

On Aug. 1, Yale University president Peter Salovey announced that he is creating a Committee to Establish Principles on Renaming. There has been a craze for renaming things on college campuses the last couple of years—a common passion in unsettled times.

In the French Revolution, leaders restarted the calendar at zero and renamed the months of the year. The Soviets renamed cities, erased the names of political enemies from the historical record, and banned scientific theories that conflicted with Marxist doctrine.

At Princeton, Stanford, Georgetown, Harvard and elsewhere, students have demanded that buildings, programs and legacies be renamed to accommodate modern sensitivities. Amherst College has dropped Lord Jeffrey Amherst as its mascot because the colonial administrator was unkind to Indians. Students at the University of Missouri have petitioned to remove a statue of the “racist rapist”Thomas Jefferson. This is part of a larger effort, on and off campuses, to stamp out dissenting attitudes and rewrite history to comport with contemporary prejudices.

But isn’t the whole raison d’être of universities to break the myopia of the present and pursue the truth? Isn’t that one important reason they enjoy such lavish public support and tax breaks?

A point of contention at Yale has been the residential college named for John C. Calhoun, a congressman, senator, secretary of war and vice president. Alas, Calhoun was also an avid supporter of slavery.

Mr. Salovey is also perhaps still reeling from the Halloween Horror, the uproar last year over whether Ivy League students can be trusted to pick their own holiday costumes, which made Yale’s cry bullies a national laughing stock. In the wake of that he earmarked $50 million for such initiatives as the Center for the Study of Race, Indigeneity, and Transnational Migration.

He then announced that Calhoun College would not change its name. Apparently, he has reconsidered. After the Committee on Renaming has done its work to develop “clearly delineated principles,” he wrote, “we will be able to hold requests for the removal of a historical name—including that of John C. Calhoun—up to them.”

I have unhappy news for Mr. Salovey. In the great racism sweepstakes, John Calhoun was an amateur. Far more egregious was Elihu Yale, the philanthropist whose benefactions helped found the university. As an administrator in India, he was deeply involved in the slave trade. He always made sure that ships leaving his jurisdiction for Europe carried at least 10 slaves. I propose that the committee on renaming table the issue of Calhoun College and concentrate on the far more flagrant name “Yale.”

There is also the matter of historical artifacts. Earlier this year an unhappy employee at Calhoun College smashed a stained-glass window because it depicted slaves. He was dismissed but then, after a student outcry, rehired. In response, Mr. Salovey convened a Committee on Art in Public Spaces. Offending objects, he explained, including “certain windows,” would be “relocated” and “conserved for future study.” Wasn’t there a similar initiative in Europe in the late 1930s and 1940s?

Yale’s leaders have compared the renaming committee to the so-called Woodward Committee that, in the mid-1970s, issued on behalf of the school a ringing defense of free speech (“to think the unthinkable, discuss the unmentionable, and challenge the unchallengeable”).

A closer historical parallel, however, might be the Committee of Public Safety, which during the French Revolution worked overtime to assure that citizens lived up to its ideal of virtue. “Virtue” was a word always on the lips of the revolutionaries in France. They took the term from the man whom Robespierre called a “prodigy of virtue,” Jean-Jacques Rousseau.

In everyday life, acting virtuously means such boring things as being kind, honest and dutiful. For moral prodigies, such pedestrian examples are beneath notice. Rousseau, “drunk with virtue” as he put it in his “Confessions,” nonetheless shipped off to a foundlings home all five of the children he had with his semi-literate mistress. She protested, but Rousseau cared not for he had “never felt the least glimmering of love for her.”

Robespierre floated aloft upon a similarly callous intoxication. The Republic, he said, was founded on “virtue and its emanation, terror.” Hence the work of the Committee of Public Safety, whose chief handmaiden was the guillotine and whose activities depended critically on anonymous reports about those whose commitment to virtue was less than wholehearted.

Yale, though sitting on a tax-exempt endowment of $24 billion, does not have the guillotine. But like many institutions entrusted with educating America’s future leaders, it is hard at work undermining due process and fostering an atmosphere of anonymous accusation. In a campus-wide email this spring, Stephanie Spangler, a Yale professor of obstetrics and gynecology as well as “University Title IX Coordinator,” discussed the school’s plans to launch “on-line tools for reporting sexual misconduct anonymously.”

The right of due process and the right to face one’s accuser have been hallowed guarantors of liberty since the Roman Republic. They are enshrined in the U.S. Constitution. But those who are infatuated with their own virtue find it easy to dispense with such unwieldy constraints.

I suspect that Mr. Salovey believes he will be able to pacify the professional grievance-mongers on his campus by bribes and capitulations. He should remember what an earlier cultural provocateur, the Yippie leader Jerry Rubin, said: “Satisfy our demands, and we’ve got twelve more. The more demands you satisfy, the more we’ve got.”

The Committee of Public Safety came into being in April 1793. On July 28, 1794, Robespierre, the man who oversaw the murder of so many, was himself guillotined. Thus do revolutions consume their abettors.

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