Thursday, September 22, 2016

In America, Gun Rights Are For Whites Only

By Eugene Robinson
The Washington Post
September 23, 2016

If you are a black man in America, exercising your constitutional right to keep and bear arms can be fatal. You might think the National Rifle Association and its amen chorus would be outraged, but apparently they believe Second Amendment rights are for whites only.

In reaching that conclusion I am accepting, for the sake of argument, the account given by the Charlotte police of how they came to fatally shoot Keith Lamont Scott on Tuesday. Scott’s killing prompted two nights of violent protests that led North Carolina Gov. Pat McCrory (R) to declare a state of emergency. Last Friday, police in Tulsa shot and killed Terence Crutcher — an unarmed black man — and the two incidents gave tragic new impetus to the Black Lives Matter movement.

Scott’s relatives claim he was unarmed as well. But let’s assume that police are telling the truth and he had a handgun. What reason was there for officers to confront him?

North Carolina, after all, is an open-carry state. A citizen has the right to walk around armed if he or she chooses to do so. The mere fact that someone has a firearm is no reason for police to take action.

This is crazy, in my humble opinion. I believe that we should try to save some of the 30,000-plus lives lost each year to gun violence by enacting sensible firearms restrictions — and that the more people who walk around packing heat like Wild West desperados, the more deaths we will inevitably have to mourn. In its wisdom, however, the state of North Carolina disagrees.

We should continue to lobby for tighter gun laws and hope that someday the voices of reason are heard. But at the same time, we should demand that current laws be enforced fairly even if we don’t like them. Scott’s death is the second recent police slaying to suggest that laws permitting people to carry handguns apparently do not apply to African Americans.

In July, police killed a black man named Philando Castile in Falcon Heights, Minn., after pulling him over for a traffic stop. When officers approached the car, Castile told them he was licensed to carry a handgun. I can only assume that Castile made this declaration so that the officers would not be surprised upon seeing the gun. But rather than assure them that he was a law-abiding citizen exercising his constitutional right, Castile’s announcement had the opposite effect.

The horror that ensued was live-streamed on Facebook by Castile’s girlfriend, Diamond Reynolds. Her cellphone video and calm, composed narration were chilling, especially to those of us who frequently commit the offense of driving while black. One of the officers shot Castile several times, and Reynolds watched as Castile slumped next to her, his life bleeding away.

Did Castile reach for the gun? Reynolds maintains he was merely reaching for his wallet to get his driver’s license, as the officer had ordered. But we have seen many times, including in the recent Crutcher case, that any perceived sudden movement by a black man under arrest, even if he is not known to have a weapon, can be seen by police as a deadly threat. Disclosure of the gun, meant to avert potential tragedy, seems to have invited it.

Afterward, it was confirmed that Castile did indeed have a legal permit to carry a gun. He was not guilty of any crime. He was just 32 — and, incredibly, had in his brief life been stopped a total of 52 times for nickel-and-dime traffic violations.

That qualifies as harassment. I know many black men who have been pulled over for some trumped-up excuse and felt threatened by police. This has happened to me.

In the Scott case, according to a Charlotte police department statement, officers said they went to a neighborhood looking for someone else and saw Scott “inside a vehicle in the apartment complex. The subject exited the vehicle armed with a handgun. Officers observed the subject get back into the vehicle at which time they began to approach the subject.”

If all they saw was a man with a gun who got out of a car and back in, what illegal activity did they observe? Why did they “approach the subject” instead of going about their business? Did they have any reason to suspect it was an illegal gun? Are all men carrying guns believed to be carrying guns illegally, or just black men?

Our gun laws should be changed. Until then, however, they must be enforced equally. Does the NRA disagree?


Article Link To The Washington Post:

Clinton’s Leading In Exactly The States She Needs To Win

Here’s why that isn’t as good as it sounds.


By Nate Silver
FiveThirtyEight
September 23, 2016

Here at FiveThirtyEight, our favorite election-related chart is what we officially call the “winding path to 270 electoral votes” and unofficially call the snake. Designed by my colleague Aaron Bycoffe, it lines the states up from most favorable for Hillary Clinton (Hawaii, Maryland) to best for Donald Trump (Wyoming, Alabama) based on the projected margin of victory in each one. The snake is bisected by a line indicating 269 electoral votes: cross this line — meaning you get 270 electoral votes — and you win the election.



Right now, Clinton is over the line by exactly one state. As of this writing, that state — what we also call the tipping-point state — is New Hampshire. But a group of states are closely lumped together, and Pennsylvania,Colorado and Wisconsin have all taken their turn as the tipping-point state in recent weeks.

If she wins all those states and everything toward the blue end of the snake, Clinton would finish with 272 electoral votes, even assuming she loses the 2nd Congressional District of Maine. (Maine and Nebraska split their electoral votes by congressional district.) That’s two more than she needs to win the election.

But in different ways, that both understates and overstates how precarious Clinton’s position is. It understates it because Clinton has no margin to spare. Clinton’s polling has been somewhere between middling and awful in most of the other swing states lately, and they all at least lean toward Trump at the moment, narrowly in some cases (such as Florida) and more clearly in others (such as Iowa). If Clinton loses any of the states on the blue side of the snake without picking anything up on the red side, she’ll be stuck on 269 electoral votes or fewer.1

On the other hand, Clinton’s leads in the states she needs to win appear to be pretty solid. As of late Thursday afternoon, she’s ahead in our forecast by 3.1 percentage points in New Hampshire, and by slightly more than that in Colorado (3.3 points), Pennsylvania (3.4 points) and Michigan (also 3.4 points).



Put another way, you might as well saw the snake in half. There’s a big gap between the New Hampshire/Colorado/Pennsylvania group of states and the next ones, where Clinton is losing.

So does that mean Clinton could win the Electoral College despite losing the popular vote? Yes, it’s possible. If every state swung by exactly 2.5 percentage points toward Trump, for instance, that’s exactly what would happen.

But that exactitude is a big assumption, especially given that we still have 47 days — and three debates — to go until the election. Even if it were Election Day, in fact, it would be unrealistic to expect such high precision. State polling averages have been pretty good for the past few presidential elections, but “pretty good” still provides for plenty of times when they miss by 2 to 4 percentage points. If one of those misses is in Trump’s favor in Pennsylvania or New Hampshire or Colorado, especially if the race shifts a bit further to Trump overall, then Clinton will go from being in a pretty good Electoral College position to having a total mess on her hands.

Furthermore, the way in which the states are aligned right now doesn’t make all that much sense based on their demographics. In the table above, you can find regression-based estimates for the outcome in each state, which are derived based mostly on how they voted in 2008 and 2012 and to a lesser degree based on their region and demographic makeup. (This regression is combined with the polling average in each state to make our forecasts, although it receives a low weight in well-polled states like these.)

There’s an apparent discrepancy between Pennsylvania and Ohio, for example. In our polling average, they’re separated by 5.2 percentage points: Clinton leads in Pennsylvania by 3.5 points but trails in Ohio by 1.7 points. In 2012, by contrast, the states were separated by only 2.4 points, and so our regression model is confused as to why the gap is so much bigger this year. Perhaps that means the polling gap between them will close — good news for Clinton if Ohio moves toward Pennsylvania, but a problem if it’s the other way around.

Likewise, how safe can Clinton feel in Colorado given her poor polling in Nevada? Can she be entirely comfortable in New Hampshire given that Maine is surprisingly close? Does the sharp tilt toward Trump in Iowa tell us that Wisconsin or Minnesota have the potential to turn red?

Between the unusual nature of Trump’s electoral appeal, the disagreements between pollsters, the large number of undecided and third-party voters, and the wider range of swing states than in 2008 or 2012, this is not a year to expect tremendous precision. Instead, the actual map is likely to be a little messier than polling averages indicate, with the probability of modest errors in either direction. For the time being, Clinton is more likely to be hurt by those errors than to be helped by them. She has one really good Electoral College path, but it’s only one path, instead of the robust electoral map that President Obama had in 2008 and 2012. That’s why our models estimate that Trump is more likely to benefit from an Electoral College-popular vote split than Clinton is, although either outcome is possible.


Article Link To FiveThirtyEight:

Will The Riots In Charlotte Help Elect Donald Trump?

With every wave of anti-police violence and rioting, the chance of a backlash from fed-up voters grows.


By Jeremy Carl
The National Review
September 23, 2016

Watching the depressing news of rioting in my beautiful home state of North Carolina, I’m beginning to think that Barack Obama and Hillary Clinton are secretly conspiring to get Donald Trump elected president.

For it would be hard to imagine a narrative playing better into the “law and order” theme Trump launched at the GOP convention than yet another racially motivated riot against the police, fed by persistently false rumors and outright lies from the “community” and irresponsible rhetoric from the federal government and the media. And it would be hard to imagine a better advertisement for how great America isn’t right now than the wave of anti-police violence that we are currently enduring.

The aftermath of the police shooting of Keith Lamont Scott, a man with convictions in multiple states including assault with a deadly weapon, and further arrests on numerous charges including assault with intent to kill, has proven sadly predictable. The riots in Charlotte unfolded in the wake of a video live-streamed on Facebook by Scott’s daughter, who was not at the scene, who among other choice bits of eloquence, informed viewers that “they shot my motherf***in daddy four times for being black.”

The officer doing the shooting in the case in question, Brentley Vinson, was himself African American, suggesting perhaps that the typical left-wing strategy of equating any police action against an African American as signaling the impending rebirth of the KKK will not be entirely successful in this case. (Of course, alleged witnesses were spreading rumors, reported credulously by the media, that the shooter was white, just as they spread equally false rumors that Mr. Scott was reading a book and was unarmed when shot, and that he had his hands in the air. Eyewitness accounts and video of Scott’s gun emerged subsequently.)

Officer Vinson, the son of a Charlotte police officer, was a recent graduate of Liberty University in Virginia, an Evangelical Christian school, where he was a captain of the football team. ”Brent has always been a great guy founded on good morals. I find it very hard to believe that he would gun down an innocent man,” one of his Liberty teammates told CNN. Michael Scurlock, a former NFL player who had befriended Officer Vinson in Bible study, described Vinson as distraught after the shooting, telling CNN, “It’s nothing easy, and I know that he expressed that through the emotions of his voice, over the phone.” Vinson’s high-school football coach told the Charlotte Observer, “We need more Brent Vinsons, that type of person, in our communities. . . . He’s a natural leader and one of those guys who always had the best interest of others before himself.” Sounds very suspicious — he’s probably one of those alt-right types.

Charlotte police chief Kerr Putney, also African American, was unsurprisingly tired of having to fight back against misinformation in the media and within the “community.” “It’s time to change the narrative,” he said, “because I can tell you from the facts that the story’s a little bit different as to how it’s been portrayed so far, especially through social media.”

Meanwhile, Charlotte descended into anarchy, as rioters looted numerous stores, stopped cars on the interstate and assaulted drivers, looted tractor-trailers, and set fires, forcing a major freeway to close and North Carolina governor Pat McCrory to call out the National Guard.

Unlike the lawless rioters, I won’t rush to judgment on what exactly transpired in the encounter between Officer Vinson and Mr. Scott. While the most explosive claims, which caused the riots, have almost certainly been proven false, we need to let the process play out to find out whether the shooting was justified, as it appears to have been, or whether Officer Vinson was in error. But even if the shooting were unjustified, it would not excuse even one minute of the lawless rioting we are seeing.

Loretta Lynch, Eric Holder, Barack Obama, and Hillary Clinton have inflamed racial tensions for political gain repeatedly over the past eight years. Speaking about the riots in Charlotte, Lynch said,“They have once again highlighted — in the most vivid and painful terms — the real divisions that still persist in this nation between law enforcement and communities of color.”

And why do they persist, Attorney General Lynch? In part because you have continued to inflame them, rather than tell African Americans the hard truths they need to hear.

Racial incitement by Trump? Even Trump’s most outrageous statements haven’t been the equivalent of having rioters shouting “hands up, don’t shoot” as rioters and looters in Charlotte did, repeating the false narrative of Ferguson’s Michael Brown that was relentlessly pushed by left-wing media and government officials.

At a campaign rally yesterday, Hillary Clinton said, “There is still much we don’t know about what happened . . . but we do know that we have two more names to add to a list of African Americans killed by police officers in these encounters,” cleverly imputing, without directly saying so, that all of these deaths were unjustified.

“It’s unbearable, and it needs to become intolerable,” Clinton continued, before tossing off a few meaningless pro-police sentiments to give her some plausible deniability.

“Intolerable.”

That’s an interesting choice of words.

Well, when I watch these videos of lawless rioting in my home state, with people shot, more than 20 police officers assaulted and hospitalized, windows smashed, and stores looted, that is intolerable.

It’s intolerable, Hillary Clinton, that business owners of all races who have invested in Charlotte had their property destroyed by thugs and rioters.

It’s intolerable, Hillary Clinton, that honest journalists who report the truth about these incidents struggle to find work, while left-wing racial arsonists command the front pages of our most prestigious newspapers and the top spots at our TV networks.

But most of all, it’s intolerable, Hillary Clinton, that brave law-enforcement officers, particularly African-American law-enforcement officers, such as Charlotte police chief Kerr Putney, Dallas police chief David Brown, and Milwaukee county sheriff David Clarke have seen themselves and their men repeatedly slandered as racists by you and your Democratic cronies, all so that you can whip up enough racial anger among African Americans to bolster your cynical quest for political power.

In many ways, Donald Trump, for all of his many flaws, represents a backlash of a silent majority of voters, looking at the endless race-baiting of the Obama years, seeing its continuation in Hillary’s candidacy, and saying, “Enough!” If that group, which grows with each outrageous riot, proves large enough to propel Trump to the White House, he will ironically have Barack Obama and Hillary Clinton to thank for it.


Article Link To The National Review:

Edward Snowden Doesn't Deserve A Pardon

By Ramesh Ponnuru
The Bloomberg View
September 22, 2016

If the most famous U.S. government secret revealed by Edward Snowden had been the only one he divulged, deciding whether he deserves a pardon from President Barack Obama would be a tougher call.

Snowden famously disclosed in 2013 that the National Security Agency had been collecting Americans’ electronic metadata in bulk. The program was authorized only by a dubious reading of existing law, and when Congress debated the issue it insisted on changes to the program. So even though Snowden broke the law, he contributed to a worthwhile democratic debate.

But that’s not the whole story, as the University of Chicago law professor Geoffrey Stone has pointed out:

"The problem is he disclosed vastly more than that, involving foreign intelligence not of Americans but of individuals who aren't American citizens in other countries. No changes were generally made in those programs and Americans don't really care. But disclosing those programs has had a serious impact on their being as effective as they had been. I think he did a lot more harm than good.

One example: One program lets the NSA gather email communications, including content of emails, not just phone numbers, targeting individuals who are not U.S. individuals, outside the U.S., where there's reason to believe the communications relate to terrorist activities. They can gather large amounts of email content, in so far as they have reasonable grounds to believe it's relevant to terrorist activity. Once disclosed, the terrorist knows this is going on and then takes measures to communicate in other ways."


Jack Goldsmith, a Harvard Law School professor, argues that these other disclosures do not square with Snowden’s claim to have been acting in defense of the Fourth Amendment. They involved “standard intelligence operations in support of national security or foreign policy missions that do not violate the U.S. Constitution or laws, and that did extraordinary harm to those missions.” They also involved legitimate intelligence operations by our allies.

In these cases, I don’t think the argument for a pardon -- that Snowden’s actions served a praiseworthy higher purpose that justified or mitigated his lawbreaking -- can hold. Joshua Franco of Amnesty International pleads in Snowden’s defense that foreigners have privacy rights, too. Maybe they should, but how we should balance our country’s legitimate national-security needs against such considerations was not Snowden’s decision to make.

Katrina vanden Heuvel wrote in the Washington Post that Snowden conducted his lawbreaking “responsibly and with great caution,” and that he can't be held responsible if journalists revealed secrets that had more value to terrorists than to the public. Actually, it is his fault, since he gave reporters those stolen secrets, apparently without reading them first.

In another Post op-ed -- the newspaper has been hosting a debate on the issue since it ran an editorial against a pardon -- Margaret Sullivan ignores the harmful disclosure of information about legitimate intelligence work in order to conclude that “Snowden acted carefully, responsibly and courageously -- and squarely in the public interest.” Actually, much of what he did was reckless and without much connection to the public interest. The president will not and should not condone that recklessness.


Article Link To The Bloomberg View:

Trump Derangement Syndrome Is Crippling The Left

By John Podhoretz
The New York Post
September 22, 2016

People are losing it over Donald Trump. The people I’m talking about are mostly liberals and Democrats who are watching with horror as the election they happily thought Hillary Clinton had put away in August has become a squeaker in September. Their attitude is that any word uttered about the election that doesn’t serve as an open denunciation of Trump is an implicit endorsement of Trump.

Let someone mention the bad behavior of the Clinton Foundation and the response is likely to be a shriek of outrage that you didn’t say something worse about the Trump Foundation. Say that Hillary is a liar, which she is, and immediately you are told Trump is a WORSE LIAR!!!!

I’m enjoying this meltdown. I’m sorry if that’s mean. I can’t help myself. For months last year when Republicans and conservatives were raising alarm bells about his rise, the general response from Democrats and liberals was a certain measure of unholy glee at what they perceived to be the collapse and self-destruction of the GOP.

It’s not that they thought Trump was a good thing, but that as a bad thing, he was delivering to distressed Republicans and conservatives a just punishment for their sins.

Well, now they know. Now they know what it feels like to see Trump defy gravity to some degree and seem to lap a candidate they find acceptable at worst and at best a world-historical agent of change.

And just like Republicans and conservatives did back then, Democrats and liberals are eating their own. They’re lashing out at anyone they think isn’t openly seeking to destroy Trump — at Matt Lauer for failing to give Trump a hard-enough time in his half-hour interview the other week, or at Jimmy Fallon for being Jimmy Fallon with Trump on the “Tonight Show” instead of being Edward R. Murrow with Joseph McCarthy.

For months now, serious members of the mainstream media have been arguing with a straight face that it’s not only acceptable but necessary for the press to favor Hillary over Trump because Trump is such a unique threat to our civilization all conventional rules of conduct (which the liberal media ignore anyway on a regular basis) can be openly tossed aside in pursuit of his defeat. This was the argument made by Jim Rutenberg.

Who is Jim Rutenberg? He’s the media columnist of The New York Times.

They’re going crazy, and as Mike Meyers’s pretentious German character Dieter said, “their agony is gorgeous.” Two examples of their derangement are too delicious not to be aired out.

First, they continue to argue that Trump was insanely irresponsible to call the terror attack in New York a bombing before it was definitively determined it was a bombing. Well, it was a bombing, and therefore, so what now? Even more telling is the fact that Hillary Clinton rose to her feet on her plane to condemn Trump for his irresponsibility — and then she, too, called it a bombing!

Second, they’ve now spent two days litigating a stupid tweet from Donald Trump Jr. — not one from Trump himself but from his son. It was a boneheaded analogy suggesting if you knew three Skittles in an entire bag would kill you, you wouldn’t eat the bag, and Syrian refugees are like that.

But to see the response to it from horrified mainstream media types and liberal solons, you would’ve thought Trump himself had just set off a pressure-cooker bomb. Oh, the shame of it! The scandal! The embarrassment! The national horror! The New York Times saw fit to put its story on Skittles-gate on the front page, for God’s sake. The front page.

When Bonasera the undertaker comes to the Godfather to seek revenge for a crime against his daughter at the beginning of the greatest movie ever made, he asks Don Corleone to “make them suffer like she suffered.”

The Godfather turns him down. “That I cannot do,” he says.

Well, right now, my own personal invisible Godfather seems to have accepted my silent plea. And now those gleeful Hillary-ites that were having the time of their lives back in December and January and February are suffering as I suffered — suffering, as Bonasera said, this very day.


Article Link To The New York Post:

Socialism’s Left Venezuela A ‘Walking Dead’ Nation

By Post Editorial Board
The New York Post
September 22, 2016

Here’s socialism at its finest: Venezuela is now forced to import oil from the United States, the devil in the eyes of the regime.

Yes, the South American energy powerhouse is still pumping 2.4 million barrels a day on its own — but that’s a million barrels below the level before Hugo Chavez took over in 1999, and down 350,000 barrels from just last year.

Worse, production in key fields has reduced the state to buying 50,000 barrels a day of US light crude to blend with the domestic petroleum for a product fit for export.

Under Chavez and his successor, Nicolás Maduro, the government nationalized key petro companies — then failed to invest in basic maintenance, instead spending the cash on buying popularity.

Now everything’s falling apart: not just the oil industry, but the whole economy. Most cash from current exports must go for debt payments — largely to “Communist” China, ironically — and to foreign firms that provide the expertise to keep anything running.

The opposition won control of the legislature in the last election, but Maduro’s hanging on with executive power, plus secret police borrowed from Cuba.

The end game is going to be extremely ugly. Food is in short supply and expensive. The government’s drafting people to work the fields. Protests and riots now choke the cities. Criminal gangs roam the countryside; hospitals are crumbling, with basic medicines scarce.

Say a prayer for the people of Venezuela.


Article Link To The New York Post:

Forget Isolation. Israel’s Diplomatic Ties Have Never Been Better.

By Josh Cohen
Reuters
September 22, 2016

Barack Obama is meeting Israeli Prime Minister Benjamin Netanyahu on the sidelines of the U.N. General Assembly Wednesday, at a time when the U.S. president is considering whether to initiate an Israeli-Palestinian peace deal before he leaves office.

If Obama does so, it will be over Netanyahu's objections – and could trigger a very public disagreement between the two leaders during Obama's final months in office.

This would not be the first Obama-Netanyahu spat, though. American officials were furious when they saw a recent video of Netanyahu describing opposition to Israeli settlements in the West Bank as “ethnic cleansing” of Jews. The State Department called it “inappropriate and unhelpful;” White House officials were reportedly livid.

On various other occasions, meanwhile, senior administration officials have described Netanyahu as “recalcitrant,” “myopic,”“reactionary,” “obtuse,” “blustering,” “pompous,” “Aspergery” and “chickenshit.” Netanyahu reportedly dislikes Obama, while Israel’s Defense Ministry has compared the Iran nuclear deal to Britain’s 1938 Munich appeasement agreement with Nazi Germany.

Given American-Israeli tension, some fret Israel risks diplomatic isolation – something even Netanyahu recently felt compelled to deny. In reality, though, Israel's diplomatic gains have never been greater. Here's why.

First and foremost, despite the Obama-Netanyahu friction, Israel’s partnership with its powerful American patron remains robust. Washington just agreed to provide Israel with a record-sized $38 billion military aid package. Both Donald Trump and Hillary Clinton emphasize their strong support for Israel. The country also retains overwhelming support in Congress and – according to the latest Gallup poll – among the American public as well.

Even beyond its relationship with Washington, Israel is successfully developing close ties with an unprecedented number of countries – including many old enemies.

Consider Egypt. Although Egyptian President Anwar El Sadat and Israeli Prime Minister Menachem Begin signed the Camp David accords almost 40 years ago, it has been a “cold peace” at best, and as late as 2011 Israel was forced to evacuate over 80 diplomats after protesters stormed its embassy in Cairo.

But since Egyptian President Abdel Fattah el-Sisi’s ascension to power in 2014, Israeli-Egyptian cooperation has reached new heights. Egypt’s Foreign Minister recently visited Israel, and a Netanyahu-Sisi summit may soon be possible.

Common national security and economic interests drive this newfound cooperation. Both sides see Gaza-based Islamist group Hamas as a common foe, and during Israel’s 2014 military campaign against Hamas Sisi reportedly took an even harder line on a possible Israeli-Hamas ceasefire than Netanyahu himself.

The two countries also share intelligence on Hamas and Islamic State’s Sinai affiliate. Egypt even allows Israel to conduct drone strikes against militants on Egyptian territory, according to a former senior Israeli official.

Mutual security interests also drive an Israeli-Saudi détente, particularly a shared fear of Shi’ite Iran. In the run-up to the Iran nuclear deal – which both Israel and Saudi Arabia opposed – Riyadh reportedly offered the Israeli government the use of its airspace to attack Iran as well as assistance with air-to-air refueling for Israeli jets. These contacts came to light when it was revealed that representatives from the two countries had held five secret meetings in 2015 to discuss managing the threat from Tehran.

Relations have continued this year. In May two former senior Israeli and Saudi officials – including Prince Turki al-Faisal, Saudi Arabia's former intelligence chief – shared the stage at a Washington think tank to discuss their mutual fear of Iran. In July a retired Saudi general led a delegation of Saudi academics and businessmen on a trip to Israel for discussions with senior Israeli officials.

While no diplomatic relationship between the two countries exists – Saudi Arabia insists an Israeli-Palestinian peace agreement be signed before it recognizes Israel – it’s extremely unlikely these types of extensive contacts could occur without approval from the highest levels in Riyadh.

A new Israel-Greece-Cyprus alliance has also emerged. The Greek and Israeli militaries hold extensive air and naval exercises together, and in 2015 Greece allowed the Israeli air force to conduct exercises over Crete.

Earlier this year, meanwhile, Greek Prime Minister Alexis Tsipras and Netanyahu held talks in Israel, followed by a three-way summit between Netanyahu, Tsipras and Cypriot President Nicos Anastasiades that concluded with the creation of a de-facto geopolitical bloc between the three states.

Security and economic interests drive this Israeli-Greek-Cypriot bloc. Greece and Cyprus are both historically antagonistic toward Turkey, while Israeli-Turkish relations deteriorated after the 2010 Mavi Marmara incident, when the Israeli navy stormed a Turkish ship trying to deliver aid to Gaza. The two countries agreed to normalize ties in June, but continue to disagree over Gaza. This makes Israeli-Greek-Cypriot defense cooperation a natural hedge against an increasingly unpredictable Ankara.

Israel’s offshore natural gas bonanza provides another reason for its alliance with Greece and Cyprus. Since Israel possesses far more gas than it needs for its own economy, Netanyahu, Tsipras and Anastasiades also discussed the possibility of building a pipeline from Israeli gas fields through Cyprus and Greece to supply Europe – something that would further cement this new three-way alliance.

Israel is also significantly expanding trade and diplomatic ties with India, the world’s largest democracy. Israel sold approximately $10 billion worth of military equipment to India in the last decade, making India the largest foreign buyer of Israeli military gear, while Israel is India's second largest arms supplier after Russia.

On the diplomatic front, Indian President Pranab Mukherjee made an official state visit to Israel in 2015 – the first ever by an Indian head of state – while India’s foreign minister visited in January. Given India’s long history of supporting the Palestinian cause and denouncing Israel, India’s willingness to bring its relationship with Israel out from “under the carpet” represents another significant success for Israeli diplomacy.

Israel has overcome a similarly fraught history with China. For many years post-revolutionary China supported the Palestinian Liberation Organization with both diplomatic and military aid, and Beijing did not officially recognize Israel’s right to exist until 1992. But business interests drive an increasingly warm relationship. Chinese-Israeli trade has exploded and the two sides are also discussing a free trade agreement.

Israel accrues significant advantages from its growing Chinese ties. As part of its “Silk Road” initiative, China recently began building a new port in the Israeli town of Ashdod on the Mediterranean, while also agreeing to fund a so-called “Red-Med” high-speed railway line to connect Israel’s Red Sea town of Eilat to Ashdod.

Chinese venture capital firms also invested $500 million in Israeli startups in 2015, and by 2020 may hold as much as $10 billion of investments in the Israeli technology industry. Netanyahu visited China in 2013, while Chinese vice premiers traveled to Israel in 2014 and again earlier this year. In May the two countries signed a 10-year multiple entry visa agreement – making Israel only the third country granted this arrangement by Beijing.

To be clear, none of Israel’s new friends are as important to the country as the United States, and Netanyahu would be wise to develop an improved personal relationship with the next American president. Nevertheless, when viewed from Israel’s parliament, the country’s place in the world has never looked more secure.


Article Link To Reuters:

George H.W. Bush's Defection Is A Big Deal

By Jonathan Bernstein
The Bloomberg View
September 22, 2016

George H.W. Bush is planning to vote for Hillary Clinton. That’s not considered major news by most mainstream outlets. But it should be.

The story, first picked up by Politico late Monday night from a Facebook post by Kathleen Kennedy Townsend, got almost no play for example from the New York Times. It created only a very small flurry of interest on Twitter, at least judging from my feed.

As Philip Bump at The Fix shows, Bush’s vote is highly unusual. The only previous exceptions after Franklin Roosevelt to the norm that former presidents support their party’s nominee were presidents who were aged, one president -- Richard Nixon -- whose support wasn’t wanted, and one instance in which Jimmy Carter failed to endorse Bill Clinton’s re-election in 1996.

Now neither former president Bush is supporting the Republican nominee, with the senior Bush actually crossing party lines to vote for Clinton. They’re joined by the 2012 Republican nominee, Mitt Romney, meaning that three of five living former Republican presidential nominees have opted not to support their nominee. And there’s a long list of important, albeit not quite as prominent, Republicans who won’t support Trump, some of whom are supporting Clinton. That’s not even counting those who grudgingly support “the Republican nominee” without saying his name, or in some cases without being willing to say he’s qualified for the job.

It’s extraordinary. The last time anything at all similar happened was in 1972, when many leading Democrats deserted George McGovern. Sure, there are always a handful of cross-party endorsements in every election, but nowhere near this number, and many of them in normal years turn out to be either very conservative Democrats backing Republicans or very liberal Republicans backing Democrats.

It’s also the best evidence, from people who follow politics closely and presumably care about both the fate of the Republican Party and of the nation, that Trump really isn’t a normal potential president. These stories are the easiest way to show just how different Trump is from a normal nominee -- something reporters have struggled to demonstrate.

After all, every presidential candidate lies, as Hillary Clinton famously did about sniper fire on a tarmac once; it’s hard to differentiate that from how Trump is unusually untrustworthy. Any candidate can be caught with a knowledge gap or botch a question, as Gary Johnson did about Aleppo and the New York City bombs recently; it’s hard to show that Trump is unusually ignorant about politics and world affairs.

Many candidates also have faced some questions about their personal finances; Trump is off the scale on that one, too (as can be seen in everything from the latest reporting on his personal “charitable” foundation to the lawsuits alleging that Trump University was a scam).

And plenty of candidates have made an ugly remark at some point or have been accused of using dog whistles to appeal to hatred, so how to show that the bigotry at the core of Trump’s campaign and his political persona are far more serious?

The cold hard fact is that elite Republicans flee from him precisely because of any or all of these four disqualifying attributes -- that he can’t be trusted, that he doesn’t have the information base to do the job, that his business and personal finances are a mess, and that he’s running as a bigot.

In other words: Trump is different. He’s not a normal candidate. His candidacy is untenable, according to those who have the strongest incentives to get it right.

Whether that information would matter to voters is an open question. I’ve seen plenty of people mock the idea, but I think there’s a good chance some Republicans would see it as a fairly strong cue. Regardless, Republican disunity and defections may be the single strongest way to demonstrate something absolutely central to understanding this election: why Donald Trump isn’t just a show-business version of a regular candidate.


Article Link To The Bloomberg View:

State Of Emergency Declared In Charlotte

By Greg Lacour and Andy Sullivan
Reuters
September 22, 2016

One person was shot and gravely wounded on Wednesday in a second night of unrest in Charlotte, North Carolina, officials said, as riot police dispersed unruly protesters after the fatal police shooting of a black man under disputed circumstances.

North Carolina's governor later declared a state of emergency amid the disturbances and said the National Guard and state Highway Patrol troopers would be sent in to help police in Charlotte restore and maintain order.

Charlotte Police Chief Kerr Putney initially reported that a person shot during the protest had died, but city officials later posted a Twitter message saying the individual had been hospitalized in critical condition on life support.

The city also said the gunshot was fired by one civilian at another, not by police. A police officer was also being treated for injuries suffered during Wednesday's protests, it said.

Putney told Fox News: "We’re trying to disperse the crowd. We’ve been very patient, but now they’ve become very aggressive, throwing bottles and so forth, at my officers, so it’s time for us now to restore order."

The flashpoint for Charlotte's unrest was Tuesday's fatal police shooting of Keith Scott, 43, who according to police was armed with a handgun and refused officers' orders to drop the weapon. His family and a witness to the shooting said Scott was holding a book, not a firearm.

Authorities have not released any video of the incident but the city's mayor said she would view the footage on Thursday.

Governor Pat McCrory said he was acting at the request of the Charlotte police chief in sending National Guard and state troopers to assist local law enforcement.

"Any violence directed toward our citizens or police officers or destruction of property should not be tolerated," McCrory said in a statement.

Unrest Erupts Outside Hotel


The latest trouble began with a peaceful rally that turned violent after several hundred chanting demonstrators marched through downtown with brief stops at a black church, police headquarters and a large entertainment venue called the EpiCentre.

As they approached downtown Charlotte's central intersection, protesters confronted a column of patrol cars and officers in front of the Omni Charlotte Hotel and began to surround groups of police and their vehicles.

Police then unleashed volleys of rubber bullets, pepper spray, tear gas and flash-bang grenades to disperse the protesters, who began hurling fireworks and debris at officers outside the hotel.

The confrontation grew more intense as a phalanx of helmeted police carrying shields advanced down a street, pushing back a crowd of demonstrators who scurried for cover as officers fired more tear gas.

Protesters smashed windows and glass doors at a nearby Hyatt hotel, whose manager told Reuters that two employees were punched. The slogan "Black Lives Matter" was spray-painted on windows.

Demonstrators were also seen looting a convenience store after smashing its windows and a shop that sells athletic wear for fans of Charlotte's National Basketball League team, the Hornets. Others set fire to trash cans.

Some protesters expressed anger at the lawlessness exhibited by fellow demonstrators. One woman was heard shouting, "Stop - that's not what this is about," as young men broke bottles in the street.

Earlier in the evening, Scott's wife, Rakeyia, issued a statement describing her family as "devastated" and appealing for calm. "We have more questions than answers about Keith's death," the statement said.

Sixteen officers were injured late on Tuesday and early Wednesday as police in riot gear clashed with demonstrators who hurled stones, set fires and briefly blocked an interstate highway.

Tuesday's disturbances in Charlotte unfolded as demonstrators in Tulsa, Oklahoma, demanded the arrest of a police officer seen in a video last week fatally shooting an unarmed black man who had his hands in clear view at the time.

The deaths were the latest incidents to raise questions of racial bias in U.S. law enforcement, and they stoked a national debate on policing ahead of the presidential election in November.

President Barack Obama spoke by telephone on Wednesday with the mayors of Charlotte and Tulsa, a White House official said.

In Charlotte, Putney insisted Scott was shot by a black officer after he exited his car and disregarded orders to drop a gun he brandished. "We did not find a book," Putney told a news conference. "We did find a weapon."

Charlotte resident Taheshia Williams said she saw the incident from her balcony and that she watched Scott get out of his car with his hands raised.

"Hands up. No gun. When he got out of the car, a book fell off his lap," Williams told reporters. She said she heard Scott ask police what he had done wrong, could not hear their reply, then heard four shots.

Black activists and pastors called for an economic boycott of the city, and the American Civil Liberties Union urged police to release body and dashboard camera footage of the incident.


Article Link To Reuters:

Hanjin Shipping Shares Rally 28 percent After Korean Air Approves Lending

By Hyunjoo Jin
Reuters
September 22, 2016

Hanjin Shipping (117930.KS) shares surged as much as 28 percent in morning trade on Thursday after the board of Korean Air Lines (003490.KS), its biggest shareholder, approved lending 60 billion won ($53.96 million) to the troubled container carrier.

Shares of Korean Air climbed 5 percent.

Korean Air's board decided late on Wednesday to provide the funds to help offload cargo that has been stranded on Hanjin ships, using Hanjin's accounts receivable as collateral, a spokesman for the airline said.


Article Link To Reuters:

Central Bankers At Wit’s End

At the Fed and in Japan, monetary policy has lost its mojo.


By Review & Outlook
The Wall Street Journal
September 22, 2016

The Federal Reserve and Bank of Japan issued new policy statements on Wednesday, and the common message is that the central bankers aren’t sure what to do. The BOJ tried to clean up for past mistakes, while the Fed postponed a rate increase amid substantial internal dissent.

The Fed’s delay wasn’t surprising given the proximity to Election Day and last week’s broadside by Fed Governor and Obama appointee Lael Brainard against higher rates. The Federal Open Market Committee chose to punt by signaling a greater willingness to raise rates while waiting until perhaps December. The decision nonetheless drew three hawkish dissents, the most in five years.

More striking was the Fed’s new consensus view of future economic growth: No more than 1.8% to 2% a year through 2019, and 1.8% a year over the “longer run.” Get your head around that one. The central bank may raise rates in December and beyond despite growth rates that in an earlier era would have been defined as stagnation.

The growth estimate is probably right given the current U.S. economic policy mix, but it certainly underscores the limits of monetary stimulus. Not even the Fed’s dominant Keynesians are promising they can still elevate the economy, after years of asserting the opposite.

The slow growth raises questions about whether the Fed will raise rates even in December. The best Chair Janet Yellen could muster in her press conference is a version of the Fed’s familiar Phillips Curve calculation that the jobless rate is low and inflation rises when labor markets are tight. So interest rates must rise. We agree with those who think the Fed would do better by first announcing it will stop rolling over the bonds that mature on its balance sheet. But the Yellen Fed seems committed to raising rates first. Good luck.

As for the Bank of Japan, Governor Haruhiko Kuroda also seems flummoxed by how to revive growth. The BOJ Policy Board’s most significant decision was deciding to change the way it buys bonds to target long-term bond yields. Typically, central banks have targeted short-term rates, but since the financial panic central banks have used bond-buying to influence long rates. The Bank of Japan will now directly target the 10-year yield, which has dropped as low as minus-0.3%, in an attempt to keep it at zero.

Wednesday’s policy is aimed at establishing a steeper yield curve that will help the profitability of banks, which take in short-term deposits and lend long-term. Japanese bank stocks rallied, as did the wider market as fears for the financial system’s stability receded. The country’s retirees, dependent on returns from their savings, will also be relieved.

But the policy is also a tacit admission that Mr. Kuroda’s plunge this year into negative interest rates has failed as monetary stimulus, making bank loans unprofitable and harming consumer confidence.

Setting interest rates along the range of different maturities could have unintended consequences. A steepening yield curve usually means that more growth and inflation are expected. But an artificial curve without those expectations could encourage more long-term saving, worsening deflation. It could also make Japan’s inefficient banks complacent about restructuring.

One obstacle to creating inflationary expectations is the BOJ’s damaged credibility. Three years ago Mr. Kuroda set an unrealistic inflation target of 2% and promised to meet it within two years, a horizon that has been continually pushed forward. On Wednesday Mr. Kuroda gave up on a timetable and said the central bank is now aiming to “overshoot” the target “at the earliest possible time.” This sounds like an attempt to tell markets that this time he really, really means it—seriously.

All of this shows that the era of relying on central bankers as economic saviors should be coming to an end. Whatever the earlier disputes about post-2008 policy, the recovery from stagnation that central bankers promised has not materialized.

Politicians need to look elsewhere to revive the prosperity that the world’s liberal democracies need to restore confidence and address their many problems. Japanese Prime Minister Shinzo Abe will have to implement the supply-side reforms he promised in 2012. And the next U.S. President needs a new growth agenda focused on tax reform and regulatory relief, among other things. The central bankers have lost their mojo, if they ever had it.


Article Link To The Wall Street Journal:

Thursday, September 22, Morning Global Market Roundup: Asian Shares Surge, Dollar Falters On Slow-Motion Fed

By Nichola Saminather and Wayne Cole 
Reuters
September 22, 2016

Asian shares rallied on Thursday, taking their cue from Wall Street, after the Federal Reserve left U.S. interest rates unchanged and slowed the pace of future hikes, knocking the dollar and lifting commodity prices.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS extended gains to 1.3 percent in its sixth straight session of increases, just 1.1 percent shy of its one-year high touched earlier this month.

Australian shares rose 0.8 percent, while South Korea's KOSPI .KS11 advanced 1.1 percent.

China's CSI 300 index .CSI300 climbed 0.9 percent, and the Shanghai Composite.SSEC moved up 0.7 percent. Hong Kong's Hang Seng .HSI jumped 1.5 percent.

Asia's strong gains follow surges of 1.1 percent for the S&P 500 .SPX, 0.9 percent for the Dow Jones industrial average .DJI and 1.3 percent for the Nasdaq Composite .IXIC, which closed at a record high.

"The market got what it expected/wanted," said Daniel Morris, senior investment strategist at BNP Paribas Investment Partners in London. "Another dose of central bank support for markets following the Bank of Japan meeting."

While Tokyo is on holiday on Thursday, stocks .N225 closed up 1.9 percent on Wednesday after the BOJ's shift to targeting a positive yield curve, a move that was considered bullish for banks, insurers and pension funds.

But "Japan equities may lag as the bank relief rally runs its course and the yen is strengthening," BNP Paribas's Morris said. "Japan needed a Fed hike in order to push the yen down."

The U.S. Fed did signal it could hike rates by year-end as the labor market improved further, but cut the number of rate increases expected in 2017 and 2018. It also reduced its longer-run interest rate forecast to 2.9 percent from 3 percent.

That left investors feeling any tightening would be glacial at best. Market pricing for a December move rose only a fraction to 59.3 percent <0>, from 59.2 percent, according to CME Group's FedWatch tool.

Richard Franulovich, an analyst at Westpac, noted that back in June the median dot plot showed five hikes to end-2017. Now it is down to just three.

"We do not feel that the dollar has the wherewithal to make a more concerted run higher in the next few weeks," he added. "The FOMC is unlikely to deliver anything more than a very 'dovish' December hike."

The dollar rose as high as 102.755 yen after the BOJ's announcement on Thursday, but the yen took back its lost ground after the BOJ's announcement left some unimpressed and following the Fed's less-hawkish statement.

"Fundamentally, (the BOJ decision) did not amount to an easing of monetary policy, but merely offers policy tweaks at the margin and a strengthening of forward guidance," said Frederic Neumann, co-head of economic research at HSBC in Hong Kong.

"The BOJ now essentially promises to purchase JGBs for even longer, until inflation exceeds, and not merely meets, its 2 percent inflation target."

The greenback was flat at 100.38 yen JPY=, having weakened 1.4 percent on Wednesday to touch a 3-1/2 week low of 100.34.

The dollar index .DXY, which tracks the greenback against a basket of six major peers, slipped 0.2 percent to $95.494. It touched a six-week high of 96.333 on Wednesday, before ending the day down 0.4 percent from its previous close.

The euro EUR=EBS was little changed at $1.11895, after gaining 0.3 percent on Wednesday.

Central Banks Still Trying


Another central bank struggling with too-low inflation is the Reserve Bank of New Zealand, which held rates steady on Thursday but renewed a pledge to cut again even as much of the domestic economy is growing briskly.

The RBNZ's blunt statement that further easing would be needed knocked the local dollar 0.2 percent to $0.7337 NZD=, but the market has found it hard to sell a currency that still offers an overnight interest rate of 2 percent.

The Australian dollar AUD= edged up 0.1 percent to a near two-week high of $0.7632 after Reserve Bank of Australia Governor Philip Lowe said interest rate cuts and a weaker currency are helping the economy, and that it was "not particularly useful" to keep cutting rates in the hope that it will eventually lift growth.

In commodity markets, gold traded down 0.3 percent at $1,333.14 an ounce XAU=, having climbed 1.7 percent as the U.S. dollar declined on Wednesday.

Oil prices added as much as 3 percent on Wednesday after a third surprise weekly drop in U.S. crude stockpiles boosted the demand outlook in the world's largest oil consumer.

Another supportive factor was an oil workers' strike in Norway, which threatened to cut North Sea crude output.

U.S. crude (WTI) futures CLc1 advanced 0.9 percent to $45.75 after soaring 2.9 percent on Wednesday. Brent crude futures LCOc1 also rose 0.9 percent to $47.23, adding to gains of 2 percent on Wednesday.


Article Link To Reuters:

Oil Climbs 1 Percent After Surprise U.S. Crude Stock Draw

By Henning Gloystein
Reuters
September 22, 2016

Oil prices rose around 1 percent on Thursday, extending gains from the previous session after a surprise third consecutive weekly U.S. crude inventory draw tightened the market.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $45.81 per barrel at 0301 GMT (11:01 p.m. EDT), up 47 cents, or 1 percent, from their previous close. The contract had already gained as much as 3 percent the day before.

Prices jumped after a report from the U.S. Energy Information Administration (EIA) showed a 6.2 million-barrel drop in crude oil inventories last week to 504.6 million barrels. Forecasters in a Reuters poll had expected a 3.4 million-barrel build.

"Oil prices rose after EIA data showed U.S. crude inventories declined to the lowest level since February," ANZ bank said in a note on Thursday.

International benchmark Brent crude futures LCOc1 were also up, gaining 48 cents, or 1 percent, from their last close to $47.31 per barrel.

Brent was lifted by an oil workers' strike in Norway, which threatened to cut North Sea crude output.

A weaker dollar .DXY after the Federal Reserve left U.S. interest rates unchanged also supported oil prices as it makes dollar-traded fuel imports cheaper for countries using other currencies.

Analysts, however, said they expect oil prices to remain range-bound at relatively low levels with global output near record highs and surpassing consumption, adding that producer talks in Algeria next week were likely to change little.

The United Arab Emirates, a participating producer, said on Wednesday that the talks were aimed at consultations rather than deciding production restraint or even cuts.

"In a world of continued (U.S.) shale productivity gains that cause other oil producing regions around the world to become highly focused on cost competitiveness, we believe investors and companies should prepare for an environment of rangebound oil prices," Goldman Sachs said in a note to investors published late on Wednesday.

In a clear illustration of the impact on the ground of an the oil market downturn, the waters around Singapore have become the dumping ground for hundreds of drilling and offshore oil support vessels that have become surplus to requirement in the current era of cheap crude.


Article Link To Reuters:

Trump Opposes Plan For U.S. To Cede Internet Oversight

By Dustin Volz
Reuters
September 22, 2016

Republican presidential nominee Donald Trump opposes a long-planned transition of oversight of the internet's technical management from the U.S. government to a global community of stakeholders, his campaign said in a statement on Wednesday.

Congress should block the handover, scheduled to occur on Oct. 1, "or internet freedom will be lost for good, since there will be no way to make it great again once it is lost," Stephen Miller, national policy director for the Trump campaign, said in a statement.

Senator Ted Cruz of Texas, a former presidential primary foe of Trump's who has refused to endorse the real estate developer, has led a movement in congress to block the transition, arguing it could cede control of the internet itself to authoritarian regimes like Russia and China and threaten online freedom.

Technical experts have said those claims are baseless, and that a delay will backfire by undermining U.S. credibility in future international negotiations over internet standards and security.

Publicly proposed in March 2014, the transfer of oversight of the nonprofit Internet Corporation for Assigned Names and Numbers, or ICANN, is expected to go forward unless the U.S. Congress votes to block the handover.

A vote to delay the transition may come as an amendment to a temporary spending bill that Congress must pass by Sept. 30 to prevent much of the federal government from shutting down. Congressional negotiators on Wednesday were working to finalize an agreement on the spending package.


Article Link To Reuters:

Biden Sees 'Less Than Even Chance' Of U.S. Congress Approving TPP Deal

By Roberta Rampton
Reuters
September 22, 2016

Vice President Joe Biden said on Wednesday that he sees a "less than even chance" that the U.S. Congress approves the 12-country Trans-Pacific Partnership trade pact before the next administration takes office in January.

Biden, speaking to the Council on Foreign Relations in New York, said that the brief "lame duck" session of Congress after the Nov. 8 presidential election was "our only real shot" for approving TPP.

The sweeping trade deal has been a central plank in President Barack Obama's foreign policy shift to counter the rising economic and military might of China, and has been broadly supported by U.S. business interests.

But the TPP is opposed by both the Republican and Democratic presidential candidates, who have blamed trade deals for U.S. job losses.

Senate Majority Leader Mitch McConnell, a Republican, has said the TPP would not get a Senate vote this year, and House of Representatives Speaker Paul Ryan has said he does not see enough votes for it to pass.

"Sometimes when there's no election to face and people are leaving and others who are staying, they may see the wisdom of TPP," said Biden, who was a long-time Democratic senator, calling the post-election session "our only real shot" at passing the deal.

"But it's going to be hard. I think it's less than an even chance, but there is a genuine chance. It's possible we can get it passed," Biden said.


Article Link To Reuters:

Yellen Helps Clinton Dodge A Bullet

Federal Reserve policymakers keep their key interest rate steady, putting the central bank on the sidelines until after Election Day.


By Ben White
Politico
September 22, 2016

Scratch one big economic worry off the list for Hillary Clinton.

Federal Reserve policymakers on Wednesday kept their key interest rate steady, avoiding a potential stock market disruption and putting the central bank on the sidelines until after Election Day.

Fed Chair Janet Yellen also strongly rejected claims lobbed at her by GOP presidential nominee Donald Trump that she is keeping rates artificially low to boost stock prices and aid Democrats.

“I can say emphatically that partisan politics plays no role in our decisions about the appropriate stance of monetary policy,” Yellen said at a news conference after the Fed announced its decision. “We do not discuss politics at our meetings and we do not take politics into account in our decisions.”

Nonetheless, the Fed’s actions can have significant political consequences.

The Federal Open Market Committee’s decision means voters are not likely to see big stock-price declines or a slowing economy before the Nov. 8 election. Clinton is counting on slowly improving views of the economy to hold off a late surge from Trump, who has made dissatisfaction with the sluggish pace of growth a centerpiece of his populist campaign. Stocks rose following the Fed’s announcement.

“The Clinton campaign should absolutely breathe a sigh of relief, because the market was just not positioned at all for a rate increase; there would have been total chaos,” said Brett Ewing, chief market strategist at First Franklin Financial Services. “Less drama is clearly good for the incumbent party.”

At her news conference, Yellen said she saw improvement in the U.S. economy but little evidence of risky inflation. And she said holding off on a hike could allow more people to come back into the labor force.

“We are generally pleased with how the U.S. economy is doing,” she said. “The economy has a little more room to run than might have been previously thought, and that’s good news. And remember that inflation continues below 2 percent.”

The move cheered investors who have driven stocks to fresh highs this year in large part fueled by the Fed’s continued easy money policy. Yellen and the Fed also offered reassuring words about the state of the economy while pointing to a possible rate hike in December.

“[T]he labor market has continued to strengthen and growth of economic activity has picked up from the modest pace seen in the first half of this year,” the Fed said in its eagerly awaited statement Wednesday. “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

The Fed’s decision on Wednesday is not a complete victory for the Clinton campaign.

By declining yet again to raise rates, the world’s most powerful central bank is signaling that it does not believe the U.S. economy is strong enough for even the slightest tightening of monetary policy. The Fed raised rates in December for the first time in nearly a decade. But it has been unwilling to do so again despite an unemployment rate of just 4.9 percent and warnings that inflation could spike in ways that would be difficult for the Fed to control.

The Fed’s target rate is now just 0.25 percent to 0.50 percent, a remarkably low figure this late in an economic recovery that gives the central bank little room to maneuver should a new crisis or recession arise. So the Fed’s move avoids a market meltdown but offers fresh rhetorical evidence for Trump and other Republicans who argue that the economy is extraordinarily weak.

“It’s certainly better for Clinton not to have a negative market reaction, but the story here is also that Fed does not have high confidence in continued improvement in the economy,” said Michael Obuchowski of Merlin Asset Management. “And that’s something Trump can talk about, that the economy is so weak the Fed can’t do anything even though it wants to.”

The Fed also reduced its outlook for economic growth this year to 1.8 percent from 2 percent while keeping projections for 2 percent growth over the next two years unchanged.

Trump has made bashing the Fed a central plank in his presidential campaign, repeatedly blasting Yellen as motivated by a desire to protect Democrats. “She’s obviously political and doing what Obama wants her to do,” Trump said on CNBC earlier this month. “I think she’s very political, and to a certain extent, I think she should be ashamed of herself.”

Trump has also said that as president he would replace Yellen, whose term runs until February 2018. And he has ripped the Fed for creating what he has called a “false economy” with high stock prices but only modest wage gains and a very low labor-force participation rate.

Yellen pushed back hard on the criticism on Wednesday. “The Federal Reserve is not politically compromised,” she said. “I can’t recall any meeting that I have ever attended where politics has been a matter of discussion. I think the public if they had been watching our meeting on TV today would have felt that we had a rich, deep, serious, intellectual debate about the risks and the forecasts for the economy.”

Yellen added that the central bank “struggled mightily with trying to understand each other’s points of view and come out at a balanced place and act responsibly, and that’s my commitment to the American people.”

Still, some Fed governors appear to agree with at least elements of Trump’s critique. Three members of the Fed’s policy-setting committee voted against the latest decision, the largest number in two years. These governors argued for a quarter-point increase.

Some market observers note, however, that investors have already done some of the Fed’s work by pushing up borrowing costs and generally tightening financial conditions without the Fed having to make an official policy move.

“Why does the Fed have to do anything if someone else is already doing the heavy lifting for them?” said David Kotok, chief investment officer at Cumberland Advisors. “Why break your back?”

As for 2016, Kotok said the decision should be a bit of a boost for Clinton, more because it avoids a nightmare scenario than does much to strengthen the economy.

“This at least doesn’t hurt her,” he said. “Whether it actually helps is another question.”


Article Link To Politico:

Yellen Helps Clinton Dodge A Bullet

‘Whites-Of-Eyes’ Comment Contradicts What Yellen Said About The Fed Being Able To Wait

News conference with top central banker has confused message.


By Rex Nutting
MarketWatch
September 22, 2016

Even after an hour of questioning, Federal Reserve Chairwoman Janet Yellen has some explaining to do.

On the one hand, she said Wednesday that Fed officials had judged that the case for higher interest rates had “strengthened” but that most members of the policy committee decided not to raise rates today because the economy has more room to run to bring more discouraged workers back into the labor market.

“We don’t see the economy is overheating now,” Yellen said, justifying the decision not to raise rates at today’s meeting.

That sure sounds like the Fed will keep rates low until it sees evidence of overheating.

But, but, but....

On the other hand, Yellen said later on in her press conference that the Fed doesn’t believe in a “whites-of-their-eyes sort of approach” to policy making. In other words, the Fed can’t wait until overheating is apparent; it must raise rates pre-emptively to keep inflation under control.

“Monetary policy works with long and variable lags.” That’s the first thing everyone is taught about monetary policy, and Yellen said she still agrees with that statement. If you wait until the economy overheats, then inflation could get a foothold and it could be harder to rein in.

So the Fed needs to be ahead of the curve, always keeping in mind that a policy change taken today may not have its full impact until late 2017 or early 2018.

So, which is it? A Fed that can wait so the economy can run for a while, or a Fed that can’t wait until it sees “the whites” of inflation’s eyes?

If Yellen is trying to explain the Fed’s reaction function, she’s doing a poor job.

It might be better for her just to say: “Right now, we’re not worried about inflation getting out of hand. Inflation is low and it’s been years since we hit our target! And in the meantime, there are millions of people who’d like to work. The appropriate policy is to keep rates low as long as there is some slack in the job market and as long as inflation doesn’t get too high. We know how to stop inflation if we need to, but right now that’s not even on our radar.”


Article Link To MarketWatch:

Fed Keeps Rates Steady, Signals One Hike By End Of Year

By Jason Lange and Howard Schneider
Reuters
September 22, 2016

The U.S. Federal Reserve left interest rates unchanged on Wednesday but strongly signaled it could still tighten monetary policy by the end of this year as the labor market improved further.

Fed Chair Janet Yellen, speaking after the central bank's latest policy statement, said U.S. growth was looking stronger and rate increases would be needed to keep the economy from overheating and fueling high inflation.

"We judged that the case for an increase has strengthened but decided for the time being to wait," Yellen told a news conference. "The economy has a little more room to run."

Yellen said she expected one rate increase this year if the job market continued to improve and major new risks did not arise.

The Fed kept its target rate for overnight lending between banks in a range of 0.25 percent to 0.50 percent, where it has been since it hiked rates in December for the first time in nearly a decade.

The central bank has appeared increasingly divided over the urgency of raising rates. On Wednesday, Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester and Boston Fed President Eric Rosengren dissented on the policy statement, saying they favored raising rates this week.

At the same time, policymakers cut the number of rate increases they expect this year to one from two previously, according to the median projection of forecasts released with the statement. Three of the 17 policymakers said rates should remain steady for the rest of the year.

The Fed also projected a less aggressive rise in interest rates next year and in 2018, and cut its longer-run interest rate forecast to 2.9 percent from 3.0 percent.

Investors did not appear to significantly shift their bets on the timing of the next rate hike. Prices for fed funds futures contracts suggested investors continued to see just better-than-even odds of a hike at the December policy meeting, and almost no chance of an increase in November.

U.S. stock prices rose after the Fed released its statement.

The dissents from those wanting a hike this week suggested to some economists that pressure was building.

"While the Federal Reserve held rates unchanged, the highly unusual 7-3 vote points to the depth of its policy dilemma and makes a December hike more likely," said Mohamed El-Erian, chief economic adviser at Allianz.

Focus On December

Last December, the Fed signaled that four rate increases were likely in 2016, but that was scaled back in March due to a global growth slowdown, financial market volatility and concerns about tepid U.S. inflation.

The central bank appeared more confident on Wednesday, saying in its statement that near-term risks for the economic outlook "appear roughly balanced." That means policymakers think the economy is about as likely to outperform forecasts as to underperform them.

The economy expanded sluggishly in the second quarter and added fewer jobs than expected in August. Inflation also showed signs of stirring last month.

The Fed's decision, which came the same day that Japan's central bank added a long-term interest rate target to its massive asset-buying program in an overhaul of its policy framework, was widely anticipated by economists.

A Reuters poll showed the median probability of a September rate rise was about 25 percent. Only 6 percent of those surveyed expected the Fed to raise rates, with the majority believing it would wait until December.

The Fed has policy meetings scheduled in early November and mid-December. Economists believe policymakers would avoid a rate hike in November in part because the meeting falls just days before the U.S. presidential election.


Article Link To Reuters: