Monday, October 10, 2016

Focused Trump Trounces Hillary At Testy Second Debate

By John Podhoretz
The New York Post
October 10, 2016

History’s weirdest election just got a lot weirder last night. After a horrendous two weeks capped by the ultimate presidential candidate’s weekend from Hell, Donald Trump turned around and trounced Hillary Clinton in the second presidential debate.

As Samuel Johnson said, the prospect of a hanging can concentrate the mind — and after an opening ten minutes in which he looked as though he was going to blow himself up with rage at Bill Clinton — Trump suddenly and surprisingly found the focus that had eluded him two weeks ago.

He came right at her — and on policy, yet. He hit her effectively on her email scandal, on the Democratic party’s commitment to ObamaCare, on her ineffectuality as a senator when it came to changing the tax policies she claims he abuses as a wealthy person, and on the administration’s energy policies.

Mrs. Clinton made a crucial choice in the early going. As Trump went after her husband for his sexual boorishness, she neither attempted to rebut him nor use his as a weapon. Instead, she echoed Michelle Obama’s claim at the Democratic convention that “when they go low, we go high.” By announcing she wasn’t going to get personal, she ceded any sharp edge in the proceedings to Trump.

Her hope was clearly that he would lose it due to her calmness. But except for two moments that were gasp-inducing in their directness — Trump saying he’d appoint a special prosecutor to go after her on the emails and later saying Hillary “has a lot of hate in her heart” — Trump did not get personal.

Her standard method of reply was to begin with a joyless little laugh that seems to be an expression of defensiveness and contempt. She would then say what he said was not true without proving it untrue, and suggested the viewers should go to her website for some good fact-checking.

And she tossed him some major softballs. When moderator Anderson Cooper brought up the leaked text of one of her secret speeches about how politicians sometimes say something different in private than in public, she went into a long disquisition about the Stephen Spielberg movie “Lincoln.” This allowed Trump to get off the best line of all the debates: “She lied. Now she’s blaming the lie on the late, great Abraham Lincoln.”

Trump, however, did say some astoundingly awful things, especially about Syria. He claimed Syria’s Bashar al-Assad (whom he said he doesn’t like) for killing ISIS when Assad is actually busy enacting a genocide against his own people in Aleppo. And when the tough-on-Russia-and-Syria strategy outlined by own vice-presidential candidate Mike Pence in the VP debate was brought up, Trump said he hadn’t spoken to Pence about it and that he disagrees.

Hillary Clinton lost the debate because she likely figures she’s already won the election — she was ahead in every battleground state now and in all the major poll averages by around 5 percent even before the nation really takes account of the “Access Hollywood” hot mic tape — and decided to play it safe.

The prevent defense is a sound strategy when you’re ahead by two touchdowns and a field goal. Hillary isn’t there yet. Her refusal to try and deal a death blow, and Trump’s own refusal to lie down and play dead, has kept him alive to fight another day.

Unless she knows there’s something even worse coming out next …

Article Link To The New York Post:

Trump Would Jail Clinton? There's A Name For That

By Noah Feldman
The Bloomberg View
October 10, 2016

Donald Trump’s threat in Sunday night’s presidential debate to appoint a special prosecutor to go after Hillary Clinton’s use of a private e-mail server is legally empty -- but it’s genuinely dangerous nevertheless. Federal regulations give the appointment power to the attorney general, not the president, precisely to protect us against a president who uses the special prosecutor as a political tool.

What separates functioning democracies from weak or failed ones is that political parties alternate in power without jailing the opponents they beat in elections. That sometimes means giving a pass to potentially criminal conduct, but that’s a worthwhile sacrifice for making republican government work.

The law itself has a telling history. After President Richard Nixon fired special prosecutor Archibald Cox in the Saturday Night Massacre, a Democratic Congress passed the Ethics in Government Act of 1978, which created an independent counsel who was appointed by a special judicial panel, not the president. The law was upheld by the U.S. Supreme Court in 1988 over the dissent of Justice Antonin Scalia -- the only justice who said the executive was the only branch of government with the capacity of initiating a criminal investigation.

But the law expired in 1999. And it was never renewed, in large part because of the perception that Kenneth Starr had gone too far as an independent prosecutor in going after President Bill Clinton.

After the independent counsel law lapsed, the Department of Justice adopted a formal regulation governing the appointment of special counsels that’s still in effect. The regulation says that the attorney general -- not the president -- has the legal authority to appoint a special prosecutor.

Several conditions apply. First, the attorney general must determine that a criminal investigation is warranted -- a presidential directive isn’t enough. Second, an ordinary investigation must “present a conflict of interest” such that “it would be in the public interest” to appoint a special counsel.

The point of these restrictions is simple: to avoid a president using the special prosecutor’s office as a tool to go after political opponents.

That matters for a functioning democracy. As political scientists have long observed, democracy depends most basically on political alternation: When parties change places after an election, the winners allow the losers to stay in business, operate as an opposition and run for office again.

That alternation means winners don’t put their opponents in jail. If they do -- or if the opponents fear that they will be jailed -- then the incentive to accept defeat evaporates. Losers in that dire position instead will turn to wide-scale popular resistance or military coups. That’s only rational if the losers think they won’t be free to run for office again.

Alternation is thus what distinguishes stable democracies from weak or failing ones. Prosecuting opponents is the hallmark of democracy-ending dictatorship. Egypt offers a recent and clear example: Abdel-Fattah El-Sisi has relentlessly prosecuted the elected leaders he displaced in his 2013 coup. No one has any illusion that the Muslim Brotherhood will be back in future elections. And no one doubts that democracy in Egypt is over.

It may seem extreme to say that Trump’s promise to prosecute Clinton threatens alternation in the U.S. After all, American democracy is pretty stable. But other presidents have bent over backward to avoid such prosecutions -- even to the point of condoning illegal behavior.

Gerald Ford’s pardon of Richard Nixon is a prime example, even though the two were from the same party. Ford judged that the republic wouldn’t be well-served by prosecution of a former president. George W. Bush didn’t seek to prosecute Bill Clinton for perjury, although legally he might have been able to do so.

And Barack Obama didn’t seek to prosecute Bush administration officials for acts that likely counted as torture.

In each instance, there were other political reasons to avoid prosecution. But the dominant rationale was surely that each president wanted to avoid the specter of using executive office to go after opponents or former presidents.

This shows that even in the U.S., the value of democratic alternation weighs very heavily -- more heavily than criminal justice. Trump’s threat to jail Clinton shows he doesn’t value that tradition of alternation. Even if he’s not elected, that’s a dangerous view.

Article Link To The Bloomberg View:

The Regulatory Tide Recedes

After years of slow growth, global leaders worry about excessive rules and regulations.

By Peter J. Wallison
The Wall Street Journal
October 10, 2016

The regulatory wave that has swept the developed world since the 2008 financial crisis may finally be cresting. Recent developments suggest a new recognition by voters and governments that excessive regulation is responsible for the slow economic growth of the past eight years. If so, this is good news. The bad news is that U.S. regulators may not have gotten the message.

Any discussion of this issue must begin with Brexit, a populist revolt against the administrative state that the European Union has become. With their divorce from the European Union, the people of Britain will be able to set their own course on trade, regulation and taxation, freeing that resourceful country to compete for investment. If the 2010 Dodd-Frank Act remains in force in the U.S., London could be the center of world finance within five years.

Even leaders of the G-20—the world’s most economically developed countries—have begun to register concern about excessive regulation. In 2009 the G-20 deputized the Financial Stability Board, a largely European organization of central banks and financial regulators, to develop a comprehensive global system of financial regulation.

The U.S. Treasury and the Federal Reserve are members and endorsed its actions with enthusiasm, pushing to implement its directives through the U.S. Financial Stability Oversight Council. Shortly after receiving its mandate, the Financial Stability Board designated 39 banks and nine insurance companies as “global systemically important financial institutions” or G-SIFIs. This included three U.S. insurers— AIG, Prudential and MetLife—which the Financial Stability Oversight Council then dutifully designated as SIFIs in the U.S.

But in this year’s G-20 meeting in China, the leaders clearly expressed reservations about the mandate they had given the Financial Stability Board. Although they have routinely endorsed the board’s regulatory program, this year the G-20 leaders added a significant coda, promising “to address any material unintended consequences” of the board’s proposals. The concern shows that political leaders have finally come to see the trade-off between regulation and economic growth.

This same trade-off was front and center in the EU’s recent decision not to implement the latest Basel-developed bank capital regulations. This was another rebuke to the Financial Stability Board, which has been coordinating its regulatory agenda with the Basel Committee on Bank Supervision. It was a particular setback to the Fed, which has been the principal advocate for tougher bank capital and liquidity rules. The EU’s decision was based squarely on its fear that capital requirements for the largest banks were already high enough and that unnecessary increases would further stifle the EU’s economic growth.

Then in September the House Financial Services Committee adopted legislation to repeal the most troubling elements of Dodd-Frank. The key provision—from chairman Jeb Hensarling—would allow banks to escape the heaviest regulation by forgoing Basel risk-based capital rules and meeting a simple tangible equity leverage test. The bill as a whole was strongly supported by the community bankers, whose enormous and unnecessary Dodd-Frank-induced compliance costs have impaired their ability to lend to start-ups and small businesses throughout the U.S.

The committee’s Democrats made no effort to amend the legislation or force votes on specific provisions, suggesting that they saw little political benefit before the election in opposing this and other Dodd-Frank reforms.

Running counter to these trends, however, was a September report by U.S. bank regulators recommending that Congress repeal provisions of the 1999 Gramm-Leach-Bliley law. These provisions permitted bank holding companies—firms that control banks—to engage in merchant banking by taking non-controlling equity positions in non-financial companies. This is a backdoor reinstatement of the 1933 Glass-Steagall Act, which separated commercial and investment banking. It would again isolate banks from the financial system’s mainstream.

Since the mid-1980s, the securities markets have out-competed banks in financing American business, and year by year the gap has grown wider. There is nothing that can be done about this. It is simply less expensive for companies registered with the SEC—which means most large companies—to finance themselves through issuing bonds, notes and commercial paper to private investors instead of borrowing from banks.

By 1999 Congress had recognized that banks could not survive as financial intermediaries unless they could also participate in the growing securities markets. Because banks’ deposits are government-insured, Congress did not want them to compete with broker-dealers in underwriting or dealing in securities. But there was a viable compromise: Bank holding companies—not the insured banks themselves—would be permitted to own investment or merchant banks. Since the adoption of this law, these activities have become one of the most profitable businesses of bank holding companies, giving them the financial strength to support their subsidiary banks.

Rescinding this authority would again place the health of the banking system at risk, just as ill-conceived regulation in the 20th century almost destroyed the U.S. railroads. The regulators’ theory is that merchant banking is risky. This is doubtful, but even if it were true the risks are being taken by companies that own banks, not by the government-insured banks. If one of those holding companies should fail, it will have no effect on subsidiary banks as long as they are well capitalized. The bank regulators should focus on assuring adequate capitalization, not trying to control the activities of non-bank affiliates.

There is solid evidence that excessive regulation since the financial crisis has kept the U.S. and other developed economies from growing faster. The political process world-wide has begun to take notice. U.S. regulators should too.

Article Link To The Wall Street Journal:

Straight Talk About Christopher Columbus

Europeans acted the way that conquerors always did. We judge them harshly because they spread a then-novel idea: equality.

By David Tucker
The Wall Street Journal
October 10, 2016

Columbus Day used to be a celebration of the enterprising courage of Christopher Columbus and other explorers who set out into the unknown and began the long process of establishing civilization in a new part of the world.

That triumphalist account will no longer do. We think now of the extraordinary presumption of sticking a flag in someone else’s land and calling it yours. We think more darkly of how European diseases more than decimated the native peoples of the Western hemisphere. We think most darkly of the slave trade that followed European contact with what was only to the Europeans a new world.

These dark thoughts aren’t amiss. Yet when we think of them we should consider two other thoughts: what the world was like when Europeans collided with the natives of North America, and why that world no longer exists.

Europeans headed west in the 15th century to what they thought was Asia because they were blocked from going east by the great Muslim empires of the time.

In Asia, China was rich and powerful beyond anything to which Europeans could aspire. Compared with the Muslims and Chinese, the Europeans were poor, backward and weak.

The Europeans suffered as the weak always do. Terrible plagues from Asia brought by commerce devastated Europe. An estimated 100 million people died, as would many more, even as the Europeans began settling in the Western hemisphere.

Europeans also suffered from slavery. For many years, Europe’s most valuable export to the Middle East was its own people, sold as slaves by the Vikings who had conquered them and settled in to rule. The English word “slave” comes from a word still used to describe some Eastern Europeans, “Slav.” In the period from 1530 to 1780, Muslim raiders captured and enslaved an estimated one million or more Europeans.

The Europeans who conquered the Western hemisphere acted as people had always acted, no better or no worse; those they conquered suffered as the Europeans themselves had suffered.

This is evident if we look at the first European conquest outside of Europe. The Europeans began to assert themselves with the 1415 conquest of Ceuta, across the Strait of Gibraltar from Spain. They conquered Ceuta from the Muslims, which was a dreadful thing to do, as it was when successive Muslim rulers took it by force from each other, after the first of them took it from the Berbers, who had taken it from the Byzantines, who had taken it from the Vandals, who had taken it from the Romans, who had taken it from the Carthaginians, who undoubtedly took it from some others, now lost to history.

The similarity of the Europeans and those they encountered in the Western hemisphere is also clear when we remember that a relatively small number of Spaniards were able to conquer the Aztec empire in part because many of the indigenous people the Aztecs had conquered—and often sacrificed to their gods—hated the Aztecs and joined with the Spanish to fight them.

Of course, to say that Europeans acted as others had acted doesn’t justify the awful things Europeans did to each other, and to non-Europeans, in their long history. But it might persuade us to understand and moderate our condemnation of Columbus.

We judge Columbus harshly because the same power that enabled the Europeans to conquer the world also allowed them to impose their views on the world. And the views they imposed are now our views.

Even as the conquest was reaching its zenith in the 19th century, the Europeans were bringing to the world the then-novel idea that one group of people didn’t have the right to impose its will on another group.

This revolution in thinking, which ultimately undermined European imperialism, was announced by the Declaration of Independence and its assertion of the self-evident truth of human equality. It was carried further by the British who suppressed the slave trade with their all-powerful navy, commercial might and insistent diplomacy, and who led the campaign for the abolition of slavery. It was completed by American insistence after the world wars of the 20th century on the right of self-determination, the right of people to self-government.

This Columbus Day we need no triumphalism. Let it be a day instead to ponder the human capability for good and evil and wonder how we might encourage more of the good.

Article Link To The Wall Street Journal:

Ditch The 'Hard Brexit' Fallacy

By Clive Crook
The Bloomberg View
October 10, 2016

Will Brexit be hard or soft? The question preoccupies British politicians and commentators -- not to mention global currency markets, if the sharp fall in sterling this week is any guide. Despite its command of the discussion, however, this hard-or-soft framing is unhelpful. It's best dropped altogether.

Sterling slumped after Prime Minister Theresa May announced on Oct. 2 that she would start the European Union's Article 50 exit process no later than the end of next March. She also repeated that she'll insist on restoring national control of immigration even if that means no longer being a member of the EU's single market.

The reaction was uniform. The government has chosen a hard Brexit. Let panic commence.

This hard-or-soft framing conflates a bundle of very different questions. Will Brexit take the U.K out of the single market? Will Britain face trade barriers? Will Brexit mean strict immigration controls? Will Britain and the EU separate on acrimonious terms, ending close cooperation on issues other than trade? Will exit be disorderly and disruptive? Declaring that Brexit will be hard implies (and is usually intended to imply) that the answer to all those questions must be yes -- and that hard thus equals disastrous.

Not so. Let's take each in turn.

Will Brexit take the U.K. out of the single market? Membership of the single market, according to the EU treaty and settled EU doctrine, requires upholding four supposedly indivisible freedoms -- free trade in goods, services and capital, and free movement of people. The fourth freedom is avowedly political, not economic: Its purpose is to dissolve the EU's internal borders. This supranational character of the European Union project is the very thing Britain objects to, and the very thing the EU insists on. So yes, Brexit means rejecting the fourth freedom, which in turn means no longer being a member of the single market.

Nobody should have needed May's speech for clarification on this.

Moving on, will Britain face new trade barriers? This remains to be seen. Membership of the single market guarantees free trade, but non-membership doesn't in any way rule it out. May's government says it wants free trade. EU governments say, we'll have to see. This second kind of "hard Brexit" -- trade restrictions -- could happen. But it isn't something May just chose, either as a goal or as the unavoidable consequence of resigning Britain's single-market membership. Rather, it's something the EU might decide to inflict. This kind of hard Brexit would be Europe's choice, not Britain's.

Let's pause to ask whether such a response on the EU's part would be just or sensible. Neither, in fact. Britain is accused of wanting to "cherry-pick" its future relations with the EU -- but the charge, never questioned, makes no sense. (Is the EU saying that the fourth freedom is a cost to be borne by all? Freedom of movement is supposed to be a benefit. If Britain rejects it, according to EU theory, Britain loses. How is that "cherry-picking"?) Equally, the EU has a strong economic interest in free trade with the U.K. -- including in financial services. Neither fairness nor economic self-interest requires the EU to raise trade barriers against the U.K.

Will Brexit mean strict immigration controls for EU citizens? It need not, and May's government seems unlikely to want such a system. A liberal work-permit scheme, with preferential (and reciprocal) access for EU citizens would be best. This might upset some hardline anti-immigrant Brexit supporters, but there's no need for May to let that subset of the pro-Brexit constituency dictate policy.

Indeed, the government should make clear that what's at stake in rejecting the fourth freedom is a constitutional principle rather than any specific immigration policy. Henceforth, Britain controls its borders. Once that power is repatriated, successive parliaments will face the decision of how hard or soft Britain's immigration controls ought to be.

Will Britain and the EU separate on acrimonious terms, bringing close cooperation on issues other than trade to an end? Again, this needn't happen. Again, mutual interest argues for the friendliest possible divorce -- and for continued, indeed closer, cooperation on issues such as defense and security.

Will exit be disorderly and disruptive, or calm and methodical? Calm and methodical would obviously be best, and calm and methodical are obviously what Britain will want. The early signs are that other EU governments have mixed feelings on the point. The desire to punish Britain for its rebellion is palpable -- and up to a point forgivable, because if Britain makes a success of Brexit, other EU members might be inclined to give it a try.

Yet the EU can't impose heavy costs on the U.K. without imposing at least some costs on itself. Europe's economies aren't exactly flourishing these days. The best way to make the EU more popular is to promote growth and raise living standards. Putting that goal second to punishing the U.K. might have the opposite effect to the one intended.

Summing up, if you leave the European Union, you leave the European Union: That's neither hard nor soft, it just is. Stepping aside from Europe's political project does not dictate whether Brexit will be hard or soft in those other crucial respects. If Britain's new prime minister is wise, she'll want Britain's economic relations with the EU to be as close as possible. If the EU's leaders are wise, they'll want the same.

Article Link To The Bloomberg View:

You’re Ruining Facebook (And Friendships) With Political Rants

By Karol Markowicz
The New York Post
October 10, 2016

This year’s presidential election seems to be more divisive and personal — friendships fraying, families fighting and acquaintances going their separate ways — than in years past. And nowhere is that more apparent than on Facebook.

Facebook isn’t for politics — or at least, it shouldn’t be. This is hard for people to understand because politics has otherwise permeated every part of our culture, so why not the most social of social media?

Musicians lecture from the concert stage, professors sidebar their opinions in class, religious leaders deliver whole sermons about presidential candidates from the pulpit.

People assume it’s normal to agitate for a candidate no matter their job and post positive information about their pick and negative information about the other guy (or gal).

The articles, the GIFs and the “this late-night comedian just DEMOLISHED the candidate I don’t like” viral videos have become part and parcel of Facebook posts during the never-ending election season.

The best reason to join Facebook is to reconnect with your best friend from first grade or to stay in touch with those crazy Australians you met while traveling in Europe that summer. It’s a way to socialize with a lot of people all at once.

Sure, you can e-mail a picture of your new baby to everyone you’ve ever met. But why not post it on Facebook and let the adoring comments roll in? The latter is just easier and more convenient for everyone involved. Facebook is a way of hanging out with everyone you ever met and political ranting makes the whole thing . . . awkward.

Plus, posting about politics is boring. Mostly because you’re boring. Sorry: Your regurgitated talking points and huffy endorsement aren’t swinging votes. No one’s waiting for you to weigh in with daily updates on why your candidate is great.

Spare everyone the argument that you just feel like you “have to” speak up because this election is so important. Everyone already knows the importance of this, and every, election. You told us this in 2012, remember? And 2008.

You don’t need to enrage your great-aunt Ida, who thinks Donald Trump will launch nukes the very day he takes office, by posting how you’re still a Bernie bro. Your co-worker from three jobs ago doesn’t care you think Hillary Clinton’s The! Most! Qualified! Presidential! Candidate! Ever! You haven’t found the smoking gun in Hillary’s e-mails, either; sorry, gumshoe.

Besides, you’re probably preaching to the choir and your friends who disagree with you have long ago silenced your missives. Facebook introduced the “unfollow” option in 2013.

This allows people to essentially mute their friends without permanently unfriending them. A Pew study from 2014 found that about a quarter of Facebook users have blocked people over political disagreements. And that’s before the election really got into high gear. It’s easy to imagine that number being higher now.

A different Pew survey from August found that nearly half of Clinton supporters don’t have any friends who support Trump and 31 percent of Trump supporters don’t know anyone voting for Hillary. We’re already in our bubbles, why make it worse with your ranting?

You’re ruining Facebook. Stop it.

And while you’re at it, stop ruining other parts of your life, too. Stop talking about politics at parties or at work. Arguing about politics has its time and place. That time is anytime you want and that place is Twitter.

Facebook is for new babies, a song of the day, vacation pictures. Twitter is the place to engage about politics. “But I don’t know how to use Twitter.” Well, if you’re posting about politics on Facebook then you don’t know how to use Facebook, either. And distilling your political opinions into 140 characters is a skill many of you could stand to learn.

Politics isn’t everything, and that should be reflected in your Facebook posts. It’s OK to have the occasional post about the election, but even a few times a week is too much.

The election will hopefully end someday and you want to still have your friends on the other side. So post a picture of your lunch instead of the latest Trump meme, or alert your friends to an article that has nothing to do with politics. Let politics become a subject in the background of your life.

Where it belongs.

Article Link To The New York Post:

The Global Economy Has Entered Unexplored, Dangerous Territory

By Lawrence Summers
The Washington Post
October 10, 2016

As the world’s finance ministers and central-bank governors came together in Washington last week for their annual global financial convocation, the mood was somber. The specter of secular stagnation and inadequate economic growth on the one hand, and ascendant populism and global disintegration on the other, has caused widespread apprehension. Unlike in 2008 (when the post-Lehman Brothers crisis was a preoccupation) or 2011 and 2012 (when the possibility of the collapse of the euro system concentrated minds), there was no imminent crisis. Instead, the pervasive concern was that traditional ideas and leaders are losing their grip and the global economy is entering unexplored and dangerous territory.

The International Monetary Fund’s growth forecast released just before the meeting was once again revised downward. While recession does not impend in any major region, growth is expected at rates dangerously close to stall speed. Worse is the spreading realization that the central banks have little fuel left in their tanks. Recessions come intermittently and unpredictably. Containing them generally requires 5 percentage points of rate cuts. Nowhere in the industrial world do central banks have anything like this kind of room, even allowing for the effects of unconventional policies such as quantitative easing. Market expectations suggest that it is unlikely they will gain much room for years.

After seven years of consistent over-optimism about economic prospects, there is a growing awareness that growth challenges are not so much a matter of the lingering effects of the crisis as they are of structural changes in the global economy that contributed to the crisis and the problems in its aftermath. There is increasing reason to doubt that the industrial world can simultaneously enjoy interest rates that support savers, financial stability and adequate growth. Saving has become overabundant, new investment insufficient and stagnation secular rather than transient.

It can hardly come as a great surprise that when economic growth falls short year after year, and when its beneficiaries are a small subset of the population, electorates turn surly. Looking back at the political traumas of 1968, when people were in the streets in many countries, it’s clear that there was something going on beyond specific issues like Vietnam in the United States. In the same way — with Brexit, the rise of Donald Trump and Bernie Sanders, the strength of right-wing nationalists in Europe, Vladi­mir Putin’s strength in Russia, and the return of Mao worship in China — it’s hard to escape the conclusion that the world is seeing a renaissance of populist authoritarianism.

These developments are mutually reinforcing. Weak economics promote angry politics which raise uncertainty, leading to still weaker economics starting the cycle again. Publics have lost confidence both in the competence of economic leaders and in their commitment to serving broad national interests, rather than the interests of a global elite. A number of longtime economic leaders in the public and private sector seem to be making their way through the grief cycle — starting with denial, moving to rage, then to bargaining and ultimately to acceptance of new realities.

It is not tenable to ignore public sentiment. Nor, as 60 years of populist policy cycles in Latin America demonstrate, is economic nationalism in its strong form a viable economic strategy. Rather, the challenge for the international community and leaders of individual nations is to find a path in which international cooperation is supported and enhanced, but instead of being focused on matters of concern to moralists and global elites is focused on the priorities of a broad middle class.

Concretely, this means rejecting austerity economics in favor of investment economics. At a time when markets are saying that inadequate rather than excessive inflation will be the problem over the next generation, central bankers need to embrace spurring demand as a primary objective and to cooperate with governments.

Enhancing infrastructure investment in the public and private sector should be an immediate priority for fiscal policy. Domestically, this means recognizing that such a course has budget benefits, as the economy expands and deferred maintenance liabilities are reduced, as well as budget costs. Globally, it means recognizing that enhanced tools for infrastructure finance offer the prospect of more investment demand and better returns to middle-class savers.

And the focus of international economic cooperation more generally needs to shift from opportunities for capital to better outcomes for labor. The achievement of this objective will require substantially enhanced cooperation to address what might be thought of as the dark side of capital mobility — money laundering, regulatory arbitrage and tax avoidance and evasion.

These are a few ideas. The general point should be clear. Few things will be as important to the success of the next president as the restoration of confidence in the global economy.

Article Link To The Washington Post:

The New Reactionaries

By Robert J. Samuelson
The Washington Post
October 10, 2016

A reactionary is someone who wishes to return, usually unrealistically, to an earlier and more appealing era. We have two reactionaries running for president. Both peddle agendas that promise to re-create a reassuring past. We are being fed different varieties of nostalgia. Neither will work.

Donald Trump is the most explicit. He pledges to “make America great again.” What does this mean? For starters, it suggests that non-Hispanic whites will recapture political power that has shifted to immigrants and their children. Many would simply be tossed out of the country. After this, Trump will reinvigorate the economy by tearing up many, perhaps all, of our trade agreements, which he blames for our economic problems.

To ensure the economy’s revival, Trump would resort to the standard Republican cure for slow growth: massive tax cuts. These would cost roughly $5 trillion over a decade, reckons the nonpartisan Committee for a Responsible Federal Budget.

Of course, most of this is unlikely. Legal immigrants account for three-quarters of all immigrants, reports the Pew Research Center. The proportion is higher for their children. Indeed, immigrants and their offspring now account for most U.S. population growth. Between now and 2065, they will represent almost 90 percent of growth, projects Pew .

As for the economy, Republicans talk casually about increasing annual economic growth to 3.5 percent to 4 percent, which is slightly above the 3.2 percent average from 1950 to 2015 . But it’s way above the recent average of 2 percent. Although raising it doesn’t sound hard, it is. Part of the decline stems from the retirement of baby-boom workers; that won’t change much. Most of the rest reflects stagnant productivity — the disappointing impact on growth of technology, management and worker skills — and is hard to influence in an $18 trillion economy.

Turn now to Hillary Clinton, who — like Trump — is busy resurrecting the past and calling it the future. The Democratic political formula is unchanging: Create handouts that make more Americans grateful for and dependent on government. Clinton has proposed raising Social Security benefits, paying tuition for most students at state colleges and universities, funding universal preschool programs and helping parents cover child-care costs.

All this is self-serving behavior. It’s using the public’s money to bribe the public, as is sometimes said. Actually, Democrats (and Republicans, too) have gone one step further. They bribe the public with borrowed money (budget deficits) and taxes on the wealthy. Clinton has ruled out tax increases on the middle class, defined as less than $250,000 of income for a family.

Democracy increasingly becomes a cynical game in which the few subsidize benefits for the many. Government isn’t disciplined, because the many have little reason to discipline it. If most government appears “free” to most people, why bother?

Of course, a progressive tax system (the rich pay more) is desirable, and many social programs are needed. But most could do with modernization. Two major programs — college student loans and Obamacare — have serious weaknesses. You might think a responsible government, before embarking on more social engineering, would fix existing programs. Perish the thought.

So the public is left contemplating two competing, but twisted, visions of the past. Trump evokes the early decades after World War II, when U.S. companies dominated the world. Germany, Japan, South Korea, Mexico and China weren’t major factors then. They are now and won’t meekly retreat. The United States runs chronic trade deficits because the dollar serves as the main global currency. This raises its exchange rate, putting U.S. manufacturers at a disadvantage.

Clinton offers warmed-over 1960s activism based on the false optimism that government can easily regulate social change. This was and is a delusional simplification. What we are likely to get are new bureaucracies presiding over new grants, regulations and tax breaks that make government more intrusive and confusing.

One irrefutable sign of this campaign’s unseriousness is the virtual absence of any discussion of America’s aging. In 1960, fewer than 1 in 10 Americans was 65 or older; now it’s 1 in 7, and by 2060, the ratio may be 1 in 4, says the Population Reference Bureau. This trend is unavoidable, but it is missing in action. How does it affect the economy and politics? How can we prevent spending on the elderly from crowding out other important functions of government, including defense, which is being squeezed in an increasingly dangerous world?

So it is with many subjects: immigration, tax changes, balancing the budget (the main reason for this: to make people weigh the benefits of more government against the costs). We get no discussion or simplistic discussion. The past takes precedence over the future. There’s a reactionary celebration of the past that, no matter who wins, has one sure consequence: disappointment.

Article Link To The Washington Post:

As Saudis Bombed Yemen, U.S. Worried About Legal Blowback

By Warren Strobel and Jonathan Landay 
October 10, 2016

The Obama administration went ahead with a $1.3 billion arms sale to Saudi Arabia last year despite warnings from some officials that the United States could be implicated in war crimes for supporting a Saudi-led air campaign in Yemen that has killed thousands of civilians, according to government documents and the accounts of current and former officials.

State Department officials also were privately skeptical of the Saudi military's ability to target Houthi militants without killing civilians and destroying "critical infrastructure" needed for Yemen to recover, according to the emails and other records obtained by Reuters and interviews with nearly a dozen officials with knowledge of those discussions.

U.S. government lawyers ultimately did not reach a conclusion on whether U.S. support for the campaign would make the United States a "co-belligerent" in the war under international law, four current and former officials said. That finding would have obligated Washington to investigate allegations of war crimes in Yemen and would have raised a legal risk that U.S. military personnel could be subject to prosecution, at least in theory.

For instance, one of the emails made a specific reference to a 2013 ruling from the war crimes trial of former Liberian president Charles Taylor that significantly widened the international legal definition of aiding and abetting such crimes.

The ruling found that "practical assistance, encouragement or moral support" is sufficient to determine liability for war crimes. Prosecutors do not have to prove a defendant participated in a specific crime, the U.N.-backed court found.

Ironically, the U.S. government already had submitted the Taylor ruling to a military commission at Guantanamo Bay, Cuba, to bolster its case that Khalid Sheikh Mohammed and other al Qaeda detainees were complicit in the Sept 11, 2001 attacks.

The previously undisclosed material sheds light on the closed-door debate that shaped U.S. President Barack Obama’s response to what officials described as an agonizing foreign policy dilemma: how to allay Saudi concerns over a nuclear deal with Iran - Riyadh's arch-rival - without exacerbating a conflict in Yemen that has killed thousands.

The documents, obtained by Reuters under the Freedom of Information Act, date from mid-May 2015 to February 2016, a period during which State Department officials reviewed and approved the sale of precision munitions to Saudi Arabia to replenish bombs dropped in Yemen. The documents were heavily redacted to withhold classified information and some details of meetings and discussion.

(A selection of the documents can be viewed here:;;;

An air strike on a wake in Yemen on Saturday that killed more than 140 people renewed focus on the heavy civilian toll of the conflict. The Saudi-led coalition denied responsibility, but the attack drew the strongest rebuke yet from Washington, which said it would review its support for the campaign to "better align with U.S. principles, values and interests."

The State Department documents reveal new details of how the United States pressed the Saudis to limit civilian damage and provided detailed lists of sites to avoid bombing, even as officials worried about whether the Saudi military had the capacity to do so.

State Department lawyers "had their hair on fire" as reports of civilian casualties in Yemen multiplied in 2015, and prominent human rights groups charged that Washington could be complicit in war crimes, one U.S. official said. That official and the others requested anonymity.

During an October 2015 meeting with private human rights groups, a State Department specialist on protecting civilians in conflict acknowledged Saudi strikes were going awry.

"The strikes are not intentionally indiscriminate but rather result from a lack of Saudi experience with dropping munitions and firing missiles," the specialist said, according to a Department account of the meeting.

"The lack of Saudi experience is compounded by the asymmetric situation on the ground where enemy militants are not wearing uniforms and are mixed with civilian populations," he said. "Weak intelligence likely further compounds the problem."

The Saudis intervened in Yemen in March 2015 to restore President Abd-Rabbu Mansour Hadi after he was ousted by the Houthi rebels, whom Riyadh charges are backed by Iran. The Saudis gave Washington little advance notice, U.S. military leaders have said.

The Saudi government has called allegations of civilian casualties fabricated or exaggerated and has resisted calls for an independent investigation. The Saudi-led coalition has said it takes its responsibilities under international humanitarian law seriously, and is committed to the protection of civilians in Yemen. The Saudi embassy in Washington declined further comment.

In a statement issued to Reuters before Saturday's attack, National Security Council spokesman Ned Price said, "U.S. security cooperation with Saudi Arabia is not a blank check. ... We have repeatedly expressed our deep concern about airstrikes that allegedly killed and injured civilians and also the heavy humanitarian toll paid by the Yemeni people."

The United States continues to urge the Kingdom to take additional steps to avoid "future civilian harm," he added.

No-Strike Lists

Since March 2015, Washington has authorized more than $22.2 billion in weapons sales to Riyadh, much of it yet to be delivered. That includes a $1.29 billion sale of precision munitions announced in November 2015 and specifically meant to replenish stocks used in Yemen.

In internal policy discussions, officials said, the Pentagon and the State Department's Near East Affairs bureau leaned toward preserving good relations with Riyadh at a time when friction was increasing because of the nuclear deal with Iran.

On the other side, the State Department's Office of the Legal Advisor, backed by government human rights specialists, expressed concern over U.S. complicity in possible Saudi violations of the laws of war, a former official said. Reuters could not determine the timing and form of that warning.

U.S. refueling and logistical support of Riyadh's air force - even more than the arms sales - risked making the United States a party to the Yemen conflict under international law, three officials said.

About 3,800 civilians have died in Yemen, with Saudi-led airstrikes on markets, hospitals and schools accounting for 60 percent of the death toll, the United Nations human rights office said in August.

It stopped short of accusing either side of war crimes, saying that was for a national or international court to decide.

The White House convened a meeting in August 2015 on how best to engage the Saudis over rising civilian casualties, the emails show, in a sign of mounting concern over the issue. That same month, State Department officials gathered to discuss how to track those casualties.

In late January 2016, Deputy Secretary of State Antony Blinken chaired a meeting with officials across the department in part to discuss "Options to limit U.S. exposure to LOAC (Law of Armed Conflict) concerns," according to a Blinken aide's email.

The Law of Armed Conflict, a group of international laws and treaties, prohibits attacks on civilians and requires combatants to minimize civilian death and damage.

While preserving military ties with Riyadh, the Obama administration has tried to reduce civilian casualties by providing the Saudis with "no-strike lists" of targets to avoid, dispatching to Saudi Arabia a U.S. expert on mitigating civilian casualties and pressing for peace talks, the officials said.

"If we’re going to be supporting the coalition, then we have to accept a degree of responsibility for what’s happening in Yemen and exercise it appropriately," a senior administration official said.

One no-strike list, called "The Overlay," was delivered to the Saudis in mid to late 2015. It included water and electrical facilities and infrastructure vital to delivering humanitarian aid, a second senior official said.

"You Can Be Guilty"

In mid-October 2015, the White House ordered the U.S. Agency for International Development to compile a separate list of "critical infrastructure" that should be spared, a State Department email said.

Striking sites on the list could "do significant harm to Yemen's ability to recover expeditiously" from the war, according to confidential U.S. talking points drafted the same month for use with Saudi officials.

"We urge you to exercise the utmost diligence in the targeting process and to take all precautions to minimize civilian casualties and damage to civilian infrastructure," one talking point said.

After ceasefire talks collapsed in August and airstrikes resumed, coalition bombs destroyed the main bridge from the port of Hodeidah to the capital of Sanaa, a main supply route for humanitarian food aid, Oxfam International said.

Another U.S. official said the bridge was on a U.S. no-strike list. Reuters has not seen those lists.

In May, Washington suspended sales to Riyadh of cluster munitions, which release dozens of bomblets and are considered particularly dangerous to civilians, officials said.

More than 60 U.S. House of Representatives members are urging Obama to halt a new Saudi arms sale. An effort to block that sale failed in the U.S. Senate on Sept. 21.

Some critics say the administration’s approach has failed.

"In the law of war, you can be guilty for aiding and abetting war crimes and at some point the ... evidence is going to continue to mount and I think the administration is now in an untenable situation," said Congressman Ted Lieu, a California Democrat and former military prosecutor.

Article Link To Reuters:

Monday, October 10, Morning Global Market Roundup: Mexican Peso Climbs, Stocks Edge Up As Trump's Chances Seen Fading

By Wayne Cole 
October 10, 2016

The Mexican peso climbed and U.S. stock futures crept higher on Monday as markets saw less chance of a victory by Republican nominee Donald Trump in his U.S. presidential bid amid a scandal over comments he made about women.

A holiday in Tokyo limited the early reaction in equities and MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was barely in the black.

EMini futures for the S&P 500 ESc1 rose 0.2 percent, as did Australian stocks , while Shanghai .SSEC firmed 1.2 percent as markets there returned from a long holiday.

Going the other way, Thailand stocks fell 2.5 percent .SETI after the palace said in a statement that 88-year-old King Bhumibol Adulyadej's health was in an unstable condition.

Trump faces the biggest crisis of his 16-month-old campaign after a tape of him making vulgar comments about women deepened fissures with establishment Republicans.

A second debate with Democrat Hillary Clinton came and went with little immediate impact on investor thinking.

Presidential betting markets had lengthened the odds on a Trump victory, while the FiveThirtyEight site of well-regarded forecaster Nate Silver put the probability of a Clinton win at over 81 percent.

Markets generally see Clinton as a known factor with middle of the road policies. There is far more uncertainty about what a Trump administration would mean for U.S. foreign policy, trade, the economy and even governance at the Federal Reserve.

In particular, Trumps' plans to slap tariffs on imports and renegotiate the North American Free Trade Agreement (NAFTA) are seen as very negative for Mexico and Canada, which is why their currencies swing when his odds of winning change.

Both currencies gained on Monday, with the U.S. dollar down 1.4 percent on the Mexican peso at 19.06 MXN=D4 and off 0.3 percent on its Canadian counterpart CAD=D4.

The dollar dipped a touch on the yen to 102.87 JPY=, while the euro was little moved at $1.1194 EUR=.

Pound In Peril

Sterling was losing ground again at $1.2402 GBP=D4 after its flash crash last Friday, with dealers braced for more volatility amid concerns about a "hard" Brexit.

A survey out on Monday showed key measures of UK business investment and turnover confidence hit four-year lows in the third quarter.

"The uncertainty of leaving the single market is causing enormous concern over the future of the UK economy and the funding of its twin deficits," said analysts at ANZ.

"Moreover, the rhetoric from the UK government on immigration and EU legislation has hardened of late at the same time as the EU's position is also hardening."

China's central bank set the value of its yuan CNY=PBOC at the lowest since September 2010, and spot yuan briefly fell through the key psychological support level of 6.7 to the dollar to a six-year-low, prompting traders to wonder if it was putting the currency back on a slow depreciation path.

A similar drop in mid-July prompted a flurry of intervention by state-run banks which lasted on and off through September, but investors took the latest fall calmly, unlike sometimes in the past when such moves sparked market unease. [CNY/]

There was relief that U.S. payrolls data last Friday were solid enough but not so hot as to add to the risk of a rate hike from the Federal Reserve.

Fed fund futures <0> imply less than 10 percent chance of a move in November, rising to around 65 percent for December.

In commodity markets, oil prices dipped further early Monday as players took profits following a strong rally last week spurred by talk of OPEC output cuts. [O/R]

Benchmark Brent LCOc1 was off 44 cents at $51.49 a barrel, while U.S. crude CLc1 eased 49 cents to $49.33.

Spot gold XAU= regained some ground to $1,262.76, after suffering its largest weekly drop in over three years.

Article Link To Reuters:

Far From Stepping Back, Top Central Banks Are Set To Double Down

By Howard Schneider and Leika Kihara 
October 10, 2016

Central banks' repeated warnings that there are limits to what they can do to bolster the sputtering world economy could suggest they are about to pull back and pass the baton to governments.

But a steady flow of research and a new tone in the debate among policymakers and advisers points in a different direction: rather than retreat, central banks are preparing for the day they may need to do more, even at the risk of antagonizing politicians who argue they already have too much power.

The shift can be seen in the acknowledgment by Federal Reserve policymakers that their massive $4 trillion balance sheet will not shrink anytime soon, or that asset buying may become a "recurrent" tool of future monetary policy. It can be seen in the comments of Bank of England officials who talk of crisis-fighting tools as now semi-permanent fixtures, or in the Bank of Japan developing a new monetary policy framework, in this case targeting long-term market interest rates.

Driving those developments is an emerging consensus among policymakers who now acknowledge that the global financial crisis has led to a fundamental shift toward low inflation, tepid growth, lagging productivity and interest rates stuck near zero.

"We could be stuck in a new longer-run equilibrium characterized by sluggish growth and recurrent reliance on unconventional monetary policy," Fed Vice Chair Stanley Fischer said last week.

For years, Federal reserve and other policymakers have discounted such a scenario, arguing that temporary factors were slowing the recovery and plotting a return to conventional pre-crisis policies.

Over the past months, though, that optimism has given way to an admission that such a return is increasingly elusive. Interest rates are set to stay low far longer than thought only a year ago and jumbo balance sheets accumulated through crisis-era asset purchases are now cast as a possibly permanent tool.

At the annual Jackson Hole Fed conference in August the discussion had shifted from the mechanics and timing of "normalization," to how and whether to expand the central bank footprint yet again.

Policymakers still keep reminding governments they should help boost productivity and growth with reforms and, where possible, spending on infrastructure.

But there has been a growing recognition among central bankers that they may not be able to simply hand the problem off, and that now is the time to lay the groundwork for more aggressive policies that may be needed down the road.

More Tools

Existing tools may not be enough "to deal with deep and prolonged economic downturns," Yellen said in Jackson Hole. She has since flagged the possibility that in a future downturn the Fed might need to start buying private securities and not just government bonds, a step already taken in Europe.

During last week's International Monetary Fund meeting, its officials even challenged the decades-old consensus about the separation between monetary and fiscal policy, suggesting central bankers should support government infrastructure spending with low borrowing rates.

"The current low-interest environment provides an historic opportunity to make these necessary investments," IMF managing director Christine Lagarde said ahead of the meetings. Loose monetary policy could double the growth impact of public spending and allow the debt burden to actually fall, she said.

On Saturday, Bank of Japan Governor Haruhiko Kuroda said such "synergy" was already factoring into the BOJ's plans.

"By continuing an extremely accommodative monetary policy, fiscal stimulus could be even more effective,” Kuroda told a seminar.

The shift has been gradual, but gained momentum this year.

Two years ago, Japanese and euro zone policy rates were still above zero, and the Fed published a policy normalization plan that said the balance sheet would begin to decline once interest rates started to rise. Fed forecasts at the time suggested rates would be on the way up from 2015 onwards.

Yet the Fed has raised rates only once since then and when it did, in December 2015, it gave a taste of things to come. The message was that the Fed would keep its large portfolio until rate tightening was "well under way."

Political Heat

Analysts at the Institute of International Finance, the global banking trade group, argued last week that any cuts to the Fed's portfolio are now so far out in the future that it serves as a form of fiscal support by keeping big amounts of government securities off the market and rebating the interest to the Treasury each year.

Over the past year research at the San Francisco Fed and elsewhere has cemented the idea that demographic trends, risk aversion, and the diminished need for physical capital in a service economy, had created a less dynamic world economy where it will be hard to move policy rates much above zero. In this context, central banks' bond holdings, negative rates or even de facto bankrolling of government spending no longer look temporary or all that unconventional..

Still, an even larger footprint for central banks poses a political challenge. There are legal constraints on the European Central Bank and some German and Dutch politicians have argued the ECB has already gone too far with its negative interest rates and bond buying.

In the United States, Republican presidential candidate Donald Trump has accused the Fed of propping up stock markets to help the Democrats, and lawmakers routinely grill Fed officials about plans to shrink the balance sheet.

Saying it will not happen until interest rates rise takes on less meaning as the expected pace of increases slows.

Former inflation hawks like St. Louis Fed President James Bullard, for example, no longer worry about the size of the Fed's asset holdings.

"Five years ago I would have been saying you are taking a lot of inflation risk," by scaling up asset purchases, Bullard said in a Reuters interview. "There seems to be no urgency now to reduce the size (of the Fed's balance sheet)."

Article Link To Reuters:

Financial Markets Continue To Price In Clinton Win After Debate

By Caroline Valetkevitch and Rodrigo Campos
October 10, 2016

Wall Street stock index futures were little changed throughout Sunday's highly contentious presidential debate, indicating that markets continue to view that Democrat Hillary Clinton holds an edge in the Nov. 8 election against her Republican rival, Donald Trump.

The 90-minute debate got off to a chilly start when Clinton and Trump greeted each other without the traditional handshake.

It quickly turned into an acrimonious discussion of a 2005 video that emerged on Friday in which Trump was heard using vulgar language and talking about groping women without consent.

Investors said there was not enough in terms of policy substance in Sunday's debate to change the market's perception of the direction of the race.

"I don’t think it changed people’s opinions in the investing community that Clinton is more likely to win, as she was before the debate, certainly after Friday," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

In a video released on Friday, Trump is heard talking on an open microphone in 2005 about groping women and trying to seduce a married woman. The video was taped only months after Trump married his third wife, Melania.

“There is still time to go and more things that could happen, but financial advisors are probably starting to feel they need to think about a Clinton win in terms of an investment thesis for 2017," Meckler said.

He said such a thesis would likely include government intervention in healthcare, particularly medicine prices, and little support for coal as an energy source.

S&P e-mini futures remained in a tight range throughout the debate, slightly higher than at the close on Friday.

“The market declared tonight’s debate a draw and has no more clue after debate than before, at least not in watching the S&P futures. Once again the debate was great theater, but did not give the market any insight," said JJ Kinahan, chief market strategist at TD Ameritrade.

"Despite the night’s civil ending, it was hard to glean much information, as a good part of the debate was simply a name-calling fest.”

Strategists in a recent Reuters equity poll mostly viewed an election victory on Nov. 8 by Clinton as more positive for the stock market through the end of the year, largely because her positions -unlike her opponent's- are well known.

Steven Englander, global head of G10 currency strategy at CitiFX in New York, said: "Both Trump and Clinton supporters expected that emerging market currencies and U.S. equities would go down and the VIX .VIX would go up if Trump were to win and vice versa if Clinton wins," he added.

Trump has been critical of a U.S. trade deal with Mexico and Canada as well as other trade deals, and has promised to build a border wall and make Mexico pay for it.

The Mexican peso rose as much as 2 percent on Sunday and was last trading up 1.3 percent versus the greenback. S&P 500 e-minis ESc1, which were up 6 points shortly after opening three hours before the debate began, were up 5.25 points, or 0.24 percent.

"It's a positive reaction (in stocks), and it's very consistent with what the market has been discounting, which is that Clinton will win and that's good news," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York, before the debate.

"It's also saying the House of Representatives will stay in the hands of the Republicans," he added.

U.S. stocks briefly gained ground following a perceived win by Clinton in the first presidential debate last month.

Article Link To Reuters:

Samsung Recall Crisis Deepens; Yonhap Reports Note 7 Production Halt

By Se Young Lee 
October 10, 2016

Samsung Electronics Co Ltd has suspended production of its Galaxy Note 7 smartphones following reports of fires in replacement devices, South Korean media said on Monday, a further setback for the tech giant in the midst of its worst ever phone recall crisis.

Samsung's decision to temporarily halt Note 7 production was done in cooperation with authorities in China and the United States, as two U.S. carriers have stopped exchanging or selling new Note 7 phones, Yonhap News Agency cited an unnamed source at a Samsung partner firm as saying.

Samsung did not immediately comment on the Yonhap report.

Problems with replacements for the Note 7 model would create a new and potentially costly chapter to a global scandal which has hurt the reputation of the world's biggest smartphone maker. It also could add new dangers for consumers.

AT&T Inc, the No.2 U.S. wireless carrier, said it will stop issuing new Note 7s to replace recalled phones due to reports of fires from replacement devices that Samsung has said used safe batteries. It will let customers with a recalled Note 7 exchange that device for another Samsung smartphone or other smartphone of their choice.

No.3 wireless carrier T-Mobile US Inc said it was temporarily halting sales of new Note 7s as well as exchanges while Samsung investigated "multiple reports of issues" with its flagship device.

T-Mobile offered customers who brought in their Note 7s a $25 credit on their phone bill.

Australia's largest carrier, Telstra Corp, said Samsung had paused supply of new Note 7s.

"Samsung says it is confident in the replacement Note 7 and advises it has no reason to believe it’s unsafe," Telstra said in a statement on its website on Monday.

But major airlines and airport authorities urged passengers to stop using the phone on board.

"In light of recent incidents and concerns raised about Samsung Galaxy Note 7 devices, passengers are strongly advised not to turn on or charge these devices on board aircraft and not to stow them in any checked baggage," Hong Kong International Airport said on its website on Monday.

Singapore Airlines also said on Monday the powering up and charging of Note 7s is prohibited on all its flights.

Samsung Investigating 

On Sept. 2, Samsung announced a global recall of 2.5 million Note 7s in 10 markets including the United States due to faulty batteries causing some of the phones to catch fire.

A Southwest Airline flight was evacuated last week after a replacement model Note 7 smartphone began smoking inside the plane, according to the family who owns the phone.

Samsung said on Monday it was investigating reports of "heat damage issues" and would share its findings when the investigation was complete.

"If we determine a product safety issue exists, Samsung will take immediate steps approved by the CPSC (U.S. Consumer Product Safety Commission) to resolve the situation," Samsung told Reuters in a statement.

A South Korean government agency said it was monitoring reports of the fires and repeated a warning from the transport ministry that the recalled Note 7 devices should not be used or charged inside airplanes.

South Korea's two largest mobile carriers, SK Telecom and KT Corp, said they were monitoring the situation but had taken no steps in regards to sales or exchange of new Note 7s.

Samsung shares, which have rebounded after an initial sell-off on the recall, were down 3.5 percent as of 0250 GMT, compared with a flat broader market.

"I thought the Note 7 matter was coming to an end, but it’s becoming an issue again," Alpha Asset Management fund manager CJ Heo said.

Samsung should be able to recover from the short-term reputational damage of the recalls, but fourth-quarter sales of the Note 7 would be hurt, he added.

Samsung's recall crisis has coincided with pressure from one of the world's most aggressive hedge funds, Elliott Management, to split the company and pay out $27 billion in a special dividend.

Article Link To Reuters:

Noble Group Agrees $1.05 Billion Sale Of U.S. Unit In Planned Move To Cut Debt

By Anshuman Daga
October 10, 2016

Singapore-listed commodities trader Noble Group agreed to sell its North American energy distribution unit to U.S. firm Calpine Corp for $1.05 billion, moving a step closer to completing a restructuring to raise $2 billion to help cut debt.

The sale of Noble Americas Energy Solutions (NAES) includes repayment of working capital of about $248 million, Noble said in a statement. Noble's shares rose nearly 7 percent in early trading on Monday.

The move comes as the Hong Kong-based trader aims to rebuild investor confidence after a brutal commodities downturn coincided with a questioning of its accounts in early 2015 by Iceberg Research, sparking a collapse in its share price and ratings credit agency downgrades.

"The sale will reduce investors' concerns about Noble's liquidity and balance sheet," said Nirgunan Tiruchelvam, analyst at Religare Capital Markets. He said the company's strategy of getting out of asset-heavy businesses rather than chase "overpriced assets" was a positive as it would help it focus on its core operations.

Noble said it expects the NAES transaction to close in December 2016. Noble's net debt rose to $3.92 billion in April-June from $3.69 billion a year ago.

"The sale of NAES substantially completes the $2 billion capital raising initiative that we announced in June", Nobles' Co-Chief Executive Officers Jeff Frase and Will Randall said in its statement. "With this divestiture, Noble will continue to reduce debt while also funding growth opportunities in our high-return businesses."

Completing a plan to cut debt could help restore stability at Noble after many months of turbulence.

Noble's former CEO Yusuf Alireza, a former Goldman Sachs Asia co-head, quit unexpectedly in late May after helping Noble secure $3 billion in credit facilities and within days, the company announced a $500 million cash call.

The firm's founder and chairman Richard Elman also said in June he would step down within 12 months. Elman grew Noble into one of the world's biggest traders of commodities in a bull run since setting up the group in 1986.

Meanwhile, Calpine, which generates electricity from natural gas and geothermal resources, said in a statement the NAES purchase price was $800 million plus an estimated $100 million of net working capital.

Article Link To Reuters:

Oil Prices Fall Over Doubts That Non-OPEC Producers Will Cut Output

By Henning Gloystein
October 10, 2016

Oil prices fell on Monday over doubts that an OPEC-led plan to cut output would rein in a global oversupply that has dogged markets for over two years.

Brent crude futures LCOc1 were trading at $51.46 per barrel, down 0.47 cents or 0.91 percent, from their last settlement.

U.S. West Texas Intermediate (WTI) futures CLc1 were down 49 cents or 0.98 percent, at $49.32 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) plans to agree on an output cut by the time it meets in late November.

The targeted range is to cut production to a range of 32.50 million barrels per day (bpd) to 33.0 million bpd.

OPEC's current output PRODN-TOTAL stands at a record 33.6 million bpd.

To achieve such an agreement among its members, some of which like Saudi Arabia and Iran are political rivals, OPEC officials are embarking on a flurry of meetings in the next six weeks, starting in Istanbul this week.

However, ANZ bank said on Monday that prices were pulled down by a statement by Russia's energy minister, Alexander Novak, who said "he was not expecting to sign a production deal with OPEC at the World Energy Conference, which starts this week in Istanbul," although the minister did say that an agreement including non-OPEC member Russia might be possible by the time OPEC officially meets on November 30.

Even if a deal is reached, analysts are unconvinced it would result in much higher prices, as doubts run high over the feasibility of a cut among rivaling members, a Reuters poll showed on Friday.

Traders said prices were also under pressure from a rise in the U.S. rig count, which implies that American producers are keen to increase production at prices around $50 per barrel.

"Since its trough on May 27, 2016, producers have added 112 (+35 percent) oil rigs in the U.S.," U.S. bank Goldman Sachs said.

Despite Monday's dip, analysts said they expected slightly higher prices for the rest of the year and into 2017.

Barclays bank said that it expected "stockdraws during the upcoming winter season will support physical oil market fundamentals, irrespective of any decision in November in Vienna. We expect that prices will rise to the low $50 per barrel range in Q4."

The British bank said that prices would receive support into next year in part from firm U.S. gasoline demand.

Article Link To Reuters:

No, The US Does Not Have The 'Slowest Growth Since 1929'

By Jacob Pramuk
October 10, 2016

Donald Trump falsely claimed Sunday night that the United States economy is enduring the "slowest growth since 1929."

"We have the slowest growth since 1929. Our country has the slowest growth and jobs are a disaster," he said at the second presidential debate in St. Louis.

It was unclear exactly what stretch of time Trump referenced, but Commerce Department data do not support his claim. While the U.S. economy currently grows much more slowly than it did in the years following World War II or even as recently as the late 1990s, it has not shrunk in the last few years, as it did several times since 1929.

The U.S. economy has contracted in eight individual years since 1930, as a percent change from the previous year, according to the Commerce Department. Four of those came from 1930 to 1933 during the Great Depression.

It last shrank in 2009, the first full year of the financial crisis.

Trump has criticized the U.S. economy under President Barack Obama and pledged to revive growth by renegotiating or pulling out of trade deals and cutting taxes across the board.

Article Link To CNBC:

How The Moderators Hijacked The Second Debate

By Kyle Smith
The New York Post
October 10, 2016

Last night was a vivid, real-time illustration of how the media think of the American people: “We’re really interested in how you think! So, please, come in, sit down and . . . let the professionals ask the questions.”

Man of the people Anderson Cooper, son of Gloria Vanderbilt, and Martha Raddatz, who had President Obama as a guest at her wedding, must have panicked when ordinary Americans invited to what was billed as a Town Hall debate in St. Louis didn’t ask the questions they were supposed to ask.

Bizarrely, the people were interested in substantive policy questions rather than in doing what the moderators wanted them to do, which was to make like Tom Cruise grilling Jack Nicholson in “A Few Good Men.”

Even when the people asked character-related questions, they asked them politely (“Do you feel you’re models appropriate and positive for today’s youth?” was the first question) instead of in the antagonistic way that journalists do, which by coincidence also wins journalists lots of attention. That wasn’t good enough for Cooper, the CNN anchor who hijacked the debate to cross-examined Trump about lewd comments he made 11 years ago. Trump did what everyone knew he would do — apologized, tried to minimize the remarks as “locker room talk” and then pivoted to Hillary Clinton’s long career attacking women who had accurately accused her husband of grotesque sexual behavior.

After all this, what did Cooper do? He asked almost the same question again.

So it went as the night wore on: For long periods of time the invited voters had as much influence on events as wallpaper. The moderators went after the candidates, mostly but not exclusively aiming their questions at Trump, repeatedly interrupting him and telling him his time was up.

Raddatz even argued with Trump after the Republican nominee made the not-crazy point that it was counter-productive for the US to announce in advance that it was planning an assault on ISIS-held Mosul, Iraq, Raddatz started defending the decision, as though she were an Obama Administration spokesman instead of merely friends.

Voters can be forgiven if they’re wondering why journalists keep mistaking themselves for the star of every show, even one that was designed to give the people a voice.

Article Link To The New York Post:

On a Bizarre Night, Trump Comes Through Okay

By Jim Geraghty
The National Review
October 10, 2016

What a bizarre debate.

It began with the candidates refusing to shake hands, an indication of the seething hostility between the two campaigns and the two candidates. The growing nastiness must have been cathartic for each of them, finally being able to bring out all of the arguments and opposition research they’ve wanted to bring up, directly to each other’s faces.

Trump probably didn’t mitigate too much of the damage from the “grab her” tape with his excuse that “it was locker-room talk” and “I’m not proud of it.” Lots of Republicans wondered if he would open with a blistering, furious counterattack, but early on, he almost seemed medically subdued. He did briefly rip into Bill Clinton’s record of sexual misconduct, and intriguingly, Hillary Clinton barely addressed those arguments. Hillary did offer her indictment, that Trump’s behavior doesn’t represent the great country full of good people that we want to be… and if everyone had switched over to the football or baseball games after that, she had a good night.

But the debate went on for another hour and fifteen minutes, and Trump seemed to have actually cracked the briefing books this time. He didn’t always explain all his references that he wedged into his two-minute answers – Sid Blumenthal, Jonathan Gruber, 33,000 e-mails – but he seemed to have more to say in all of his opportunities. He also pivoted to the topics he wanted to get to tonight; he barely did this in the other debate. He remembered to hit Obamacare early and enjoyed a whole segment on it. Whether or not viewers came away believing Trump had a detailed plan to fix it, Hillary Clinton had to concede the glaring and worsening problems in the program. If voters head to the polling places thinking about how disappointed and angered they are by Obamacare, that’s a bad sign for Clinton and Democrats in general.

Moderator Martha Raddatz detests Donald Trump, didn’t hide it much at all, and she seemed to want to debate Trump herself. That was an exceptionally unwise approach to the role of moderator, in part because it validated his complaint from earlier in the evening that it would be “three on one.”

Finally, it ended on something resembling a genuine gracious note. Asked if they could find something to praise in the other, Clinton praised Trump’s children. Trump offered comments that could pop up in an ad for Hillary Clinton. For one shining moment, Trump actually took the high road, and praised Clinton for never quitting, and for being a fighter. She seemed surprised and a little flattered – and she should, since those are undoubtedly among the qualities that Trump admires the most in himself.

Once he got beyond the opening twenty minutes, Trump had a much better performance. It was if he suddenly remembered he was up on stage to make an argument — my opponent has been in Washington for twenty-five years and represents the status quo, with all of its failures, disappointments, outrages and broken promises — and finally made that argument. Will it change the dynamics of the race? That may depend upon the size of the audience. Perhaps an audience as large as the first debate’s 80 million or so tuned in, expecting a Trump meltdown… and then didn’t get one.

Article Link To The National Review:

Donald Trump’s Meltdown Is Nearly Complete

His debate performance was disastrous because he succeeded at the only thing he came to accomplish: to pander to his demoralized supporters.

By Brian Beutler
The New Republic
October 10, 2016

Since he launched his presidential campaign over a year ago, Donald Trump’s overarching strategy has been unchanged: win by subjecting his opponents to abuse and humiliation. On Sunday night, that strategy changed to subjecting Hillary Clinton to as much humiliation as possible on his way to defeat.

Rattled by the disclosure of audio and video footage of himself bragging about sexually assaulting women with impunity, Trump launched a ceaseless and unhinged series of attacks on Clinton, both on the debate stage and off.

Prior to the debate, Trump hosted a previously unannounced press event with Bill Clinton accusers Paula Jones, Kathleen Willey, and Juanita Broaddrick. The stunt was so craven and vulgar, it repulsed members of his own entourage, who up until Sunday were happy to play “what about Bill?!” whenever a new instance of Trump’s misogyny surfaced in the campaign. In the end, Trump placed Jones et al in the audience, while New Jersey Governor Chris Christie, one of Trump’s closest advisers, declined to attend at all.

During the debate, Trump followed suit, berating Clinton for her husband’s infidelities, and calling her “the devil.” He promised that if he’s president of the United States, he would instruct his attorney general to appoint a special prosecutor to investigate Clinton’s email practices, and, in the fashion of a junta leader, that under his administration she’d “be in jail.”

Had Clinton given a similar performance, commentators would describe it as a meltdown, and if Trump’s campaign wasn’t already melting down, they might say it about him.

But Trump’s campaign is melting down. At one point he castigated his own running mate, Mike Pence, for serving up ad hoc Syria policy at the vice presidential debate last week: “He and I haven’t spoken, and I disagree.” To preserve any semblance of political livelihood, Trump came prepared to pander to his core, demoralized supporters and motivate them through the final stretch of the campaign. That Trump is the GOP nominee is a testament to the fact that he knows how to fire up the conservative base better than anyone else in the party. But for a party desperate to break ranks with him—to avoid being dragged down with him—his performance was disastrous precisely because Trump succeeded at the only thing he came to accomplish.

There is a codependent psychology that explains the connection between the horrifying skeletons in Trump’s closet and the loyalty of his core supporters, a mutually destructive symbiosis that impels Trump to inflict more and more of this kind of damage on himself without worrying about chasing away his base.

The emergence of the “grab them by the pussy” video, and the way Trump has responded to it, is part of a striking pattern.

There is a story roiling under the surface of this campaign, suggesting that there is outtake, b-roll, and other unaired NBC footage of Trump from his years hosting The Apprentice, saying things that contain even less ambiguity than the tape that has upended this campaign.

A couple months ago, amid a prior, raging discussion about Trump’s racism and lack of impulse control, I made gentleman’s bets with friends and fellow journalists about this basic point. Specifically, I bet that at some point during his 40 years in public life, someone, somewhere must have captured audio or video of Trump using the N-word.

Well, there is now a great deal of high-level, informed speculation that such footage exists.

Perhaps it doesn’t exist, or it exists but will never be disclosed. But my supposition that such a disclosure is likely was rooted in a few personal and professional experiences. I grew up in a part of California where Trump’s politics and his particular kind of persona are very popular. I’ve also met and interviewed enough wealthy, entitled egomaniacs (though none quite as brash as Trump) to know how unvarnished they can be in certain circumstances: in small, intimate settings where everyone is loyal, or larger ones where everyone’s subordinate to them—like, for instance, the set of The Apprentice.

The odds that a racist person like Trump, someone who clearly holds black people and other minorities in deep contempt, hasn’t used that slur, or other similarly unacceptable pejoratives, has always struck me as very low. It reflects how he feels, and he just as clearly sees it as his earned right to say whatever he wants, others’ feelings be damned.

When that right is infringed upon by public opprobrium, as it has been repeatedly during the course of this campaign, Trump feels compelled to reassert it. Trump’s supporters like him for many reasons, but one is that they admire and find validation in the projected sense that past a certain level of power and success, you can be liberated from cultural constraints. Take the mask off and behave like a boor without fear of reprisal. Be unafraid.

With all we know about Trump, and all we know about why he commands such loyalty, it’d be out of character for Trump to have been conscientious, disciplined, intimidated enough to have never used the term in a public setting. That’s why the footage that surfaced Friday, while grotesque, was ultimately unsurprising. By the same token, it would’ve been out of character for him to behave contritely on Sunday night, as the leaders of his party were no doubt praying he would.

If further footage exists, it won’t reflect a momentary loss of self-possession on Trump’s part. It will be part of the greater karmic rendezvous with destiny he embarked toward when his campaign for the presidency began. With all the things—from “grab them by the pussy” to “you’d be in jail”—that he’s felt entitled to say, without consequence, his entire life. They will come to the fore only because Republicans nominated him to be presidency. And Republicans will be unable to claim innocence or feign surprise.

Article Link To The New Republic: