Thursday, November 3, 2016

Brexit Just Became Even More Complicated, Thanks to High Court

Ruling isn’t likely to lead to a blocking of Britain’s exit from the EU, but it will make it messier.

By Stephen Fidler
The Wall Street Journal
November 4, 2016

If the pound rallied after the British High Court’s ruling Thursday because investors expect Brexit to now be less likely, they will probably be disappointed. The odds are that the court’s decision, rather than ruling out Brexit, will just make it messier.

It certainly complicates the life of British Prime Minister Theresa May, and at the very least could set back her desired timetable for exiting the European Union. She has said she would start two years of negotiations over the divorce settlement, invoking Article 50 of the EU’s Lisbon Treaty by the end of March.

The government has said it would appeal the ruling to the Supreme Court, which will hear arguments in December and probably rule in January. If the top court overturns Thursday’s ruling, the way is cleared for Mrs. May’s timetable.

However, that court may want clarity on an assumption made by the High Court and by both sides in the case: that Article 50, once triggered, is irrevocable.

The High Court said because Article 50 has no reverse gear and would mean the U.K.’s inevitable exit from the EU, invoking it would take away some rights from British citizens and people living in the U.K. For that reason, Parliament would need to approve it.

The reversibility of Article 50 is, however, a matter of some dispute. European Council President Donald Tusk has said the U.K. could row back on Article 50 if it didn’t like the outcome of the negotiations.

Ironically, if the U.K.’s top court wants certainty on this, it would have to refer the matter to the European Court of Justice, the EU’s highest court, and then wait months for its adjudication. Steve Peers,a legal expert at the University of Essex, says other British courts could ask for this clarification, too.

If the U.K.’s top court upholds Thursday’s judgment, it sets in train a complicated legislative process.

The government would need to place before Parliament a draft bill that would be debated in the House of Commons and amended before going to the (unelected) House of Lords for debate and further amendment. The whole thing would then be sent back to the Commons for its final say.

A three-month timetable for this process would be ambitious, particularly if lawmakers demanded greater scrutiny about the government’s negotiating stance. Such a request would make it much tougher for Mrs. May to keep to her plan not to offer “a running commentary” on the Brexit talks.

Parliament could reject the bill, accept it or try to tie the government’s hands. While Parliament couldn’t insist on the exact shape of the final deal, since that would depend on negotiations with the rest of the EU, lawmakers might set certain conditions. These could include preserving the rights of EU citizens already in the U.K. or insisting that the government seek to minimize economic disruption.

‘I worry that betrayal may be near at hand.’—Nigel Farage, former leader of the UK Independence Party

The big question, though, is whether the large anti-Brexit majorities in both houses will defeat the bill and prevent the government from invoking Article 50 altogether. For various reasons, this is unlikely—though tight parliamentary arithmetic means it is impossible to rule out.

A taste of the reaction, were it to happen, was already evident Thursday. “I worry that betrayal may be near at hand,” Nigel Farage, the former leader of the UK Independence Party, tweeted, adding: “I now fear every attempt will be made to block or delay triggering Article 50. They have no idea [of the] level of public anger they will provoke.”

Indeed, any parliamentary decision deemed to ignore the result of the referendum—which was legally speaking only advisory—would risk provoking a political crisis.

In the Commons, members of Parliament would have to consider whether they wanted to ignore the referendum vote. If Mrs. May wanted to bring her party into line, she could make it a vote of confidence, meaning a general election would be called if she lost.

That would pose real challenges for many MPs—particularly Conservatives—who would have to seek re-election in their euroskeptic constituencies. Chris Hanretty of the University of East Anglia has calculated that majorities in 401 out of the 633 parliamentary constituencies in England, Scotland and Wales voted for Brexit.

But Mrs. May’s working majority is thin—only 15. And the House of Lords, which doesn’t face elections, could prove a thorn in her side. The most likely outcome is still Brexit, if delayed, and it will be politicians rather than lawyers who decide it. But the increased uncertainty will keep investors on their toes, and the British political system under strain.

Article Link To The Wall Street Journal:

European Stocks Seen Lower On US Election; Credit Suisse, Societe Generale Report Earnings

By Silvia Amaro
November 3, 2016

European markets should open lower on Thursday morning on continued concerns over the U.S. election, with investors also focused on the Bank of England's latest rate decision and fresh corporate earnings.

The FTSE is seen 17.5 points lower at 6,832.8, the CAC 40 is expected to open 9 points lower at 4,408.4 and the DAX should be 18.4 points lower at 10,358.6.

The U.S. Federal Reserve announced Wednesday that it was keeping its interest rate at 0.25-0.5 percent, but sent stronger signals that, unless a major event takes place before December 14, it is ready to hike rates. Anxiety among investors looms as uncertainty regarding next week's U.S. presidential becomes more evident. Polls continue to show a tight race between Hillary Clinton and Donald Trump.


On the earnings front, Vonovia, the German real estate company, presented a rise in its key profit metric of 8 percent in the first nine months of 2016.

The French bank, Societe Generale, said its revenue went up 4 percent during the third quarter, due to higher fixed income trading. However, the bank is concerned over weakness in its domestic retail business.

Credit Suisse saw net profit of 41 million Swiss francs ($42.25 million) in the third quarter of this year. The number surprised on the upside against a Reuters poll estimating a contraction of 120 million Swiss francs.

L'Oreal, Morrison, Glencore and 3i Infrastructure are due to announce their earnings throughout Thursday.

Governor Mark Carney of the Bank of England will announce the bank's latest rate decision at 12.00 London time. Thursday's monetary meeting is the first following Carney's announcement that he will continue in the job until 2019.

Thursday's calendar will also see the release of the U.K.'s PMI services figures and the euro area's unemployment rate for September.

Article Link To CNBC:

How Much Europe Do Europeans Need?

By Joschka Fischer
Project Syndicate
November 3, 2016

In his final address to the European Parliament in 1995, then-French President Fran├žois Mitterrand, whose failing health was evident to all, found the following indelible words to characterize Europe’s great scourge: “Le nationalisme, c’est la guerre!”

Nationalism and war were the defining experiences of Mitterrand’s political career, and he was referring not only to the dreadful past – the first half of the twentieth century, with its two World Wars, dictatorships, and the Holocaust. He viewed nationalism as the greatest future threat to European peace, democracy, and security.

Although nationalist war was tearing apart Yugoslavia at the time, few of those who listened to Mitterrand in Strasbourg that day could have imagined that, 21 years later, nationalism would be experiencing a Europe-wide revival. But nationalist politicians whose declared goal is to destroy Europe’s unity and peaceful integration have now won in major democratic elections and referenda.

The United Kingdom’s decision in June to leave the European Union marked a momentary climax for resurgent nationalism, but one can also see it on the march in Hungary, Poland, and France, where Marine Le Pen and her far-right National Front have been gaining strength in the run-up to next year’s presidential election. How could it have come to this, given Europe’s first-hand experience with nationalism’s destructive power in the twentieth century, when it caused millions of deaths and devastated the entire continent?

For starters, the 2008 financial crisis and ensuing global recession are widely, and justifiably, seen as a massive failure on the part of the “establishment.” Anti-elite sentiment continues to erode intra-European solidarity and mutual trust, and the EU has become mired in a prolonged bout of slow growth and high unemployment.

Across the West, a general feeling of decline has taken hold, owing to the shift in global wealth and power toward Asia. The United States has withdrawn geopolitically, while Russia has revived its great-power ambitions to challenge Western hegemony and values. Worldwide, there is growing discontent with globalization, digitization, and free trade, accompanied by a slow shift toward protectionism. Europeans, in particular, seem to have forgotten that protectionism and nationalism are inextricably linked – one cannot be had without the other.

Finally, there is a generalized fear of the unknown, as many countries confront issues relating to inflows of foreigners – whether refugees or migrants – and internal changes brought about by the increasing economic and political empowerment of women and minorities. These developments, which have coincided with the larger-scale transformations and ruptures in Europe that began in 1989, have triggered fears that establishment political parties and democratic institutions have failed to address.

As always, when fear runs rampant in Europe, people seek salvation in nationalism, isolationism, ethnic homogeneity, and nostalgia – the “good old days,” when supposedly all was well in the world. Never mind that the bloody, chaotic past was anything but perfect. Nationalist leaders and their supporters today are living in a “post-empirical” reality, where the truth and experience have no purchase.

All of this reflects a profound change in how Europeans see themselves. After two World Wars and during the Cold War, European integration was a no-brainer. But the shared understanding that unity delivers peace, prosperity, and democracy has been weakened over time by persistent crises, and it could now be lost completely unless it is reinforced by a forward-looking message.

It is absurd to think that Europe’s historic nation-states are an answer to the globalized political, economic, and technological realities of the twenty-first century. If Europeans believe that, then they must be willing to pay the price for less integration, in the form of declining prospects and new dependencies. The most important global decisions in this century will not be made democratically in Europe, but unilaterally in China or elsewhere.

Europe’s languages and cultures have a long history. But, lest we forget, its nation-states are a more recent development, especially outside of Western Europe. It would be a grave mistake to think that they represent Europe’s “end of history.” On the contrary, if the nation-state model wins out over integration, Europeans will pay a high price in this century. How European countries fare in the future is a question that can be answered only collectively, not on the basis of some individually defined national interest, as in the nineteenth century.

Moreover, with Russia, Turkey, the Middle East, and Africa nearby, Europe lives in a difficult and challenging neighborhood. It does not enjoy the American luxury of having its security guaranteed by geography. Rather, its safety and prosperity must constantly be defended through politics, which is necessarily a joint effort.

The central question for Europe’s future is how much power the EU needs in order to guarantee peace and security for its citizens. That, too, can be addressed only collectively. What is already clear is that Europeans will need not just more Europe, but also a different and more powerful Europe.

Article Link To Project Syndicate:

China's Actions Are Causing U.S. 'Militarization' Of The Pacific

Beijing’s provocative moves are increasingly threatening to key U.S. allies, causing the United States to respond.

The National Interest
November 3, 2016

Last month Asia defense analysts Nicholas Borroz and Hunter Marston argued in an op-ed in the New York Times that Washington’s excessive “focus on militarization” is “a recipe for conflict” with China in the Asia-Pacific. This provocative piece—in effect questioning a key component of the U.S. strategic rebalance, or “pivot” to Asia policy—arrives at an important time in the United States, with the presidential election only days away and every U.S. policy position seemingly up for debate and reevaluation. While their commentary headlined “Washington Should Stop Militarizing the Pacific” is timely, the reality is that the U.S. alliance structure they critique has provided regional peace and economic prosperity since the end of World War II. Until Beijing’s rising confidence caused it to challenge Washington’s position in the region, the system had existed virtually unchanged.

In 2009, China submitted its so-called “Nine-Dash Line” sovereignty claim over large swaths of the disputed South China Sea to the United Nations. The United States responded with Secretary of State Hillary Clinton’s 2010 statement on the importance of freedom of navigation and peaceful resolution of disputes in accordance with international law. Since 2010, Beijing has ignored U.S. and international calls to resolve disputes peacefully, prompting the Obama administration in 2011 to announce the strategic rebalance policy and, as part of it, to strengthen Washington’s military posture in Asia. Again, this only occurred in response to Chinese actions.

Unfortunately, China has consistently demonstrated that it has no plans to reverse or modify its behavior in the South China Sea. Beijing’s rhetoric toward neighboring countries has been particularly aggressive and threatening. For example, during the most recent meeting last month of Non-Aligned Movement (NAM) nations, Beijing—through its state-run newspaper Global Times—reprimanded Singapore for allegedly attempting to endorse the Permanent Court of Arbitration’s July ruling against China’s South China Sea claims in the NAM Summit Final Document. The editor pointedly responded to the Singaporean ambassador’s disagreement with the Global Times article by stating that “most ASEAN countries deal with the sensitive South China Sea ruling in a balanced way” and “I think Singapore should feel ashamed when you tried to trip up China, your largest trading partner.”

Singapore is a non-claimant in the South China Sea and had successfully maintained a low profile until now. Claimants, however, routinely endure threats and criticism from Beijing. For instance, a source connected with the Chinese military recently said of Vietnam—China’s most formidable neighboring claimant—that “we should go in and give them a bloody nose like Deng Xiaoping did to Vietnam in 1979.” Beijing has also consistently denigrated Manila’s decision to turn to the Permanent Court of Arbitration to settle its disputes, with Chinese Premier Li Keqiang last month referring to the recent U.N. ruling as being “null and void.” (New Philippines president Rodrigo Duterte recently said he would walk away from the ruling in favor of better ties with China).

Borroz and Marston also quickly dismiss Chinese land reclamation efforts in the South China Sea instead of more critically interpreting these activities as unilateral and threatening actions against not only neighboring countries, but also Washington’s future ability to conduct military operations in the region. According to the respected Asia Maritime Transparency Initiative, since 2013 China has created 3,200 new acres of land out of islets and reefs in the South China Sea. It has also built three runways to project Chinese air power, to include use by both fighter and bomber aircraft, in the Spratly Islands and has added radar facilities as well as the HQ-9 air defense system to its Woody Island outpost in the Paracel Islands. China also now conducts routine maritime “sovereignty” air and sea patrols throughout the region. Beijing has also demonstrated a penchant for aggressive behavior with its neighbors. Chinese fishing ships regularly try to intimidate those of other claimants. If China is left unchecked, regional allies and partners believe they would have to fend for themselves—a prospect they worry about and have conveyed privately to U.S. interlocutors.

Given such behavior, it is curious that Borroz and Marston would choose to chastise U.S. policymakers, including President Obama, for being “condescending” and “patronizing” to China. There are many instances in which Chinese interlocutors have launched into equally unproductive recriminations against U.S. policy as well. By referencing China’s negative experiences at the hands of Western and Japanese powers from 1839 to 1949 during the so-called “Century of Humiliation”—which the United States notably had minimal participation in—Borroz and Marston in effect bolster China’s victimhood narrative instead of holding Beijing accountable for its own actions. Following the arbitration announcement, for example, Beijing claimed to be a victim of international bias to explain why it had decided not to abide by the ruling, even though it is a signatory to the international law of the sea.

Borroz and Marston also appear to play into China’s victimhood narrative by submitting that the United States has recently established new defense partnerships with Vietnam and India. In the case of Vietnam, President Obama visited there in May and lifted the U.S. ban on lethal security assistance, allowing Hanoi to purchase a range of offensive weaponry. This move should not be interpreted as a new defense pact as there has been no movement toward such an understanding. The authors also seem to misinterpret the implications of India signing a military logistics deal with Washington. New Delhi is reluctant to get into any formalized—and especially high-profile—military arrangement with the United States for fear of antagonizing China, and there is no evidence that Washington seeks such an outcome. On the Indian side, the fact that New Delhi went this far suggests much more about the level of concern among Indian leaders on the seriousness of the China threat than it does about the United States trying to establish a new defense partnership. Borroz’s and Marston’s apparent exaggeration of this point would appear to encourage China’s encirclement, or “containment,” narrative.

That said, the authors’ core argument is important to consider: Would a reduced U.S. military footprint in the Asia-Pacific logically result in a less confrontational China? While it is tricky or even impossible to prove a counterfactual, at least two ongoing security situations reasonably could become worse if Washington invested less militarily in the region.

First is the status of Taiwan. Since the United States began adhering to the “One China Principle” in 1979, Washington has been exceptionally sensitive to Beijing’s wishes to not recognize Taiwanese independence. Beijing, however, continues to prioritize developing military capabilities to coerce Taipei and ultimately, if deemed required, launch an amphibious invasion to retake the island. Washington’s routine arms transfers to Taiwan and the signaling of U.S. resolve almost certainly help defend it and are almost certainly the only factors standing in the way of Chinese ambitions to rein in Taiwan by force. If resolved peacefully, the Taiwan issue would likely do much to advance the cause for U.S. demilitarization in the Pacific.

A second security situation is the ongoing China-Japan standoff over the Senkaku or Diaoyu islands in the East China Sea. Although the current conflict began with Tokyo’s nationalization of the islands in 2012, Chinese military pressure since then has been unrelenting, with Beijing declaring an air defense identification zone (ADIZ) in 2013 over the East China Sea, and Chinese air and naval patrols becoming a regular occurrence near the islands. It is difficult to envision how a reduced U.S. military presence would support peace in this context. As much as China is trying to push Japan out of these islands, it has remained cautious to avoid provoking invocation of the U.S.-Japan alliance.

Borroz and Marston are on firmer ground when they assess the second-order effects of U.S. Terminal High Altitude Area Defense (THAAD) missile deployments by the end of next year to South Korea. Although U.S. officials have strenuously argued that the objective of THAAD is to intercept missiles launched from North Korea, Beijing contends that the system could easily be aimed at China’s nuclear capabilities. Whether or not this is true, it is fair to suggest that U.S. policymakers at least consider how THAAD might prompt China to develop new capabilities or modify its nuclear behavior and the potential implications for nuclear stability.

While Borroz and Marston criticize Washington’s military activities in the region, they do not seem to propose a realistic way of transitioning U.S. policy from military to “non-military” forms of collaboration in the region. China’s actions are increasingly threatening to key U.S. allies and partners who would be left to deal with Beijing alone were the United States to reduce its military footprint. Any change in U.S. policy must be premised on concrete, measurable and genuine changes in Chinese behavior.

Vladimir Of Arabia

It's not just Syria: Russia has been quietly building power throughout the Middle East – and challenging America’s superpower status.

Foreign Policy
November 3, 2016

In his masterful account Strategy: A History, Sir Lawrence Freedman defines strategy as “the art of creating power.” This is a useful lens through which to consider one of this year’s key geopolitical trends: Russia’s return to the Middle East.

Apart from its close ties to the Syrian regime, which date back to the 1970s, Moscow has had no substantial role in the Middle East since 1972, when President Anwar Sadat kicked Soviet advisers out of Egypt.

Why return now? At a general level, it’s clear that Russian President Vladimir Putin wants to challenge the notion of a U.S.-led world order and encourage the return to a multipolar one, though there are certain self-imposed constraints on his ambitions. Although he has intervened in Georgia and Ukraine, he doesn’t seem willing to start a wider war by attacking any Eastern European states that are already members of NATO. In the Middle East, however, Putin has a theater to undermine Western influence, and to create power for himself, without the risk of triggering a war with the West.

As any demagogue knows, one way to create power out of nothing is to find a division and then exploit it. In the Middle East, the fundamental division Russia has exploited is the one between the West’s aversion to Islamists, on the one hand, and human rights abuses on the other. The conflict between these aims often produces equivocation in Western foreign policy. It also opens up political space where Russia can operate by investing in repression and discounting democracy.

Moscow unequivocally supports the current authoritarian regimes in Damascus, Cairo, and Tobruk, which it portrays as bulwarks against the spread of radical Islam. In Egypt, Putin has consistently backed President Abdel Fattah al-Sisi’s actions against the Muslim Brotherhood, for example, in the face of widespread evidence of repressive tactics by his military government. Since 2013, Russia has stepped in to provide arms to the Egyptian government, exploiting U.S. reluctance to provide military hardware that could be used for domestic political repression. Although Egypt continues to depend on much greater levels of financial support from Washington than from Moscow, this action exemplifies Russia’s strategy for exploiting any seam between the United States and its regional allies when Washington equivocates between security and human rights.

We see the same thing in Libya and Syria, where Russia does not contend with an established U.S. partner. In Syria, despite human rights atrocities by the Syrian government that have attracted Western scorn, the West has not been able to explain how getting rid of Bashar al-Assad’s regime would improve the country’s security, since that could lead to a rise in Islamist anarchy. Putin has exploited this gap by unreservedly backing Assad, leaving the West arguing for a gradual “transition” away from the Syrian president. And that further boosts the influence of Russia and Iran, the only countries with the leverage to initiate any such transition.

As for Libya, the United States is invested in the U.N.-backed Government of National Accord, based out of Tripoli, which seeks to unify a divided country. The problem is that the separatist government in Tobruk in eastern Libya, which is supported by Egypt and the United Arab Emirates, has not agreed to this merger.

Sensing an opportunity to get between the United States and two traditional allies (Egypt and the UAE), while nominally supporting the official U.N. process, Russia has funneled arms, likely via Serbia and Belarus, to the forces of Gen. Khalifa Haftar, who supports the Tobruk government. And following Haftar’s successful takeover of the oil terminals in Libya’s Sirte basin over the last two months, and his hard line against Islamist groups in Benghazi, the West currently appears to have accepted the reality — and, to an extent, the necessity — of his power and, by extension, Russia’s influence in Libya.

Much the same could be said about Putin’s surprise diplomatic volte-face toward Turkey. Again sensing an opportunity to chip away at the NATO alliance, after the attempted coup against President Recep Tayyip Erdogan in July, Putin invited the Turkish leader to Moscow. Russian sanctions imposed after the downing of a Russian fighter jet in Syria last year were lifted, and the West now has to deal with the tricky situation of a NATO member whose president’s political philosophy has more in common with Putin’s than the democratic values NATO is supposed to protect.

Though Putin has tried to insert himself into several other areas of Middle Eastern politics this year, we should not exaggerate his influence. Recall for example that the propaganda value the Russians attached to a Syria bombing raid from an Iranian base in August irritated Tehran, and the Russians were kicked off the base three days later. Likewise, Putin’s attempt to carve out a role in the Israeli-Palestinian peace process this year, which appears primarily designed to challenge the United States as the key broker, is not likely to result in any breakthrough.

So is Putin a strategic mastermind or a reckless gambler? The reality is more prosaic. Yes, Russia has made diplomatic gains this year, notably in eastern Libya and Turkey, and has propped up Assad, but this has come at serious long-term economic cost to Russia.

As any demagogue knows, the only way to maintain power generated out of nothing through division is to keep stoking the flames of perpetual conflict upon which these divisions depend. But when you make a perpetual enemy out of the West, you can’t be surprised when you seem to be perpetually on the receiving end of economic sanctions and a general wariness by Western firms to invest in your country.

It’s possible that Putin believed his actions in the Middle East would give him leverage to bargain sanctions away, despite the fact that Ukrainian and Syrian sanctions are not formally linked. But it’s more realistic to assume that Putin’s encouragement of a state of perpetual conflict with the West makes a relaxation of sanctions unlikely in the near term, especially if Hillary Clinton enters the White House. If anything, Putin has boxed Russia into a position where it must increasingly orient its economy toward China, and away from the West, which gives Beijing considerable leverage over Moscow.

It’s also important to note the role of deception and bluff in Russian strategy. This is a way of generating power out of nothing, but it’s a duplicitous kind of power that in the long run destroys one’s credibility.

Take for example Russia’s relationship with Saudi Arabia. Despite being on different sides of the Syrian civil war, Putin has managed to bring Riyadh into its diplomatic orbit through cooperation on oil policy, given how both Saudi-led OPEC states and Russia need substantially higher prices for government budgets to break even.

Moscow has voiced commitment to such cooperation, and the Saudis appear to have bought into this assurance — for without it, Russia could simply gobble up much of any market share conceded by a Saudi production cut. But Riyadh will almost certainly lose out in any such deal. Last month, Igor Sechin, the CEO of Russian state-controlled oil company Rosneft, said his company would not take part in any such cut, implicitly contradicting Putin.

Russia seems to want to get the Saudis to sign on to a deal Moscow has no real intention of supporting. But it’s hard to see how long Putin can trick them into doing the heavy lifting. In the short term, the official announcement of an OPEC-Russia oil production deal, which is expected to come this month, will temporarily lift prices. But in the long term, when the deal breaks down, as it must, it will erode Putin’s credibility with Riyadh and OPEC.

Gauging the success of Putin’s strategy really depends on the time frame: In 2016, Russia is up in the Middle East; in the longer term, the damage he has done to the Russian economy by breaking with the West will outweigh the value of an alliance with the likes of eastern Libya or even perhaps Turkey. Already battered by low oil prices, the Russian economy can hardly afford to be unplugged from Western capital markets and investment.

But maybe Russian international success is entirely the wrong way of thinking about what Putin gains from a strategy of perpetual conflict. Strategy might be the art of creating power, but the power the strategist is most interested in might be at home. Perpetual conflict abroad clearly helps rally popular support among Russians to keep Putin entrenched in the Kremlin, even as his country rots around him.

Article Link To Foreign Policy:

Pentagon Retreats On Promise To Attack Raqqa ASAP

When the defense secretary promised an assault on ISIS’s capital in ‘weeks,’ the Pentagon reacted with a collective WTF. Defense officials say an attack is more like six months off.

The Daily Beast
November 3, 2016

Defense Secretary Ash Carter’s claim last week that the assault on Raqqa, the capital of the so-called Islamic State, was “within weeks” was a surprise to the commanders planning the war, who believe local troops will not enter the city for months, three defense officials told The Daily Beast.

One official told The Daily Beast the attack on the ISIS capital could be six months away.

“The broader question of retaking Raqqa and who does that is still open and we’re gonna continue to discuss that with all of our coalition partners,” Navy Capt. Jeff Davis, a Pentagon spokesman, explained to reporters Wednesday.

The local forces needed have not all been identified, their roles have yet to be defined, the weapons and training have yet to be allocated, and the so-called Islamic State has yet to be cut off from supply lines and foreign fighter flows that allow it to build up its defensive measures, officials said.

“Weeks?!” one commander said when he first heard the weeks long timeline. “I’ve never heard anyone say that.”

Given all that, the only concrete U.S. plan so far is that in the coming weeks, U.S.-led coalition war planes will turn up strikes on the outskirts of Raqqa, softening the perimeter defenses and signaling to civilians that it’s time to flee, if they can, two senior U.S. military officials told The Daily Beast.

“You don’t necessarily have to have all these issues worked out to continue the isolation phase and advance that,” a senior military official said Wednesday. “Isolation” is a military term of art describing encircling the enemy and cutting them off from escape or resupply.

The forces the U.S. would like to meld together to take Raqqa—Kurdish and Syrian Arab fighters and Turkish forces—are at odds with each other politically and sometimes on the battlefield. While the Syrian Arabs are willing to work with the Turkish troops, the Kurds thus far are not, defense officials said. The officials spoke anonymously because they were not authorized to describe the planning for the Raqqa assault publicly.

That is, the Turks don’t want the Kurdish forces known as YPG in any Raqqa offensive. The Kurds want to trade their help in taking Raqqa for U.S. support for an eventual homeland. And the U.S. wants to defeat ISIS and is looking for viable partners on the ground to lead the assault, even ones that are foes to their NATO ally, Turkey.

For the U.S., the Kurdish YPG has proven the most effective guerilla fighting force in the region, and is partnered with U.S. special operators based in Syria who help the fighters coordinate strikes and plan operations.

And now Turkey is threatening to enter another Syrian city, al-Bab, which currently is under ISIS control, but also part of Kurdish aspirations for an autonomous region in northern Syria. The YPG would view an assault on Raqqa as secondary to keeping al-Bab out of Turkish control.

The Turks don’t want the YPG in any Raqqa offensive. The Kurds want to trade their help in taking Raqqa for U.S. support for an eventual homeland. And the U.S. wants to defeat ISIS and is looking for viable partners on the ground to lead the assault, even ones that are foes to their NATO ally, Turkey.

So far, U.S. officials have yet to reach any kind of deal with Turkey and but remain optimistic, albeit less so with each passing day.

“Nobody feels the need to take that off the table,” the official said of Turkey’s offer to take part. “There might be some role.”

Ideally, the Americans want Turkey’s support for the operation on Raqqa, but for now, would settle for their acquaintance, which to date has not been forthcoming.

“There’s a significant Arab element of the Syrian Defense Forces—a third of them—who would be willing to work with Turks,” the official added.

In addition, the U.S. military hopes to have roughly 6,000 Kurdish YPG troops positioned to cut off ISIS flight from Raqqa, a fourth senior defense official explained to The Daily Beast.

It is all part of what the U.S. military is calling the isolating and shaping campaign of the battle for Raqqa—a process that took eight months before the battle started for Mosul. Raqqa is a smaller city but could have a higher concentration of ISIS fighters.

Carter said that the Raqqa assault would begin within “weeks” and overlap with Mosul one, which appeared to be part of a messaging campaign to suggest ISIS would face a two-front war. Iraqi forces launched an offensive to take back Mosul from ISIS, on Oct. 17. On Wednesday, Iraqi forces entered the eastern edge of the city.

The premature prediction of an imminent Raqqa assault could be more about the Obama administration trying to paint its ISIS fight in the best light during the last few weeks of an election.

“I think that any administration in the last few months in office is going to try to shape their legacy and wrap up things they don’t want to leave to the next administration. It could be that Carter’s statement is linked to that desire,” Daveed Gartenstein-Ross, a senior fellow at the Washington, D.C.-based Foundation for Defense of Democracies.

But there is a risk with rushing such a campaign, even one that, if successful, would likely mark the demise of the so-called caliphate.

“The hastier your desire to enter, the uglier your allied forces will be,” Gartenstein-Ross explained.

There has already been a months-long U.S.-led coalition airstrike campaign around Raqqa, combined with a ground campaign to seize back towns and villages ISIS once controlled between Raqqa and the Syrian-Turkish border. ISIS operatives used to be able to hopscotch from their defacto capital to Turkey via safe havens it controlled, hiding from air strikes and resupplying along the way, but now there’s a buffer of no-go territory between Raqqa and Turkey, one of the officials said. The daily drumbeat of airstrikes has also cut off ISIS supply routes and oil infrastructure, and has all but destroyed its illicit oil sales, once a top source of ISIS revenue, which brought in $500 million in 2014.

Simultaneously, coalition airstrikes in Iraq have helped drive ISIS out of several Iraqi cities including Fallujah, Tikrit, Ramadi, and Hit.

In addition, strikes against leadership figures continue, as midlevel leaders expose themselves to coalition targeting as they are forced to move around the battlefield to boost the morale of increasingly embattled ISIS rank and file.

Article Link To The Daily Beast:

Is Martin Babinec The New Mike Bloomberg?

Republicans rejected Martin Babinec. Now he’s running against them.

By Patricia Murphy
The Daily Beast
November 3, 2016

When Martin Babinec heard that Rep. Richard Hanna, his congressman in Upstate New York, was retiring earlier this year, he knew this would be his chance to run for an open seat in Congress.

Babinec had grown up the son of a factory worker in Little Falls, N.Y., moved overseas to work with the Navy, and then founded TriNet, a cloud-based human resources company that grew to $2.7 billion in revenue in 2015. Six years ago, he started a non-profit to help fund start-ups in the area and keep talent, jobs, and warm bodies in the region, which has seen an out-migration of more than one million people in the last 10 years.

“When Hanna announced his retirement, I was not expecting it and I was not doing anything actively to position myself for running for office,” Babinec said, in a recent interview. “But I was aware there are opportunities to leverage the congressional role to take this mission that I’ve been on to make a difference to the next level next level.”

It would all read like a modern-day sequel to Mr. Smith Goes to Washington, except for what happened next when Babinec, a multimillionaire and hometown do-gooder, approached local Republicans to explore running for the seat.

“There were some Republicans who supported my message and welcomed my candidacy, but there were a significant number who felt that because I had been an independent voter and not a Republican that they couldn’t get behind it for the sole reason that I had not been a Republican,” Babinec said. “And that’s kind of what’s wrong with our system, where the emphasis on partisanship outweighs what’s the right message and what changes are we trying to make.”

Discouraged by Republicans, but still focused on a seat in Congress, Babinec founded the Upstate Jobs Party to run as its candidate, and now finds himself in a three-way race for the open seat, along with Democrat Kim Myers , whose family founded Dick’s Sporting Goods, and Republican Claudia Tenney, a conservative New York Assemblywoman.

A cursory glance at the $12 million spent in this race is all it takes to understand how important winning the NY-22 seat is to both parties. The Democratic House Majority PAC has pumped more than $2.5 million into the race, while the National Republican Congressional Committee has put in another $2.4 million. The Democratic Congressional Campaign Committee tapped Myers for its “Red to Blue” priority candidate program to flip GOP-held seats, while the NRCC named Tenney to its Young Guns program.

In the middle of it all, Babinec won the endorsement of the region’s major newspaper and became the only third-party candidate ever to be endorsed by the U.S. Chamber of Commerce.

The most recent Siena poll from the end of September showed Babinec trailing, but competitive with Myers and Tenney, who ran against Hanna in the 2014 GOP primary as a Tea Party-backed candidate whom Hannah has refused to endorse. Tenney was winning with 35% to Myers’ 30% and Babinec’s 24%.

Steve Greenberg, who conducted the Siena poll, describes Babinec as “not your grandfather’s third-party candidate.”

“As of a month ago, the three candidates were within 11 points of each other,” he said. “That is a legitimate three way race.”

In the sprawling district, which went for Mitt Romney with 49% in 2012 and has both Donald Trump and Sen. Chuck Schumer up by double-digits, Greenberg said the most unusual aspect of Babinec’s performance is how evenly he is drawing support from different groups. In the Siena poll, Babinec drew 22% of Democrats, 24% of Republicans, and 25% of independents. He was winning 24% of people from the southern portion of the district, 23% from the middle, and 24% from the northern portion. He polled at 23% among men and 24% of women.

“I’ve never seen something where between 22% and 25% of every party, every region, every gender are supporting a third-party candidate,” he said.

Babinec has said he would caucus with House Republicans and supports Paul Ryan for Speaker and doesn’t know who he’ll support for president, but that doesn’t mean the GOP or Democrats are giving him a free pass. NRCC Spokesman Chris Pack said, “The NRCC’s objective has always been to defend and grow our majority, and New York’s 22nd District is no exception.” The NRCC’s ads blanketing the district portray Myers and Babinec as liberals “who both support Hillary Clinton.”

Babinec has also made it into the Democratic House Majority PAC’s attack ads, which call him “too conservative” and Tenney “too sleazy.”

In a statement to the Daily Beast, DCCC spokesman Bryan Lesswing portrayed the race as, “a GOP civil war erupting between conservative candidates Martin Babinec and Claudia Tenney in New York’s 22nd congressional district,” which both Democrats and Republicans believe they will win.

Babinec said the biggest surprise has been how partisan the race has become, even for the man without major party backing. “In terms of partisanship trumping the values and quality of the message,” he said. “This is what’s wrong with our system.”

The next Siena poll will be out before Election Day. It will show whether a candidate without a party can even make a go of it in the district where he was born, who can finance his own race, and wants to serve. No matter the result, Babinec says he and his new Upstate Jobs Party are in New York politics to stay.

Article Link To The Daily Beast:

Team Hillary’s Pathetic Response To The FBI Bombshell

By Jonah Goldberg
The New York Post
November 3, 2016

The word of the weekend was “protocol.”

In deciding to tell Congress about a new trove of emails that may or may not contain classified information and may or may not relate to Hillary Clinton, FBI Director James Comey broke Justice Department protocol both by releasing information close to an election and by revealing details of an ongoing investigation. It was a “stunning breach of protocol,” former Attorney General Eric Holder dutifully insisted.

Tim Kaine invoked protocol more than a half-dozen times Sunday in his interview with ABC’s George Stephanopoulos. “It is just extremely puzzling,” the Democratic vice presidential nominee said. “Why would you break these two protocols?”

“Puzzled” was the runner-up word of the weekend; Kaine used it repeatedly, as did Clinton’s campaign manager Robby Mook. “We are so puzzled right now,” Mook told NBC’s Chuck Todd.

Well, let’s try to solve this riddle. Comey’s regrettable decision is much easier to understand once you realize it is one small piece of the larger puzzle. He made a bad choice — though probably the least bad choice of those available to him — precisely because all of the relevant actors in this sordid mess have been breaking protocol for years.

Clinton broke all kinds of protocol by setting up her stealth server and then lying about it not only in public but also, I would argue, to Congress. She broke protocol when her aides smashed phones with a hammer and erased emails — official government records — after they were subject to a congressional subpoena.

Bill Clinton broke protocol when he met with Attorney General Loretta Lynch in secret while his wife was still under investigation by the FBI. Lynch, smarting from her breach of protocol with the former president, widened the breach by refusing to recuse herself and investing instead in the FBI director the authority to decide whether or not to prosecute Hillary Clinton.

President Obama broke protocol when he told “60 Minutes” that Clinton — with whom he had corresponded over an unsecure email channel — did nothing to endanger national security long before the investigation was even concluded.

And, of course, the Democratic Party broke not a formal protocol but one hell of a rule of thumb by nominating a woman who carries more baggage than the cargo hold of the Queen Mary.

“There is a very good argument — I would say, an irrefutable argument — that Comey should never have pronounced that the Clinton emails investigation was closed (in fact, it would have been appropriate if he had made no public statement about the investigation at all),” Andrew McCarthy, a former federal prosecutor, writes in National Review. “But having made that pronouncement — which, again, Mrs. Clinton was thankful to have and which she has ceaselessly exploited — he was obliged by law-enforcement principles to amend it when it was no longer true.”

And that gets to the heart of it. Comey by his own hand, as well as with the encouragement of the Obama administration, the media and the Clinton Industrial Complex, found himself perched atop an enormous mountain of crap. Any effort to get off the fetid summit was bound to leave him soiled.

That is what Clintons do. They do not care about the breach of protocol, only the reach of protocol. Everyone should be sticklers for the rules, except the Clintons and their henchmen. That was the story of the Bill Clinton administration, from the firing of the White House travel office through the numerous money-raising scandals, the impeachment drama and the president’s disastrous last-minute pardons.

They force their allies to sell off bits and pieces of their credibility defending the indefensible, while insisting their critics are the only ones with bad motives. Already, the word has gone forth that Comey’s reputation must be destroyed to protect what’s left of Clinton’s, even though she is the author of her own travails.

We knew it was coming when Clinton said Friday night that Comey sent his letter to the “Republican members of the House.” That was a distortion. He sent it to the relevant chairs, plus the relevant ranking Democrats. But that is standard protocol in Clinton world: Destroy the messenger.

Article Link To The New York Post:

Trump The Opera

In place of a routine political endorsement, we give Trump the ultimate tribute—his own opera.

By Daniel Henninger 
The Wall Street Journal
November 3, 2016

Political endorsements are a dime a dozen. Instead, we will give Donald J. Trump the grandest tribute to his unique presidential campaign—the world premiere of “Trump the Opera.”


Trump: Donald Trump

Crooked Hillary: Hillary Clinton

Lyin’ Ted: Ted Cruz

Little Marco: Marco Rubio

Low Energy Jeb: Jeb Bush

The Director: James Comey

Huma the Maidservant: Huma Abedin

Carlos Danger: Anthony Weiner

The Trump Clan: Ivanka, Melania, Donald Jr., Eric

The Clinton Cronies: John Podesta, Cheryl Mills, Terry McAuliffe

Spear Carriers: Chris Christie, Rudy Giuliani, Billy Bush, Corey Lewandowski, Miss Universe 1996

The Mainstream Media Chorus

My Husband:
Bill Clinton (Mr. Clinton’s performance is made possible by a special gift from the Opera Society of Kazakhstan.)

Act One

Scene 1: A dining room at Trump’s Mar-a-Lago estate in Florida.

Trump, the scion of an American real-estate family, is eating dinner, seated at one end of a 60-foot-long table. At the other end is his wife, Melania. Along the sides of the table are the Trump Family—his daughter Ivanka and two older sons, Donald Jr. and Eric. Trump puts down his Big Mac and says, “I am going to be president.” Ivanka says: “Of what?” Trump, reddening, shouts: “What else? Of the United States!” Melania faints, falling to the floor.

As Donald Jr. rushes to revive Melania, a short, wiry man enters the dining room. Eric says to his father: “Who is this guy?” Trump tells the family his name is Corey Lewandowski. Trump says he found Lewandowski in New Hampshire and that he will run Trump’s presidential campaign. Revived, Melania implores her husband: “Why have you done this to me?” Trump replies: “I want to build a wall.” Trump and Lewandowski sing the moving construction duet: “A beautiful wall (Un bel muro).”

Scene 2: A Republican primary debate.

Trump stands behind a podium on a stage. On either side of him, extending to the edges of the stage, are 15 men and a woman who all say they are running for the Republican presidential nomination. The debate begins and Trump announces that he will not address anyone by their real name. Instead, he refers to them as Lyin’ Ted, Little Marco and Low Energy Jeb.

The men have heard rumors of Trump’s wrathful followers, the Trumpians, and accept Trump’s insults. Lyin’ Ted attempts to placate Trump, addressing him as “my good friend, Donald.” Trump hears this as an insult and replies that Lyin’ Ted’s father might have had something to do with the Kennedy assassination. Lyin’ Ted pulls a knife from his belt. Carly Fiorina holds on to Lyin’ Ted’s wrist and in a terrifying aria warns Trump to “beware the revenge of women (la vendetta delle donne).” Gripping the sides of his lectern, Trump vows he will never again look upon the face of Fiorina.

Act Two

Scene: An interrogation room at the FBI.

It is late Saturday afternoon. Light from the setting sun illuminates the faces of Democratic presidential candidate Crooked Hillary, the Director James Comey, and Crooked Hillary’s lawyer and confidante, Cheryl Mills. Comey asks Crooked Hillary if it is true that while she was Secretary of State, she maintained a personal email server.

Crooked Hillary replies with one of the most extended arias in the history of opera: “I do not recall (Non ricordo).” Comey asks if she used the server to discuss her daughter’s wedding. Crooked Hillary replies: “Non ricordo.”

The Director asks if she has ever heard of the Clinton Foundation. Crooked Hillary rises from the table and shrieks, in a piercing F above high C: “Non ricordo! Non ricordo!”

Mills, the confidante, leans forward and asks Comey in a low, ominous whisper if the FBI is recording their conversation. The Director says she has insulted him, smashes Mills’ laptop against the wall and orders them to leave the building.

Act Three

Scene One: An outdoor stage in Palm Beach, Florida.

Trump, beset by the vast forces of Crooked Hillary and various female accusers, has retreated to his kingdom in southern Florida. Standing before a huge throng, Trump defends himself by singing the Duke of Mantua’s aria from Verdi’s “Rigoletto”: “Questa o quella (This woman or that woman).” Trump suddenly cries out that Crooked Hillary “should be locked up!” The Trumpian chorus thunders: “Lock her up! Lock her up! (Rinchiudetela!)”

Scene Two: The basement of Crooked Hillary’s castle in Chappaqua.

It is the night before the election. Crooked Hillary, Huma the Maidservant, Carlos Danger and James Comey sit at a table on top of which is a silver chalice and small ceramic pitcher. Behind them is a mammoth pile of destroyed electronics—laptops, PCs, BlackBerrys, servers.

The Director places a document on the table and the three sign it. Carlos Danger pours white liquid from the pitcher into the chalice and all drink from it, including Comey. As the others seem to fall asleep, Crooked Hillary rises to sing her last aria: “I spent my entire life helping everyone (Tutta la mia vita).”

Final Act

Scene: A golden apartment in Trump Tower on Fifth Ave.

It is 4 a.m. on election morning. Trump is at his desk, tweeting curses and maledictions at his enemies. Trump’s consigliere, Rudolph Giuliani, enters the room and tells Trump he is still a genius. Trump tweets more curses. The Trump Family enters with Chris Christie, now returned from exile in New Jersey.

All walk out onto a balcony above Fifth Avenue, led by Trump. A crowd has filled the street below. Trump suddenly climbs onto a chair and raises his arms, as if about to jump into the crowd. Instead, Trump raises his right hand, forms his thumb and fingers into a delicate zero and sings the final aria in the 72-hour-long opera: “Believe me (Credetemi). It will be so beautiful. It’s going to be very, very beautiful. Believe me.”

Opera ends. Trump begins three days of curtain calls.

Article Link To The Wall Street Journal:

The Moral Foundations Of Trumpism

By Francis Wilkinson
The Bloomberg View
November 3, 2016

After Yale University economist Robert Shiller this week signed a letter supporting Hillary Clinton, he explained that he normally doesn't engage in politics, but that "the destruction that Trump's campaign tactics have done to the institutions of this nation is a great moral issue."

Morality and politics are complicated, even for Nobel Prize winners from the Ivy League. By many credible accounts, Donald Trump is either an extremely immoral man or an utterly amoral one. He lies habitually. He cheats spouses, partners and contractors. He humiliates women and brags of groping them. He exempts himself from civic duties others follow, bragging about his success in avoiding taxes and reneging on promises made to charities. His sprawling antipathies extend far and wide.

Despite this, tens of millions of Trump supporters consider themselves not only patriotic Americans but moral human beings, and most of their neighbors and families would no doubt concur. It's a conundrum -- good, decent people supporting a moral delinquent who subverts many of their most basic values. At the same time, many Trump supporters rage against a competent, unpopular, political operator whose most prominent flaws, including hiding her official e-mails, would not make a Trump top-10 list. They believe Hillary Clinton is an affront to their morality.

To sort through it, I returned to Jonathan Haidt's powerful 2012 book, "The Righteous Mind." I'm not sure it helped me.

Haidt used moral foundations theory to analyze the evolution of political communities and the differences between liberals and conservatives. The book is rich with evolutionary psychology, anthropology and other academic disciplines, and I apologize for simplifying it. But a key idea is that conservatives and liberals apply different moral frameworks to assess the world.

Specifically, liberals emphasize caring and fairness. Conservatives are committed to their own interpretations of those values while also placing great emphasis on authority, loyalty and sanctity, which liberals tend to discount.

When it comes to authority (the police know best), loyalty (tradition, family, community) and sanctity (traditional marriage), conservatives pretty much run the table, according to Haidt. (A sixth value, concerning liberty and oppression, has multiple liberal and conservative valences.)

These "moral matrices," as Haidt calls them, help us sort through political affinities. But they're highly adaptable. Some people care deeply about helping Syrian refugees. Others care equally deeply about the fate of fetuses in the womb. These caring people usually don't have a political identity in common.

In Nazi Germany, it was "fair" to wreak vengeance on Jews because, in the Nazi imagination, they deserved it. The U.S. is not Germany circa 1938, and the Trump campaign is not a Nazi enterprise. But in 2016 America, the Ku Klux Klan and American Nazis support Trump in part out of "loyalty" to their white tribe.

Morality is easily perverted. That's why norms are so important. They help us distinguish between the loyalty of mobsters who commit murder together and the loyalty of parents who raise children together. Norms police behavior; they keep us coloring inside the lines. Once those lines are crossed, norms become more difficult to safeguard and maintain, and society risks losing important moral contours.

Trump's contempt for norms is not new, or exclusively political. He engaged in flagrantly unfair business practices, refusing to pay small contractors for their work because he was rich enough, and bully enough, to cheat them. For decades he trampled both liberal and conservative notions of sanctity. (Is there any corner of the culture war where it's OK to call your daughter "a piece"?)

Trump's pitch is that he must break eggs -- dispense with "political correctness" -- to impose order on a political culture spinning out of control. He'll reassert traditional sexual and racial hierarchies while imposing a gruff authoritarian discipline on national politics and restoring the lost economy of the mid-20th century.

It requires a certain psychological and cultural disposition to find this fantasy appealing. Few Trump voters are latter-day brown shirts, spreading anti-Semitism, or pummeling protesters. Most are simply engaged in a familiar bargain with themselves, in which they regulate their perceptions, and recalibrate their values, to meet larger needs.

Bernie Sanders supporters who once bitterly resented the insider political culture of Hillary Clinton but now support her are perhaps treading similar terrain. Many Sanders supporters are angry, like Trump supporters. They resent elites. They feel threatened by the global economic order. But they don't share the Trumpian fear of domestic cultural change. They are not reactionaries.

"Once you see yourself as part of a group that’s in some sense threatened, your moral compass adjusts accordingly, and things that seem abhorrent to people outside of your group can seem good and true to you," e-mailed Robert Wright, author of "The Moral Animal" and "Nonzero," probing studies of evolutionary psychology and the development of human societies. "Trump promises to vanquish the threat, so he seems good from within the group; he’s judged leniently, while people seen as part of the threat are judged harshly. This is unfortunately how the mind works, and pretty much all of us have exemplified the problem at one point or another. That we don’t realize we’ve exemplified it is just testament to how subtly and effectively the machinery works."

Again, that's true for liberals as much as conservatives. But it's conservatives who feel most threatened these days, as demographic and cultural change tests their racial tolerance, traditional values and very concept of America. It's hardly a coincidence that a white male candidate steeped in racist and sexist language and conduct is running against the first female major-party nominee, or following the first black president. Trump is the embodiment of reaction.

Under cultural threat, conservatives have been making stark departures from longstanding political norms -- suppressing the votes of people who disagree with them, deliberately promoting government waste and dysfunction -- that they might find abhorrent under less stressful circumstances.

Trump arguably represents the most egregious break from political norms yet. He is a wildly dangerous and unstable figure, which is why many fellow Republicans have declared him beyond the pale. For some, denouncing Trump was a political decision. For most, however, it appears to have been made on grounds of national security, morality or both, which required refuting an evolving, adaptive moral narrative spun by conservative allies.

Win or lose, Trump will receive tens of millions of votes next Tuesday. His tally will be analyzed for its political content. But it will also represent the latest push in moral relativism sweeping conservative America and, as Shiller perceived, threatening vital American institutions.

Once a system has become sufficiently elastic to accommodate, rationalize and even champion a Trump, there's no telling where the boundaries move next.

Article Link To The Bloomberg View:

Hillary Won’t Survive Another WikiLeaks Dump

By John Crudele
The New York Post
November 3, 2016

The stock market has been pouting about Trump’s recent surge in the polls for a week.

This is going to be a helluva finish, so let me recap some of my predictions for those of you who aren’t binge - following this election.

I said it a long time ago and I will say it again that I think that Hillary Clinton will be unelectable by Election Day.

And I’ll repeat some other things I said.

The Democrats made a big mistake when they picked Clinton as their candidate, because too many people knew too much about her.

FBI Director James Comey did the Democrats — not the Republicans — a big disservice last summer by not coming down harder on Clinton.

If Comey had brought down the hammer, the Dems could have switched candidates.

And, I said, Clinton was being set up for an ambush by someone connected with the Russians who had hacked her personal e-mails. (Her password was stolen, my sources tell me, when she was traveling to Russia as secretary of state.)

Many of you may think that Comey’s decision to reopen the e-mail investigation was the ambush I was predicting.

No, the ambush I am expecting has to do with the release of Clinton’s own e-mails in Phase 3 of the leaks.

If I had to guess, the newest releases will contain Hillary Clinton’s personal stuff. Unless WikiLeaks is lying, Phase 3 should come before the weekend. Only then will Clinton be unelectable.

Article Link To The New York Post:

ISIS Leader Confident Of Victory In First Message About Mosul Battle

By Mostafa Hashem and Ahmed Tolba 
November 3, 2016

Islamic State leader Abu Bakr al-Baghdadi expressed confidence in victory, in his first message after U.S.-backed Iraqi forces started an offensive to take back Mosul, the last major city under control of his group in Iraq.

He also called on Islamic State fighters to invade Turkey.

"This raging battle and total war, and the great jihad that the state of Islam is fighting today only increases our firm belief, God willing, and our conviction that all this is a prelude to victory," he said in an audio recording released online by supporters on Thursday.

The authenticity of the 31-minute-long recording could not be verified.

The previous message purportedly coming from Baghdadi was from December 2015, an audio recording that reassured followers and supporters that airstrikes by Russia and the U.S.-led coalition had failed to weaken the group in Syria.

Baghdadi, an Iraqi whose real name is Ibrahim al-Samarrai, called on the population of Mosul's Nineveh province ``not to weaken in the jihad'' against the "enemies of God."

He also called on the group's suicide fighters to "turn the nights of the unbelievers into days, to wreak havoc in their land and make their blood flow as rivers."

The battle that started on Oct. 17 with air and ground support from a U.S.-led coalition is shaping up as the largest in Iraq since the U.S.-led invasion of 2003.

Mosul still has a population of 1.5 million people, much more than any of the other cities captured by Islamic State two years ago in Iraq and neighboring Syria.

Baghdadi told Islamic State's fighters to ``unleash the fire of their anger'' on Turkish troops fighting them in Syria, and to take the battle into Turkey.

``Turkey today entered your range of action and the aim of your jihad ... invade it and turn its safety into fear.''

Islamic State has been retreating since last year in both Iraq and Syria, in the face of a myriad of different forces.

In Iraq, it is fighting U.S.-backed Iraqi government and Kurdish forces, and Iranian-backed Iraqi Shi'ite militias.

In Syria, it is fighting Turkish-backed Syrian rebels opposed to Syrian President Bashar al-Assad, U.S.-backed Kurdish fighters as well as Russian- and Iranian-backed Syrian army units loyal to Assad and foreign Shi'ite militias.

Baghdadi told his followers to launch ``attack after attack'' in Saudi Arabia, targeting security forces, government officials, members of the ruling Al Saud family and media outlets, for ``siding with the infidel nations in the war on Islam and the Sunna (Sunni Muslims) in Iraq and Syria.''

Islamic State's leader also said ``the caliphate was not affected'' by the death of some of its senior commanders, mentioning Abu Muhammad al-Adnani and Abu Muhammad al-Furqan, both killed earlier this year in U.S. airstrikes.

Article Link To Reuters:

Thursday, November 3, Morning Global Market Roundup: Asia Stocks, Dollar Slip Amid U.S. Election Tension

By Wayne Cole
November 3, 2016

Asia shares joined the U.S. dollar on the defensive on Thursday as the nail-biting U.S. presidential race saw the S&P 500 suffer its longest losing streak in five years as investors sailed to safer harbors.

Tensions were aggravated by media reports that some agents at the FBI had wanted to press ahead with an investigation of the Clinton Foundation, but senior officials at the agency and at the Justice Department did not think much of the evidence.

Dealers said Asian markets were reacting with caution to the reports, but there was some precautionary selling of dollars.

The U.S. currency slipped 0.5 percent to 102.75 yen JPY=, while the euro edged up 0.2 percent to $1.1116 EUR=.

The dollar in turn added 0.5 percent on the Mexican peso MXN=, which acts as a bellwether for investor angst over the risk of a victory by Republican Donald Trump. Trump's radical positions on Mexican migration and trade could severely disadvantage the U.S's southern neighbor if he wins.

Sovereign bonds, gold and Swiss franc were also in favor, and even the prospect of a December rate increase from the Federal Reserve could not steady the dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.3 percent, while South Korea .KS11 eased 0.2 percent. Shanghai .SSEC added 0.3 percent.

Emini futures for the S&P 500 ESc1 slipped 0.3 percent, while Treasury bond futures gained <)#TY:>.

Tokyo markets were closed for a holiday, which was likely just as well as the Nikkei .N225 would have been hard pressed by the rising yen.

Narrowing polls had already led markets to price in more risk that Trump might defeat his Democratic rival Hillary Clinton, perhaps remembering the turmoil that followed the surprise Brexit vote.

An average of polls compiled by the RealClearPolitics website showed Clinton just 1.7 percent ahead of Trump nationally on Wednesday. A Reuters/Ipsos daily tracking poll released late the same day showed Clinton ahead by 6 percentage points among likely voters.

Investors generally view Clinton as a known quantity, but there is deep uncertainty about what a Trump win might mean for U.S. economic policy, free trade and geopolitics.

"We are not quite at the point where we need to think about canned food and underground wood bunkers, but we are being schooled in understanding the dynamics politics plays on financial markets," said Chris Weston, chief market strategist at broker IG Research.

"Despite all the thoughts about central bank policy changes, improving inflation trends and ever-changing economics, politics dominates markets above all else."

Slow Motion Fed

The baleful effect was all too apparent on Wall Street where the Dow .DJI ended Wednesday down 0.43 percent. The S&P 500 .SPX lost 0.65 percent and the Nasdaq .IXIC 0.93 percent.

Another session of losses for the S&P would match the record for consecutive down days set in 2008.

Politics also overshadowed the Fed's November policy meeting where it kept rates steady as expected and opened the door a little wider to a rate rise next month.

"Barring a shock to the global economy and/or upheaval in financial markets, we continue to anticipate a 25 basis point rate hike at the 14 December meeting," said Peter Dragicevich, a senior currency and rates strategist at CBA.

"We, and the FOMC, are looking for the tightening cycle to continue to be slow and limited," he added, predicting just two more rate increases over 2017.

In commodity markets, spot gold XAU= was firm at $1,302.66 an ounce, having hit its highest since Oct. 4.

Oil pared some losses after sliding on Wednesday when data showed weekly U.S. crude inventories rose 14.4 million barrels, far above forecasts.

Helped by the weaker dollar, U.S. West Texas Intermediate crude CLc1 bounced 45 cents to $45.79 a barrel, though that followed a near 3 percent drop overnight. Brent LCOc1 added 58 cents to $47.44.

Article Link To Reuters:

Weaker Dollar Lifts Oil Prices From Five-Week Low

By Mark Tay
November 3, 2016

Crude oil prices rose on Thursday as a weaker U.S. dollar buoyed sentiment in the market, lifting prices from five-week lows.

Brent crude was trading up 55 cents, or 1.2 percent, at $47.41 a barrel after touching a five-week low at $46.46 in the previous session.

U.S. West Texas Intermediate (WTI) crude was up 50 cents, or 1.1 percent, at $45.84 per barrel.

The U.S. dollar index slipped for a third session in a row on Thursday and was down 0.09 percent on concerns over the outcome of next week's U.S. presidential election. A weak dollar makes dollar-denominated oil less costly for importing countries.

The weaker dollar provided the market with some reprieve even as crude prices fell to five-week lows in the previous session as U.S. crude oil stockpiles soared more than 14 million barrels last week, the largest weekly build since the U.S. Energy Information Administration started keeping records in 1982.

Concerns over supply disruptions in Nigeria also supported prices as militants in Nigeria's southern Niger Delta oil hub attacked a pipeline operated by the Nigerian National Petroleum Corporation on Wednesday.

"The market is always a little sensitive to (news about supply disruptions)," said Ric Spooner, chief market analyst at CMC Markets.

Article Link To Reuters:

Cubs Win The World Series Over Cleveland, 8-7!

Target's Leadership Shakeup Continues, Grocery Chief Steps Down

By Nandita Bose 
November 3, 2016

Target Corp (TGT.N) said on Wednesday its grocery chief is stepping down, as the retailer struggles to overhaul a key business and attract more shoppers to visit its grocery aisles.

Anne Dament will leave the company on Nov. 18, less than eighteen months after she was appointed and tasked with turning around the grocery business, which accounts for a fifth or about $18.5 billion of Target's overall sales.

This is the third high-profile exit at Target in less than four months. In September, the Minneapolis-based retailer's chief digital officer Jason Goldberger left the company, a month after Target's chief marketing officer Jeff Jones left to join Uber Technologies [UBER.UL].

Revamping the grocery business and making the sixth-largest U.S. retailer a more compelling destination for groceries has been a key priority for Chief Executive Brian Cornell who took over in 2014.

Since then Target has added more healthy, organic and gluten-free items in an effort to attract millennial shoppers, improved its store design and made leadership changes in the business.

But despite these efforts, grocery sales during the second quarter fell with Target reporting its first quarterly drop in comparable sales in two years. The company lowered its forecast for the rest of the year, saying it expects sales to be flat to down 2 percent in the two remaining quarters.

Target's sales have suffered as shoppers increasingly use online retailers such as Inc (AMZN.O) and focus their spending on big-ticket items like cars and home renovations rather than small discretionary purchases.

Target spokeswoman Katie Boylan said the retailer will conduct a "comprehensive search" both internally and externally for Dament's replacement.

Article Link To Reuters:

Aging Pipelines Raise Concerns

Building new systems has become harder amid opposition from landowners and environmental groups.

By Alison Sider and Nicole Friedman
The Wall Street Journal
November 3, 2016

More than 60% of U.S. fuel pipelines were built before 1970, according to federal figures. Recent disruptions on Colonial Pipeline Co.’s fuel artery running up the East Coast show why some energy observers worry that this is a problem.

The pipeline, which began operating fully in 1964, was partially shut down for nearly two weeks in September. Fuel prices spiked throughout the Southeast, rising more than 20 cents a gallon in places like Atlanta.

Motorists this week began to worry again after the company’s main gasoline pipeline, which supplies about a third of the gas consumed on the East Coast, was shut down. It was struck by construction equipment Monday, killing one person and injuring several others.

The company has said the 5,500-mile pipeline, which runs from Houston to New Jersey and serves 13 states, could restart as soon as Saturday, though as of Wednesday afternoon the pipeline was still on fire. Gasoline futures fell 2.4%, to $1.4479 a gallon, on the New York Mercantile Exchange Wednesday after rising as much as 15% following the Colonial explosion.

Colonial isn’t the only major pipeline constructed decades ago. That includes a 3,000-mile fuel pipeline that first opened in 1956 and serves California, Texas and five other states. Another system that now carries fuel more than 1,800 miles from the Gulf Coast to the Chicago area opened in 1971.

Building pipelines has become harder amid opposition from landowners and environmental groups concerned about pipeline safety and stemming fossil-fuel development. Kinder Morgan Inc.had plans to build a new fuel pipeline from South Carolina to Jacksonville, Fla., by 2017. But it shelved the project after running into opposition, including legislation in Georgia aimed at keeping it from being built.

Carl Weimer, executive director of the advocacy group Pipeline Safety Trust, said fuel pipeline systems can operate safely for decades if they are well maintained. But after 40 or 50 years, problems like corrosion increase. “Clearly, operators don’t have a complete handle on how to operate these older pipelines,” Mr. Weimer said, referring to maintenance issues that get harder as systems age.

Companies, industry groups and even regulators have said that with advances in pipeline monitoring and repair techniques, as well as regular maintenance and inspection, pipelines can last a long time.

Colonial’s pipeline carries more than 100 million gallons of fuel a day. Its role as a critical link between refiners on the Gulf Coast and consumers up and down the Atlantic Coast means that any problem on the pipeline can have an outsize impact on fuel supplies and prices at the pump.

Most other regions that rely on pipelines to deliver fuel from far-flung refiners are located near a second system that could deliver fuel as a fallback.

“If a pipeline from Los Angeles to Las Vegas goes down, there’s some capability to supply Las Vegas from Salt Lake City,” said David Hackett, president of consulting firm Stillwater Associates.

Colonial Pipeline has spent more than $95 million on an upgrade that has allowed the pipeline to carry more than 200,000 additional barrels a day since 2011. But the company would need to expand its capacity by another 300,000 to 500,000 barrels a day to meet demand, Chief Financial Officer Dave Doudna said in a 2015 interview. He said that would require a new pipeline, which would cost more than a billion dollars and face large regulatory hurdles.

“The permitting process takes a long time, the cost to build is expensive. And what you end up finding is that customers aren’t willing, or have not been willing to commit, for a period of 10 to 15 years,” he said. “I would say a lot of it is the regulatory environment we’re living in today.”

Finding customers to underwrite the cost of a big investment like a pipeline is a challenge for the infrastructure industry broadly, said Rob Thummel, portfolio manager for energy-focused asset manager Tortoise Capital Advisors.

In places like the Northeast, which can also take in fuel from overseas or waterborne shipments from the Gulf Coast in a pinch, customers aren’t always willing to lock in long-term contracts. Some customers worry that demand will change in the coming years or imports could become more attractive.

“It’s not just, ‘Build it and they will come,’ ” he said. “You need a committed partner who is committed to pay the toll, not just for a year or two, but at least 10 years.”

By contrast, more than 20,000 miles of new crude-oil pipelines have been built in the past decade, and natural-gas pipeline infrastructure has expanded as well, as production from U.S. shale formations increased rapidly, though these projects are also facing opposition.

But the pipes that carry gasoline, diesel and other fuels haven’t experienced the same growth, because fuel demand isn’t rising everywhere and because some run through more populated areas than where crude is drilled and face more public resistance.

Article Link To The Wall Street Journal:

Fitbit Forecasts Dismal Holiday Quarter, Shares Sink

By Laharee Chatterjee and Arunima Banerjee
November 3, 2016

Wearable fitness device maker Fitbit Inc's (FIT.N) revenue forecast for the key-holiday shopping quarter fell well below of analysts' estimates, hurt by soft demand and production issues related to its new Flex 2 wristband.

Shares of the company, which also reported lower-than-expected quarterly revenue, plummeted more than 30 percent in extended trading on Wednesday and were set to hit record-low levels on Thursday.

Fitbit forecast revenue of $725 million to $750 million for the October-December quarter. That was well below analysts' average estimate of $985.1 million, according to Thomson Reuters I/B/E/S.

The forecast implies revenue growth of 5.4 percent at the top end. Analysts were expecting growth to pick up to 38.4 percent from the 23.1 percent in the latest third quarter, which is the smallest rise since the company went public in June 2015.

"We continue to grow and are profitable, however, not at the pace previously expected," Chief Executive James Park said.

Fitbit's transition to its newer products, greater-than-anticipated softness in the wearables market and production issues with the new Flex 2 wristband were the chief causes for the weak outlook, Chief Financial Officer Bill Zerella told Reuters.

The production issue – Fitbit found it "incredibly difficult" to find small-enough batteries to fit – started in the third quarter and is not expected to be resolved before the end of December, Zerella said. He estimated that hit Fitbit's revenue forecast by about $50 million.

Fitbit is the leader in the fast-growing wearable devices market, according to research firm IDC. The company expects worldwide shipments of such devices to rise 29 percent in 2016 and more than double by 2020.

But, Fitbit's top position is under increasing threat from rivals such as Apple Inc (AAPL.O), Samsung Electronics (005930.KS), Xiaomi and Garmin Ltd (GRMN.O), whose devices have features that rival those in Fitbit's devices.

"Fitbit's destiny isn't completely within their control. Unless companies find a way to get a mass market of consumers to put … devices on their wrist, there's a limited upside there," said Forrester analyst Julie Ask.

While Fitbit's revenue growth has been slowing, it had topped analysts' estimates in its five quarters as a public company. That streak ended in the latest third quarter.

Fitbit, which launched two new fitness wristbands, Charge 2 and Flex 2, in late August, said it sold 5.3 million devices in the quarter, edging past analysts average estimates of 5 million, according to research firm FactSet StreetAccount.

However, the average selling price for its devices fell to $93 from $99 in the prior quarter, and missed analysts average estimate of $98.25, according to FactSet StreetAccount.

That meant Fitbit's total revenue of $503.8 million missed analysts average estimate of $506.9 million.

Revenue in its Asia Pacific market plummeted 45.1 percent to $35.7 million as sales partners continued to work their way through existing inventory of Fitbit devices.

Operating expenses jumped 52.4 percent, largely due to higher research and development costs. The company's net income plunged about 75 percent to $26.1 million.

Article Link To Reuters: