Thursday, June 15, 2017

Thursday, June 15, Morning Global Market Roundup: Global Stocks Pressured By Report On Trump Probe, Fed Hike, Soft U.S. Data

By Hideyuki Sano
June 15, 2017

U.S. stock futures and Asian shares slid on Thursday, hit by soft U.S. economic data, a relatively hawkish Federal Reserve and a media report that U.S. President Donald Trump is being investigated by a special counsel for possible obstruction of justice.

S&P mini futures dipped as much as 0.3 percent, while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7 percent, led by resource shares.

Japan's Nikkei fell 0.3 percent.

European shares were expected to get off to a tentative start, with spread-betters looking at a flat open in Germany's DAX and a 0.1 percent fall in Britain's FTSE.

The Federal Reserve raised interest rates as expected on Wednesday and gave a first clear outline on its plan to reduce its $4.2-trillion portfolio of bonds.

Fed Chair Janet Yellen said the process could start "relatively soon", while projections of the Fed board members also showed they expect one more rate hike by the end of year.

A majority of Wall Street's top banks now expect the Fed to start reducing re-investment in bonds in September, compared to their previous median forecast of such a move in December.

Yet the Fed's decision and confidence in continued U.S. economic growth was over-shadowed by surprisingly weak data released earlier in the day.

"The Federal Reserve was a little bit more hawkish than market expectations. They are following up on their plan outlined in March even as inflation has fallen short of forecast for three months in a row," said Tomoaki Shishido, senior economist at Nomura Securities.

Consumer prices unexpectedly fell on month in May and the annual increase in core CPI slipped to 1.7 percent, the smallest rise since May 2015, after advancing 1.9 percent in April.

Investors' inflation expectations gauged by the spread between the 10-year inflation-linked bonds and conventional bonds fell to 1.726 percent, completely wiping out its rise since the U.S. presidential election.

Retail sales fell 0.3 percent last month - the largest fall since January 2016 and way below economists' expectations for a 0.1 percent gain - amid declining purchases of motor vehicles and discretionary spending.

Risk sentiment was also hit by fear of more U.S. political turmoil after the Washington Post reported that Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.

Mueller is investigating alleged Russian interference in the 2016 U.S. presidential election and possible collusion with the Trump campaign. Trump's legal team denounced the report.

The news came just after the No. 3 Republican in the House of Representatives, Steve Scalise, was shot by a gunman angry with Trump and other Republicans. Scalise was listed in critical condition.

The weak U.S. data had knocked the dollar and U.S. bond yields to its lowest level in seven months against a basket of currencies.

The dollar index was little changed on Thursday after sliding to as low as 96.323 on Wednesday, having shed nearly 6 percent on the year, before bouncing back a tad on the Fed's policy tightening.

The euro traded at $1.1220, after scaling a seven-month high of $1.1296. The dollar fetched 109.54 yen, not far from Wednesday's eight-week low of 108.81 yen.

The 10-year U.S. Treasuries yield had slipped to as low as 2.103 percent and last stood at 2.134 percent.

"You cannot help the impression that there is a gap between the Fed's bullish inflation forecast and the weakness in actual data," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

"The Fed seems to think the weakness is temporary. But that view will be tested in coming months," he added.

Money market instruments such as Fed fund futures show market players see the likelihood of one more rate hike this year as less than 50 percent.

Following the Fed's rate hike, China's central bank left interest rates for open market operations unchanged on Thursday, unlike in March when it lifted short-term interest rates in what economists said was a bid to stave off capital outflows and further depreciation pressure on the yuan.

Analysts had been split on whether China would follow the Fed again, noting the yuan is in much better shape than a few months ago after authorities' recent moves to flush out depreciation bets against the currency.

The yuan held stable in early trade, trading at 6.7854 per dollar in the offshore trade.

The British pound stood little changed at $1.2746 ahead of the Bank of England's policy meeting that is widely expected to keep interest rates on hold.

Crude oil prices were listless after having slumped nearly 4 percent to their lowest close in seven months on Wednesday, on an unexpected large build in gasoline inventories.

Brent crude futures fetched $46.83 per barrel in late Asian trade, flat on the day but not far from a five-month low of $46.64 touched in early May.

Many other commodity prices are also under pressure. Thomson Reuters CRB index tumbled to 14-month lows, having fallen almost 12 percent from this year's high hit in January.

Article Link To Reuters:

Qatar Signs $12 Billion Deal To Buy F-15 Jets From U.S.

By Ankit Ajmera And Mike Stone
June 15, 2017

Qatar's Ministry of Defense said on Wednesday the country signed a deal to buy F-15 fighter jets from the United States for $12 billion.

The deal was completed despite the Gulf country being criticized recently by U.S. President Donald Trump for supporting terrorism.

U.S. Defense Secretary Jim Mattis and representatives from Qatar were set to meet Wednesday to seal the agreement, a source familiar with the deal told Reuters. Bloomberg News reported the deal was for 36 jets.

The sale will increase security cooperation and interoperability between the U.S. and Qatar, the Pentagon said in an emailed statement on Wednesday.

Defense Secretary Mattis and Qatari Minister of State for Defense Affairs Khalid al-Attiyah also discussed the current state of operations against the ISIS and the importance of de-escalating tensions so all partners in the gulf region can focus on next steps in meeting common goals, the Pentagon added.

In November, the United States approved possible sale of up to 72 F-15QA aircraft to Qatar for $21.1 billion. Boeing Co is the prime contractor on the fighter jet sale to the Middle East nation.

Boeing declined to comment.

Trump on Friday accused Qatar of being a "high-level" sponsor of terrorism, potentially hindering the U.S. Department of State's efforts to ease heightening tensions and a blockade of the Gulf nation by Arab states and others.

Article Link To Reuters:

Oil Prices Struggle On Doubts OPEC Can Rein In Oversupply

By Henning Gloystein 
June 15, 2017

Oil prices wallowed near their lowest levels in seven months early on Thursday, hurt by high global inventories and doubts over OPEC's ability to implement production cuts.

Brent crude futures were at $47.01 per barrel, virtually steady after slumping nearly 4 percent in the previous session.

U.S. West Texas Intermediate (WTI) crude futures were at $44.70 per barrel, also little changed from their last close.

Both benchmarks are hovering near levels last reached in late November last year when production cuts led by the Petroleum Exporting Countries (OPEC) were first announced in an effort to prop up prices.

"For OPEC, an oversupply headache became a migraine," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

Brent and WTI are down some 12 percent since their opens on May 25, when the agreement to cut was extended to the end of the first quarter next year, instead of expiring this month as initially planned.

"OPEC 2017 year-to-date exports are only down by 0.3 million barrels per day (bpd) from the October 2016 baseline," analysts at AB Bernstein said in a note to clients.

OPEC's pledge was to cut some 1.2 million bpd, while other producers including Russia would bring the total reduction to almost 1.8 million bpd.

However, some OPEC members including Nigeria and Libya have been exempt from cutting, and their rising output undermines efforts led by Saudi Arabia.

Meanwhile, production in the United States - which is not participating in the deal - has jumped by more than 10 percent over the past year to 9.33 million bpd.

"Production growth in Libya and Nigeria and continued rig additions in U.S. are complicating the picture, raising doubts on OPEC's strategy. For OECD inventories to return to the normalized levels, OPEC needs to drain by 34 million barrels a month or 1 million barrels for the next 10 months. This looks challenging," AB Bernstein said.

The International Energy Agency (IEA) said this week that oil supplies next year would still outpace demand despite consumption hitting 100 million bpd for the first time.

Article Link To Reuters:

As Oil Tanks, Saudi Arabia's Next Effort To Boost Prices May Be Targeting US Oil Inventory Data

-- Saudi Arabia and other producers are frustrated that growing U.S. production is hurting the oil market.
-- Saudi Arabia is said to be considering holding back exports into the U.S. in July.
-- Reduced exports would show up in weekly U.S. government data and send a bullish signal to the market.

By Patti Domm 
June 15, 2017

The unrelenting slide in crude prices is pressuring Saudi Arabia and other major oil producers, and their next tactic may be to try to reduce the highly visible U.S. oil inventories.

U.S. weekly inventory data is perhaps the most frequent and visible source of oil storage data, showing U.S. inventories and a whole range of other data, including imports, exports and U.S. production.

Saudi Arabia, which has a large refinery on the U.S. Gulf Coast, was reported this week to be planning to hold back some exports to the U.S. in July. That could show up immediately in the U.S. Energy Information Administration's import data and inventories as a bullish signal.

"I think their next plan of attack is to drop exports to the U.S. so they can manufacture a drop in the EIA report," said John Kilduff of Again Capital. "It will make it look like inventories are really coming down."

Of the 8 million barrels a day imported into the U.S. last week, Saudi Arabia probably supplied about 1 million barrels a day, said Kilduff. He said that could come down by 100,000 to 250,000 barrels a day.

"The Saudis understand the importance of changing optics in the U.S. and are following it up by continuing to signal that they are going to reduce shipments into the U.S.," said Helima Croft, global head of commodities strategy at RBC. She said Saudi Arabia's energy minister has made clear that reducing U.S. shipments was an option.

"It's a good time to reduce because they're going into seasonal domestic demand swings," said Croft. Saudi Arabia uses more oil domestically during the summer months for its utilities.

Oil prices cratered Wednesday, falling to a five-week low, after the EIA report showed a smaller-than-expected draw of 1.7 million barrels of crude but a bearish build in gasoline stockpiles of 2.1 million barrels. Brent fell 3.7 percent to just under $47 per barrel, and U.S. crude West Texas Intermediate futures dropped 3.8 percent, falling below the key $45 per barrel level.

Crude has been under pressure also this week after OPEC reported ramped-up supplies from Libya and Nigeria, while OPEC and Russia recently sealed a deal to extend their 1.8 million barrels a day in production cuts for another nine months.

"Libya and Nigeria popped up, but at what point is the market's focus? They're more focused on the U.S. What's hanging over this market is that the U.S. will continue to overwhelm everything," Croft said.

"Everybody keeps saying it's OPEC's fault, but ... which producer just pumped up production?" Croft said. U.S. production has been growing and increased in the last week to 9.3 million barrels a day from 9.2 million the week earlier.

The International Energy Agency says non-OPEC supply should grow by 660,000 barrels a day this year but will more than double that by increasing 1.5 million barrels a day next year, outstripping demand growth.

The targeting of U.S. inventories is not a surprise, as OPEC has said that traders look too much at U.S. data and that global inventories have been coming down.

"The U.S. numbers are more available than most other numbers, so sending less to the U.S., it probably helps the optics of this. But ultimately whether or not they're shifting supply between the U.S. and Asia. Let's say inventory drawdowns, even outside of the U.S., should start to take physical effect on the market," said Eric Lee, Citigroup energy analyst.

The next level to test could be $40.

Lee said he expects inventories to continue to draw and $40 is unlikely. "If you did see $40 oil, that would suggest customers would draw even more than they were going to draw and that means a bigger snap-up later this year. In terms of $40 oil over the next three years, I see more of a fundamental basis for that."

Article Link To CNBC:

Blame Gasoline For Oil’s Drop To The Lowest Level Of The Year

Gasoline demand over past 4 weeks down 1.2% vs. year ago.

By Myra P. Saefong
June 15, 2017

Gasoline led the drop in the oil complex Wednesday as traders fretted over weak demand and an unexpected rise in weekly supplies of the fuel during the summer driving season.

U.S. inventories of motor gasoline rose by 2.1 million barrels for the week ended June 9, as supplies of crude oil fell by 1.7 million barrels, the Energy Information Administration reported Wednesday.

The rise for gasoline stockpiles contradicted expectations for a decline of between 500,000 barrels and 1.5 million barrels forecast by Citi Futures—and the decline for crude supply was smaller than expectations for a 2 million- to 3 million-barrel fall.

July gasoline RBN7, +0.28% was down 4.2% at $1.437 a gallon on the New York Mercantile Exchange, while July West Texas Intermediate crude CLN7, -0.13% lost 3.8% to $44.70 a barrel. Prices for both contracts were set to end the session at their lowest levels since November.

The EIA also reported that motor gasoline product supplied, an indicator for demand, averaged more than 9.5 million barrels a day over the last four weeks. That’s down 1.2% from the same time a year ago.

“Demand for gasoline is weaker than one would expect given that the national average [price] is lower than a year ago,” Patrick DeHaan, senior petroleum analyst at GasBuddy, told MarketWatch. Some of last year’s readings inched closer to implied demand of 10 million barrels a day, he said.

The weak demand comes despite the fact that the market is in the middle of the summer driving season, which began on Memorial Day—more than two weeks ago.

“I still believe we’ll have some record-breaking weeks for driving season demand but as I’ve stressed before, the peak driving season is clustered in 10 weeks between late June and Labor Day weekend,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service.

He said that U.S. refinery inputs hit a record last week, with the amount of crude processed at just over 1 million barrels a day more than the same time last year.

U.S. crude-oil refinery inputs averaged about 17.3 million barrels a day last week, up 29,000 barrels a day than the week before, the EIA reported.

“Refiners continue to churn out supply, with gasoline inventories rising and few slowdowns in sight aside from some minor flaring events” at some refineries, DeHaan said. “I’m not sure even a major refinery issue could temper the bearishness that we’re seeing.”

“I’d have expected demand to be closer to 9.6-9.8 [million barrels a] day for this time of year, but I haven’t lost all hope just yet,” he said. “Look for improvement by [the] July peak-travel season.”
‘Gas prices nationally are lower than they were to start the year. I can’t think of a single time that’s happened. Higher prices in winter than summer?’Patrick DeHaan, GasBuddy

Given that, DeHaan doesn’t believe that gasoline prices at the retail level have bottomed out quite yet.

“Gas prices nationally are lower than they were to start the year,” he said. “I can’t think of a single time that’s happened. Higher prices in winter than summer?”

Prices are close to the “valley” the market saw in February at $2.26 a gallon, which was the lowest so far this year, he said. That shows how “wacky this year is at the pump.”

On Wednesday afternoon, the average price for a gallon of regular unleaded stood at $2.32, according to GasBuddy.

Year to date, gasoline prices have traded between a low of $2.26 and a high of about $2.42 a gallon, said Kloza, but he believes “both extremes will give way.”

“Any hurricane in the Gulf of Mexico will lift prices (as would an overdue rebound in crude) this summer,” he said. “But we’ll see lower pump prices in the last 100 days of 2017 thanks [in part] to the post Labor Day demand slump.”

Article Link To MarketWatch:

OPEC Stumbles In Face Of Oil Glut

Production cuts aren’t drawing oil out of storage and are helping U.S. shale producers.

By Summer Said, Georgi Kantchev and Neanda Salvaterra
The Wall Street Journal
June 15, 2017

OPEC is running smack into a wall of crude-oil storage.

The global oil glut is proving immune to the limits set by the Organization of the Petroleum Exporting Countries and its big-producer allies like Russia, fueling the idea that output caps withholding almost 2% of world crude supply were a miscalculation.

Both Brent, the international benchmark, and West Texas Intermediate, the U.S. price setter, fell almost 4% to their lowest levels of 2017 on Wednesday after the release of fresh data about inventories. Overall, prices are down over 17% since the beginning of the year.

In the U.S., the Energy Information Administration said Wednesday that crude stockpiles fell last week by 1.7 million barrels, less than the 2.6 million drop forecast by a Wall Street Journal survey. At the same time, gasoline inventories rose by 2.1 million barrels, compared with the survey’s expectation of a 700,000 decline, underlining worries about the oversupply extending to crude oil’s products.

Oil stockpiles in the Organization for Economic Cooperation and Development—a club of 35 countries with industrialized economies—rose by 18.6 million barrels in April and were higher than they were when OPEC agreed to its cut late last year, said the International Energy Agency, a Paris-based group that advises governments on energy trends.

“There’s still so much crude in storage," said Doug King, chief investment officer at RCMA Asset Management and manager of that firm’s $200 million Merchant Commodity hedge fund. “OPEC needs much deeper cuts to draw inventory.”

Adding to oil traders’ angst: U.S. oil production has come roaring back to life. The IEA said U.S. crude supply will grow almost 5% on average this year, and nearly 8% in 2018, potentially vaulting American producers ahead of Saudi Arabia in daily output.

“Such is the dynamism of this extraordinary, very diverse industry it is possible that growth will be faster,” the IEA said.

With shale producers humming and storage tanks still brimming full of crude, the production limits that OPEC, Russia and others have approved through March 2018 are coming under heightened scrutiny. Bjarne Schieldrop, chief commodities analyst at SEB Markets, the Nordic bank, called it an “error.”

“It would stimulate production in the U.S. too much and this is basically what we are seeing,” he said.

OPEC and its leader, Saudi Arabia, the world’s largest exporter, had resisted cutting output when oil prices began crashing in the summer and fall of 2014, reasoning it couldn’t stop the market slide on its own. It changed course late last year after bringing Russia and 10 other non-OPEC producers on board for almost 600,000 barrels a day in cuts.

But even those combined efforts have done little to drain oil in storage. Eugen Weinberg, an oil analyst at Commerzbank, said OPEC needed to end its production cut.

“The only option that OPEC has for the next five years is to let the market go,” said Mr. Weinberg.

OPEC representatives said Wednesday that the rising inventories were concerning but that they couldn’t abandon the production-cut deal. They pointed to a problem of rising production from Libya and Nigeria, which were exempted from obligations.

“The market fundamentals are improving and there are signs that stocks are going down, but only time would tell if we have made the right decision or not,” said a senior OPEC official from a Persian Gulf oil-producing country.

Saudi energy minister Khalid al-Falih said this week that the production cuts would start having an impact this summer, accelerating a drop in stored oil that OPEC said began in January. He has said OPEC and Russia would do “whatever it takes” to bring supply back in line with demand.

Daniel Yergin, vice chairman of IHS Markit and a long-time oil market watcher, said OPEC wouldn’t abandon its production-cut agreement, which took almost a year to put together through 2016.

“When OPEC and the other producers agreed to this deal, they hoped that, as the old adage says, time heals all—and time will heal the inventory problem,” Mr. Yergin said. “They should now take a deep breath and realize this will take a lot more time.”

OPEC this week acknowledged that its efforts weren’t working as quickly as it thought. In its own monthly market report, the cartel on Tuesday blamed U.S. shale for slowing its rebalancing efforts.

The cartel set a tough goal last December, when its officials said they wanted to cut oil-storage levels to the five-year average.

OPEC said OECD storage levels actually have been falling but by only 88 million barrels in the first four months of 2017. At that pace, it would take until March 2018 for stockpiles to fall another 250 million barrels to the five-year average.

In 2018, non-OPEC production is set to increase by 1.5 million barrels a day, the IEA said, more than the 1.4 million barrels of growth forecast for world consumption. That means OPEC could have to sacrifice more market share over a longer period to maintain its output cuts.

Article Link To The WSJ:

ObamaCare’s ‘Secret’ History

Jonathan Gruber is back and betting again on public ‘stupidity.’

By Review & Outlook
The Wall Street Journal
June 15, 2017

Senate Republicans continue to negotiate the details of their health-care reform, and one measure of progress is that their opponents are more manic and disingenuous. Progressives who used to deride the GOP for incompetence are now panicked that they may really succeed, and thus the faux tantrums.

The distortion du jour is that the GOP is operating “in secret.” This week Minority Leader Chuck Schumer accused Republicans of working “behind closed doors, writing a bill they won’t let the public read...Today, no Member of Congress can read the bill because we don’t know what it is.”

Despite Mr. Schumer’s bewilderment, he still knew enough to assert that the Senate bill will “greatly hurt the American people.” Well, which is it? And if Republicans are trying to suppress a public debate about repealing and replacing Obama Care, then they haven’t prevailed, either now or across the presidential campaign. Health care has been central to U.S. political debate for nearly a decade as Democrats created a new entitlement with little public support.

Compared to that effort, the Senate this time has been a model of deliberative democracy. On Dec. 19, 2009, a Saturday, then Majority Leader Harry Reid tossed the 2,100-page bill the Senate had spent that fall debating and offered a new bill drafted in an invitation-only back room. Democrats didn’t even pretend to care what was in it while passing it in the dead of night on Dec. 24, amid a snowstorm, in the first Christmas Eve vote since 1895.

Liberals excused this legislative sausage-making as the price of making history, which was an insult to sausages. MIT economist and ObamaCare architect Jonathan Gruber told an academic audience in 2014 that “lack of transparency is a huge political advantage. And basically, you know, call it the stupidity of the American voter or whatever, but basically that was really, really critical to getting the thing to pass.”

Mr. Gruber has since re-emerged to complain of the current debate that “I’m just worried about the speed they’re moving at for what that implies, because it implies no effort to actually get this right.” The professor had apologized for what he called his “inexcusable” remarks in 2014 but he’s betting he can con Americans again.

The irony is that the GOP negotiations are so time-consuming because Senators are trying to improve the product as they build a consensus that can get 50 votes. They’re trying to answer the House bill’s critics on the left and right, not that they’ll get any credit.

One objection is that the House’s tax credits aren’t generous enough to help the working poor; the Senate is likely to increase their value. Another is that the House’s Medicaid expansion wind-down is too disruptive for Governors to manage; the Senate will probably create a longer off-ramp. When they reach an agreement, they’ll release the specifics.

The policy parameters are known to anyone paying attention, including those like Mr. Gruber who are arguing in especially bad faith because no bill the Senate could possibly produce would satisfy them. Even as the GOP moves the bill toward the political center, reflexive liberal opposition increases.

Mr. Schumer claimed Republicans have “solicited zero bipartisan support,” which is hilarious. Democrats opted for total pre-emptive resistance to the Trump Administration, and in January Mr. Schumer and Nancy Pelosi announced together that “we are a united caucus. We are two united caucuses. And we’re united in our opposition to these Republican attempts to make America sick again,” as he put it. House Republicans hadn’t even released a bill at that point and the ObamaCare exchanges were already in increasing distress, but Democrats refused to participate.

This is also a notable change from 2009-10, when Democrats froze out centrist Republicans who wanted to cut a bipartisan deal of the kind Orrin Hatch and Ted Kennedy had struck on the children’s health insurance program. The Obama White House preferred a far more liberal program that would complete the entitlement state. The GOP’s obligation now is to start to clean up that mess.

Article Link To The WSJ:

Uber: 14 Bosses, One Corporate ‘Game of Thrones?’

Ride-hailing firm will turn company reins over to group of senior executives while CEO Travis Kalanick regroups.

By Greg Bensinger and Kelsey Gee
The Wall Street Journal
June 15, 2017

The decision by Uber Technologies Inc.’s chief executive to take an indefinite leave of absence will put management of the world’s most valuable startup in the collective hands of more than a dozen managers—a challenging structure for a company that has favored a strong central leader and pitted executives against each other.

The ride-hailing firm said Tuesday it would turn the company reins over to a group of 14 senior executives while CEO Travis Kalanick regroups following a punishing half-year of scandals and setbacks, capped by the death of his mother in a boating accident that left his father seriously hurt.

The recent exits of Mr. Kalanick’s effective second-in-command, Emil Michael, and the previous deputy, Jeff Jones, and of several other direct reports to the CEO have left Uber with no real line of succession.

The company now has made the unusual choice of having Uber run by the heads of legal, human resources, communications, products, operations and other units.

“A committee is very implausible,” said Joseph Bower, a Harvard Business School professor emeritus of business administration. “You can’t make decisions that way.”

Mr. Kalanick, in his note to staff announcing his leave, said “I will be available as needed for the most strategic decisions, but I will be empowering [the committee] to be bold and decisive in order to move the company forward swiftly.”

An Uber spokesman said the company has “a strong leadership team including veterans who helped make the business what it is today, and new talent who are helping to drive the changes we’re committed to making.”

Uber has been grappling with accusations of sexism and sexual harassment and on Tuesday rolled out reforms to upend its workplace culture after a months-long investigation led by former U.S. Attorney General Eric Holder.

Mr. Kalanick said he would take the time off “to become the leader that this company needs” and to grieve for his mother.

Adding to the complexity, the company is seeking a laundry list of executives, including chief operating and chief financial officers, general counsel and a marketing chief. Board Director David Bonderman stepped aside Tuesday after making a sexist remark during a company all-hands meeting. There is little precedent for Uber’s transition of power in the corporate world, but some management experts say the closest approximation is “Game of Thrones,” the television show depicting mythical fights for control among several clans.

“If your bet is that Travis will come back, you want to show that you’re his man or woman,” said Sydney Finkelstein, a management professor at Tuck School of Business at Dartmouth College and author of “Superbosses: How Exceptional Leaders Master the Flow of Talent.”

The history of business successes where rule is split between more than a single CEO is spotty. Oracle Corp. has been operating with co-CEOs since 2014 when Larry Ellison relinquished the top job—the stock is up about 13% since then—and Samsung Electronics Co.remains the top global seller of smartphones by market share under three CEOs.

At other companies, the results have been less stellar. BlackBerry maker Research In Motion Ltd. battled investor discontent for years over its co-CEO structure and ultimately put in a single leader, though the business still plunged into irrelevance.

Similar co-CEO arrangements at Citigroup Inc., Martha Stewart Living Omnimedia Inc. and Workday Inc. were quickly scuttled.

Last year, Whole Foods Market Inc., too, eliminated the co-CEO structure after six years. Inc.’s Zappos unit has been experimenting with an unusual management philosophy called Holacracy, in which titles and bosses are eliminated, since 2013. But the structure sowed confusion and when the shoe seller offered severance in 2015 for those who wanted to quit, 14% took the offer.

Rarer still are firms led by committee. Watch and jewelry maker Cie. Financière Richemont SA has been operating without a CEO since Richard Lepeu stepped down in March.

Top executives report into the chairman and decisions are made by consensus. DPR Construction has senior leaders rotate through an eight-member management committee. Employees at those firms have said committees can sometimes make decisions painstaking and cause infighting.

At Uber, the transition will be particularly tricky since Mr. Kalanick has structured the San Francisco company to funnel big day-to-day decisions through him, say people familiar with the matter.

Mr. Kalanick, known for his relentless and punishing will to win, was also reluctant to be challenged as CEO and could lash out at what he felt was insubordination, these people say.

Without a central leader, executives may jockey to be atop the heap in deference to Uber’s 14 leadership principles, which include “always be hustlin’” and “toe stepping.” (Mr. Holder’s recommendations included reformulating those principles.)

Uber said it would divide the management committee into four units: business; people and organization; product and engineering; and legal safety and policy and communications.

The 14 executives include Rachel Holt, Andrew MacDonald and Pierre Dimitri Gore-Coty, the heads of operations in the U.S. and Canada; Latin America and Asia Pacific; and Europe, Middle East and Africa, respectively.

Also included are Ryan Graves, the first Uber CEO, a board member and senior vice president of operations; CTO Thuan Pham ; Chief Security Officer Joe Sullivan ; communications and policy chief Jill Hazelbaker ; product-management head Daniel Graf ; chief of self-driving vehicle development Eric Meyhofer; product leader Jeff Holden ; HR boss Liane Hornsey ; and Chief Legal Officer Salle Yoo.

The group also includes two new additions to upper management at Uber: David Richter, who was promoted just this week to fill Mr. Michael’s role, and recent hire from Harvard Business School, Frances Frei, a senior vice president of leadership and strategy.

Mr. Finkelstein of Dartmouth said he expects two or three managers to rise to the top of Uber’s new committee of leaders, and that there may be a division in the company’s top ranks between those who support Mr. Kalanick’s vision for the startup, and those who prefer to steer it in new directions. “The ones that campaign to bring him back, or discretely seek his advice, may see an opportunity to take over while the CEO is in the penalty box,” he said.

“Having two people making joint leadership decisions is a big mistake for companies, but 14 is setting up a war for succession,” Mr. Finkelstein said. “If there’s no CEO, all of these people know they’re candidates for the job.”

Article Link To The WSJ:

Immigration Not Enough To Halt Exodus From Biggest U.S. Cities

Chicago leads nation in domestic departures in Bloomberg data; Dallas, Houston, Phoenix among American cities showing gains.

By Vincent Del Giudice and Wei Lu
June 15, 2017

Immigration to the U.S. has failed to make up for the number of residents leaving New York, Los Angeles and Chicago -- the nation’s top three metropolitan areas.

Chicago -- beset by crime, economic and budgetary woes and high taxes -- is the net exodus leader among 100 metro areas tracked by Bloomberg using Census Bureau data for the year through July 1, 2016. An average 245 local residents left the Windy City each day compared with the arrival of 71 foreigners. Census doesn’t inquire about a person’s citizenship status. 

As Chicago struggles, so does Illinois. Last year, the net number of business establishments in the Prairie State fell by 1,235 from 2015, the worst performance of any state in the union, Bureau of Labor Statistics data show.

For the nation’s third most-populous metropolitan area, foreign immigration “is the only offset we’ve got and it would be tragic to lose,” said Diane Swonk, chief executive and founder of DS Economics in Chicago.

As for the broader economic implications, Federal Reserve Bank of Philadelphia President Patrick Harker is among some U.S. central bank officials who have suggested labor shortages across the entire country could be aggravated by government steps to crack down on illegal immigration, a political hot-button issue amid outcries that undocumented foreign workers are taking American jobs.

In the New York metropolitan area, financial-hub Manhattan prospers while old factory towns such as Paterson, New Jersey, and Waterbury, Connecticut, languish. The region registered an average daily loss of 548 local residents against a gain of 394 foreigners, according to the data.

While Los Angeles gained more than 54,000 international migrants, it lost more than 87,000 people due to domestic migration, the third-worst outflow in the country. On the bright side, Census data show there were 166,913 births in the City of Angels in the year ended July 1, 2016, second only to New York City with 247,502.

Overall, the population of Los Angeles, including net births and migration, grew by 41,619 residents during the period. That compares with a 35,571 increase in the New York area and a 19,570 decline in Chicago, which was one of 15 cities to show an outright decrease.

America’s Sunbelt is absorbing the exodus. The area -- where jobs generally are plentiful, taxes are lower and winter temperatures milder -- stretches from parts of North Carolina in the east to California in the west.

An average of a hundred or more people each day moved to Dallas, Houston, Atlanta and Phoenix. Dallas led all metropolitan areas with 235 arrivals: 165 from within the U.S. and 70 from outside the country.

Immigration is particularly notable in Miami, where 178 people from outside the U.S. moved each day versus an outflow of domestic residents. Florida has been the favored destination for many people fleeing the political and economic crisis in Venezuela.

Article Link To Bloomberg:

How This Economic Recovery Ends

Every time there's full employment, there's a spike in oil prices. And guess what comes next.

By Conor Sen
The Bloomberg View
June 15, 2017

Every boom in the U.S. economy is different, but over the past several decades, each has ended the same way. First you get full employment. Then you get a spike in the price of oil. And then there's a recession.

The U.S. hit full employment in August 2015. And yet the prevailing wisdom is that oil prices will hold steady around $50 per barrel, or even fall because of production gluts. What could cause a spike? It's worth looking at both history and current events.

The unemployment rate has gotten to 5 percent or lower four times since the early 1970s, and each time the economy followed this pattern with an oil spike and a recession. The first and most extreme case was the 1973 OPEC oil embargo that began in October 1973. At that time the unemployment rate was 4.6 percent. Over the next five months the price of oil tripled in global markets, plunging the U.S. into an immediate recession that eventually coincided with the resignation of President Richard Nixon.

The second case was the First Gulf War. The unemployment rate touched as low at 5 percent in early 1989. Because of rising tensions in the Middle East, eventually leading into Iraq's invasion of Kuwait and the American military response, the price of oil jumped from around $16 in June 1990 to $40 later that fall. Recession began in July.

The late 1990s boom in the U.S. may be remembered more for technology stocks, but it also coincided with an oil spike. After the emerging market crises of 1998, the price of oil dropped as low as $11 a barrel. Yet by March 2000, as technology stocks were peaking, it had soared to over $33 a barrel, its highest level since the Gulf War. And in the last economic cycle, even as the housing market was collapsing, the price of oil soared, rising from $52 a barrel in January 2007 to almost $150 a barrel by the summer of 2008.

Global markets were obsessed with oil from 2014 through 2016 and the risks that its drop posed to markets and economies. Yet for consumption-led economies like the U.S., it's a rise, not a fall, in the price of oil that is worrisome. And the time to worry about a spike in the price of oil is when the labor market is around full employment. In all four of the cycles described, that spike -- at least a doubling in all four occasions -- never took more than a few years after the unemployment rate hit 5 percent.

With supply-and-demand fundamentals seemingly so poor for oil at the moment, what could possibly lead to a spike in oil by the end of the decade? First, as news out of Qatar this month reminds us, geopolitics can emerge as a risk at any time. Second, in the wake of the oil price drop over the past few years, investments in energy exploration and production fell sharply. Exxon's capital expenditures in the first quarter of 2017 were at their lowest level since the first quarter of 2005, and that's in nominal dollars. In real dollars you'd have to go back further than that. Less investment now will eventually mean lower production in the future and tighter supply.

And third, full employment has its own dynamics. It means energy firms looking to staff up are potentially competing with other sectors like construction for workers and raw materials, raising production costs that then have to be passed on in the price of oil. While the U.S. economy is less energy-intensive than it has been in the past, companies looking to become more efficient on the labor front may employ energy-intensive equipment or machinery.

Finally, one can't help but notice that oil spikes and the following recessions were followed by the departures of three of the last four elected Republican presidents -- Nixon and both Bushes. If an unpopular health-care bill and the Russia investigation don't take down the Trump presidency, perhaps $100 oil will.

Article Link To The Bloomberg View:

What The Fed's Rate Hike Means For Your Credit-Card Debt And Savings

The decision to hike the key interest rate could impact your wallet sooner than you think.

By Maria LaMagna
June 15, 2017

Bad news for people with credit-card debt: It’s about to get more expensive.

The Federal Reserve said Wednesday it is raising its benchmark federal-funds rate by a quarter percentage point, to a range between 1% and 1.25%.

In other words, the Fed announced an increase in how much banks will be charged to borrow money from Federal Reserve banks. (The Fed raises and lowers interest rates in an attempt to control inflation.)

“The cumulative effect of rate hikes on consumers is mounting,” said Greg McBride, the chief financial analyst at the personal-finance website

That increase will most likely eventually be passed on to consumers, said Sean McQuay, a credit card expert at the personal finance website NerdWallet. Many households with credit card debt — the average household carrying credit card debt has more than $16,000 — will likely take a hit.

McBride said credit card rates will rise 1 percentage point higher than they were two years ago, and the minimum payment on a $30,000 home equity line will now be $25 more a month than it was before the Fed started hiking rates.

Here’s how the latest Fed rate increase could impact your credit cards and bank accounts.

Credit Cards

Because a rise in the federal funds rate means banks will likely pay more to borrow from the Federal Reserve, they may pass that cost on to consumers.

Credit card interest rates are variable (banks and credit card companies should state that their rates are variable in the literature customers receive to learn about their cards), and they are tied to the prime rate, an index a few percentage points above the federal funds rate. It is a benchmark that banks use to set home equity lines of credit and credit card rates; as federal funds rates rise, the prime rate does, too.

As a result, credit card holders are likely to see their interest rates rise, and that will happen soon, McBride said.

He predicted that could happen within about 60 days, or two statement cycles.

Some companies even raise their variable rates on the exact same day the Fed raises its rates, said Chris Mettler, the founder and president of CompareCards, a credit-card comparison website.

When the Fed raised the rate in 2015 — the first rate hike since 2006 — it only took about a month or two for the majority of banks that the personal finance website NerdWallet works with to change the variable APRs on their credit cards, McQuay said. They included both major banks and lesser-known ones.

What’s more: Banks are under no obligation to let their customers know they are raising their credit card rates when the Fed announces an interest-rate increase, so consumers should check on their own to find out if their rates are rising, McQuay said.

The average household now pays a total of $1,292 in credit card interest per year, according to NerdWallet’s research. Now that the Federal Reserve increased its rates as analysts expected, the total will rise to $1,309, NerdWallet found. Although that amount won’t “break the bank,” McQuay said, consumers who have debt should expect this trend of rising interest rates to continue.

People who currently have credit card debt should consider trying to refinance or consolidate it now, or find a lower-interest rate card they can transfer their existing balances to, said Rachel Podnos, an attorney and financial planner based in Washington, D.C., told MarketWatch.

Many balance transfer cards have 0% introductory interest rates, McQuay said. Banks and credit card companies will likely keep those rates at 0% rather than raise them to slightly over 0%, because offering that 0% introductory rate is helpful for marketing. However, because the banks will be paying more to borrow, they may eventually shorten the introductory period if they are unable to afford that 0% for the long periods of time they offer now. As a result, securing one of these cards sooner rather than later would be a good idea.

Bank Accounts

For savers, a rise in Federal Reserve interest rates is good news, Podnos said.

Savings account rates will likely increase slightly, which should help consumers, especially since interest rates on savings accounts are at historic lows. (Although consumers shouldn’t expect those rates to rise much, McBride said. One important caveat: Banks will likely have to collect extra income from borrowers before being able to pass those funds onto the savers, he said.)

Personal finance sites and NerdWallet compile lists of the highest-yielding savings accounts. Online-only banks often offer accounts with higher yields than traditional banks do, as those lists show.

Online banks are more likely to pass those higher savings rates on to customers, and to do it quickly, McBride said, based on what Bankrate has previously found.

Consumers may be missing out on by using a low-yield savings account, a recent NerdWallet survey found. A savings account with one of the highest yields advertised (with a rate of 1.1%) pays $274 more per year than a low-interest account (0.01%) on savings of $25,000, it found.

“There is an arms race among the top-yielding online savings accounts, where there is a continual game of one-upmanship which will continue as the Fed raises rates further,” McBride said.

“For most banks it will be months before any improvement in savings returns is seen, and even then it will be inconsequential because their yields are so much lower. Don’t wait six months for your bank to raise their rate from 0.10% to 0.15% when you could be earning 1.3% now.”

That said, even the highest-yielding accounts currently don’t pay consumers enough to even offset the rate of inflation; so while consumers may want to put easily-accessible savings in a bank account, they should also make sure to diversify by investing instead of waiting for money to lose value, McQuay added.

He also suggested checking with credit unions, which sometimes have higher-yielding savings accounts than banks offer; they may even offer higher yields in person than they advertise online, he said.

Article Link To MarketWatch:

Yellen Doubles Down On Bet Hot Job Market Stokes Inflation

Fed chief counsels against overreacting to recent price data; Economists caution her gamble hinges on a 60-year-old theory.

By Rich Miller
June 15, 2017

Federal Reserve Chair Janet Yellen is pressing ahead with plans to normalize monetary policy, betting that the ongoing strength of the labor market will ultimately prevail over the recent weakness in inflation.

In a press conference on Wednesday after the Fed raised interest rates for the second time in 2017, Yellen played down a softening of price pressures in the last few months and voiced confidence the central bank was on course to hit its 2 percent inflation goal.

"It’s important not to overreact to a few readings, and data on inflation can be noisy," she told reporters.

The decision to push forward on normalization -- the Fed also provided further details of its plan to begin reducing its balance sheet this year -- is not without its perils. If Yellen is wrong and inflation stays low, the Fed is in danger of having companies and consumers conclude that the central bank is not serious about hitting its price goal.

“The risk is that the Fed is too complacent on inflation and more than just transitory factors are keeping it from rising, and that the Fed is too confident about labor market improvement transitioning to wages and inflation," said Michael Gapen, chief U.S. economist at Barclays Plc in New York.

Labor Specialist

A noted labor economist, Yellen is pinning her hopes on an ever-tightening job market eventually lifting wages and inflation -- a relationship quantified in the so-called Phillips Curve that was first developed almost 60 years ago. At 4.3 percent in May, the unemployment rate is below the level that policy makers reckon is sustainable in the long-run.

“We continue to feel that with a strong labor market and with a labor market that’s continuing to strengthen, the conditions are in place for inflation to move up," Yellen said.

Inflation in recent months, though, has been slowing, not quickening. The Fed’s favorite price gauge was 1.7 percent higher in April than a year ago, down from 1.9 percent in March and 2.1 percent in February. And it probably took another leg down last month, based on separate consumer price data released on Wednesday.

‘One-Off’ Factors

Yellen attributed much of the recent weakness to“one-off” factors such as a steep decline in mobile-phone costs and a drop in prescription drug prices.

Investors don’t seem to be buying that explanation. They’ve trimmed odds for a third rate hike this year to less than 50 percent -- in spite of policy makers’ reiteration of those plans on Wednesday.

“There’s a lot of skepticism on Wall Street,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “You look at market inflation expectations, and they’re moving in the opposite direction that the Fed wants them to move.”

For their part, economists began to pull forward their calls for a balance-sheet decision after Wednesday’s meeting. Economists at Citigroup Inc. joined those at Goldman Sachs Group Inc. and Morgan Stanley in looking for an announcement in September on when the wind-down begins. NatWest economists also moved up to September.

In a separate statement on Wednesday, the Fed spelled out the details of its plan to allow the balance sheet to shrink by gradually rolling off a fixed amount of assets on a monthly basis. The initial cap will be set at $10 billion a month: $6 billion from Treasuries and $4 billion from mortgage-backed securities.

The caps will increase every three months by $6 billion for Treasuries until they reach $30 billion and $4 billion for MBS until they reach $20 billion.

Officials didn’t reveal how large the portfolio might be when finished, nor the exact timing of when the process will begin this year, though Yellen told reporters it could get underway “relatively soon” if the economy performs as expected.

Article Link To Bloomberg:

Special Counsel Is Investigating Trump For Possible Obstruction Of Justice

By Devlin Barrett, Adam Entous, Ellen Nakashima and Sari Horwitz
The Washington Post
June 15, 2017

The special counsel overseeing the investigation into Russia’s role in the 2016 election is interviewing senior intelligence officials as part of a widening probe that now includes an examination of whether President Trump attempted to obstruct justice, officials said.

The move by special counsel Robert S. Mueller III to investigate Trump’s conduct marks a major turning point in the nearly year-old FBI investigation, which until recently focused on Russian meddling during the presidential campaign and on whether there was any coordination between the Trump campaign and the Kremlin. Investigators have also been looking for any evidence of possible financial crimes among Trump associates, officials said.

Trump had received private assurances from then-FBI Director James B. Comey starting in January that he was not personally under investigation. Officials say that changed shortly after Comey’s firing.

Five people briefed on the interview requests, speaking on the condition of anonymity because they were not authorized to discuss the matter publicly, said that Daniel Coats, the current director of national intelligence, Mike Rogers, head of the National Security Agency, and Rogers’s recently departed deputy, Richard Ledgett, agreed to be interviewed by Mueller’s investigators as early as this week. The investigation has been cloaked in secrecy, and it is unclear how many others have been questioned by the FBI.

The NSA said in a statement that it will “fully cooperate with the special counsel” and declined to comment further. The office of the director of national intelligence and Ledgett declined to comment.

The White House now refers all questions about the Russia investigation to Trump’s personal attorney, Marc Kasowitz.

“The FBI leak of information regarding the president is outrageous, inexcusable and illegal,” said Mark Corallo, a spokesman for Kasowitz.

The officials said Coats, Rogers and Ledgett would appear voluntarily, though it remains unclear whether they will describe in full their conversations with Trump and other top officials or will be directed by the White House to invoke executive privilege. It is doubtful that the White House could ultimately use executive privilege to try to block them from speaking to Mueller’s investigators. Experts point out that the Supreme Court ruled during the Watergate scandal that officials cannot use privilege to withhold evidence in criminal prosecutions.

The obstruction-of-justice investigation of the president began days after Comey was fired on May 9, according to people familiar with the matter. Mueller’s office has taken up that work, and the preliminary interviews scheduled with intelligence officials indicate that his team is actively pursuing potential witnesses inside and outside the government.

The interviews suggest that Mueller sees the question of attempted obstruction of justice as more than just a “he said, he said” dispute between the president and the fired FBI director, an official said.

Investigating Trump for possible crimes is a complicated affair, even if convincing evidence of a crime were found. The Justice Department has long held that it would not be appropriate to indict a sitting president. Instead, experts say, the onus would be on Congress to review any findings of criminal misconduct and then decide whether to initiate impeachment proceedings.

Comey confirmed publicly in congressional testimony on March 20 that the bureau was investigating possible coordination between the Trump campaign and the Russians.

Comey’s statement before the House Intelligence Committee upset Trump, who has repeatedly denied that any coordination with the Russians took place. Trump had wanted Comey to disclose publicly that he was not personally under investigation, but the FBI director refused to do so.

Soon after, Trump spoke to Coats and Rogers about the Russia investigation.

Officials said one of the exchanges of potential interest to Mueller took place on March 22, less than a week after Coats was confirmed by the Senate to serve as the nation’s top intelligence official.

Coats was attending a briefing at the White House with officials from several other government agencies. When the briefing ended, as The Washington Post previously reported, Trump asked everyone to leave the room except for Coats and CIA Director Mike Pompeo.

Coats told associates that Trump had asked him whether Coats could intervene with Comey to get the bureau to back off its focus on former national security adviser Michael Flynn in its Russia probe, according to officials. Coats later told lawmakers that he never felt pressured to intervene.

A day or two after the March 22 meeting, Trump telephoned Coats and Rogers to separately ask them to issue public statements denying the existence of any evidence of coordination between his campaign and the Russian government.

Coats and Rogers refused to comply with the president’s requests, officials said.

It is unclear whether Ledgett had direct contact with Trump or other top officials about the Russia probe, but he wrote an internal NSA memo documenting the president’s phone call with Rogers, according to officials.

As part of the probe, the special counsel has also gathered Comey’s written accounts of his conversations with Trump. The president has accused Comey of lying about those encounters.

Mueller is overseeing a host of investigations involving people who are or were in Trump’s orbit, people familiar with the probe said. The investigation is examining possible contacts with Russian operatives as well as any suspicious financial activity related to those individuals.

Last week, Comey told the Senate Intelligence Committee that he had informed Trump that there was no investigation of the president’s personal conduct, at least while he was leading the FBI.

Comey’s carefully worded comments, and those of Andrew McCabe, who took over as acting FBI director, suggested to some officials that an investigation of Trump for attempted obstruction may have been launched after Comey’s departure, particularly in light of Trump’s alleged statements regarding Flynn.

“I took it as a very disturbing thing, very concerning, but that’s a conclusion I’m sure the special counsel will work towards, to try and understand what the intention was there, and whether that’s an offense,” Comey testified last week.

Mueller has not publicly discussed his work, and a spokesman for the special counsel declined to comment.

Accounts by Comey and other officials of their conversations with the president could become central pieces of evidence if Mueller decides to pursue an obstruction case.

Investigators will also look for any statements the president may have made publicly and privately to people outside the government about his reasons for firing Comey and his concerns about the Russia probe and other related investigations, people familiar with the matter said.

Comey testified before the Senate Intelligence Committee last week that he was certain his firing was due to the president’s concerns about the Russia probe, rather than over his handling of a now-closed FBI investigation into Hillary Clinton’s use of a private email server as secretary of state, as the White House had initially asserted. “It’s my judgment that I was fired because of the Russia investigation,” Comey said. “I was fired, in some way, to change — or the endeavor was to change the way the Russia investigation was being conducted.”

The fired FBI director said ultimately it was up to Mueller to make a determination whether the president crossed a legal line.

In addition to describing his interactions with the president, Comey told the Intelligence Committee that while he was FBI director he told Trump on three occasions that he was not under investigation as part of a counterintelligence probe looking at Russian meddling in the election.

Republican lawmakers seized on Comey’s testimony to point out that Trump was not in the FBI’s crosshairs when Comey led the bureau.

After Comey’s testimony, in which he acknowledged telling Trump that he was not under investigation, Trump tweeted that he felt “total and complete vindication.” It is unclear whether McCabe, Comey’s successor, has informed Trump of the change in the scope of the probe.

Article Link To The Washington Post:

Political Death Threats Becoming New, Unsettling Normal

By Michael Goodwin
The New York Post
June 15, 2017

It was heartening to see members of Congress from both parties echo calls for unity following Wednesday’s attempted massacre.

Putting aside their habitual rancor, Democrats and Republicans joined together to emphasize that violence has no place in our politics.

There is no possible counter-argument, but let’s admit the ugly truth the pols won’t: This is all about the election of Donald Trump, and the unhinged vitriol that shadows him.

There is nothing bipartisan about the peculiar hate gripping significant slices of America. Breaking a major social taboo, elements of the left have openly put a target on a sitting president and too many mainstream Democrats have been silent.

Think Kathy Griffin’s severed head. Think Madonna telling a rally she thinks about blowing up the White House. Think Shakespeare in the Park using a Trump stand-in for Julius Caesar — and the audience loving the blood lust.

Did a single leading Democrat denounce any of these outrages as dangerous incitement? How about celebrated cultural figures or religious leaders or historians — did any blow the whistle and say this is a line we do not cross because we know that way lies madness?

If they did, you can count them on one hand. Words have consequences, and so does silence.

Where’s the left-wing media when it comes to the spreading maniacal expressions of Trump Derangement Syndrome? So eager to lecture Americans about how they should feel and what they should believe about every aspect of daily life, the media don’t have the moral courage to call out their own cultural warriors when they go off the rails.

Indeed, the collapse of media standards when it comes to covering Trump is, I believe, a significant contributor to the bitter political and cultural schisms roiling the nation. No political figure in modern times has taken such a vicious pounding from establishment organizations, and their bias will inevitably serve as a license for some people to act.

The hatred for Trump doesn’t stop with him. It often extends to his supporters in a trickle-down spasm of violence, and it was not happenstance that yesterday’s attacker was a Bernie Sanders supporter who went gunning for Republican members of Congress.

Conservatives invited to speak on college campuses are so routinely greeted with violent protests that it is no longer a big news story.

Nothing could be less classically liberal than silence by intimidation, yet many faculty and college administrators wink and nod, as if blocking someone else’s free speech is a new form of free speech.

Actually, it’s not new. Every fascist, authoritarian and tin-pot dictator in history has tried to shut down dissent. Have the educated elite forgotten everything they learned? Or do their enlightened politics justify any means necessary?

To be clear, the animal who pulled the trigger is solely responsible for his actions. But unless we find that James T. Hodgkinson suffered from an acute mental illness, I see him as a Kathy Griffin Democrat who turned her “comedy” into action.

A recent post on his Facebook page reads:

“Trump is a Traitor. Trump Has Destroyed Our Democracy. It’s Time to Destroy Trump & Co.”

Sadly, there is nothing unusual about those words. They are actually quite common these days.

I frequently get letters from Trump-haters saying something almost identical. He’s a bigot, he’s unAmerican, he’s a traitor — and so are you for supporting him.

I hope you die. I hope your children die.

Yes, Americans actually write those things to other Americans over political differences. And they sign their names, as if it’s normal.

Tragically, it is becoming normal, and so, in the words of the late Sen. Daniel Patrick Moynihan, we see first-hand what it means when deviance is defined down.

Numbed by repetition, we gradually come to accept the unacceptable. Little by little, the barrier island is eroded, then we are shocked when there is nothing to stop the storm surge.

This is not to suggest that hatred for political figures is limited to the left. President Barack Obama, as a black man, was many times the target of racial prejudice from people on the right.

Yet a major difference was that all major American institutions, and virtually the entire political establishment, denounced that despicable animus when it surfaced. A united front against open expressions of racism held its ground.

With Trump, just the opposite is happening. The rage over his election, instead of waning, continues to gather steam. The fervent desire to be rid of him and anyone who supports him is expanding into dangerous dimensions.

And now the first shot has been fired. Let’s pray it is the last and that America comes to its senses before it is too late.

Article Link To The NY Post:

It Feels Like America Is Descending Into Chaos

By John Podhoretz
The New York Post
June 15, 2017

I turned 7 in 1968, and though my memories are necessarily fuzzy, I can still sum up a queasy sense of the chaos that pervaded the year as it streamed out of the 12-inch black-and-white television in our dining room.

The president announcing he wouldn’t run for reelection. Assassinations, first of Dr. King and then of Bobby Kennedy. Urban riots showing neighborhoods burning along with nightly footage of the war in Vietnam. Massive demonstrations against the war, and Columbia, the university in my neighborhood, shut down by a sit-in.

The long hot summer, concluding with Chicago cops clashing with protesters outside the Democratic National Convention. The year 1968 was characterized by violence at home and violence abroad, and a sense that America itself was on fire.

My son turns 7 in a month. Forty-nine years from now, will he summon up a similar feeling of chaos when he thinks back to 2017?

The first five months of the year have certainly felt like a time of political disorder in the United States, a disorder that some have welcomed as the cost of changing the country’s direction and others have found enervating and frightening.

It’s been bad, but not 1968-level bad.

But then came Wednesday’s ghastly shooting spree at the congressional Republican baseball practice.

This was a planned act of political slaughter to make what appears to be an ideological point — the first such major event since the assassins’s spree that began with JFK in 1963, reached an apogee in 1968, and came to an end with the nearly successful attempt on Ronald Reagan in 1981.

Will this prove to have been a lone event? Or is it the beginning of another long hot summer my son will remember forever — the herald of a new kind of chaos with a signature frighteningly reminiscent of 1968?

Even the fact that I can ask this question, and that I’d wager you are not immediately scoffing at it, suggests we may be at the precipice.

We all know the kindling is there. The baseball-field shooter was a consumer of far-left anti-Republican media; it would only take one consumer of media on the other side to seek to equalize the suffering to ignite a national powder keg.

I don’t want to invoke all the clichés of the past decade but you know them all — we’re a divided nation, we’re all living in our own bubbles, we don’t even accept the same facts and we hate each other.

The problem is these clichés are largely true.

“Americans tend to belong to their political ‘tribe’ not so much because they love its ideas but rather because they despise their opponents,” David French has written in National Review.

French says we are not headed toward civil war but we appear to be heading for a divorce along red/blue, right/left lines, and that the grounds for divorce seem to be utter incompatibility.

It is certainly more pleasant to think about divorce than war, especially since there’s no chance of an actual sovereign division of the United States. But divorces can turn destructive and emotionally violent as the parties seek to take vengeance on each other rather than find a pleasant but distant way to be apart.

The fight for control of the marital assets is often less about securing them for yourself and more about denying them to the hated other. And if the fight goes on long enough, the assets themselves are frittered away entirely in the process.

The United States is in a time of great danger. It is not my son’s happy boyhood memories that are at stake. It is his future, and all of ours.

Article Link To The NY Post: