Tuesday, August 1, 2017

The Month That Was - July 2017

Sydney M. Williams

The Month That Was – July 2017
August 1, 2017

The summer looks out from her brazen tower,
Through the flashing bars of July.”
Francis Thompson (1859-1907)
“A Corymbus for Autumn”
The Poems of Francis Thompson – 1909

The month began with celebrations on the birth of our nation and ended with the death of little Charlie Gard. July 4, 1776 began a revolution that led to a Republic of a free and independent people. Charlie Gard became a metaphor for an intrusive state where life and death decisions are made by courts, not parents. The question was never would Charlie survive, but where and when would he die? While it was the English court system that determined how and when his death would come, we in the U.S. are moving inexorably in the same, leftward direction. This is a debate that will not, and should not, go away.

The last day of the month marked the centennial of the start of the 100-day battle at Passchendaele (the Third Battle of Ypres), which became a grim symbol of war’s folly. A half million soldiers became casualties over those weeks on Flanders Field. When the battle was over, the front lines had barely budged. “I died in hell – (They called it Passchendaele),” wrote Siegfried Sassoon, in his poem “Memorial Tablet.”[1]

Like every month, much happened during July. Chancellor Angela Merkel hosted the G20 in Hamburg, a gathering that brings together world leaders, hopefully to ease tensions. After thirty-seven months of ISIS control, the city of Mosul was re-taken by Iraqi forces. In the meantime, ISIS terrorists established a new beachhead in the Philippines by laying siege to Marawi, a city of 200,000. North Korea launched two more ICBMs, showing the U.S. may not be safe, should Kim Jong Un decide to attach a nuclear warhead to an ICBM. Is he testing the Trump Administration, or is he testing the West? Mr. Trump replaced his chief of staff, Reince Priebus with John Kelly, a necessary step given persistent leaks and a lack of discipline in the White House. Mr. Priebus had been Chair of the Republican National Committee, while Mr. Kelly had been Secretary for Homeland Security and before that a four-star Marine Corps General. The attempt to repeal and replace ObamaCare failed, demonstrating that an entitlement, once granted, is almost impossible to take away – at least until Washington runs out of “other people’s money.”

Republicans failed to pass health reform; their efforts resembled an uncoordinated, undisciplined Newfoundland puppy chasing his tail in an open field. But Republicans should not lose sight of what has been accomplished. In his first 100 days, Mr. Trump signed 13 Congressional Review Acts, nullifying unnecessary regulations and preventing agencies from reissuing them. He signed 30 Executive Orders, reducing powers of the Executive. Congress enacted 28 new laws.

The biggest news from my perspective – and one whose effects are nebulous, but may be long lasting – is the continuing attempt to destroy the Trump Presidency. Debate is integral to democracy, but when disagreements descend into venality chaos ensues, and nihilism results. We have even seen public calls for Mr. Trump’s assassination. While there is no question that Mr. Trump can be his own worst enemy, the forces aligned against him are as ruthless as they are relentless. Mr. Trump’s habit of spontaneous tweeting does not serve him, though his desire to speak directly to the American people is understandable. It has become difficult to separate real news from fake news. Will Attorney General Sessions and Secretary of State Tillerson resign, or is that simply a wish on the part of those who would disrupt the Presidency? What, for example, was the role of Fusion GPS, a Washington-based opposition research firm, in the Russian allegations? Who hired Glenn Simpson, its founder, to put together a “hit-job” on Mr. Trump? Why did Democrats in Congress retreat from demanding Donald Trump and Paul Manafort testify in a public forum, when they learned Mr. Simpson would be required to do so as well?

There is no denying the importance of much of the month’s news – the fate of health care; Syria and Iran; the balloon-like nature of ISIS to be squeezed in one location, only to reappear in another; the on-going bickering with Putin who, after having been cajoled for a decade and a half, has become public enemy number one; and an unpredictable leader (Kim Jung Un) who has the capability to destroy the world. But the nastiness of the attacks on Trump represent a new and different threat. Our democracy is the crucible from which liberalism flows. Trump is not the problem. He may have an ego the size of a house. He may be inept as chief executive of our Republic (though that I don’t believe). He may be coarse. He may be antiestablishment. But we have survived worst, including Presidents who attempted to amass power. If his Administration is rendered ineffectual because of personal hatred; if he is tossed from office because of personal animosity, a dangerous precedent will have been set.

The problem is not Trump. It is politicians who place demands of special interests above needs of citizens. It is political correctness that permeates our society and erodes our soul. It is the subversion of historical truths for fear of offending in our universities. It is a culture that celebrates fame, no matter how attained, and which undermines our values. It is those who seek power under the guise of doing good.

But, back to the news: Twice during the month, North Korea launched ICBMs capable of reaching the U.S. After the first launch, Nikki Haley called an emergency meeting of the UN Security Council. Nothing happened. After the second, Beijing issued a statement condemning Pyongyang’s, and Mr. Trump, in a show of military strength, sent two B-1 bombers over the Korean Peninsula. Will it be enough? Indicative of rising tensions between the U.S. and Russia, the House (419-3) and the Senate (98-2) passed new sanctions on Russia for meddling in last year’s election.  The bill now sits on the President’s desk where it is expected to be signed. In retaliation, Russia seized two U.S. properties and demanded the U.S. reduce staff at their Embassy and Consulates. In a second incident, the USS Stethem, an Arleigh Burke-class destroyer, sailed within twelve nautical miles of Triton Island, a disputed island in the South China Sea, claimed by China, Taiwan and Vietnam. Venezuela held a sham election, giving President Nicolás Maduro increased powers. Several people were killed, including two teenagers and one candidate for the Assembly.   

Anthony Scaramucci, the foul-mouthed, linguistically challenged Wall Streeter was appointed and then fired as White House Communication Director. Imran Awan, formerly Debby Wasserman-Schultz’s director of IT, was stopped as he attempted to flee the U.S. for Pakistan. He was arrested for bank fraud, but the bigger crime was his accessing of e-mails and electronic files of the House’s Intelligence and Foreign Affairs Committee. His wife and brothers, who were in on the caper, had been fired in February and were already back in Pakistan. According to reports, Mr. Awan was paid almost four times the average salary for a staff worker. Why? This is a story which the media should explore.

While volatility has become the norm in the hyperbolic halls of Washington, Wall Street, in terms of the VIX, is experiencing its least volatile year since 1965, according to one report I read. “Stability,” Hyman Minsky (an American economist who died in 1996) used to say, “leads to instability.” In a dynamic world, things change. The UK banking regulator announced that LIBOR (London Interbank Offered Rate) would be phased out over the next five years. As a benchmark, LIBOR is responsible for the pricing of trillions of dollars in loans worldwide. But it is prone to manipulation, as the rate is determined by banks volunteering how much it would “theoretically” cost to borrow money from other banks. Bankers became skillful at gaming the system – getting LIBOR to move in directions favorable to themselves. After the financial crisis, more than a dozen banks paid roughly $10 billion in penalties for fraudulent LIBOR activities. While all markets have done well this year, tech stocks, especially the biggest ones, have led the way. The S&P 500 is up 10.4% year-to-date, while the NASDAQ 100 is up 21.5%. Five tech companies – Apple, Alphabet (Google), Microsoft, Facebook and Amazon – now account for $3 trillion in market capitalization, or about 16% of the S&P 500. An article this month in The Financial Times on changes in the retail industry noted that 8,640 stores could close this year, with the loss of over 100,000 jobs. The culprit – in a word, Amazon. Retail is experiencing the realization of Joseph Schumpeter’s theory regarding creative destruction. Elon Musk, CEO of Tesla, announced, and NPR reported, that he had “received verbal government approval…to build an underground NY-Phil-Balt-DC Hyperloop,” which would provide New York to Washington, DC travel in “29 minutes!” That government support for new industries is critical was seen in Tesla’s announcement of sales in Hong Kong for April – when authorities slashed a tax break for electric vehicles, not a single Tesla model was sold that month. In March, 2,939 vehicles were sold.

Elsewhere, Mark Zuckerberg claimed that Facebook is “the new church.” As strange and disconcerting as it seems, he may be right. A survey last year in The Atlantic reported: “about one fifth of Americans now go to religious services a few times a year…,” while another article last year in the same magazine stated that 53% of Americans use Facebook every day. A chunk of ice the size of Connecticut broke off from the Antarctic Peninsula, creating one of the largest icebergs ever. It came from an area that had experienced warming toward the end of the 20th Century, but since had been cooling. Fusion GPS (mentioned above) was accused by David Browder of launching a smear campaign against him. Browder is the founder of Hermitage Capital, the man behind the Magnitsky Act, a Putin nemesis and author of “Red Notice.” The NASA spacecraft Juno, circling Jupiter, revealed the largest storm in the solar system. It flew 5,600 miles above that planet’s Great Red Spot, a monster cyclone that has been churning for 350 years. The storm is 10,000 miles wide – big enough to swallow Earth. Is nature more powerful than man? It would seem so. Police in Australia disrupted a plot by Islamic terrorists to bring down an airplane.

Flash floods killed ten in Arizona. Sean Spicer left the White House. OJ Simpson was paroled. Representative Steve Scalise was released from the hospital six weeks after being shot. Senator John McCain was diagnosed with a brain tumor. Ten migrants died in a tractor trailer in San Antonio, Texas. It was disclosed that the military spends $41.6 million on Viagra, and that New York City spent $2 million on a bathroom with four stalls and four sinks in a City park. Is there waste in government? Silly question. Fact-checking site Snopes, a determiner of fake news for Facebook, is on the verge of collapse, with its founder David Mikkelson accused of fraud and lies. Omar Khadr, a Canadian terrorist who killed an American soldier, was awarded $8 million by the Canadian government for alleged mistreatment while being held at Guantanamo Bay. Joey Chestnut won his 10th title at Nathan’s Famous July 4th hotdog eating contest on Coney Island, gobbling 72 dogs and buns in ten minutes!

The American League won the 88th All-Star Game. Each league has won 43 times, and twice they have tied. Twenty-three-year-old Garbiñe Murguruza Blanco won Wimbledon, beating Venus Williams, while thirty-five-year-old Roger Federer beat Marin Cilic, to win his eighth Wimbledon title. Chris Froome of the UK won the Tour de France, and American Jordan Spieth won the British Open.

Death carried away Chinese Nobel laureate Liu Xiabo, who was awarded the Peace Prize in absentia in 2010, as Chinese officials would not release him from prison for the ceremony. He died of liver cancer. I lost three friends: Alex Bass, a childhood friend I had not seen for years. Peter O’Hara, a friend from the Hillsboro Club, and a long-time friend and fellow New York Drone, Charles Gould. May they rest in peace.

On to August.






[1] While wounded at Passchendaele, Siegfried Sassoon survived the war, dying in 1967 at age 81.

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