The Month That Was - May 2018

Sydney M. Williams

The Month That Was – May 2018

May 31, 2018

“As full as spirit as the month of May,

And as gorgeous as the sun in midsummer.”

                                                                                                Henry IV, Part I

                                                                                                Williams Shakespeare

What a month! The anti-Trump venom persisted…and worsened. It came into sharper focus with the news that the FBI, under the Obama Administration, had inserted Stefan Halper as a spy (or informant, as the New York Times euphemistically called him) into the Trump campaign – ‘Operation Crossfire,’ as it was dubbed – “benign information gathering,” as James Clapper put it[1]. This is in addition to the dubiously obtained FISA warrants to surveil the Trump organization. Not since Lyndon Johnson spied on Goldwater in 1964 has the FBI been so blatantly used for political purposes. But, where is the outrage over the use of government to silence the opposition? Incredibly (and fortunately), it is having little effect on Mr. Trump’s policies here or abroad – like the tax bill, deregulation, North Korea, Jerusalem and Iran. 

As for the latter, the EU is upset over Mr. Trump’s failure to recertify the Iran nuclear deal. Only a people who viewed Mr. Obama’s Iran deal through the commercial lens of their largest companies would be so unconcerned with a rogue nation that has used its new-found wealth to fund militarization and terrorism. Only a people protected by their big brother in North America would not fret about the nuclear ambitions of Iran.(Despite the EU having a slightly larger economy, the U.S. spends more than two and a half times what the EU does on defense, and a big slice of that spending is in defense of Europe.)

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Consider the month’s news: The spiking of the Iran nuclear deal (a deal which Mr. Obama realized the Senate would never support); setting a date (possibly) to meet with Kim Jong-un, and re-locating (finally) the U.S. Embassy in Israel from Tel Aviv to Jerusalem. Curiously, but not surprisingly, the Left derided all three decisions. Nancy Pelosi criticized the President for meeting with Mr. Kim and then criticized him for renegotiating the terms. The movement of the U.S. Embassy to Jerusalem was accomplished, but both Iran (financial sanctions and a new deal) and North Korea (denuclearization of the Peninsula) remain works in progress. The Left is in denial: How does an outsider, a boorish, unprincipled ignoramus, with dyed-blonde hair, accomplish what sanctimonious political elites could not? 

North Korea released three American hostages and blew up tunnels at its Punggye-ri testing site. (Admittedly, that site was probably unusable.) To protest the opening of the U.S. Embassy, Hamas (and Iran) showed their true colors, sending (paid) demonstrators to their deaths in Gaza. Iran fired rockets at Israel’s Golan Heights from bases in Syria, which were knocked down by Israel’s superior technology. Later, a number of Iranian bases in Syria were destroyed by Israel’s air force. Trade wars spurted, spluttered and spurted. Republicans in Congress took issue with Mr. Trump’s decision to rescue China’s telecom company ZTE. But, we must remember that Mr. Trump, like the fox to Congress’s hedgehog, is playing multiple hands with China – North Korea, relations with Iran, a laser attack from an air base in Djibouti and military bases in the South China Sea. Congress, playing to special interests and the media, like the hedgehog, takes on one issue at a time.

Nicolas Maduro’s re-election in Venezuela was fore-ordained and will worsen the condition of its people. Following imposition of new sanctions, the U.S. Envoy in Caracas was expelled. In a surprise, Iraq’s Muqtada al-Sadr’s coalition was the big winner in his country’s Parliamentary elections. Mr. al-Sadr was strongly anti-American during the 2003 invasion but is now strongly anti-Iran. Shia terrorist groups Hezbollah and Amal were the big winners in Lebanon’s election. Ninety-two-year-old former Malaysian Prime Minister Mahathir Mohamad defeated his former mentee, current Prime Minister Najib Razak. The latter has been embroiled in corruption charges. This was the first defeat for the Barisan Nasional coalition since Malaysia was untethered from Great Britain in 1957. In Italy, President Sergio Mattarella’s decision to reject the attempt of two rival populist parties – 5-Star Movement and the League – to form a government was applauded in Brussels and y the liberal media, but it risks democracy in the Eurozone’s third largest economy. In a decision that could have come from Lewis Carroll, Syria was named president of the United Nation’s Conference on Disarmament. For virtually the entire month Hawaii’s Kilaueu’s volcano on the Big Island has been spilling lava, releasing toxic gasses and erupting molten rocks. 

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The latest school shootings in Texas, in which ten people died, means we must re-think our response to mass gun violence. We are living with an epidemic that is expanding geometrically. The Left says curtail guns. The Right insists on adherence to the 2^ndAmendment. We must think outside the box. Stricter rules regarding gun-ownership make sense and I see no civilian need for automatic assault rifles. But guns have always been common. Our home in the small New Hampshire town where I grew up was likely the only one without weapons, yet even gun accidents were rare. Personally, I am not a fan of guns; nevertheless, it is not the weapon that is at fault. It is the individual who pulls the trigger.

Wikipedia lists school and college shootings by decade. While perhaps not precisely accurate, the numbers suggest a trend. In the 1940s, there were eight such shootings, with eleven dead. In the 1950s, the number doubled to sixteen, with fourteen dead. In the 1960s, nineteen shootings left forty-four dead. In the 1970s, there were thirty-one attacks, leaving thirty-seven dead. In the 1980s, that rose to forty-one, with fifty-one losing their lives. In the 1990s, sixty-six shootings left ninety-three dead. In the 2000s, sixty-five shootings caused one hundred and eleven to die. And, in the 2010s, just through 2014, there have been 93 shootings, with ninety-one dead. If we take this contagion seriously, as we must, Congress will have to consider, besides gun laws, the role of mental health and the culture of violence that permeates our lives, from Hollywood to rock music, video games and late-night talk shows. Families and communities must be unafraid to call-out mental issues where they exist. Political correctness should be abandoned. Parents and schools must re-focus on old-fashioned rules: civility, respect, manners and decency. 

During the month Connecticut joined eleven states and the District of Columbia in approving a National Popular Vote compact, which would require each participating state to allocate its electors to the winner of the national popular vote, regardless of how its citizens voted. What they want: eliminate the Electoral College. Connecticut’s vote, hasty and unwise, was taken in response to the 2016 election. Keep in mind, Mrs. Clinton’s popular victory was made possible because of only two states – New York and California. What is being implied (but unsaid) is that smaller states don’t count. Ironically, at the Constitutional Convention in 1787, the author of the Great Compromise, which gave Congress its bicameral structure, was Connecticut’s Roger Sherman. The Compromise ensured that small states would get equal representation in the Senate, while the House would reflect population. It is one of the fundamental elements in the checks and balances that have allowed our government to survive over two hundred years. “I do not, gentlemen, trust you,” said Gunning Bedford of Delaware. “If you possess the power, the abuse of it could not be checked; and what then would prevent you from exercising it to our destruction?” Wiser heads than those in Connecticut, I hope, will prevail.

In a case that pitted the National Collegiate Athletic Association against the State of New Jersey, the Supreme Court, in a 6-3 decision, struck down a 1992 law, the Professional and Amateur Sports Protection Act, which prohibited states from authorizing gambling. The federalist in me said that was a good thing, individual states should make such decisions. The financier in me said this will help states in economic distress. However, the moralist in me said this was a terrible decision. It will encourage gambling – the belief that riches can come from little or no effort. Gambling is addictive and encourages bad behavior. It can lead to depression, criminal activities and bankruptcy. The National Council on Problem Gambling claims that 16% of Americans gamble at least once a week. Like the lottery, it will provide funds to states but do so via a regressive tax. If not accompanied by fiscal restraint, it will do nothing to reduce deficits. 

Elsewhere, domestically, Gina Haspel was confirmed as the first woman Director of the CIA. Midterm and state elections are under way. Primaries and conventions were held in Connecticut, Indiana, Ohio, West Virginia, Idaho, Nebraska, Oregon, Pennsylvania, Arkansas, Georgia, Kentucky and Texas. 

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Stocks meandered, on light volume, with diminished volatility. For the month, the DJIA closed up 2%. It is the bond market where attention should be paid. James Grant, in the May 4 issue of “Grant’s Interest Rate Observer,” wrote: “For the first time since 1981, Treasuries (U.S.) have delivered a negative, inflation adjusted return over the trailing three years.” The U.S. bull market in bonds began in September 1981 when the yield on the Ten-year reached 15.68%. It troughed two years ago (thirty-five years later), with the yield at 1.39%. It closed this month at 2.8%. Like any market, prices (and yields) don’t go in straight lines, but one can infer whether one is in a long-term bear or bull market. My conclusion is that a bear market in bonds began two years ago; but tops and bottoms of markets can extend across months, if not years. Central banks around the world have become (or are becoming) less expansionary, but you wouldn’t know it when looking at yields on some European bonds. The yield on the U.S. Two-year, at 2.4%, exceeds the yield on government Ten-year bonds in Germany, France, the UK and Spain. I find it hard to believe that Europe, with its slower economic growth and more socialist ways, is more credit worthy than the U.S. However, that spread differential – undeserved, in my opinion – has strengthened the Dollar and could cause U.S.  Treasury yields to moderate in the near term, but I suspect that in ten years yields will be higher. 

The concern for stocks is liquidity. Increasingly, trading is dominated by machines: High Frequency Traders (HFTs), index funds and ETFs, where individual company fundamentals matter less than asset allocation decisions. The floor of the NYSE is almost fully automated, not dissimilar to the NASDAQ. The question, to which no one has an answer: what happens when a mini flash-crash turns into a full-blown panic? Ultimately fundamentals would carry the day, but the short term could be scary. Markets are based on faith, trust and confidence – characteristics of people, not machines. One answer: dividends – the ultimate return on stocks. And the IRS could treat dividends as returns of capital, which is what they are. 

The month also saw further declines in the Argentina Peso and the Turkish Lira. Currency depreciation is a concern and reflects a lack of confidence in government and its monetary policy. (The Venezuela Bolivar has fallen 90%, since Maduro came to power in April 2013.) To stem the decline, Argentina’s central bank raised rates to 40%, while the Turkish Central Bank raised its lending rate to 16.5%. The price of crude oil was volatile but flat on the month, but still on an upward path that began in January 2016. The Dollar nudged higher, driven by higher yields on U.S. Treasuries, and Bitcoins were lower by about 20%. Investment manager AllianceBernstein announced a move from Manhattan to Nashville, following other money managers, like PIMCO, Charles Schwab and Fidelity, who are opening offices in Austin, Phoenix, Denver and Dallas. High state and local taxes (and regulatory practices) arewatched by businesses. The second revision to first quarter U.S. GDP showed the economy gaining 2.2 percent.

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The number of births in the U.S., according to the National Center for Health Statistics, dropped by two percent last year, to 60.2 for every 1000 women between the ages of 15 to 44 – the lowest in forty years, giving the U.S. a fertility rate of 1.76. We were at 2.12 in 2007. While there are those who are not concerned about these numbers, lower birth rates reflect a pessimistic view of the future and imperil economic growth. Pope Francis, straying from his spiritual responsibilities, declared that financial derivatives, like credit default swaps are “amoral” and “a ticking time bomb.” This is a man not particularly fond of capitalism, which he has described as “terrorism against humanity.” All Catholic Bishops in Chile offered to resign following revelations of a sex abuse scandal. President Trump announced he wanted to form a fifth branch of the military – a space force. UK reporter Tommy Robinson was jailed on breach of peace charges in Leeds for filming Muslims charged with rape and pedophilia. Missouri Governor, Republican Eric Greitens resigned over a sex scandal. ABC cancelled Roseanne Barr’s show because of a racist Tweet about Valerie Jarret. Ms. Barr blamed Ambien. Ms. Jarrett blamed President Trump. Meghan Markle married her Prince.

Speaking at a tech conference, President Obama said, “I didn’t have scandals, which seems like it shouldn’t be something to brag about.” Has he forgotten Lois Lerner at the IRS, targeting conservatives, or letting Nakoula Basseley Nakoula take the fall for the Benghazi attack that caused the death of Ambassador Chris Stevens?  Does he no longer remember Uranium One or ‘Fast and Furious?’ Ireland voted to allow women to have abortions in the first twelve weeks of pregnancy. While I agree that women should have control over their bodies, there was something unseemly about young women gloating over receiving permission to take a life.  What about personal responsibility? A male student in an Indiana high school opened fire before being tackled by seventh-grade science teacher Jason Seaman. Mr. Seaman was wounded, as was one other student. But his action prevented more casualties.

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In sports, “Justify” won the Kentucky Derby and the Preakness, both on sloppy tracks. He will head to New York for the Belmont Stakes and a chance at the Triple Crown. The Golden Knights (Las Vegas) and the Capitals (Washington) will play for the Stanley Cup, and the NBA Championship will pit the Golden State Warriors (Oakland) against the Cleveland Cavaliers.

Death took Tom Wolfe, best known for his novel that captured the ‘80s, The Bonfire of the Vanities. He died at 88. Philip Roth – author of Goodbye Columbusand Portnoy’s Complaint– died at 85. Professor Bernard Lewis, one of the great scholars of Islam, died at 101. Richard Pipes, the leading intellectual opponent of détente and an escapee from Poland in 1946, died at 94. Alan Bean, the fourth man to walk on the moon died at 86. And I lost a good friend, former classmate of my wife and former Lieutenant Governor of Connecticut, Eunice Groark. Eunice was 80.

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We approach the midpoint of the year and the year’s longest day. Like all months, it will bring good news and bad, the expected and the unexpected. Let us hope that wisdom prevails, that respect dispels disdain and crudity makes way for comity. Above all, I hope the month brings peace and good health.

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[1]I wrote that Halper was a spy; that is an opinion; however, one based on extensive reading and strong belief.

"The Month That Was - November 2017"

Sydney M. Williams

swtotd.blogspot.com

The Month That Was

“November 2017”

December 1, 2017

“November’s sky is chill and drear;

November’s leaf is red and sear.”

                                                                                                Sir Walter Scott (1771-1832)

                                                                                                “Ettrick Forest in November,” 1808

November is a month for memories. We think of the Pilgrims who celebrated their first year in the New World, in 1621 – and try to make sense of the hardships they endured, all for the cause of freedom to worship as they chose. We give thanks they succeeded. On the 11^th of November, we remember the 18 million soldiers and civilians who died in World War I – a day commemorated as Armistice, Poppy, Remembrance and Veterans Day. Sadly, it was a war that did not “end all wars,” but served as prelude to a bigger conflict. But, in the end, freedom prevailed. On November 22^nd, 1963 at 12:30PM President John F. Kennedy was assassinated – catapulting the nation into a struggle to understand, why? For us who were young and free, it was as though we also had been struck down. And, that most iconic of American films, Casablanca, premiered in New York City on November 26, 1942 – Thanksgiving Day. It was a movie with relevance today – a story of refugees trapped by events beyond their control, with a majority of the actors and actresses, either foreign born or refugees themselves – all seeking freedom.

The beacon of freedom, more than anything else, defines the world’s conflicts. That was so this month. Some who live in democracies are unappreciative of freedom’s rarity and fragility; for others, it is a distant siren, a promise. Islamic extremists, who despise the concept of freedom – individual, religious, political and economic – were relentless during the month. According to Wikipedia, more than 600 died at Islamists’ hands. Sayfullo Habibullaevic Saipov, a native of Uzbekistan now living in New York, drove a truck down a bike lane in lower Manhattan, killing eight cyclists. Before being caught, he shouted Allahu Akbar! God is the greatest! He had left a note pledging allegiance to ISIS. In a mosque on Egypt’s Sinai Peninsula, ISIS gunmen murdered 305 Sufi Muslims, a sect they consider heretical. On the Korean Peninsula, a North Korean soldier, identified only by his surname, Oh, escaped to the South, carrying with him five bullet wounds from North Korean soldiers, who shot him as he slipped across the border. What motivated Oh? Perhaps he had heard President Trump speak in Seoul of the “dazzling light” of South Korea versus the “impenetrable darkness” of the North – “the glories of freedom versus the toll of tyranny.”

Freedom, or the lack thereof, was at the center of the decision to elevate Xi Jinping last month. It is the crux of the debate between Brussels and London over Brexit – between the vision of Europe articulated by Margaret Thatcher almost forty years ago of a region based on nation-states that cooperate in trade and defense, versus the bureaucratic and liberty-challenged monolith preferred by those like Jean Claude Junker – an unaccountable and under-representative government that serves the needs of bureaucrats, not the wishes of the people – the populous. (Populism has been redefined by European politicians and media, and has assumed a pejorative connotation, to include all those – from nationalists to lovers of liberty – who threaten the comfortable lives led by arrogant elites in Brussels.) In the U.S., freedom lurks behind the debate raging between those who want government to do more, and those who would have it do less – to determine where on the spectrum, between anarchy and tyranny, one would prefer our politics to lie. Freedom is at risk in universities and colleges where conservatives are banned and debate is stifled.

Tales of unwanted sexual advances gripped Hollywood, Washington and the media. The sins of Harvey Weinstein unleashed a torrent of similar stories, some true, others fabricated; some incredulously denied, others admitted to with “crocodile” tears. The consequence, we hope, will be a society more respectful, but which will maintain due process[1]. Off-year elections proved a boon to Democrats, as they did well in state elections and won the governorships of Virginia and New Jersey. In a bad year for his Party, John Curtis kept Utah’s third Congressional District seat in Republican hands. Twenty-six people were shot and killed in a Texas church, including the pastor’s fourteen-year-old daughter. In Thornton, Colorado, a man carrying a handgun walked into a Walmart and shot three people dead. And in the northern California town of Rancho Tehama a maniacal gunman killed five people, including his wife. As ubiquitous as mass shootings have become, the problem is not, in my opinion, guns. It is a system that allows the mentally disturbed to purchase weapons. Border agent Rogelio Martinez was stoned to death in an attack along the Big Bend Sector of the Texas-Mexico border, abetting the call for stronger border security.

The House version of the tax bill was released, along with misinformation from what purports to be a responsible press, especially as it pertains to the deductibility of state and local taxes. Republicans would have been smarter had they explained that this bill would drive economic growth by reducing corporate and low and middle-income tax rates, but would raise taxes on high-income people living in high-taxed states.

Richard Cordray stepped down as chief of the Consumer Financial Protection Bureau (CFPB), an agency set up by the Obama Administration, which receives funding from the Federal Reserve, not Congress. It is a rogue agency, essentially the handwork of Senator Elizabeth Warren (D-MA) who hand-picked its director, Mr. Cordray. It is unaccountable to Congress and designed to be independent of the Executive. It has shaken down banks for tens of millions of dollars, giving them no chance to appeal. The proceeds have been used to fund groups that support the CFPB’s mission and policies. Mr. Cordray’s resignation set off a storm between the agency, the President and Senator Warren. Before leaving, Mr. Cordray anointed his assistant Leander English as interim director. Mr. Trump appointed OMB Director Mike Mulvaney, an outspoken critic of the CFPB, for the same position. Courts sided with the President. The federal bribery case against Senator Bob Menendez (D-NJ) ended in a hung jury. Adding fuel to the fires that consume political intrigues in Washington was Donna Brazile’s new book, “Hacks.” In it she disclosed an agreement between the Clinton campaign and the DNC. In return for needed cash, the Clintons got a right of first refusal over the party’s communication director and final say on all staff.

President Trump made a ten-day trip to Asia, visiting Japan, South Korea, China, Vietnam and the Philippines. The purpose was to attend an Asia-Pacific Economic Council (APEC) meeting in Danang, Vietnam, where he chatted informally with Vladimir Putin. He argued for fair trade practices: “…we seek robust trade relationships rooted in the principles of fairness and reciprocity.” But, the real purpose was to garner support for further isolating North Korea. Later, Air China suspended flights to North Korea, and the Friendship Bridge, which crosses the Yalu River, was closed, if only temporarily. Perhaps in response, North Korea launched its first missile in two months – a missile capable of reaching the U.S.

Syria signed the Paris Accord, joining a list of other climate-responsible nations, like Afghanistan, North Korea and Zimbabwe. Saudi Arabia’s crown prince Muhammed bin Salmon seems determined to bring his country into the 21^st Century by restoring moderate Islam, limiting dependency on oil and lessening the role and influence of the royal family. Despite the fact that fifteen of the nineteen hijackers who attacked the United States sixteen years ago were Saudi citizens, the Prince spoke of his country’s fight against Islamic terrorism. He was quoted in the November 27^th edition of The Financial Times: “Today, we began tracking down terrorism…We will pursue it until it disappears completely from the face of the earth…The greatest danger of extremist terrorism is in distorting the reputation of our tolerant religion.” It is a given that Islamic extremism will never be defeated until moderate Muslims join the chase. Perhaps they have. Germany still has not formed a government, but a grand coalition may be in the offing. In October, Angela Merkel’s Christian Democrats (CDU) won just over 30% of the vote. Second, were Social Democrats (SPD), led by Martin Schulz, with a little over 20%. Failure to form a minority government had Mrs. Merkel making the case for new elections. But such a prospect worried the SPD because of fear that the far-right AfD Party, which had been third in the elections and is anti-EU, may be gaining support. In the meantime, Britain stumbles towards Brexit, hamstrung by elites in London and Brussels who have created their own form of “resistance.” Robert Mugabe resigned as President of Zimbabwe, after a terror-filled thirty-seven-year reign that caused his resource-rich country to become one of the world’s poorest. His former Vice President Emmerson Mnangagwa, a man Mugabe had fired, was sworn in as President. A $10 million dollar-settlement and immunity from prosecution were offered to placate the 93-year-old Mr. Mugabe.

Jerome Powell, a member of the Federal Reserve’s Board of Governors, was named as the new chairman. Third quarter GDP growth was revised up to a positive 3.3%. General Electric cut its quarterly dividend by 68%, to $0.10 per share. The current yield places the stock above the midpoint for all S&P companies, on a yield basis. Going forward, GE will focus on healthcare, power and aerospace. Softbank offered Uber, a private company, a price 30% below last year’s valuation for a 14% stake. Uber, a disruptive technology unpopular with the Left, has been a bane for unionized taxi drivers and fleet owners, the latter who benefit from regulation that limits the number of medallions. Nevertheless, progress persists. Volvo received an order from Uber for 24,000 self-drive cars, to begin production in 2019. As manifestation of the decline in cable television viewership, ESPN lost two million subscribers this past fiscal year. They are now 88 million viewers versus 100 million in 2010. The price of Bitcoins soared above $11,000. In a column in The Wall Street Journal, James Mackintosh noted that in May 2010 a programmer paid 10,000 Bitcoins for two pizzas, or the equivalent today of $7 million a slice!

The Houston Astros beat the L.A. Dodgers to win the World Series. For the first time in forty years, an American woman won the New York marathon, with a time of 2:26:53, a minute ahead of last year’s champion, Mary Keitany of Kenya who was second.

In other news, Prince Harry, fifth in line to the English crown, announced his engagement to the beautiful Meghan Markle, a mixed-race, divorced American actress. Leonardo da Vinci’s painting “Salvator Mundi” sold for $450.3 million at Christies. Senator Rand Paul (R-KY) was physically attacked by a neighbor. The release of Bin Laden’s documents show that he was still in charge and had ties to Iran. A 7.3 magnitude earthquake along the Iraq-Iran border left 330 dead. A Texas trooper was shot and killed during a routine road stop. Anthony Weiner reported to a federal prison in Massachusetts and Oscar Pistorius had his prison sentence doubled when he appealed his six-year term. The Pope made a politically sensitive trip to Myanmar. President Trump put a hold on the Department of Interior’s decision to allow the importation of elephant trophies from Zimbabwe and Zambia, referring to trophy hunting as a “horror show.”  American rapper, Swoop Dogg’s new album cover showed the body of Trump in a morgue with the album’s title: “Make America Crip Again!” I don’t think Mr. Broadus likes Mr. Trump.

Actor and singer David Cassidy died at age 67. Liz Smith, queen of the tabloid gossip columnists died at 94. Jim Nabors, aka Gomer Pyle, died at 87. I lost a cousin – a first cousin once removed – Caroline Blake who died at 102, and a friend from Old Lyme, Bob Adams died at age 87. And my youngest son’s brother-in-law Tom Comer suffered a heart attack and died too young at age 54.

Today marks the first of December, the last month of the year. As we age, time rushes by at an ever-increasing pace. An hour is still an hour, a day yet a day, and a month a month. We cannot slow time down or speed it up, but we can and we should appreciate its value and extract all we can, from each minute, week and year. Despite our differences, whether racial, religious, economic, cultural, or political, and no their intensity, we should respect one another. May your holidays be merry. May love and peace reign throughout the world.

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[1] I will have more to say on this subject in Monday’s Thought of the Day.

The Month That Was - September 2017

Sydney M. Williams

swtotd.blogspot.com

The Month That Was

“September 2017”

October 1, 2017

“September: it was the most beautiful of words, he’d always felt,

evoking orange-flowers, swallows and regret.”

                                                                                                Alexander Theroux (1939-)

                                                                                                Darconville’s Cat, 1981

Hurricanes in the Caribbean and the U.S., earthquakes in Mexico and forest fires out west dominated the news. The New York Times, in reporting on the devastation and sounding like an Old Testament prophet, noted, people could be excused for believing that an angry God (perhaps Al Gore?) had let loose His wrath for destroying what He had created – God, that is, not Al Gore. Hyperbole sells news, so perhaps the folks at the Times could be excused for trying to make an extra buck out of other people’s misery.

Torrents were not limited to Mexico, the Caribbean and the Texas/Florida coasts. At the United Nations, President Trump gave a Reagan-like speech, as he did in Poland. He praised the work of the UN, and cited the principles on which it was founded: “pillars of peace, sovereignty, security and prosperity.” He spoke of its cooperation: “Strong sovereign nations let diverse countries with different values, different cultures and different dreams not just coexist, but work side by side, on the basis of mutual respect.”  He reminded those listening that Americans “have paid the ultimate price to defend our freedom and the freedom of many nations represented in this great hall.” He emphasized he was an American leader, not a world leader.

He warned that if the UN is to be an effective partner reform is necessary to confront those who would dismantle the world we know: “Too often the focus of this organization has not been on results, but on bureaucracy and process. In some cases, states that seek to subvert this institution’s noble ends have hijacked the very systems that are supposed to advance them.” He reminded his audience that “some governments with egregious human rights records sit on the Human Rights Council.”

President Trump called out North Korea for what they are, a country that impoverishes its people and risks catastrophe in the Pacific region. Bully’s intimidate, he asserted, and must be confronted. He did add a sentence, the last part of which became headline news in much of the media: “The United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea.” Most press accounts left off the final two sentences of the paragraph: “The United States is ready, willing and able, but hopefully this will not be necessary. That’s what the United Nations is all about. That’s what the United Nations is for. Let’s see how they do.” Mr. Trump spoke frankly of the Maduro regime in Venezuela, using two of the best sentences in the speech: “The problem in Venezuela is not that socialism has been poorly implemented, but that socialism has been faithfully implemented. From the Soviet Union to Cuba to Venezuela, whenever true socialism or communism has been adopted, it has delivered anguish and devastation and failure.”

As do many in politics, Mr. Trump has multiple personalities, like Joanne Woodward as Eve in, “Three Faces of Eve,” or the two faces of Janus. He reminds one of Dr. Doolittle’s Pushmi-Pullyu. We do not know which way he is headed. The weekend after his speech to the UN, he became embroiled in an argument with NFL players, who prefer to kneel rather than stand during the National Anthem.  Mr. Trump is right about the disrespect they show, but who cares what those morons do? Don’t we have bigger issues, like economic growth; addressing the inequities embedded in the miss-named Affordable Care Act; fixing Dodd-Frank, which has allowed “too-big-to-fail” banks to proliferate, or doing something about our unsustainable debt? Should not tax reform take priority, or the geopolitical concerns in the Middle East and Southeast Asia? Why take on the NFL? My father warned me: never argue with an idiot, for a passerby would be unable to distinguish between the two. The consequence for Mr. Trump was that a great speech disappeared into a miasma of kneeling, self-righteous, juvenile football players.

Like one of its rockets, North Korea rose in the news. In the first of the month they detonated an Atomic bomb estimated at 50 kilotons, four or five times larger than the one that destroyed Hiroshima. In the middle of the month, they launched a missile that flew to a height of 478 miles and traveled 2,300 miles, over Japan and into the Pacific – far enough to reach the U.S. airbase in Guam. In the last days of the month, a war of words broke out, with Donald Trump referring to Kim Jong-un as “Rocket Man,” and Mr. Kim describing Mr. Trump as a “dotard.” The good news was that the Chinese appear to be increasingly concerned about instability on the Korean Peninsula. They instructed their banks to halt new business with North Korea and to unwind old loans, and ordered closure of North Korean businesses in China. The Chinese, above all else, want stability. They do not want hordes of refugees crossing into their country. If they sense the Peninsula is becoming too volatile, they may force regime change.

Angela Merkel won a fourth term, but this time receiving 33% of the vote (versus 41% four years ago). The surprise winner was the far-right party, the AfD (Alternative for Germany), which picked up 13%, or three times what they received in 2013. Nationalism is alive. In Europe, it is seen in the success of far-left and far-right parties, as a reaction to an over-reaching Brussels. In Catalonia, separatists prepared for a possible referendum on October 1. Iraqi Kurds voted overwhelmingly for independence. In Myanmar, a refugee crisis developed, as thousands of Muslim Rohingya crossed into Bangladesh, fleeing their majority-Buddhist homeland. It is estimated that a million Rohingya live (or lived) in Myanmar, where they have been denied citizenship since 1982. Theresa May, giving a speech in Florence regarding Brexit, went “wobbly.” Two earthquakes hit Mexico, with the second killing hundreds in Mexico City.

The U.S. Senate failed to pass health care reform. Tom Price, Secretary of HHS, resigned for excessive use of private jets. Harvey hit the Texas gulf coast, and then Irma crossed over the Keys and swept up the west coast of Florida. Combined, they left 160 dead and an estimated $300 billion in damages. Among the dead in Florida were eight elderly patients who died of heat exhaustion in a nursing home. Hurricane Maria devastated Puerto Rico and the U.S. Virgin Islands. It seems Donald Trump was right when he complained that Trump Tower had been bugged. It turns out that Samantha Power, Mr. Obama’s Ambassador to the UN, “unmasked” hundreds of those on the Trump campaign and transition teams, and Susan Rice, former National Security Advisor and dissembler regarding Benghazi and Bowe Bergdahl, eavesdropped on opponents to the Iran deal. Valerie Plame, who rose to prominence on the mistaken accusation that she had been outed as a CIA agent by the Bush Administration, retweeted a “virulently anti-Semitic article by a well-known bigot,” according to Alan Dershowitz.

President Trump rescinded President Obama’s executive order that created DACA (Deferred Action for Childhood Arrivals), the “Dreamers.” The status of those who came as children, and who are now in school, college, the military or in jobs, remains unclear. Mr. Trump wants to have Mr. Obama’s executive order converted into Congress-passed legislation. Senator Bob Menendez’ (D-NJ) trial on corruption charges began and is expected to take two months. Former U.S. Congressman Anthony Weiner (D-NY) was found guilty of sexting a fifteen-year-old girl and sentenced to 21 months in prison. The New York Times described him as “teary and chastened.” Really? In Alabama, Ray Moore beat Senator Luther Strange, to win the Republican nomination for Senate.

The U.S. debt ceiling was extended for three months. The Federal Reserve announced they would begin to unwind their balance sheet, and Stanley Fischer resigned as the Fed’s Vice Chair. In a nine-page outline that disclosed little, Mr. Trump unveiled his tax reform package. The Economist reported that Australia had completed its 104^th consecutive quarter of economic growth – a modern record among OECD nations. Rolling Stone is being sold by Jann Wenner, the magazine’s founder and publisher. Toys ‘r Us filed for bankruptcy. Facebook, a company that last year had revenues of $27.6 billion, is facing charges that it accepted $150,000 in ad revenues from Russia. Second quarter GDP was revised up for the second time, to 3.1%. Household net worth in the U.S. rose two percent in the second quarter to a record $96.2 trillion. That sounds like a lot, until one realizes how concentrated it is. Median household net worth is $121,000. Bitcoin prices, which began the year at $968.23, began the month of September at $4,718.70. The price closed Friday at 4,165.51 – the first (I believe) down month this year. Stocks were modestly higher for the month – giving us the longest quarterly win-streak in twenty years. U.S. Treasuries were essentially flat. Gold, which has had a good year, closed the month with a small loss. Market volatility remained low.

At the U.S. Open, an unranked American, Sloane Stephens, defeated her team mate Madison Keys, in straight sets. Thirty-one-year old Rafael Nadal won in straight sets over South African Kevin Anderson. This was Nadal’s 16^th career grand slam and third U.S. Open win. The Cleveland Indians set an American League record with 22 consecutive wins. And Yankee, Aaron Judge set a record, on September 25^th, for the most home runs – 50 – for a rookie.

In other news, Jean-Claude Juncker unveiled his vision for a bigger, more powerful EU and said Britain would regret leaving. Of course, embedded in his braggadocio was the reason Britain voted to exit. The conservative mayor of the Belgian city of Mouscron was found in a cemetery with his throat slit. Kate Middleton, the Duchess of Cambridge and future Queen of England, announced she will be having a third child. Rare, white giraffes were cited in Kenya. The IOC selected Paris to host the 2024 Olympics. After thirteen years of exploring the moons around Saturn, NASA’s spacecraft Cassini, came to a planned end, in a blaze of burning plastic and aluminum, as it plunged into Saturn’s atmosphere. A report from Germany reflected the cultural challenges facing the West: Between 2010 and 2015, 1.4 million more Christians died in Germany than were born. In 2016, 537 Catholic parishes were closed. In contrast, the number of mosques rose from 700 in the 1980s to 2,300 in 2009. Muslims in Europe are younger, more religious and have higher birthrates than average Europeans. Saudi women were granted permission to drive, starting in June, but will still need their husband’s permission to open a bank account.

Transgender Chelsea Manning, former U.S. Army private and convicted felon for illegally releasing State and Defense Department documents, was named a “visiting fellow” at the John F. Kennedy School of Government at Harvard. The offer was rescinded when his appointment outraged others. However, she was still invited to lecture. Hillary Clinton released her book What Happened? to yawns. Oberlin College, according to its student newspaper, is missing its enrollment target by about eighty students. Was that a testament to rising costs, diminishing returns for graduates, political correctness, or a lack of diversity of thought on college campuses? Mayor Bill de Blasio easily won re-nomination. Eleven-year-old Frank Giaccio wrote to the President, offering his lawn mowing services. Mr. Trump took him up, and Frank mowed the Rose Garden lawn. “A great job!’ Mr. Trump said.

Death took Liliane Bettencourt, the world’s richest woman (heiress to L’Oreal), at age 94. Penny Chenery, owner of Secretariat, died at 95.  Jake LaMotta, heavyweight champion from 1949-1951, also died at 95. We lost two writers – J.P. Donleavy, author of Ginger Man, who died at 91 and Lillian Ross, who wrote “Talk of the Town” pieces for The New Yorker, at 99. Playboy founder, Hugh Hefner, died at 91. And a good friend from Old Lyme, Ed Wolcott, World War II Army Air Corps pilot and hero, died at age 95.

We move on to October, a month that begins with leafs green and ends with limbs clean.