Mass Murder In Las Vegas and the NFL Self-Destructs

Al Tuchfarber

7 years ago

In Brief

Tax cuts and tax reform are now domestic issue #1 for the Trump and Republican agendas. They will focus on corporate rate cuts to foster job creation and growth and on middle-class tax cuts and simplified filing.
China is ramping up for a crucial Party Congress [every 5 years] on Oct 18 to re-elect Xi Jinping as party leader. This Congress will have very substantial implications for Chinese, regional and world politics. The results of the Congress will likely set the stage for major economic reform, substantial slowing of GDP growth and major Chinese actions on N Korea’s Kim regime
“Bad cops” Trump and Haley, “good cop” Tillerson and “tough cop” Mattis confuse many.
The NFL has been killing its Golden Goose of a money-making juggernaut with its support of some players disrespecting the flag and national anthem. It is too late to reverse some of the financial and PR carnage. New survey shows the collapse of the sport’s favorability.
The deaths and carnage from the Las Vegas shootings are creating a new dynamic in the gun-control debate and policy changes are likely, including some supported by the NRA.
New forecasts on tax reform and Obamacare.

In-Depth

2017 Predictions—Accuracy Report – October

On January 2, 2017, I published 25 predictions for 2017. They are shown below. In brackets, after each, is an evaluation of their current status—CORRECT, IN-PROCESS/PROBABLY CORRECT, IN-PROCESS/OUTCOME UNKNOWN, or IN-PROCESS/PROBABLY WRONG.

Few pundits and analysts get held accountable for their analysis and predictions. As my mantra is “accuracy” I will report on the status of my predictions each quarter.

I’ll give myself a passing grade if 80% or more prove to be correct. None of you will like all my predictions and some of you will dislike many of them. Even I don’t like some of them. The appropriate metric isn’t like or dis-like but accuracy. This is something much of the media seems to have forgotten.

President Trump will nominate and have confirmed a Supreme Court justice to replace Antonin Scalia. [CORRECT]
He will have nominated and had confirmed scores of federal judges at the district and appeals court level. [CORRECT]
More illegal immigrants will leave the US in 2017 than enter, but legal immigration will stay at about 1,000,000. [IN-PROCESS/PROBABLY CORRECT]
Most those who leave will do so voluntarily or be forced to leave because of criminal acts they committed in addition to being an illegal residence in the US. [CORRECT]
No Brownsville TX to San Diego CA physical border wall will be built as it is physically almost impossible but the US borders will be more tightly controlled than at any time in generations. [CORRECT]
The number of new federal regulations and executive orders issued will plummet and many hundreds will be eliminated, cancelled, or reversed by the administration, Congress, or the courts. [CORRECT]
Major tax reform and tax cuts [personal and corporate] will be passed and signed. [IN-PROCESS/UNKNOWN OUTCOME]
Obamacare will meet one of two fates. It will be partially repealed and partially replaced. Or, it will be left to complete its self-destruction as it is totally non-viable fiscally for insurance providers, the federal government, and the state governments. [CORRECT]
All the following groups will be DISPLEASED with SOME of Trump’s major policies:a. Fiscal conservatives, because he adds to the deficit [CORRECT]
b. Social conservatives, because he isn’t socially conservative enough [CORRECT]
c. National defense conservatives, because he isn’t, in their eyes, aggressive enough with US enemies, and [CORRECT]
d. Democrats and the mainstream media for almost everything he does. [CORRECT]
Trump will continue or establish several new methods of communicating directly with voters, effectively bypassing conventional, national media channels. [CORRECT]
The percentage of Americans saying the country is headed in the right direction will exceed 40% by Thanksgiving 2017, up from an average of less than 30% in 2016. [IN-PROCESS/PROBABLY WRONG]
Major federal policy changes will be initiated and be designed to increase US energy independence from all but Canada. [CORRECT]
US air and water will get cleaner in 2017 as it has for decades. [CORRECT]
US CO2 emissions will fall in 2017 as they have since 1992. [CORRECT]
President Trump’s approval rating will average over 50% in November 2017. [IN-PROCESS/PROBABLY WRONG]
Outgoing President Obama and Secretary Clinton will come under harsh political attack from Democrats and the media for the hollowing-out of the Democratic party in the southern, plains, mountain, and mid-western states. [CORRECT]
The broadest measure of unemployment [U-6] will fall one percent or more by November 2017, from a little over 9% now. [CORRECT]
Any major threat to a NATO country by Russia will be met with a surprisingly aggressive US response from the Trump administration. [CORRECT]
The rules-of engagement for US troops will be loosened markedly in almost all theaters of operation. That is, they will be permitted to take more aggressive action against the enemy. [CORRECT]
ISIS will lose all or almost all its geographic territory [Caliphate] in 2017 but will remain a terrorist threat for years to come. [CORRECT]
There will be increasing “push-back” against China’s territorial offensive in the East and South China Seas by the US, Japan, Taiwan, Vietnam, and others. [CORRECT]
There will be no large-scale trade war with China in 2017 as Trump’s economic and foreign policy advisors will convince him China’s economy is near a breaking point due to unstainable levels of debt and major policy errors. [No need to push an adversary when they are already self-destructing.] [IN-PROCESS/PROBABLY CORRECT]
Congress will NOT enact authority to place tariffs on US companies moving plants from the US and shipping goods back to the US from those plants. But Trump and Pence will use the bully-pulpit, tax cuts, regulation cuts and local resources to short-circuit the departure of many plants and jobs. However, few net new manufacturing jobs will be created because productivity increases have been the most important destroyer of manufacturing jobs. Those will continue. [CORRECT]
Economic and political instability in the EU will continue throughout 2017. Both left-wing and right-wing political groups and voters will turn further toward populism and against internationalist, globalist parties. [IN-PROCESS/PROBABLY CORRECT]
Chinese foreign reserves will continue to fall in 2017 as will the yuan/renminbi relative to the dollar. [IN-PROCESS/UNKNOWN OUTCOME]

SUMMARY OF EVALUATIONS

To date the score is:

18 CORRECT
3 IN-PROCESS/PROBABLY CORRECT
2 IN-PROCESS/UNKNOWN OUTCOME
2 PROBABLY WRONG

I’ll report to you again in January.

Forecasts

I’ve added new forecasts.

POLITICAL Forecasts, Elections

The chance the Rs will lose at least a few seats in the 2018 House elections is 80 to 90 percent.
The chance the Rs will lose their 241-194 House majority in 2018 is 10 to 20 percent
NEW—The chance the Republicans will still control the Senate after next year’s elections is 90 to 95%.
The chance the Ds lose two or more of their 48 Senate seats in ’18 is 85 to 90 percent.
The chance that Donald Trump will be the 202o R nominee is 90 to 95 percent.
The chance that Trump will win a 2nd term is 80 to 85 percent.
Policy & legislative forecasts
NEW–There is a 70-80% probability the Congress will pass and Trump sign major tax reform and tax cuts for most by fall 2018.
NEW–There is a 50-50 probability that Obamacare Repeal and Replace will be passed and become law by fall 2018. [This issue will not go away as Obamacare is self-destructing with high premiums, increasing state costs and insurance company losses.]

Media

Don’t forget the Tuchfarber 30 Day test—when you get upset about something in the news ask if it is likely to be IMPORTANT IN 30 days or soOnly seldom will it be so and you can usually ignore it.

Global Politics

Stopping North Korea

Most of the press coverage of the US options and likely choices for dealing with N Korea’s nukes and missiles has been about the two extremes: dialogue-diplomacy-negotiation or war.

Dialogue and negotiation are inevitable but nearly certain not to bear meaningful fruit as the last 25-30 years of “strategic patience” has proven. The N Koreans always promise to abide by deals but always lie. Hot war- conventional or nuclear- is also not a high probability, although its probability is not zero.

N Korea’s Kim regime disappears- is obliterated- in any hot war and its defeat is essentially inevitable. Kim is killed or is a war criminal on the way to an execution. The most important reason a hot war is unlikely is that Kim is a weak sybarite and does not want to lose his opulent lifestyle or end his family dynasty. He just added his sister to the ruling Politburo.

If a war does occur, S Korea will have millions of deaths and trillions of dollars in damage. Secretary of Defense Mattis is clear about the necessity of avoiding that.

The US would lose thousands of its soldiers and more Americans resident in S Korea. It would also be on the hook for hundreds of billions to help rebuild S Korea and, ironically, N Korea.

The key player here is China and the key question is how far the Trump administration will go to force China to solve the problem. Short of war, only China can do so. My read is that Trump will do whatever it takes to push China into action.

At least three major avenues exist to force China to solve the problem.

An option already initiated but in its infancy and applied, so far, to only a few institutions in China, is to deny access to the US and the US controlled international financial systems. So far it is targeted at just a handful of Chinese banks and companies. It can be extended to many more on a selective or global basis. The Chinese Central Bank and policy makers have told their financial institutions to end dealings with N Korea. We’ll see if that is real or more of the standard posturing from China.
In addition to #1 is the initiation of a major trade war with China. About 4 or 5% of China’s GDP is exports to the US. A major trade war would throw then into an economic collapse and endanger the Chinese regime after a year or so as the legitimacy of the regime is based on economic growth and higher wages. Such a trade war would cause serious shortages of some products in the US and widespread uproar but US exports to China are less than 1% of US GDP. This is an extreme and dangerous step but is much more acceptable than war.
The continuation of a nuclearized N Korea with ballistic missiles capable of hitting Japan and, in a few years, the US, makes it highly likely that Japan will go nuclear [they can in months, as they have the plutonium and the technology]. Japan would be followed by S Korea in a few years at most and not much before Japan helped nuclearize Taiwan. Vietnam would probably join the club in less than a decade.Before such widespread nuclear proliferation occurred the US, S Korea and Japan would all vastly expand their anti-missile systems. Both events are a strategic disaster for China. Extensive anti-missile systems in S Korea and Japan seriously degrade China own strategic missile force deterrence. S Korea, Japan, Taiwan and Vietnam with nukes is a strategic disaster of the first order for China. And don’t forget, during the Presidential campaign Trump “played” with offering Japan and S Korea nukes.
Neither such escalation- nukes or robust anti-missile systems in East Asia are desirable but either is far more desirable that a hot war with many million casualties and unknowable secondary and tertiary consequences.

The important point here is that there are many options stronger than negotiation and less onerous than war.

In less than two weeks Party Secretary/President Xi is likely to gain nearly total control of all the levers of power in China—military, police, economic, political and media. This will occur at the 19th Party Congress starting on October 18. If I was Kim Jong-un I’d be holding my breath after that… waiting for the next shoe to drop.

Good Cops, Bad Cop, Tough Cop

There are constant stories in the press that suggest Secretary of State Tillerson and Trump … or Trump and Secretary of Defense Mattis …or Tillerson and UN Ambassador Haley are out of sync with each other. The mainstream media presents things as the Trump administration being in chaos. They probably believe that is true and certainly hope it is true.

Even the conservative press gets caught up in this story with reporting on internal conflicts and lack of loyalty to Trump.

May I suggest another interpretation that is more consistent with Trump’s style and history?

Trump, Tillerson, Mattis and Haley are all successfully engaged in a planned role-playing performance. Each is choreographed to perform in ways that fit their roles and expectations.

Trump loves being the unpredictable “bad cop” even when he is actually a deal maker and compromiser.

Tillerson, as Secretary of State, must be a diplomat…the “good cop” … even though he is a tough no-nonsense negotiator.

Mattis— “Mad Dog Mattis”—is tough as nails but hates war and dead soldiers and destroyed families. His role as the “tough cop” is to be clear that we can absolutely destroy our enemies.

Nikki Haley’s role is closer to Trump’s. She is to get the world’s attention at the UN, especially that of Russia and China but also that of US allies. No more “Mister Nice Guy” is her marching order.

She and Trump are the “bad cops” and will insist on real change but with the caveat that deals not be “win-lose”, but “partially win- partially win”.

Try that out as a template and watch how all four behave.

China’s Politics and Economy

China’s politics and economy are so important to the global economy and the general situation around the globe I am adding a regular section on it to the newsletter. The section will periodically include detailed articles on specific things but will also list each week evidence that suggest an economic soft landing for China—a controlled slowdown to “normal” economic growth levels—or a hard-landing—a more rapid, extended and dangerous bursting of China’s asset bubbles.

I WILL ADD AND DELETE ITEMS TO THIS SECTION AS RELEVANCE DICTATES. “NEW” ANALYSES WILL BE SO LABELLED AND REVISED SECTIONS WILL BE LABELLED “CHANGED”.

New or Major Evidence for Soft Landing

The WSJ reports that Chinese regulators removed emergency measures they put on the Chinese stock exchanges in support of equities following crashes in 2015 and 2016. This is a sign of confidence and stability.
The political leadership, including President Xi, and the financial regulators have promised to rein in excessive speculation and credit growth. [We’ve been promised that for many years and the debt has continued to sky.]

New or Major Evidence for Hard Landing

NEW—The WSJ headlines…” Consumer Loans Fuel China Housing”. Short-term consumer loans have grown at an astounding 100% rate in the last year but not for retail spending whose growth is little changed. Rather it is for investments in housing extending the housing bubble and adding more debt.
Party Secretary/President XI continues to purge opponents and those offering him only weak support so as to have almost complete control of the levers of power when the economic/financial crisis starts to bite. On Oct 18 every 5-year Party Congress starts. Expect major news at the end of it and for months to come.
S&P has joined Moody’s and Fitch in downgrading China’s debt because of excessive and growing levels of that debt.
Two quotes from separate stories in a recent WSJ accurately describe where things are with China’s economy. “China’s economic mandarins are unlikely to permit an overly sharp slowdown in investment that could tank commodity markets right ahead of the twice-a decade Communist Party leadership shuffle kicking-off in mid-October.” “An all-powerful leadership can likely keep the forces of disruption at bay for some time. But they haven’t disappeared…”
China is preparing for the start of its every five-year, 19th Party Congress in the middle of October. At the meetings, General Secretary Xi will be re-elected as General Secretary, the Party’s official leader, and most of the ruling members of the Politburo will retire as they have reached the official retirement age of 68. Xi has been maneuvering for years to pack the new Politburo with his allies and will probably succeed setting himself up to continue his rule after his new 5-year term ends in 2022. Most experts think that is his goal and that he will set the stage for it at this fall’s Party Congress. This will also set the stage for major economic and financial reforms likely to slash China’s high growth rate which has been “bought” with a massive accumulation of debt. Such reforms are almost sure to be accompanied by a long, slow economic hard-landing and much social and political unrest. Thus, Xi feels he must have total control for himself and the country to get through the coming crisis. Stay tuned…
A WSJ story reads— “…China has been reeling in some of its biggest deal makers on mounting concerns about capital leaving the country and debt loads posing a risk to its economy.”
The WSJ’s Heard on the Street [Sept 8] wrote…” This doesn’t mean China’s bad loan problem has gone away, it just has been swept under a convenient nearby rug.”
WSJ article points out that the yield curve in China has flattened—the prices of 3-year bonds are essentially the same as 10-year bonds. Such flattening is often, but not always, indicative of an economic slowdown on the horizon.
Several weeks ago, the IMF raised its projections for Chinese growth but sternly warned that rapidly increasing Chinese debt will hit 300% by 2022. Others like the Institute for International Finance [IIF} asserted in June that Chinese debt already totaled over 300% of GDP, a high percentage for a developing country.
China is now officially and publicly instructing its companies that they must stop foreign investments in areas like insurance, hotels, other real-estate, gambling facilities, etc. Foreign investments are to be directed to two areas. The first is into strategic areas, as defined by the government, such as technologies where the intellectual property gained fits with government plans for China to become a major, worldwide competitor in various fields. [Sound like Japan in the 1970s and 80s?] The second area is into investments consistent with China’s One Belt-One Road strategy to tie it more completely with all of Asia as well as Europe and Africa.

These all indicate concern that economic, financial and political risks are rising.

Musings

This is a new section. My “musings” will not have the factual and analytic rigor required for the other sections above. But, they will not be just opinions like the Opinion and Commentary articles. They will be somewhat free-flowing and speculative. Please comment if you like or dislike them.

Musings on the Las Vegas shootings

It is impossible to comprehend the horror and carnage of the Las Vegas shootings—almost 60 dead, 500+ wounded. Hundreds of lives shattered and thousands living in fear for years or a lifetime.

Why?

We don’t know!

Stephen Paddock’s motive is unknown at this point… a mystery.

He cased other public venues in Las Vegas, Boston and Chicago…maybe others as well.

He didn’t “just snap” …not with months or years of planning.

We don’t really know what the girlfriend or associates know.

We don’t know what the authorities know.

But, we will know a great deal more in weeks.

The left wants to use this tragedy to get a great deal more gun control. That won’t happen for a variety of reasons, not the least of which is that Paddock violated numerous existing laws, but not in any way detectable prior to the disaster.

There will likely be a few tweaks to existing gun control laws or regulations coming out of this tragedy. Even the NRA seems amenable to outlaw the bump stocks that made Paddock’s semi-automatics near automatics.

But, an increasingly conservative Supreme Court and federal judiciary is not likely to allow serious diminution of the right to bear arms, especially when as WSJ columnist Peggy Noonan accurately states that the American people do not trust “government” to protect their person and property.

Think about the implications of that…

Opinion and Commentary

NFL Disaster

The NFL has created a financial disaster for itself with politically correct stupidity.

When Colin Kaepernick knelt during the national anthem in protest of killings of black men by police officers he could have been punished immediately with a fine, suspension or expulsion. He and all players, staff and owners sign away many rights, including free speech, when they agree to NFL employment.

But, political correctness ruled the day and now the $14 billion-dollar Golden Goose is in jeopardy.

In a poll by the Winston group, reported widely in the left-wing and right-wing press, the popularity of NFL football has tanked in just 1 month.

In August this year, before the regular season began, national ratings of the NFL were 57% favorable and 23% unfavorable. In September, after widespread kneeling and bench-sittings during the anthem, they plummeted to 44% favorable and 40% unfavorable. What is far worse, among the prime football interest group—34-54-year-old males—favorability fell from 73% to 42%, a 31% decline.

Can we say “disaster”!

As I have said in previous weeks, money will end up ruling the day and the anthem will end-up being respected by all on the field by order of the league. But, the damage has been done and cannot be completely healed.

Putting this in a much broader context, there is a large backlash building and, already underway, against left-wing political atrocities. The reaction to the NFL mistake is just a minor example.

Expect a strong negative reaction if Antifa’s planned Columbus Day actions, tomorrow, occur.

Trump’s nomination and election were caused by the Democratic Party’s abandonment of their former core group, white working-class voters.

Clinton and Obama and others now label them as “deplorable”. Big mistake…