Archive for the ‘Uncategorized’ Category

Turnaround in Health Care Stocks Sends Indexes to Records

December 9, 2016

The Associated Press

December 9, 2016

NEW YORK — U.S. stocks are rising Friday as major indexes continue to set records. Some of the largest gains are going to industries that have been left out of the post-election rally, including health care companies and makers of household goods. Banks, which have led that surge, are slipping.

KEEPING SCORE: The Dow Jones industrial average added 62 points, or 0.3 percent, to 19,677 as of 11:18 a.m. Eastern time. The Standard & Poor’s 500 index rose 8 points, or 0.3 percent, to 2,253. The Nasdaq composite gained 27 points, or 0.5 percent, to 5,444.

The Russell 2000 index of smaller-company stocks advanced 3 points, or 0.2 percent, to 1,389. All four indexes closed at record highs Thursday and they’re on pace for their biggest weekly gains since the presidential election.

HEALTH CARE HOPPING: Drug companies bounced back. Biotechnology companies had been hit hard this week after President-elect Donald Trump said he wants to reduce drug prices, but they have now recovered those losses. Biogen jumped $12.59, or 4.3 percent, to $302.13 and Botox maker Allergan rose $4.88, or 2.6 percent, to $193.35 while Pfizer added 86 cents, or 2.8 percent, to $31.80.

TECH CLIMBING: Technology stocks rose for the sixth consecutive day. They are still slightly lagging the market since last month’s presidential election. Chipmaker Broadcom rose $8.54, or 5 percent, to $179.25 after reporting earnings that were far above expectations. The company also doubled its quarterly dividend. Apple gained $2.14, or 1.9 percent, to $114.27. The tech giant also hasn’t done much since the election. Google parent Alphabet, which has traded lower over the last month, picked up $7.91, or 1 percent, to $803.08.

TAKEOFF: United Continental rose $1.78, or 2.4 percent, to $74.52 and American Airlines leaped $1.73, or 3.6 pecent, to $49.78 after both companies reported encouraging revenue measurements.

GET SOME REFRESHMENTS: Coca-Cola climbed as investors were pleased with the company’s CEO transition plans. Coke said Muhtar Kent, 64, will step down in May after eight years as CEO. He will remain chairman of the board. Chief Operating Officer James Quincey, who has worked at the company for 20 years, will become CEO. The company’s stock gained $1.07, or 2.6 percent, to $42.05.

Other consumer goods makers also climbed. Procter & Gamble, which makes Tide detergent, Charmin toilet paper, and many other products, picked up 56 cents to $84.06. PepsiCo gained $1.31, or 1.3 percent, to $103.46. The household goods sector is down about 2 percent since the election. Only those companies and utilities have fallen since Nov. 9.

HARD TIMES: Furniture and housewares company Restoration Hardware tumbled after its fourth-quarter forecast was far weaker than analysts expected. The company said consumers spent less because of the election and it shipped its catalogues later than planned. Sales of its holiday collection have also been disappointing. The stock lost $6.46, or 16.6 percent, to $32.53. It’s down 59 percent this year.

BANKS: Financial companies were headed for a rare loss. Financial services firm T. Rowe Price gave up $1.33, or 1.7 percent, to $77.29 and insurer Aflac shed $1.25, or 1.8 percent, to $68.37. The S&P 500 financial index has climbed 18 percent since the election. That’s twice as much as any other sector, and the S&P 500 overall is up 2.8 percent.

ENERGY: Benchmark U.S. crude oil jumped 57 cents, or 1.1 percent, to $51.41 a barrel in New York. Brent crude, the international standard, added 19 cents to $54.08 a barrel in London.

BONDS: U.S. government bond prices slipped again. The yield on the 10-year Treasury note inched up to 2.43 percent from 2.41 percent. That yield is used to set interest rates on many kinds of loans including mortgages.

CURRENCIES: The dollar rose to 115.14 yen from 114.20 yen. The euro fell to $1.0541 from $1.0603.

OVERSEAS: The CAC 40 in France was up 0.5 percent and the British FTSE 100 rose 0.2 percent. Germany’s DAX rose 0.2 percent. Japan’s Nikkei 225 gained 1.2 percent as the yen weakened against the dollar. Hong Kong’s Hang Seng index fell 0.4 percent.

South Korea’s Kospi index slid 0.3 percent after legislators voted to impeach President Park Geun-hye over a corruption scandal. She has denied allegations she colluded with a confidante who extorted companies and manipulated state affairs. South Korea’s prime minister will lead the country until a high court rules if Park must resign.

___

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at http://bigstory.ap.org/journalist/marley-jay

Martin Scorsese’s Journey From Near-Death Drug Addict to ‘Silence’

December 9, 2016

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Fifty years after fighting for his life, the 74-year-old director talks overcoming an epic lawsuit, starving actors and a death on set to bring his passion project — a Japanese novelist’s masterpiece — to the screen: “I was blind, and now I can see.”

In 1978, Martin Scorsese nearly died. Years of hard living and drug abuse finally had caught up with the filmmaker, and yet he continued to push himself, until one day, he collapsed. “After finishing New York, New York, I took chances,” he says. “[I was] out of time and out of place and also in turmoil in my own life and embracing the other world, so to speak, with a kind of attraction to the dangerous side of existence. Then on Labor Day weekend, I found myself in a hospital, surprised that I was near death.”

At age 35, he was fighting for his life. “A number of things had happened,” he continues. “Misuse of normal medications in combinations [to which] my body reacted in strange ways. I was down to about 109 pounds. It wasn’t only drug-induced — asthma had a lot to do with it. I was kept in a hospital for 10 days and nights, and they took care of me, these doctors, and I became aware of not wanting to die and not wasting [my life].”

Alone in that hospital, occasionally visited by such friends as Robert De Niro, the director thought back to his roots as a Catholic growing up in New York’s Little Italy, the son of two garment workers, a boy who had fallen under the influence of a charismatic priest and at one point considered becoming a seminarian, only to be thrown out of the preparatory seminary because he never could make it to Mass on time. All these years later, “I was stunned by the realization of my naivete and denial,” he says. “I prayed. But if I prayed, it was just to get through those 10 days and nights. I felt [if I was saved] it was for some reason. And even if it wasn’t for a reason, I had to make good use of it.”

When Scorsese emerged from that dark night of the soul, like the blind man in the Bible, he felt the scales were removed from his eyes. “[In the New Testament], they were all complaining about Jesus, that he hangs out with publicans and tax men and whores,” explains the director, “and the man says, ‘All I know is, I was blind and now I can see.’ ”

•••

Half a lifetime later, Scorsese, 74, has returned to that spiritual crisis and used it as the underpinning of another story, of men facing their own such challenge in a very different time and place, 17th century Japan.

Based on Shusaku Endo’s 1966 novel and starring Andrew Garfield, Adam Driver and Liam Neeson, Silence charts the physical and emotional journeys of two Jesuit priests who travel from Portugal to Japan in an attempt to win converts — only to be persecuted for their beliefs.

Neeson plays Father Ferreira in <em>Silence</em>, which shot in Taiwan. It was hard &ldquo;getting to the location, constantly walking up mountains,&rdquo; says Scorsese. &ldquo;I had a bodyguard who would sometimes carry me [because it was] so steep, and you had to be very careful where you placed your foot.&rdquo;
Kerry Brown/Paramount Pictures
Neeson plays Father Ferreira in Silence, which shot in Taiwan. It was hard “getting to the location, constantly walking up mountains,” says Scorsese. “I had a bodyguard who would sometimes carry me [because it was] so steep, and you had to be very careful where you placed your foot.”

Twenty-eight years in the making, the $46.5 million film (which opens Dec. 23) has gone through multiple script drafts; has seen various stars come and go, including Daniel Day-Lewis, Benicio Del Toro and Gael Garcia Bernal; and has faced challenges that nearly killed it on several occasions, “an extraordinary Gordian knot of legal problems and issues,” says Scorsese.

The resulting film will test Paramount’s marketing skills as it seeks to persuade audiences to embrace a two-hour-and-40-minute tale that centers on the human capacity for suffering and redemption and asks viewers to enter not only Scorsese’s imaginative realm but also his spiritual one. “I’m a believer with some doubts,” he says. “But the doubts push me to find a purer sense of the other, a purer sense, if you want, of the word ‘God.’ ”

•••

Silence came to Scorsese in the midst of the cacophony surrounding 1988’s The Last Temptation of Christ, his adaptation of Nikos Kazantzakis’ controversial novel, which posits that Jesus was tempted to come down from the cross and live as an ordinary man.

Whatever the director had hoped to achieve with that picture — a spiritual dialogue, perhaps — faded amid the barrage of criticism and even death threats from religious hardliners. And yet it was through this movie that he received an unexpected gift.

“We screened a rough cut of Last Temptation to the religious groups and others who were complaining about the film but hadn’t seen it,” he recalls. “We went to a hotel here [in New York] and had a little private dinner, and Archbishop Paul Moore Jr. of the Episcopal Church was there with his wife. And as he was leaving, he says, ‘There’s a book I want to send to you.’ ”

&ldquo;I saw <em>Silence</em> as a story where there was grace throughout. Grace through other people. Grace through the landscape. Those things in life are incalculable.&rdquo; &mdash; Martin Scorsese

Kerry Brown/Paramount Pictures
“I saw Silence as a story where there was grace throughout. Grace through other people. Grace through the landscape. Those things in life are incalculable.” — Martin Scorsese

The book was Endo’s novel, which blended real-life figures with loosely fictionalized ones in its account of missionaries Sebastiao Rodrigues (Garfield) and Francisco Garrpe (Driver), who come to Japan in 1639, searching for their predecessor, Father Cristovao Ferreira (Neeson), who is rumored to have “apostatized.”

Scorsese was too drained by Last Temptation to finish the novel then, but he returned to it in August 1989 and decided to buy the rights, even though its meaning proved elusive to him. “I was taken by the moment of apostasy,” he says, “but I didn’t quite understand the epilogue,” when the book follows Rodrigues over many years after he has been tortured and freed. “I thought it would be interesting to write a script.”

Based on his interest, an offshoot of Italy’s Cecchi Gori Pictures paid $700,000 for the option and hired Scorsese, along with his longtime collaborator, Jay Cocks (Mean Streets), to develop a screenplay. Legal documents indicate they received $250,000 for their services, with an additional $150,000 due if the project moved forward. But Cocks searched in vain for the story’s emotional core.

“I was flummoxed,” he says. “I immediately crashed into a creative crisis. I had a real struggle finding a thematic through line, but the deal was made, and I started writing.”

When he finished, he knew the screenplay wasn’t quite right. “Marty didn’t say his ultimate criticism, ‘Well, that’s a noble effort,’ ” notes Cocks wryly. “That’s when you know you’ve f—ed up, and I didn’t get that.” Still, it was apparent the screenplay lacked a dramatic heart, and he moved on to other projects, while Scorsese turned to 1995’s Casino and 1997’s Kundun.

Gianni Nunnari, then the pres­ident of Cecchi Gori, brought in other writers. “There was a period of time when maybe you were trying to refresh it or find other ways,” he says. “But that was much, much after Jay did his draft.”

&ldquo;A Jesuit priest gave me the tools and guidance to create my own very deep, intimate relationship with God, which was a really interesting thing to undertake at age 31.&rdquo; &mdash; Andrew Garfield
Wesley Mann
“A Jesuit priest gave me the tools and guidance to create my own very deep, intimate relationship with God, which was a really interesting thing to undertake at age 31.” — Andrew Garfield

Michael Gordon (300) took a shot, and so did Nicholas Kazan (Reversal of Fortune), who agreed to work for scale on the condition that he be paid in full later. Their participation would cloud issues of chain-of-title that subsequently would dog the picture. But for now, as far as Scorsese was concerned, Silence went quiet and only briefly was revived in 2003, shortly after Gangs of New York, when he and Cocks discussed tackling it again.

“I had to re-convince Jay,” he says. “The night at the Academy Awards [when Gangs was nominated for best picture], I remember us embracing, and I was relieved. [I took] a deep breath and said, ‘OK. Now Silence.’ And we both laughed.”

•••

Their laughter proved premature. Throughout, there had been questions surrounding who truly owned the underlying material, not least because the novel had been filmed once before, in 1971, by Japan’s Masahiro Shinoda. That ownership became the subject of a venomous dispute between Nunnari and Cecchi Gori, who parted ways and then sued each other in 2008 over the spoils of their years together.

“It was about who’s getting what — ‘You did this, you did that,’ ” says Nunnari, possibly understating the bitterness of the battle and the hostility several of the players still feel toward him for the emotional and financial roller coaster it caused them.

The problems were compounded when Cecchi Gori Pictures faced financial problems, and they became even worse when one of the company’s owners, Vittorio Cecchi Gori, was sentenced to prison for issues related to the company’s bankruptcy. By the time the courts awarded Cecchi Gori the rights, Scorsese had committed to other ventures, and in 2012 the company sued him for “intentional and negligent misrepresentation.”According to the suit, Scorsese repeatedly asked to postpone Silence so that he could direct such films as The Departed (2006), Shutter Island (2010) and Hugo (2011), even though he faced financial penalties each time. The suit was triggered by Cecchi Gori’s discovery that he was preparing yet another film, The Wolf of Wall Street. It demanded more than $1.5 million in damages.

At the time, the director’s lawyers said he already had paid more than $3.5 million in penalties. Niels Juul, who then served as CEO of Cecchi Gori, notes: “It was not Cecchi Gori Pictures he gave $3.5 million to. He gave it to Nunnari.”

Says Scorsese, “I don’t remember [the details]. All I know is that, whenever anything happened, I’d ask my manager and my agents and my lawyers to please make sure we did not lose the project. And they would go back into this morass of complications and try to work it out.”

In January 2014, he and Cecchi Gori settled out of court. The latter agreed to free up the rights to the novel; the director committed to make Silence after Wolf. His dream project finally was a go.

•••

Or at least it would have been, if the money had been in place. Regardless of the lawsuit, no one had resolved the conundrum of financing. Initial budgets projected a cost of $100 million, an astronomical number for a period piece shot in Japan.

Scorsese and Cocks at last had written a screenplay they liked, but the money to shoot it ebbed and flowed. Even with such stars as Day-Lewis and Bernal attached, it failed to get made because either the money or the director was unavailable.

“In 2009, we came close,” says Scorsese. “[The Departed producer] Graham King paid for a location scout in Japan, and we went to Nagasaki [and] met some ‘hidden Christians’ — there’s maybe 200 or 300 left, and they practice Christianity based on what the hidden Christians from the 17th century left them, and their language is a combination of Portuguese, Japanese and Latin.”

Despite this, the movie seemed doomed until September 2010, when Goodfellas producer Irwin Winkler visited Scorsese on the Hugo set and asked about Silence.

“I said, ‘What did you ever do about that script you had for so many years?’ ” recalls Winkler. “And he said: ‘I haven’t been able to get it done. Why don’t we do this together?’ ”

Martin Scorsese
Wesley Mann
Martin Scorsese

Winkler plunged in. “We spent three or four years looking for financing,” he says. “Generally, everybody said no. I called all the studios, all the independents. We had to search high and low and couldn’t find anybody to put up any money. France’s MK2 expressed great interest, and we spent six months with them, but they decided to pull out. That was very, very disheartening.”

Then, out of the blue, Winkler received a call from producer-financier Randall Emmett.

A one-time assistant to Mark Wahlberg, Emmett had made dozens of films, from 2000’s Escape to Grizzly Mountain on. Flush with funding from Dubai, the filmmaker and his partner, George Furla, were eager to work with Scorsese and persuaded him to trek to Cannes, where in May 2013 he and his partners romanced foreign-sales agents. Stuart Ford’s IM Global agreed to pay $21 million for foreign rights; Emmett’s backers committed to $25 million more; and Paramount came on board as the domestic distributor.

Everything looked like a go — until a large chunk of the money fell through, right before shooting was due to commence in early 2015. With the crew in limbo, Mexican financier Gaston Pavlovich and his partner, Dale Brown (who already were investors), agreed to replace the missing millions.

The budget was locked at more than $46 million, and filming was all set to begin.

•••

Where the movie would be shot had remained in flux until deep into its history.

“We scouted New Zealand, we scouted Vancouver, we scouted the Pacific Northwest,” says Scorsese’s producing partner, Emma Tillinger Koskoff. “We did budgets for all these places because to shoot this movie in Japan, it would have been close to $100 million. But we also got a great tax credit in Taiwan [and decided to shoot there].”

As Scorsese moved into heavy preproduction, some of the finest actors of the day traipsed into his midtown Manhattan offices to audition.

“It was incredibly nerve-racking,” says Garfield, who then was completing The Amazing Spider-Man 2.

He was hired with a year to go before the actual shoot, turned down everything else and immersed himself in the literature of the Jesuits, meeting regularly with Father James Martin, a priest who served as an adviser on the movie.

“He gave me spiritual direction as if I were a Jesuit in training,” says Garfield. “It became a very personal journey for me, a dual journey: It was me and Rodrigues, walking together, so that I could allow the events of the story to affect me in the way that a young, ambitious, intelligent, articulate, learned Jesuit would respond to being dropped into the front lines of the battle for Christianity.”

With Driver cast as the other lead missionary, the two young actors were sent to a Jesuit retreat in Wales, where Garfield completed the arduous Spiritual Exercises of St. Ignatius Loyola.

“It’s almost like a 12-step program,” he explains. “In fact, it’s the basis for a lot of 12-step programs, a longform meditation and prayer spent imagining the life of Christ, story by story, gospel by gospel, and sitting with his teachings, sitting with him as he discovers who he is in the wilderness, and really meditating upon his life and even crucifixion.”

By the time of the shoot, he says, “I was filled up with all this information and all this longing to spread the teachings of Christ, which I truly started to adore.”

Andrew Garfield
Wesley Mann
Andrew Garfield

Adoration turned to horror two weeks before the start of principal photography in January 2015, when a construction worker was killed. “The studio where we were shooting had a backlot and various different sets that we were repurposing for our needs,” says Koskoff. “The studio told us one of the structures we wanted to use was not sound. We hired an independent construction company to come in and make it safe. They had an accident, a horrible, horrific accident — they were shoring up this building and a scissor lift clipped the side of the roof, and the structure toppled and killed a man and seriously injured two other people. It affected everybody who was on the film tremendously.”

Nothing the production faced came close to that nightmare, but the shoot was hardly easy. Turbulent weather, inaccessible locations and the difficulty of accurately researching the past tormented the filmmakers.

Some of that pushed Scorsese’s team into areas that few living historians could tell them about.

“In the original versions of the script, there was a term like ‘the samurai comes and arrests him,’ ” says Marianne Bower, Scorsese’s researcher and a co-producer on the movie. “One of our consultants said, ‘Every time they refer to a Japanese official as a samurai, you’ll need to be more specific about the rank and file of the samurai because there is a hierarchy.’ So we had to go through that process of learning what the different ranks were.”

Language was another issue. “The script for the Japanese characters went through a two-part process,” says Bower. “It was first translated into 17th century Japanese, and then we had Japanese historians and language consultants adapt that into a version that a modern audience would understand.”

The experience was physically tough on Scorsese. It was hard “physically getting to the location, constantly walking up mountains,” he admits. “I had a bodyguard who would sometimes carry me [because it was] so steep, and you had to be very careful where you placed your foot.”

Pope Francis shook hands with Scorsese on the occasion of their private audience at the Vatican on Nov. 30, when <em>Silence</em> was screened for the pontiff.

AP Images
Pope Francis shook hands with Scorsese on the occasion of their private audience at the Vatican on Nov. 30, when Silence was screened for the pontiff.

Nor did the semitropical climate help. Once, the heat reached record temperatures. “I remember almost passing out, and everybody just stripped and kept shooting,” he adds. The next day, the temperature plunged and “we were buffeted by winds and rain. It was a typhoon, and we shot in the typhoon.”

Koskoff remembers getting a 4 a.m. call warning her that they were in the middle of a lightning storm: “The makeup tent had blown off the side of the mountain, and our entire infrastructure was destroyed. We had 400 extras in buses sitting on the top of a mountain with lightning and thunder, and we just had to sit it out.”

Logistics were complicated by Scorsese’s desire to shoot in continuity, and they were made trickier still by having a crew that spoke a multitude of languages, and rarely the same one. Hardest of all was the challenge the cast faced in losing a massive amount of weight.

“I think I lost 51 pounds,” says Driver.

The fasting, adds Garfield, “does things to your mind, especially when you’re on location in Taiwan, not knowing anybody. I would have about three hours’ sleep a night and have dreams and visions of the greatest meals of my life with the closest people. It’s very isolating and lonely and creates a spiritual hunger and a longing for comfort and connection.”

•••

That connection only began to be restored when the shoot wrapped in May 2015. Garfield traveled alone to Northern California’s Big Sur, contemplating the sea and his thoughts, unwilling to return to the world he had known for several days. But Scorsese had to dive in to the editing, which consumed him for nearly a year and a half.

In late November, he began to show his picture for the first time, and then at the end of the month, he flew to Rome with his wife, Helen, two of their daughters and some key members of the movie team, to screen the film for about 200 Jesuit priests at the Vatican.

In a private meeting with Pope Francis, Scorsese gave him a copy of the Madonna of the Snows, based on a Japanese scroll painting revered by the hidden Christians.

“We talked about the film and the fact that Andrew had undergone the Spiritual Exercises,” he says. “I told him, the next thing [for Garfield] to do was get ordained — but instead he got me. That got a big laugh. We were naturally nervous, but he was just disarming and put us at ease. He gave us rosary beads and said, ‘Pray for me.’ It was really moving. He blessed my wife and told me he hoped the film would bear much fruit. And I said, with his inspiration, yes.”

Meaningful as that was, it paled beside the screening for the Jesuits.

“[That] was remarkable,” says Cocks. “[There was] a hush throughout the film, laughs of recognition that surprised us and tears at the end. The film had a great spiritual impact on all there, which is what we had hoped and dared to expect.”

More than anything, it was an affirmation for Scorsese of why he had tackled the material in the first place. “The act of working out these themes rekindled in him certain very deep seeds of his own faith that he very seldom articulates,” says Cocks. “He found not only a certain challenge in this: He found a separate peace.”


Wesley Mann

This story first appeared in the Dec. 16 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

http://www.hollywoodreporter.com/features/martin-scorsese-interview-death-drug-addict-silence-953300

Islamic State looks to regroup in Libya after losing Sirte

December 9, 2016

Reuters

By Aidan Lewis | TUNIS

Islamic State has lost senior figures in an unsuccessful seven-month battle to defend its coastal stronghold in Libya, but there are already signs it will try to fight back through sleeper cells and desert brigades.

Libyan officials say hundreds of Islamic State militants may have escaped before the start of the battle for Sirte in May or during its early stages.

That has prompted fears of a counter-attack or insurgent campaign that could enable the militants to show they are still in business despite the rout, a heavy blow for a group that is also under intense military pressure in its core territory of Iraq and Syria.

Some cells have already been active. Islamic State is thought to be behind at least two dozen attacks or attempted attacks to the south and west of Sirte since August, said Heni Nsaibia of Menastream, a risk consultancy that monitors jihadist activity in the region.

Before May, IS was thought to have several thousand fighters stationed in Sirte – estimates of the exact number varied widely. Both leadership and rank and file had a heavy foreign presence, drawing on recruits from north and sub-Saharan Africa, according to Sirte residents and security officials in Misrata, the city that led the campaign to retake the jihadist stronghold.

Much of that force has likely been wiped out over the past seven months, with dozens killed on both sides during the heaviest days of fighting. Islamic State was targeted by nearly 500 U.S. air strikes since Aug. 1.

Local officials say a number of high-level Libyan figures perished, including preacher and commander Hassan al-Karami, and senior official Abu Walid al-Ferjani.

Foreign commanders have also died, according to messages of mourning posted on social media accounts close to the militant group, though it is unclear how far up the hierarchy they were or how important to the group’s future operations, said Marco Arnaboldi, a researcher of political Islam specializing on Libya.

FEW PRISONERS

Misratan officials refused to comment on reports of Islamic State militants being killed after capture, but fighters and commanders say they took few, if any, prisoners.

Ibrahim Baitulmal, head of Misrata’s military council, estimated that 1,700 jihadists’ bodies had been recovered during the campaign, adding that the number killed would have been higher since the militants retrieved some of their own dead.

He said among those killed in the final days of the battle in Sirte was Abu Habib Jazrawi, a Saudi who is thought to have taken the name Abdul Qadr al-Najdi before being named as Islamic State’s leader in Libya in March.

Islamic State has not announced his death. Regional media reported that Najdi was replaced in September by a Tunisian, Jalaludin Al-Tunsi, possibly appointed to carry on the fight outside Sirte. “He’s one of the leaders who is going to prepare the next wave of Islamic State from south of the city,” said Arnaboldi.

The jihadist group has made no secret of its plans to continue the fight, in a country still roiled by the turmoil it exploited in the past. In August, the new leader of its east Libyan branch, Abu Musab al-Farouq, said high-level figures who had escaped from Sirte were helping it regroup not far away.

In late October the head of the west Libyan branch, Abu Hudhayfah al-Muhajir, acknowledged that the group had been suffering, but said it would continue its campaign for “conquest and empowerment” and was still attracting a steady flow of foreign fighters.

“Most of our people in Sirte have moved to neighbouring areas six months ago – and are still moving – during which they experienced the worst,” he said in an interview with Al Naba, an Islamic State newsletter.

“The mujahideen in the Libyan provinces are still well … Their security detachments are still spread in all the cities and the areas, and their brigades move in the east and west of the desert.”

(Additional reporting by Mohamed Lagha in Misrata; Editing by Mark Trevelyan)

Here’s Why Donald Trump Is Right About China

December 9, 2016

 

By Fortune

DECEMBER 8, 2016, 10:24 AM EST

Chinese imports are killing American innovation

Once upon a time, it was de rigeur for U.S. politicians to boast of the prowess of the American worker. Donald Trump, in his policies at least, seems to be putting an end to that.

“We need not shrink from the challenge of the global economy,” then-President Bill Clinton said in his 1997 State of the Union Speech, when free trade was a much more popular idea than it is today. “After all, we have the best workers and the best products. In a truly open market, we can out-compete anyone, anywhere on Earth.”

President-elect Donald Trump speaks to supporters during a rally, Thursday, Dec. 8, 2016, in Des Moines, Iowa. (AP Photo, Charlie Neibergall)

Today, this kind of American exceptionalism is harder to justify. Many politicians have given up on it altogether. Trump gave a hint at the different approach they’d be taking to international economic competition when he met with executives of the heating and cooling firm Carrier. “I don’t want them moving out of the country without consequences,” Trump told the New York Times. Mike Pence added, contra Clinton, that “The free market has been sorting it out and America’s been losing.”

A Republican Vice President arguing that the White House should interfere with the workings of the free market in order to protect American workers would have been unthinkable just five years ago. But there is increasing evidence that global trade doesn’t work the way that free market fundamentalists have always believed.

In a new working paper published on Monday by the National Bureau of Economic Research, economists David Autor, David Dorn, Gordon Hanson, Pian Shu, and Gary Pisano come to the same conclusion. The paper finds that competition with Chinese exporters have had deleterious effects on American innovation. To do so, the authors looked at how import competition affects innovation in the United States by studying the effect of increased import competition on American manufacturing firms’ R&D spending and issuance of patents. “Our results suggest that the China trade shock reduces firm profitability in U.S. manufacturing, leading firms to contract operations along multiple margins of activity, including innovation.”

This is counter to the popular belief that while specific American workers may be harmed by free trade encouraging low-skilled jobs to move abroad, the American economy would benefit overall by increased competition because competition leads to more innovation and lower prices for consumers.

But this economics-101 conception of the global economy has long since stopped working for the American people, and the political class is finally catching on. Last month, the Pew Research Center published two sets of polling results that show that the plurality of Americans believe that “U.S. involvement in the global economy is a bad thing because it lowers wages and costs jobs in the U.S.” However, when scholars in international relations at major Universities were asked the same question, 9-in-10 said that it was a good thing because “it provides the U.S. with new markets and opportunities for growth.”

screen-shot-2016-12-07-at-5-08-09-pm

This likely shows the disconnect between the theoretical foundations of how international trade works and the practical and anecdotal effects of what average people see everyday. In theory, international trade makes everyone richer as countries shift production to goods and services they can produce most efficiently. But this increased wealth is of little consequence to average folks if it captured by the lucky few.

One of the more perceptive observations of the Donald Trump campaign was that the political and academic class in the United States had overlooked these effects, while many Americans have not.

Source: http://fortune.com/2016/12/08/trump-china/

Related:

China Faces Off Against World on Open Global Markets

December 9, 2016

Anniversary of China’s accession to World Trade Organization highlights global rift over Beijing’s economic policy

Donald Trump returned to Iowa triumphant Thursday, rallying in Des Moines not as an unconventional presidential candidate, but as the president-elect of the United States.

Trump drew a crowd of perhaps 6,000 supporters to Hy-Vee Hall for his thank-you tour rally, reveling in his 9-point Iowa victory and sharing the stage with Gov. Terry Branstad, his newly named ambassador to China.

“I’m here today for one main reason – to say thank you to the great, great people of Iowa!” Trump said as he took the stage. “You went out and pounded — and I mean pounded — the pavement. You organized your fellow citizens and propelled us to victories at the grassroots and every other level. We have a movement the likes of which this world has never seen before.”

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Dec. 9, 2016 5:32 a.m. ET

China’s 15-year anniversary as a member of the World Trade Organization on Sunday threatens to trigger a clash with growing forces in the West that cast Beijing as an abuser of open global markets.

The anniversary marks Beijing’s eligibility for “market-economy status,” which would remove many risks of punishment when Chinese companies are accused of selling products below cost. But the issue is bringing to the fore mounting global frustration over China’s state-led economic policy.

Since joining the WTO on Dec. 11, 2001, China has leveraged the open markets the organization fosters to lift millions of people from poverty and catapult itself to become the world’s No. 2 economy. But Beijing’s critics say it has gamed the system by curbing access to its markets and marshaling massive state resources to compete against foreign companies.

“China wanted the advantages without meeting its obligations, and trade won’t work when it’s a one-way street like that,” said Rep. Sander Levin, the top Democrat on the House committee that overseas trade. “They went in with full knowledge and essentially began thumbing their nose.” Mr. Levin voted for legislation tied to China’s WTO accession but has since become a vocal critic of Beijing’s compliance.

Changing China’s market-economy status is dependent on individual countries declaring that they are changing the way they handle antidumping and other trade cases—something the Obama administration isn’t ready to do.

“It is a conversation that we are engaged in, but it is not ripe for us to change our protocols,” said Commerce Secretary Penny Pritzker said last month after talks with Chinese officials.

President-elect Donald Trump has threatened to declare China a currency manipulator and slap big tariffs on its hundreds of billions of dollars in annual exports, although some of his aides have played down those warnings as laying the ground for future negotiations. “They haven’t played by the rules, and they know it’s time they’re going to start,” Mr. Trump said at an Iowa rally on Thursday, naming “massive theft of intellectual property” and “product dumping.”

Mr. Trump’s comments and choice of advisers—including steel executives—suggest his administration will step up trade enforcement against China through the WTO as well as in antidumping and subsidy cases within the U.S., trade lawyers say. Trump representatives didn’t comment on the issue.

ENLARGE

The European Commission, the EU’s executive arm, also isn’t ready to declare China a market economy. In November, the commission proposed a new formula to calculate antidumping duties.

In cases where it determines markets are distorted by state intervention, the commission would eliminate the concept of nonmarket economies and instead allow for high tariffs to be imposed on imports deemed to be priced below international-market levels.

“We are not declaring China a market economy status but we are reforming the system so as to make it country-neutral,” Cecilia Malmström, the EU’s trade chief said Wednesday.

Japan said this week it continued to view China as a non-market economy.

Beijing bridles at being a lightning rod for global angst over trade and unemployment and on Thursday renewed vows to take WTO countermeasures if it doesn’t receive market status.

“We are playing by the rules and you need to keep your promise,” Xue Rongjiu, a trade adviser to the State Council, China’s cabinet, said this month. “It’s unfair to blame China for your problems, which have resulted from bad management and operations.”

Economists say China generally abides by WTO rules, a system largely designed to address the movement of goods across borders, making it difficult to deny Beijing market-economy status over the long term.

But the rules are ill-equipped to handle China’s massive state companies, investment inequity, intellectual property issues, limited transparency and restricted access to new economic sectors like services, internet and the cloud, critics say.

“The WTO seems like a single-stroke engine in a jet-engine age,” said James McGregor,former chairman of the American Chamber of Commerce in China. “China has played into our open system with great skill.”

Free-trade advocates focus on Chinese state-owned entities, which are granted such benefits as preferential funding, free land, protected domestic markets and limited pressure to turn a profit, saying the system fuels debt and inefficiency that distorts global markets. President Xi Jinping has vowed to maintain the central economic role for state-owned firms.

Zak Fardi, founder of U.S. solar panel maker 1SolTech Inc., said China’s system victimized him. The Dallas-based company prospered until late 2011 when Chinese state-subsidized panels began flooding the U.S. market, he said. The Chinese sold panels at 40% below his production cost and offered customers multimillion-dollar lines of credit he was unable to match.

Panel makers petitioned for help, leading to punitive U.S. and European duties on imports of Chinese solar cells even as Chinese manufacturers denied competing unfairly. But by then the damage was done. Not only did Mr. Fardi’s business fail but dozens of Chinese solar makers did too after the subsidies sparked a competitive glut. “They kicked our butts,” Mr. Fardi said. “It was definitely dumping. It seemed very well organized.”

Shipping containers at a port in Qingdao in eastern China's Shandong province.
Shipping containers at a port in Qingdao in eastern China’s Shandong province. PHOTO: CHINATOPIX/ASSOCIATED PRESS
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Aside from solar panels, China has used an array of state financing, subsidies and price cutting to secure globally dominant positions in disc drives and personal computers, saidDirkThomas, principal in Hong Kong-based Summit Partners, a tech advisory firm. Beijing is now setting its sights on mobile phones and semiconductors, he said. “It’s the same game over and over again,” said Mr. Thomas, who helps Chinese technology companies acquire assets overseas.

Beijing’s industrial policies are driving discontent to new levels, especially over excess Chinese production of steel, aluminum and other products. In the first half of 2016, 17 countries and regions launched 65 trade investigations against Chinese products, a two-thirds increase year-over-year, according to Chinese data. Beijing has pledged to cut 150 million tons of steel production by 2020, but industry analysts say that would reduce only about a third of China’s 30% excess capacity.

A new source of concern to foreign companies is the “Made in China 2025” blueprints released last year that call for indigenous development and import substitution in many strategic industries where Western companies have an edge, including semiconductors.

“The global system of trade is under siege and has been challenged by the biggest new kid on the block, China, not playing by the rules,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China. “China points at growing protectionism of the West, but they only have themselves to blame.”

Calls also are rising to tighten curbs on Chinese technology investments in the U.S. in response to investment bans Beijing has imposed, often on national security grounds.

“With [China’s] expansive definition, national security could be your local ballet school,” said Claire Reade, a former U.S. Trade Representative negotiator and now a trade lawyer.

This month, President Barack Obama blocked on national security grounds the proposed acquisition by a Chinese company, Fujian Grand Chip Investment Fund, of German chip maker Aixtron SE, which has operations in California.

In response, a Chinese Foreign Ministry spokesman said this week that Beijing hopes Washington will “cease making groundless accusations” against Chinese companies.

Write to Mark Magnier at mark.magnier@wsj.com and William Mauldin at william.mauldin@wsj.com

http://www.wsj.com/articles/china-faces-off-against-world-on-trade-1481279521

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Najib opens thorny debate in Myanmar genocide claim

December 9, 2016

Reuters

December 9, 2016

Myanmar considering lodging an official complaint with Asean over what it calls a serious breach of pledge of non-interference in fellow member’s domestic issues.

 

KUALA LUMPUR: Prime Minister Najib Razak’s stern rebuke to Myanmar for a military-led crackdown on Muslim Rohingyas was a rarity among Southeast Asian nations, who adhere to a policy of non-interference in each other’s domestic affairs.

Critics saw the beleaguered Najib reaching for the moral high ground with his criticism over the weekend of Myanmar in order to pander to Malay Muslim voters after a series of protests calling for him to resign over a corruption scandal.

Najib is eyeing elections in the second half of 2017, nearly a year ahead of the August 2018 deadline, a government source told Reuters.

At a rally on Sunday, Najib called for foreign intervention to stop the “genocide” of Rohingya Muslims and lashed out at Nobel laureate Aung San Suu Kyi for her inaction.

The persecution of the Rohingyas in Rakhine state, however, has been going on for years. It has forced hundreds of thousands to board flimsy boats and flee to neighbouring countries, including Malaysia, Thailand and Indonesia – which along with Myanmar are all members of Asean.

More than 100,000 Rohingya live in poverty and face harassment as illegal migrants in Malaysia. Many others fell into the hands of human traffickers on their perilous journeys from Myanmar.

Myanmar incensed

The Myanmar government was incensed by Najib’s criticism.

Presidential spokesman Zaw Htay said Myanmar was considering lodging an official complaint with Asean, the bloc of 10 Southeast Asian nations that agree on economic cooperation but pledge non-interference in each other’s domestic issues.

“He (Najib) could have tried to handle this issue diplomatically through the ambassadors,” Zaw Htay was quoted telling the local media in Myanmar. He accused Najib of looking to win popular support among his Muslim voters.

Myanmar said this week it was halting workers going to Malaysia in response to the comments.

But Najib in his rally speech suggested that Asean must set aside its principle of non-interference to tackle regional issues like the Rohingya repressions and migrations, especially when they pose questions about universal values.

“We want to remind Myanmar’s government that the Asean charter also upholds basic human rights,” the prime minister said in his speech.

Invisible migrants

Rohingyas in Malaysia applauded Najib’s intervention.

“Rohingya people are hoping something may change in Myanmar – and also in Malaysia, where many of us live,” said Faisal Islam Muhammad Kassim of the Rohingya Society in Malaysia.

Many of them live in squalor in Kuala Lumpur’s suburbs, working illegally in restaurants and construction sites, where they are routinely underpaid. Families and single men live in matchbox apartments with over half a dozen cramped into one room.

“We are harassed everyday … by the cops and by everyone,” said a Rohingya migrant living illegally, who did not want to be identified. “We have no dignity here.”

Malaysia is not a signatory to the 1951 UN Convention on the status of refugees, which means all refugees, including Rohingya, are viewed as illegal migrants awaiting resettlement in a third country.

The United Nations High Commissioner for Refugees (UNHCR) representative in Malaysia, Richard Towle, said Rohingyas in Malaysia are in the “invisible bottom 30% of society, and very much at risk of exploitation and abuse”.

“Although it’s proper to highlight the situation in Myanmar itself, it’s also very important to look at the situation of the Rohingya in Bangladesh and here in Malaysia, where there is a lot we can still do to make their lives more secure and safer,” Towle said.

Pressure of scandal

Najib’s popularity dropped after he was linked to a multi-billion dollar graft scandal at state fund 1MDB. Tens of thousands marched on the streets of Kuala Lumpur last month, demanding he step down and face corruption charges.

Najib has denied wrongdoing and has used powerful security laws to block dissenters and his opponents.

He needs the support of the powerful Islamist party PAS, to secure a convincing win in the next elections. Najib has put his weight behind an Islamic law, hudud, that sets out punishments such as amputation and stoning.

The law may be tabled in parliament next year.

“Quite clearly, there is a major domestic political dimension to this, as Najib positions himself as the champion of downtrodden Muslims in the region, which he and Umno obviously believe will be popular in the Malay Muslim heartland,” said Phil Robertson, deputy director for the Asia Division of Human Rights Watch.

“And of course, talking about the Rohingya is a good way to change the subject from the 1MDB scandal,” he added.

Najib’s office did not respond to requests for comment.

http://www.freemalaysiatoday.com/category/nation/2016/12/09/najib-opens-thorny-debate-in-myanmar-genocide-claim/

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South China Sea: Vietnam prepares for dangerous days ahead with China

December 9, 2016

Updated about 9 hours ago

The Vietnamese flag flies above the east coast of Ly Son island, looking out towards the Paracels and Spratlys.
Above: Part of the Vietnamese presence at Ly Son island

Provocative activity in the South China Sea is clearly visible in the fiercely contested Spratly Islands, satellite pictures released today show.

Dredging work appears to be underway on a reef that is covered with water at high tide, but is an important stake in the hotspot, with a Vietnamese flag, lighthouse and soldiers stationed there.

“We can see that, in this environment Vietnam’s strategic mistrust is total … and they are rapidly improving their defences,” retired British navy intelligence analyst, Trevor Hollingsbee said.

The dredging risks provoking the anger of Vietnam’s main rival in the sea — China.

The whole South China Sea was once a region of uncontested traditional fishing waters, but as billions of dollars of gas and oil have been discovered, countries are vying for control.

A trip to the more northern Paracel Islands exposes the rawness of national sensitivities.

Sparkling on the horizon as our boat navigates the swell and leaving Vietnam behind us, the Paracels are one of the world’s most contentious flashpoints.

‘My ancestors have always fished here’

Captain Bui Ngoc Thanh and his crew of 18 are heading north. He risks harassment in these forays, but there is the lure of abundant fish and giant clams.

The fishermen also have a defiant attitude-fuelled by their country’s own historic claims on the area.

The latest attack was only two weeks ago, Captain Bui said.

The Chinese Coastguard stopped them near Woody Island. Officials boarded the boat and beat the crewusing clubs and electric cattle prods.

Captain Bui Ngoc Thanh stands at the helm of a fishing boat.

“They climbed on my roof and cut the Vietnamese flag, cut our radio antennae and stole all our fish and equipment,” Captain Bui said.

“They forced us to lie down on the front deck until they had taken everything.”

“They yelled at us and their translator told us that we were fishing illegally in Chinese waters. But I know these are Vietnamese waters because my ancestors have always fished here,” he said.

China justifies its claims of sovereignty over much of the South China Sea because of ancient trade routes.

As his men haul in their nets, Captain Bui says fish stocks are down because the subsidised Chinese fishing fleet is expanding.

“In the past we could get the same amount of fish in one week that we get now in one month,” he says.

Soon Captain Bui and his crew head back with their catch to Ly Son Island, just off Vietnam’s coast.

President of the Ly Son Fishermen’s Association, Nguyen Qua Chinh sits in front of fleet of fishing boats.
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Vietnam building strategic partnerships

Ly Son sits between Vietnam’s two main two hotspots – the Paracels in the north claimed by Vietnam and China, and the Spratleys in the south, with overlapping claims by a cluster of different countries.

Ly Son is Vietnam’s historic gateway for its military and fishermen to their “East Sea”. It is the most northerly island Vietnam still controls.

At a diplomatic level, Vietnam and China seem eager to defuse tensions.

Prime Minister Nguyen Xuan Phuc’s six-day visit to China in September culminated in reassurances: “China and Vietnam can … promote maritime cooperation through friendly negotiations,” proclaimed China’s President Xi Jinping.

But its build-up of military installations on artificial islands continues unabated, with hangars being built to house jet fighters.

Vietnam is making strident moves to counter Chinese domination.

Earlier satellite pictures show an airstrip on Vietnam’s Spratly Island recently extended to accommodate most planes in its air force, according to the Centre for Strategic and International Studies in Washington.

In August, Reuters reported Vietnam had discretely fortified five Spratly Islands with rocket launchers within range of China’s newly-built airstrips. Chinese state-run media described the move as “a terrible mistake”.

“It is within out legitimate right to self-defence to move any of our weapons to any area at any time within our sovereign territory,” Deputy Defence Minister Senior Lieutenant-General Nguyen Chi Vinh said.

Vietnam is building strategic partnerships, with India extending a $US500 million line of credit for defence equipment, and Japan has supplied coast guard vessels and joined in naval exercises.

“We share similar strategic concerns and maybe we trust India and Japan more to be longer term allies,” said noted authority on the South China Sea, Professor Tran Duc Anh Son.

A monument marking the annual trip by a group of soldiers sent by the King of Hue.

Back on Ly Son, I am shown a museum dedicated to Vietnam’s claims to the sea.

The legal argument derives from 1836 when the king of Hue began dispatching soldiers once a year to the islands, hunting for pearls, giant clams and salvaged treasure from boats which sank on treacherous reefs. This regal connection is significant.

“Vietnam is the rightful owner of the Paracels and Spratlys,” argues Nguyen Lan Anh, Deputy Director of East Sea policy.

“Sovereignty cannot be claimed by fishermen, but it can be claimed through edicts of a king.”

Pham Thoai Tuyen, 72, is an 11th-generation descendant of one of the six original families who settled the island in 1609. His forebears placed stone markers on a few Paracel islands, which they named after themselves.

“These islands have been part of Vietnam for a long time,” Mr Pham says.

He is angered when he hears of the increasing harassment by Chinese Coast Guard ships and fishermen.

At least 18 boats out of the 250-strong Ly Son fleet have been sunk by the Chinese in the past three or four years, while many others have been rammed and attacked, says Nguyen Quoi Chinh, president of the local fishermen’s association.

Some fishermen have been killed.

There is some evidence regional tensions have calmed over the Spratlys since Philippines President Rodrigo Duterte softened his country’s stance towards China’s claims in August.

Almost alone, Vietnam is firming its stand and the Coast Guard reports increasing hostilities.

So far, this is a slow-burning war between rival Coast Guards and fishermen, as the competing nations deploy coast guards instead of navies to avoid escalation.

At Coast Guard headquarters in Ky Ha harbour, Colonel Tran Van Dung escorts me onto the bridge of one of his newest ships, and explains the challenges.

Colonel Tran Van Dung, Commander of Coast Guard operations in region 2, central Vietnam.

His fleet of 20 ships must cover 175,000 square kilometres, including the Paracels and northern Spratlys.

“In recent years we have rescued many fishermen and protected them in their traditional fishing areas,” he says.

“We need to double our fleet and personnel — and this is happening.”

Fishermen are encouraged to operate in the claimed waters as they play an important role in the continuation of sovereignty and provide useful information.

Vietnam cannot win a war against China, but it can hold its ground and repel them, as it has done in battles before — the last was two years ago when China provocatively hauled an oil rig into the contentious waters.

Violent anti-Chinese riots saw a number of people killed and thousands flee the country, before the rig was moved.

While China resists addressing the basis of the competing claims, underlying problems are not being resolved. Dangerous days are looming, as frictions increase.

Back on his new coast guard cutter, Colonel Tran remains confident.

“We will always be the winner in war because we have the support of our people,” he says, evoking past victories Vietnam has won against great powers like the US and France.

He is clearly thinking now of a rising power to the north as he descends the gangway again.

Topics: world-politics, vietnam, china

http://www.abc.net.au/news/2016-12-09/south-china-sea-vietnam-prepares-for-dangerous-days-ahead/8101192

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China H-6 bomber Scarborough Shoal, the Philippines

China and Russia held joint military exercises in the Pacific Ocean in 2014 and in  September 2016.

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Russia’s Buildup in Kaliningrad to Test Donald Trump on NATO

December 9, 2016

U.S. calls Moscow’s moves to reinforce its territory between Poland and Lithuania ‘destabilizing’

The Kabardino-Balkaria anti-submarine ship firing a missile during a parade of Russian Baltic Fleet ships on Russian Navy Day in July off the coast of Kaliningrad.

The Kabardino-Balkaria anti-submarine ship firing a missile during a parade of Russian Baltic Fleet ships on Russian Navy Day in July off the coast of Kaliningrad. PHOTO: ZUMA PRESS
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Updated Dec. 9, 2016 6:06 a.m. ET

KALININGRAD, Russia—Military maneuvering here in the Baltic region by Russia and NATO presents a challenge for President-elect Donald Trump and his commitment to America’s European allies.

The North Atlantic Treaty Organization plans to station a multinational force on its eastern flank by May as a deterrent following Moscow’s aggression in Ukraine. But already in January, a brigade from the U.S. Army 4th Infantry Division will arrive in Germany and then move to Poland—before Inauguration Day, according to U.S. military officials.

After conducting systems tests in Poland, one battalion will go back to Germany to the training center, another battalion will go to the Baltic states and one battalion will go to Romania, the officials said.

NATO military officials held an exercise last week to help plan the deployment. “There are units ready to deploy on the other side of the holidays,” U.S. Army Gen. Curtis Scaparrotti, the Supreme Allied Commander, Europe, said Wednesday.

Meanwhile, Russia has been moving in recent months to deploy new antiship missile systems, S-400 air defenses and nuclear-capable Iskander missiles to the Kaliningrad region, long its citadel on the Baltic Sea.

The exclave is now sandwiched between new NATO members Poland and Lithuania. Officials in Washington and Brussels have said the buildup is meant to test the Western alliance—a postwar mutual-defense pact that Mr. Trump raised questions about during his campaign.

State Department spokesman John Kirby last month called the deployment unwarranted and “destabilizing to European security.”

Moscow quickly fired back.

“Russian state security is the prerogative of our country’s leadership alone,” said Maj. Gen. Igor Konashenkov, spokesman for the ministry of defense. “So any claims and suggestions about where, when, what and how we need to ensure our security on our territory, keep to yourselves.”

Russian officials have described the Iskander deployment as a counterweight to missile-defense systems the U.S. has put in Romania and plans to install in Poland. Washington says the systems are to guard against missiles fired toward Europe from countries such as Iran, but Russia sees them as a threat.

Asked in November about the missile deployment, Kremlin spokesman Dmitry Peskovwas quoted by the news agency Interfax as saying: ”NATO is an aggressive bloc, so Russia is doing everything necessary to respond to that.”

NATO Secretary-General Jens Stoltenberg described the alliance’s moves as measured.

“We don’t want confrontation,” he said Wednesday. “But we have to respond when we see a more assertive Russia acting the way that they have done in Ukraine and the military build up close to our borders.”

Despite the heated rhetoric, President Vladimir Putin said Russia is “ready to cooperate” with the Trump administration. “It is important to normalize [ties] and begin to develop a bilateral relationship,” he said on Dec. 1.

Iskander missile launchers in the Victory Parade in Moscow in 2015 marking the 70th anniversary of the defeat of the Nazis in World War II. Russia has been moving to deploy the missiles in its exclave of Kaliningrad.
Iskander missile launchers in the Victory Parade in Moscow in 2015 marking the 70th anniversary of the defeat of the Nazis in World War II. Russia has been moving to deploy the missiles in its exclave of Kaliningrad. PHOTO:ASSOCIATED PRESS

During his campaign, Mr. Trump expressed admiration for Mr. Putin’s leadership and said the U.S. and Russia could cooperate more on fighting terrorism.

Meanwhile, his comments about NATO’s collective defense obligations have raised hackles among U.S. allies. In an interview with the New York Times, Mr. Trump said that if Russia attacked the Baltic states, he would consider coming to their defense only after reviewing “if they have fulfilled their obligations to us.”

Kaliningrad, called Königsberg when it was part of Prussia and Germany, traces its origins to a fortified medieval town. It was blasted into ruins during World War II, pounded first by British bombers and then by a final Soviet assault in spring 1945.

The Soviets expelled the German population and renamed it after a Communist revolutionary. Much of the center was rebuilt with concrete-block housing that left little trace of its prewar splendor.

Today, Kaliningrad wants to project an image of a trading center and window to Europe.

“Kaliningrad is a very peaceful city,” said deputy mayor Artur Krupin. “Residents of Kaliningrad are very peaceful and good, they want in the best sense of the word to represent Russia’s interests within the European Union. They want to invite guests.”

The walled fortifications that remain in the city, he added, “have lost their original meaning.”

Russian army soldiers waiting to supervise visitors at a display of military vehicles during Russian Navy day at the Vistula lagoon in Baltiysk, Russia, on July 31. The Kaliningrad region has increasingly returned to its Soviet-era role as a garrison on the strategic Baltic Sea coast.
Russian army soldiers waiting to supervise visitors at a display of military vehicles during Russian Navy day at the Vistula lagoon in Baltiysk, Russia, on July 31. The Kaliningrad region has increasingly returned to its Soviet-era role as a garrison on the strategic Baltic Sea coast. PHOTO: ANDREY RUDAKOV/BLOOMBERG
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Mr. Krupin described Kaliningrad as “a platform for international dialogue” because of its proximity to markets in Eastern Europe. Local residents say economic ties have been set back by Russia’s chilly relations with NATO members, however.

In July, the Polish government did away with visa-free travel for Kaliningrad residents and neighboring Ukrainians to Polish border regions, citing security reasons ahead of a NATO summit and a visit by Pope Francis.

While Poland has since reinstated local border traffic with Ukraine, it decided not to with Kaliningrad, ending a brisk suitcase trade in household goods.

Asked about the matter in September, Polish Interior Minister Mariusz Blaszczak said the exclave was heavily militarized and has a new governor close to the Kremlin.

Russia’s economic crisis has also hit the region, which depends on tourism in addition to manufacturing and trade. A vendor selling amber souvenirs in the Baltic resort of Svetlogorsk said most visitors were retirees with little to spend because the Russian government hadn’t adjusted pensions in line with inflation.

“I hope there is a revolution!” he said. “Nothing will change as long as these guys are in charge.”

Despite saber-rattling over the region, however, little anti-Americanism is in evidence. Kaliningrad even has a restaurant downtown called Obama Pizza. Its slogan: Yes We Eat.

“We’re not changing it to Trump,” the pizzeria’s manager said.

Write to Nathan Hodge at nathan.hodge@wsj.com

http://www.wsj.com/articles/russias-buildup-in-kaliningrad-to-test-donald-trump-on-nato-1481279401

U.S. defense chief reassures Afghans amid questions over Trump’s policies

December 9, 2016

Reuters

By Idrees Ali | KABUL

The United States will “remain committed” to Afghanistan, U.S. Defense Secretary Ash Carter said on Friday, amid questions about what President-elect Donald Trump’s foreign policy will mean for the country as it faces a renewed Taliban insurgency.

Carter arrived in the Afghan capital earlier on an unannounced visit and met U.S. troops and Afghan President Ashraf Ghani.

“America is, and will remain, committed to a sovereign and secure Afghanistan,” Carter told a news conference with Ghani.

Trump has given few details of his foreign policy plans, with surprisingly few specifics on Afghanistan, where nearly 10,000 U.S. troops remain more than 15 years after the Islamist Taliban were toppled by U.S.-backed Afghan forces.

Afghanistan was barely mentioned during a bitterly fought election campaign, which largely focused on domestic issues, between Republican Trump and his Democratic rival, former secretary of state Hillary Clinton.

Trump, however has said the United States should stop carrying out “nation building”.

Ghani and Trump spoke by telephone last week and the Trump transition team said in a statement they discussed the “terrorism threats facing both countries”. [ nW1N1D90GK]

Speaking with reporters at Bagram air base north of Kabul later on Friday, General John Nicholson, the commander of U.S. and international forces in Afghanistan, said it was important for the United States to remain committed in Afghanistan.

“Our policy of having an enduring counterterrorism effort alongside of our Afghan partners is, in my view, very sound and something we need to continue,” Nicholson said.

Leaders of five out of the 20 designated militant organizations in the Afghanistan-Pakistan region had been killed and Islamic State had lost two-thirds of its territory, something that needed to continue in future, he said.

Carter said the Trump transition team had not asked to speak to Nicholson, but he would be made available if requested.

One of the most important questions facing Trump on Afghanistan, former officials and experts say, is how many U.S. troops will stay on there.

Acknowledging that Afghan security remained precarious and Taliban forces had gained ground in some places, President Barack Obama shelved plans to cut the U.S. presence almost in half by year’s end, opting instead to keep 8,400 troops there through to the end of his presidency in January.

Ghani thanked Carter for the U.S. military contribution and its sacrifices in the conflict.

James Dobbins, a former U.S. special envoy for Afghanistan, said Afghanistan would not figure highly for Trump, given the fight against Islamic State militants in Syria and Iraq.

This, Dobbins said, was likely to mean that the number of U.S. troops in Afghanistan would remain unchanged, at least in the short term.

Trump will inherit a challenging security situation in Afghanistan.

A number of provincial capitals have been under pressure from the Taliban while Afghan forces have been suffering high casualty rates, with more than 5,500 killed in the first eight months of 2016.

(Additional reporting by Hamid Shalizi; Editing by Paul Tait, Robert Birsel)

Can Obama Trump-proof America?

December 9, 2016
December 9, 2016
The Associated Press

Since election day, President ­Barack Obama has appointed 56 people to boards, commissions and offices in the hopes that they remain in those posts for years to come.

He has reduced the prison sentences of 79 federal inmates. He has handed out the nation’s highest civilian honour to 21 people who he said personally made an impact on his life.

And he has churned out rules, regulations and policies several times a week.

Obama is trying to put the people and policies in place that he wants to outlast his presidency in the final weeks before Donald Trump takes over. And his supporters want more, way more.

People are, as you can imagine – they are getting quite desperate
RENA STEINZOR, CENTRE FOR PROGRESSIVE REFORM

Every president tries to push through last-minute policies before their time in office comes to a close. But this year has a more frantic feel as special interest groups push Obama to do more, not just because the president-elect is of a different party but because few people know what he will do.

“People are, as you can imagine – they are getting quite desperate,” said Rena Steinzor, a member of the Centre for Progressive Reform, a liberal advocacy group, who is pressing Obama to act. “Filling boards and doing whatever he can to establish protections that Trump would have to unwind is a good strategy.”

 The newly made wax statue of Donald Trump stands next to the wax statue of former US President Barack Obama at the wax museum of Rome. Photo: AFP

With six weeks remaining, their to-do list for Obama is long.They want him to issue an executive order requiring federal contractors to disclose their political donations.

They also want him to pardon immigrants in the country illegally and direct federal employees to quickly process applications for immigrants who came into the US illegally as children. And they want him to make good on his campaign pledge to close the prison for suspected terrorists at Guantanamo Bay.

No one disputes that Obama has the authority to do what he is doing, but Trump supporters don’t think he should be doing them anyway.

“There’s a few weeks left. The voters have spoken,” said Diane Katz, a senior research fellow in regulatory policy the Heritage Foundation, a conservative think tank. “Someone who is more humble or respectful might say ‘they made a choice different than me’ and allow the new administration to do it.”

Someone who is more humble or respectful might say ‘they made a choice different than me’ and allow the new administration to do it.
DIANE KATZ, HERITAGE FOUNDATION

White House press secretary Josh Earnest pushed back on that notion, and said Obama is president until January 20 and that the administration is engaged in “a continuous and persistent effort to complete the work that’s already been started”.

“It’s his job,” said Carmel Martin, a former Obama appointee who is now executive vice-president of policy at the left-leaning Centre for American Progress.

“I think it’s … not just appropriate but necessary for the current president to keep moving forward. President Obama is trying to leave the house in good working order.”

Trump won’t be able to reverse Obama’s actions easily.

Sure, he can change Obama’s executive actions with a quick stroke of the pen. But rule changes require justification following a Reagan-era court case mandating that regulation changes aren’t done on a whim. Many of the ­appointments could outlast Obama and Trump because the terms are five to seven years and require Senate confirmation.

Some of the special interest groups pushing Obama know that whatever he does could end up in court, but they don’t mind because at least that provides a chance at maintaining the action. “If you don’t even try, you don’t get there,” Steinzor said. “People are saying ‘see you court’.”