Architectural index, Corporate leverage, Saudi oil pricing

Muddling through at depressed levels:

Saudis set price. If they decide to hike as below, it will happen:

OPEC’s new price hawk Saudi Arabia seeks oil as high as $100

Apr 18 (Reuters) — Top oil exporter Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel. OPEC, Russia and several other producers began to reduce supply in January 2017 in an attempt to erase a glut. They have extended the pact until December 2018 and meet in June to review policy. OPEC is closing in on the original target of the pact – reducing industrialized nations’ oil inventories to their five-year average. Two industry sources said a desired crude price of $80 or even $100 was circulated by senior Saudi officials in closed-door briefings in recent weeks.

Factory orders, Cash bonuses, Oil prices

As the chart shows, year over year growth has gone to near 0 since the election, and the hurricane replacement effect has since dissipated:

Highlights

A big upward revision to core capital goods highlights today’s factory orders report which closes the book on what was a mixed October for manufacturing. The month’s 0.1 percent decline, which is better than expected and actually hits Econoday’s high estimate, reflects a 33 percent downswing for commercial aircraft orders that follows, however, a very strong recent run and looks to build again following Boeing’s success at November’s Dubai air show.

The split between the report’s two main components shows a 0.7 percent gain for nondurable goods — the new data in today’s report where strength is tied to petroleum and coal — and a 0.8 percent dip for durable orders which is 4 tenths improved from the advance report for this component. And driving the upward revision for durables is a major upward revision to October core capital goods (nondefense ex-aircraft) which is now up 0.3 percent from the initial 0.5 percent decline. This extends what is a very strong run for a component that offers leading indications on business investment.

Shipments of core capital goods are also revised higher, up an additional 2 tenths to 1.1 percent to extend what is also an impressive run, one that feeds directly into nonresidential fixed investment and marks a strong early plus for fourth-quarter GDP. Other readings include a 0.2 percent gain for inventories and a 0.6 percent gain for total shipments, a mismatch pointing to the need for restocking but not enough to change the inventory-to-sales ratio which holds at 1.37. Not a plus in the report is no change in unfilled orders which have yet to get going.

A plus in the report is a sharp 1.3 percent rise in vehicle orders as the auto sector responds to the hurricane-replacement sales surge of September and October. Looking past the headline, this report is very solid and points squarely at a rising contribution from the factory sector.


From this longer view I don’t see much to get excited about here, and the numbers are not adjusted for inflation:

And previously released credit aggregates, vehicle sales, and building permits are saying growth has already ended:

More Employers Skip The Cash Bonus

From Challenger Gray and Christmas

Higher corporate profits, low unemployment, and high economic confidence among employers is not translating to more cash-based year-end bonuses.

Saudi Arabia may raise January oil prices to Asia to over 3-year high

SINGAPORE, Dec 1 (Reuters) — Top oil exporter Saudi Arabia is expected to raise the January price for its flagship Arab Light crude in Asia to the highest in more than three years to track a stronger Dubai benchmark, trade sources said on Friday.

Robust demand in Asia and continuing supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and Russia are rebalancing global oil markets. The producers agreed on Thursday to extend those supply cuts to end-2018, a decision that pushed Brent above $64 a short time later.

A price hike would track a wider price spread between prompt and third month cash Dubai that rose 31 cents last month from October, trade sources said. Front-month Dubai is higher than those in future months, indicating strong demand for prompt oil.

The survey respondents also expect an increase of 50-60 cents in Arab Extra Light’s OSP in January after naphtha margins surged last month to the highest since early 2016.

January price hikes for Arab Medium and Heavy grades were likely to be smaller than those for light grades as fuel oil cracks weakened last month, the respondents said.

One of the four respondents expected a price cut for Arab Heavy crude.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom’s monthly OSPs.

Below are expected Saudi prices for January (in $/bbl against the Oman/Dubai average):

DEC Change est.JAN OSP

  • Arab Extra Light +2.45 +0.50/+0.60 +2.95/+3.05
  • Arab Light +1.25 +0.25/+0.40 +1.50/+1.65
  • Arab Medium +0.00 +0.10/+0.35 +0.10/+0.35
  • Arab Heavy -1.15 -0.15/+0.30 -1.30/-0.85
  • Construction spending, Rig count, Fed US leading index, Flynn news

    Up a bit this month but as per the chart it’s bumping along at recession type levels:

    Highlights

    It’s not housing that drove construction spending up a very sharp 1.4 percent in October but non-residential activity which had been lagging in this report. Spending on private non-residential construction jumped 0.9 percent in the month with strength centered in office construction and transportation construction. Despite the improvement, year-on-year spending on the non-residential side is still negative, at minus 1.3 percent. Public building also had a strong month with educational building up 10.9 percent for a standout year-on-year rate of 14.6 percent. Spending on highways & streets was also strong in October, up 1.1 percent though still down on the year, at minus 8.5 percent.

    Residential spending has been leading this report but October was moderate, up 0.4 percent overall and held back by a 1.6 percent decline for multi-units. But home improvements were strong in the month, up 1.4 percent for an 8.7 percent yearly rate. Total residential spending is up a year-on-year 7.4 percent with spending on new single-family homes up a very significant 8.9 percent.

    But new homes aside, overall construction spending is up only 2.9 percent which is a very moderate total that evokes this week’s Beige Book where modest-to-moderate still dominated the description of the economy.

    This is not adjusted for inflation:


    Seems to go up when the price of oil goes up…


    Looks like we’ve crossed the line?

    Keeps getting worse:

    Flynn says Trump transition official told him to make contact with Russians

    As part of a plea deal, former national security adviser Michael Flynn has admitted that a senior member of the Trump transition team directed him to make contact with Russian officials in December 2016.

    Flynn pleaded guilty Friday to making false statements to the FBI, becoming the first official who worked in the Trump White House to make a guilty plea so far in a wide-ranging investigation led by special counsel Robert Mueller into possible coordination between Russia and the Trump campaign to influence the outcome of the 2016 election.

    The government did not reveal the identity of the senior transition official.

    JOLTS, Redbook sales, Rig count, Credit check, NK comment, PMC jersey

    Openings higher than hires tells me employers don’t want to pay up, which is also suggested by low wage growth:

    Highlights

    In the latest indications of strong, tight conditions in the labor market, job openings rose to a higher-than-expected 6.170 million in July for a 0.9 percent increase from June. Hirings also rose, up 1.3 percent to 5.501 million which, however, is 669,000 below openings. Openings have been far ahead of hirings for the past several years to indicate that employers are having a hard time filling positions.

    Other indications are steady to higher with the separation rate at 3.6 percent, the quits rate at 2.2 percent, and the layoff rate at 1.2 percent. The only employment data that aren’t strong, in data however that are not part of the JOLTS report, are wages, yet job openings in this report are certain to catch the eye of the more hawkish FOMC policy makers who continue to warn that wage-push inflation is inevitable.

    The growth rate of new openings is at stall speed:


    The new hiring has stalled:


    Moving higher again, as previously discussed:


    Looks like the increases in new drilling are behind us, and new wells are costing a lot less than before the shale bust, so it’s all adding that much less to GDP:


    Not to kick a dead horse, but gdp growth is getting less support from credit growth than it did last year. And that reduction appears to be over 2% of GDP. So far GDP has held up from consumers dipping into savings, which looks to me to be an unsustainable process:


    I’m thinking I’d tell North Korea that if they don’t abandon their nukes will give China a green light to annex them… ;)

    China urges North Korea to ‘take seriously’ bid to halt nuclear program

    Sept 12 (Reuters) — China’s U.N. Ambassador Liu Jieyi called on North Korea to “take seriously the expectations and will of the international community” to halt its nuclear and ballistic missile development, and called on all parties to remain “cool-headed” and not stoke tensions. Liu said relevant parties should resume negotiations “sooner rather than later.” To kick-start talks, China and Russia have proposed a dual suspension of North Korea’s nuclear and ballistic missile testing as well as U.S. and South Korean military exercises. U.S. Ambassador to the United Nations Nikki Haley has called the proposal insulting.

    Mtg purchase apps, Fed’s beige book report, Trump comments

    Still soft, also somewhat in line with decelerating bank mortgage lending:

    Highlights

    Purchase applications for home mortgages fell a seasonally adjusted 3 percent in the July 7 week, while applications for refinancing fell 13 percent from the previous week to the lowest level since January 2017. The refinance share of mortgage activity fell 2.8 percentage points to 42.1 percent. The decline in applications was registered despite adjustments for the Fourth of July holiday. On an unadjusted basis, purchase applications were down a much sharper 22 percent from the previous week. The weekly decline shaved the year-on-year purchase index gain by 3 percentage points to 3 percent. Along with the midweek holiday, rising mortgage undoubtedly took their toll on mortgage application activity. After rising 7 basis points in the prior week, the average interest rate on 30-year fixed rate conforming mortgages ($424,000 or less) rose another 2 basis points to 4.22 percent.

    First ‘weak’ report in a long time. And not to forget the Fed sees it their role to manage expectations…

    Highlights

    Wages are on the rise but only a modest-to-moderate rise, with economic growth described as slight-to-moderate across the Federal Reserve’s 12 districts. And a few of the districts are now saying that overall price pressures have eased. Consumer spending is rising in most districts but at a slower pace. Two districts, Cleveland and Philadelphia, are reporting slowing in overall growth. Two other districts, Atlanta and St. Louis, are reporting flat employment levels.

    This edition, especially the descriptions of inflation and the introduction of the word “slight” for the downside description of growth, is perhaps the weakest Beige Book so far this year. There are, however, indications of strength with the report noting that qualified workers are in short supply and the labor market is continuing to tighten for both skilled and unskilled labor and especially in the construction and high-tech sectors.

    Still no evidence he’s capable of any adult thought whatsoever:

    Trump says he’s doing ‘many things’ that are the ‘exact opposite’ of what Putin wants

  • Donald Trump claims Russia’s Vladimir Putin would be happier with a Hillary Clinton presidency.
  • The president claims that his 2016 election opponent would have spent less on the military and focused less on the traditional energy sector.
  • His comments come amid renewed focus on his campaign’s interactions with individuals tied to the Kremlin.
  • Saudi pricing, Euro fx rate, Tooth fairy index, NY Times Trump interview

    Looks like Saudis are moving to lower prices?

    Saudi Aramco Said to Cut Pricing For May Arab Light Oil to Asia

    By Serene Cheong and Sharon Cho

    Apr 5 (Bloomberg) — Saudi Aramco sets Arab Light crude differential at 45c/bbl discount to Oman-Dubai benchmark for May sales to Asia, say people with knowledge of matter who asked not to be identified because the information is confidential.

  • That’s a 30c/bbl decrease from April OSP
  • NOTE: Co. was expected to decrease Arab Light differential by 35c/bbl for May sales to Asia, according to Bloomberg News survey Link
  • May Arab Super Light price cut by 20c to $3.75/bbl premium
  • May Arab Extra Light price reduced by 35c to 60c/bbl premium
  • May Arab Medium price unchanged at 85c/bbl discount
  • May Arab Heavy price unchanged at $2.60/bbl discount
  • An indication that the fx value of the euro has been a function of foreign government buying and selling:

    Partial Transcript: Trump’s Interview With The Times

    WASHINGTON — The following is a partial transcript of President Trump’s interview with The New York Times’s Maggie Haberman and Glenn Thrush. It has been lightly edited for content and clarity, and omits several off-the-record comments and asides.

    At least six White House aides were sitting in: Gary D. Cohn, President Trump’s lead economic adviser and a former president of Goldman Sachs; Reed Cordish, an assistant to the president; Sean Spicer, the press secretary; Hope Hicks, a long-serving Trump aide; and eventually Vice President Mike Pence and the chief of staff, Reince Priebus.

    MAGGIE HABERMAN, White House correspondent: Seems like it’s actually not been a terrible process for [Judge Neil M.] Gorsuch, right? I mean, it’s been pretty smooth.

    PRESIDENT TRUMP: It’s never an easy process. I think it’s been very smooth considering there’s tremendous hostility on the other side. I think it’s been pretty smooth.

    HABERMAN: You talk to Democrats privately that will admit —

    TRUMP: I do.

    HABERMAN: But do they admit to you that they don’t actually have a huge objection to Gorsuch, they think that he’s probably —

    Continue reading the main story
    TRUMP: They do. They admit that.

    HABERMAN: Right. In private.

    TRUMP: Elijah Cummings [a Democratic representative from Maryland] was in my office and he said, “You will go down as one of the great presidents in the history of our country.”

    HABERMAN: Really.

    TRUMP: And then he went out and I watched him on television yesterday and I said, “Was that the same man?”

    [Laughter.]

    TRUMP: But I said, and I liked him, but I said that was really nice. He said, in a group of people, “You will go down as one of the great presidents in the history of our country.” And then I watched him on television and I said, “Is that the same man that said that to me?”

    GLENN THRUSH, White House correspondent: Why do you think Democrats feel the need to oppose Gorsuch? What do you think the politics is?

    TRUMP: Well, I think that some of it had to do with the election. They thought they were going to win. You know, winning the Electoral College is, for a Republican, is close to impossible and I won it quite easily. And I think they are still recovering from that, but they are recovering now. I think the Susan Rice thing is a massive story. I think it’s a massive, massive story. All over the world, I mean other than The New York Times.

    HABERMAN: We’ve written about it twice.

    TRUMP: Huh?

    HABERMAN: We’ve written about it twice.

    TRUMP: Yeah, it’s a bigger story than you know. I think —

    HABERMAN: You mean there’s more information that we’re not aware of?

    TRUMP: I think that it’s going to be the biggest story.

    THRUSH: Why? What do you think —

    TRUMP: Take a look at what’s happening. I mean, first of all her performance was horrible yesterday on television even though she was interviewed by Hillary Clinton’s P.R. person, Andrea Mitchell [the NBC News journalist]. Course you’ve been accused of that also.

    HABERMAN: Mostly by you, though.

    TRUMP: No, no, no. Mostly by a lot of people. So you know, we’ll see what happens, but it looks like it’s breaking into a massive story.

    THRUSH: What do you think are — what other shoes are there to drop on this?

    HABERMAN: Yeah, what else could we learn on this?

    TRUMP: I think you’re going to see a lot. I think you’ll see a lot.

    HABERMAN: In terms of what she did and in terms of [unintelligible]?

    TRUMP: I think in terms of what other people have done also.

    HABERMAN: Really?

    TRUMP: I think it’s one of the biggest stories. The Russia story is a total hoax. There has been absolutely nothing coming out of that. But what, you know, what various things led into it was the story that we’re talking about, the Susan Rice. What’s happened is terrible. I’ve never seen people so indignant, including many Democrats who are friends of mine. I’ve never seen them acting this way. Because that’s really an affront on them, you know, they are talking about civil liberties. It’s such an affront, what took place.

    THRUSH: What other people do you think will get ensnared in this? Can you give us a sense? How far this might extend —

    HABERMAN: From the previous administration.

    TRUMP: I think from the previous administration.

    THRUSH: How far up do you think this goes? Chief of staff?

    TRUMP: I don’t want to say, but —

    THRUSH: President?

    TRUMP: I don’t want to say, but you know who. You know what was going on. You probably know better than anybody. I mean, I frankly think The Times is missing a big thing by not writing it because you’re missing out on the biggest story there is.

    [Mr. Trump makes a comment off the record, and mentions the Fox News host Bill O’Reilly.]

    THRUSH: We’re back on the record?

    HABERMAN: Yeah, back on the record, do you think that he’s being unfairly treated? I mean, I watched it because I was curious how he was dealing with everything.

    TRUMP: I think he’s a person I know well. He’s a good person. I think he may, you know, I think he shouldn’t have settled, personally, I think he shouldn’t have settled.

    HABERMAN: How come?

    TRUMP: Because you — should have taken it all the way. No, I know Bill. Bill’s a good person.

    HABERMAN: Yeah.

    TRUMP: I don’t think Bill would do anything wrong.

    HOPE HICKS, White House director of strategic communications: Can we get to infrastructure? [Laughter.] Because I know we are sensitive about time.

    HABERMAN: I understand. I just want to ask one last follow-up on that note, and then we’ll move on, not on O’Reilly.

    TRUMP: You certainly covered O’Reilly big. Not Susan Rice, boy, O’Reilly [unintelligible]. He’s taking my place. He’s taking my place.

    HABERMAN: Sir, if you could give us more information about Rice. If the administration would give us more information —

    TRUMP: No, you have a lot of information. No, you have so much information.

    HABERMAN: If you would have given it to us last week, we would have written it. Would you declassify some of the information so that —

    TRUMP: I don’t want to talk about that.

    HABERMAN: No? O.K.

    TRUMP: No. I just don’t want to talk about that. It’s such an important story for our country, for the world. What took place.

    HABERMAN: Why not talk about it then? With all due respect.

    TRUMP: At the right time, I will be.

    THRUSH: One last thing on that. Have you actually seen intelligence that leads you to believe that people other than Susan Rice are involved.

    TRUMP: I don’t want to comment on anything about — other than to say I think it’s a — I think it’s truly one of the big stories of our time.

    THRUSH: Do you think she might have committed a crime?

    TRUMP: Do I think?

    THRUSH: Yeah.

    TRUMP: Yes, I think.

    HABERMAN: On infrastructure, just generally speaking, there’s been a lot of reports floating around about this package that you’re looking at. Can you give us the broad outlooks?

    TRUMP: We want to do a great infrastructure plan, and on that side I will say that we’re going to have, I believe, tremendous Democrat support. We are also going to have some good Republican support, and I think it’s going to be one of the very bipartisan bills and it’s going to happen. I may put it in with health care.

    FROM CUMMINGS:

    “During my meeting with the president and on several occasions since then, I have said repeatedly that he could be a great president if … if … he takes steps to truly represent all Americans rather than continuing on the divisive and harmful path he is currently on,” Cummings said in a statement Thursday.

    At that same meeting, Cummings said that he confronted Trump about his unfounded claims of massive voter fraud and the offensive way in which he characterized the black community during his campaign.

    “When we hear those words about carnage and we are living in depressed situations, I told him it was very hurtful,” Cummings said last month.

    Factory orders, Rail Carloads, Trump comments

    Back to slow growth from the lower levels:


    Durable goods orders:


    Capital goods:


    It’s gone from bad to worse. Hard to see how this can continue much longer:

    Trump’s Wiretap Claims: What We Know and What We Don’t

    White House sources acknowledge that Trump had no idea whether the claims he was making were true when he made them. He was basing his claims on media reports—some of them months old—about the possibility that the Foreign Intelligence Surveillance Court may have authorized surveillance of Trump associates, presumably pursuant to a federal investigation of their ties to Russia.

    Later Saturday morning, White House Counsel Don McGahn told staffers to avoid discussions about the president’s tweets or any possible investigation—an order that effectively paralyzed the White House staff for much of the day. Staffers were afraid to talk to one another for fear of running afoul of McGahn’s guidance and even those authorized to talk to the media were nervous about doing so.

    At 8:55 on Sunday morning, the White House issued a statement about the president’s tweets and the ensuing controversy. “Reports concerning potentially politically motivated investigations immediately ahead of the 2016 election are very troubling. President Donald J. Trump is requesting that as part of their investigation into Russian activity, the congressional intelligence committees exercise their oversight authority to determine whether executive branch investigative powers were abused in 2016. Neither the White House nor the President will comment further until such oversight is conducted.”

    The formal language masks the rather extraordinary work that this statement is doing: The White House is asking Congress to investigate in order to determine whether President Trump’s tweeted claims were true.

    Ryan timeline, Trump remarks

    It will be a while before even the discussions begin:

    House Speaker Paul Ryan said Thursday that Republican lawmakers will try to push through tax reform and infrastructure bills — two key policies for investors — in the spring after focusing on health care.

    “It’s just the way the budget works that we won’t be able to get the ability to write our tax reform bill until our spring budget passes, and then we write that through the summer,” Ryan said on “Fox and Friends.”

    He added that an infrastructure package “comes out of our spring budget, as well.”

    Black history month remarks: http://theconcourse.deadspin.com/a-full-transcript-of-donald-trumps-black-history-month-1791871370

    Prayer breakfast remarks:

    Like every president since Dwight D. Eisenhower, President Donald Trump attended the annual National Prayer Breakfast. But the 45th president was the only one to ask the bipartisan gathering to pray for Arnold Schwarzenegger.

    Trump did address faith in his speech Thursday, but he also took jabs at “Celebrity Apprentice” after the show’s producer Mark Burnett introduced him.

    “When I ran for president, I had to leave the show. That’s when I knew for sure I was doing it,” Trump said. “And they hired a big, big movie star, Arnold Schwarzenegger, to take my place. And we know how that turned out. The ratings went right down the tubes, it’s been a total disaster, and Mark will never, ever bet against Trump again. And I want to just pray for Arnold if we can for those ratings, OK?”

    And then there’s this type of thing:

    In a report released at 4:56 a.m. Thursday from Reuters:

    “U.S. military officials told Reuters that Trump approved his first covert counterterrorism operation without sufficient intelligence, ground support or adequate backup preparations.

    “As a result, three officials said, the attacking SEAL team found itself dropping onto a reinforced Al Qaeda base defended by landmines, snipers, and a larger than expected contingent of heavily armed Islamist extremists.”

    Early reports on the troubling raid have also repeatedly stated that the Obama administration knew full well about the target, but did not execute the raid for “operational reasons.” What that generally means is that the Obama administration surveyed this situation and did not feel that they had the intelligence needed to run the operation.

    One of the three military officials who spoke to Reuters confirmed this very thing. They said, “The decision was made … to leave it to the incoming administration, partly in the hope that more and better intelligence could be collected.”

    And this:

    Renewed fighting in east Ukraine has become the first major international test of the Trump administration and could embolden Russia without a strong U.S. response, the chairman of the powerful Senate Armed Services Committee told the president on Thursday, urging him to follow through on permission Congress has already granted to send weapons to Ukraine.

    Sen. John McCain pointed out in a letter to President Donald Trump that forces backed by Moscow began testing the shaky cease-fire lines around the Ukrainian town of Avdiivka almost immediately after Trump spoke by telephone with the Russian president on Saturday.

    “Vladimir Putin is moving quickly to test you as commander-in-chief,” the Arizona Republican wrote. “America’s response will have lasting consequences.”

    Rental tightness, Trump comments

    12302

    From the National Multifamily Housing Council (NMHC): Apartment Markets Soften in the January NMHC Quarterly Survey

    — Apartment markets continued to retreat in the January National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions. All four indexes of Market Tightness (25), Sales Volume (25), Equity Financing (33) and Debt Financing (14) remained below the breakeven level of 50 for the second quarter in a row.

    “Weaker conditions are evident across all sectors as the apartment industry adjusts to changing conditions,” said Mark Obrinsky, NMHC’s Senior Vice President of Research and Chief Economist. “Rising supply—particularly during a seasonally weak quarter—is causing rent growth to moderate in many markets. At the same time, the sharp rise in interest rates in recent months was a triple whammy for the industry. First, higher rates directly worsen debt financing conditions. Second, the associated rise in cap rates also put a crimp in sales of apartment properties. Third, higher cap rates following the long run-up in apartment prices caused greater caution among equity investors.”

    Read more at http://www.calculatedriskblog.com/#2WgZcWzbFIxpsveW.99

    TRUMP’S VAINGLORIOUS AFFRONT TO THE C.I.A.

    By Robin Wright

    Jan 22 (The New Yorker) — The President’s remarks to the C.I.A. on Saturday, delivered in front of a hallowed memorial, stirred anger and astonishment among current and former agency officials.

    The death of Robert Ames, who was America’s top intelligence officer for the Middle East, is commemorated among the hundred and seventeen stars on the white marble Memorial Wall at C.I.A. headquarters, in Langley, Virginia. He served long years in Beirut; Tehran; Sanaa, Yemen; Kuwait City; and Cairo, often in the midst of war or turmoil. Along the way, Ames cultivated pivotal U.S. operatives and sources, even within the Palestine Liberation Organization when it ranked as the world’s top terrorist group. In April, 1983, as chief of the C.I.A.’s Near East division, back in Washington, Ames returned to Beirut for consultations as Lebanon’s civil war raged.

    Shortly after 1 p.m. on April 18th, 1983, Ames was huddling with seven other C.I.A. staff at the high-rise U.S. Embassy overlooking the Mediterranean, when a delivery van laden with explosives made a sharp swing into the cobblestone entryway, sped past a guard station, and accelerated into the embassy’s front wall. It set off a roar that echoed across Beirut. My office was just up the hill. A huge black cloud enveloped blocks.

    It was the very first suicide bombing against the United States in the Middle East, and the onset of a new type of warfare. Carried out by an embryonic cell of extremists that later evolved into Hezbollah, it blew off the front of the embassy, leaving it like a seven-story, open-faced dollhouse. Sixty-four were killed, including all eight members of the C.I.A. team. It was, at the time, the deadliest attack on an American diplomatic facility anywhere in the world, and it remains the single deadliest attack on U.S. intelligence. (Only one of the thirty attacks on U.S. missions since then, in Nairobi, in 1998, has been deadlier.)

    Ryan Crocker, the embassy’s political officer, had met with Ames earlier that day. Crocker was blown against the wall by the bomb’s impact, but escaped serious injury. He spent hours navigating smoke, fires, and tons of concrete, steel, and glass debris, searching for his colleagues.

    “This is seared into my mind, irretrievably,” Crocker recalled for me this weekend. “There wasn’t an organized recovery plan, not in the initial hours after the bombing. I was de facto in charge that first awful night, when you dug a little and shouted out in case there was someone alive there, and then dug a bit more. Somewhere that night, I was on that rubble heap, and a radiator caught my eye. There was an object at the foot of the radiator. It looked like a beach ball, covered thick with dust. It was Bob Ames’s head.”

    Ames left behind a widow and six children. He was so clandestine that his kids did not know that he was a spy until after he was killed. President Ronald Reagan and his wife, Nancy, saw the flag-draped coffins of the American victims arrive at Andrews Air Force Base, and met with the families of the deceased.

    Reagan, who had known Ames, recounted the meetings in his diary, according to Kai Bird’s book about Ames, “The Good Spy”: “We were both in tears—I know all I could do was grip their hands—I was too choked up to speak.” More than three thousand people turned out for the memorial service at the National Cathedral for Ames and the other American victims.

    On his first full day in office, President Trump spoke at the C.I.A. headquarters in front of the hallowed Memorial Wall, with Ames’s star on it. Since his election, Trump has raged at the U.S. intelligence community over its warnings about Russian meddling in the Presidential election. After CNN reported on, and BuzzFeed published, an as-yet unsubstantiated dossier about Trump’s ties to Russia and personal behavior, the President erupted on Twitter, “Intelligence agencies should never have allowed this fake news to ‘leak’ into the public. One last shot at me. Are we living in Nazi Germany?”

    On Saturday, speaking to about four hundred intelligence officials, Trump blamed any misunderstanding on the media. “They are among the most dishonest human beings on Earth,” he said. (The official White House transcript notes “laughter” and “applause” here.) “They sort of made it sound like I had a feud with the intelligence community. And I just want to let you know, the reason you’re the No. 1 stop is exactly the opposite—exactly.”

    Trump vowed greater support for America’s sixteen intelligence agencies than they had received from any other President. “Very, very few people could do the job you people do,” he said. “I know maybe sometimes you haven’t gotten the backing that you’ve wanted, and you’re going to get so much backing. Maybe you’re going to say, Please don’t give us so much backing. Mr. President, please, we don’t need that much backing.” Trump said he assumed that “almost everybody” in the cavernous C.I.A. entry hall had voted for him, “because we’re all on the same wavelength, folks.”

    In his remarks, Trump made passing reference to the “special wall” behind him but never mentioned the top-secret work or personal sacrifices of intelligence officers like Ames and the others who died in Beirut, including the C.I.A. station chief Kenneth Haas, and James F. Lewis, who had been a prisoner of war in North Vietnam, and his wife Monique, who was on her first day on the job at the Beirut embassy. Nor did the President refer to any of the dozens of others for whom stars are etched on the hallowed C.I.A. wall of honor. It was like going to the Tomb of the Unknown Soldier and not mentioning those who died in the Second World War.

    Trump’s unscripted remarks were, instead, largely about himself, even as he praised Mike Pompeo—a West Point and Harvard Law School graduate, Kansas congressman, and Tea Party supporter—as his choice to lead the C.I.A.

    “No. 1 in his class at West Point,” Trump said. “Now, I know a lot about West Point. I’m a person that very strongly believes in academics. In fact, every time I say I had an uncle who was a great professor at M.I.T. for thirty-five years, who did a fantastic job in so many different ways, academically—was an academic genius—and then they say, Is Donald Trump an intellectual? Trust me, I’m like a smart person.”

    Apparently as proof, the President noted that he had set an “all-time record” in Time magazine cover stories. “Like, if Tom Brady is on the cover, it’s one time, because he won the Super Bowl or something, right?” he told the intelligence officials. “I’ve been on it for fifteen times this year. I don’t think that’s a record that can ever be broken.” Time told Politico’s Playbook that it had published eleven Trump covers—and had done fifty-five cover stories about Richard Nixon.

    Trump spoke briefly about eradicating “radical Islamic extremism,” a cornerstone of his foreign policy. But he devoted more than twice as many words to the dispute over the turnout at his Inauguration. “Did everybody like the speech?” Trump asked. “I’ve been given good reviews. But we had a massive field of people. You saw them. Packed. I get up this morning, I turn on one of the networks, and they show an empty field. I say, wait a minute, I made a speech. I looked out, the field was—it looked like a million, million and a half people.”

    Crowd scientists who spoke to the Times estimated that about a hundred and sixty thousand people attended, compared with the record-setting 1.8 million who were estimated to have been at President Obama’s first Inauguration. Trump was defiant. “We caught them, and we caught them in a beauty,” he told the C.I.A. crowd. “And I think they’re going to pay a big price.”

    Trump’s remarks caused astonishment and anger among current and former C.I.A. officials. The former C.I.A. director John Brennan, who retired on Friday, called it a “despicable display of self-aggrandizement in front of C.I.A.’s Memorial Wall of Agency heroes,” according to a statement released through a former aide. Brennan said he thought Trump “should be ashamed of himself.”

    Crocker, who was among the last to see Ames and the local C.I.A. team alive in Beirut, was “appalled” by Trump’s comments. “Whatever his intentions, it was horrible,” Crocker, who went on to serve as the U.S. Ambassador in Iraq, Syria, Afghanistan, Pakistan, Lebanon, and Kuwait, told me. “As he stood there talking about how great Trump is, I kept looking at the wall behind him—as I’m sure everyone in the room was, too. He has no understanding of the world and what is going on. It was really ugly.”

    “Why,” Crocker added, “did he even bother? I can’t imagine a worse Day One scenario. And what’s next?”

    John McLaughlin is a thirty-year C.I.A. veteran and a former acting director of the C.I.A. who now teaches at Johns Hopkins University. He also chairs a foundation that raises funds to educate children of intelligence officers killed on the job. “It’s simply inappropriate to engage in self obsession on a spot that memorializes those who obsessed about others, and about mission, more than themselves,” he wrote to me in an e-mail on Sunday. “Also, people there spent their lives trying to figure out what’s true, so it’s hard to make the case that the media created a feud with Trump. It just ain’t so.”

    John MacGaffin, another thirty-year veteran who rose to become the No. 2 in the C.I.A. directorate for clandestine espionage, said that Trump’s appearance should have been a “slam dunk,” calming deep unease within the intelligence community about the new President. According to MacGaffin, Trump should have talked about the mutual reliance between the White House and the C.I.A. in dealing with global crises and acknowledged those who had given their lives doing just that.

    “What self-centered, irrational decision process got him to this travesty?” MacGaffin told me. “Most importantly, how will that process serve us when the issues he must address are dangerous and incredibly complex? This is scary stuff!”

    Trump could have taken a page from Reagan, whom he has often invoked. In 1984, at a groundbreaking ceremony for an addition to C.I.A. headquarters, Reagan told the intelligence community, “The work you do each day is essential to the survival and to the spread of human freedom. You remain the eyes and ears of the free world. You are the ‘trip wire’ over which totalitarian rule must stumble in their quest for global domination. . . . From Nathan Hale’s first covert operation in the Revolutionary War to the breaking of the Japanese code at Midway in World War II, America’s security and safety have relied directly on the courage and collective efforts of her intelligence personnel.”

    Bruce Riedel was a protégé of Ames at the C.I.A.; they travelled together in the Middle East. For more than three decades, he has made an annual visit to Ames’s grave at Arlington National Cemetery. He noted one glaring omission from Trump’s comments: a third of the stars are from deaths that have happened since 9/11, “making it more dangerous to work for the agency now than ever before.” He faulted Trump for not visiting the Counterterrorism Center, talking to the team now tracking Al Qaeda and Islamic State leaders, and seeing how drones work—all “invaluable experience when he later needs to make life-and-death decisions,” Riedel, now a senior fellow at the Brookings Institution, told me.

    Paul Pillar, a Vietnam veteran, rose to become deputy director of the Counterterrorism Center and later the National Intelligence Officer in charge of the Middle East and South Asia. He, too, was anguished by Trump’s comments. “He used the scene as a prop for another complaint about the media and another bit of braggadocio about his crowds and his support,” Pillar told me Sunday. “That the specific prop was the C.I.A.’s memorial wall, and that Trump made no mention of those whom that wall memorializes, made his performance doubly offensive.”

    At 7:35 a.m. on Sunday, Trump responded on Twitter to the negative reactions to his comments. “Had a great meeting at CIA Headquarters yesterday, packed house, paid great respect to Wall, long standing ovations, amazing people. WIN!”

    But it’s hard to see how America’s new leader will recoup from a performance so shallow, irreverent, and vainglorious.

    Putin, Maryland business activity

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