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Wall Street Plunges on Realization Trump’s China Deal Didn’t Change a Thing

Wall Street fell off a cliff yesterday, losing 3% or more of its value after president Donald Trump confirmed nothing much had changed following his meeting with Chinese president Xi Jinping on Dec. 1.

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Arthur J. Villasanta – Fourth Estate Contributor

Washington, DC, United States (4E) – Wall Street fell off a cliff yesterday, losing 3% or more of its value after president Donald Trump confirmed nothing much had changed following his meeting with Chinese president Xi Jinping on Dec. 1.

Analysts agree a series of demoralizing tweets by Trump indicating no significant progress had been made in ending his trade war against China helped ignite the massive sell-offs yesterday. American media reports the Dow Jones Industrial Average fell by 200 points after those tweets.

One particularly damning tweet by Trump boasted, “I am a Tariff Man.”

At the end of the trading day, the Dow plummeted 799 points, or 3.1%. At one point, the Dow was down 818 points. The S&P 500 lost 3.2%, while the NASDAQ shed 3.8%. It was the Dow’s fourth-biggest point decline in history.

It took only two days for the sheen to wear-off Trump’s boast China had bowed to his demands. Wall Street was initially encouraged by Trump’s deal with Xi in which both sides agreed to a 90-day truce in the U.S.-China trade war.

In a knee jerk response, all three equities markets improved on Monday buoyed by optimism the U.S. and China might strike a deal to end their rancorous trade war. The Dow gained nearly 300 points.

This flirtation with optimism quickly ended yesterday after investors realized Trump’s boasts of progress were only hot air. The sentiment is that Trump intentionally oversold his “accomplishments,” which are at odds with what other members of his administration are saying.

Uncertainty as to what Trump and Xi really agreed upon indicated to investors that no one seems to know exactly what’s going on, and this temporary trade war truce is no guarantee of any substantive progress in the future being made.

Trump’s series of tweets also show he has no problems with re-igniting the trade war if a broader agreement on his terms isn’t reached in the next 90 days.

It also didn’t help investors that Trump’s boasts turned out to be only boasts devoid of any reality. Trump claimed China had agreed to slash its current 40 percent tariffs on U.S. auto imports to zero. He also claimed China will “start purchasing agricultural product immediately.”

On the other hand, National Economic Council Director Larry Kudlow refused to confirm any of these boasts.

Kudlow acknowledged there was no “specific agreement” on auto tariffs. He also said he couldn’t “specifically” answer questions about China’s agricultural product purchases. He said his “expectation” is that China might roll back tariffs on goods “quickly.”

Kudlow and Trump also disagreed on when this 90-day trade war truce will begin. Kudlow said it starts Jan. 1, 2019; Trump demurred, saying the clock started ticking on Dec. 1.

“The trade war between the United States and China has been put on hold for the holidays, but the respite will be brief given the 90-day deadline and inherent difficulty in addressing the fundamental factors driving trade tensions between the two countries,” said Isaac Boltansky, an analyst at research firm Compass Point LLC.

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Politics

North Korea Threatens to Cancel Denuclearization Talks over Latest Sanctions

North Korea angrily blasted the latest United States sanctions, saying this move by the Trump administration could “block the path to denuclearization on the Korean peninsula forever.”

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Arthur J. Villasanta – Fourth Estate Contributor

Pyongyang, North Korea (4E) – North Korea angrily blasted the latest United States sanctions, saying this move by the Trump administration could “block the path to denuclearization on the Korean peninsula forever.”

North Korea denounced the latest U.S. sanctions, which Washington imposed on three top Noorth Korean officials for serious human rights abuses and censorship. It expressed “shock and indignation” at the new U.S. sanctions while accusing Trump of being “bent on bringing… relations back to the status of last year which was marked by exchanges of fire.”

Pyongyang noted Trump’s policy of “maximum pressure” will be his “greatest miscalculation.”It urged Trump to return to the confidence building that was hoped for following the summit in Singapore last June between Trump and Kim Jong-un.

Washington said it imposed the sanctions after a U.S. Department of State report revealed human rights abuses committed by the men. The U.S. Department of Treasury named those sanctioned as Ryong Hae Choe, an aide close to Kim, who leads the Workers’ Party of Korea Organization and Guidance Department. Also sanctioned was State Security Minister Kyong Thaek Jong sand Propaganda and Agitation Department head Kwang Ho Pak.

The sanctions freeze any assets the three North Koreans might have under U.S. jurisdiction. It also generally prevents them from making transactions with anyone in the United States. The sanctions were announced as the State Department released a report on North Korean human rights and other abuses.

The State Department report said human rights abuses in North Korea “remain among the worst in the world and include extrajudicial killings, forced labor, torture, prolonged arbitrary detention, rape, forced abortions, and other sexual violence.

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Chris Matthews Predicts Trump Might Resign “in the Coming Weeks”

Liberal pundit Chris Matthews, who hosts the talk show, “Hardball with Chris Matthews” on MSNBC, told his TV audience about his hunch Donald Trump might resign in the coming weeks as part of a deal with Special Counsel Robert Mueller.

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New York, NY, United States (4E) – Liberal pundit Chris Matthews, who hosts the talk show, “Hardball with Chris Matthews” on MSNBC, told his TV audience about his hunch Donald Trump might resign in the coming weeks as part of a deal with Special Counsel Robert Mueller.

Matthews also said Donald Trump Jr. and Ivanka Trump could be the “next dominoes to fall” in the Mueller investigation. Trump’s children might face prosecution and possible prison time for their roles related to Russian meddling in the 2016 presidential elections.

“But what if the prosecutor were to offer the president an alternative,” asked Matthews. “What if he were to say he would let the children walk if the old man does the same? That would mean giving up the presidency in exchange for acquittals all around — not just for himself, but for all his kids.”

He said Trump might have to emulate former Vice President Spiro Agnew, who resigned in 1973 as part of a deal with prosecutors to avoid prison time in a tax evasion case.

“Leverage the office while you still have it,” said Matthews in a piece of advice to Trump.

“So let’s watch the probable events of the coming weeks bring all this to a breaking point,” he said. “It is going to be historic.”

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US Senate Passes Criminal Justice Reform

The U.S. Senate on Tuesday overwhelmingly approved legislation to decrease America’s substantial prison population by lowering some mandatory federal sentences, giving inmates added opportunities to earn reductions in jail time, and encouraging prisoners to better themselves so they are less likely to return to crime upon release.

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Washington, DC, United States (VOA) – The U.S. Senate on Tuesday overwhelmingly approved legislation to decrease America’s substantial prison population by lowering some mandatory federal sentences, giving inmates added opportunities to earn reductions in jail time, and encouraging prisoners to better themselves so they are less likely to return to crime upon release.

Passing 87-12, the First Step Act was hailed by proponents as a long-overdue retooling of the federal criminal justice system, an effort that drew resounding support from both Republican and Democratic lawmakers as well as President Donald Trump.

“Congratulations to the Senate on the bipartisan passing of a historic Criminal Justice Reform Bill,” Trump tweeted shortly after the vote. “I look forward to signing this into law!”

“The bill makes smart changes to our criminal justice system in ways that will make it fairer, more humane, and more just,” Senate Democratic Leader Chuck Schumer of New York said.

“This legislation is proof that we can be tough on crime and more compassionate to those who deserve a second chance,” Mississippi Republican Roger Wicker said in a statement.

The bill retroactively ends the discrepancy in federal sentences for drug offenses involving crack and the powder form of cocaine, which would reduce jail time for thousands of prisoners convicted of crack offenses.

The legislation also reduces some mandatory sentences, gives federal judges more flexibility to make exceptions to mandatory prison terms, and allow inmates to earn greater sentence reductions through good behavior and vocational training.

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