The fundamentals have not changed. In fact, they continue to worsen. And stocks tumbled this morning when the markets opened. For the first time since 2007, the yields on short-term U.S. bonds eclipsed those of long-term bonds. This phenomenon, called the inverted yield curve, has preceded every recession in the past 50 years.
Bigger picture, the United States remains engaged in a trade war with China, the world’s second-largest economy, with no end in sight. Trump’s insistence that he still plans to impose all the previously announced duties on Dec. 15 forces corporate chieftains to prepare for more troubled waters ahead. Many analysts said the delay does nothing to mitigate the ominous clouds of uncertainty that hang over the economy. “Trade wars are good and easy to win,” Trump said last year. That was wrong.
Beyond the inverted yield curve, economists are pointing to a litany of other early warning signs that indicate a recession looms, despite the Federal Reserve’s recent decision to cut interest rates. There’s already been a decline in business investment, and some companies are pulling back on hiring.
Yesterday, Trump came closer than he has before to acknowledging that his tariffs on Chinese imports are really taxes on American consumers. He’s been falsely claiming that the Chinese are paying the full price of his tariffs. “We are doing this for the Christmas season, just in case some of the tariffs would have an impact on U.S. consumers,” the president told reporters, as he prepared to fly to a speech in western Pennsylvania.
It’s no coincidence that the products that got a carve-out from the planned 10 percent tariff on $300 billion worth of imports are consumer goods such as cellphones, laptops, strollers and sneakers. Higher prices might have caused sticker shock over the holidays. The prior tariffs, which have gone into effect, mostly increased the price of component parts that companies use to assemble something else. These new tariffs would hit finished goods such as iPhones, which are assembled in China, making it more likely that the higher costs are passed on to consumers.
Trump wants to win reelection, and he’s sensitive to the markets. The result has been a series of erratic policy announcements that often appear to be improvisational and that cause whiplash for the markets. It sometimes feels as if Trump is practicing the “madman theory” in trade negotiations. Is he being crazy? Or crazy like a fox? For example, how seriously are we to take it when Trump threatens, as he did yesterday, to pull out of the World Trade Organization?
“It’s complete manipulation,” said Kenny Polcari of Butcher Joseph Asset Management. “[Trump] threatens the market, by surprise, two weeks ago. The markets re-price. Then he says, ‘I think we are going to delay those tariffs.’ … The [algorithms] respond immediately and take the market higher,” Polcari told my colleagues Taylor Telford and Thomas Heath. “Of course the market is going to rally!”
“We are all just one tweet away from significant volatility,” RSM chief economist Joe Brusuelas wrote in a note to his clients after Trump’s tariff postponement. “The idea that this is a major source of relief to the economy is not tethered to empirical reality.”
“We were relieved. But does that stop the volatility and instability? No,” said Jay Foreman, chief executive of the Florida-based toy company Basic Fun. Foreman told the Associated Press yesterday that he’s still considering layoffs this fall to offset his higher costs and noted that, despite Trump’s reprieve, tariffs remain a severe threat.
“The climbdown over the China tariffs does not mean a trade deal is now near, not least because China's authorities currently face a much bigger problem, namely, the challenge to their legitimacy in Hong Kong, and that will take precedence,” wrote Pantheon Macroeconomics chief economist Ian Shepherdson in a note to investors that Tory Newmyer covered in this morning’s Finance 202. “But we can fully understand markets' relief at the lifting of the threat of tariffs on consumer goods just ahead of the holiday shopping season.”
-- U.S. businesses have begun taking down job listings because of the uncertainty caused by the trade war: “Win Cramer had big plans to hire several new employees this summer for his company, including a chief operating officer, but he took the job listings down after Trump tweeted that more tariffs would hit Chinese goods in September,” our economics correspondent Heather Long reported yesterday. “‘It’s the most frustrating time I’ve ever had running a business, and I’ve been doing this for 20 years,’ said Cramer, chief executive of JLab Audio, which makes wireless earbuds and headphones sold at Best Buy, Target and elsewhere.
“The United States had 7.3 million job openings in June, down from a peak of 7.6 million in November. … While the decline is modest, economists are concerned hiring could dry up quickly as companies see no end in sight to Trump’s trade war and they look to cut costs. The reduction in job openings is also widespread across many industries, signaling how cautious companies are becoming. A decrease in job openings has tended to be a signal of economic trouble. … Job openings peaked in April 2007, for example, nine months before the start of the Great Recession. Job openings in many industries have declined since November, including the information sector, financial services, transportation and warehousing, and hotels and food service, suggesting wide concern about future growth. Actual hires also have slowed this year, with average monthly job gains falling to 165,000 a month, down from 223,000 a month last year.”
-- “Uncertainty” is the buzzword that keeps coming up in notes from Wall Street institutions to their clients that seem to become gloomier with each passing day:
“Trade’s simmer has begun to boil, business sentiment and capital spending have softened further, global growth remains weak and inflation expectations have fallen,” Morgan Stanley’s Ellen Zentner wrote on Monday. “Heightened market volatility and increased news flow on trade may soften consumer sentiment and spending.”
Goldman Sachs said Sunday it does not expect a trade deal between the U.S. and China before the 2020 election. “Fears that the trade war will trigger a recession are growing,” wrote Goldman’s chief U.S. economist, Jan Hatzius, explaining why growth projections are being lowered. “Overall, we have increased our estimate of the growth impact of the trade war. The drivers of this modest change are that we now include an estimate of the sentiment and uncertainty effects ... Relatedly, the business sentiment effect of increased pessimism about the outlook from trade war news may lead ﬁrms to invest, hire, or produce less.”
“We are worried,” Bank of America Merrill Lynch chief economist Michelle Meyer wrote Friday. “We now have a number of early indicators starting to signal heightened risk of recession. Our official model has the probability of a recession over the next 12 months only pegged at about 20 percent, but our subjective call based on the slew of data and events leads us to believe it is closer to a 1-in-3 chance. … Three out of the five economic indicators (auto sales, industrial production, and aggregate hours worked) which track the business cycle closely are near levels consistent at the start of the previous recessions.”
-- More dark mood music:
- Inflation in the United States was slightly higher last month than expected: The Labor Department announced yesterday that the consumer price index rose 0.3 percent in July. That’s modest but was above analyst predictions.
- U.S. mortgage debt reached a record in the second quarter, exceeding its 2008 peak as the financial crisis unfolded. “Mortgage balances rose by $162 billion in the second quarter to $9.406 trillion, surpassing the high of $9.294 trillion in the third quarter of 2008, the Federal Reserve Bank of New York said Tuesday,” per the Wall Street Journal.
- China’s economy is faltering: “The jobless rate in Chinese cities again rebounded in July to its highest level since regular reporting on the data began, as employers turned cautious,” today's Journal reports. “Other key economic readings for the month, including factory production, consumption and property investment, came in much lower than expected.”
- Germany’s economy shrank slightly last quarter. Europe’s biggest economy suffered from falling exports, and the auto industry is struggling to adjust to new emissions standards, per the AP.
- The British economy also unexpectedly shrank, for the first time since 2012, because of uncertainties surrounding Brexit.
-- Finally, some good news: We’re hiring! I’m looking for an ambitious reporter to help me write The Daily 202. This is a demanding job that requires a news junkie and a creative thinker who is skilled at connecting the dots about news developments in Washington, around the country and the world. The ideal candidate will have a track record of writing conceptual scoops in the political arena, examining key developments in the White House, Congress or on the campaign trail in a fresh and original light. That candidate should be able to identify key themes and story lines from the slew of news that breaks on a daily basis, and skillfully synthesize those events in a meaningful and revelatory way for readers. This position is based in our Washington newsroom. (Read the full job posting here.) Email me at James.Hohmann@washpost.com if you have questions or ideas.
WHILE YOU WERE SLEEPING:
-- Trump appears to have backed away from what had been imminent plans to commute the sentence of former Illinois governor Rod Blagojevich in the face of massive Republican blowback, CNN reports: “Several Republican lawmakers called acting White House chief of staff Mick Mulvaney and White House counsel Pat Cipollone. At least two of them, Reps. Darin LaHood and Mike Bost, made their case directly to the President on Thursday night, urging him not to go forward. … Another White House official said that while Blagojevich's pardon seemed imminent late last week, there had been no movement on the matter since Trump spoke with the two congressmen. It appeared to be on ice, the official said, while offering the caveat that Trump could change his mind and decide to move forward.
“Multiple sources familiar with the calls said Trump and Mulvaney both did not seem aware of the details of Blagojevich's case, even though the president had decried the former governor as being treated ‘unbelievably unfairly.’ … Trump's son-in-law and senior adviser Jared Kushner had been funneling messages of support for Blagojevich's commutation to the president … Trump adviser and former New York City Mayor Rudy Giuliani also made it clear to Trump that Blagojevich's sentence was too harsh. Bernard Kerik, a former NYPD commissioner who served time in prison on a tax fraud conviction and has been advocating for Blagojevich, slammed the opposition.”
-- Opinion columnist Elizabeth Bruenig went to her home state of Texas for a deep dive into why Trump seems poised to fare even better among evangelicals in 2020 than he did in 2016. Partly this is because they are culture warriors and want to get another ally on the Supreme Court, of course, but she concludes that it’s also because “the backlash against them has cemented so much of what they already suspected about liberals’ attitudes.”
“Overall, American culture is hardly trending toward adherence to evangelical beliefs, with approval of same-sex marriage steadily rising among all religious groups (even evangelicals), religious affiliation quickly dropping, and support for legal abortion lingering at all-time highs,” Bruenig writes in a thoughtful essay. “In some sense it seemed that Trump is able, by being less Christian than your average Christian, to protect Christians who fear incursions from a hostile dominant culture. But that paradox also supplies a handy solution to the question of whether Christians should direct their efforts to worldly politics or turn inward, shunning political life for spiritual pursuits. By voting for Trump — even over more identifiably Christian candidates — evangelicals seem to have found a way to outsource their fears and instead reserve a strictly spiritual space for themselves inside politics without placing evangelical politicians themselves in power. In that sense, they can be both active political agents and a semi-cloistered religious minority, both of the world and removed from it, advancing their values while retreating to their own societies.”
-- For a separate story, religion reporter Julie Zauzmer interviewed more than 50 evangelical Christians in the battleground states of Florida, Pennsylvania and Wisconsin: “In conversation, evangelical voters paint the portrait of the Trump they see: a president who acts like a bully but is fighting for them. A president who sees America like they do, a menacing place where white Christians feel mocked and threatened for their beliefs. A president who’s against abortion and gay rights and who has the economy humming to boot. … The allegations that Trump sexually assaulted numerous women are not a moral concern, many Christians say. … Opponents decry his attitude toward people of color, his approach to immigrants detained at the border, his answers to violence in American cities, and on and on. But in Appleton, Wis., the Rev. Dennis Episcopo hasn’t felt the need as a religious leader to denounce any of it in front of his congregation, which includes more than 5,000 attendees on a typical Sunday. The megachurch that he has led for 22 years is almost entirely white and conservative, like the lakeside region where it is located. Episcopo has not seen any behavior from Trump in the past three years that would prompt him to openly dissuade churchgoers from supporting this president. ‘There could be something, where society really crosses the line on something, that I feel as a pastor I have to get up and say something,’ he muses. ‘But it hasn’t happened yet.’”
-- Former Colorado governor John Hickenlooper (D) is considering ending his presidential bid to run for the Senate. From the New York Times: “Hickenlooper, who is mired at the bottom of public polling of the presidential race, hopped into Senator Michael Bennet’s car on Friday night in [Iowa] to discuss his impending decision. [They drove around together for 20 minutes in Clear Lake before the Wing Ding dinner.] … Officials who have been in discussions with the Hickenlooper campaign said Tuesday that the former two-term governor is giving serious consideration to switching to the Senate race but stressed that a final decision has not yet been made. Short of a massive change in political momentum, Mr. Hickenlooper is certain to fail to qualify for the next round of presidential debates in September, an additional blow to a campaign struggling to attract attention and financial contributions. ...
“Recent days have brought unsubtle messages that high-ranking Democratic officials in Colorado and Washington believe Mr. Hickenlooper is in the wrong race. The Denver Post on Sunday published polling done on behalf of ‘a national Democratic group involved in Senate races’ that showed Mr. Hickenlooper holding a 51-point lead over two other Democrats in the state’s 2020 Senate race. On Monday, the 314 Action Fund, a super PAC that backs candidates who are scientists, announced a ‘Draft Hick for Senate’ campaign along with a poll it commissioned showing Mr. Hickenlooper leading Senator Cory Gardner, a Colorado Republican seeking re-election, by 13 percentage points in a head-to-head matchup.”
-- Beto O’Rourke, who returned to his hometown of El Paso after the mass shooting there, may resume his 2020 campaign as early as this week amid persistent calls for him to run for Senate instead. Supporters of the former congressman want him to challenge Sen. John Cornyn (R). (Politico)
-- Republican donors are being advised by allies of Mike Pompeo to hold off on contributing to any of the current Senate candidates in Kansas as the secretary of state weighs whether to run for the open seat of retiring Sen. Pat Roberts. From Bloomberg News: “A Pompeo ally has been advising potential contributors to wait until after the secretary of state makes his decision ... The top U.S. diplomat and former CIA director, who served as a congressman in Kansas’s 4th district from 2011-2017, has until June to enter the race.”
-- Trump is trying to turn Joe Biden’s gaffes into a major liability. Matt Viser reports: “Over the last few days, Biden has made a string of small missteps while campaigning during a crucial stretch in Iowa. … He has bungled oft-repeated lines, saying ‘truth over facts’ rather than truth over lies. … He spoke of meeting with Parkland students when he was vice president, even though the Florida school shooting occurred a year after he left office. … On their own, none of these mistakes significantly alter the race. ... Some say the gaffes pale in comparison to things Trump says. … That hasn’t stopped Trump and his allies from seizing on Biden’s comments. … On Friday, he said ‘Joe is not playing with a full deck’ and that ‘something’s going wrong with him.’”
-- Biden can learn a few lessons from Mitt Romney’s 2012 presidential campaign, writes Dan Balz: “He continues to lead in the polls, nationally and in early states. He has led those polls from the start of the year to today. Still, he is treated as being in a precarious position, a vulnerable candidate not at his best and a few mistakes away from a real fall. Just like Romney through much of 2011. Romney was the disrespected front-runner in the 2012 Republican field. He could be awkward as a candidate and paid a price for it in the coverage of his campaign. But as with Biden, he led in most — not all — surveys ahead of the primaries and caucuses.”
-- A new survey finds support for abortion rights remains steady, despite a growing partisan divide. Ariana Eunjung Cha and Scott Clement report: “No more than a quarter of residents in any state supports a total ban despite the increasing political divide on the issue. The Public Religion Research Institute survey released Tuesday involves an extraordinarily large sample of 40,292 interviews measuring abortion attitudes throughout 2018, allowing it to produce nuanced results for individual states and for very small demographic groups. It found that Americans remain generally supportive of abortion rights, with 54 percent saying it should be legal in all or most cases and 40 percent saying it should be illegal.”
THE NEW WORLD ORDER:
-- The Hong Kong protest movement is facing a tipping point as demonstrators seek the sympathy of the international community. Gerry Shih and Timothy McLaughlin report: “After late-night mob scenes marred a demonstration that paralyzed this city’s airport, protesters on Wednesday issued apologies seeking the international public’s sympathy and forgiveness as they fought to regain control over a narrative that seemed to be tilting in Beijing’s favor for the first time. The appeals, which included apologies to the police force, come as the struggle over public opinion reaches a climax. While Hong Kong’s protest movement has become steadily radicalized and fractured, the Chinese government has sharply ramped up a propaganda effort in state media and on social networks to discredit and deflate a movement that to this point enjoyed wide support across Hong Kong society.
“Hong Kong’s airport ground to a near-halt for a second day Tuesday after protesters assailing police brutality and government indifference occupied departure halls, sparking tense but largely peaceful confrontations with frustrated passengers, many of them stranded. The mood turned darker by nightfall after protesters seized two men — one a reporter for Chinese state media, another they claimed to be a Chinese government agent — and clashed with police and paramedics who tried to evacuate the pair. At one point, protesters surrounded and kicked a police van, sparking hand-to-hand clashes with riot police who fired pepper spray near the departure terminal.
“On Wednesday, police warned that protesters arrested during the terminal fracas could face life in prison. Seven men aged 17 to 28 years old were detained, five for unlawful assembly and two for assaulting police officers and possession of offensive weapons, said Mak Chin Ho, assistant police commissioner. … Threats of such severe punishment fit with an approach by Beijing, and its supporters in the Hong Kong government, to dramatically raise the potential cost for taking part in demonstrations.”
-- China is threatening to use military-style force in Hong Kong, hoping that threats alone will disperse protests, as students plan to continue protesting once universities resume classes next month. Anna Fifield reports: “That would take the protests uncomfortably close to celebrations planned on Oct. 1 to mark the 70th anniversary of the foundation of the People’s Republic of China, which was established with the goal of unifying greater China under the leadership of the Communist Party. … That concern, combined with increasingly strident rhetoric from Chinese officials, has raised fears about the possibility of military intervention in Hong Kong. This week, state-affiliated media outlets tweeted ominous videos of Chinese tanks carrying out exercises in Shenzhen, the southern Chinese city that borders Hong Kong, while authorities in Beijing portrayed the protests as ‘terrorism.’ China already stands accused of sending in thugs from local gangs to try to deter the protesters in Hong Kong, and there are growing concerns that it will send in the People’s Armed Police, a paramilitary force responsible for internal security and ‘stability maintenance.’ Or perhaps even the People’s Liberation Army.”
-- Bloody eye patches have become the latest symbol of the Hong Kong protests after a young woman was hit in the face with a projectile that many protesters believe was fired by police. Katie Mettler reports: “Authorities said at a news conference that there was no proof to back up that claim. From the tension, a new rallying symbol was born. ‘Eye for an eye,’ some protesters shouted as they continued their sit-in ... Demonstrators also spray-painted ‘eye for an eye’ throughout the airport in Chinese and in English and covered their faces with mock eye patches made of gauze. Some colored them red, to signify blood.”
-- China asked the Trump administration to back off after U.S. lawmakers, including Speaker Nancy Pelosi (D-Calif.) and House Minority Leader Kevin McCarthy (R-Calif.), condemned the violence against pro-democracy activists. From Reuters: “The United States has denied Chinese suggestions that it has a hand in the unrest. But China’s foreign ministry spokeswoman Hua Chunying said the lawmakers’ comments have ‘provided new and powerful evidence to the world.’”
-- Meanwhile, Trump said the “thing” in Hong Kong — which he called a “riot” last week — is “very tough” but stopped short of criticizing China. From the Times: “In comments to reporters and in a series of afternoon tweets, Mr. Trump took no strong position on the demonstrations that have gripped Hong Kong for weeks and have drawn an increasingly brutal response from local security forces. He echoed none of the defenses of freedom and democracy coming from both Democrats and Republicans. … ‘We’ll see what happens. But I’m sure it’ll work out,’ he said. He added: ‘I hope it works out for everybody, including China. I hope it works out peacefully. I hope nobody gets hurt. I hope nobody gets killed.’ The president later tweeted that intelligence reports indicated that China’s government ‘is moving troops to the Border with Hong Kong.’”
-- Follow the money: Senate Majority Leader Mitch McConnell (R-Ky.) had quarterbacked the effort on Capitol Hill to lift sanctions on Russia’s largest aluminum producer, a company that soon afterward backed the creation of the first new aluminum-rolling mill in the U.S. in nearly four decades — built in McConnell’s home state. Tom Hamburger and Rosalind S. Helderman report: “In January, as the Senate debated whether to permit the Trump administration to lift sanctions on Russia’s largest aluminum producer, two men with millions of dollars riding on the outcome met for dinner at a restaurant in Zurich. On one side of the table sat the head of sales for Rusal, the Russian aluminum producer that would benefit most immediately from a favorable Senate vote. … On the other side sat Craig Bouchard, an American entrepreneur who had gained favor with officials in Kentucky … By the next day, McConnell had successfully blocked the bill, despite the defection of 11 Republicans.
“Within weeks, the U.S. government had formally lifted sanctions on Rusal, citing a deal with the company that reduced the ownership interest of its Kremlin-linked founder, Oleg Deripaska. And three months later, Rusal announced plans for an extraordinary partnership with Bouchard’s company, providing $200 million in capital to buy a 40 percent stake in the new aluminum plant in Ashland, Ky. — a project heralded by Gov. Matt Bevin (R) ‘as significant as any economic deal ever made in the history of Kentucky.’ A spokesman for McConnell said the majority leader did not know that Bouchard had hopes of a deal with Rusal at the time McConnell led the Senate effort to end the sanctions. … Democratic senators have called for a government review of the deal, prompting a Rusal executive in Moscow last week to threaten to pull out of the investment.”
-- Russian villagers were told to leave their town following a missile test explosion. Will Englund reports: “It took most of Tuesday for officials to realize how damaging this looked given the nuclear materials involved in the accident. Arkhangelsk Gov. Igor Orlov insisted it wasn’t an evacuation but a ‘routine measure.’ … About 450 people are said to live in the village, which abuts a military testing range. … A resident of Nyonoksa told ArkhangelskOnline that the village has been evacuated before, presumably because of the hazards of tests or other military activity nearby. … Local officials conducted a study of soil, sand, river and seawater samples from several points in the region and reported no excess levels of radiation, according to media reports.”
-- Russia said the explosion caused a 16-fold spike in radiation. From the BBC: “Readings for gamma radiation at six testing stations in Severodvinsk, a city of 180,000 people, ranged from 4 to 16 times the normal rate of 0.11 microsieverts per hour,” Russia’s weather sevice said.
-- Donald Trump Jr. visited Indonesia to tout his family’s new resorts and defend his father. Stanley Widianto and Joshua Partlow report: “‘We have turned down a lot of deals,’ Trump Jr. said at a news conference in the capital city of Jakarta. ‘We made a very conscious decision of the family not to do that right now.’ The Trump Organization has promised it would make no new foreign deals during President Trump’s time in office. Plans for the two Indonesia resorts predate the Trump presidency but appeared to have stalled in recent years. Trump Jr. called it ‘nonsense’ that the president’s foreign policy might be swayed by his business interests. ‘He wouldn’t make decisions that affect a country based on a real estate deal,’ Trump Jr. said of his father.”
-- Pakistan moved to ban single-use plastic bags. Anyone in the capital region of 1.5 million who uses, sells or manufactures the bags will face a fine. Pamela Constable reports: “The ban is the latest project in Prime Minister Imran Khan’s green initiative, which began last year with a campaign to plant 10 billion trees to fight deforestation. … The fines in Pakistan will also be steep — $31 for using a single bag, $63 for selling one and up to $31,000 for manufacturing them. The national per capita income is $1,200 per year. Shoppers are not likely to be aggressively pursued, but companies that make and supply the bags have been warned that they will be inspected to enforce the ban.”
-- In a bid to retain power, Venezuelan President Nicolás Maduro is cracking down on his own military. From the Times: “Top military leaders have repeatedly declared their allegiance to the Maduro administration. But over the past two years, as the oil-rich economy crumbled and a majority of Venezuelans were left without sufficient food and medicine, factions within the security forces have staged at least five attempts to overthrow or assassinate the president. The government claims to have foiled at least a dozen more plots in that period … Mr. Maduro’s Socialist Party is resorting to this siege mentality to justify ubiquitous surveillance, arbitrary detentions and the torture of perceived enemies, including those inside Venezuela’s 160,000-strong armed forces.”
THE DOMESTIC AGENDA:
-- The Justice Department reassigned the warden of the federal detention center where sex offender Jeffrey Epstein died. Two staffers were placed on leave. From Devlin Barrett, Matt Zapotosky and Aaron C. Davis: “The move to transfer Lamine N’Diaye, who had only recently begun working as the MCC’s warden, came a day after Attorney General William P. Barr decried ‘serious irregularities’ there and a ‘failure’ to keep Epstein secure. … Barr appointed James Petrucci, who has been running a federal prison in nearby Otisville, N.Y., as the facility’s new acting warden. The MCC is run by the Bureau of Prisons, which is part of the Justice Department and falls under Barr’s authority. … Epstein was being held in a special housing unit of the MCC called Nine South and should have been checked on by the staff every 30 minutes. But correctional officers had not done so for ‘several’ hours before he was found by staff as they delivered breakfast to inmates, a person familiar with the matter said …
“To those who have worked in or around the MCC, Epstein’s death is viewed as a symptom of long-term problems there and, more broadly, within the Bureau of Prisons. Robert Hood, a former chief of internal affairs for the bureau, said the MCC has had longtime problems with overcrowding and understaffing. But in recent years, he said, the bureau has been afflicted by a lack of leadership, with a significant number of senior positions filled by temporary appointments. … Sometimes, incompetence in the building reaches alarming proportions, observers said. In May 2017, for instance, a bank robber named David Evangelista was accidentally released from the MCC, even after he told staff he still had years left on his sentence …Still, the MCC is considered one of the safest and most secure lockup in the federal system. When Joaquín Archivaldo Guzmán Loera, the drug kingpin better known as ‘El Chapo,’ was brought to New York, he was jailed there.”
-- The two prison staff members who were guarding Epstein fell asleep and failed to check on him for three hours, per the Times, which adds that the staffers — both working overtime — falsely recorded in a log that they had checked on the financier every 30 minutes, as was required. The paper notes that such false entries in an official log could constitute a federal crime.
-- The news of Epstein’s death was posted on 4chan more than half an hour before it became public, leading the New York City Fire Department to look into whether an employee shared the details improperly. From BuzzFeed News: “Almost 40 minutes before ABC News first reported Epstein’s death on Twitter, someone posted still-unverified details on 4chan, the anonymous message board popular with far-right trolls and white nationalists. … After publishing the post, other 4chan users egged on the author. When they expressed doubt, the original poster added more information to the discussion thread, including a detailed breakdown of the procedures allegedly used to resuscitate Epstein, which suggest the poster may have been a first responder, medical worker, or otherwise privy to details about efforts to resuscitate the disgraced financier. ... After telling BuzzFeed News the post was ‘under review,’ an FDNY spokesperson said authorities ‘determined this alleged information did not come from the Fire Department.’”
-- Trump defended his promotion of the baseless conspiracy theory connecting the Clintons to Epstein’s death. John Wagner reports: Trump said he “retweeted a ‘very highly respected conservative pundit’ who is a ‘big Trump fan.’ On Saturday, Trump retweeted a message from conservative actor and comedian Terrence K. Williams that suggested former president Bill Clinton might have been involved in the death of Epstein, the politically connected financier who had been facing multiple charges of sex trafficking involving underage girls. ‘He’s a very highly respected conservative pundit,’ Trump told reporters in New Jersey, referring to Williams. ‘He’s a big Trump fan. That was a retweet, that wasn’t from me. That was from him, but he’s a man with half a million followers, a lot of followers. And he’s respected.’”
-- England’s Prince Andrew is facing fresh scrutiny for his past friendship with Epstein. Adam Taylor and Karla Adam report: “Buckingham Palace has never explained the photograph. It shows a middle-aged Prince Andrew, Duke of York, smiling with his arm around the bare waist of Virginia Roberts, then 17, who claims she was later paid by Jeffrey Epstein for sexual encounters with the prince. In the background stands Ghislaine Maxwell, a British socialite who accusers say was Epstein’s girlfriend and madam. The photo was reportedly taken at Maxwell’s London home in 2001. … With Epstein now dead after a suspected suicide Saturday and Maxwell apparently outside the reach of investigators, hiding from the limelight she once embraced, the Duke of York may be the highest-profile member of Epstein’s circle from the time of the allegations against him. On Friday, newly unsealed legal documents from a defamation suit Roberts brought against Maxwell resurfaced old accusations and elaborated on the account of inappropriate behavior. In the documents, Roberts, now Virginia Giuffre, says she was ‘trafficked’ to Andrew, with whom she claims to have had three sexual encounters.”
-- David Boies, the Democratic lawyer who once worked for Al Gore but who has been criticized for the methods he used to defend Theranos, will once again confront Alan Dershowitz, the intellectual bulwark on O.J. Simpson’s defense team, in a separate legal fight over Epstein’s actions. From Tom Jackman, Deanna Paul and Manuel Roig-Franzia: “In this long-running melodrama, Boies and his partners at Boies Schiller Flexner represent one of Epstein’s accusers, Virginia Roberts Giuffre — who was a teenage locker-room attendant at President Trump’s Mar-a-Lago resort when she met Epstein. Giuffre has alleged that Epstein demanded that she have sex with him repeatedly when she was underage and lent her for sex to his friends, including Dershowitz. … Dershowitz’s effort to counter the accusations has been made all the more nettlesome because his long-ago representation of Epstein has come under greater scrutiny following Epstein’s arrest last month. Dershowitz, an emeritus Harvard University law professor, is also fending off a defamation suit filed by Giuffre, set for key oral arguments next month, in which Boies has become a vital player. Because Epstein’s death will end his criminal case, the Giuffre defamation action against Dershowitz could be one of the dwindling number of cases that would allow for the full public airing of numerous accusations against Epstein that his alleged victims have long sought.”
-- The “Send her back!” chant continues to reverberate in Greenville, N.C., where Trump held a rally weeks before the El Paso shootings. For some voters there, the chant echoes as a prelude to murder. Griff Witte reports: “Samar Badwan, a Greenville resident, watched that day as 8,000 neighbors and fellow citizens jammed a local basketball arena to serenade the president with chants of ‘Send her back,’ a response to Trump’s insistence that a Muslim, Somali American congresswoman should ‘go back’ to the land of her birth. … Before that day, Badwan had never had to question whether her hijab was incompatible with her Southern drawl. She never had to fear that her North Carolina neighbors might hold her Palestinian heritage against her. She never had to think that in Greenville — a city she has been proud to call home for 30 years, raising three children along the way — her faith would mark her as an unwanted outsider. Then the president came to town.”
-- A little girl begged for her father’s release after he was captured during the ICE raids in Mississippi. A week later, he’s still detained. From CNN: “Andres Gomez-Jorge is being held at the Adams County Correctional Facility in Natchez, Mississippi. His family spoke on the phone with him briefly Tuesday for the first time since his arrest. The call came hours after CNN published a story saying that the family didn't know his whereabouts and feared for his well-being.”
-- U.S. citizens are lining up for jobs in rural Mississippi that have opened up because of the ICE raids, which resulted in the arrest of hundreds of immigrant workers. Jonnelle Marte reports: “In a state where the poultry industry is one of the biggest drivers of the economy, some of the job applicants said they hoped the opportunities at Koch Foods, one of the meatpacking plants targeted by the raids, would improve their finances in both substantial and incremental ways. They arrived seeking a steadier paycheck. A slightly higher wage. A more accommodating schedule. … Even as many of the job hunters pondered the ways the chicken-processing jobs might bring them more stability, many of the workers — who were required to bring two forms of identification to the job fair — said they sympathized with the [detained employees] … Their sentiments challenge the narratives that typically drive the immigration debate in the United States, pitting undocumented workers against Americans seeking opportunity.”
-- D.C. Mayor Muriel Bowser (D) said she will not accept a federal government plan to house unaccompanied migrant children in Washington. Fenit Nirappil reports: “Bowser was reacting to an application from Dynamic Service Solutions, a federal contractor, to open a temporary shelter for children in the District. The company has been advertising job listings for educators, caseworkers and medical staff members to work with ‘unaccompanied alien’ children in the nation’s capital. … The proposed facility would house as many as 242 children, according to a person familiar with the contractor’s application to the city. Some members of the D.C. Council said they were under the impression that the shelter would be located on private property in Takoma, a Northwest D.C. neighborhood near the Maryland border.”
-- A House panel with jurisdiction over firearms is expected to return early from recess to vote on new gun-control measures. “But there’s one problem: Democrats are privately sparring over what exactly to approve,” Rachael Bade and Paul Kane report. “House Democrats universally agree on expanding background checks, legislation they easily passed in February. They’ve also coalesced around proposals restricting high-capacity magazines, instituting ‘red flag’ laws that keep guns from individuals showing warning signs of violence, and potentially even legislation on hate crimes — ideas the House Judiciary Committee is expected to consider the week of Labor Day, according to two people familiar with the plan, a week before the full House is officially scheduled to return. But there’s still disagreement on whether the House should advance legislation reinstating an assault weapons ban that expired 15 years ago.”
-- Gun-control groups are trying to build on the momentum after El Paso and Dayton. Amy B Wang, Tom Hamburger, Josh Dawsey and Marissa J. Lang report: “‘People are fed up. This keeps on happening,’ Christian Heyne, vice president of policy for the Brady Campaign to Prevent Gun Violence. ‘The response to this from a small few people in one body of our federal government of Congress is the same. That’s unbelievably frustrating.’ Simultaneously, the groups are emboldened by what they see as a vacuum created by turmoil within the National Rifle Association. (The NRA denies its influence is slipping and has been talking directly to the president and others in the White House.) Gun-control activists are also aware of — if not completely reassured by — Trump’s comments that he would support expanded background checks.”
-- FBI agents found 25 guns and 10,000 rounds of ammunition in an Ohio teen’s bedroom after he threatened to assault a law enforcement officer. From WGN-TV: “According to court documents, the user posted a threat to assault federal law enforcement officers writing, ‘shoot every agent on sight,’ in a discussion about the Branch Davidian standoff in Waco in 1993.”
-- “It’s been 5 years since a police officer killed my son, Michael Brown. Nothing has changed.” Lezley McSpadden, the chief executive and founder of the Michael O.D. Brown Foundation, writes in an op-ed for The Post: “For many young black and brown people, the police too often feel like an occupying force in their neighborhoods instead of a force for good. A new study of young adults from the GenForward Survey at the University of Chicago found that while most white young adults believe you can trust the police ‘always’ or ‘often’ to do what is right, less than a third of young African Americans believe the same. Similarly, nearly half of African Americans ages 18 to 36 say they 'always' or 'often' go out of their way to avoid contact with the police or other law enforcement, compared with slightly more than a quarter of white young adults.”
-- The New York Times demoted its congressional editor after he made problematic comments on Twitter. Paul Farhi reports: “The editor, Jonathan Weisman, came under fire for tweets questioning whether Reps. Rashida Tlaib (D-Mich.) and Ilhan Omar (D-Minn.) actually represented the Midwest and whether Reps. Lloyd Doggett (D-Tex.) and John Lewis (D-Ga.) represented the Deep South, given that their districts are primarily urban and heavily minority. Weisman said he was questioning whether the districts truly reflected the broader politics of their regions, which are predominantly white and more rural. He deleted the tweets after they were roundly criticized as racist. He later asked author and Times contributor Roxane Gay for an ‘enormous apology’ in an email after she called him out for those tweets and for criticizing him for identifying another congresswoman as African American without mentioning that her primary challenger is also African American. Gay posted Weisman’s email to her and her assistant and criticized him for his ‘audacity and entitlement’ for contacting her and her publisher to demand the apology. A Times spokeswoman, Eileen Murphy, said Weisman had apologized to Executive Editor Dean Baquet for ‘his recent serious lapses in judgment,’ but that he has been demoted and will no longer edit the newspaper’s coverage of Congress. The Times didn’t specify what Weisman’s duties will be. The paper also said he would no longer be active on social media.”
QUOTE OF THE DAY: “Give me your tired and your poor who can stand on their own two feet and who will not become a public charge,” said Ken Cuccinelli, the acting director of U.S. Citizenship and Immigration Services, in a twist of Emma Lazarus's famous words etched on the Statue of Liberty. Cuccinelli added that “all immigrants who can stand on their own two feet, self-sufficient, pull themselves up by their bootstraps” would be welcome in the U.S. (Colby Itkowitz and Felicia Sonmez)
SOCIAL MEDIA SPEED READ:
Stephen Colbert mocked Cuccinelli for his comments:
The New York mayor's office also responded to Cuccinelli's words:
Trump lashed out at critics who he said are "blaming him” for the crisis in Hong Kong:
The top House Republican expressed support for the islanders:
So did the speaker:
South Bend, Ind., Mayor Pete Buttigieg had a grim conversation with a voter in Iowa:
Buttigieg also went down the giant slide:
And Rep. Alexandria Ocasio-Cortez (D-N.Y.) wished lefties a happy day:
VIDEOS OF THE DAY:
Stephen Colbert joked that Trump is acting like a cartoon villain:
Trevor Noah questioned Fox News host Tucker Carlson's sudden vacation: